********************************************************
                         NOTICE
********************************************************
This document was converted from
WordPerfect or Word to ASCII Text format.
Content from the original version of the document such as
headers, footers, footnotes, endnotes, graphics, and page numbers
will not show up in this text version.
All text attributes such as bold, italic, underlining, etc. from the
original document will not show up in this text version.
Features of the original document layout such as
columns, tables, line and letter spacing, pagination, and margins
will not be preserved in the text version.
If you need the complete document, download the
WordPerfect version or Adobe Acrobat version, if available.
*****************************************************************
Before the
               Federal Communications Commission
                    Washington, D.C.  20554
In the Matter of                     )
                                     )
Amendments to Parts 1, 2, 87 and 101         )
of the Commission's Rules           )        WT Docket No. 99-327
                                   To License Fixed Services         )
at 24 GHz                           )
                        REPORT AND ORDER
     Adopted:  July 25, 2000            Released:  August 1, 2000
By the Commission:  Commissioner Ness issuing a statement; Commissioners Furchgott-Roth and Tristani
concurring and issuing separate statements.
                       Table of Contents
                                                  Paragraph No.
     I.                                                     INTRODUCTION. . . . . . 1
     II.                                                    EXECUTIVE SUMMARY . . . . . .2
     III.                                                   BACKGROUND. . . . . . . 3
     IV.                                                    DISCUSSION. . . . . . . 6
          A.                                                Licensing Plan for 24 GHz Services . . . . . . . 6
               1.                                           Table of Allocations. . . . . . . 6
               2.                                           Geographic Area Licensing . . . . . . 12
               3.                                           Spectrum Blocks . . . . . . 19
               4.                                           Treatment of Incumbents . . . . .22
          B.                                                Application, Licensing and Processing Rules. . . . . 25
               1.                                           Regulatory Status . . . . . 25
               2.                                           Open Eligibility. . . . . . 30
               3.                                           Performance Requirements. . . . . . . 36
               4.                                           License Term and Renewal Expectancy . . . . . . 39
               5.                                           Application of Title II Requirements to Common Carriers . . . . . . 43
               6.                                           Aggregation, Disaggregation and Partitioning. . . . . . . 47
               7.                                           Foreign Ownership Restrictions. . . . . . .52
          C.                                                Technical Rules. . . . . . .56
               1.                                           Emission Mask . . . . .57
               2.                                           Equipment Requirements. . . . . .59
               3.                                           Efficiency Standard . . . . . . .62
               4.                                           Antenna Directivity . . . . . . .63
               5.                                           Licensing and Coordination. . . . . . 65
               6.                                           RF Safety . . . . . . .68
          D.                                                Competitive Bidding Procedures . . . . . . 69
               1.                                           Statutory Requirements. . . . . .69
               2.                                           Incorporation by Reference of Part 1 Standardized Auction Rules . . . . .71
               3.                                           Provisions for Designated Entities. . . . . . . 76
     V.                                                     PROCEDURAL MATTERS. . . . . 89
     VI.                                                    ORDERING CLAUSES. . . . . . 92
APPENDIX A     List of Pleadings
APPENDIX B     Final Regulatory Flexibility Analysis
APPENDIX C     Final Rules
     I.   INTRODUCTION
1.     By this Report and Order we adopt service rules for licensing the 24.25-24.45 GHz and 25.05-
25.25 GHz bands (24 GHz band).  We adopt, in part, service rules proposed in the Notice of Proposed
Rulemaking (NPRM) to govern the licensing and operation of the 24 GHz band.  We also adopt, in part,
competitive bidding rules proposed in the NPRM to select among new licensees for this band. In this Report
and Order, we amend Parts 1, 2, 87 and 101 of the Commission's Rules to promote effective use of the
24 GHz band and to accommodate deployment of point-to-point, point-to-multipoint, and multipoint-to-
multipoint fixed wireless technology at 24 GHz.  The rule changes we adopt today establish a flexible
regulatory and licensing framework.  Our decision today will enhance opportunities to provide a broadband
wireless service, foster effective competition, and further our efforts for consistent rule application regarding
broadband wireless services.
     II.  EXECUTIVE SUMMARY
3.     In this Report and Order we make the following major determinations regarding the 24 GHz band.
              We assign the 24 GHz band for licensing throughout the United States by Economic Areas
          (EAs) (constituting 172 service areas).  We also authorize additional areas for licensing
          covering the following United States territories and possessions: Guam, Northern Mariana
          Islands, Puerto Rico, the United States Virgin Islands, American Samoa and the Gulf of
          Mexico.
              We permit 24 GHz band licensees to offer a variety of fixed services, however, we decline to
          allocate mobile operations for the 24 GHz band at this time.
              24 GHz licensees, including incumbent Digital Electronic Message Service (DEMS) licensees,
          will be governed by Part 101 of the Commission's Rules as discussed herein.
              We license the 24 GHz band in 40 MHz flexible channel pairs.  In addition, we provide
          24 GHz band licensees more flexibility in system design, by designating that either the upper
          or lower side of the 40 MHz channel pairs can be used for the nodal station or the subscriber
          station.
              We permit open eligibility for 24 GHz band licensees.
              We adopt our proposed framework for license terms for 24 GHz band licensees.  Licensees
          will have a ten-year license term from the date of grant.  Licensees must demonstrate that they
          are providing substantial service when they file their renewal application.
              We allow 24 GHz band licensees to partition and/or disaggregate their licenses.  We also
          allow licensees to aggregate 24 GHz band spectrum.
              We adopt technical standards that are both consistent with our Part 101 rules and provide
          licensees increased flexibility in system design, including but not limited to, an emission mask
          for the 24 GHz band; allowing the use of non-directional antennas as well as one-foot
          diameter parabolic antennas; eliminating individual licensing for nodal stations; and allowing
          a maximum contiguous bandwidth of up to 200 MHz through aggregation.
              The general competitive bidding rules set forth in Part 1, Subpart Q, of the Commission's
          Rules apply to the 24 GHz band, unless otherwise provided herein.
              We adopt a three-tiered approach to small business bidding credits.  Very small businesses
          with average annual gross revenues not exceeding $3 million are eligible to receive a 35
          percent bidding credit; small businesses with average annual gross revenues not exceeding
          $15 million are eligible to receive a 25 percent bidding credit; and entrepreneurs with average
          annual gross revenues not exceeding $40 million are eligible to receive a 15 percent bidding
          credit.
     XI.  BACKGROUND
12.    In 1983, the Commission adopted rules for the Digital Electronic Message Service (DEMS).
DEMS systems are common carrier point-to-multipoint microwave networks designed to communicate
information between a fixed (nodal) station and a number of fixed user terminals.  This service was intended
to accommodate operation of high-speed, two-way, point-to-multipoint terrestrial microwave transmission
systems.  Initially, DEMS was allocated spectrum in the 18.36-18.46 GHz bands coupled with the 18.94-
19.04 GHz band.  Subsequently, the Commission amended the initial DEMS allocation and designated
spectrum in the 18.82-18.92 GHz and 19.16-19.26 GHz bands for DEMS.  The Commission began granting
DEMS licenses in the early 1980's; however, due to several factors, including the high cost of equipment, the
service was not deployed widely.  In the early 1990s, a small number of companies, including Associated
Communications, L.L.C., Digital Services Corporation, Microwave Services, Inc., and Firstmark
Communications, Inc., began acquiring licenses in approximately thirty of the Nation's largest markets.
13.    On March 14, 1997, the Commission adopted a Reallocation Order requiring the relocation of
DEMS operations from the 18 GHz band to the 24 GHz band.  These actions were taken in an effort to protect
two government earth stations, alleviate sharing issues between 18 GHz non-government satellite services
(NGSO) and DEMS licensees, and to ensure the viability of DEMS.  In order to protect the government earth
stations, the incumbent DEMS licensees in the Washington, D.C. and Denver, Colorado areas were required
to immediately cease operations in the 18 GHz band.  In all other areas, incumbent DEMS were directed to
discontinue operations in the 18 GHz band no later than January 1, 2001.  The Commission concluded that
the 400 MHz in the 24 GHz band was sufficient to meet the spectrum needs of the DEMS licensees.  In order
to accommodate this relocation, the Commission, in the Reallocation Order amended the Table of Frequency
Allocations and Part 101 of the Commission's Rules regarding Fixed Microwave Service to permit fixed
service use of the 24 GHz band.  On June 25, 1997, the Wireless Telecommunications Bureau (Bureau) issued
a Modification Order modifying existing DEMS licenses to provide for operation in the 24 GHz band.
14.    On November 10, 1999, we released a Notice of Proposed Rulemaking (NPRM) proposing
licensing and service rules to govern both incumbents and new licensees in the 24 GHz band.  Therein, we
proposed to auction new licenses in the 24 GHz band and to apply the Part 101 service rules, as modified to
reflect the particular characteristics and circumstances of the band, to both these new licensees and to the
relocated incumbents.  We also proposed to apply competitive bidding procedures under the Part 1 competitive
bidding rules for future licensing in this band.  We sought comment on whether to adopt rules providing for
a Broadcasting Satellite Service (BSS) in the 24 GHz band, while proposing to remove and/or reallocate certain
non-government radionavigation services.  Additionally, we sought comment on whether to expand the array
of services offered in the 24 GHz band to include mobile operations, rather than exclusively fixed service.
     XV.  DISCUSSION
     A.   Licensing Plan for 24 GHz Services
     1.        Table of Allocations
16.    Background.  In the Reallocation Order, we adopted fixed service as the only authorized use under
the Table of Frequency Allocations.  In keeping with this allocation, we proposed to permit 24 GHz band
licensees to use the spectrum for any fixed service.  Generally, we proposed service rules that would enable
licensees to offer a wide variety of services and minimize regulatory burdens.  In that vein, in the NPRM, we
raised questions concerning the possibility of expanding the array of services offered in the 24 GHz band to
include mobile operations.
17.    Discussion.  As a general matter, commenters in this proceeding strongly support our goal of
providing licensees maximum flexibility in the use and design of their systems in the 24 GHz band.  Teligent,
for instance, agrees that our proposal to adopt rules promoting flexibility provides a proper framework to
encourage local competition and the growth and development of innovative services.  Several commenters,
however, while still desirous of flexibility with regard to the provision of fixed services, urge us not to allow
mobile operations, but rather to retain primary status for fixed services in the 24 GHz band.  These
commenters concur with our statement concerning the current lack of equipment for mobile use and point out
that no demonstration has been made that mobile operations would be compatible with fixed operations.
Moreover, our recent decision to allocate 200 MHz of spectrum at 25.05-25.25 for BSS feeder links adds
another layer of complexity to the coordination process.  Several of the commenters suggest that we authorize
mobile services on a secondary basis or limit the use of mobile operations to the 24 GHz band fixed licensees
so that they can "introduce mobile options, when feasible, within the frequency parameters of their existing
licenses."  We agree with the majority of commenters that it is premature to consider mobile operations for
this service, and therefore, we will not allocate for mobile operations in the 24 GHz band at this time.
Nevertheless, we concur with Teligent that, since equipment for mobile operations may become available in
the future, we should not completely preclude the possibility of mobile operations in the 24 GHz band.  Thus,
while we conclude that the 24 GHz band will remain a fixed service at this time, we reserve the discretion to
revisit permitting mobile operations if we are presented with technical information demonstrating that such
operations are technically feasible (e.g., concerns regarding possible harmful interference to 24 GHz band fixed
operations and BSS are addressed).
18.    Sharing Criteria for Satellite Services and Terrestrial Fixed Services.  Background.  We recently
amended the Table of Frequency Allocations to allocate spectrum for BSS use, effective April 1, 2007.  In
the 18 GHz Report and Order, we allocated spectrum in the downlink band at 17.3-17.7 GHz for primary BSS
use.  In the uplink band, we allocated 300 MHz of spectrum at 24.75-25.05 GHz for primary Fixed Satellite
Service (FSS) Earth-to-space use, limited to feeder links for the BSS allocation in the 17.3-17.7 GHz band,
and in addition, we allocated 200 MHz of spectrum at 25.05-25.25 GHz for co-primary sharing between FSS
and the 24 GHz Service, requiring coordination between these services.  In the NPRM in this proceeding, we
tentatively concluded, because the corresponding downlink BSS allocation is not immediately effective, to defer
the implementation of a sharing methodology between the satellite interests and the terrestrial fixed service
interests.  Nevertheless, we solicited comment on the interaction between these two services.
19.    Discussion.  In light of the fact that the downlink BSS allocation in the 17.3-17.7 GHz band will
not become effective until April 1, 2007, we continue to believe that it would be premature to implement
sharing criteria at this time.  Teligent, PCIA, and FWCC agree that it is too early for the Commission to
implement a sharing criteria, because of the seven-year delay before BSS can effectively use the 24 GHz band.
In the alternative, DIRECTV contends that, because the preparation of technical rules and international
coordination agreements will take several years to finalize, it is not too early to begin developing the necessary
rules to support BSS operations in the 24 GHz band.
20.    We agree with Teligent that it would be premature to undertake a precise set of rules for sharing,
in that the potential parameters of such a satellite system are also unknown.  Therefore, consistent with the
18 GHz Report and Order, we will consider any sharing criteria in a future rulemaking proceeding.  In this
context, Teligent suggests that a formal working group composed of fixed wireless operators and satellite
representatives should convene near the 2007 benchmark date to develop sharing criteria and the necessary
separation distance for non-ubiquitous BSS uplink earth stations.  We agree that industry consensus can be
helpful for developing any sharing criteria and separation distances, and although we are not requiring that a
working group be established at this time, we encourage industry representatives to engage in ongoing
collaboration prior to the April 1, 2007 milestone.  With seven years prior to any potential BSS allocation
becoming effective in the 25.05-25.25 GHz band, we are not adopting sharing criteria between the co-primary
fixed service licensees and satellite operators in the 24 GHz band at this time because we believe that there will
be sufficient opportunity to develop appropriate sharing methodologies.  In the interim, we encourage
negotiations between parties regarding terms and conditions, consistent with our 24 GHz band rules, to allow
a satellite operator to provide an uplink earth station service within a licensee's license area (such as through
partitioning, disaggregation or a leasing arrangement).  We further note that satellite operators could choose
to pursue use of the 24 GHz band for BSS feeder links through a license won at the upcoming auction (thereby
becoming a wireless licensee).  It is contemplated that, because this spectrum will be used in the U.S. by BSS
operators for feeder links, the satellite operators will provide predominantly domestic service.
21.    Non-Government Radionavigation Service.  In the NPRM, we proposed to delete the non-
Government radionavigation service allocations in the 24.25-24.45 GHz and 25.05-25.25 GHz bands.  We
also proposed to modify the Table of Frequency Allocations to reflect the FAA's decommissioning of a radar
facility at the Newark, New Jersey International Airport.  We note that footnote US341, addressing the
Newark radar facility, has already been removed from the Table of Allocations pursuant to a proceeding by
the Office of Engineering and Technology (OET).  Finally, we proposed to amend Section 87.173(b) of our
Rules to change the entry for aeronautical radionavigation from 24.25-25.25 GHz to 24.75-25.05 GHz.  We
received no comments related to these proposals.  Therefore, for the reasons underlying our proposals regarding
Aeronautical Radionavigation Service operations in 24.25-25.25 GHz and 24.75-25.05 GHz, we adopt them
as final rules.
               1.   Geographic Area Licensing
22.    Background.  In the NPRM, we requested comment on the type of service area that should be used
to license the 24 GHz band.  The Commission originally used Standard Metropolitan Statistical Areas (SMSA)
to license the DEMS service.  However, SMSAs did not include rural communities, and thus DEMS licensees
were unable to provide service to these communities.  Therefore, we tentatively concluded to license the
24 GHz band on the basis of 172 EAs with additional EA-like areas, covering United States territories and
possessions.  We indicated our belief that the use of EAs, in conjunction with the proposed partitioning and
disaggregation rules, would create reasonable opportunities for the dissemination of 24 GHz band licenses
among a large number of entities.  While we concluded that the EA licensing scheme would best serve the
public interest in facilitating efficient use of this spectrum, we nonetheless solicited comment on alternative
geographic areas.
23.    Discussion.  Although we received a mixed reaction to our EA licensing approach, we have
concluded that EAs are the best basis for geographic area licensing in the 24 GHz band.  Teligent and Wireless
One agree with our decision to use EAs to license 24 GHz.  In this regard, Teligent states that the relatively
small size of an EA should minimize the burden of performance requirements and thereby encourage rapid and
intensive use of the spectrum.
24.    Several commenters, however, oppose an EA licensing approach.  PCIA, RTG and SBA argue
that the large size of EAs precludes small entities and start-up companies from participating at auction.  SBA
indicates that the use of EAs discourages small business participation by allowing the high value of urban areas
to influence the bidding for the less valuable rural areas included within the EA.  These commenters argue
that the adoption of even smaller license areas would reduce spectrum warehousing and speed service to rural
areas, and they offer a range of smaller alternative geographic areas.  We do not believe that service areas
smaller than EAs would prove a beneficial licensing approach for the 24 GHz band.
25.    We agree with Teligent that smaller alternative service areas are unlikely to permit the efficiencies
necessary to justify the large cost of providing fixed wireless service.  Rather, we agree that EA based licenses
are more likely to offer licensees the opportunity to realize the necessary economies of scale.  In the recently
released Narrowband PCS Second Report and Order, we found that large service areas are more appropriate,
because they serve the needs of a wider range of entities, including both large and small service providers.
We believe that this finding is appropriately applied to the 24 GHz band.  We do not believe that EAs are so
large that they will preclude smaller businesses from participating at auction.  Our recent experience with the
39 GHz auction, where EAs were used, indicates that small entities were able to successfully bid at auction.
Moreover, entities desiring larger service areas will be able to create such areas by aggregating licenses.
Finally, in response to PCIA's request that we reconsider BTAs, we note that issues surrounding Rand
McNally's copyright interest in BTAs are not easily resolved and, therefore, rule out the use of BTAs for this
service.
26.    Moreover, we have received comments regarding the necessity for parity within the broadband
services.  Therefore, we believe that retaining the same service area as that used for the 39 GHz Service
would place both services on an equal footing.  Also, we believe that the three-tiered approach to bidding
credits we are adopting herein will ameliorate concerns regarding the inability of smaller entities to participate
at auction and aid these smaller entities when seeking financial backing.
27.    Some commenters find our rationale that post-auction partitioning and disaggregation will open
up opportunity to smaller entities to be faulty and argue that we should encourage small business participation
at auction.  NTCA argues, for example, that rural telephone companies have not been successful in obtaining
partitioned areas, because licensees are generally able to meet the Commission's performance requirements by
serving the more urban areas, and therefore are able to hold onto the entire service area.  As stated above, we
believe that flexible partitioning and disaggregation/aggregation fosters rapid delivery of service to rural areas
and encourages the participation of smaller entities at auction, consistent with our mandate to ensure that
licenses are disseminated among a wide array of applicants.  NTCA offers no concrete evidence, indicating
otherwise.  In fact, the benefits of post-auction partitioning and disaggregation are demonstrated in recent
assignments of C Block Broadband PCS licenses.  Moreover, entities such as rural telephone companies may
form a bidding consortium in order to level the playing field at auction, and thereafter, partition or disaggregate
to the consortium members in order to form a smaller service area.  Thus, we continue to believe that our
flexible partitioning rules provide an effective mechanism/vehicle by which smaller or newly formed entities
can gain access to the broadband wireless market.
28.    For these reasons, we determine that EAs constitute the most appropriate geographic area licensing
for the 24 GHz band.  EAs will provide ample population coverage and allow 24 GHz band licensees the
flexibility to provide a multitude of service offerings.  Thus, we determine to use a total of 176 service
areas the 172 EAs specified by the Department of Commerce and four EA-like areas for Guam and the
Northern Mariana Islands, Puerto Rico and the United States Virgin Islands, American Samoa, and the Gulf
of Mexico.
               1.   Spectrum Blocks
29.    Background.  In the Reallocation Order, the Commission determined that the differences in
propagation, rain attenuation, and available equipment between the 18 GHz and 24 GHz bands would require
DEMS systems in the 24 GHz band to use approximately four times as much bandwidth as DEMS systems
operating at 18 GHz to maintain comparable reliability and coverage.  Therefore, we decided to license the
relocated operations in 40 MHz channel pairs.  We concluded that DEMS licensees require 40 MHz channel
pairs at 24 GHz for their capacity to be equivalent to the capacity they had at 18 GHz. Section 101.147(r)(9)
of the Commission's Rules currently separates the frequencies between the transmit and receive and it
establishes one set of channels for nodal station use (24.25-24.45 GHz) and another set for use as user stations
(25.05-25.25 GHz).  We proposed that the same amount of spectrum be provided to each new 24 GHz licensee
as is provided under the rules for the relocated licensees.  We sought comment on these proposals.
30.    Discussion.  Commenters generally support the spectrum block proposal to retain five blocks of
40 MHz channel pairs, however, they seek additional flexibility to make more efficient use of the blocks.  In
this regard, commenters seek the amendment of the channel designations in Section 101.147(r)(9) to eliminate
the directional dictates of the spectrum pairs, and thereby, accommodate the use of time division duplex (TDD)
technology.  TDD is a technical design for duplex communications whereby both upstream and downstream
communications utilize the same RF channel by sharing it in the time domain.  One commenter includes among
the benefits of TDD improved spectral efficiency and less expensive equipment.  In that vein, PCIA and
FWCC also seek to amend Section 101.147(r)(9) to allow aggregation of channel blocks to create spectrum
blocks larger than 40 MHz.
31.    One of the desired uses for the 24 GHz band is to provide high-speed data.  In many situations the
downstream (i.e., from node-to-subscriber) data path needs to be larger than the upstream (i.e., from
subscriber-to-node) data path.  For example, a licensee may want to use 60 MHz for the downstream data and
only 20 MHz for the upstream data path.  Thus, in order to allow licensees more flexibility, we will change the
designation of the 40 MHz channel pairs to indicate that either the upper or lower side can be used for the nodal
station or the subscriber station.  In doing so, we will designate the 40 MHz channel pairs as before, but
remove the requirement that the upper or lower side can be used for the nodal station or for the subscriber
station.  This will also allow all 80 MHz or any portion thereof to be used for one-way communications if so
desired by the area licensee and allow 24 GHz band licensees the additional flexibility of fixed use for
technologies such as TDD and applications like high speed Internet access.  We note that allowing the channels
to be used in this manner will change the emission mask standards by increasing the maximum bandwidth.
This issue will be addressed in the technical rules section.
               1.   Treatment of Incumbents
32.    Background.  As was discussed above, incumbent DEMS licensees are required to relocate their
operations to the 24 GHz band by January 1, 2001.  After the completion of this relocation, such licensees shall
be governed by Part 101 of the Commission's Rules.  In the NPRM, we proposed to make the incumbent
licensees subject to any changes we make in this proceeding to the Part 101 Rules.  Accordingly, we sought
comment on our tentative conclusion that no special rules for the protection of incumbents are necessary.
33.    Discussion.  In general, commenters support the Commission's proposal that 24 GHz band
operations be governed by Part 101.  Wireless One states that it is essential that all licensees be subject to
uniform licensing and service rules.  Accordingly, we conclude that all licensees in the 24 GHz band including
incumbent licensees previously licensed under our DEMS rules, will be governed by Part 101 of the
Commission's Rules, as discussed herein.  Further, we are eliminating all reference to DEMS in our rules
governing the operations in the 24 GHz band.
34.    Teligent seeks reassurance that incumbent areas will be protected from harmful interference.  In
this regard, it requests clarification that incumbents licensed on a SMSA basis will retain exclusive right to
their licensed channels within their service area and that the new 24 GHz band licensees will be required to
protect the incumbents against harmful interference.  We clarify that we will exclude the SMSAs of authorized
incumbent licensees from the applicable EAs offered at auction and that incumbents will retain exclusive rights
to use those channels located within its SMSA.  Furthermore, as stated in the NPRM, we believe that the
protection requirements afforded by Section 101.509 of the Commission's Rules will allow the incumbent
licensees and new licensees to effectively coordinate their systems to avoid harmful interference.  As we have
done with other services, we note that should an incumbent lose its authority to operate, the incumbent's
authorization will revert to the relevant EA licensee.  Thus, the EA license holder will be permitted to operate
within the portion of the forfeited SMSA situated within its EA without being subject to competitive bidding.
We believe that this approach best serves the public interest by ensuring efficient use of spectrum and
reassuring that any disruption in service will be remedied as expediently as possible.
          A.   Application, Licensing and Processing Rules
               1.   Regulatory Status
35.    Background.  In the NPRM, we sought comment on a proposed licensing framework, similar to
that adopted for other broadband services, wherein a license applicant may request common carrier status
and/or non-common carrier status under a single authorization, rather than require the applicant to choose
between these services.  We also proposed that if licensees change their service offering, such that it would
alter their regulatory status, they must notify the Commission, although such a change would not require prior
Commission authorization.
36.    Discussion.  As stated above, commenters in this proceeding supported the proposition that
24 GHz band licensees be provided with maximum flexibility to offer a variety of services.  Our proposed
licensing framework, intended to allow further market development, was met with support among the
commenters.  Teligent noted that our proposal to allow applicants to request both common carrier and non-
common carrier status in a single license provides the licensee with maximum flexibility and minimal regulatory
burden.  Thus, similar to the approach taken towards regulatory status for both the LMDS and the 39 GHz
band, we adopt a broad licensing framework in order to encourage further market development by allowing
24 GHz licensees to provide a wide array of services without unwarranted regulatory restraint.
37.    As we have stated in the past, it is within the licensee's discretion to determine the exact nature
of the service to be provided under the regulatory classifications it selects.  By way of guidance for future
applicants, we note that an election to provide service on a common carrier basis requires the elements of
common carriage be present in the type of service the license applicant seeks to provide; otherwise, the service
is categorized as non-common carriage.  The 1996 Act provides that a telecommunications carrier shall be
treated as a common carrier only to the extent that it is engaged in providing telecommunications services.
Telecommunications service is defined as the offering of telecommunications for a fee directly to the public,
or to such classes of users as to be effectively available to the public, regardless of the facilities used.  As we
indicated in the NPRM, we depend on the license applicant to notify the Commission of its intent to provide
common carrier services, thereby enabling us to determine whether to apply the statutory requirements of Title
II of the Communications Act.  We note that to the extent that a 24 GHz band licensee is a telecommunications
carrier it will be governed by the duties required under Part 51, including interconnection with other
telecommunications carriers.  Also to the extent that a 24 GHz band provider meets the definition of a local
exchange carrier it will also be governed by the requirements set forth in Subpart C of Part 51 of our Rules.
38.    We also adopt our proposal requiring licensees to notify the Commission of a change in the service
or services they offer, if such a change would result in a change of their regulatory status, although such change
would not require prior Commission authorization.  Licensees must notify the Commission within thirty days
of a change in regulatory status, unless the change results in the discontinuance, reduction, or impairment of
the existing service, in which case a different time period may apply.  In this instance, the licensee is governed
by Section 101.305 of the Commission's Rules and must submit an application under Section 1.947 of the
Commission's Rules in conformance with the deadlines established by Section 101.305.
39.    In addition, we adopt our proposal that 24 GHz band license applicants are not required to detail
the specific services they seek to provide.  As we stated in the NPRM, we believe it is sufficient that an
applicant indicate its choice of regulatory status in the context of our streamlined application process.  We
conclude that a 24 GHz band licensee will be able to provide all permissible services anywhere within the
licensed geographic service area, consistent with its regulatory status.  Licensees are permitted to add remove,
or relocate sites within their service area without prior Commission approval, unless requirements otherwise
set forth in our rules would entail the filing of a separate authorization.  In this regard, we note that a licensee
may be required to comply with separate filing or authorization requirements in modifying a station where: (1)
there is a National Environmental Policy Act (NEPA) concern pursuant to Section 1.1301 through 1.1319; (2)
areas where radio frequency quiet zones are in place under Section 1.924; (3) antenna structure requirements
under Part 17 requires licensees to register with the Commission prior to construction; (4) any restrictions
regarding border areas under international agreement; and (5) any applicable technical rules in Part 101.
               1.   Open Eligibility
40.    Background.  In the NPRM, we reiterated that our primary goal in this proceeding was to
encourage efficient competition, particularly in the local exchange telephone market.  We tentatively
concluded that, because of current market conditions in the 24 GHz band, it was unnecessary to impose an
eligibility restriction on either incumbent local exchange carriers (ILECs) or incumbent cable operators.
However, we sought comment as to whether open eligibility would indeed pose a significant likelihood of
competitive harm in specific markets, and if so, whether eligibility restrictions are an effective way to address
that harm.
41.    Discussion.  We received relatively few comments concerning our tentative conclusion not to
impose eligibility restrictions on the participation of ILECs or incumbent cable operators.  Those comments
we did receive supported open eligibility, but did not specifically address the likelihood of competitive harm.
For example, RTG "vigorously" supports this initial decision and states that open eligibility will foster
competition and encourage innovation.  In addition, RTG contends that open eligibility will aid in promoting
the deployment of 24 GHz band service to rural areas "by broadening the number of potential providers."
42.    We believe that substantial competitive harm is unlikely to result from ILEC and incumbent cable
eligibility in this service.  The number of broadband present and anticipated competitors in the marketplace
lessens the likelihood that ILECs and incumbent cable operators can thwart competition.  For instance, CLECs
are providing competitive broadband services (i.e., digital subscriber line (DSL)) either over their own facilities
and/or through unbundled network elements (UNEs) obtained through the incumbent local exchange carrier
(ILEC).  Also, as noted in the LMDS Third Report and Order, CLEC and ILECS are increasing their use of
DSL service, in turn cable modem providers are competing with the DSL offerings, and satellite companies
are now providing one-way nationwide broadband service.  In addition, emerging broadband providers are
likely to offer consumers even more choices.  Moreover a number of fixed wireless service providers are
offering comparable services (i.e., 39 GHz, MMDS and LMDS). Therefore, the possibility that incumbents
could foreclose the development of competition by acquiring licenses in the 24 GHz band is remote.
43.    Finally, we note that no such restriction was placed on the 39 GHz band at its onset and the
eligibility restriction placed on ILECs and incumbent cable operators in LMDS sunset on June 30, 2000.
Moreover, we believe that there are several service specific distinctions between the 24 GHz band and LMDS,
at its inception, that further substantiate our decision not to impose an eligibility restriction for the 24 GHz
band.  In the LMDS Second Report and Order, the Commission concluded that several factors increased the
feasibility of anti-competitive preemption.  First, the Commission concluded that, because of the unusually
large spectrum offering (1150 MHz) and the service's potential to offer a variety of fixed services, an LMDS
license would be of particular value to an incumbent both for the purpose of providing increased services and
also to preserve excess profits that a competitor could erode.  The 24 GHz band, however, involves a smaller
allocation of 400 MHz of non-contiguous bandwidth.  Another factor that the Commission relied on in the
LMDS proceeding was the offering of one large license for each mostly unencumbered geographic area.
However, in this instance, we will be offering five licenses each per geographic area.  Furthermore, in the
24 GHz band, unlike LMDS, there are broadband services currently being provided.
44.    We received no comments providing information disputing our conclusion that the 24 GHz band
spectrum may be inadequate for the provision of competitive multi-channel video programming distribution
(MVPD).  We based this conclusion both on our own assessment and on the current services offered by
Teligent, which are limited to voice and data.  Moreover, even if an MVPD offering were possible, we believe
that the number of available licenses in each EA (five) would hinder any anti-competitive conduct by incumbent
cable operators.  Therefore, we continue to believe that it is unnecessary to adopt a restriction excluding the
participation of incumbent cable companies in this service.
45.    Finally, we note that Teligent has expressed concern regarding ILEC dominance in access to multi-
tenant buildings and requests that we consider adopting safeguards to prevent ILEC dominance in the
marketplace.  Specifically, Teligent requests that we prohibit "any telecommunications carrier . . . from
entering into or maintaining a contract with a building owner or manager that provides for that carrier's
exclusive access to a multi-tenant building."  We share Teligent's concern and are currently considering
rooftop access issues in the Competitive Networks proceeding.  We believe that the Competitive Networks
proceeding is the more appropriate proceeding in which to consider these issues.  Moreover, as Teligent itself
noted in the LMDS eligibility restriction proceeding, the acquisition of a license does not reduce or eliminate
an ILECs' motivation or ability to restrict the multiple-unit rooftop access of competitors.  Thus, we adopt
our proposal to allow open eligibility in the 24 GHz band.
               1.   Performance Requirements
46.    Background.  The Commission has, in other wireless services, imposed performance requirements
to ensure that the spectrum is used effectively and that service is deployed rapidly.  More recently, the
Commission has employed a substantial service standard as a mechanism to foster rapid development of
spectrum.  In the NPRM, we solicited comment on whether a substantial service requirement or, in the
alternative, a minimum coverage requirement is more appropriate for this band.  In this connection, we asked
whether a safe harbor standard is warranted and requested comment on possible sanctions for licensees that
fail to meet the performance requirements.
47.    Discussion.  The majority of commenters preferred the application of a renewal expectancy based
on the substantial service requirement, noting the flexibility that such a standard will offer licensees as they
determine how best to implement business plans for the 24 GHz band.  However, RTG preferred a minimum
coverage requirement to ensure the deployment of services in the 24 GHz band to rural areas if the Commission
uses EA-based service areas for this band.  We disagree with RTG that strict minimum coverage requirements
are necessary.  In this regard, we note that some commenters believe that the suggested alternative minimum
coverage requirements would be inconsistent with other fixed services.  In addition, PCIA asserts that
imposition of a numerical minimum coverage requirement might adversely affect the financing opportunities
for 24 GHz band applicants and licensees.  Based on the record in this proceeding, we believe that the
substantial service standard, in lieu of specific coverage requirements, best serves the public interest.  In
addition to being consistent with the approach used in other wireless services, we believe that this standard is
sufficiently flexible to foster expeditious development and deployment of systems and will ultimately create
competition among the service providers in this band.
48.    We define substantial service as "a service that is sound, favorable, and substantially above a level
of mediocre service which might minimally warrant renewal."  As a result of the flexibility that this standard
affords, we have, in past proceedings, provided safe harbor examples to provide guidance to licensees in
meeting this requirement.  Safe harbor examples for the a 24 GHz point-to-point/multipoint licensee may
consist of a showing of four links per million population within a service area or service to an area that has
very limited access to either wireless or wireline telecommunications services.  In order to determine whether
a licensee has provided substantial service at the end of the license term, we will consider factors such as:  i)
whether the licensee's operations service niche markets or focus on serving populations outside of areas
serviced by other licensees; ii) whether the licensee's operations serve  populations with limited access to
telecommunications services; and iii) a demonstration of service to a significant portion of the population or
land area of the licensed area.  We emphasize that this list is not exhaustive and that the substantial service
requirement can be met in other ways.  Hence, we will review licensees' showings on a case-by-case basis.
If a licensee fails to meet the performance requirement, the subject license will not be renewed.
49.    We note that several licenses currently held by incumbent licensees are scheduled to expire in
2001.  Under the previous performance requirements, incumbent licensees were required to construct at least
one link in their service area within eighteen months, without any further performance requirements imposed
during their license term.  We recognize that the substantial service requirement we adopt herein differs
somewhat from the previous performance requirement.  We also note that these license terms are of a limited
duration.  Under these circumstances, we believe that we should incorporate the build-out showing into the
showing required at renewal.  Accordingly, we determine that those incumbent 24 GHz band licensees who
have met the build-out requirements of Section 101.63 by their 2001 renewal date will satisfy the substantial
service requirement we have adopted herein.  We believe that this approach furthers the public interest and
affords incumbent licensees the opportunity to continue implementation of their existing business plans.  This
decision also allows us to remain consistent with our renewal requirements, as discussed below, ensuring
efficient use of the spectrum, and expeditious service to the public.
               1.   License Term and Renewal Expectancy
50.    Background.  In the NPRM, we sought comment on the license term and renewal expectancy
requirements for the 24 GHz band.  We indicated that a ten-year license term, combined with a renewal
expectancy, would promote a stable regulatory environment that will encourage the development of this
spectrum.  Thus, we proposed that the license terms for both incumbent and new 24 GHz band licensees be
ten years, with a renewal expectancy based on a showing that the licensee is providing substantial service.
We also requested comment on possible alternatives to this proposal, such as whether a longer license term is
warranted.  In addition, we proposed that the renewal application of a 24 GHz band licensee must, at a
minimum, include specific showings in order to claim renewal expectancy.
51.    Discussion.  Based on the record in this proceeding, we adopt a ten-year license term, in
conjunction with a renewal expectancy based on substantial service.  Hence, a renewal applicant shall receive
a preference or renewal expectancy if the applicant has provided substantial service during its previous license
term and has complied with the Communications Act and Commission rules and policies.  Generally,
commenters supported this proposal.  For instance, Teligent indicated that a license term in excess of ten years
may lead to spectrum warehousing because longer license terms provide the Commission with fewer
opportunities to determine whether a licensee is providing substantial service.  In addition, FWCC and PCIA
stressed the importance of adopting a license term and renewal expectancy that is consistent with other fixed
wireless services.  We have made significant efforts to establish consistency and promote regulatory parity
with respect to policies governing the wireless services.  In other contexts, we have recognized the advantages
that a ten-year license term and renewal expectancy based on a substantial service requirement affords nascent
providers and, thus, endorsed this approach.  Similarly, we believe that adopting a requirement that 24 GHz
band licensees make a showing of substantial service at renewal in order to acquire an expectancy will further
the public interest.  In addition to ensuring regulatory consistency, this approach will promote the development
of the 24 GHz band.
52.    In order to claim a renewal expectancy, we will require the licensee to, at a minimum, provide the
Commission with 1) a description of its current service in terms of geographic coverage and population served
or links installed and a description of how the service complies with the substantial service requirement; and
2) copies of any Commission Orders finding the licensee to have violated the Communications Act or any
Commission rule or policy, and a list of any pending proceedings that relate to any matter described by the
requirements for the renewal expectancy.  These requirements are in the public interest as these showings
ensure that the licensee is using the spectrum efficiently to provide services to the public, has operated its
facilities in compliance with the Commission's rules, and has the requisite qualifications to be a Commission
licensee.
               1.   Application of Title II Requirements to Common Carriers
53.    Background.  We have taken various steps to foster competition among telecommunications
service providers.  We recognize that certain provisions of the Communications Act may not be as necessary
or may prove to be more burdensome to a new entrant and that removing and/or reducing unnecessary
regulation tends to encourage market entry and lower costs.  In our effort to facilitate the entry of new operators
into the various markets, we have exercised our authority under Sections 10 and 332(c)(1)(A) of the
Communications Act to streamline and/or eliminate various Title II requirements for common carriers.  For
example, in the commercial mobile radio service (CMRS) proceeding, we utilized our forbearance authority
for certain requirements involving the filing of tariffs and inter-carrier contracts and the maintenance of certain
records.  In addition, we have applied our forbearance authority in permitting competitive access providers
(CAPS) and competitive local exchange carriers (CLECs) to file permissive tariffs.  We nonetheless note that
there also have been instances where we specifically declined to forbear from enforcing certain provisions
against either CLECS or CMRS providers.
54.    In the NPRM, we noted our forbearance authority pursuant to Section 10 of the Communications
Act and considered the extent to which we should apply Title II requirements to common carriers in this
context.  Thus, we sought comment on whether we should forbear from enforcing any provisions of the
Communications Act or the Commission's Rules on common carrier licensees in the 24 GHz band.
55.    Discussion.  Although we solicited comment on the appropriate use of our forbearance authority
with respect to the 24 GHz band, we received few comments regarding this matter.  One commenter indicated
that we should extend forbearance to all non-dominant carriers in the 24 GHz band regardless of the technology
they employ to provide their services.  Two commenters stated that we should extend the maximum possible
forbearance to 24 GHz band licensees and also initiate a proceeding that applies forbearance to all fixed
wireless licensees regardless of the frequency band.  Only PCIA offered specific provisions for us to consider,
suggesting that we immediately relieve all fixed wireless carriers from the same common carrier regulations
as to which it has exercised forbearance with respect to CMRS carriers.  However, none of the commenters
described how forbearance from any of the provisions is warranted pursuant to the provision of Section 10 of
the Communications Act.  Section 10 provides the Commission forbearance authority, if the Commission
determines that 1) enforcement  of the regulation and/or provision is not necessary to ensure that charges,
practices, classifications, or regulations are reasonably fair; 2) enforcement is not necessary in order to protect
consumers; and 3) forbearance is consistent with the public interest.
56.    PCIA expressed concern that selective application of forbearance to 24 GHz band licensees would
threaten to provide one group of licensees with a regulatory advantage over other fixed licensees offering
similar services and, thus urged us to adopt a uniform policy that relieves all fixed wireless frequency bands
from unnecessary regulations.  We are currently conducting a broad analysis with respect to forbearance from
applying Title II obligations of the Act and certain provisions of the Commission's rules to various wireless
telecommunications carriers, including fixed wireless service providers.  The PCIA Forbearance Order and
NPRM examines our prior efforts to consolidate onerous regulations, as well as, previous application of our
forbearance authority.  For example, we have streamlined Sections 211 and 214 of the Act and have afforded
relief to non-CMRS providers by 1) granting blanket entrance authorizations to all carriers for domestic
services; 2) providing for automatic grant of international entrance applications after 14 days in most instances;
3) establishing automatic grant of domestic exit applications after 31 days for non-dominant carriers; and 4)
providing that non-dominant carriers need not file contracts for domestic services.  In addition, we are
exploring our forbearance authority with respect to the Part 101 Services in an outstanding proceeding.
Hence, a decision to utilize our forbearance authority in the Part 101 MO&O and NPRM will apply to the
24 GHz band as well.  As a result, we decline to address any specific forbearance measures for the 24 GHz
band at this time.  We note that we are currently preparing a staff report in connection with the Section 11
Biennial Review and anticipate its release for comment later this year.  We encourage parties to pursue some
of these issues concerning streamlining regulations and/or the application of our forbearance authority in that
proceeding.
               1.   Aggregation, Disaggregation and Partitioning
57.    Background.  In a number of recent proceedings, we have adopted a flexible approach for
partitioning and disaggregation.  This approach is intended to encourage spectrum efficiency and afford all
parties an opportunity to respond to market demands for services and/or spectrum in unserved and underserved
areas.  In this regard, we sought comment on whether to apply such an approach to the 24 GHz band, and if
so, what limits, if any, should be placed on the ability of a 24 GHz band licensee to partition its service area
and/or disaggregate its spectrum.  We also sought comment on what information we should require parties
to file in conjunction with this process.
58.    Discussion.  We received no comments opposing our proposed flexible approach to partitioning
and disaggregation for the 24 GHz band.  In addition, we note that our proposal is consistent with the
approaches adopted in other fixed wireless contexts.  Because we continue to believe that the flexibility
provided by this approach will accommodate license transferability and provide a mechanism by which new
entrants and small businesses are afforded additional opportunities to become service providers in the 24 GHz
band, we will adopt our proposal.  Thus, we will permit incumbents and new 24 GHz band licensees to
partition their service areas along any area defined by the parties.  We will also allow
aggregation/disaggregation of any spectrum without restriction on the amount of spectrum disaggregated.
59.    In the event that a 24 GHz license is partitioned or disaggregated, any partitionee or disaggregatee
is authorized to hold its license for the remainder of the original licensee's (i.e., partitionor or disaggregator)
license term and a demonstration must be made that the applicable construction requirements have been met
for the partitioned area or disaggregated spectrum at the time of renewal.  However, we have determined that
participants to a partitioning agreement should be permitted to negotiate whether one party or both will be
responsible for compliance with these requirements.  In addition to being consistent with provisions in other
services, we conclude that this approach is appropriate because it will "ensure that licensees have the flexibility
to structure their business plans while ensuring that partitioning not be used as a vehicle to circumvent the
applicable construction requirements."  Thus, parties will be given two options to meet the substantial service
construction requirement.  Under the first option the parties to the partitioning agreement would certify that
they would each separately satisfy the substantial service requirement for their portion of the service area.
If either party fails to meet the substantial service requirement by the end of the license term, then the non-
performing licensee's authorization would be subject to cancellation at the end of the initial license term.
Under the second option, the original licensee or partitionor certifies that it has met or will meet the substantial
service requirement for the entire service area during the license term.  If the original licensee fails to make the
required showing, then this licensee's authorization will be subject to cancellation, but the partitionee's license
will not be affected by this cancellation.
60.    We also conclude that parties to a disaggregation agreement should be given the flexibility to
determine which party will assume responsibility for complying with our construction requirements in regard
to the disaggregated portion of the license.  As with partitioning agreements, parties must certify whether one
licensee will fulfill the applicable requirements or whether the parties will share responsibility.  In addition,
we will permit 24 GHz band licensees to enter into combined partitioning and disaggregation agreements.  As
we have stated in the past, we believe that offering this option will promote spectral efficiency.  We also
believe that combined partitioning and disaggregation will speed service to unserved or underserved areas,
enhance competition, and encourage new entrants into the market.
61.    We consider partitioning and disaggregation to be a form of license assignment that will require
prior Commission approval, unless pro-forma in nature.  Therefore, a 24 GHz band licensee will be required
to file a standard application for approval of assignment on a FCC Form 603.  We note that if a licensee has
negotiated a frequency coordination agreement with another licensee, such agreement shall remain in effect on
all parties regardless of an assignment or partitioning and/or disaggregation arrangements unless a new
agreement is reached.  In effect, the frequency coordination agreement will convey with the license.  Finally,
24 GHz band licensees who receive bidding credits at auction and subsequently seek to partition or
disaggregate their spectrum holding(s) will be subject to the unjust enrichment provisions contained in Section
1.2111(e) of our Rules.
               1.   Foreign Ownership Restrictions
62.    Background.  Foreign ownership and citizenship requirements for 24 GHz band licensees are set
forth in Sections 310(a) and 310(b) of the Communications Act, as modified by the 1996 Act, which restricts
the issuance of licenses to certain applicants.  Section 310(a) prohibits any foreign government or
representative from holding a station license.  Section 310(b) prohibits certain defined foreign ownership
interests in common carrier licenses.  In the NPRM, we concluded that Section 101.7 of the Commission's
Rules, which implements Section 310 of the Act, should be applied to the 24 GHz band.  Section 101.7(a)
prohibits the granting of any license to be held by a foreign government or its representative.  Section 101.7(b)
prohibits the grant of a common carrier license to an applicant who fails any of the four citizenship
requirements listed therein.
63.    Discussion.  We received one comment supporting our proposal to extend the Part 101 foreign
ownership requirements to 24 GHz band licensees.  This commenter agrees that requiring Part 101 compliance
is consistent with the application of Section 310 and the World Trade Organization (WTO) Basic
Telecommunications Agreements.  Based on our review of the record in this proceeding and for the reasons
stated in the NPRM, we will apply Section 101.7 of the Commissions Rules without modification to the 24 GHz
band.
64.    As we have done in the case of MDS, satellite service, and LMDS, we will require an applicant
electing non-common carrier status to also submit the same information that common carriers applicants must
submit in order to address the alien ownership restrictions under Section 310(b) of the Act.  Because 24 GHz
band licensees are permitted to offer both common and non-common carrier services, we believe this
requirement is necessary in order to enable us to ascertain compliance of all 24 GHz band licensees with the
alien ownership restrictions set forth in Section 101.7 of the Commission's Rules.  This information can be
used whenever the licensee changes to common carrier status without imposing an additional filing requirement
when the licensee makes the change.  We note, moreover, that we would not disqualify an applicant requesting
authorization exclusively to provide non-common carrier service from obtaining a 24 GHz band license solely
on the basis that its citizenship information would disqualify it from receiving a common carrier license.
65.    Accordingly, common carrier and non-common carrier licensees in the 24 GHz band will be
required to provide the alien ownership information requested by FCC Form 601.  Moreover, both common
carriers and non-common carriers must amend their FCC Form 602 to reflect any changes in foreign ownership
information.  We note that, in response to the WTO Basic Telecommunications Agreement, we have relaxed
our policy concerning foreign ownership of common carrier licenses under Section 310(b)(4).  We now
presume that ownership by entities that are WTO members serves the public interest.  However, ownership by
entities from countries that are not WTO members continues to be subject to the effective competitive
opportunities test established by the Commission.
          A.   Technical Rules
66.    As discussed above, our general proposal was to apply the technical rules in Part 101 to govern
the use of the 24 GHz band, including the technical parameters, such as channelization, frequency tolerance
and stability, power and emission limitations, antennas, and equipment authorization.  We note, however, that
the technical parameters currently governing 24 GHz band operations were done in the Reallocation Order
and were derived from those applied to DEMS operations at 18 GHz.  Therefore, there was initial concern as
to whether these parameters were suited specifically for the 24 GHz band.  We requested comment on our
proposed general approach for the 24 GHz band.  Specifically, we sought comment on whether operations in
this band should be limited to digital modulation and whether future development of the 24 GHz band will be
facilitated by adopting technical parameters different from those currently provided for in our Part 101 rules.
We also proposed the retention of a separate emission mask for the 24 GHz band by adding a new subsection,
(a)(5), to Section 101.111(a).  In addition, we requested comment regarding the licensing and coordination of
24 GHz stations.  In this connection, we proposed to replace the current requirement for licensing of individual
nodal stations with a coordination requirement.  Further, we proposed to remove the current 80 km coordination
distance, and instead require that 24 GHz band licensees coordinate their facilities whenever their facilities have
line-of-sight into other 24 GHz band licensees' facilities or are within the same geographic area.  We also
proposed that licensees and manufacturers be subject to the RF radiation exposure requirements specified in
Sections 1.1307(b), 2.1091 and 2.1093 of the Commission's Rules.
               1.   Emission Mask
67.    Many commenters suggest that the proposed emission mask requirement in Section 101.111(a)(5)
is inappropriate for the 24 GHz band and request that we instead apply the emission mask set forth in Section
101.111(a)(2)(ii) of our Rules.  One commenter notes that the proposed mask is too lax with regard to channel
roll off and requires an unachievable noise floor.  As an alternative, commenters suggest that the emission
mask in Section 101.111(a)(2)(ii) will result in an appropriate level of adjacent channel interference protection
and a consistent mask for all frequency bands above 15 GHz, thereby making it easier for manufacturers to
design equipment.  Teligent requests that we grant similar regulatory treatment for 24 GHz band licensees that
was accorded to 39 GHz licensees regarding the applicability of emission limits for aggregated channel blocks.
Teligent contends that there is no need to protect against adjacent channel interference when adjacent channels
are licensed to the same entity, and urges us to modify Section 101.109, Note 7 of our Rules to include a
reference to the 24 GHz band.  Teligent also seeks clarification that the proposed emission mask  (1) applies
only to the edge of each channel, and not to subchannels established by licensees; (2) can be satisfied by
locating the carrier frequencies of the subchannel radios sufficiently far from the channel edges so that the
emission levels of the mask are satisfied; and (3) be interpreted such that the value B is the 40 megahertz
bandwidth of the licensed channel, even in the case where narrower subchannels are used.  Teligent also
requests that, in the case of subchannel use, the mean output power to be used in emission mask calculations
is the sum of the output power levels of a fully populated channel.
68.    Based on the record in this proceeding, we will adopt the emission mask set forth in Section
101.111(a)(2)(ii) of the Commission's Rules, with some modifications, for the 24 GHz band.  We note that
the maximum value of B in the equation for the emission mask is normally taken from the bandwidth table set
forth in Section 101.109 of our Rules which shows a maximum value of 40 MHz.  Even though we are
allowing disaggregation and aggregation of spectrum in addition to allowing both sides of the channel pair to
be used as transmit, the actual value of B can be much larger.  However, we will specify that the maximum
value of B used in the emission mask equation is limited to 40 MHz for all cases.  Also, the minimum value
of B shall be 40 MHz  regardless of the size of the channel actually used and regardless of whether subchannels
are being used.  We shall also modify Section 101.109, Note 7 to include reference to the 24 GHz band and
its aggregated bandwidths.  This will make the roll-off at the edges of the band similar no matter how large or
small the actual bandwidth is.
               1.   Equipment Requirements
69.    Both Nortel and Teligent urge the Commission to "grandfather" previously deployed equipment.
Specifically, Teligent is currently operating its transmitters pursuant to a waiver of the DEMS emission mask
rule in Section 101.111 of the Commission's Rules.  The initial waiver was necessary, following the DEMS
relocation, because the emission mask in Section 101.111 was developed for 18 GHz band operations and was
not suited for 24 GHz band operations.  When the DEMS incumbents first began to relocate from the 18 GHz
band, no 24 GHz band equipment existed.  Therefore, the DEMS incumbents were forced to modify existing
23 GHz band equipment to utilize the 24 GHz band.  Since we do not wish to adopt a minimum standard for
this modified equipment, and commenters have not requested it, we instead considered the comments requesting
that we grandfather this equipment.  Teligent states that it has entered into long-term contracts with its
equipment vendors, and thus requests that we grandfather its current transmitting equipment for the remainder
of the useful life of the equipment.  Moreover, Nortel and Teligent both request that licensees be given a
sufficient transition period, wherein licensees would be permitted to continue deploying this equipment until
new equipment, which satisfies the standards adopted in this proceeding, is commercially available.  Nortel
notes that such a transition period is consistent with Commission precedent and will allow licensees to "make
full use of their equipment, and avoid service disruptions to customers."
70.    In the past, we have allowed licensees to continue to use equipment that did not comply with newly
implemented rules changes either indefinitely or for a specified period.  Also, in this instance, we do not find
that grandfathering the 24 GHz band equipment will greatly undermine the technical standards adopted in this
proceeding.  The technical standards for 24 GHz band are designed to promote effective means of coordinating
stations near the boundary regions of adjacent areas, to assist equipment manufacturers by providing them with
guidelines for the design of 24 GHz band equipment, and to ensure that licensees utilize the spectrum
efficiently.  Although grandfathering 24 GHz band equipment may cause added difficulty to the coordination
of existing systems, this should only be a problem along the service area boundaries and we believe that any
risk of harmful interference can be resolved by way of coordination among the licensees.  Furthermore, we
agree with Nortel and Teligent that requiring licensees to immediately replace existing equipment could
potentially disrupt service currently being provided to the public.  Finally, we believe that any interference
issues will be short-term in nature, and will be resolved once the grandfathered equipment has reached the end
of its useful life.  Thus, we will allow any equipment that is put in place by January 1, 2001 to be
grandfathered indefinitely, thereby allowing 24 GHz band operators to continue to utilize their recently
deployed equipment.  However, any equipment deployed after January 1, 2001, must comply with the technical
standards adopted in this proceeding.
71.    Additionally, Teligent requests that 24 GHz band equipment be subject to our verification
procedures, rather than certification.  Currently, Section 101.139 of the Commission's Rules requires that
point-to-multipoint transmitters in the 39 GHz band, LMDS and DEMS must be a type which has been
certified by the Commission, however, most other point-to-point microwave transmitters are subject to the less
onerous verification procedure.  Teligent indicates that utilizing the verification procedure promotes the public
interest by allowing faster implementation of new technology.  We note that this matter is being addressed in
the Part 101 proceeding, and should be decided in that proceeding.
               1.   Efficiency Standard
72.    Section 101.141 of the Commission's Rules requires that 24 GHz band DEMS licensees meet a
spectral efficiency standard.  However, in this proceeding we have altered the nature of 24 GHz Service to
allow more flexibility in system design and to license on a geographic basis.  Moreover, consistent with our
actions in other proceedings, we believe it unwise to adopt technical rules that will require updating as
technology advances.  Therefore, we eliminate the 24 GHz band from the spectral efficiency standard.  We
believe that this will provide 24 GHz band licensees with the necessary maximum flexibility to respond to
market forces.
               1.   Antenna Directivity
73.    Comsearch requests that we amend the directional antenna standards of Section 101.115 of our
Rules to allow for use of one foot diameter parabolic antennas.  Teligent requests that the user station antenna
directivity requirement in Section 101.115 be eliminated.
74.    Based on our review of the record in this proceeding and the proposals presented by Comsearch
and Teligent , we conclude that our rules regarding antenna directivity should be modified.  In this regard, we
will amend the directional antenna standards of Section 101.115 of our Rules to allow for use of one foot
diameter parabolic antennas.  We will effectuate this amendment by changing the antenna beamwidth value
to 2.8 degrees instead of 2.2 and increasing the pattern to require a front-to-back ratio of 45 dB for Category
B and 60 dB for Category A instead of 36 dB and 55 dB, respectively.  Although we are not persuaded that
the nodal station and user station antenna directivity requirement in Section 101.115 should be eliminated, we
are convinced that it is unnecessary to require 24 GHz band licensees to comply with these standards in every
instance.  However, we decline to eliminate the requirement entirely, because it provides an established
technical standard for the Commission to apply in the event that licensees are unable to resolve a coordination
conflict.  One such instance where we believe that the antenna standards may be needed is within 56 km of the
U.S./Canadian border where 24 GHz band licensees are required to comply with an international coordination
agreement.  Another example is near the service area boundaries where coordination with other licensees takes
place.  Also, we will require the use of higher performance antennas where interference problems can be
resolved by the use of such antennas. This decision will grant 24 GHz band licensees greater flexibility by
allowing point-to-point, point-to-multipoint, and/or multipoint-to-multipoint service systems usage.  We note,
however, that allowing both the nodal and user stations to utilize non-directional antennas may result in more
complicated and less effective frequency coordination.  Licensees are expected to resolve such difficulties with
sharing agreements.
               1.   Licensing and Coordination
75.    As stated above, commenters agree with our proposal to eliminate individual licensing for nodal
stations and adopt geographic area licensing in the 24 GHz band with a frequency coordination requirement.
However, we note that most of these commenters believe that the coordination requirements we proposed
require better clarification or delineation.  For instance, Teligent comments that, while it agrees that an 80 km
coordination distance is too large, use of a specified coordination distance is an effective method of
coordination and consistent with operations in other frequency bands.  Teligent also suggests that a
coordination distance be developed by an industry body, such as NSMA, and that, in the interim, 40 km would
suffice.  Other commenters request a more precise definition for the line-of-sight coordination requirement or
an alternative coordination requirement.  These commenters recommend that an alternative coordination
requirement might include one or a possible combination of distance, line-of-sight, power flux density (PFD)
limit, and radius requirements.  Finally, Comsearch requests that we clarify whether both nodal and user
stations are to be coordinated or only nodal stations.  It also requests clarification of any filing requirements
for station modification and deletion.
76.    Based upon or review of the record in this proceeding, we conclude that we should eliminate
individual licensing for nodal and user stations and adopt a more precise definition for the line of sight
coordination requirement by requiring coordination of both nodal and user stations when they have optical line
of sight into other licensees' areas or other licensees' facilities within the same geographic area.  In addition,
we note that the U.S. and Canada have now agreed on the coordination parameters between the countries in
the border areas.  The first step to coordination in this agreement is for the two parties to form a mutual
agreement on the use of their systems.  If this fails, the agreement specifies PFD levels which trigger
coordination for stations which are within 56 km of the border and have an optical line-of-sight into the
adjacent area.  The agreement considers mitigating techniques such as antenna discrimination, polarization,
frequency offset, shielding, site selection and power control to facilitate coordination of systems.  We are aware
that for different areas of the country the rainfall varies as well as the terrain and foliage which affect shielding.
Rather than specify a distance such as 40 km which Teligent suggested, we believe the most flexible approach
is to recognize the variations of each unique area and to allow the relevant licensees to mutually resolve their
coordination problems with as little input from the Commission as possible.
77.    The Canadian Agreement specifies that no coordination is required if the PFD at the boundary is
 114 dBW/m2 in any 1 MHz.  It also specifies that entities can deploy equipment subject to successful
coordination between affected licensees with PFDs up to  94 dBW/m2 in any 1 MHz.  If powers exceed a PFD
of to  94 dBW/m2 in any 1 MHz, the deployment is subject to the consent of the licensee(s) in the adjacent
service area.  Therefore, we will use the PFD levels established in the Canadian Agreement as recommended
guidelines for coordination between U.S. licensees, but not require them to be met (other than for Canadian
coordination) to allow for the licensees in each area to establish values more in line with the systems and
techniques they deploy.  In this connection, we note that licensees will have varying requirements based on their
specific system architecture, the local terrain, and the rainfall characteristics of their region.  Several
commenters suggested that the industry, through a group such as NSMA, study the appropriate PFD levels and
determine a standard for coordination.  While we endorse this industry study approach in the future, we believe
that it would be inappropriate at this time to specify, by rule, the PFD values at the EA boundary for which
coordination is required between U.S. licensees.  We believe that ultimately the licensees need to discuss their
systems with each other to optimize the usage in each area, and develop sharing agreements, and we will only
specify recommended PFD guidelines to be followed when a licensee's antenna has optical line-of-sight into
another area and is within 56 km.
               1.   RF Safety
78.    In the NPRM, we tentatively concluded that routine environmental evaluations for RF exposure
should be required in the case of fixed operations, including base stations, when the effective radiated power
(ERP) is greater than 1,000 watts.  We received no comments on this proposal.  Therefore, for the reasons
discussed in the NPRM, we will require licensees and manufacturers to be subject to the RF radiation exposure
requirements specified in Sections 1.1307 (b) of the Commission's Rules.  We will modify this rule
accordingly to apply to user and nodal stations.
          A.   Competitive Bidding Procedures
               1.   Statutory Requirements
79.    Background. The Balanced Budget Act of 1997 amended Section 309(j) of the Act to require the
Commission to award mutually exclusive applications for initial licenses or permits using competitive bidding
procedures, with very limited exceptions.  Based on our tentative conclusion that it would serve the public
interest to implement a geographic area licensing approach, we tentatively concluded in the NPRM that
mutually exclusive applications for initial licenses in the 24 GHz band must be resolved through competitive
bidding.  In the NPRM we also stated that in determining whether to resolve mutually exclusive applications
for licenses in the 24 GHz band through competitive bidding, we intend to adhere to any conclusions we reach
in the Balanced Budget Act proceeding regarding the scope of our auction authority.
80.    Discussion.  In light of our decision to adopt a geographic area licensing approach based on EAs
for the 24 GHz band, under which mutually exclusive applications may be filed, we conclude that mutually
exclusive initial applications for the 24 GHz band must be resolved through competitive bidding.   We note
that we have not yet reached any conclusions regarding the issues raised in the Balanced Budget Act proceeding
related to Section 309(j)(6)(E).  However, we find no basis in the record for considering an approach to
licensing the 24 GHz band other than geographic area licensing.  While certain commenters have suggested the
use of geographic areas other than EAs, none has argued that we should use a licensing scheme that would
preclude the filing of mutually exclusive applications.  For services in which we have found that a licensing
approach based on geographic area licensing serves the public interest, we have assigned licenses through
competitive bidding.  This approach is consistent with other Commission decisions made since the enactment
of the Balanced Budget Act.
               1.   Incorporation by Reference of Part 1 Standardized Auction Rules
81.    Background.  In the NPRM we proposed to conduct the auction for initial licenses in the 24 GHz
band in conformity with the general competitive bidding rules set forth in Part 1, Subpart Q, of the
Commission's rules, and substantially consistent with the bidding procedures that have been employed in
previous Commission auctions.  Specifically, we proposed to employ the Part 1 rules governing designated
entities, application issues, payment issues, competitive bidding design, procedure and timing issues, and
collusion.
82.    Discussion.  We adopt our proposal to conduct the auction for initial licenses in the 24 GHz band
in conformity with the general competitive bidding rules set forth in Part 1, Subpart Q, of the Commission's
Rules, unless otherwise provided herein.  This decision is consistent with our ongoing effort to streamline our
general competitive bidding rules for all auctionable services, increase the efficiency of the competitive bidding
process, and provide more guidance to auction participants.  Moreover, all commenters who addressed the issue
agree that use of the Part 1 competitive bidding rules to award licenses for the 24 GHz band is consistent with
statutory requirements and will be beneficial in that it will lead to the rapid deployment of service in the
24 GHz band.  Our application of the Part 1 rules to the 24 GHz band will include any amendments that may
be adopted in the ongoing Part 1 proceeding.
83.    Teligent requests that we auction licenses in the 24 GHz band using the simultaneous multiple
round auction design and not implement real time bidding for this auction.  Teligent is concerned that the
implementation of real time bidding may delay the auction due to the necessity for development and testing of
new software.  Consistent with the Balanced Budget Act and current practice, the Bureau will seek comment
on matters such as auction design in a public notice prior to the auction.
84.    Teligent also recommends that the Commission implement the shortest period allowable for the
filing of petitions to deny against long-form applications following the auction. Section 1.2108(b) provides
that the Commission shall not grant a license less than seven days after public notice that long-form
applications have been accepted for filing and that, in all cases, the period for filing petitions to deny such
applications shall be no shorter than five days.
85.    We will adopt a ten-day period for filing petitions to deny against long-form applications.
Although we have the authority to reduce the filing period to five days, we find that a ten-day filing period
serves the public interest by providing parties, including small businesses, more flexibility in challenging license
awards than a five-day period.  Nonetheless, we delegate to the Bureau the discretion to implement a five-day
period in exigent circumstances.
               1.   Provisions for Designated Entities
                    a.   Small Business Definitions and Bidding Credits
86.    Background.  In the NPRM, we observed that the capital costs of operational facilities in the
24 GHz band are likely to vary widely.  Accordingly, we sought to adopt small business size standards that
would afford licensees substantial flexibility.  We proposed to adopt the definitions the Commission adopted
for broadband PCS for "small" and "very small" businesses, which the Commission also had adopted for
2.3 GHz and 39 GHz applicants.  Thus, we proposed to define small businesses as entities with average annual
gross revenues not to exceed $40 million for the preceding three years and very small businesses as entities with
average annual gross revenues not to exceed $15 million for the preceding three years.  We further proposed
to provide a 15 percent bidding credit to small businesses and a 25 percent bidding credit to very small
businesses.  In addition, we sought comment on whether specific provisions should be adopted with respect
to rural telephone companies.
87.    Discussion.  We will modify our proposal and adopt three small business definitions.  Two of the
commenters, PCIA and RTG, state that, in light of our proposal to use EAs, the proposed two-tiered system
is not sufficient to allow small businesses the opportunity to participate at auction.   Because the capital costs
of operational facilities in the 24 GHz band are likely to vary widely, we believe that the use of three small
business definitions will be useful in promoting opportunities for a wide variety of applicants in the 24 GHz
band.  Accordingly, we will define a very small business as an entity with average annual gross revenues not
to exceed $3 million for the preceding three years, a small business as an entity with average annual gross
revenues not to exceed $15 million for the preceding three years, and an entrepreneur as an entity with average
annual gross revenues not to exceed $40 million for the preceding three years.
88.    Some of the commenters are concerned that our proposed level of bidding credits is too low.  PCIA
and RTG request that we consider the three levels of bidding credits that were provided to participants in the
LMDS auction.  Teligent supports bidding credits mirroring those offered for 39 GHz.  While we agree with
PCIA and RTG that we should adopt three-tiered bidding credits, we decline to adopt the higher level of credits
provided to participants in the LMDS auction.  We will adopt the bidding credits provided in the Part 1 general
competitive bidding rules.  Thus, very small businesses will receive a bidding credit of 35 percent, small
businesses will receive a bidding credit of 25 percent, and entrepreneurs will receive a bidding credit of 15
percent.
89.    In the Part 1 Third Report and Order, the Commission established a standard schedule of bidding
credits for small businesses.  While these bidding credits are higher than some previously adopted for specific
services, we concluded in the Part 1 Third Report and Order that, based on our auction experience and the
fact that we have decided to suspend the use of installment payments, the schedule adopted would provide
adequate opportunities for small businesses to participate in spectrum auctions.  We find that it is not
necessary to depart from the Part 1 schedule here by providing the same levels of bidding credits that were
offered for LMDS.  The higher LMDS bidding credits were established prior to our adoption of the Part 1
bidding credits, at a time when we were beginning to reexamine our installment payments plans and were
concerned about compensating for the decision not to offer installment payments to LMDS licensees.  Based
on our subsequent experience, we believe that the levels of bidding credits in the Part 1 schedule are sufficient
to promote the participation of small businesses in the 24 GHz band.
90.    Teligent stresses that bidding credits should be uniform among competing services and that the
credits offered for the 39 GHz band should be adopted for the 24 GHz band because of similarities between
the bands and the need to eliminate any regulatory disparities that may lead to marketplace distortions.  We
are not persuaded by Teligent's argument.  Our proposal of bidding credits in the 39 GHz band predates the
effective date of the Part 1 amendments.  As we noted above, our general competitive bidding rules increase
the efficiency of the competitive bidding process and provide more guidance to auction participants.  We also
note that there are many variables affecting auction behavior of bidders.  While differing credit levels result
in differing trade-offs of the interests of designated entities and non-designated entities within each auction, it
is not clear that differing credit levels disadvantage winning bidders in one auction as a whole relative to the
winning bidders of another auction.  Success of a company after licensing will not depend on the bidding credit
initially afforded, but upon the ability to keep up with ever changing marketplace conditions and needs.  Thus,
we are not persuaded at this time that it would be in the public interest to deviate from the general competitive
bidding rules set forth in Part 1, subpart Q, of the Commission's rules.
91.    RTG suggests that the Commission should provide bidding credits to rural telephone companies
irrespective of such companies' gross revenues.  Teligent, however, opposes RTG's suggestion, arguing that
RTG has presented no sound basis for additional bidding credits for rural telephone companies and that the
application of such bidding credits would distort the free and efficient operation of the market.  We are not
persuaded by RTG's suggestion that the Commission should provide special bidding credits for rural telephone
companies in order to meet its obligation under Section 309(j) to ensure that rural telephone companies have
the opportunity to participate in spectrum-based services.  The record in this proceeding does not provide
sufficient evidence that large rural telephone companies encounter barriers to capital formation comparable
to those faced by other designated entities.  Moreover, the vast majority of rural telephone companies that have
participated in the Commission's auctions to date have identified themselves as small businesses and have
qualified for bidding credits on that basis.   Thus, we conclude that small business bidding credits are sufficient
to ensure that rural telephone companies have opportunities to participate in the 24 GHz auction.  However,
if in future proceedings a sufficient record can be adduced, we may adopt incentives including bidding credits
to promote the deployment of wireless telecommunications services to areas with little or no access to
telecommunication services.
92.    Further, we remain committed to meeting the statutory objectives of promoting economic
opportunity and competition, avoiding excessive concentration of licenses, and ensuring access to new and
innovative technologies by disseminating licenses among a wide variety of applicants, including small
businesses, rural telephone companies, and businesses owned by members of minority groups and women.  In
addition to helping rural telephone companies, we believe the bidding credits we adopt here for small businesses
will assist in meeting these objectives because many minority- and women-owned entities are small businesses
and will therefore qualify for these special provisions.  We note too that the Commission's Office of
Communications Business Opportunities has initiated several studies to gather information regarding barriers
to entry faced by minority- and women-owned firms that wish to participate, or have participated, in
Commission auctions.  In addition, we will continue to track the rate of participation in our auctions by
minority- and women-owned firms and evaluate this information with other data gathered to determine whether
provisions to promote participation by minorities and women can satisfy judicial scrutiny.  If a sufficient
record can be established, it may be appropriate to consider race- and gender-based auction provisions at that
time.
                    a.   Attribution of Gross Revenues of Investors and Affiliates
93.    Background.  In the NPRM, in the context of proposing the use of the Part 1 general competitive
bidding rules, we noted that we have sought comment on attribution rules in the Second Further Notice of
Proposed Rule Making in the Part 1 proceeding.
94.    Discussion.  We will adopt attribution rules for the 24 GHz band that are consistent with the
Commission's proposal in the Part 1 Second Further Notice of Proposed Rule Making, wherein we proposed
a "controlling interest" standard as the general attribution rule for all future auctions.  Under this standard,
we will attribute to the applicant the gross revenues of its controlling interests and their affiliates in assessing
whether the applicant is qualified to take advantage of our small business provisions.
95.    A "controlling interest" includes individuals or entities, or groups of individuals or entities, that
have control of the applicant under the principles of either de jure or de facto control.  De jure control is
typically evidenced by the holding of more than 50 percent of the voting stock of a corporation or, in the case
of a partnership, general partnership interests.  De facto control is determined on a case-by-case basis; our
analysis includes the criteria set forth in Ellis Thompson.
96.    The rule we adopt here provides specific guidance on the calculation of various types of ownership
interests.  For purposes of calculating equity held in an applicant, the definition provides for full dilution of
certain stock interests, warrants and convertible debentures.  In addition, the definition provides for attribution
of partnership and other ownership interests, including stock interests held in trust, non-voting stock and
indirect ownership through intervening corporations.  When an applicant cannot identify controlling interests
under the definition, the revenues of all interest holders in the applicant and their affiliates will be attributed.
For example, if a company is owned by four entities, each of which has 25 percent voting equity, and no
shareholders' agreement or voting trust gives any one of them control of the company, the revenues of all four
entities must be attributed to the applicant.  Treating such a corporation in this way is similar to our treatment
of a general partnership all general partners are considered to have a controlling interest.
97.    Our intent is to provide flexibility that will enable legitimate small businesses to attract passive
financing in a highly competitive and evolving telecommunications marketplace. At the same time, we believe
that this controlling interest threshold will function effectively to ensure that only those entities truly meriting
small business status are eligible for small business provisions.  In particular, we believe that the de jure and
de facto concepts of control used to determine controlling interests in an applicant and the application of our
affiliation rules will effectively prevent larger firms from illegitimately seeking status as a small business.
98.    Wireless One requests that we clarify that for the purpose of determining eligibility for bidding
credits, personal income is not to be included in calculating the aggregate gross revenues of the applicant, its
affiliates and controlling principals.  As Wireless One points out, we have previously stated that the personal
income of an individual is part of personal net worth and thus not attributable.  However, we note that
operation of our definition of "affiliate" will cause all affiliates of a controlling interest to be affiliates of the
applicant.  Thus, although we do not attribute the personal income of an individual with a controlling interest
in an applicant, if this individual has a controlling interest in another entity our affiliation rules would make
attributable to the applicant the gross revenues of that entity.
     XCIX.     PROCEDURAL MATTERS
100.   Paperwork Reduction Analysis.  This Report and Order contains either a new or modified
information collection.  As part of its continuing effort to reduce paperwork burdens, the Commission invites the
general public and the Office of Management and Budget (OMB) to take this opportunity to comment on revision
to the information collections contained in the Report and Order.  As required by the Paperwork Reduction Act
of 1995, Pub. L. No. 104-13 public comments on the information collections contained in the Report and Order
are due 30 days after publication of the summary of the Report and Order in the Federal Register.  Comments on
the modified and proposed information collections contained in the Report and Order should address:  (a) whether
the collection of information is necessary for the proper performance of the functions of the Commission, including
whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways
to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the
collection of information on the respondents, including the use of automated collection techniques or other forms of
information technology.  These comments should be submitted to Judy Boley, Federal Communications Commission,
Room 1-C804, 445 12th Street, S.W., Washington, D.C. 20554, or via the Internet to jboley@fcc.gov.
Furthermore, a copy of any such comments should be submitted to Virginia Huth, OMB Desk Officer, 10236
NEOB, 725 17th Street, N.W., Washington, D.C. 20503.
Regulatory Flexibility Act
101.   As required by Section 604 of the Regulatory Flexibility Act ("RFA"), 5 U.S.C.  604 (1981),
we have prepared a Final Regulatory Flexibility Analysis ("FRFA") of the expected impact on small entities
by the policies and rules adopted in this Report and Order.  The FRFA is contained in Appendix B.
Further Information
102.   For further information regarding this Report and Order, contact Catherine Fox, Michael
Pollak, Shellie Blakeney or Paul Moon, Wireless Telecommunications Bureau, Public Safety and Private
Wireless Division, Policy and Rules Branch, at (202) 418-0680 (voice), (202) 418-7233 (TTY); or Nese
Guendelsberger of the Auctions and Industry Analysis Division, Wireless Telecommunications Bureau at (202)
418-0660 (voice), (202) 418-7233 (TTY).
     CIII.     ORDERING CLAUSES
104.   Accordingly, IT IS ORDERED that the actions of the Commission herein ARE TAKEN
pursuant to Sections 4(i), 257, 303, 309(j) of the Communications Act of 1934, as amended, 47 U.S.C. 
154(i), 257, 303, 309(j).
105.   Accordingly, IT IS ORDERED that Parts 1, 2, 87 and 101 of the Commission's Rules ARE
AMENDED as set forth in Appendix C, effective sixty days after their publication in the Federal Register,
following OMB approval.  If OMB approval is not issued within sixty days after publication of a summary
of this Report and Order in the Federal Register, a notice shall be published in the Federal Register specifying
a revised effective date.
106.   IT IS FURTHER ORDERED pursuant to Section 4(i) of the Communications Act of 1934,
as amended, 47 U.S.C.  154(i), that the Commission's Consumer Information Bureau, Reference Information
Center, SHALL SEND a copy of this Report and Order, including the Final Regulatory Flexibility Analysis,
to the Chief Counsel for Advocacy of the Small Business Administration.
                              FEDERAL COMMUNICATIONS COMMISSION
                              Magalie Roman Salas
                              Secretary
                                                           APPENDIX A
                       LIST OF PLEADINGS
The following documents were filed in response to the Notice of Proposed Rulemaking:
     Amendments to Parts 1, 2 and 101 of the Commission's Rules to License Fixed Services at
     24 GHz, Notice of Proposed Rulemaking, WT Docket No. 99-327, 14 FCC Rcd. 19263.
  LIST OF PARTIES RESPONDING TO NOTICE OF PROPOSED RULEMAKING
Comments
Comsearch
DIRECTV Enterprises, Inc. (DIRECTV)
Ensemble Communications, Inc. (Ensemble)
Fixed Wireless Communications Coalition (FWCC)
Nortel Networks, Inc. (Nortel)
Office of Advocacy, U.S. Small Business Administration (SBA)
Personal Communications Industry Association (PCIA)
Rural Telecommunications Group (RTG)
Teligent, Inc. (Teligent)
Wireless One Holding Company (Wireless One)
Reply Comments
Teligent, Inc. (Teligent)
National Telephone Cooperative Association (NTCA)
                           APPENDIX B
             FINAL REGULATORY FLEXIBILITY ANALYSIS
     As required by the Regulatory Flexibility Act ("RFA"), an Initial Regulatory Flexibility Analysis
("IRFA") was incorporated in Appendix A of the Notice of Proposed Rulemaking (NPRM) issued in this
proceeding.  The Commission sought written public comment on the proposals in the NPRM, including
comment on the IRFA.  No comments were filed in direct response to the IRFA.  This Final Regulatory
Flexibility Analysis ("FRFA") conforms to the RFA.
I.  Need for, and Objectives of, the Report and Order
1    In the Report and Order we adopt rules for licensing and operation of the 24.25-24.45 GHz and 25.05-
25.25 GHz bands.  In addition, the Commission adopts competitive bidding rules to select among new licensees
for this band.  We amend Parts 1, 2, 87 and 101 of the Commission's Rules and expect such amendments to
promote the effective use of the 24 GHz band and to accommodate deployment of point-to-point, point-to-
multipoint, and multipoint-to-multipoint fixed wireless technology at 24 GHz.  The rule changes we adopt
today establish a flexible regulatory and licensing framework, which will enhance opportunities to provide a
broadband wireless service, foster effective competition, and further our efforts for consistent rule application
regarding broadband wireless services.
II.  Summary of Significant Issues Raised by the Public Comments in Response to the IRFA
2.     No comments were filed in direct response to the IRFA.  However, as described in Section V, we
have taken into account all comments submitted generally by small entities.
III.  Description and Estimate of the Number of Small Entities to Which the Rules Will Apply
3.     The RFA directs agencies to provide a description of, and, where feasible, an estimate of the
number of small entities that may be affected by the proposed rules, if adopted.  The RFA defines the term
"small entity" as having the same meaning as the terms "small business," "small organization," and "small
governmental jurisdiction."  In addition, the term "small business" has the same meaning as the term "small
business concern" under the Small Business Act.  A small business concern is one which:  (1) is independently
owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria
established by the Small Business Administration (SBA).  A small organization is generally "any not-for-profit
enterprise which is independently owned and operated and is not dominant in its field."  Nationwide, as of
1992, there were approximately 275,801 small organizations.  "Small governmental jurisdiction" generally
means "governments of cities, counties, towns, townships, villages, school districts, or special districts, with
a population of less than 50,000."  As of 1992, there were approximately 85,006 such jurisdictions in the
United States.  This number includes 38,978 counties, cities, and towns; of these, 37,566, or ninety-six
percent, have populations of fewer than 50,000.  The Census Bureau estimates that this ratio is approximately
accurate for all governmental entities.  Thus, of the 85,006 governmental entities, we estimate that 81,600
(ninety-one percent) are small entities.
4.     Incumbent Licensees.  The rules we are adopting today will affect incumbent licensees who were
relocated to the 24 GHz band from the 18 GHz band, and applicants who wish to provide services in the
24 GHz band.  The Commission has not developed a definition of small entities applicable to licensees in the
24 GHz band.  Therefore, the applicable definition of small entity is the definition under the SBA rules for the
radiotelephone industry that provides that a small entity is a radiotelephone company employing fewer than
1,500 persons.  The 1992 Census of Transportation, Communications, and Utilities, conducted by the Bureau
of the Census, which is the most recent information available, shows that only 12 radiotelephone firms out of
a total of 1,178 such firms that operated during 1992 had 1,000 or more employees.  This information
notwithstanding, we believe that there are only two licensees in the 24 GHz band that were relocated from the
18 GHz band, Teligent and TRW, Inc.  It is our understanding that Teligent and its related companies have
less than 1,500 employees, though this may change in the future.  However, TRW is not a small entity.
Therefore, only one incumbent licensee in the 24 GHz band is a small business entity.
5.     New Licensees.  The proposals also affect potential new licensees on the 24 GHz band.  Pursuant
to 47 C.F.R.  24.720(b), the Commission has defined "small business" for Blocks C and F broadband PCS
licensees as firms that had average gross revenues of less than $40 million in the three previous calendar years.
This regulation defining "small business" in the context of broadband PCS auctions has been approved by the
SBA.  With respect to new applicants in the 24 GHz band, we shall use this definition of "small business"
and apply it to the 24 GHz band under the name "entrepreneur."  With regard to "small business," we shall
adopt the definition of "very small business" used for 39 GHz licenses and PCS C and F block licenses:
businesses with average annual gross revenues for the three preceding years not in excess of $15 million.
Finally, "very small business" in the 24 GHz band shall be defined as an entity with average gross revenues
not to exceed $3 million for the preceding three years.
6.     The Commission will not know how many licensees will be small or very small businesses until
the auction, if required, is held.  Even after that, the Commission will not know how many licensees will
partition their license areas or disaggregate their spectrum blocks, if partitioning and disaggregation are
allowed.
IV.  Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements
7.     This Report and Order adopts rules that will entail reporting, recordkeeping, and/or third-party
consultation.  However, the Commission believes that these requirements are the minimum needed.  By this
Report and Order, we require licensees to notify the Commission within 30 days of a change in regulatory
status between common carrier and/or non-common carrier.  We also require licensees to substantiate their
renewal expectancies with information demonstrating substantial service.  In addition, because we consider
partitioning and disaggregation to be a form of license assignment, we require such action to receive
Commission approval via application for assignment on FCC Form 603.  With regard to alien ownership, we
require licensees to amend their FCC Form 602 to reflect any changes in foreign ownership information,
together with the initial information required by FCC Form 601.
V.  Steps Taken To Minimize Significant Economic Impact on Small Entities, and Significant
Alternatives Considered
8.     The RFA requires an agency to describe any significant alternatives that it has considered in
reaching its proposed approach, which may include the following four alternatives:  (1) the establishment of
differing compliance or reporting requirements or timetables that take into account the resources available to
small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements
under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption
from coverage of the rule, or any part thereof, for small entities.
9.     Geographic Area Licensing.  In the NPRM, we noted that the Commission originally used
Standard Metropolitan Statistical Areas (SMSA) to license the DEMS service, which failed to include rural
communities because SMSAs are too large.  We then proposed to reduce the licensing service area in order to:
(1) include rural communities; (2) maximize the opportunities for the dissemination of 24 GHz licenses among
a wide array of entities; and (3) facilitate efficient use of this spectrum.  While adopting Economic Areas (EAs)
in this Report and Order, we cite to our experience with the 39 GHz auction in which the majority of small,
very small and rural qualified bidders won licenses.  We also note that our decision to offer flexible
partitioning and disaggregation/aggregation will speed service to rural areas and encourage the participation
of smaller entities at auction.  In addition, we adopt flexible bidding credits for smaller entities, while noting
that small entities may further form bidding consortiums to prevail at auction.  In sum, we believe that
adopting EAs for licensing this service will serve the public interest best, in light of the overall changes we are
making here to specifically benefit small entities.
10.    Changes in Regulatory Status.  In this Report and Order, we authorize 24 GHz licensees to
provide common carrier service, non-common carrier service, or both under a single license.  We also adopt
our proposal in the NPRM to require licensees to notify us within 30 days of such a change in regulatory status.
However, we minimize the reporting burden by declining to require licensees to obtain Commission
authorization prior to a change in regulatory status.  In addition, we decline to require that the licensees detail
the specific services they seek to provide.  This is consistent with our streamlined application process, and it
serves to simplify the reporting requirements for small entities.
11.    Renewal Expectancy.  In this Report and Order, we adopt a ten-year license term in conjunction
with a renewal expectancy based on substantial service.  In order to demonstrate substantial service, licensees
must provide the Commission with a description of geographic coverage and population served or links
installed, and a description of how the service complies with the substantial service requirement.  In addition,
licensees must submit copies of any violations or proceedings that relate to their renewal expectancy.  While
taking into account this burden on small entities, we note that such recordkeeping ensures that the 24 GHz band
is not "warehoused" or abused to the preclusion of small business opportunities.  In this context, we also note
that we declined here to adopt a license term in excess of ten years, in order to afford more opportunities for
entities, including small businesses, to capture licenses that fail to meet substantial service.
12.    Aggregation, Disaggregation and Partitioning.  In order to overcome entry barriers for smaller
entities, we adopt here flexible partitioning and disaggregation rules.  Parties to partitioning and disaggregation
agreements may negotiate whether one party or both will be responsible for demonstrating fulfillment of
pertaining construction requirements.  Parties may also combine partitioning and disaggregation agreements.
Any such agreements are treated, however, as a form of license assignment and therefore require Commission
approval via filing FCC Form 603.  Licensees who received bidding credits at auction and who subsequently
partition or disaggregate are also subject to the unjust enrichment provision contained in our Rules.  We
believe that these recordkeeping and unjust enrichment restrictions are the minimum needed, when weighed
against the significant benefits to small entities that result from the flexible approach we are adopting here.
13.    Foreign Ownership Restrictions.  In order to supervise effectively the compliance of 24 GHz
licensees with regard to our alien ownership restrictions, we require both common carrier and non-common
carrier licensees in the 24 GHz band to provide the alien ownership information requested in FCC Form 601,
as well as amendments in FCC Form 602 to reflect any changes in foreign ownership information.  This
enforcement is a mutual benefit to all licensees and a minimal reporting burden.
14.    Competitive Bidding Procedures.  In the Report and Order, we adopt a ten-day period for filing
petitions to deny long-form applications.  We decline to adopt a five-day period in order to give small
businesses more flexibility in challenging license awards.  We also adopt a third level of small business bidding
credits in addition to those proposed in the NPRM, in respect of the fact that the capital costs of operating
facilities in the 24 GHz band will vary widely.  Finally, we adopt attribution rules based on a "controlling
interest" standard to determine eligibility for our small business provisions. We believe these rules, along with
our affiliation rules, will prevent larger firms from illegitimately seeking status as a small business.  All of these
decisions regarding competitive bidding procedures will work to the benefit of small entities.
     Report to Congress:  The Commission will send a copy of this Report and Order, including this
FRFA, in a report to be sent to Congress pursuant to SBREFA, 5 U.S.C.  801(a)(1)(A).  In addition, the
Commission will send a copy of the Report and Order, including this FRFA, to the Chief Counsel for
Advocacy of the Small Business Administration.  A copy of the Report and Order and this FRFA
(or summaries thereof) will also be published in the Federal Register.  See 5 U.S.C.  604(b).
                           APPENDIX C
                FINAL RULES FOR REPORT AND ORDER
Parts 1, 2, 87, and 101 of Title 47 of the Code of Federal Regulations are amended as follows:
PART 1   PRACTICE AND PROCEDURE
1.  The authority citation for Part 1 continues to read as follows:
AUTHORITY:  47 U.S.C. sections 151, 154, 303, and 309(j) unless otherwise noted.
2.  The entry in the Table in Section 1.1307(b)(1) for Local Multipoint Distribution Service is amended to
add "24 GHz Service" after every occurrence of LMDS, to read as follows:
 1.1307  Actions which may have a significant environmental effect, for which Environmental
Assessments (EAs) must be prepared.
* * * * *
     (b)  * * *
     (1)  * * *
TABLE 1   TRANSMITTERS, FACILITIES AND OPERATIONS SUBJECT TO ROUTINE
ENVIRONMENTAL EVALUATION
Service (title 47 CFR rule part)
Evaluation required if:
* * *
* * *
Local Multipoint Distribution Service (subpart L of part 101)
and 24 GHz (subpart G of part 101).
Non-building-mounted antennas:  height above ground level
to lowest point of antenna < 10 m and power > 1640 W EIRP
Building-mounted antennas:  power > 1640 W EIRP
LMDS and 24 GHz Service licensees are required to attach a
label to subscriber transceiver antennas that:
(1) provides adequate notice regarding potential
radiofrequency safety hazards, e.g., information regarding the
safe minimum separation distance required between users
and transceiver antennas; and
(2) references the applicable FCC-adopted limits for radio-
frequency exposure specified in  1.1310 of this chapter
* * * * *
PART 2   FREQUENCY ALLOCATIONS AND RADIO TREATY MATTERS; GENERAL
RULES AND REGULATIONS
3.  The authority citation for Part 2 continues to read as follows:
AUTHORITY:  47 U.S.C. 154, 302, 303, 307, 336, and 337, unless otherwise noted.
4.  Section 2.106, the Table of Frequency Allocations, is amended by revising pages 71 and 72 of the
Table.
The revisions read as follows:
 2.106  Table of Frequency Allocations.
* * * * *
                                           22.5-27.5 GHz (SHF)
                                                                                     Page 71
                                     International Table
                                    United States Table
                                      FCC Rule Part(s)
                                          Region 1
                                          Region 2
                                          Region 3
                                     Federal Government
                                   Non-Federal Government
                                         22.5-22.55
                                            FIXED
                                           MOBILE
                                         22.5-22.55
                                            FIXED
                                           MOBILE
                                            US211
                                         22.55-23.55
                                            FIXED
                                       INTER-SATELLITE
                                           MOBILE
                                           S5.149
                                         22.55-23.55
                                            FIXED
                                       INTER-SATELLITE
                                           MOBILE
                                        S5.149 US278
                                          Satellite
                                     Communications (25)
                                    Fixed Microwave (101)
                                         23.55-23.6
                                            FIXED
                                           MOBILE
                                         23.55-23.6
                                            FIXED
                                           MOBILE
                                    Fixed Microwave (101)
                                           23.6-24
                            EARTH EXPLORATION-SATELLITE (passive)
                                       RADIO ASTRONOMY
                                  SPACE RESEARCH (passive)
                                           S5.340
                                           23.6-24
                            EARTH EXPLORATION-SATELLITE (passive)
                                    RADIO ASTRONOMY US74
                                  SPACE RESEARCH (passive)
                                            US246
                                          24-24.05
                                           AMATEUR
                                      AMATEUR-SATELLITE
                                           S5.150
                                          24-24.05
                                        S5.150 US211
                                          24-24.05
                                           AMATEUR
                                      AMATEUR-SATELLITE
                                        S5.150 US211
                                     ISM Equipment (18)
                                        Amateur (97)
                                         24.05-24.25
                                        RADIOLOCATION
                                           Amateur
                            Earth exploration-satellite (active)
                                           S5.150
                                         24.05-24.25
                                    RADIOLOCATION US110
                                             G59
                                 Earth exploration-satellite
                                           (active)
                                           S5.150
                                        24.05-24.25
                                     Radiolocation US110
                                           Amateur
                                 Earth exploration-satellite
                                           (active)
                                           S5.150
                                     ISM Equipment (18)
                                  Private Land Mobile (90)
                                        Amateur (97)
                                         24.25-24.45
                                            FIXED
                                         24.25-24.45
                                       RADIONAVIGATION
                                         24.25-24.45
                                       RADIONAVIGATION
                                            FIXED
                                           MOBILE
                                         24.25-24.45
                                        24.25-24.45
                                            FIXED
                                    Fixed Microwave (101)
                                               
                                         24.45-24.75
                                            FIXED
                                       INTER-SATELLITE
                                         24.45-24.65
                                       INTER-SATELLITE
                                       RADIONAVIGATION
                                           S5.533
                                         24.45-24.65
                                            FIXED
                                       INTER-SATELLITE
                                           MOBILE
                                       RADIONAVIGATION
                                           S5.533
                                         24.45-24.65
                                       INTER-SATELLITE
                                       RADIONAVIGATION
                                           S5.533
                                          Satellite
                                     Communications (25)
                                         24.65-24.75
                                       INTER-SATELLITE
                                     RADIOLOCATION-SAT-
                                   ELLITE (Earth-to-space)
                                         24.65-24.75
                                            FIXED
                                       INTER-SATELLITE
                                           MOBILE
                                        S5.533 S5.534
                                         24.65-24.75
                                       INTER-SATELLITE
                          RADIOLOCATION-SATELLITE (Earth-to-space)
                                         24.75-25.25
                                            FIXED
                                         24.75-25.25
                                       FIXED-SATELLITE
                                   (Earth-to-space) S5.535
                                         24.75-25.25
                                            FIXED
                                       FIXED-SATELLITE
                                   (Earth-to-space) S5.535
                                           MOBILE
                                         24.75-25.05
                                       RADIONAVIGATION
                                         24.75-25.05
                                       FIXED-SATELLITE
                                   (Earth-to-space) NG167
                                       RADIONAVIGATION
                                         Satellite
                                     Communications (25)
                                        Aviation (87)
                                           S5.534
                                         25.05-25.25
                                         25.05-25.25
                                       FIXED-SATELLITE
                                   (Earth-to-space)  NG167
                                            FIXED
                                         Satellite
                                     Communications (25)
                                    Fixed Microwave (101)
                                         25.25-25.5
                                            FIXED
                                   INTER-SATELLITE S5.536
                                           MOBILE
                Standard frequency and time signal-satellite (Earth-to-space)
                                         25.25-25.5
                                            FIXED
                                           MOBILE
                                Standard frequency and time
                                 signal-satellite (Earth-to-
                                            space)
                                          25.25-27
                                   Standard frequency and
                                time signal-satellite (Earth-
                                          to-space)
                                 Earth exploration-satellite
                                       (space-to-space)
                                    Note:  In its Manual,
                                  NTIA has added a primary
                                   inter-satellite service
                                   allocation to the band
                                   25.25-27.5 GHz, limited
                                 the use of this allocation
                                    by adopting footnote
                                   S5.536, and has changed
                                the directional indicator for
                                   the Earth exploration-
                                satellite service allocation
                                   in the band 25.5-27 GHz
                                   from space-to-space to
                                       space-to-Earth.
                                           25.5-27
                EARTH EXPLORATION-SATELLITE (space-to-Earth) S5.536A S5.536B
                                            FIXED
                                   INTER-SATELLITE S5.536
                                           MOBILE
                Standard frequency and time signal-satellite (Earth-to-space)
                                           25.5-27
                                            FIXED
                                           MOBILE
                                Standard frequency and time
                                 signal-satellite (Earth-to-
                                            space)
                                 Earth exploration-satellite
                                       (space-to-space)
                                           27-27.5
                                            FIXED
                                   INTER-SATELLITE S5.536
                                           MOBILE
                                           27-27.5
                                            FIXED
                              FIXED-SATELLITE (Earth-to-space)
                                INTER-SATELLITE S5.536 S5.537
                                           MOBILE
                                           27-27.5
                                            FIXED
                                           MOBILE
                                          27-27.5
                                 Earth exploration-satellite
                                       (space-to-space)
PART 87   AVIATION SERVICES
5.  Section 87.173(b), the Frequency Table, is amended as follows:
          Revise the radionavigation entry from 24,250-25,250 MHz to 24,750-25,050 MHz.
PART 101   FIXED MICROWAVE SERVICES
6.  The authority citation for Part 101 continues to read as follows:
AUTHORITY:  47 U.S.C.  154, 303, 309(j), unless otherwise noted.
7.  The subpart G in the table of contents is amended to read as follows:
24 GHz Service and Digital Electronic Message Service
8.  Section 101.1 is amended by inserting the words "24 GHz Service" between the words "carrier" and "and" in subsection
101.1(b).
9.  Section 101.3 is amended by adding a definition of 24 GHz Service and by changing the definition of Digital Electronic
Message Service to read as follows:
 101.3 Definitions
           As used in this part:
* * *
           Digital Electronic Message Service.  A two-way end-to-end fixed radio service utilizing digital termination
systems for the exchange of digital information in the frequency bands 10,550-10,680 MHz, 18,820-18,920 MHz,
and 19,160-19,260 MHz.  This service may also make use of point-to-point microwave facilities, satellite facilities
or other communications media to interconnect digital termination systems to comprise a network.
* * *
     Nodal station.  The central or controlling stations in a microwave radio system operating on point-
to-multipoint or multipoint-to-multipoint frequencies with one or more user stations or internodal links.
* * *
     24 GHz Service.  A fixed point-to-point, point-to-multipoint, and multipoint-to-multipoint radio
system in the 24.25-24.45 GHz band and in the 25.05-25.25 GHz band consisting of a fixed main (nodal)
station and a number of fixed user terminals.  This service may encompass any digital fixed service.
* * *
     User or subscriber station.  The station(s) in a microwave radio system operating at the users'
premises on point-to-multipoint or multipoint-to-multipoint frequencies and communicating with one or
more nodal stations.
* * * * *
10.  Section 101.21 is amended by inserting the words "and 24 GHz Service" after the words "Local
Multipoint Distribution Service" in subsection 101.21(g).
11.  Section 101.21 is amended by inserting the words "and 24 GHz Service" after the words "Local
Multipoint Distribution Service" in subsection 101.21(g).
12.  Section 101.45 is amended by adding the words "and in the 24 GHz Service" after the words "Local
Multipoint Distribution Service" in subsection 101.45(b).
13.  Section 101.61 is amended by adding the words "and in the 24 GHz Service" to the heading and by
inserting, at the end of the section, the sentence:  "This section also applies to 24 GHz licensees that are
licensed according to Economic Areas."
14.  Section 101.63 is amended by inserting the words "and in the 24 GHz Service" after the words "Local
Multipoint Distribution Service" in subsection 101.63(a).
15.  Section 101.101 is amended by changing the entry for 24,250-25,250 MHz in the table to read as
follows:
 101.101  Frequency availability.
Radio service
Frequency band (MHz)
Common
carrier
(Part 101)
Private radio
(Part 101)
Broadcast
auxiliary
(Part 74)
Other (Parts 15,
21, 22, 24, 25,
74, 78 & 100)
Notes
* * *
24,250-25,250
CC
OFS
* * *
* * * * *
16.  Section 101.105 is amended by deleting the words "and all point-to-multipoint channels in the 18 GHz
band" after the words "in the 10.6 GHz band" in subsection 101.105(c)(6).
17.  Section 101.109(c) is amended by adding footnote 7 to the bandwidth entry for 24, 250-25,250 MHz
and by revising footnote 7 to read as follows:
Frequency band (MHz)
Maximum authorized bandwidth
* * *
* * *
24,250 to 25,250
40 MHz 7
* * *
* * *
* * *
     7For channel block assignments in the 24,250-25,250 MHz and 38,600-40,000 MHz bands, the
authorized bandwidth is equivalent to an unpaired channel block assignment or to either half of a
symmetrical paired channel block assignment.  When adjacent channels are aggregated, equipment is
permitted to operate over the full channel block aggregation without restriction.
     Note to Footnote 7:  Unwanted emissions shall be suppressed at the aggregate channel block
edges based on the same roll-off rate as is specified for a single channel block in paragraph 101.111(a)(1)
or in paragraphs 101.111(a)(2)(ii) and (iii) of this chapter as appropriate.
18.  Section 101.111 is amended to add a new Section 101.111(a)(2)(iv) and to replace the paragraph in
101.111(a)(4) to read as follows:
 101.111  Emission Limitations.
* * * * *
     (a)(2)(iv)  The emission mask for 24 GHz Service used the equation in section (a)(2)(ii) above and
applies only to the edge of each channel, but not to subchannels established by licensees.  The value of P in
the equation is for the percentage removed from the carrier frequency and assumes that the carrier
frequency is the center of the actual bandwidth used.  The emission mask can be satisfied by locating a
carrier of the subchannel sufficiently far from the channel edges so that the emission levels of the mask are
satisfied.  The 24 GHz emission mask shall use a value B (bandwidth) of 40 MHz, for all cases even in the
case where a narrower subchannel is used (for instance the actual bandwidth is 10 MHz) and the mean
output power used in the calculation is the sum of the output power of a fully populated channel.
* * *
     (a)(4)  For DEMS channels in the 17,700-19,700 MHz band:
     (i)  * * *
* * * * *
19.  Section 101.115 is amended by revising the entries for "24,250 to 25,250" and footnote 10 to the
Antenna Standards table in section 101.115(c) to read as follows:
 101.115  Directional antennas.
* * * * *
     (c)  * * *
Antenna Standards
Frequency (MHz)
Category
Maximum
beamwidt
h to 3 dB
points 1
(included
angle in
degrees)
Minimum
antenna
gain (dbi)
Minimum radiation suppression to angle in degrees from center
line of main beam in decibels
5o to
10o
10o to
15o
15o to
20o
20o to
30o
30o to
100o
100o
to
140o
140o
to
180o
24,250 to 25,25010
A
B
2.8
2.8
38
38
25
20
29
24
33
28
36
32
42
35
55
36
60
45
* * *
     10DEMS User Station antennas in this band must meet performance Standard B and have a
minimum antenna gain of 34 dBi.  The maximum beamwidth requirement does not apply to DEMS User
Stations.  DEMS Nodal Stations need not comply with these standards.  Stations authorized to operate in
the 24,250-25,250 MHz band do not have to meet these standards, however, the Commission may require
the use of higher performance antennas where interference problems can be resolved by the use of such
antennas.
* * * * *
20.  Section 101.139 is amended to add a new Section 101.139(g) to read as follows:
* * * * *
     (g)  After January 1, 2001, a transmitter operating on the 24,250 - 24,450 MHz and 25,050 -
25,250 MHz bands must meet the emission limitation set forth in  101.111(a)(2)(ii).
21.  Section 101.141 is amended by deleting the phrase "and in the 24.25-25.25 GHz band" in the
introductory paragraph.
22.  Section 101.147 is amended by revising the first sentence of the introductory paragraph of
Section 101.147(r) by adding the words: "except 24 GHz band licensees" after the word "Applicants".
Section 101.147(r)(9) is amended by renumbering the introduction as " 101.147(r)(9)(i)" and by
renumbering existing " 101.147(r)(9) (i) and (ii)" as " 101.147(r)(9)(i)(A)and (B)," respectively, and
Section 101.147(r)(9) is also amended by adding a new " 101.147(r)(9)(ii)" (immediately preceding
 101.147(r)(10)) to read as follows:
 101.147  Frequency assignments.
* * * * *
     (r)  17,700 to 19,700 MHz and 24,250 to 25,250 MHz.  Applicants, except 24 GHz band
licensees, may use * * *
* * *
     (r)(9)(i)  The following frequencies are available for point-to-multipoint DEMS Systems, except
that channels 35-39 were available only to existing 18 GHz DEMS licensee as of March 14, 1997 and are
now available by geographic area licensing in the 24 GHz Service to be used as the licensee desires.  The
24 GHz spectrum can be aggregated or disaggregated and does not have to be used in the transmit/receive
manner shown except to comply with international agreements along the US borders.  Systems operating on
Channels 25-34 must cease operations as of January 1, 2001, except that those stations on these channels
within 150 km of the coordinates 38o 48' N/ 76o 52' W (Washington, DC, area) and 39 o 43' N/ 101 o 46'
W (Denver, Colorado area) must cease operations of June 5, 1997:
* * *
     (A)  Each station on channels 25 - 34 will be limited to one frequency pair per SMSA.  Additional
channel pairs may be assigned upon a showing that the service to be provided will fully utilize the spectrum
requested.  A channel pair may be subdivided as desired by the licensee.
     (B)  A frequency pair on channels 25 - 34 may be assigned to more than one licensee in the same
SMSA or service area so long as the interference protection criteria of  101.105 are met.
     (ii)  Channels 35 - 39 are licensed in the 24 GHz Service by Economic Areas for any digital fixed
service.  Channels may be used at either nodal or subscriber station locations for transmit or receive but
must be coordinated with adjacent channel and adjacent area users in accordance with the provisions of
Section 101.509.  Stations must also comply with international coordination agreements.
23.  Section 101.305(a) is revised by deleting the word "and" and adding a comma after the words
"Common Carrier Services" and adding the words: "or 24 GHz Service" after the words "Local Multipoint
Distribution Service."  Section 101.305(b) is revised by adding the words: "and 24 GHz Service" after the
words "Local Multipoint Distribution Service."  Section 101.305(c) is revised by adding the words: "and
24 GHz Service" after the words "Local Multipoint Distribution Service."
24.  Section 101.311 is amended by inserting the words "and 24 GHz Service" after the words "Local
Multipoint Distribution Service".
25.  Subpart G is amended to read as follows:
24 GHz Service and Digital Electronic Message Service
26.  Section 101.501 is amended to read as follows:
 101.501  Eligibility.
     See  101.147(n) for licensing of DEMS facilities in the 10.6 GHz band.  Applications for new
facilities using the 18 GHz band are no longer being accepted.  Any entity, other than one precluded by
 101.7 of this part, is eligible for authorization to provide 24 GHz Service under this subpart.
27.  Section 101.503 is amended by adding the words "10.6 GHz" before the word "DEMS" wherever it
appears.
28.  Section 101.505 is amended by replacing the words " 101.147(r)(9)" with " 101.147(m), (n), and
(r)(9)."
29. Section 101.509 is amended to read as follows:
 101.509  Interference Protection Criteria.
     As a condition for use of frequencies in this service each licensee is required to:
     (1) Engineer the system to be reasonably compatible with adjacent and co-channel operations in the
same or adjacent areas on all frequencies; and
     (2) Cooperate fully and in good faith to resolve whatever potential interference and transmission
security problems may be present in adjacent and co-channel operations.
     All harmful interference to other users of co-channel and adjacent channel use in the same or
adjacent geographical area are prohibited.  In areas where Economic Areas are in close proximity, careful
consideration should be given to minimum power requirements and to the location, height, and radiation
pattern of the transmitting and receiving antennas.  Licensees are expected to cooperate fully in attempting
to resolve problems of potential interference before bringing the matter to the attention of the Commission.
     Licensee shall coordinate their facilities whenever the facilities have optical line-of-sight into other
licensees' areas or are within the same geographic area.  Licensees are encouraged to develop operational
agreements with relevant licensees in the same or adjacent areas.  Incumbent SMSA licensee(s) shall retain
exclusive rights to its channel(s) within its SMSA and must be protected.
Licensees shall comply with the appropriate coordination agreements between the United States and
Canada and the United States and Mexico concerning cross-border sharing and use of the 24 GHz bands
which may require using channels pairs in accordance with the table in Section 101.147(r)(9).
     The Commission recommends that coordination is not necessary if the power flux density (pfd) at
the boundary of the relevant adjacent area is lower than  114 dBW/m2 in any 1 MHz.  This value can be
changed and agreed upon by both coordinating parties.  Licensees should be able to deploy with a pfd up to
 94 dBW/m2 in any 1 MHz at the boundary of the relevant adjacent area without negatively affecting the
successful operations of the adjacent area licensee.
30.  Section 101.511 is amended to read as follows:
 101.511  Permissible services.
     (a)  Authorizations for stations in the 24 GHz Service will be granted to provide services on a
common carrier basis or a non-common carrier basis or on both a common carrier and non-common carrier
basis in a single authorization.
     (b)  Stations may render any kind of digital communications service consistent with the
Commission's rules and the regulatory status of the station to provide services on a common carrier or non-
common carrier basis.
     (c)  An applicant or licensee may submit a petition at any time requesting clarification of the
regulatory status required to provide a specific communications service.
31.  Section 101.521 is amended by adding the words "in the 10.6 GHz band" after the word "frequencies."
32.  Section 101.523 is added to read as follows:
 101.523  Service areas.
     (a)  The service areas for 24 GHz are Economic Areas (EAs) as defined below.  EAs are delineated
by the Regional Economic Analysis Division, Bureau of Economic Analysis, U.S. Department of
Commerce.  The Commerce department organizes the 50 States and the District of Columbia into 172 EAs.
Additionally, there are three EA-like areas: Guam and Northern Mariana Islands; Puerto Rico and the U.S.
Virgin Islands; and American Samoa and the Gulf of Mexico.  A total of 176 authorizations will be issued
for the 24 GHz Service by the FCC.
     (b)  Where an incumbent SMSA license area in the 24 GHz band occupies only a portion of an EA
available for application under the competitive bidding rules, the SMSA portion will be excluded from
auction and the incumbent licensee will retain the exclusive right to those channels within the SMSA.
33.  Section 101.525 is added to read as follows:
 101.525  24 GHz system operations.
     (a)  A licensee using the 24 GHz band may construct and operate any number of fixed stations
anywhere within the area authorized to serve without prior authorization, except as follows:
     (1)  A station would be required to be individually licensed if:
     (A)  international agreements require coordination;
     (B)  submission of an Environmental Assessment is required under  1.1307 of this Chapter.
     (C)  the station would affect the radio quiet zones under  1.924 of this Chapter.
     (2)  Any antenna structure that requires notification to the Federal Aviation Administration (FAA)
must be registered with the Commission prior to construction under  17.4 of this Chapter.
     (b)  Whenever a licensee constructs or makes system changes as described in paragraph (a)(1), the
licensee is required to notify the Commission within 30 days of the change under  1.947 of this chapter
and include a statement of the technical parameters of the changed station.
34.  Section 101.526 is added to read as follows:
 101.526  License term.
     The license term for stations licensed under this subpart is ten years from the date of license grant
or license renewal for incumbent licensees.
35.  Section 101.527 is added to read as follows:
 101.527  Construction requirements for 24 GHz operations.
     (a)  Each licensee must make a showing of "substantial service" within ten years of its license
grant.  A "substantial service" assessment will be made at renewal pursuant to the provisions and
procedures set forth in  1.949 of this chapter.
     (1)  "Substantial service" is a service which is sound, favorable, and substantially above a level of
mediocre service which just might minimally warrant renewal during its past license term.
     (b)  Each licensee must, at a minimum file:
     (1) A report, maps and other supporting documents describing its current service in terms of
geographic coverage and population served to the Commission.  The report must also contain a description
of the licensees' investments in its operations.  The report must be labeled as an attachment to the renewal
application; and
     (2) Copies of all FCC orders finding the licensee to have violated the Communications Act or any
FCC rule or policy; and a list of any pending proceedings that relate to any matter described in this
paragraph.
     (c)  Failure to demonstrate that substantial service is being provided in the service area will result
in forfeiture of the license, and the licensee will be unable to regain it.
     (d)  The frequencies associated with incumbent authorizations, licensed on a SMSA basis, that
have cancelled automatically or otherwise been recovered by the Commission will automatically revert to
the applicable EA licensee.
36.  Section 101.529 is added to read as follows:
 101.529  Renewal expectancy criteria for 24 GHz licenses.
     (a)  A renewal applicant involved in a renewal proceeding shall receive a preference, commonly
referred to as a renewal expectancy, that is the most important factor to be considered in the proceeding as
long as the applicant's past record for the relevant license period demonstrates that:
     (1)  The renewal applicant has provided "substantial service" pursuant to  101.527; and
     (2)  The renewal applicant has substantially complied with applicable FCC rules, policies, and the
Communications Act of 1934, as amended.
     (b)  In order to establish its right to a renewal expectancy, a licensee in the 24 GHz service
involved in a renewal proceeding must submit a showing explaining why it should receive a renewal
expectancy.  At a minimum, this showing must include:
     (1)  A description of how the licensee has complied with the "substantial service" requirement; and
     (2)  Copies of all FCC orders finding the licensee to have violated the Communications Act or any
FCC rule or policy; and a list of any pending proceedings that relate to any matter described in this
paragraph.
     (c)  In making its showing of entitlement to a renewal expectancy, a renewal applicant may claim
credit for any system modification applications that were pending on the date it filed its renewal
application.  Such credit will not be allowed if the modification application is dismissed or denied.
37.  Section 101.531 is added to read as follows:
 101.531  Application form and contents.
     (a)  Applications for initial authorization of 24 GHz facilities are filed on FCC Form 175 in
accordance with Subpart M of this Part, and Subpart Q of Part 1.  FCC Form 601 is submitted
subsequently either by the winning bidder, if an auction is held to decide among two or more mutually
exclusive applications, or, in cases of no mutual exclusivity, by the sole applicant.  Applications to amend
pending applications and to modify licenses are filed on FCC Form 601.
     (b) Foreign ownership information.  All applicants for 24 GHz licenses must provide the
information requested on FCC Form 601 to address all of the eligibility requirements in  101.7 of this
Part.  All licensees will keep the information updated.
38.  Section 101.533 is added to read as follows:
 101.533  Regulatory status.
     (a)  Initial applications.  An applicant for a 24 GHz license must specify on FCC Form 601 if it is
requesting authorization to provide services on a common carrier basis, a non-common carrier basis, or on
both a common carrier and non-common carrier basis.
     (b)  Amendment of pending applications.  Any pending application may be amended to:  (i) change
the carrier status requested; or (ii) add to the pending request in order to obtain both common carrier and
non-common carrier status in a single license.
     (c)  Modification of license.  A licensee may modify a license to:  (i) change the carrier status
authorized; or (ii) add to the status authorized in order to obtain both common carrier and non-common
carrier status in a single license.
39.  Section 101.535 is added to read as follows:
 101.535  Geographic partitioning and spectrum aggregation/disaggregation.
     (a)  Eligibility.
     (1)  Parties seeking approval for partitioning and disaggregation shall request from the
Commission an authorization for partial assignment of a license pursuant to  1.948 of this chapter.
     (2)  24 GHz licensees may apply to the Commission to partition their licensed geographic service
areas to eligible entities and are free to determine the portion of their service areas to be partitioned.
24 GHz licensees may aggregate or disaggregate their licensed spectrum at any time following the grant of
a license.
     (3)  Any existing frequency coordination agreements shall convey with the assignment of the
geographic area or spectrum, and shall remain in effect unless new agreements are reached.
     (b)  Technical standards.
     (1) Aggregation.  There is no limitation on the amount of spectrum that a 24 GHz licensee may
aggregate.
     (2)  Partitioning.  In the case of partitioning, applicants and licensees must file FCC Form 603
pursuant to  1.948 of this chapter and list the partitioned service area on a schedule to the application.
The geographic coordinates must be specified in degrees, minutes, and seconds to the nearest second of
latitude and longitude and must be based upon the 1983 North American Datum (NAD83).
     (3)  Disaggregation.  Spectrum may be disaggregated in any amount.  A licensee need not retain a
minimum amount of spectrum.
     (4)  Combined partitioning and disaggregation.  The Commission will consider requests for
partial assignment of licenses that propose combinations of partitioning and disaggregation.
     (c)  Unjust enrichment.  24 GHz licensees that received a bidding credit and partition their licenses
or disaggregate their spectrum to entities not meeting the eligibility standards for such a bidding credit, will
be subject to the provisions concerning unjust enrichment as set forth in  1.2111.
     (d)  License term.  The license term for a partitioned license area and for disaggregated spectrum
shall be the remainder of the original licensee's license term as provided for in  101.526 of this subpart.
     (e)  Construction requirements.  Applications requesting approval for partitioning or
disaggregation must include a certification by each party stating that one or both parties will satisfy the
construction requirement set forth in  101.529 of this subpart.  Failure by a party to meet its respective
construction requirement will result in the automatic cancellation of its license without further Commission
action.
40.  Section 101.537 is added to read as follows:
 101.537  24 GHz band subject to competitive bidding.
     Mutually exclusive initial applications for licenses in the 24 GHz band are subject to competitive
bidding procedures.  The procedures set forth in part 1, subpart Q, of this chapter will apply unless
otherwise provided in this part.
41.  Section 101.538 is added to read as follows:
 101.538  Designated entities.
     (a)  Eligibility for small business provisions.
     (1)  A very small business is an entity that, together with its controlling interests and affiliates, has
average gross revenues not exceeding $3 million for the preceding three years.
     (2)  A small business is an entity that, together with its controlling interests and affiliates, has
average gross revenues not exceeding $15 million for the preceding three years.
     (3)  An entrepreneur is an entity that, together with its controlling interests and affiliates, has
average gross revenues not exceeding $40 million for the preceding three years.
     (4)  For purposes of determining whether an entity meets one of the definitions set forth in
paragraphs (a)(1), (a)(2), and (a)(3) of this section, the gross revenues of the entity, its controlling interests
and affiliates shall be considered on a cumulative basis and aggregated.  An applicant seeking status as a
very small business, small business, or entrepreneur under this section must disclose on its short- and long-
form applications, separately and in the aggregate, the gross revenues of the applicant (or licensee), its
controlling interests and affiliates for each of the previous three years.
     (5)  Persons or entities that hold interests in an applicant (or licensee) that are affiliates of each
other or have an identity of interests identified in  1.2110(b)(4)(iii) of this chapter will be treated as
though they were one person or entity and their ownership interests aggregated for purposes of determining
an applicant's (or licensee's) compliance with the requirements of this section.
     (6)  Where an applicant (or licensee) cannot identify controlling interests under the standards set
forth in this section, the gross revenues of all interest holders in the applicant, and their affiliates, will be
attributable.
     (7)  A consortium of very small businesses, a consortium of small businesses, or a consortium of
entrepreneurs is a conglomerate organization formed as a joint venture between or among mutually
independent business firms, each of which individually satisfies the applicable definition in paragraph
(a)(1), (a)(2), or (a)(3) of this section.  Where an applicant or licensee is a consortium of very small
businesses, a consortium of small businesses, or a consortium of entrepreneurs, the gross revenues of each
very small business, small business, or entrepreneur shall not be aggregated.
     (8)  Designated entities must describe on their long-form applications how they satisfy the
requirements for eligibility for designated entity status, and must list and summarize on their long-form
applications all agreements that affect designated entity status such as partnership agreements, shareholder
agreements, management agreements and other agreements, including oral agreements, establishing, as
applicable, de facto or de jure control of the entity.  Such information must be maintained at the licensee's
facilities or by its designated agent for the term of the license in order to enable the Commission to audit
designated entity eligibility on an ongoing basis.
     (b)  Controlling interest.
     (1)  For purposes of this section, a controlling interest includes individuals or entities with either de
jure or de facto control of the applicant.  De jure control is evidenced by holdings of greater than
50 percent of the voting stock of a corporation, or in the case of a partnership, general partnership interests.
De facto control is determined on a case-by-case basis.  An entity must disclose its equity interest and
demonstrate at least the following indicia of control to establish that it retains de facto control of the
applicant:
     (i)  The entity constitutes or appoints more than 50 percent of the board of directors or
management committee;
     (ii)  The entity has authority to appoint, promote, demote, and fire senior executives that control
the day-to-day activities of the licensee; and
     (iii)  The entity plays an integral role in management decisions.
     (2)  The following rules apply for the calculation of certain interests.
     (i)  Ownership interests shall be calculated on a fully diluted basis; all agreements such as
warrants, stock options, and convertible debentures will generally be treated as if the rights thereunder
already have been fully exercised.
     (ii)  Partnership and other ownership interests and any stock interest equity, or outstanding stock,
or outstanding voting stock shall be attributed as specified below.
     (iii)  Stock interests held in trust shall be attributed to any person who holds or shares the power to
vote such stock, to any person who has the sole power to sell such stock, and to any person who has the
right to revoke the trust at will or to replace the trustee at will.  If the trustee has a familial, personal, or
extra-trust business relationship to the grantor or the beneficiary, the stock interests held in trust will be
attributed to the grantor or beneficiary, as appropriate.
     (iv)  Non-voting stock shall be attributed as an interest in the issuing entity.
     (v)  Limited partnership interests shall be attributed to limited partners and shall be calculated
according to both the percentage of equity paid in and the percentage of distribution of profits and losses.
     (vi)  Officers and directors of an entity shall be considered to have a controlling interest in the
entity.  The officers and directors of an entity that controls a licensee or applicant shall be considered to
have a controlling interest in the licensee or applicant.
     (vii)  Ownership interests that are held indirectly by any party through one or more intervening
corporations will be determined by successive multiplication of the ownership percentages for each link in
the vertical ownership chain and application of the relevant attribution benchmark to the resulting product,
except that if the ownership percentage for an interest in any link in the chain exceeds 50 percent or
represents actual control, it shall be treated as if it were a 100 percent interest.
     (viii)  Any person who manages the operations of an applicant or licensee pursuant to a
management agreement shall be considered to have a controlling interest in such applicant or licensee if
such person, or its affiliate, has authority to make decisions or otherwise engage in practices or activities
that determine, or significantly influence:
     (A)  The nature or types of services offered by such an applicant or licensee;
     (B)  The terms upon which such services are offered; or
     (C)  The prices charged for such services.
     (ix)  Any licensee or its affiliate who enters into a joint marketing arrangement with an applicant or
licensee, or its affiliate, shall be considered to have a controlling interest, if such applicant or licensee, or its
affiliate, has authority to make decisions or otherwise engage in practices or activities that determine, or
significantly influence:
     (A)  The nature or types of services offered by such an applicant or licensee;
     (B)  The terms upon which such services are offered; or
     (C)  The prices charged for such services.
     (c)  Bidding credits.  A winning bidder that qualifies as a very small business or a consortium of
very small businesses as defined in this section may use the bidding credit specified in  1.2110(e)(2)(i) of
this chapter.  A winning bidder that qualifies as a small business or a consortium of small businesses as
defined in this section may use the bidding credit specified in  1.2110(e)(2)(ii) of this chapter.  A winning
bidder that qualifies as an entrepreneur or a consortium of entrepreneurs as defined in this section may use
the bidding credit specified in  1.2110(e)(2)(iii) of this chapter.SEPARATE STATEMENT OF COMMISSIONER SUSAN NESS
     Re:  In the Matter of Amendments to Parts 1, 2, 87, and 101 of the Commission's Rules to
     License Fixed Services at 24 GHz, WT Docket No. 99-327.
I support our decision today making available spectrum in the 24 GHz band for fixed wireless service.  We
have attempted to promulgate flexible rules that will permit fixed wireless service providers using
this spectrum to compete aggressively with fixed wireless providers using other spectrum and other
technologies to provide broadband data and voice services to consumers on a local and nationwide basis.
In this order, we license the 24 GHz band on the basis of 172 Economic Areas ("EAs"), with additional
areas covering the United States' territories and possessions.  In adopting EAs, we choose a service area
size that balances the needs of national service providers and the needs of smaller, regional providers.
In addition, since we also used EAs for fixed wireless services in the 39 GHz band, the use of EAs here will
apply a consistent licensing scheme providing for fair competition between services in each band.
While I support this decision, I am troubled about the difficulties that rural carriers face in obtaining
spectrum to provide fixed wireless services to their communities.  A review of the issues raised in this
proceeding, and in other contexts, indicates that our current policies may not maximize the potential of
wireless technology to serve rural areas.  While it may not be appropriate to address these issues in this
proceeding, I believe that we need to undertake a more comprehensive review of the ways in which we can
encourage the more rapid build-out of rural wireless systems.  There are at least three areas of relevant
inquiry:
Service Areas of License.  We need to evaluate our trend to use larger service areas in our licensing
processes.  Auction of larger service areas limits the ability of smaller providers with rural strategies to
obtain spectrum.  While the theory behind our partitioning and disaggregation rules would suggest that
rural carriers could obtain access to spectrum, there is evidence that in practice this has not happened.  We
should determine whether our use of larger service areas promotes or inhibits the development of service in
rural areas, and whether we can adjust our policies to provide greater incentives for the deployment service
in rural areas if we license spectrum using large service areas.
Substantial Service Requirement.  We have adopted a "substantial service" option in the construction and
coverage requirements for various spectrum licensees.  This standard is intentionally flexible.  The
vagueness of the current standard, however, may inhibit the deployment of wireless service to rural areas.
We must examine whether licensees satisfying their construction requirements by providing "substantial
service" provide service to rural areas, or whether they rely on service in more densely populated areas to
justify a claim that they substantially serve their entire licensed area.
Intermountain Microwave Test.  Under Section 310(d) of the Communications Act, a licensee cannot
relinquish or transfer "control" of a wireless license without Commission approval.  The factors the
Commission uses to determine the locus of de facto control were set forth in Intermountain Microwave,
decided more than thirty-five years ago.  The indicia of control in that case were developed in the context
of a "mom-and-pop" owner of a stand-alone microwave system.  Modern wireless systems and providers,
to put it mildly, are often organized quite differently, making the test less useful.
I think it is time we revisited the Intermountain Microwave test for de facto control, at least as it is applied
in the context of Section 310(d).  The modern realities of financing and operating telecommunications
systems using wireless technology argue for adoption of a test that would permit licensees to extend service
throughout their service area by permitting other operators to use spectrum without formal partitioning or
disaggregation.  We should consider whether and how we could adopt such an approach, and whether it
would further speed deployment of wireless services into rural areas.                    CONCURRING STATEMENT OF
              COMMISSIONER HAROLD FURCHTGOTT-ROTH
     Re In the Matter of Amendments to Parts 1, 2, 87, and 101 of the Commission's Rules to License
     Fixed Services at 24 GHz, WT Docket No. 99-327 (rel. July 31, 2000).
     I support today's decision to promptly make available spectrum in the 24 GHz band.  The fixed
wireless industry has experienced exponential growth in recent years and today's decision will provide still
more spectrum for this rapidly developing industry segment.  In this context the precise contours of the
fixed wireless industry continue to evolve.  Unlike PCS, where the majority of service providers have
developed national footprints, it is not clear today how fixed wireless service fits into the marketplace.  Will
it become a largely urban and local service, or will a regional approach prevail?  Alternatively, will fixed
wireless at 24 GHz become a nationwide service offering?  From the Commission's standpoint there is no
"right" answer.  Instead, the FCC must attempt to develop a flexible spectrum policy that is "business plan
neutral."
Accordingly, I am intrigued by the prospect of utilizing smaller service areas for some of these
licenses.  The size of the initial license areas should not matter.  Our disaggregation and partitioning rules
should facilitate a secondary market that permits licensees to slice and dice spectrum for the highest-valued
use.  However, our partitioning and disaggregation rules have a mixed record and appear to create
substantial transaction costs.  These apparent difficulties create increased pressure on the Commission to
craft initial license allocations that respond to market demand.  Here, numerous parties requested smaller
service areas.  In response I would have considered subdividing one or two of the five licenses into smaller
licensing units in order to meet this apparent demand.  Smaller license areas may also facilitate the
deployment of competitive services to underserved areas and permit the development of business plans
based on a more localized strategy.  Going forward, rather than assuming all services are going to be
"national," I believe it is important that we closely examine our initial license allocation strategy in each
service to permit a whole range of business plans to audition in the marketplace.
                                      CONCURRING STATEMENT OF COMMISSIONER GLORIA TRISTANI
     Re:  Amendments of Parts 1, 2, 87 and 101 of the Commission's Rules To License Fixed
     Services at 24 GHz, WT Docket No. 99-327 (rel. July 31, 2000)
While I support this decision and look forward to the upcoming licensing of more fixed wireless spectrum
in the 24 GHz band, I would have preferred to take further steps that could serve to foster fixed wireless
build-out in America's smaller cities and rural areas.  In particular, I would have licensed one or two of the
five 24 GHz license blocks in smaller geographic areas.
The record here reflects several parties' conviction that spectrum in smaller cities and rural areas may lay
fallow when bundled in geographic licenses with urban areas.  Simply put, a winning bidder today may
concentrate its investment and build-out in dense urban areas despite holding a license that covers smaller
cities and rural areas.  While our rules allow for partitioning and disaggregation of spectrum, this policy
has produced mixed results at best.  By making one or two of the five licenses available in smaller
geographic blocks, we could have offered an opportunity for providers with a small city/rural focus to bid
at auction for the spectrum necessary for their business plans.  A fixed wireless offering, after all, need not
have a regional or national strategy in order to succeed.  At the same time, providers with a regional or
nationwide business strategy could aggregate these licenses for a larger footprint.
The fixed wireless industry is a wonderful example of intermodal competition.  However, I would have
preferred one extra step to promote widespread deployment.  Nonetheless, I believe fixed wireless providers
offer great promise as competitive entrants in large urban settings and beyond and I support this item.