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
2. In this Report and Order we make the following major determinations regarding the
24 GHz band.
? We assign the 24 GHz band for licensing throughout the United States by Economic
Areas (EAs) (constituting 172 service areas).  We also authorize additional areas for
licensing covering the following United States territories and possessions: Guam,
Northern Mariana Islands, Puerto Rico, the United States Virgin Islands, American
Samoa and the Gulf of Mexico.
? We permit 24 GHz band licensees to offer a variety of fixed services, however, we
decline to allocate mobile operations for the 24 GHz band at this time.
? 24 GHz licensees, including incumbent Digital Electronic Message Service (DEMS)
licensees, will be governed by Part 101 of the Commission's Rules as discussed herein.
? We license the 24 GHz band in 40 MHz flexible channel pairs.  In addition, we provide
24 GHz band licensees more flexibility in system design, by designating that either the
upper or lower side of the 40 MHz channel pairs can be used for the nodal station or the
subscriber station.
? We permit open eligibility for 24 GHz band licensees.
? We adopt our proposed framework for license terms for 24 GHz band licensees.
Licensees will have a ten-year license term from the date of grant.  Licensees must
demonstrate that they are providing substantial service when they file their renewal
application.
? We allow 24 GHz band licensees to partition and/or disaggregate their licenses.  We also
allow licensees to aggregate 24 GHz band spectrum.
? We adopt technical standards that are both consistent with our Part 101 rules and provide
licensees increased flexibility in system design, including but not limited to, an emission
mask for the 24 GHz band; allowing the use of non-directional antennas as well as one-
foot diameter parabolic antennas; eliminating individual licensing for nodal stations; and
allowing a maximum contiguous bandwidth of up to 200 MHz through aggregation.
? The general competitive bidding rules set forth in Part 1, Subpart Q, of the Commission's
Rules apply to the 24 GHz band, unless otherwise provided herein.
? We adopt a three-tiered approach to small business bidding credits.  Very small
businesses with average annual gross revenues not exceeding $3 million are eligible to
receive a 35 percent bidding credit; small businesses with average annual gross revenues
not exceeding $15 million are eligible to receive a 25 percent bidding credit; and
entrepreneurs with average annual gross revenues not exceeding $40 million are eligible
to receive a 15 percent bidding credit.
III. BACKGROUND
3. In 1983, the Commission adopted rules for the Digital Electronic Message Service
(DEMS).  DEMS systems are common carrier point-to-multipoint microwave networks designed to
communicate information between a fixed (nodal) station and a number of fixed user terminals.   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.
4. On March 14, 1997, the Commission adopted a Reallocation Order requiring the
relocation of DEMS operations from the 18 GHz band to the 24 GHz band.   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.
5. On November 10, 1999, we released a Notice of Proposed Rulemaking (NPRM)
proposing licensing and service rules to govern both incumbents and new licensees in the 24 GHz band.
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.
IV. DISCUSSION
A. Licensing Plan for 24 GHz Services
1. Table of Allocations
6. 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.
7. Discussion.  As a general matter, commenters in this proceeding strongly support our
goal of providing licensees maximum flexibility in the use and design of their systems in the 24 GHz
band.   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).
8. 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.
9. Discussion.  In light of the fact that the downlink BSS allocation in the 17.3-17.7 GHz
band will not become effective until April 1, 2007,  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.
10. We agree with Teligent that it would be premature to undertake a precise set of rules for
sharing, in that the potential parameters of such a satellite system are also unknown.   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.
11. 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.
2. Geographic Area Licensing
12. Background.  In the NPRM, we requested comment on the type of service area that
should be used to license the 24 GHz band.  The Commission originally used Standard Metropolitan
Statistical Areas (SMSA) to license the DEMS service.   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.
13. Discussion.  Although we received a mixed reaction to our EA licensing approach, we
have concluded that EAs are the best basis for geographic area licensing in the 24 GHz band.  Teligent
and Wireless One agree with our decision to use EAs to license 24 GHz.   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.
14. 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.
15. We agree with Teligent that smaller alternative service areas are unlikely to permit the
efficiencies necessary to justify the large cost of providing fixed wireless service.   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.
16. 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.
17. Some commenters find our rationale that post-auction partitioning and disaggregation
will open up opportunity to smaller entities to be faulty and argue that we should encourage small
business participation at auction.   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.
18. For these reasons, we determine that EAs constitute the most appropriate geographic area
licensing for the 24 GHz band.  EAs will provide ample population coverage and allow 24 GHz band
licensees the flexibility to provide a multitude of service offerings.  Thus, we determine to use a total of
176 service areas-the 172 EAs specified by the Department of Commerce and four EA-like areas for
Guam and the Northern Mariana Islands, Puerto Rico and the United States Virgin Islands, American
Samoa, and the Gulf of Mexico.
3. Spectrum Blocks
19. Background.  In the Reallocation Order, the Commission determined that the differences
in propagation, rain attenuation, and available equipment between the 18 GHz and 24 GHz bands would
require DEMS systems in the 24 GHz band to use approximately four times as much bandwidth as DEMS
systems operating at 18 GHz to maintain comparable reliability and coverage.   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.
20. Discussion.  Commenters generally support the spectrum block proposal to retain five
blocks of 40 MHz channel pairs, however, they seek additional flexibility to make more efficient use of
the blocks.   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.
21. One of the desired uses for the 24 GHz band is to provide high-speed data.  In many
situations the downstream (i.e., from node-to-subscriber) data path needs to be larger than the upstream
(i.e., from subscriber-to-node) data path.  For example, a licensee may want to use 60 MHz for the
downstream data and only 20 MHz for the upstream data path.  Thus, in order to allow licensees more
flexibility, we will change the designation of the 40 MHz channel pairs to indicate that either the upper or
lower side can be used for the nodal station or the subscriber station.  In doing so, we will designate the
40 MHz channel pairs as before, but remove the requirement that the upper or lower side can be used for
the nodal station or for the subscriber station.  This will also allow all 80 MHz or any portion thereof to
be used for one-way communications if so desired by the area licensee and allow 24 GHz band licensees
the additional flexibility of fixed use for technologies such as TDD and applications like high speed
Internet access.  We note that allowing the channels to be used in this manner will change the emission
mask standards by increasing the maximum bandwidth.  This issue will be addressed in the technical rules
section.
4. Treatment of Incumbents
22. Background.  As was discussed above, incumbent DEMS licensees are required to
relocate their operations to the 24 GHz band by January 1, 2001.  After the completion of this relocation,
such licensees shall be governed by Part 101 of the Commission's Rules.   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.
23. Discussion.  In general, commenters support the Commission's proposal that 24 GHz
band operations be governed by Part 101.  Wireless One states that it is essential that all licensees be
subject to uniform licensing and service rules.   Accordingly, we conclude that all licensees in the 24
GHz band including incumbent licensees previously licensed under our DEMS rules, will be governed by
Part 101 of the Commission's Rules, as discussed herein.  Further, we are eliminating all reference to
DEMS in our rules governing the operations in the 24 GHz band.
24. Teligent seeks reassurance that incumbent areas will be protected from harmful
interference.  In this regard, it requests clarification that incumbents licensed on a SMSA basis will retain
exclusive right to their licensed channels within their service area and that the new 24 GHz band licensees
will be required to protect the incumbents against harmful interference.   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.
B. Application, Licensing and Processing Rules
1. Regulatory Status
25. 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.
26. Discussion.  As stated above, commenters in this proceeding supported the proposition
that 24 GHz band licensees be provided with maximum flexibility to offer a variety of services.   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.
27. As we have stated in the past, it is within the licensee's discretion to determine the exact
nature of the service to be provided under the regulatory classifications it selects.   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.
28. We also adopt our proposal requiring licensees to notify the Commission of a change in
the service or services they offer, if such a change would result in a change of their regulatory status,
although such change would not require prior Commission authorization.   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.
29. In addition, we adopt our proposal that 24 GHz band license applicants are not required
to detail the specific services they seek to provide.  As we stated in the NPRM, we believe it is sufficient
that an applicant indicate its choice of regulatory status in the context of our streamlined application
process.   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.
2. Open Eligibility
30. Background.  In the NPRM, we reiterated that our primary goal in this proceeding was to
encourage efficient competition, particularly in the local exchange telephone market.   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.
31. Discussion.  We received relatively few comments concerning our tentative conclusion
not to impose eligibility restrictions on the participation of ILECs or incumbent cable operators.  Those
comments we did receive supported open eligibility, but did not specifically address the likelihood of
competitive harm.  For example, RTG "vigorously" supports this initial decision and states that open
eligibility will foster competition and encourage innovation.   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."
32. We believe that substantial competitive harm is unlikely to result from ILEC and
incumbent cable eligibility in this service.  The number of broadband present and anticipated competitors
in the marketplace lessens the likelihood that ILECs and incumbent cable operators can thwart
competition.   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.
33. Finally, we note that no such restriction was placed on the 39 GHz band at its onset and
the eligibility restriction placed on ILECs and incumbent cable operators in LMDS  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.
34. We received no comments providing information disputing our conclusion that the
24 GHz band spectrum may be inadequate for the provision of competitive multi-channel video
programming distribution (MVPD).   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.
35. Finally, we note that Teligent has expressed concern regarding ILEC dominance in
access to multi-tenant buildings and requests that we consider adopting safeguards to prevent ILEC
dominance in the marketplace.   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.
3. Performance Requirements
36. Background.  The Commission has, in other wireless services, imposed performance
requirements to ensure that the spectrum is used effectively and that service is deployed rapidly.  More
recently, the Commission has employed a substantial service standard as a mechanism to foster rapid
development of spectrum.  In the NPRM, we solicited comment on whether a substantial service
requirement or, in the alternative, a minimum coverage requirement is more appropriate for this band.
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.
37. Discussion.  The majority of commenters preferred the application of a renewal
expectancy based on the substantial service requirement, noting the flexibility that such a standard will
offer licensees as they determine how best to implement business plans for the 24 GHz band.
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.
38. We define substantial service as "a service that is sound, favorable, and substantially
above a level of mediocre service which might minimally warrant renewal."   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.
39. We note that several licenses currently held by incumbent licensees are scheduled to
expire in 2001.  Under the previous performance requirements, incumbent licensees were required to
construct at least one link in their service area within eighteen months, without any further performance
requirements imposed during their license term.   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.
4. License Term and Renewal Expectancy
40. Background.  In the NPRM, we sought comment on the license term and renewal
expectancy requirements for the 24 GHz band.   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.
41. Discussion.  Based on the record in this proceeding, we adopt a ten-year license term, in
conjunction with a renewal expectancy based on substantial service.   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.
42. In order to claim a renewal expectancy, we will require the licensee to, at a minimum,
provide the Commission with 1) a description of its current service in terms of geographic coverage and
population served or links installed and a description of how the service complies with the substantial
service requirement; and 2) copies of any Commission Orders finding the licensee to have violated the
Communications Act or any Commission rule or policy, and a list of any pending proceedings that relate
to any matter described by the requirements for the renewal expectancy.  These requirements are in the
public interest as these showings ensure that the licensee is using the spectrum efficiently to provide
services to the public, has operated its facilities in compliance with the Commission's rules, and has the
requisite qualifications to be a Commission licensee.
5. Application of Title II Requirements to Common Carriers
43. Background.  We have taken various steps to foster competition among
telecommunications service providers.  We recognize that certain provisions of the Communications Act
may not be as necessary or may prove to be more burdensome to a new entrant and that removing and/or
reducing unnecessary regulation tends to encourage market entry and lower costs.  In our effort to
facilitate the entry of new operators into the various markets, we have exercised our authority under
Sections 10 and 332(c)(1)(A) of the Communications Act to streamline and/or eliminate various Title II
requirements for common carriers.  For example, in the commercial mobile radio service (CMRS)
proceeding, we utilized our forbearance authority for certain requirements involving the filing of tariffs
and inter-carrier contracts and the maintenance of certain records.   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.
44. In the NPRM, we noted our forbearance authority pursuant to Section 10 of the
Communications Act and considered the extent to which we should apply Title II requirements to
common carriers in this context.  Thus, we sought comment on whether we should forbear from enforcing
any provisions of the Communications Act or the Commission's Rules on common carrier licensees in the
24 GHz band.
45. Discussion.  Although we solicited comment on the appropriate use of our forbearance
authority with respect to the 24 GHz band, we received few comments regarding this matter.  One
commenter indicated that we should extend forbearance to all non-dominant carriers in the 24 GHz band
regardless of the technology they employ to provide their services.   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.
46. PCIA expressed concern that selective application of forbearance to 24 GHz band
licensees would threaten to provide one group of licensees with a regulatory advantage over other fixed
licensees offering similar services and, thus urged us to adopt a uniform policy that relieves all fixed
wireless frequency bands from unnecessary regulations.   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.
6. Aggregation, Disaggregation and Partitioning
47. 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.
48. Discussion.  We received no comments opposing our proposed flexible approach to
partitioning and disaggregation for the 24 GHz band.  In addition, we note that our proposal is consistent
with the approaches adopted in other fixed wireless contexts.   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.
49. In the event that a 24 GHz license is partitioned or disaggregated, any partitionee or
disaggregatee is authorized to hold its license for the remainder of the original licensee's (i.e., partitionor
or disaggregator) license term and a demonstration must be made that the applicable construction
requirements have been met for the partitioned area or disaggregated spectrum at the time of renewal.
However, we have determined that participants to a partitioning agreement should be permitted to
negotiate whether one party or both will be responsible for compliance with these requirements.  In
addition to being consistent with provisions in other services, we conclude that this approach is
appropriate because it will "ensure that licensees have the flexibility to structure their business plans
while ensuring that partitioning not be used as a vehicle to circumvent the applicable construction
requirements."   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.
50. We also conclude that parties to a disaggregation agreement should be given the
flexibility to determine which party will assume responsibility for complying with our construction
requirements in regard to the disaggregated portion of the license.  As with partitioning agreements,
parties must certify whether one licensee will fulfill the applicable requirements or whether the parties
will share responsibility.   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.
51. 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.
7. Foreign Ownership Restrictions
52. Background.  Foreign ownership and citizenship requirements for 24 GHz band licensees
are set forth in Sections 310(a) and 310(b) of the Communications Act, as modified by the 1996 Act,
which restricts the issuance of licenses to certain applicants.   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.
53. Discussion.  We received one comment supporting our proposal to extend the Part 101
foreign ownership requirements to 24 GHz band licensees.  This commenter agrees that requiring Part
101 compliance is consistent with the application of Section 310 and the World Trade Organization
(WTO) Basic Telecommunications Agreements.   Based on our review of the record in this proceeding
and for the reasons stated in the NPRM, we will apply Section 101.7 of the Commissions Rules without
modification to the 24 GHz band.
54. As we have done in the case of MDS, satellite service, and LMDS, we will require an
applicant electing non-common carrier status to also submit the same information that common carriers
applicants must submit in order to address the alien ownership restrictions under Section 310(b) of the
Act.   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.
55. Accordingly, common carrier and non-common carrier licensees in the 24 GHz band will
be required to provide the alien ownership information requested by FCC Form 601.  Moreover, both
common carriers and non-common carriers must amend their FCC Form 602 to reflect any changes in
foreign ownership information.  We note that, in response to the WTO Basic Telecommunications
Agreement, we have relaxed our policy concerning foreign ownership of common carrier licenses under
Section 310(b)(4).  We now presume that ownership by entities that are WTO members serves the public
interest.  However, ownership by entities from countries that are not WTO members continues to be
subject to the effective competitive opportunities test established by the Commission.
C. Technical Rules
56. As discussed above, our general proposal was to apply the technical rules in Part 101 to
govern the use of the 24 GHz band, including the technical parameters, such as channelization, frequency
tolerance and stability, power and emission limitations, antennas, and equipment authorization.   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
57. Many commenters suggest that the proposed emission mask requirement in
Section 101.111(a)(5) is inappropriate for the 24 GHz band and request that we instead apply the
emission mask set forth in Section 101.111(a)(2)(ii) of our Rules.   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.
58. Based on the record in this proceeding, we will adopt the emission mask set forth in
Section 101.111(a)(2)(ii) of the Commission's Rules, with some modifications, for the 24 GHz band.  We
note that the maximum value of B in the equation for the emission mask is normally taken from the
bandwidth table set forth in Section 101.109 of our Rules which shows a maximum value of 40 MHz.
Even though we are allowing disaggregation and aggregation of spectrum in addition to allowing both
sides of the channel pair to be used as transmit, the actual value of B can be much larger.  However, we
will specify that the maximum value of B used in the emission mask equation is limited to 40 MHz for all
cases.  Also, the minimum value of B shall be 40 MHz  regardless of the size of the channel actually used
and regardless of whether subchannels are being used.  We shall also modify Section 101.109, Note 7 to
include reference to the 24 GHz band and its aggregated bandwidths.  This will make the roll-off at the
edges of the band similar no matter how large or small the actual bandwidth is.
2. Equipment Requirements
59. Both Nortel and Teligent urge the Commission to "grandfather" previously deployed
equipment.  Specifically, Teligent is currently operating its transmitters pursuant to a waiver of the DEMS
emission mask rule in Section 101.111 of the Commission's Rules.   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."
60. In the past, we have allowed licensees to continue to use equipment that did not comply
with newly implemented rules changes either indefinitely or for a specified period.   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.
61. Additionally, Teligent requests that 24 GHz band equipment be subject to our verification
procedures, rather than certification.  Currently, Section 101.139 of the Commission's Rules requires that
point-to-multipoint transmitters in the 39 GHz band, LMDS and DEMS must be a type which has been
certified by the Commission, however, most other point-to-point microwave transmitters are subject to
the less onerous verification procedure.   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.
3. Efficiency Standard
62. 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.
4. Antenna Directivity
63. Comsearch requests that we amend the directional antenna standards of Section 101.115
of our Rules to allow for use of one foot diameter parabolic antennas.   Teligent requests that the user
station antenna directivity requirement in Section 101.115 be eliminated.
64. Based on our review of the record in this proceeding and the proposals presented by
Comsearch and Teligent , we conclude that our rules regarding antenna directivity should be modified.  In
this regard, we will amend the directional antenna standards of Section 101.115 of our Rules to allow for
use of one foot diameter parabolic antennas.  We will effectuate this amendment by changing the antenna
beamwidth value to 2.8 degrees instead of 2.2 and increasing the pattern to require a front-to-back ratio of
45 dB for Category B and 60 dB for Category A instead of 36 dB and 55 dB, respectively.  Although we
are not persuaded that the nodal station and user station antenna directivity requirement in Section
101.115 should be eliminated, we are convinced that it is unnecessary to require 24 GHz band licensees to
comply with these standards in every instance.  However, we decline to eliminate the requirement
entirely, because it provides an established technical standard for the Commission to apply in the event
that licensees are unable to resolve a coordination conflict.  One such instance where we believe that the
antenna standards may be needed is within 56 km of the U.S./Canadian border where 24 GHz band
licensees are required to comply with an international coordination agreement.   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.
5. Licensing and Coordination
65. As stated above, commenters agree with our proposal to eliminate individual licensing
for nodal stations and adopt geographic area licensing in the 24 GHz band with a frequency coordination
requirement.   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.
66. Based upon or review of the record in this proceeding, we conclude that we should
eliminate individual licensing for nodal and user stations and adopt a more precise definition for the line
of sight coordination requirement by requiring coordination of both nodal and user stations when they
have optical line of sight into other licensees' areas or other licensees' facilities within the same
geographic area.  In addition, we note that the U.S. and Canada have now agreed on the coordination
parameters between the countries in the border areas.   The first step to coordination in this agreement is
for the two parties to form a mutual agreement on the use of their systems.  If this fails, the agreement
specifies PFD levels which trigger coordination for stations which are within 56 km of the border and
have an optical line-of-sight into the adjacent area.  The agreement considers mitigating techniques such
as antenna discrimination, polarization, frequency offset, shielding, site selection and power control to
facilitate coordination of systems.  We are aware that for different areas of the country the rainfall varies
as well as the terrain and foliage which affect shielding.  Rather than specify a distance such as 40 km
which Teligent suggested, we believe the most flexible approach is to recognize the variations of each
unique area and to allow the relevant licensees to mutually resolve their coordination problems with as
little input from the Commission as possible.
67. The Canadian Agreement specifies that no coordination is required if the PFD at the
boundary is -114 dBW/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.
6. RF Safety
68. In the NPRM, we tentatively concluded that routine environmental evaluations for RF
exposure should be required in the case of fixed operations, including base stations, when the effective
radiated power (ERP) is greater than 1,000 watts.  We received no comments on this proposal.  Therefore,
for the reasons discussed in the NPRM, we will require licensees and manufacturers to be subject to the
RF radiation exposure requirements specified in Sections 1.1307 (b) of the Commission's Rules.   We
will modify this rule accordingly to apply to user and nodal stations.
D. Competitive Bidding Procedures
1. Statutory Requirements
69. Background. The Balanced Budget Act of 1997 amended Section 309(j) of the Act to
require the Commission to award mutually exclusive applications for initial licenses or permits using
competitive bidding procedures, with very limited exceptions.   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.
70. 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.
2. Incorporation by Reference of Part 1 Standardized Auction Rules
71. Background.  In the NPRM we proposed to conduct the auction for initial licenses in the
24 GHz band in conformity with the general competitive bidding rules set forth in Part 1, Subpart Q, of
the Commission's rules, and substantially consistent with the bidding procedures that have been employed
in previous Commission auctions.  Specifically, we proposed to employ the Part 1 rules governing
designated entities, application issues, payment issues, competitive bidding design, procedure and timing
issues, and collusion.
72. Discussion.  We adopt our proposal to conduct the auction for initial licenses in the
24 GHz band in conformity with the general competitive bidding rules set forth in Part 1, Subpart Q, of
the Commission's Rules, unless otherwise provided herein.   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.
73. Teligent requests that we auction licenses in the 24 GHz band using the simultaneous
multiple round auction design and not implement real time bidding for this auction.  Teligent is concerned
that the implementation of real time bidding may delay the auction due to the necessity for development
and testing of new software.   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.
74. Teligent also recommends that the Commission implement the shortest period allowable
for the filing of petitions to deny against long-form applications following the auction.  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.
75. We will adopt a ten-day period for filing petitions to deny against long-form applications.
Although we have the authority to reduce the filing period to five days, we find that a ten-day filing
period serves the public interest by providing parties, including small businesses, more flexibility in
challenging license awards than a five-day period.  Nonetheless, we delegate to the Bureau the discretion
to implement a five-day period in exigent circumstances.
3. Provisions for Designated Entities
a. Small Business Definitions and Bidding Credits
76. Background.  In the NPRM, we observed that the capital costs of operational facilities in
the 24 GHz band are likely to vary widely.  Accordingly, we sought to adopt small business size
standards that would afford licensees substantial flexibility.  We proposed to adopt the definitions the
Commission adopted for broadband PCS for "small" and "very small" businesses, which the Commission
also had adopted for 2.3 GHz and 39 GHz applicants.   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.
77. Discussion.  We will modify our proposal and adopt three small business definitions.
Two of the commenters, PCIA and RTG, state that, in light of our proposal to use EAs, the proposed two-
tiered system is not sufficient to allow small businesses the opportunity to participate at auction.
Because the capital costs of operational facilities in the 24 GHz band are likely to vary widely, we believe
that the use of three small business definitions will be useful in promoting opportunities for a wide variety
of applicants in the 24 GHz band.  Accordingly, we will define a very small business as an entity with
average annual gross revenues not to exceed $3 million for the preceding three years, a small business as
an entity with average annual gross revenues not to exceed $15 million for the preceding three years, and
an entrepreneur as an entity with average annual gross revenues not to exceed $40 million for the
preceding three years.
78. Some of the commenters are concerned that our proposed level of bidding credits is too
low.   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.
79. 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.
80. Teligent stresses that bidding credits should be uniform among competing services and
that the credits offered for the 39 GHz band should be adopted for the 24 GHz band because of
similarities between the bands and the need to eliminate any regulatory disparities that may lead to
marketplace distortions.   We are not persuaded by Teligent's argument.  Our proposal of bidding
credits in the 39 GHz band predates the effective date of the Part 1 amendments.  As we noted above, our
general competitive bidding rules increase the efficiency of the competitive bidding process and provide
more guidance to auction participants.  We also note that there are many variables affecting auction
behavior of bidders.  While differing credit levels result in differing trade-offs of the interests of
designated entities and non-designated entities within each auction, it is not clear that differing credit
levels disadvantage winning bidders in one auction as a whole relative to the winning bidders of another
auction.  Success of a company after licensing will not depend on the bidding credit initially afforded, but
upon the ability to keep up with ever changing marketplace conditions and needs.  Thus, we are not
persuaded at this time that it would be in the public interest to deviate from the general competitive
bidding rules set forth in Part 1, subpart Q, of the Commission's rules.
81. RTG suggests that the Commission should provide bidding credits to rural telephone
companies irrespective of such companies' gross revenues.   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.
82. Further, we remain committed to meeting the statutory objectives of promoting economic
opportunity and competition, avoiding excessive concentration of licenses, and ensuring access to new
and innovative technologies by disseminating licenses among a wide variety of applicants, including
small businesses, rural telephone companies, and businesses owned by members of minority groups and
women.  In addition to helping rural telephone companies, we believe the bidding credits we adopt here
for small businesses will assist in meeting these objectives because many minority- and women-owned
entities are small businesses and will therefore qualify for these special provisions.   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.
b. Attribution of Gross Revenues of Investors and Affiliates
83. Background.  In the NPRM, in the context of proposing the use of the Part 1 general
competitive bidding rules, we noted that we have sought comment on attribution rules in the Second
Further Notice of Proposed Rule Making in the Part 1 proceeding.
84. Discussion.  We will adopt attribution rules for the 24 GHz band that are consistent with
the Commission's proposal in the Part 1 Second Further Notice of Proposed Rule Making, wherein we
proposed a "controlling interest" standard as the general attribution rule for all future auctions.   Under
this standard, we will attribute to the applicant the gross revenues of its controlling interests and their
affiliates in assessing whether the applicant is qualified to take advantage of our small business
provisions.
85. A "controlling interest" includes individuals or entities, or groups of individuals or
entities, that have control of the applicant under the principles of either de jure or de facto control.  De
jure control is typically evidenced by the holding of more than 50 percent of the voting stock of a
corporation or, in the case of a partnership, general partnership interests.  De facto control is determined
on a case-by-case basis; our analysis includes the criteria set forth in Ellis Thompson.
86. The rule we adopt here provides specific guidance on the calculation of various types of
ownership interests.  For purposes of calculating equity held in an applicant, the definition provides for
full dilution of certain stock interests, warrants and convertible debentures.  In addition, the definition
provides for attribution of partnership and other ownership interests, including stock interests held in
trust, non-voting stock and indirect ownership through intervening corporations.  When an applicant
cannot identify controlling interests under the definition, the revenues of all interest holders in the
applicant and their affiliates will be attributed.   For example, if a company is owned by four entities,
each of which has 25 percent voting equity, and no shareholders' agreement or voting trust gives any one
of them control of the company, the revenues of all four entities must be attributed to the applicant.
Treating such a corporation in this way is similar to our treatment of a general partnership-all general
partners are considered to have a controlling interest.
87. Our intent is to provide flexibility that will enable legitimate small businesses to attract
passive financing in a highly competitive and evolving telecommunications marketplace. At the same
time, we believe that this controlling interest threshold will function effectively to ensure that only those
entities truly meriting small business status are eligible for small business provisions.  In particular, we
believe that the de jure and de facto concepts of control used to determine controlling interests in an
applicant and the application of our affiliation rules will effectively prevent larger firms from
illegitimately seeking status as a small business.
88. Wireless One requests that we clarify that for the purpose of determining eligibility for
bidding credits, personal income is not to be included in calculating the aggregate gross revenues of the
applicant, its affiliates and controlling principals.   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.
V. PROCEDURAL MATTERS
89. 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
90. As required by Section 604 of the Regulatory Flexibility Act ("RFA"), 5 U.S.C.  604
(1981), we have prepared a Final Regulatory Flexibility Analysis ("FRFA") of the expected impact on
small entities by the policies and rules adopted in this Report and Order.  The FRFA is contained in
Appendix B.
Further Information
91. For further information regarding this Report and Order, contact Catherine Fox, Michael
Pollak, Shellie Blakeney or Paul Moon, Wireless Telecommunications Bureau, Public Safety and Private
Wireless Division, Policy and Rules Branch, at (202) 418-0680 (voice), (202) 418-7233 (TTY); or Nese
Guendelsberger of the Auctions and Industry Analysis Division, Wireless Telecommunications Bureau at
(202) 418-0660 (voice), (202) 418-7233 (TTY).
VI. ORDERING CLAUSES
92. Accordingly, IT IS ORDERED that the actions of the Commission herein ARE TAKEN
pursuant to Sections 4(i), 257, 303, 309(j) of the Communications Act of 1934, as amended, 47 U.S.C.
  154(i), 257, 303, 309(j).
93. Accordingly, IT IS ORDERED that Parts 1, 2, 87 and 101 of the Commission's Rules
ARE AMENDED as set forth in Appendix C, effective sixty days after their publication in the Federal
Register, following OMB approval.  If OMB approval is not issued within sixty days after publication of
a summary of this Report and Order in the Federal Register, a notice shall be published in the Federal
Register specifying a revised effective date.
94. IT IS FURTHER ORDERED pursuant to Section 4(i) of the Communications Act of
1934, as amended, 47 U.S.C.  154(i), that the Commission's Consumer Information Bureau, Reference
Information Center, SHALL SEND a copy of this Report and Order, including the Final Regulatory
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.
						FEDERAL COMMUNICATIONS COMMISSION
						Magalie Roman Salas
						Secretary
APPENDIX A
LIST OF PLEADINGS
The following documents were filed in response to the Notice of Proposed Rulemaking:
Amendments to Parts 1, 2 and 101 of the Commission's Rules to License Fixed Services at
24 GHz, Notice of Proposed Rulemaking, WT Docket No. 99-327, 14 FCC Rcd. 19263.
LIST OF PARTIES RESPONDING TO NOTICE OF PROPOSED RULEMAKING
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
beamwidth
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.
	  We note, as an initial matter, that DEMS licensees who have been relocated to the 24 GHz band will be
considered incumbents in the 24 GHz band and will be governed by the rules we adopt herein, unless otherwise
indicated.
  See Amendment to Parts 1, 2, and 101 of the Commission's Rules To License Fixed Services at
24 GHz, WT Docket 99-327, Notice of Proposed Rulemaking, 14 FCC Rcd 19263 (1999) (NPRM).
  See Amendment of Parts 2, 21, 74 and 94 of the Commission's Rules to Allocate Spectrum at 18 GHz
for, and to Establish other Rules and Policies Pertaining to, the Use of Radio in Digital Termination Systems and
in Point-to-Point Microwave Radio Systems for the Provision of Digital Electronic Message Services, and for
other Common Carrier, Private Radio, and Broadcast Auxiliary Services; and to Establish Rules and Policies for
the Private Radio Use of Digital Termination Systems at 10.6 GHz, 54 Rad. Reg. 2d 1091 (1983).
  See id.
  See Amendment of Parts 2, 21, 74 and 94 of the Commission's Rules to Allocate Spectrum at 18 GHz
for, and to Establish other Rules and Policies Pertaining to, the Use of Radio in Digital Termination Systems and
in Point-to-Point Microwave Radio Systems for the Provision of Digital Electronic Message Services, and for
other Common Carrier, Private Radio, and Broadcast Auxiliary Services; and to Establish Rules and Policies for
the Private Radio Use of Digital Termination Systems at 10.6 GHz, 56 Rad. Reg. 2d 1171 (1984).
  See Amendment of the Commission's Rules to Relocate the Digital Electronic Message Service From
the 18 GHz to the 24 GHz Band and to Allocate the 24 GHz Band for Fixed Service, ET Docket No. 97-99,
Memorandum Opinion and Order, 13 FCC Rcd 15147, 15149  6 (1998) (DEMS MO&O).
  The Reallocation Order provides a complete background of the events preceeding the DEMS relocation
from 18 GHz band to the 24 GHz band.  See Amendment of the Commission's Rules to Relocate the Digital
Electronic Message Service from the 18 GHz Band to the 24 GHz Band and To Allocate the 24 GHz Band For
Fixed Service, Order, 12 FCC Rcd 3471-3475  2-10 (1997) (Reallocation Order).
  Id.
  Id. at 3475-76  11, 14.  The Commission reasoned that it was necessary to relocate the entire
DEMS service, as opposed to only those licensees in the Washington D.C. and Denver regions, because of the
unlikelihood that separate 24 GHz equipment would be manufactured solely for the Washington and Denver
markets.  Thus, the Commission explained that bifurcating the DEMS licensees would in effect preclude these two
markets from receiving DEMS service.  DEMS MO&O, 13 FCC Rcd at 15152-53  12.
  See Reallocation Order, 12 FCC Rcd at 3475  11; see also DEMS MO&O, 13 FCC Rcd at 15153  13.
  Reallocation Order, 12 FCC Rcd 3471.
  Amendment of the Commission's Rules to Relocate the Digital Electronic Message Service from the
18 GHz Band to the 24 GHz Band and To Allocate the 24 GHz Band For Fixed Service, Order, 12 FCC Rcd 8266
(1997).
  NPRM, 14 FCC Rcd at 19263.
  Id. at 19265  1.
  Id.
  Reallocation Order, 12 FCC Rcd at 3475  13.
  NPRM at 19267-67  6, 19271-72  13-15.
  Id. at 19267  6.
  See, e.g., Teligent Comments at 5; Wireless One Comments at 1.
  Teligent Comments at 5.
  Wireless One Comments at 1; PCIA Comments at 4-5; FWCC Comments at 2-3.
  FWCC Comments at 3; PCIA Comments at 4.
  See infra  8.
  FWCC Comments at 3; Wireless One Comments at 1.
  PCIA Comments at 5.
  Teligent Comments at 7.
  We note that the Commission has permitted the provision of additional operations in existing services
when it determined that it was in the public interest to do so.  See, e.g., Amendment of Parts 21 and 74 to Enable
Multipoint Distribution Service and Instructional Television Fixed Service Licensees to Engage in Fixed Two-
Way Transmission, MM Docket No. 97-217, Report and Order, 13 FCC Rcd 19112 (1998); Amendment of the
Commission's Rules to Permit Flexible Service Offerings in the Commercial Mobile Radio Services, WT Docket
No. 96-6, First Report and Order and Further Notice of Proposed Rulemaking, 11 FCC Rcd 8965 (1996);
Amendment of Part 95 of the Commission's Rules to Allow Interactive Video and Data Service Licensees to
Provide Mobile Service to Subscribers, WT Docket No. 95-47, Report and Order, 11 FCC Rcd 6610 (1996)
(IVDS Report and Order).
  See Redesignation of the 17.7-19.7 GHz Frequency Band, Blanket Licensing of Satellite Earth Stations
in the 17.7-20.2 GHz and 27.5-30.0 GHz Frequency Bands, and the Allocation of Additional Spectrum in the 17.3-
17.8 GHz and 24.75-25.25 GHz Frequency Bands for Broadcast Satellite-Service Use, Report and Order, FCC 00-
212 (rel. June 22, 2000) (18 GHz Report and Order).
  Id. at  96-99.
  Id.
  NPRM, 14 FCC Rcd 19268-69  7.
  See 18 GHz Report & Order at  96-99.
  PCIA Comments at 5; FWCC Comments at 3; Teligent Comments at 9.
  DIRECTV Comments at 4.
  Teligent Comments at 9.
  18 GHz Report and Order at  98.
  Teligent Comments at 10.
  Note that a provider of satellite services using BSS feeder links at 25.05-25.25 must also obtain a Part
25 license, which could be sought after an amendment of the Part 25 service rules or upon a waiver of those rules.
  NPRM, 14 FCC Rcd at 19269  8.
  Id.
  Amendment of Part 2 of the Commission's Rules to Make Non-Substantive Revisions to the Table of
Frequency Allocations, Memorandum Opinion and Order, 15 FCC Rcd 3459, 3477  45 (1999).
  Id.
  See NPRM, 14 FCC Rcd at 19270  9.
  Id.
  NPRM at 19269-70  9.
  Teligent Comments at 10-14; Wireless One Comments at 2.
  Teligent Comments at 11.
  PCIA Comments at 5-11; SBA Comments at 1-4; RTG Comments 5-12; NTCA Reply at 1-4.
  PCIA Comments at 6-11, SBA Comments at 1-2, RTG Comments at 11-13.
  SBA Comments at 2.
  See, e.g., id.
  PCIA maintains that the Rand McNally copyright issues can be resolved and requests that we
reconsider our earlier decision not to use Basic Trading Areas (BTAs).  In the alternative PCIA suggests the
possible use of  the Commerce Department's Component Economic Areas (CEAs).  PCIA Comments at 6-11.
SBA and RTG prefer the use of Metropolitan Statistical Areas (MSAs) in conjunction with Rural Service Areas
(RSAs).  SBA Comments at 1-2, RTG Comments at 11-13.
  Teligent Comments at 12.
  See id.
  See Amendment of the Commission's Rules to Establish New Personal Communications Services,
Narrowband PCS, GEN Docket No. 90-314, Second Report and Order and Second Further Notice of Proposed
Rulemaking, FCC 00-159 (rel. May 18, 2000) (Narrowband PCS Second Report and Order).
  See 39 GHz Band Auction Closes Winning Bidders of 2,173 License Announced, Public Notice,
DA 00-1035 (released May 10, 2000).  Out of the twenty-two small and very small bidders who participated at
auction eighteen were successful in winning licenses.  Id.
  Narrowband PCS Second Report and Order, FCC 00-159 at  10.
  See Amendment of the Commission's Rules Regarding the 37.0-38.6 GHz and 38.6-40.0 GHz Bands,
ET Docket No. 95-183, Memorandum Opinion and Order, 14 FCC Rcd 12428, 12452 at  46 (1999)
(39 GHz MO&O).
  See, e.g., PCIA Comments at 2; Teligent Comment at 5.
  The Commission used EAs to license the 39 GHz Service.  See 39 GHz MO&O, 14  FCC Rcd at
12452-53  46.
  See infra  77, 78.
  PCIA Comments at 7-8; SBA Comments at 2-3; NTCA Reply Comments at 2-3.
  NTCA Reply Comments at 3.
  47 U.S.C.  309(j)(3)(B), 309(j)(4)(C); see PCIA Comments at 7.
	  See Wireless Telecommunications Bureau Grants Consent to Assign C and F Block Broadband PCS
and SMR Licenses (Application File Nos. 0000016887, 0000016892), Public Notice, DA 00-213 (rel. Feb. 8,
2000).
	  47 C.F.R.  1.2105.
  See, e.g., Geographic Partitioning and Spectrum Disaggregation by Commercial Mobile Radio Services
Licensees and Implementation of Section 257 of the Communications Act - Elimination's of Market Barriers,
WT Docket No.96-148, Report and Order and Further Notice of Proposed Rulemaking, 11 FCC Rcd 21831,
21843-44  13-17 (1996) (Partitioning and Disaggregation Report and Order).
  NPRM, 14 FCC Rcd at 19273  16.
  Id.
  47 C.F.R.  101.147(r)(9).
  FWCC Comments at 3-5; Wireless One Comments at 3-5; PCIA Comments at 11-13; Teligent
Comments at 40-41; Ensemble Comments at 1-7.
  Id.
  Ensemble Comments at 4.
  Id. at 1, 4-7.
  PCIA Comments at 12-13; FWCC Comments 4-5.
  See infra  57, 58.
  NPRM, 14 FCC Rcd at 19271  11.
  Id. at  12.
  Wireless One Comments at 2.
  Teligent Comments at 13-14.
  47 C.F.R.  101.509.
  See, e.g., 39 GHz Report & Order, 12 FCC Rcd at 18637  79; MAS Report and Order, FCC 99-415 at
 70.
  See, e.g., 39 GHz MO&O, 12 FCC Rcd at 18637  79.
  See, e.g., Rulemaking to Amend Parts 1, 2, 21 and 25 of the Commission's Rules to Redesignate the
27.5-29.5 GHz Frequency Band, To Reallocate the 29.5-30.0 GHz Frequency Band, To Establish Rules and Policies
for Local Multipoint Distribution Service and for Fixed Satellite Services, CC Docket 92-297, Second Report and
Order, Order on Reconsideration and Fifth Notice of Proposed Rulemaking, 12 FCC Rcd 12545, 12642-45  218-
227 (1997) (LMDS Second Report and Order); 39 GHz Report and Order, 12 FCC Rcd at 18636  76.
  See NPRM, 14 FCC Rcd at 19274  19.
  Id.
  See supra  7.
  PCIA Comments at 13; Teligent Comments at 18-19; Teligent Reply Comments at 2.
  Teligent Comments at 18.
  LMDS Second Report and Order, 12 FCC Rcd 12545, 12642-45  218-227; 39 GHz Report and Order,
12 FCC Rcd at 18636  76.
  See, e.g., LMDS Second Report and Order, 12 FCC Rcd at 12644  223.
  47 U.S.C.  153(44).
  47 U.S.C.  153(46).
  See NPRM, 14 FCC Rcd at 19274  18.
  47 C.F.R.  51.100.
  47 C.F.R.  51.201 - 51.223.
  See 1.947 (b) of the of the Commission's Rules, 47 C.F.R.  1.947 (b).  A change in regulatory status
would require Commission prior authorization, however, if the change raised issues concerning the benchmark
contained in Section 310(b)(4) of the Act.  See infra n. 180.
  47 C.F.R.   1.947, 101.305.
  NPRM, 14 FCC Rcd at 19274  19.
  Id.
  We note that this applies to incumbent licensees as well as to new 24 GHz band licensees.
  See infra  66 n. 216.
  See 47 C.F.R.  1.1301-1319, 1.924, 17.4.
  NPRM, 14 FCC Rcd at 19275  20.
  Id. at 19276-77  21-22.
  This standard was adopted in the 39 GHz Report and Order.  See 39 GHz Report and Order, 12 FCC
Rcd 18600, 18619  32.
  RTG Comments at 13.
  Id.
  See the LMDS Third Report and Order for an extensive market analysis in relation to the LMDS
eligibility restriction.  Rulemaking to Amend Parts 1, 2, 21 and 25 of the Commission's Rules to Redesignate the
27.5-29.5 GHz Frequency Band, to Reallocate the 29.5 -30.0 GHz Frequency Band, to Establish Rules and
Policies for Local Multipoint Distribution Service and For Fixed Satellite Services, CC Docket No. 92-297, Third
Report and Order and Memorandum Opinion and Order, FCC 00-223 (rel. June 27, 2000) (LMDS Third Report
and Order).
  Id. at  18.
  Id.  In addition, we note that we are currently continuing our inquiry into broadband deployment.  See
Inquiry Concerning Deployment of Advanced Telecommunications Capability to All Americans in a Reasonable
and Timely Fashion, and Possible Steps to Accelerate such Deployment Pursuant to Section 706 of the
Telecommunications Act of 1996, CC Docket No. 98-146, Notice of Inquiry, FCC 00-57 (rel. February 18, 2000).
  See 47 C.F.R.  101.1003.  Section 101.1003 prohibited ILECs and incumbent cable companies in
LMDS from holding an attributable interest in a LMDS A Block license, where the LMDS geographic service area
significantly overlaps the incumbents authorized or franchised service area.
  47 C.F.R.  101.1003(a)(1).
  LMDS Second Report and Order, 12 FCC Rcd at 12610  149, 12617-19  163-165, 12621  170.
  LMDS provided two licenses per BTA.  The A Block license is comprised of 1150 MHz of total
bandwidth and the B Block license is comprised of 150 MHz of total bandwidth.
  See Reallocation Order, 12 FCC Rcd at 3471.  See also supra  20.
  NPRM, 14 FCC Rcd at 19277  22; see also Teligent Comments at 7, n.12.  Teligent indicates that
MVPD is not currently offered in the 24 GHz band.
  NPRM, 14 FCC Rcd at 19277  22.
  Teligent Comments at 17-18.
  Id. at 19-24.
  Promotion of Competitive Networks in Local Telecommunications Markets, WT Docket No. 99-217,
CC Docket No. 98-98, Notice of Proposed Rulemaking and Notice of Inquiry, FCC 99-141 (rel. July 9, 1999).
  Teligent Comments at 6 in LMDS Third Report and Order proceeding.
  See NPRM, 14 FCC Rcd at 19280-81  32.
  See id. at 19281  33-34.
  FWCC Comments at 7; PCIA Comments at 16-18; Teligent Comments at 26-28.
  RTG Comments at 14-15.
  See FWCC Comments at 7; PCIA Comments at 17; Teligent Comments at 27.
  See PCIA Comments at 17-18.
  47 C.F.R.  22.940(a)(1)(i).  See also LMDS Second Report and Order, 12 FCC Rcd 12545, 12660;
Amendment of the Commission's Rules to Establish Part 27, the Wireless Communications Service, GN Docket
No. 96-228, Report and Order, 12 FCC Rcd 10785, 10843-10844 (1997) (WCS Report and Order); Amendment of
Part 95 of the Commission's Rules to Provide Regulatory Flexibility in the 218-219 MHz Service, WT Docket
No. 98-169, Report and Order and Memorandum Opinion and Order, 15 FCC Rcd 1497, 1537-38 (1999) (218-
219 MHz Service Report and Order); MAS Report and Order, FCC No. 99-415  94.
	  See 39 GHz Report and Order, 12 FCC Rcd 18600, 18625  46.
  See LMDS Second Report and Order, 12 FCC Rcd at 12660; WCS Report and Order, 12 FCC Rcd at
10843-44; 218-219 MHz Service Report and Order, 15 FCC Rcd at 1538; MAS Report and Order at  95.
	  47 C.F.R.  101.63.
	  See e.g., 39 GHz Report and Order, 12 FCC Rcd 18600, 18625  47.
  NPRM, 14 FCC Rcd at 19279  29.
  Id.
  See supra  37-38.
  NPRM at 19279  29.
  Id. at 19280  30.
	  We note that incumbent licensees that currently have a license term of less than less than ten years will
receive a ten-year term upon renewal.
  See, e.g., FWCC Comments at 7; PCIA Comments at 16-18; Teligent Comments at 26-28; Teligent
Reply Comments at 10.
  Teligent Comments at 26.
  FWCC Comments at 7; PCIA Comments at 16.  See also supra  36.
  See, e.g., LMDS Second Report and Order at 12545; 39 GHz MO&O, 14 FCC Rcd 12428; 218-
219 MHz Report and Order at 1497.
  See 39 GHz Report and Order, 12 FCC Rcd 18600, 18623; MAS Report and Order at  95.
  See Implementation of Sections 3(n) and 332 of the Communications Act, Regulatory Treatment of
Mobile Services, Second Report and Order, 9 FCC Rcd 1411, 1463-93 (1994) (CMRS Second Report and Order).
The Commission determined to forbear sections 203, 204, 205, 211, 212, and most application of section 214.
Id. at 1478-80.
  See In the Matters of Hyperion Telecommunications, Inc. Petition Requesting Forbearance, Time
Warner Communications Petition for Forbearance, Complete Detariffing for Competitive Access Providers and
Competitive Exchange Carriers, Memorandum Opinion and Order and Notice of Proposed Rule Making, 12 FCC
Rcd 8596 at 8608-10  23-27.
  See CMRS Second Report and Order at 1478 (declining to forbear Sections 201 and 202 of the
Communications Act); In the Matter of Personal Communications Industry Association's Broadband Personal
Communications Services Alliance's Petition for Forbearance for Broadband Personal Communications Services,
Forbearance from Applying Provisions of the Communications Act to Wireless Telecommunications Carriers, WT
Docket No. 98-100, Memorandum Opinion and Order and Notice of Proposed Rulemaking, 13 FCC Rcd 16857,
16914 (1998) (declining to forbear from applying Section 20.12(b) of the Commission's Rules (resale rule) and
Sections 201 and 202 of the Communications Act).
  NPRM at 19281-82  35.
  Teligent Comments at 29.
  PCIA Comments at 13-16; FWCC Comments at 6.
  PCIA Comments at 16.
  See 47 U.S.C.  160(a).
  PCIA Comments at 15-16.
  See Personal Communications Industry Association's Broadband Personal Communications Services
Alliance's Petition for Forbearance for Broadband Personal Communications Services, Memorandum Opinion and
Order and Notice of Proposed Rulemaking, 13 FCC Rcd 16857 (1998) (PCIA Forbearance Order and NPRM).
  Id.
  See 47 C.F.R.  43.51; Implementation of Section 402(b)(2)(A) of the Telecommunications Act of
1996, Report and Order, 14 FCC Rcd 11364, 11370-75  8-18, 11378-81  26-32 (1999); 1998 Biennial
Regulatory Review - Review of International Common Carrier Regulations, Report and Order, 14 FCC Rcd 4909,
4912-27  8-40 (1999).
  Reorganization and Revision of Parts 1, 2, 21, and 94 of the Rules to Establish a New Part 101
Governing Terrestrial Microwave Fixed Radio Services, WT Docket No. 94-148, Memorandum Opinion and
Order and Notice of Proposed Rule Making, FCC 00-33  83 (rel. Feb. 14, 2000) (Part 101 MO&O and NPRM).
  See, e.g., MAS Report and Order, FCC No. 99-415 at  78-88; 39 GHz MO&O, 14 FCC Rcd 12428;
Revision of Part 22 and Part 90 of the Commission's Rules to Facilitate Future Development of Paging Systems,
PR Docket No. 93-253, Memorandum Opinion and Order on Reconsideration and Third Report and Order, 14
FCC Rcd 10030, 10101 (1999) (Paging Systems Third Report and Order); Rulemaking to Amend Parts 1, 2, 21,
and 25, of the Commission's Rules to Redesignate the 27.5-29.5 GHz Frequency Band, To Reallocate the 29.5-
30.0 GHz Frequency Band, To Establish Rules and Policies for Local Multipoint Distribution Service and for
Fixed Satellite Services, CC Docket No. 92-297, Fourth Report and Order, 13 FCC Rcd 11655 (1998) (LMDS
Fourth Report and Order); Partitioning and Disaggregation Report and Order, 11 FCC Rcd 21831.
  Partitioning Report and Order, 11 FCC Rcd at 21843  12.
  NPRM, 14 FCC Rcd at 19279  27-28.  Partitioning is the assignment of geographic portions of a
license along geopolitical or user defined boundaries other than those defined by Rand McNally.  Disaggregation
is the assignment of discrete portions or blocks of licensed spectrum to another entity.
  Id.
  See LMDS Fourth Report and Order, 13 FCC Rcd at 11655; 39 GHz MO&O, 14 FCC Rcd at 12460-
61  60-63.
  Teligent Comments at 25-26.
  See, e.g., LMDS Fourth Report and Order, 13 FCC Rcd at 11664-65  16.
  See, e.g., PCS Order, 11 FCC Rcd at 21855; LMDS Report and Order, 13 FCC Rcd 11665  16.
  See, e.g., LMDS Report and Order, 13 FCC Rcd 11665  16.
  Id.
  Id. at 11666  19.
  We note that our decision to allow combined partitioning and disaggregation is consistent with our
approach in other services.  See, e.g., MAS Report and Order, FCC 99-415  88; 39 GHz MO&O, 14 FCC Rcd at
2460; Paging Systems Third Report and Order, 14 FCC Rcd at 10110; PCS Order, 11 FCC Rcd at 21866.
  See, e.g., 39 GHz Report and Order, 12 FCC Rcd 18635  73.
  See 47 C.F.R.  1.948.
  47 C.F.R.  1.2111(e).
  See 47 U.S.C.  310(a), 310(b).
  47 C.F.R.  101.7(b).
  NPRM, 14 FCC Rcd at 19277  23-24.
  47 C.F.R.  101.7(a).
  47 C.F.R.  101.7(b).
  Teligent Comments at 24-25.
  See MDS Report and Order, 2 FCC Rcd at 4253  16 (1987); Streamlining the Commission's Rules
and Regulations for Satellite Application and Licensing Procedures, IB Docket No. 95-117, Report and Order,
11 FCC Rcd 21581, 21599  43 (1996); LMDS Second Report and Order, 12 FCC Rcd at 12651  243.
  We note, however, that to the extent that a licensee's decision to change its regulatory status raises
issues with respect to that licensee exceeding the benchmark contained in Section 310(b)(4), the rules require the
Commission's prior approval before the licensee can make this change.  Rules and Policies on Foreign
Participation in the U.S. Telecommunications Market and Market Entry and Regulation of Foreign-Affiliated
Entities, IB Docket Nos. 97-142 and 95-22, Report and Order and Order on Reconsideration, 12 FCC Rcd 23891,
23940-41  111-118 (1997).
  See Rules and Policies on Foreign Participation in the U.S. Telecommunications Market, IB Docket
No. 97-142, Market Entry and Regulation of Foreign-Affiliated Entities, IB Docket No. 95-22, Report and Order
and Order on Reconsideration, 12 FCC Rcd 23891, 23935-47  97-132 (1997).
  NPRM, 14 FCC Rcd at 19282-83  36.
  Id. at  37.
  Id.
  Id.
  Amendment to Parts 1, 2, and 101 of the Commission's Rules To License Fixed Services at 24 GHz,
ET Docket 99-327, Erratum to Notice of Proposed Rulemaking at  7 (rel. Dec. 23, 1999).
  Id. at  38-39.
  PCIA Comments at 19; FWCC Comments at 5.; Nortel Comments at 2-4; Teligent Comments at 29-32.
  Nortel Comments at 3.
  Nortel Comments at 4-5; Teligent Comments at 31-32.
  Teligent Comments at 32.
  Id. at 32-33.
  Id.
  Id. at 33-34.
  See Modification Order, 12 FCC Rcd at 8767  3.
  Teligent Comments at 14.
  Id. at 15.
  Nortel Comments at 5; Teligent Comments at 15.
  Nortel Comments at 5.
  See, e.g., Replacement of Part 90 by Part 88 to Revise the Private Land Mobile Radio Services and
Modify the Policies Governing Them and Examination of Exclusivity and Frequency Assignment Policies of the
Private Land Mobile Services, PR Docket No. 92-235, Second Memorandum Opinion and Order, 14 FCC Rcd
8642, 8658-59  34 (1999) (PLMRS Second MO&O) (allowing low power licensees to remain at low power and
continue to use wideband equipment on a secondary basis); PLMRS Second MO&O, 14 FCC Rcd at 8665  47
(permitting new licensees on emergency medical communications channels to continue to use non-compliant
equipment for one year following effective date of new transmitting and receiving requirements, because type
accepted equipment was not yet available); Amendment of Part 25 of the Commission's Rules and Regulations to
Reduce Alien Carrier Interference Between Fixed-Satellites at Reduced Orbital Spacings and to Revise
Applications Processing Procedures for Satellite Communications Services, CC Docket No. 86-496, Second
Report and Order and Further Notice of Proposed Rulemaking, 8 FCC Rcd 1316, 1322  38-39 (1993)
(extending compliance deadline for non-conforming antennas by one year); Amendment of Section 94.65(3) of the
Commission's Rules to Rechannelize the 2450-2483.5 MHz Band, PR Docket No. 89-113, Report and Order,
5 FCC Rcd 4655, 4656-57  13-17 (1990) (permitting systems previously authorized to operate at 2.5 GHz to
continue to operate existing 800 kHz channel equipment indefinitely, rather than convert to 625 kHz channels).
  January 1, 2001, is the mandatory deadline for the incumbent licensees to relocate from 18 GHz to
24 GHz.  See supra  4.
  47 C.F.R.  101.139.
  Teligent Comments at 42.
 Part 101 MO&O and NPRM, 15 FCC Rcd 1329, 3157-58  57.
  47 C.F.R.  101.141.
  39 GHz Report and Order, 12 FCC Rcd at 18629  60; LMDS Second Report and Order, 12 FCC Rcd
at 12672  301.
  Comsearch Comments at 6.
  Teligent Comments at 39.
  At present no such agreement exists with Mexico.
  See PCIA Comments at 18-19; FWCC Comments at 7-8; Nortel Comments at 4; Comsearch
Comments at 2-3; Teligent Comments at 34.
  Teligent Comments at 37.
  Id. at 37-38.
  FWCC Comments at 8; PCIA Comments at 19.
  Comsearch Comments at 4.
  Id. at 4-6.
  See Interim Arrangement Concerning the Sharing between Canada and the United States of America
on Broadband Wireless Systems in the Frequency Bands 24.25-24.45 GHz, 25.05-25.25 GHz, and 38.6-40.0 GHz
signed by the FCC on Dec 8, 1999 and Canada on Dec 21, 1999 (Canadian Agreement).
  47 C.F.R.  1.1307(b).
  See 47 U.S.C.  309(j)(1), (2). Section 309(j)(2) exempts from auctions licenses and construction
permits for public safety radio services, digital television service licenses and permits given to existing terrestrial
broadcast licensees to replace their analog television service licenses, and licenses and construction permits for
noncommercial educational broadcast stations and public broadcast stations.
  NPRM, 14 FCC Rcd at 19286  43-45.
  Id.  See also Implementation of Sections 309(j) and 337 of the Communications Act of 1934 as
Amended, WT Docket No. 99-87, Notice of Proposed Rule Making, 14 FCC Rcd 5206 (1999).
  See supra  13-18.
  Teligent supports the Commission's tentative conclusion that mutually exclusive applications for
initial licenses in the 24 GHz band must be resolved through competitive bidding.  Teligent Comments at 43.
See also RTG Comments at 4.
  See, e.g., Amendment of the Commission's Rules Regarding Multiple Address Systems, WT Docket
No. 97-81, Report and Order, FCC No. 99-415 at  14 (rel. Jan. 19, 2000).
  NPRM, 14 FCC Rcd at 19286  46.
  See infra at  83-88 for a discussion of the attribution rule we adopt today.
  See, e.g., Teligent Comments at 42-46.
  The Second Further Notice of Proposed Rule Making in the Part 1 proceeding is currently pending.
Amendment of Part 1 of the Commission's Rules - Competitive Bidding Procedures, WT Docket No. 97-82, Third
Report and Order and Second Further Notice of Proposed Rule Making, 13 FCC Rcd 374, 471-484 (1998).  See
also Amendment of Part 1 of the Commission's Rules - Competitive Bidding Procedures, WT Docket No. 97-82,
Third Further Notice of Proposed Rule Making, 14 FCC Rcd 21558 (1999).
  Teligent Comments at 46-47.
  See Balanced Budget Act of 1997  3002(a)(E)(i); 47 U.S.C.  309(j)(3)(E)(i).
  Teligent Comments at 47-48.
  47 C.F.R.  1.2108.  See also Balanced Budget Act of 1997  3008.
  NPRM, 14 FCC Rcd at 19287-19288  48, 49.  See also 47 C.F.R.  24.720(b)(1)(2),
27.210(b)(1)(2), 101.1209(b)(1)(i)(ii).
  NPRM, 14 FCC Rcd at 19287-19288  48, 49.
  PCIA Comments at 20-21; RTG Comments at 17-18.
  PCIA Comments at 20-21; RTG Comments at 17-18; Teligent Reply Comments at 5-6.
   PCIA Comments at 20; RTG Comments at 18.  In the LMDS auction, bidding credits of 35 percent
and 45 percent were available for small and very small businesses, respectively, and a 25 percent bidding credit
was available for entrepreneurs.  See 47 C.F.R.  101.1107.
  Teligent Comments at 49; Teligent Reply Comments at 5-6.  For the 39 GHz auction, small businesses
received a 25 percent bidding credit and very small businesses received a 35 percent bidding credit.  See 47 C.F.R.
 101.1208
  47 C.F.R.  1.2110(e).
  Part 1 Third Report and Order, 13 FCC Rcd at 402-04  45-48; 47 C.F.R.  1.2110(e).
  Id. at 403, 404  47.
  See Rulemaking to Amend Parts 1, 2, 21, and 25 of the Commission's Rules to Redesignate the 27.5-
29.5 GHz Frequency Band, to Reallocate the 29.5-30.0 GHz Frequency Band, to Establish Rules and Policies for
Local Multipoint Distribution Service and for Fixed Satellite Services, Second Order on Reconsideration,
CC Docket No. 92-297, 12 FCC Rcd 15082, 15095-15096  19-20 (1997).
  Teligent Comments at 49; Teligent Reply Comments at 5-6.
  RTG Comments at 18.
  Teligent Reply Comments at 6-7.
  To date, 89 percent of rural telephone companies participating in Commission auctions of wireless
licenses have identified themselves as small businesses on their FCC Form 175 short-form applications.
  See Extending Wireless Telecommunications Services To Tribal Lands, Report and Order and
Further Notice of Proposed Rule Making, WT Docket No. 99-266, FCC 00-209 (2000).  We remain committed to
encouraging the deployment of advanced telecommunications capability to all Americans on a reasonable and
timely basis.  See Section 706(a) of the Telecommunications Act of 1996, Pub.L. 104-104, Title VII,  706, Feb. 8,
1996, 110 Stat. 153, reproduced in the notes under 47 U.S.C.  157.
  See supra  77-78.
  See Adarand Constructors, Inc. v. Pea, 515 U.S. 200 (1995); United States v. Virginia, 518 U.S. 515
(1996).
  NPRM, 14 FCC Rcd at 19287  46.
  See Part 1 Third Report and Order, 13 FCC Rcd at 477-78  185-86.
  See Ellis Thompson Corporation, 9 FCC Rcd 7138, 7138-7139  9 (1994) ("Ellis Thompson"), in which
the Commission identified the following factors used to determine control of a business: (1) use of facilities and
equipment; (2) control of day-to-day operations; (3) control of policy decisions; (4) personnel responsibilities; (5)
control of financial obligations; and (6) receipt of monies and profits.  See also Intermountain Microwave, 24 Rad.
Reg. (P&F) 983 (1963); In re Application of Baker Creek Communications, L.P. for Authority to Construct and
Operate Local Multipoint Distribution Services in Multiple Basic Trading Areas, Memorandum Opinion and Order,
13 FCC Rcd 18709 (1998) (discussing in detail the factors constituting de facto control); Stephen F. Sewell,
Assignments and Transfers of Control of FCC Authorizations Under Section 310(d) of the Communications Act of
1934, 43 Fed. Comm. L.J. 277 (1991).
  See 47 C.F.R.  1.2110(b)(4).
  Wireless One Comments at 3.
  See, e.g., Revision of Part 22 and Part 90 of the Commission's Rules to Facilitate Future Development
of Paging Systems, WT Docket No. 96-18, Memorandum Opinion and Order on Reconsideration and Third
Report and Order, 14 FCC Rcd at 10086  100 (1999);  "Wireless Telecommunications Bureau Responds to
Questions About the Local Multipoint Distribution Service Auction," Public Notice, 13 FCC Rcd at 346 (1998);
Competitive Bidding Fifth Memorandum Opinion and Order, 10 FCC Rcd at 421  30 (1994).
  See 47 C.F.R 1.2110(b)(4).  See also In re Application of Baker Creek Communications, L.P. for
Authority to Construct and Operate Local Multipoint Distribution Services in Multiple Basic Trading Areas,
Memorandum Opinion and Order, 13 FCC Rcd 18709 (rel. Sept. 22, 1998).
  See 5 U.S.C.  603.  The RFA, see 5 U.S.C.  601 et. seq., has been amended by the Contract With
America Advancement Act of 1996, Pub. L. No. 104-121, 110 Stat. 847 (1996) (CWAAA).  Title II of the
CWAAA is the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).
  See Amendment to Parts 1, 2, and 101 of the Commission's Rules To License Fixed Services at 24 GHz,
WT Docket 99-327, Notice of Proposed Rulemaking, 14 FCC Rcd 19263, 19292 (2000) (NPRM).
  See 5 U.S.C.  604.
  5 U.S.C.  603(b)(3).
  See 5 U.S.C.  601(6).
  5 U.S.C.  601(3) (incorporating by reference the definition of "small business concern" in 15 U.S.C.
 632).  Pursuant to the RFA, the statutory definition of a small business applies "unless an agency, after
consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public
comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and
publishes such definition(s) in the Federal Register."  5 U.S.C.  601(3).
  Small Business Act, 15 U.S.C.  632 (1996).
  5 U.S.C.  601(4).
  1992 Economic Census, U.S. Bureau of the Census, Table 6 (special tabulation of data under contract to
Office of Advocacy of the SBA).
  5 U.S.C.  601(5).
  U.S. Dept. of Commerce, Bureau of the Census, "1992 Census of Governments."
  Id.
  See 13 C.F.R.  121.201, Standard Industrial Classification (SIC) Code 4812.
  U.S. Bureau of the Census, U.S. Department of Commerce, 1992 Census of Transportation,
Communications, and Utilities, UC92-S-1, Subject Series, Establishment and Firm Size, Table 5, Employment
Size of Firms: 1992, SIC Code 4812 (issued May 1995).
  Teligent has acquired the DEMS licenses of FirstMark, the only other licensee in the 24 GHz band
whose license has been modified to require relocation to the 24 GHz band.
  See Implementation of Section 309(j) of the Communications Act - Competitive Bidding, Fifth
Report and Order, 9 FCC Rcd 5532, 5581-82  115 (1994).
  See 5 U.S.C.  603.
  See supra Section IV.A.2  12 (only four such bidders lost, out of twenty-eight).
  Id. at  14, 15.
  Id. at  17.
  We do note, however, that some changes may be substantial enough to require application under
separate part provisions for both incumbents and new licensees (i.e., discontinuance, reduction or impairment of
existing service, environmental impact, quiet zones, antenna structure requirements, international borders, and
technical rules under Part 101).  See supra Section IV.B.1  28, 29.
  47 C.F.R.  1.2111(e).
  See 47 C.F.R.  101.7.
  We proposed a 15 percent bidding credit for small businesses, and a 25 percent bidding credit for very
small businesses.  See NPRM, 14 FCC Rcd at 19287, 19288  48, 49.  However, we are adopting bidding credits
of 15, 25, and 35 percent for three categories of small businesses.  See supra Section IV.D.3.a  76.
  47 C.F.R.  101.535.
  In particular, as indicated by NTCA, rural telephone companies may not be successful in obtaining
partitioned areas because licensees are generally able to meet our performance requirements by only serving urban
areas.  See Amendments to Parts 1, 2, 87 and 101 of the Commission's Rules To License Fixed Services at
24 GHz, Report and Order, WT Docket No. 99-327, at  17.
  See e.g., Amendment of the Commission's Rules to Establish New Personal Communications Services,
Narrowband PCS, Second Report and Order and Second Further Notice of Proposed Rulemaking, GEN Docket
No. 90-314, ET Docket No. 92-100 (rel. May 18, 2000); Rule Making to Amend Parts 1, 2, 21 and 25 of the
Commission's Rules to Redesignate the 27.5-29.5 GHz Frequency Band, To Reallocate the 29.5-30.0 GHz
Frequency Band, To Establish Rules and Policies for Local Multipoint Distribution Service and for Fixed Satellite
Services, Fourth Report and Order, 13 FCC Rcd 11655 (1998).
  12 F.C.C.2d. 559 (1963) (Intermountain Microwave).  The factors in Intermountain Microwave are:
(1) Does the licensee have unfettered use of all facilities?
(2) Who controls daily operations?
(3) Who determines and carries out the policy decisions, including preparing and filing
applications with the Commission?
(4) Who is in charge of employment, supervision, and dismissal of personnel?
(5) Who is in charge of the payment of financing obligations, including expenses arising out
of operation?
(6) Who receives monies and profits from the operation of the facilities?
See also Ellis Thompson Corporation, 10 FCC Rcd 12554 (1995) (Ellis Thompson); Baker Creek
Communications, L.P., 13 FCC Rcd 18709 (1998).
  While we have applied the Intermountain factors and permitted licensees to enter into "turn-key"
management agreements under which third parties construct and operate communications systems, we require the
licensees to engage in certain actions that may needlessly inhibit service to the public to avoid an unauthorized
transfer of control.  See generally Ellis Thompson, supra note 4; Miller Communications, Inc., 3 FCC Rcd 6477
(Mob. Serv. Div 1987); Jacksonville Cellular Telephone Corp., 2 FCC Rcd 6416 (Mob. Serv. Div. 1987), aff'd, 3
FCC Rcd 5386 (1988).
  One reason for some reluctance to adopt smaller service areas in this band is that we failed to pursue
this approach in the recent 39 GHz band auctions.  In light of the highly competitive relationship between the
national players in this band and 39 GHz, it may not be fair to subject only the 24 GHz band to these smaller
license segments.  However, other services that compete with these bands are subject to smaller license areas.
  See 47 C.F.R.  101.1323; Policy Statement: In the Matter of Principles for Reallocation of Spectrum
To Encourage the Development of Telecommunications Technologies for the New Millennium, 14 FCC Rcd
19868, FCC 99-354,  12-13 (rel. Nov. 22, 1999); Federal Communications Commission Public Forum on
Facilitating the Development of Secondary Markets for Radio Spectrum, Partitioning and Disaggregation (May 31,
2000), available at <http://www.fcc.gov/Bureaus/Engineering_Technology /Public_Notices/2000/da001139.html>.
  For businesses with more regional or national strategies, smaller service areas should only slightly
increase the transaction costs of acquiring these licenses at auction.  (In this regard, the use of combinatorial
bidding will enable the FCC more freely to utilize smaller license areas by reducing the transaction costs of
aggregation and maximizing the cumulative value of the licenses.)  In evaluating our overall spectrum
management goals, the small increases in transaction costs inherent in smaller license areas must be balanced
against the apparently substantial reduction in transaction costs created by eliminating the need for smaller players
to acquire their spectrum from the secondary market.
	Federal Communications Commission	FCC 00-272
27
39
	Federal Communications Commission	FCC 00-272
A - 7
J:\ANALYSIS\24ghz\PN\fc000272.doc
A - 1
27
B - 2
B - 1
	Federal Communications Commission	FCC 00-272
C - 1
	Federal Communications Commission	FCC 00-272
C - 2
	Federal Communications Commission	FCC 00-272
1