SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549

                            Form 10-K
        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
               THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1996
Commission File No. 000-27582

                    CELLULARVISION USA, INC.
     (Exact name of Registrant as specified in its charter)

           Delaware                              13-3853788
       (State or Other                        (I.R.S. Employer
       Jurisdiction of                         Identification
       Incorporation or                           Number)
        Organization)

              505 Park Avenue, New York, New York 10022
               (Address of Principal Executive Offices)
                            (212) 751-0900
                   (Registrant's telephone number)

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12 (g) of the Act:
Common Stock, par value $.01 per share

     Indicate by check mark whether the Registrant (1) has  filed
all  reports required to be filed by Section 13 or 15(d)  of  the
Securities  Exchange Act of 1934 during the preceding  12  months
(or  for such shorter period that the registrant was required  to
file  such  reports),  and (2) has been subject  to  such  filing
requirements for the past 90 days.  Yes ( X)  No ( )

     Indicate  by  check mark if disclosure of delinquent  filers
pursuant  to Item 405 of Regulation S-K is not contained  herein,
and  will  not  be  contained, to the best  of  the  Registrant's
knowledge,   in   definitive  proxy  or  information   statements
incorporated by reference in Part III of this Form  10-K  or  any
amendment to this Form 10-K. (   )

     The aggregate market value of the Registrant's Common  Stock
held  by nonaffiliates of the Registrant was $50,461,000 on March
26, 1997, based on the closing sale price of the Common Stock  on
the NASDAQ National Market system on that date.

     The  number  of  shares of Common Stock  outstanding  as  of
March 26, 1997 was 16,000,000.


               DOCUMENTS INCORPORATED BY REFERENCE

Part III - Registrant's Proxy Statement for its Annual Meeting of
Stockholders scheduled to be held in May 1997.


                    CELLULARVISION USA, INC.
                        TABLE OF CONTENTS

                             PART I

     Item 1         Business
     Item 2         Properties
     Item 3         Legal Proceedings
     Item 4         Submission of Matters to a Vote of Security Holders

                             PART II

    Item 5          Market for Registrant's Common Equity  and Related
                    Stockholder Matters
    Item 6          Selected Financial Data
    Item 7          Management's Discussion  and  Analysis  of
                    Financial Condition and Results of Operations
    Item 8          Consolidated  Financial  Statements  and Supplementary Data
    Item 9          Changes in and Disagreements with Accountants
                    on Accounting and Financial Disclosure

                          PART      III

    Item 10         Directors and Executive  Officers  of  the Registrant
    Item 11         Executive Compensation
    Item 12         Security  Ownership of Certain  Beneficial
                    Owners and Management
    Item 13         Certain   Relationships   and   Related Transactions

                             PART IV

    Item 14         Exhibits, Financial Statement Schedules  and
                    Reports on Form 8-K

          The Private Securities Litigation Reform Act of 1995
provides a "safe harbor" for forward-looking statements.  Certain
information included in this Annual Report on Form 10-K for the
years ended December 31, 1995 and 1996 is forward-looking, such
as information relating to future capital expenditures and the
effects of future regulation and competition.  Such forward-
looking information involves important factors that could
significantly affect expected results in the future from those
expressed in any forward-looking statements made by, or on behalf
of, the Company.  These factors include, but are not limited to,
uncertainties relating to economic conditions, government and
regulatory policies, pricing and availability of equipment,
technological developments and changes in the competitive
environment in which the Company operates.  Each such forward-
looking statement is qualified by reference to the following
cautionary statements.

          Changes in the factors set forth above may cause the
Company's results to differ materially from those discussed in
the forward-looking statements.  The factors described herein are
those that the Company believes are significant to the forward-
looking statements contained herein and reflect management's
subjective judgment as of the date hereof (which is subject to
change).  However, not all factors which may affect such forward-
looking statements have been set forth.  The Company does not
undertake to update any forward-looking statement that may be
made from time to time by or on behalf of the Company.


                                PART I

ITEM 1.  BUSINESS

Overview

      CellularVision USA, Inc. (together with its operating subsidiary,
CellularVision  of  New York, L.P. ("CVNY"), the "Company")   owns  and
operates a multichannel broadband cellular television system in an area
which includes New York City under a 1,000 MHz commercial license  from
the Federal Communications Commission (the "FCC"). The Company has been
operating a 49-channel broadband cellular television system in portions
of  Brooklyn on a limited basis since 1992. In December 1995,  the  FCC
granted   the  Company's  34  applications  for  additional  commercial
transmitter  sites.  In  1996, the Company  expanded  its  subscription
television  services to cover approximately one-third of  its  licensed
service area, the 8.3 million population, New York Primary Metropolitan
Statistical  Area ("PMSA"), a region consisting of New  York  City  and
three suburban counties. Currently, there are approximately 2.9 million
people   in   the  area  covered  by  the  Company's  ten   operational
transmitters in Brooklyn, Queens and Manhattan. The Company intends  to
have  17  transmitters  in operation by the  end  of  1997,  which  are
expected  to give it access to subscribers throughout most of  the  New
York PMSA. The Company's transmitter permits are conditional upon,  and
subject  to  conformance with the final FCC rules for Local  Multipoint
Distribution Service ("LMDS").

      On  March 13, 1997, the FCC released its Second Report and Order,
Order  on  Reconsideration,  and Fifth Notice  of  Proposed  Rulemaking
("Second  Report  and  Order") which adopted the service,  auction  and
eligibility rules for the nationwide licensing of LMDS. The FCC  stated
in  the  Second  Report and Order that it will commence processing  the
Company's  renewal  application by placing the application  on   Public
Notice not later than 30 days after the March 13, 1997 release date  of
the  Order.  The  new  LMDS service rules will apply  to  this  renewal
application.  As  a result of its deployment efforts  since  1992,  and
based  on  the  license renewal expectancy earned by the  Company,  the
Company believes the renewal application should be granted promptly  by
the FCC.

     The FCC's  rules for LMDS set forth in the Second Report and Order
authorize  the Company, upon receiving its license renewal, and  future
providers of LMDS services in other areas, to offer a variety  of  two-
way broadband services, such as wireless local loop telephone services,
high   speed  data  transmission  (including  Internet  access),  video
teleconferencing  (including distance learning  and  telemedicine)  and
interactive television (collectively, "Two-Way Services"). The  Company
believes  that  future  implementations of its  multichannel  broadband
cellular telecommunications system will not only support these  two-way
services, but also be able to accommodate additional television channel
capacity  through the use of digital compression and other  techniques,
if  and  when  the  costs  of  such  technologies  make  implementation
commercially feasible. In addition, the FCC rules for LMDS provide  for
the  granting,  through a competitive auction process, of  licenses  to
offer  these  services in basic trading areas ("BTA's") throughout  the
United  States. The Company believes that, as a result of the  licenses
awarded  through this proposed auction process, a new  segment  of  the
telecommunications industry will emerge based upon  the  multiple  uses
for  this wide band of spectrum. The Company expects to bid in the LMDS
auctions, alone or in partnership with others, to expand its operations
to  other territories, thus leveraging the experience and expertise  it
has  obtained through operation of its existing LMDS system,  presently
the only commercial operation of LMDS in the United States. The Company
believes  it will be in the forefront of this new industry segment  due
to  its  early  operational  start  date,  its  unique  LMDS  operating
experience,  and its existing commercial license to serve the  nation's
largest media market.

      In  addition,  pursuant  to  the Company's  Pioneer's  Preference
request,  the  FCC may grant the Company the option to  purchase  on  a
discounted  basis, an expansion of its existing licensed  territory  to
include  the entire New York BTA, a region consisting of the  New  York
PMSA  and  18  additional counties located in  New  York,  New  Jersey,
Connecticut  and  Pennsylvania, which would  bring   approximately  8.9
million  additional  people into the Company's  service  area.  In  the
Second  Report  and  Order  the FCC deferred action  on  the  Company's
tentative  Pioneer's  Preference award  and  instead  ordered  a  "peer
review"  process, whereby the FCC would  select a panel  of  technical,
non-FCC  experts to review the Company's technology and advise the  FCC
whether  the  Pioneer's  Preference  should  be  granted.  The  Company
believes,  based  on the 1994 General Agreement on  Tariffs  and  Trade
("GATT") legislation and the FCC's prior determinations not to  subject
parties  to  peer  review whose Pioneer's Preference applications  were
accepted  for  filing  before  September  1,  1994,  that  this  is  an
unnecessary  regulatory requirement. The Company is  currently  seeking
FCC clarification on this issue. Accordingly, there can be no assurance
that the FCC will  grant the Company's Pioneer's Preference.

Company History

      Hye  Crest  Management, Inc., a predecessor of the Company  ("Hye
Crest"),  was formed in 1988 by Messrs. Shant S. Hovnanian, Bernard  B.
Bossard  and  Vahak  S.  Hovnanian,  directors  of  the  Company   (the
"Founders").   Prior   to  the  consummation   of   the   Incorporation
Transactions (as defined below), each of the Founders held one-third of
the outstanding capital stock of Hye Crest. In 1991, Hye Crest received
permission  from  the  FCC to commence commercial broadcast  operations
using the LMDS technology developed by Suite 12 Group, which was formed
in 1986 and is also owned by the Founders in equal shares ("Suite 12").
From  1986  through 1992, Suite 12's principal operations consisted  of
the  development  of the LMDS technology. Hye Crest  began  service  to
subscribers in 1992. Suite 12 permitted Hye Crest to use certain patent
rights,  the  LMDS  technology, and head-end and transmitter  equipment
supporting   commercial   broadcast  operations   under   an   informal
arrangement that was formalized in 1993 when (i) Suite 12 conveyed that
equipment  to  Hye Crest, and (ii) Suite 12's successor, CellularVision
Technology & Telecommunications, L.P. ("CT&T"), entered into a  license
agreement  (the  "CT&T  License Agreement")  with  CVNY.  The  Founders
collectively  own  80%, and a subsidiary of Philips  Electronics  North
America  Corporation ("Philips") holds 20%, of the  outstanding  equity
interests of CT&T.

      CVNY was formed in 1993 and initially financed by the Founders to
carry  on  the  business of Hye Crest and commercialize a  multiple-use
cellular telecommunications service in the New York PMSA, beginning  in
the  Brighton Beach area of Brooklyn.  Hye Crest contributed all of its
operations and assets, including its FCC commercial license, to CVNY in
exchange  for managing general partnership interests constituting  more
than 90% of CVNY's outstanding equity interests. For regulatory reasons
which are no longer applicable, Hye Crest temporarily held title to the
head-end facilities, which have now been transferred to CVNY. Suite  12
contributed an FCC experimental license to CVNY in exchange for limited
partnership  interests.  In July 1993, a subsidiary  of  Bell  Atlantic
Corporation  ("Bell  Atlantic") became the  Company's  first  corporate
investor.  From 1993 to 1995, Bell Atlantic also provided certain start-
up  operational  and  management services to the Company.   In  October
1993,  Philips  purchased an equity interest in the  Company  from  its
Founders,  and in December 1993, investment funds managed by affiliates
of  J.P.  Morgan & Co. Incorporated ("Morgan" and, together  with  Bell
Atlantic  and  Philips,  the  "Corporate Investors")  invested  in  the
Company.

      The  Company  was formed in October 1995 to serve  as  a  holding
company  for  100% of both Hye Crest and CVNY.  In February  1996,  the
Company  consummated the initial public offering (the  "Initial  Public
Offering",  "IPO") of shares of its common stock, par  value  $.01  per
share  (the  "Common Stock").  Immediately prior to the Initial  Public
Offering,  the  Company consummated the following events (collectively,
the  "Incorporation Transactions"):  (i) Morgan converted  $10  million
principal  amount  of the $15 million principal amount  of  convertible
exchangeable subordinated notes of CVNY (the "Morgan Notes") into 4,547
shares  of  Common  Stock  and exchanged $5 million  principal  amount,
together with interest accrued thereon as of December 15, 1995, for non-
convertible  debt  securities  (the "Morgan  Exchange  Notes")  of  the
Company,  (ii)  the  Company issued an aggregate of  93,180  shares  of
Common  Stock  to the Founders in exchange for all outstanding  capital
stock  of  Hye  Crest, and to Bell Atlantic, Philips and  Suite  12  in
exchange for all of their respective partnership interests in CVNY, and
(iii)  the  Company  effected a 133.0236284-for-1 stock  split  of  the
outstanding  shares  of  Common  Stock  and  issued  an  aggregate   of
13,000,000 shares of Common Stock to the holders thereof.  As a  result
of  the Incorporation Transactions, the Company is the sole stockholder
of  Hye  Crest, which has no independent business, and CVNY is a wholly
owned subsidiary of the Company and continues to carry on its business.
In December 1995, the FCC approved the pro forma transfer of control of
CVNY  from Hye Crest to the Company.  In July, 1996, Hye Crest  changed
its name to CellularVision Capital Corporation.

Business Strategy

      The Company's strategy for successful operation is based upon the
following principles:

      Capture  New  York  Cable Television Market  Share.  The  Company
intends  to  capture a significant portion of the 3.2 million-household
New  York  PMSA  subscription television market by instituting  a  mass
marketing  program highlighting the Company's dependable, high  quality
picture  and  low prices. The Company currently offers 49 of  the  most
popular  cable and broadcast television channels at prices 20%  to  30%
less than its franchised cable competitors.

      The  Company's  prompt, courteous and effective customer  service
specialists  are  central  to  the  differentiating  the  Company  from
competitors. At present, the Company's average response time to a phone
call  is under 10 seconds and over 90% of calls are answered within  30
seconds,  a  response time that is better than industry standards.  The
Company  offers  same-day  repair services, and  customers'  calls  are
handled 24-hours a day.

      Expand  Business  Class  Market in New  York.   The  Company  has
implemented  a  strategy  which  brings  business-oriented   television
programming  to workplaces in the New York City business and  financial
community where cable television connections are now unavailable or not
economically viable. The Company has formed a strategic cross promotion
alliance  with  Bloomberg  Information Television  (BIT).  The  Company
currently markets a 14 channel "Business Class" service, featuring  BIT
and  other popular news and business channels, to offices in Lower  and
Mid-town Manhattan.

      Expand Service Territory; Pursue New Markets. Depending upon  the
confirmation of the Company's tentative Pioneer's Preference and prices
paid at the LMDS auctions for other BTA licenses, the Company plans  to
expand  its  service area to include the entire New  York  BTA,  adding
approximately  8.9  million  people to  its  service  area.  Under  its
tentative Pioneer's Preference, if granted, the Company would have  the
exclusive  right to extend its license to add this additional territory
at  a 15% discount from the average price paid at the LMDS auctions for
licenses  in comparable service areas. The FCC has permitted  broadband
Personal Communications Services Pioneer's Preference awardees  to  pay
for their licenses over five years, with interest only payments for the
first   two   years,  at  an  interest  rate  equal  to  the  five-year
U.S.Treasury Note plus 2.5 percent. The Company believes that  it  will
be  permitted  to pay for its Pioneer Preference license,  if  granted,
under similar terms, although there can be no assurance that this  will
be  the  case.  If  the  FCC  does not grant  the  Company's  Pioneer's
Preference, the FCC, can be expected to auction this remaining  portion
of  the  New  York BTA and the Company may then acquire this  remaining
service area at auction.

      Introduce Two-Way Broadband Services. The Company expects  to  be
among  the first LMDS operators to introduce two-way services, such  as
wireless  local  loop telephone services, high speed data  transmission
(including Internet access), video teleconferencing (including distance
learning  and telemedicine) and interactive television, which  services
were  authorized by the FCC in the rules for LMDS adopted in the Second
Report and Order.

     In 1996 the Company introduced the first high-speed wireless modem
to the New York market. Field trails of a 500  Kbps  modem  began  in
September 1996 and have  been  successfully completed.  The $200 product
operates at data rates  approximately  20 times  faster  than conventional
28.8 Kbps modems, and approximately  4 times  faster  than ISDN. The Company
recently began  marketing  trials that will continue until the expected
commercial launch later in 1997.

The CellularVision TM System

      The  Company's multichannel broadband cellular television  system
operates in the 28 GHz frequency range. Prior to the development of the
Company's system, transmission of communication signals in the  28  GHz
frequency  range  was  not  commercially  pursued  apart  from  limited
satellite applications because technical impediments, such as intercell
interference  and  rainfade, were thought  to  be  insurmountable.  The
Company's  system eliminates or significantly reduces these impediments
through the placement of its cells and its unique system architecture.

       Video,   telephone  services  ("telephony")  or   data   signals
transmitted   through  the  Company's  system,   such   as   television
programming,  are  received by the system from satellite  transponders,
terrestrial microwave facilities and/or studios at a head-end.  Signals
from  the head-end are then transmitted to omnidirectional transmitters
or  a  small  number  of  broad-beam  transmitting  antennas  (each,  a
"transmitter") located in each adjacent cell which, in turn,  transmits
the  signals to subscribers within the cell. Point-to-point relays (the
"relays"),  which  are  installed with the  transmitter,  are  used  to
transmit  signals  to cells not adjacent to the head-end.  The  Company
then  deploys  small  solid-state repeaters to  transmit  signals  into
shadowed areas. The signal is received at the subscriber's premises  by
a  small (approximately six and five-eighths inches square) flat plate,
high-gain  antenna  connected to one or more fully-addressable  set-top
converters.  One  remote  control unit is provided  with  each  set-top
converter.

Competitive Advantages

      The  Company's  system  has  a number  of  significant  cost  and
technical  attributes  that  the  Company  believes  will  affect   its
competitiveness:

      Low  Cost  Infrastructure. The Company believes that  its  system
offers  a  low  cost, high quality and dependable alternative  to  both
franchised  cable  systems  and  satellite  systems,  such  as   Direct
Broadcast  Satellite  ("DBS").  The  Company  believes  that   it   can
consistently  offer  substantially the same services  at  significantly
lower prices than franchised cable systems because the Company's system
does not require the extensive networks of cables and amplifiers or the
constant maintenance and repair of system architecture inherent in such
systems. DBS systems have a lower cost per household passed but involve
the  expense  associated with high-powered direct broadcast satellites.
Currently  the  subscriber is required to purchase receiving  equipment
priced over $200 and pay up to an additional $200 for installation.  In
addition, subscribers are required to pay monthly charges comparable to
cable rates. By comparison, the Company's subscribers have to pay up to
a  $50 installation fee, all or a portion of which may be waived during
promotions,  and  monthly  charges that are  significantly  lower  than
comparable cable rates.

      High  Quality Picture. The Company's system has been designed  to
deliver a generally superior picture quality as compared to the quality
generally  characteristic of franchised cable or current MMDS  systems.
In  a  franchised  cable system, each time a television  signal  passes
through an amplifier, some measure of noise is added which results in a
grainier  picture.  As  a  result,  franchised  cable  picture  quality
generally  degrades significantly depending on the distance the  signal
travels from the head-end to the subscriber. Current MMDS systems  lack
the  FM  video  fidelity associated with the Company's system  and  the
Company  believes  that  these systems are also  generally  subject  to
perceptible interference. The Company's system, by contrast,  has  been
designed to deliver its subscribers a video picture without perceptible
interference  under  most  conditions.  The  superior  quality  of  the
Company's   system   is  particularly  striking  on  large-screen   and
projection  televisions, which amplify the distortions  and  graininess
characteristic of other transmission technologies.

      Dependability.  As  compared  to franchised  cable  systems,  the
Company  believes  that  its system provides a highly  reliable  signal
because  there  is  no  cable, amplifiers or processing  and  filtering
equipment between the transmitter which serves the subscriber  and  the
subscriber's household to potentially break or malfunction. Failure  of
any one of these components in the chain may "black-out" large portions
of franchised cable systems, and diagnosis and repair efforts involve a
network  consisting  of hundreds of miles of cable  and  related  relay
equipment,   in  contrast  to  the  Company's  simpler  subscriber/cell
alignment. The Company's transmitter installations are fully redundant,
with automatic fault detection and switch-over to a back-up transmitter
and  an  uninterruptable  power supply allowing  continuous  broadcasts
during temporary local power outages.

      Compact  Antenna. Unlike currently available MMDS systems,  which
require rooftop mounted antennas of varying  sizes up to three feet  in
diameter,  or DBS systems, which require an 18-inch outdoor dish  aimed
directly  at a satellite stationed low above the southern horizon,  the
Company's  antennas, in many cases, permit reception  of  signals  when
mounted  inside  the  subscriber's window,  eliminating  the  need  for
outdoor installations.

      The  Company believes that these antennas, in many cases,  permit
delivery  of its services to the apartment buildings and office  towers
which  are  characteristic  of much of its  service  territory  without
extensive in-building wiring. This wiring is necessary not only in  the
case  of franchised cable, but also with wireless technologies such  as
MMDS, Satellite Master Antenna ("SMATV") service and DBS, whose signals
require  a  direct line-of-sight to the transmitter, and, consequently,
in  a  densely  populated  urban environment such  as  New  York  City,
generally  require rooftop antenna installation in apartment or  office
buildings  and  internal wiring of the building to deliver  service  to
subscribers. Because the Company believes that its system will in  many
cases be able to be installed for an individual subscriber without such
wiring,  the  Company  expects  that  its  marketing  efforts  will  be
simplified.

      Localized  Programming  and Advertising  Options.  The  Company's
channel offerings can be localized on a cell-by-cell basis, permitting,
for  example, channels targeted to demographic or linguistic groups  in
particular  neighborhoods, as well as micro-marketing.  In  comparison,
cable  operators  generally  offer  uniform  programming  throughout  a
geographic service area, and DBS systems offer the same programming  on
a nationwide basis and do not offer any local programming.

      Accurate, High-Speed Data Transmission. The system's high signal-
to-noise ratio enables it to transmit large volumes of data at least as
accurately  as  fiber  optic systems. This  capability  enables  it  to
support  a  high-speed, broadband data network for Internet access  and
private data transmission applications.

      Mitigation of the Multipath Phenomenon. Multipath is a phenomenon
in  broadcast transmission which results in the reception  of  multiple
signals  at  the  receiver (literally on multiple  transmission  paths)
which  can  severely  degrade the picture and audio  quality  or  cause
undesirable  levels of errors in digital systems. Multipath  can  be  a
severe  drawback  in systems such as VHF/UHF television  and  currently
available   MMDS  systems,  which  use  AM  modulation  and  relatively
broadbeam  receive  antennas. The Company's system,  which  employs  FM
modulation  and  narrow  beam receive antennas,  can  reject  multipath
degradation  of  the  signal. Because of this  advantage,  the  Company
believes  that  its service will be relatively immune  to  the  picture
"ghosting" and other degradations that result from multipath.

      Large  Spectrum Grant and Efficient Spectrum Usage.  The  Company
currently  has  the  right to use 1,000 MHz of  spectrum,  one  of  the
largest  blocks of spectrum ever awarded, and its system permits  reuse
of  this  spectrum  in  each  one of its  cells.  This  may  result  in
advantages  over  competing technologies, such as MMDS  systems,  which
typically  have  access to a maximum of 200 MHz of fragmented  spectrum
and  use  frequencies  only once in a metropolitan  area.  The  Company
believes that its spectrum-efficient system will enhance its ability to
provide  localized programming and advertising options and, eventually,
to  examine  and  address  on  a selective  basis  additional  business
opportunities for two-way services as are permitted by the FCC  in  the
LMDS  Second Report and Order. The Company, consistent with  the  rules
adopted  in the Second Report and Order, will have exclusive access  to
an  additional  150  MHz  of 31 GHz spectrum once  its  current  NYPMSA
license is renewed, bringing its total spectrum grant to 1,150 MHz.

Future Two-Way Broadband Services

     The Company expects that future implementations of its system will
support  two-way  services such as wireless local loop telephony,  high
speed  data  transmission   (including   Internet   access),   video
teleconferencing  (including distance learning  and  telemedicine)  and
interactive  television.  The  Company's  system  can  support  two-way
communication by inserting communication channels between the Company's
49 polarized  video  channels  and  transmitting  such  communication
channels in the opposite polarization. An alternative approach to  this
configuration  can  be  achieved  through  separation  of  the  two-way
services in a separate band assigned to LMDS in the higher frequencies.
In the Second Report and Order, the FCC adopted flexible rules for LMDS
that  will  expand the range of services that the Company is authorized
to offer to its subscribers to include two-way services. Implementation
of  such  services  will  be predicated upon the  availability  of  the
requisite  two-way  LMDS equipment, which the Company's  suppliers  and
other  third parties currently have under development and, in the  case
of interactive video, upon the emergence of available programming.

      The  Company believes that it will have a substantial competitive
advantage in providing these services to certain markets because of its
inherent  ability to access many sites without the cost  of  installing
and   maintaining  telephone  or  fiber  optic  lines  in   a   crowded
metropolitan environment, or accessing and wiring individual buildings.
This  advantage  will  be  enhanced in the case  of  potential  two-way
customers  who  are already multichannel television subscribers.  Thus,
residential  subscribers  may  be  offered  an  upgrade  to   telephony
services,  interactive television and high speed data access  services,
such  as the Internet, and business subscribers who have subscribed  to
Business  Class Service may be offered high speed broadband  links  for
private data networks.

      The  Company has demonstrated a non-line-of-site, 28 GHz wireless
telephone  link and video-telephony link using a prototype  transceiver
that  supports  such services. A commercial version is currently  under
development.  The other hardware necessary to support two-way  services
would consist of minor modifications to off-the-shelf equipment such as
switches  and  converters to permit existing input devices  other  than
television  sets, such as telephones and computers, to be connected  to
the system.

      The  Company  believes  that two-way services  can  be  supported
without  interference with its existing analog 49-channel  multichannel
broadband cellular television system, and that this system will support
digital compression technologies when commercially viable, permitting a
significant  increase in the number of cable channels and at  the  same
time  permitting  enhanced  two-way  services.  Nonetheless,  like  any
wireless system, the Company's operations will ultimately be subject to
total  bandwidth  constraints, and the Company intends  to  manage  its
service  offerings  to  focus  on  high value-added  telecommunications
markets  for which the Company's technologies are best suited.  Because
the  Company's  offerings  of  two-way services  could  potentially  be
locally tailored on a cell-by-cell basis, various combinations of  two-
way services could be deployed.

      While  the Company is not currently authorized to provide two-way
services, and may not be technically prepared to begin offering any  of
these services on a commercial basis upon receiving authorization to do
so  (which will occur upon  renewal of its New York PMSA license),  the
Company  believes its system can be configured to support, and  intends
to offer, some or all of the following  two-way services:

      Wireless  local  loop telephony. The Company's  system  could  be
adapted  to support ordinary voice telephony, giving customers equipped
with  a  two-way antenna the ability to plug both their television  and
their  telephone into the same specially adapted converter box,  paying
for  both  services with a single monthly bill. Calls would be switched
either at a site co-located with the local telephone company, or  at  a
private switching facility. The Company believes deregulatory trends in
the  telephone industry may make this type of alternate access  service
an  increasingly attractive business for the Company, either solely  or
through  an  alliance  with strategic partners. For  this  reason,  the
Company  has  commenced  negotiations with NYNEX,  the  local  exchange
carrier,  for  an interconnection and resale agreement, and  has  begun
preparation  of  an  application  to  the  state  authorities  for  the
necessary approvals to provide local telephone service.

     High speed data transmission. Given the low cost of build-out, the
Company  believes its system provides an attractive method  of  linking
wide  area  networks  on  a  primary or  back-up  basis  and  providing
individuals and businesses with high speed data transmission, including
Internet access.

      Video teleconferencing. The Company has demonstrated in tests the
capacity  of  its  system to support full-duplex, full  motion  two-way
video  teleconferencing, and is evaluating the  purchase  of  equipment
that  would  support  such a service among its subscribers  within  its
service  territory  in  the future. The Company  intends  to  select  a
transmission  standard  that  will  permit  an  interface  with   video
teleconferencing systems in other areas. The system requires a standard
video  camera and a two-way antenna/transceiver, and produces a quality
of  service  attainable  today  on  a  commercial  basis  only  through
expensive  fiber  optic  cabling and/or broadband  satellite  linkages.
Video teleconferencing has a number of applications, including personal
and  business  communications  and  specialized  applications  such  as
distance learning and telemedicine.

     Interactive television. The Company expects that demand will exist
in  the future for a communications medium that can support interactive
television programming such as interactive home shopping, mass audience
participation programs and sophisticated, multiplayer video games.  The
Company  believes that its system's technical characteristics  of  low-
cost  build-out (especially as compared with the cost of  laying  fiber
optic cable), high quality and two-way capability can make it a leading
technology supporting these services.

Current Operations

      The  Company is licensed by the FCC to conduct operations in  the
New  York  PMSA  and, based on the FCC's December  1995  grant  of  the
Company's 34 applications for additional commercial transmitter  sites,
intends  to deploy additional transmitters that will give it access  to
subscribers  throughout most of the New York PMSA by the end  of  1997.
These  grants  are subject to modification to conform  with  the  FCC's
final  rules for LMDS.  According to industry estimates, the  New  York
PMSA  includes approximately 8.3 million people, of which  the  Company
believes  a  large proportion will be capable of being  served  by  the
Company's  system.  In  addition, if  the  FCC  grants  the  Company  a
Pioneer's Preference, under the FCC's most recent proposal, the Company
would  be allowed to expand its service area to include the entire  New
York  BTA,  of  which  the New York PMSA is a part,  by  paying  a  fee
representing the difference between the value of a license to serve the
New  York BTA and the value of the Company's current commercial license
to  serve the New York PMSA, subject to a 15% discount from the average
auction  price  paid  at the LMDS auctions for licenses  in  comparable
service  areas.  See  "_Industry  Regulation."  The  expansion  of  the
Company's  licensed territory to include all of the New York BTA  would
bring  an  approximate addition of 8.9 million people into its  service
area.  However, the Commission in the Second Report and Order,  decided
to  subject the Company's Pioneer's Preference request to a peer review
process.  Therefore, there can be no assurance that the FCC will  grant
the Company's  Pioneer's Preference.

      The Company's head-end has been fully operational since 1992  and
is  currently being used to transmit programming to the 10  operational
cells  located in Brooklyn, Queens and Manhattan. In 1996, the  Company
expanded its subscription television services to cover one-third of its
licensed  service  area,  the  8.3  million  people  New  York  Primary
Metropolitan Statistical Area ("PMSA"), a region consisting of New York
City  and  three suburban counties. Currently, there are  approximately
2.9  million people in the area covered by the Company's 10 operational
transmitters. The Company intends to have 17 transmitters in  operation
by the end of 1997, which are expected to give it access to subscribers
throughout most of the New York PMSA. The Company's transmitter permits
are   subject  to  modification  to conform with  the final  rules  for
LMDS.

      The Company has leased space on 15 rooftops for its transmitters,
and  believes that leased space on rooftops in New York City and  other
locations  in the New York PMSA will be readily available to  serve  as
additional  transmitter  sites.  The Company  is  in  negotiations  for
rooftop  space  on  four  additional  sites  in  New  York  City,   for
transmitter deployment. The Company is actively pursuing over 50  sites
for its repeaters. The Company has letters of intent from landlords  to
lease space at an additional 24 sites throughout the New York PMSA.

      The  Company offers subscribers a full range of local, basic  and
premium  programming  choices.  Since  all  of  the  Company's  set-top
converters are fully addressable, the Company also offers regular  pay-
per-view  movies and special pay-per-view events. In addition,  due  to
its   system  architecture,  the  Company  can  vary  programming   and
advertising  on  a  cell-by-cell basis in order to appeal  to  specific
demographic groups. For example, the Company currently carries  Russian
language  programming targeted to the large Russian-speaking population
of the Brighton Beach area of Brooklyn, New York.

     The following table sets forth the Company's current channel line-
up:

Encore*               The Disney Channel    Univision (WXTV)
Plex*                 CNBC                  BET
Starz*                C-SPAN                The International Channel
Showtime*             MSNBC                 Russian American Broadcasting
The Movie Channel*    Headline News         The Prevue Guide
Flix*                 CNN                   ESPN
HBO*                  Bloomberg             Madison Square
                      Information           Garden Network
                      Television
Cinemax*              The Weather Channel   MSG 2
Playboy Television*   Nickelodeon           MSG 3
Pay Per View Movies   TV Food Network       ESPN 2
Pay Per View Special  MTV                   SportsChannel
Pay Per View Events   VH-1                  WCBS
USA Network           E! Entertainment      WNBC
TNT                   Comedy Central        WNYW
Turner Classic Movies The Discovery Channel WABC
WTBS                  The Learning Channel  WWOR
Lifetime              Court TV              WPIX
Arts & Entertainment  Sci-Fi Channel        WNET

* Denotes premium programming.

Marketing

      Presently the Company's sales strategy incorporates a variety  of
targeted tactics. Direct mail is used as a response vehicle as well  as
a  softener  for  door to door sales, consisting of an  in-house  sales
force    complimented   by   subcontractors.   The   Company   utilizes
telemarketing for both acquisition and retention purposes. In  addition
to   sales   related   calls,  telemarketing  representatives   perform
installation  reminder calls, customer research and welcome  calls.  As
the  build-out of its system continues, the Company intends to  augment
current   efforts   with  mass  marketing  programs,  including   radio
advertising and print media, to bring about increased awareness of  its
quality  and cost advantages. At that time, the Company may  supplement
its  direct sales force by marketing subscriber-installed units through
consumer electronics and telephone retail stores.

Customer Service

     The Company's prompt, courteous and effective customer service
specialists are central to differentiating the Company from competitors
and attracting and retaining subscribers. To offer superior customer
service as its subscriber base expands, the Company intends to provide
a ratio of customer service specialists to subscribers significantly
higher than that currently offered by its subscription television
competitors. Presently, the Company offers same-day repair services
and, customer's calls are handled 24-hours a day.

Competition

     The telecommunications industry and all of its segments are highly
competitive.  The  Company competes with franchised cable  systems  and
also faces or may face competition from several other sources, such  as
MMDS, SMATV, DBS, video service from telephone companies and television
receive-only satellite dishes. Moreover, The Telecommunications  Reform
Act of 1996 (the "Telecommunications Reform Act"), which was passed  by
the  U.S. Congress and signed into law by President Clinton on February
8, 1996, eliminates restrictions that prohibit local telephone exchange
companies  from  providing video programming in their  local  telephone
service  areas,  thus  potentially resulting in significant  additional
competition from local telephone companies.

      Pay  television operators face competition from other sources  of
entertainment,  such as movie theaters and computer  on-line  services.
Further,  premium  movie services offered by cable  television  systems
have  encountered significant competition from the home video industry.
In  areas  where several off-air television broadcasts can be  received
without the benefit of cable television, cable television systems  have
experienced  competition  from  such  broadcasters.  Many  actual   and
potential  competitors  have  greater financial,  marketing  and  other
resources than the Company. No assurance can be given that the  Company
will be able to compete successfully.

       Franchised   Cable.  The  Company  believes  that  its   primary
competition  in  providing video programming  to  subscribers  is  from
franchised  cable  operators. In the New  York  PMSA,  these  operators
include   Time   Warner,  TCI  and  Cablevision,  all  of   which   are
significantly larger and have substantially greater financial resources
than  the  Company. The technology used by such operators  is  a  cable
system  which transmits signals from a head-end, delivering  local  and
satellite-delivered programming via a distribution  network  consisting
of  amplifiers,  cable  and other components  to  subscribers.  Regular
system maintenance is required due to flooding, temperature changes and
other  events  that  may lead to equipment problems.  To  reduce  these
problems, some traditional cable companies have begun installing hybrid
fiber-coaxial cable networks. Although hybrid fiber-coaxial plants  may
substantially remedy the transmission and reception problems  currently
experienced  by coaxial cable distribution plants, hybrid fiber-coaxial
systems  will still be subject to outages resulting from severed  lines
and  failure of electronic equipment, and are very expensive to install
and maintain.

      Franchised cable systems cost significantly more to build and  to
maintain  than the Company's system. Although the Company believes  its
head-end  equipment costs are comparable to those of  franchised  cable
systems,   the  installation  of  cable  and  amplifiers  required   by
franchised  cable  operators  is  considerably  more  costly  than  the
installation  of transmitters and repeaters required by  the  Company's
system.  At  present,  the franchised cable systems  in  the  Company's
service  area  offer 25 to 30 more channels than the Company's  system,
although  the Company believes that many of these channels  carry  less
frequently viewed programming. Moreover, the cellular architecture used
by the Company will permit it to vary its channel line-up on a cell-by-
cell  basis,  enabling  it  to offer the channels  most  in  demand  in
individual segments of the larger media market.

      The Telecommunications Reform Act contains a provision that would
reduce  the  regulatory  burden  on  the  Company's  franchised   cable
competitors. See "_Industry Regulation-Telecommunications Reform Act."

      Multichannel  Multipoint  Distribution  Service.  MMDS  "wireless
cable"  systems  such as CAI Wireless Systems, Inc.  use  microwave  AM
signals  in  the 2.5 to 2.7 GHz frequency band to transmit  programming
directly  from  a head-end located on top of a local vantage  point  to
receive  antennas currently up to three feet in diameter and  generally
located  on  subscribers' rooftops. The Company believes  that  smaller
MMDS  antennas may be under development. The microwave signal  is  then
converted  to  frequencies that can pass through  conventional  coaxial
cable  to  a set-top converter. The Company's system, which employs  FM
modulation  and  narrow  beam receive antennas,  can  reject  multipath
degradation  of  the  signal. Because of this  advantage,  the  Company
believes  that  its service will be relatively immune  to  the  picture
"ghosting" and other degradations that result from multipath phenomena.
The  Company believes that this latter characteristic, unless mitigated
by  future  technical developments, will limit MMDS's  suitability  for
service  in  large  urban areas. MMDS also operates with  substantially
less  spectrum  than the Company's 1,000 MHz allocation,  limiting  its
video channel capacity. MMDS systems must aggregate spectrum from three
separate  blocks  of  spectrum in the 2.5 to 2.7 GHz  frequency  range,
almost  70% of which spectrum is not available exclusively for wireless
cable  operations  and must be leased from and shared with  educational
licensees,  in  order to provide a maximum 32 to 33 channels  of  video
programming under current technology. Therefore, as a result of  MMDS's
limited  spectrum and other technical constraints, the Company believes
that  LMDS  has  a  distinct advantage over MMDS  in  providing  viable
competition in today's video programming marketplace.

       Satellite  Master  Antenna  Service  ("SMATV").   SMATV  service
operators  such  as  Liberty  Cable,  typically  receive  signals  from
satellites  with small satellite dishes located on a rooftop  and  then
retransmit the signals by wire to units within a building or complex of
buildings.  Additionally,  the FCC permits point-to-point  delivery  of
video programming by SMATV operators with microwave licenses in the  18
GHz   frequency  band,  which  allows  operators  to  realize  economic
efficiencies  by  linking multiple buildings  from  a  common  head-end
without crossing public rights-of-way and avoiding the need for  costly
head-end facilities at each building served. SMATV operators delivering
programming  in  these manners are not required to obtain  a  franchise
from local authorities.

      Direct  Broadcast  Satellite  ("DBS").  DBS  service,  which  has
recently  been  introduced  in  the  United  States,  consists  of  the
transmission of a high powered signal from a satellite directly to  the
home user, who is able to receive the signal on a relatively small  (18
inch  diameter) dish mounted on a rooftop or in the yard.  DBS  service
does  not deliver local television broadcast stations and requires  the
purchase  of  receiving  equipment  at  a  significant  cost   to   the
subscriber. The leading DBS provider currently requires its subscribers
to  invest  in receiving equipment which the Company believes currently
retails  for approximately $200, and pay up to an additional  $200  for
installation.  DBS system operators must also incur  costs  related  to
satellite  launches and satellite maintenance and repair. DBS  antennas
in  the  United States must be aimed directly at a satellite  stationed
low  above  the  southern  horizon, and  are  therefore  not  generally
practicable in urban environments such as New York City where  multiple
dwellings may block this line-of-sight.

      Telephone  Company  Provision of Video Programming.  The  current
regulatory  framework  that  traditionally prohibited  local  telephone
companies,  also  known  as  local exchange  companies  ("LECs"),  from
providing  video programming directly to subscribers in their telephone
service areas is evolving rapidly to permit LECs to play a broader role
in   the   competitive   video  marketplace.  In   this   regard,   the
Telecommunications Reform Act repealed the telco-cable  cross-ownership
restriction,  and  allows  LECs several  options  for  providing  video
services   to  their  telephone  customers  under  various   regulatory
frameworks.  Among  other  things, under the Telecommunications  Reform
Act, LECs can provide video programming to customers in their telephone
service  areas either as common carriers, cable systems or "open  video
systems," an entirely new regulatory framework.  In March 1996, the FCC
eliminated   rules   implementing   the   telco-cable   cross-ownership
restriction,  and commenced a rulemaking to implement  the  open  video
systems  framework  in a way that will promote congressional  goals  of
flexible  market entry, enhanced competition, diversity of  programming
choices  and  increased consumer choice.  In June 1996, the  Commission
adopted streamlined certification and regulations under which LECs  and
(non-LECs)  can operate as open video systems providers  under  various
conditions. On October 11, 1996, the FCC certified the first open video
system.  Since that time, additional certifications have been  granted,
including three within various portions of the Company's NY PMSA.

      While  LEC  delivery  of video programming  likely  will  require
extensive  deployment  of  fiber optic transmission  facilities  and/or
highly  sophisticated electronics at a substantial capital  investment,
LECs could provide a significant source of competition in the future.

      Television  Receive-Only Satellite Dishes. Satellite  dishes  are
used  by individuals and commercial establishments for direct reception
of  video  programming  that  is also shown  on  franchised  cable  and
wireless cable television systems. Satellite dishes are generally  more
competitive  in rural markets than in urban areas, principally  because
rural  subscribers  do not have access to franchised  cable.  Satellite
dish service currently requires each subscriber to purchase and install
a  seven-to-ten foot diameter satellite dish, at a cost  in  excess  of
$3,000, although some operators have reduced those charges to as low as
$750  for  limited  offerings. Additionally, cable  programming  (e.g.,
ESPN, CNN, HBO) is delivered "scrambled," requiring owners of satellite
receivers  to  purchase descrambling units and pay annual authorization
fees  directly to programming suppliers. In addition, satellite systems
do not deliver local broadcast television stations.

Regulatory History

      The  Company's  FCC Licenses. The Company holds a  fixed  station
commercial license pursuant to a waiver of the FCC's rules in the Point-
to-Point  Microwave Radio Service granted by the FCC  in  January  1991
which authorizes the Company to use the 27.5-28.5 GHz frequency band to
operate a multicell video delivery system throughout the New York PMSA.
The 1,000-plus square mile New York PMSA includes the five boroughs  of
New  York City, and Putnam, Rockland and Westchester counties.  In  its
1991  decision  granting the Company's license, the FCC authorized  the
location  of  the  Company's  first  transmitter  in  Brighton   Beach,
Brooklyn,  and  set  forth  a procedure for the  filing  of  additional
applications   for   authority  to  operate   additional   transmitters
throughout  the  Company's authorized service area.  The  January  1991
decision authorized a 24-channel video system and was modified in March
1992  to  authorize operation of a 49-channel system. In  addition,  on
December  7,  1995,  the  FCC  granted  the  Company's  34  transmitter
applications,  conditional upon and subject  to  conformance  with  the
final actions taken by the FCC in the LMDS Rulemaking proceeding.

      The  Company's  license is the only commercial license  for  this
service  granted by the FCC.  This license was granted for a  five-year
term rather than the general fixed service license term of ten years in
order  to  encourage  the  prompt deployment of  the  Company's  system
throughout its authorized service area, and expired in February 1996. A
timely  application  for  renewal  of  this  fixed  commercial  station
license  was filed on December 29, 1995. The FCC stated in  the  Second
Report and Order that it will commence processing the Company's renewal
application by placing the application on Public Notice not later  than
30  days  after the March 13, 1997 release date of the Order.  The  new
LMDS  service rules will apply to this renewal application.  While  the
Company has an expectation of a renewal of this license, as a result of
its  deployment efforts since 1992 and the FCC's adoption of a  renewal
expectancy  provision  in the Second Report  and  Order,  there  is  no
guarantee that the FCC will renew the license.

      Under  the FCC's rules, a license automatically stays in   effect
pending FCC action on a timely filed renewal application.  In addition,
the  Communications  Act  of 1934 (the "Communications  Act")  provides
procedures  under which any party in interest may file  a  Petition  to
Deny the renewal of a fixed point-to-point microwave license by setting
forth  specific  allegations  of  fact  sufficient  to  show  that  the
petitioner  is  a  party  in interest and that  grant  of  the  renewal
application would be prima facie inconsistent with the public interest,
convenience and necessity. While the Company is not aware of any  facts
or circumstances to justify the filing of such a petition, there can be
no  assurance that such a petition will not be filed, or to predict the
outcome of the FCC's deliberations on any such petition in advance.

      In the First Report and Order the FCC grandfathered the Company's
continued  operations in the 27.5-28.5 GHz spectrum (which the  Company
currently  is  licensed  to use) for a period of  two  years  from  the
release date of the First Report and Order, July 22, 1996, or until the
first GSO/FSS satellite intended to operate in the 28.35-28.50 GHz band
is   launched,   whichever  occurs  later.  Additionally,   under   the
grandfather provision adopted by the FCC, the Company is authorized  to
use  the  newly  designated  150  MHz at  29.1-29.25  GHz  for  hub-to-
subscriber  operations during the grandfathered period,  thus  allowing
the  Company  currently to use 1,150 MHz in the New York PMSA.  At  the
conclusion of the grandfathered period, the Company will be required to
cease  its  operations in the 28.35-28.50 GHz spectrum thus maintaining
its  1,000  MHz  spectrum allocation, at 27.5-28.35 GHz and  29.1-29.25
GHz,  along  with an additional 150 MHz in the 31 GHz band, subject  to
license renewal, as explained below. In addition, the Second Report and
Order confirms that the  FCC will allow  the renewed license to conform
to the final rules for LMDS, including the authorization of the Company
to  offer  the panoply of LMDS services the technology is  expected  to
offer.

     The Company also holds an experimental license authorizing limited
market  tests which was granted by the FCC in 1988 and has been renewed
for  full  two-year  terms on a bi-yearly basis.  Other  entities  hold
experimental licenses for LMDS use outside of the New York BTA as well.
In  August  1993, the FCC approved the modification of this license  to
authorize  two-way  video, voice and data transmissions  with  variable
modulation and bandwidth characteristics. On June 30, 1995, the Company
filed  a  timely  application for renewal of its  experimental  license
which had an expiration date of September 1, 1995. The FCC granted  the
renewal  application, effective September 1, 1995, for a  new  two-year
license term. In addition, on November 26, 1996, the Company filed  for
an  experimental license in the 31.0-31.3 GHz in the New  York  BTA  in
order  to conduct limited market studies of various packages of  video,
telephony   and/or  data  services  delivered  through  31   GHz   LMDS
technology. This application currently is pending before the FCC.

     The FCC's LMDS Rulemaking Proceedings. The subscription television
service currently offered by the Company in New York is one example  of
a diverse range of telecommunications services including two-way video,
telephony  and data services, which could be supported by the Company's
system  in  the 28 GHz frequency band. This range of services developed
by the Company using the technology licensed from CT&T has become known
as  LMDS.  In  response to a Petition for Rulemaking and  Petition  for
Pioneer's  Preference filed by the Company in 1991, the FCC  adopted  a
Notice  of Proposed Rulemaking, Order, Tentative Decision and Order  on
Reconsideration  ("First  NPRM") in December 1992,  which  proposed  to
redesignate the 27.5-29.5 GHz band for point-to-multipoint use, and  to
license  LMDS as a new service on a nationwide basis with the  issuance
of  two  1  GHz licenses per service area. At that time, the  FCC  also
tentatively  granted the Company's request for a Pioneer's  Preference,
by which the Company would be awarded a license for the service area of
its  choice in recognition of its significant efforts in developing the
innovative LMDS technology.

      On  July  17, 1996, by unanimous vote, the FCC adopted the  First
Report  and  Order and Fourth NPRM, which formally established  a  band
plan  and sharing rules as previously proposed by the FCC in the  Third
NPRM. This plan allocated to LMDS the 28 GHz frequency band nationwide,
850  MHz  spectrum from 27.5-28.35 GHz on a primary basis  for  two-way
LMDS transmissions, with an additional non-contiguous 150 MHz from 29.1-
29.25  GHz  to be shared on a co-primary basis with MSS systems.  While
the  sharing  rules  adopted  for the 150 MHz  limit  LMDS  to  hub-to-
subscriber  transmissions due to concerns about potential  interference
between LMDS and MSS, in the First Report and Order the FCC stated that
it  will  revisit that limitation if the LMDS industry can  demonstrate
definitively that LMDS return links do not interfere with MSS systems.

      Further, in the Fourth NPRM portion of the decision, in an effort
to  provide additional spectrum for LMDS, the FCC proposed to  allocate
300 MHz from 31.0-31.3 GHz on a primary basis for two-way LMDS use. The
FCC  reiterated  the potential value of LMDS as  "real competition"  in
the  local  telephony and multichannel video distribution markets,  and
stated that this additional spectrum would provide consumers access  to
more  choices in the new services and innovative technologies. The  FCC
proposed  to license the 850 MHz and 150 MHz blocks of 28 GHz spectrum,
together with the 300 MHz of 31 GHz spectrum as a single, 1.3 GHz block
of  spectrum  for  LMDS  licenses. The Fourth  NPRM  sought  additional
comment  on whether local exchange carriers and cable operators  should
be permitted to hold an LMDS license in their service areas.

      Moreover,  in  the  First Report and Order,  the  FCC  explicitly
recognized  the role of the Company as the only commercial Licensee  of
LMDS  in the United States. Moreover, the FCC stated "its intention  to
facilitate  the  development of LMDS in New York and the  rest  of  the
nation," and noted that `permitting CellularVision to proceed with  its
business  plan and existing system design in the contiguous 1  GHz  for
which it was originally licensed will help ensure a seamless transition
for CellularVision's customers as LMDS is licensed pursuant to the band
plan  implemented in the Report and Order."  Accordingly, demonstrating
its commitment to the Company's build-out of its system in the New York
PMSA, in the First Report and Order the FCC grandfathered the Company's
continued  operations in the 27.5-28.5 GHz spectrum (which the  Company
currently  is  licensed  to use) for a period of  two  years  from  the
release date of the First Report and Order, July 22, 1996, or until the
first GSO/FSS satellite intended to operate in the 28.35-28.50 GHz band
is   launched,   whichever  occurs  later.  Additionally,   under   the
grandfather provision adopted by the FCC, the Company is authorized  to
use  the  newly  designated  150  MHz at  29.1-29.25  GHz  for  hub-to-
subscriber  operations during the grandfathered period,  thus  allowing
the  Company  currently to use 1,150 MHz in the New York PMSA.  At  the
conclusion of the grandfathered period, the Company will be required to
cease  its  operations in the 28.35-28.50 GHz spectrum thus maintaining
its 1000 MHz spectrum allocation, at 27.5-28.35 GHz and 29.1-29.25 GHz,
along  with  an  additional 150 MHz  in the 31  GHz  band,  subject  to
license renewal, as explained below.

      On  March  13, 1997, the FCC  adopted the LMDS Second Report  and
Order   in  this  proceeding,  which  includes  service,  auction   and
eligibility  rules for LMDS, and addresses the proposed  allocation  of
300  MHz  in  the  31 GHz band for LMDS. This Second Report  and  Order
largely  concludes the LMDS rulemaking proceeding except for  undecided
issues regarding the implementation of disaggregation and partitioning,
which  is  subject  to  a  Fifth  Notice of  Proposed  Rulemaking.  FCC
officials have stated their intent to commence the nationwide licensing
of LMDS through spectrum auctions by the summer of 1997.

      The  FCC  in  the Second Report and Order provides for  two  LMDS
licenses  per Basic Trading Area ("BTA"):  one license for  1,150  MHz,
the  other  for 150 MHz, amounting to 1,300 MHz allocated to  LMDS.  In
addition   to the non-contiguous 1 GHz of 28 GHz spectrum allocated  to
LMDS in the First Report and Order, the FCC has allocated an additional
300 MHz in the 31 GHz band for LMDS, 150 MHz of which will be allocated
to  one LMDS license, the other 150 MHz will be combined with the 1,000
MHz in the 28 GHz band.

      The 1,150 MHz license will consist of:  850 MHz in the 27.5-28.35
GHz  band  on a primary protected basis; 150 MHz in the 29.1-29.25  GHz
band,  at  the  present  time for LMDS hub-to-subscriber  transmissions
only,  on  a  co-primary  basis  with Mobile  Satellite  Service  (MSS)
systems;  and  150  MHz in the 31.075-31.225 GHz band  on  a  protected
basis. The 150 MHz license will consist of two 75 MHz bands located  at
each  end  of  the 300 MHz block in the 31.0-31.075 GHz and 31.225-31.3
GHz  bands  on  a  protected  basis. LMDS licenses  operating  in  this
bifurcated  31  GHz  band  will  be  required  to  afford  interference
protection to incumbent licensees. Also, this second 150 MHz block  can
be combined with the 1,150 MHz license to create a 1.3 GHz LMDS system.

      In  order  to encourage competition  in  the video and  telephony
markets,  the  FCC  decided to substantially  restrict  local  exchange
carriers  ("LEC's") and cable companies from acquiring  the  1,150  MHz
LMDS  license. Under the rules adopted in the Second Report and  Order,
LECs and cable companies will be ineligible to acquire a 20% or greater
ownership interest in an 1,150 MHz LMDS license in their service region
for  a  period  of  three years. An incumbent LEC or cable  company  is
considered `in-region' and, therefore, ineligible to acquire  an  1,150
MHz  license,  if 10% of the BTA's population is within its  authorized
service  area. This eligibility restriction may be extended beyond  the
three-year  period by the FCC based on a determination  that  Incumbent
LECs  or  cable  companies continue to have substantial  market  power.
Also,  the eligibility restriction will be examined by the FCC  at  the
time  of its annual review, the first of which will take place  in  the
year 2000, to determine whether competition in the local telephone  and
video  distribution industries has increased sufficiently to make these
restrictions unnecessary. Finally, upon a showing of good  cause  by  a
petitioning  LEC  or cable company, the FCC may waive  the  eligibility
restriction on a case-by-case basis. Cable companies and LECs  will  be
able  to bid on the 150 MHz license in their service area, as there  is
no such eligibility restriction on this LMDS license.

     In order to encourage small businesses to enter the LMDS industry,
the   FCC  has  adopted  several  opportunity  enhancing  measures  for
qualifying small businesses. The FCC will define a "small business"  as
an   entity   whose  average  annual  gross  revenues,  together   with
controlling  principals and affiliates for the  three  preceding  years
does not exceed $40 million. A small business will be entitled to a 25%
bidding  credit.  Small  businesses are also  entitled  to  installment
payments  at  an  interest rate based on the  rate  for  U.S.  Treasury
obligations of maturity equal to the license term (10yrs) fixed at  the
time of licensing, plus 2.5%. Payments shall include interest only  for
the  first  two years and payments of interest and principal  amortized
over  the  remaining eight years. The rate of interest on  ten-year  US
Treasury  obligations will be determined by taking the coupon  rate  of
interest on ten-year US Treasury notes most recently auctioned  by  the
Treasury   Department   before  licenses  are  conditionally   granted.
Moreover,  entities with gross revenues exceeding $40 million  but  not
exceeding $75 million, will be entitled to a 15% bidding credit and the
same  ten-year repayment plan as small businesses except  interest  and
principal will be amortized over the whole ten-year period.

      The  FCC  also  initiated a Fifth Notice of  Proposed  Rulemaking
("Fifth NPRM") to address the issues of disaggregation and partitioning
which  will  enable a licensee to assign a portion of its bandwidth  or
geographic   service  area  to  another  entity.  The  FCC  tentatively
concluded  to  allow disaggregation and partitioning  without  imposing
substantial  regulatory  requirements and  issued  the  Fifth  NPRM  to
solicit  public comment regarding the most effective way  to  implement
partitioning and disaggregation for LMDS licensees.

      In  the LMDS Second Report and Order, the FCC deferred action  on
the  Company's tentative Pioneer's Preference award and instead ordered
a  "peer  review"  process, whereby the FCC would  select  a  panel  of
technical,  non-FCC  experts  to review the  Company's  technology  and
advise the FCC whether the Pioneer's Preference should be granted.  The
Company  believes,  based on the 1994 GATT legislation  and  the  FCC's
prior  determinations  not  to subject parties  to  peer  review  whose
Pioneer's  Preference  applications were accepted  for  filing   before
September  1, 1994, that this is an unnecessary regulatory requirement.
The  Company  is  currently seeking FCC clarification  on  this  issue.
Accordingly,  there  can be no assurance that the FCC  will  grant  the
Company's Pioneer's Preference.

      Based  on  the Second Report and Order, wherein the FCC confirmed
that  it  will  commence  processing the Company's  commercial  license
renewal  application for the New York PMSA within 30 days of the  March
13,  1997 release of the Order, the outcome of the Pioneer's Preference
award has no impact on the Company's license to operate in the New York
PMSA.  As previously stated by the FCC in the Third NPRM, the Pioneer's
Preference  would apply only to the outer portion of the New  York  BTA
not  covered  by the Company's existing license for the  PMSA.  If  the
Company  ultimately  is awarded the Pioneer's Preference,  the  Company
would  be  licensed to use the portion of the New York BTA outside  the
New York PMSA pursuant to the FCC's band segmentation plan (i.e., 27.5-
28.35  GHz,  29.1-29.25 GHz and 30.0-30.3 GHz). While the remainder  of
the  New York BTA would be awarded to the Company without being subject
to a spectrum auction, under the FCC's most recent proposal the Company
would have the exclusive right to extend its license to add the portion
of  the  New York BTA not included in the 1,000-plus square  mile  area
covered  by  the Company's existing license for the New  York  PMSA  by
paying a fee representing the difference between the value of a license
to  serve  the  New  York  BTA and the value of the  Company's  current
commercial  license  to  serve the New York  PMSA,  subject  to  a  15%
discount  from the average price paid at the LMDS auctions for licenses
in  comparable  service areas. In addition, the FCC is considering  the
adoption of conditions on the Company's Pioneer's Preference similar to
those   placed  on  the  Pioneer's  Preferences  granted  to   Personal
Communications  Service  licensees. If adopted,  these  conditions  may
require  the  Company to construct the system subject to the  Pioneer's
Preference  using  substantially the same  technology  upon  which  its
Pioneer's Preference award is based.

Industry Regulation

      General. The proprietary LMDS technology licensed by the  Company
from  CT&T  has been repeatedly recognized formally by  the  FCC  as  a
pioneering  wireless  communications innovation, opening  a  previously
underutilized frequency band for terrestrial applications. At  present,
the  Company  is the only entity commercially licensed by  the  FCC  to
transmit  multichannel services in the 28 GHz frequency band. Moreover,
the  unique LMDS technology is capable of providing a diverse range  of
services, including interactive, high-quality video, telephony and data
services.  Subsequent to the grant of the Company's commercial  license
in  1991,  the FCC in 1992 commenced the LMDS rulemaking proceeding  to
develop rules for the licensing of LMDS nationwide. With the release of
the  Second Report and Order on March 13, 1997 providing LMDS  service,
auction and eligibility rules, the LMDS rulemaking is largely completed
and   FCC  officials  have  stated  that  auctions  for  LMDS  licenses
nationwide could commence by the summer of 1997.

       From   a   regulatory  standpoint,  the  Company's  subscription
television  service  currently offered in the  New  York  PMSA  is  not
treated  as  a  "cable system," as that term is defined  by  42  U.S.C.
section 522(7)  and  interpreted by the FCC's rules  and  relevant
decisions including  the  Second  Report  and Order.  As  the  FCC  has
formally recognized  in  the  Second Report and Order,  as  a  wireless
service provider, the LMDS licensee providing video programming services
is not subject  to franchising or regulation as a cable system. As  a
result, the  Company  is  not required to comply with the FCC's  onerous
rules applicable to franchised cable systems, including, among other
things, rate  regulation and the requirement to obtain a franchise  from
local government authorities in order to provide its video services.

      While the Company's video operations are not subject to the FCC's
requirements applicable to franchised cable systems, the  FCC  has  the
power  to  issue, revoke, modify and renew licenses within the spectrum
utilized  by the Company's subscription television service, subject  to
FCC  and  judicial  case law precedent, which relies on  the  equitable
concept  of renewal expectancy for any FCC licensee who acts in  accord
with  the  terms of its license and seeks to serve the public interest,
convenience  and  necessity. The FCC also may approve  changes  in  the
ownership  of  such licenses, regulate equipment used by the  Company's
video  operations, and impose certain equal employment opportunity  and
retransmission consent requirements.

      Telecommunications  Reform Act. On February  8,  1996,  President
Clinton  signed  into law the Telecommunications Reform  Act,  landmark
communications  reform legislation that significantly  relaxes  various
restrictions  applicable to franchised cable operators  and  local  and
long   distance   telephone   providers.  Among   other   things,   the
Telecommunications  Reform  Act  (i)  allows  Regional  Bell  Operating
Companies ("RBOCs") to offer in-region video services and long distance
telephone service, subject to certain requirements; (ii) preempts state
laws,  where  applicable,  allowing cable and long  distance  telephone
companies to offer local telephone service; and (iii) amends  the  1992
Cable Act to substantially deregulate cable rates.

      With regard to franchised cable operators, the Telecommunications
Reform  Act  also contains provisions that will reduce  the  regulatory
burdens  on  franchised  cable  systems  by  freeing  them  from   rate
regulation of the cable programming services tier by March 31, 1999, or
immediately for systems with fewer than 50,000 subscribers. Under  this
new  legislation, franchised cable operators also will  be  allowed  to
offer  special  discounts  to  residents of  multiple  dwelling  units,
thereby  intensifying competition between franchised cable and wireless
operators.

     1984 Cable Act. Under the Cable Communications Policy Act of 1984,
as amended by the Telecommunications Reform Act (the "1984 Cable Act"),
"cable systems" may not be operated without a franchise from applicable
local  government authorities. Federal law exempts from the  definition
of a "cable system" those systems that (i) use wire or cable within the
premises  of  a  single building only; (ii) interconnect  one  or  more
buildings   only  through  radio  facilities;  or  (iii)   interconnect
buildings,  by  cable or wire, provided that the system  does  not  use
public  rights-of-way. Such systems, therefore,  are  not  required  to
obtain franchises from applicable local government authorities and  are
subject   to  fewer  regulations  than  traditional  franchised   cable
operators. As the FCC has recognized in the Second Report and Order, an
LMDS video distribution system, such as that operated by the Company in
the  New  York  PMSA,  would not be considered a "cable  system"  since
signals are transmitted to subscribers by radio spectrum. Moreover, all
transmission and reception equipment associated with the Company's LMDS
video  distribution  operations can be  located  on  private  property,
eliminating the need for utility poles and dedicated easements.

      1992 Cable Act. On October 5, 1992, the U.S. Congress passed  the
1992  Cable  Act  which imposes greater regulation on franchised  cable
operators  and  permits  regulation of cable  service  rates  by  local
franchising  authorities  in  areas in which  there  is  no  "effective
competition." The 1992 Cable Act, while primarily known for  regulating
cable  rates,  also covers numerous other issues, including  (i)  equal
employment  opportunity  hiring policies; (ii) subscriber  home  wiring
ownership;  (iii) compatibility of set-top converters  with  television
sets;  (iv)  carriage by private and franchise cable systems  of  local
television stations so-called "retransmission consent" and "must  carry
rules;"  (v)  customer  service standards; and (vi)  non-discriminatory
access  to  programming  by  Multiple  Video  Programming  Distributors
("MVPDs").

      The  Company's  operations  will  not  be  subject  to  the  rate
regulation and "must carry" rules of the 1992 Cable Act which  restrict
the business practices of franchised cable companies.

     Retransmission Consent. Under the 1992 Cable Act, MVPDs, including
the  Company's wireless LMDS video distribution system, are  prohibited
from  carrying  local  television signals without first  obtaining  the
television   station's   consent,  commonly  known   as   a   station's
"retransmission consent" right. The Company has obtained all  necessary
retransmission consents.

      Program  Access.  The  1992 Cable Act  also  contains  provisions
designed  to  ensure  access  by  all MVPDs  to  programming  on  fair,
reasonable  and non-discriminatory terms. The program access provisions
prohibit vertically integrated cable programmers, programmers in  which
a  cable  operator holds a five percent or greater voting or non-voting
ownership  interest, a partnership interest or has a common officer  or
director,  from discriminating against MVPDs in the prices they  charge
for   programming.  Moreover,  the  1992  Cable  Act's  program  access
provisions prohibit most exclusive dealing agreements that have in  the
past enabled franchised cable operators to procure programming that  is
unavailable to competitors. The program access provisions also prohibit
"non-price"  discrimination by a programmer  between  competing  MVPDs,
including  the unreasonable refusal to sell programming to a  class  of
video  provider, or refusing to offer particular terms to an individual
video  provider.  On August 24, 1995, the FCC, acting  on  a  complaint
filed  by  the  Company, ordered SportsChannel Associates,  a  unit  of
Cablevision Systems Corporation ("SportsChannel"), to offer its  sports
programming  to the Company on non-discriminatory terms  based  on  the
FCC's finding that SportsChannel had unreasonably refused to sell  such
programming. SportsChannel challenged the FCC's decision  by  filing  a
Petition for Reconsideration and a Petition for Stay pending FCC action
on  reconsideration, which the Company opposed, and the FCC denied  the
petition  for  Stay. Additionally, on March 12, 1996, the FCC  affirmed
its  decision  in  favor of the Company. In October 1995,  the  Company
executed  a  contract with SportsChannel, and now offers  SportsChannel
programming to its subscribers.

      Compulsory  Copyright  License.  Under  federal  copyright  laws,
permission from a television program's copyright holder generally  must
be  secured  before  the video programming may be retransmitted.  Cable
systems,  however,  may  obtain  a  compulsory  copyright  license  and
retransmit local television broadcast programming without securing  the
prior  approval of the holders of the copyrights for such  programming,
by  filing reports and remitting semiannual royalty fee payments to the
Registrar of Copyrights.

      On  January 1, 1994, the U.S. Copyright Office held that  certain
wireless video programming distributors, such as satellite carriers and
MMDS  operators,  were not "cable systems" eligible  for  a  compulsory
copyright  license.  Subsequently, the Congress enacted  the  Satellite
Home  Viewer  Act of 1994, which broadened the U.S. Copyright  Office's
"cable  system"  definition  to include all wireless  cable  operators,
arguably  making  the  Company  eligible  for  a  copyright  compulsory
license. Accordingly, the Company has filed all necessary Statements of
Account with the Copyright Office.

        Restrictions   on   Over-the-Air   Reception    Devices.    The
Telecommunications  Act  of  1996  directed  the  FCC   to   promulgate
regulations to prohibit restrictions that impair a viewer's ability  to
receive  video programming services through devices designed for  over-
the-air   reception  of  television  broadcast  signals,   multichannel
multipoint   distribution  service,  or  direct   broadcast   satellite
services.  In  a Report and Order released on August 6, 1996,  the  FCC
established   a   rule  that  prohibits  restrictions   impairing   the
installation,  maintenance  or use of an antenna  designed  to  receive
numerous  video  programming  services,  specifically  including  LMDS.
However, the Commission limited the interim applicability of this  rule
to  antennas located on property within the exclusive use or control of
the   antenna  user  where the user has a direct or indirect  ownership
interest  in  the property. In a Further Notice of Proposed  Rulemaking
that  is  ongoing, the FCC is requesting further comment on  situations
involving:  (1)  property not under the exclusive use and control of  a
person  who  has  a direct or indirect ownership interest;   and,   (2)
residential or commercial property subject to a lease agreement.

Equipment and Facilities

     The unique feature of the Company's customer premises equipment is
its  highly-directional,  flat  plate, window,  roof  or  wall  mounted
antenna (approximately six and five-eighths inches square) which, based
on  its unique characteristics and design, reduces the risk of theft of
service.  This antenna, which is connected to and powered by a  set-top
converter,  makes  reception  of  the  Company's  high  quality  signal
possible. The Company's antenna permits indoor installations,  in  many
cases,  thereby  avoiding the costs involved in outdoor  installations.
All  of  the Company's set-top converters are fully addressable, making
pay-per-view services available to all of its subscribers, and enabling
the  Company to control access to all of its channels, further reducing
the  risk  of theft of services. Subscribers are also supplied  with  a
hand-held, wireless remote control unit. The Company presently  obtains
its customer premises equipment through CT&T. CT&T obtains the customer
premises  equipment it supplies to the Company from sole-source,  third
party suppliers.

      The principal physical assets of the Company's system consist  of
head-end  equipment  (including satellite signal  reception  equipment,
demodulators,  multiplexers and encoders), transmitters, repeaters  and
subscriber  equipment, as well as office space. The Company's  head-end
facility  collects  and  feeds voice, video and data  information  from
external   sources  such  as  satellites,  local  television  broadcast
programming  and  Information  Service  Providers  into  the  Company's
system,  which  transmits  the signals from cell  to  cell.  The  cells
transmit  the  Company's signal directly to the  subscriber's  home  or
office  where  it  is  received by an antenna connected  to  a  set-top
converter. The Company deploys repeaters to fill in  shadowed areas not
served directly from the cell sites.

ITEM 2.  PROPERTIES

     The  Company  subleases approximately 9,800 square  feet  for  its
executive offices in Manhattan pursuant to a sublease which expires  in
July  1999. In addition, the Company leases approximately 9,350  square
feet  for  its administrative, customer service and warehouse needs  in
Brooklyn, New York. The Company's lease for such facility terminates in
May  1999.  In November 1996, the Company entered into a lease  for  an
additional  20,400 square feet of space at its Brooklyn location.  This
space will be utilized for the addition of a new head-end facility  and
for  the expansion of the Company as the employee base increases.  This
lease will expire in October 2004.

     In  addition,  as  the Company expanded into the  Queens  area  in
September  1996,  an  additional  satellite  office  for  installation,
service  and  sales was established. The lease for 10,000  square  feet
expires  in  August  2004. The Company also leases one  New  York  City
apartment for system demonstration and general corporate purposes.

       The Company leases approximately 3,250 square feet of indoor and
outdoor space on which it has constructed its head-end facility.  These
leases expire in 1998 and 1999.

      The Company anticipates that the 17 transmitters it plans to have
deployed  by  the  end  of  1997, will give it  access  to  subscribers
throughout  most of the New York PMSA. The Company leases approximately
100  square  feet  of  space  on  each  of  fifteen  rooftops  for  its
transmitters. These leases, several of which contain seven-year renewal
options,  expire from 1999 to 2003. The Company is currently  in  final
negotiations  for rooftop space on four additional sites  in  New  York
City. In addition, the Company has letters of intent from landlords  to
lease  space at a total of 24 additional sites throughout the New  York
PMSA.  The Company believes that leased space on rooftops in  New  York
City and other locations in the New York PMSA will be readily available
to serve as additional transmitter sites.

ITEM 3.  LEGAL PROCEEDINGS

     In  February  1996, a suit was filed against the Company  alleging
that  the  Company caused the U.S. Army to breach a contract  with  the
plaintiff  wherein  the  plaintiff was to have an  exclusive  right  to
provide  cable television services at an army base located in Brooklyn,
New  York. The suit alleges that by entering into a franchise agreement
with the Army which grants the Company the right to enter the army base
to  build,  construct, install, operate and maintain its  multi-channel
broadband cellular television system, the Company induced the  Army  to
breach its franchise agreement with the plaintiff. The Army has advised
the Company that it has the right to award the franchise to the Company
and  the Company is continuing to provide service at the army base. The
suit seeks $1 million in damages and is in its preliminary stages.  The
Company  cannot  make a determination at this time as to  the  possible
outcome  of the action or whether the case will go to trial. A  summary
judgment motion has been filed by the Company and is currently pending,
requesting  that  the  court dismiss the case.  The  Company  does  not
believe  that in the event an adverse judgment is rendered, the  effect
would be material to the Company's financial position but it could have
a  material  effect  on operating results in the period  in  which  the
matter is resolved.

     In  November 1995, a purported class action suit was filed against
the  Company in New York State Supreme Court alleging that the  Company
had  engaged  in a systematic practice of installing customer  premises
equipment in multiple dwelling units without obtaining certain landlord
or  owner consents allegedly required by law. The Suit seeks injunctive
relief and $4 million in punitive damages. The Company believes,  based
upon advice of counsel, that this suit is likely to be resolved without
a  material  adverse effect on the financial condition of the  Company,
but could have a material effect on operating results in the period  in
which the matter is resolved.

     Prior  to 1992, Vahak and Shant Hovnanian were officers, directors
and principal shareholders of Riverside Savings Bank, a state-chartered
savings  and  loan association that entered receivership  in  1991.  In
certain civil litigation against the Hovnanians and others that ensued,
which  is  pending in the U.S. District Court for the District  of  New
Jersey,  the Resolution Trust Corporation has alleged simple and  gross
negligence and breaches of fiduciary duties of care and loyalty on  the
part  of  the  defendants.  Although  this  action  is  still  in   its
preliminary stages, the defendants have obtained dismissal  of  certain
allegations and intend to continue to vigorously defend the action.

ITEM 4.  SUBMISSION  OF MATTERS TO VOTE OF SECURITY HOLDERS

                                 None

                                PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
      MATTERS

     The  Common  Stock is listed for quotation on the NASDAQ  National
Market system (the "NNM") under the symbol "CVUS."  The following table
sets  forth high, low and closing sale prices for the Common Stock  for
the fiscal quarters indicated, as reported by the NNM.


                    High Sale       Low Sale      Closing Sale
1996
First Quarter*     $15.750       $10.125           11.000
Second Quarter      16.750         8.875           15.750
Third Quarter       16.750         9.250           10.000
Fourth Quarter       9.500         4.375            7.000


____________
* Commencing February 8, 1996, the first day of public trading of the
  Common Stock, through March 31, 1996.

     On  December  31,  1996, the last sale price of  the  Common  Stock  as
reported  on  the  NNM was $7.00 per share.  As of December  31,  1996,
there were 41 registered shareholders of the Common Stock.

     The Company has never declared or paid any cash dividends and does
not  intend to declare or pay cash dividends on the Common Stock at any
time  in the foreseeable future.  Future earnings, if any, will be used
to  finance  the  build-out  of  the Company's  multichannel  broadband
cellular television system in the New York PMSA.



ITEM 6.   SELECTED CONSOLIDATED FINANCIAL DATA

      The selected consolidated financial data set forth below should
be read in conjunction with Item 7_Management's Discussion and Analysis
of Financial Condition and Results of Operations and the Consolidated
Financial Statements of the Company and related Notes thereto included
on pages 20 to 50 of this Report.

                              Year Ended December 31,

                      1992      1993     1994      1995      1996

                       (in thousands, except per share data)

Statement of
Operations
Data:
Revenue.........     $   2  $     55    $   51     $1,196     $2,190
Service
Cost............         3        24        39        603      1,175
Selling General
and
administrative..       499     1,799     2,884      5,637     10,574
Management
fees............         -       250     1,546      2,699          -
Depreciation and
amortization....         51       73       188      1,376      2,258
Total operating
expenses........        553    2,146     4,657     10,315     14,007
Operating Loss..       (551)  (2,091)   (4,606)    (9,119)   (11,817)
Net interest
income (expense)         -       100    (1,393)    (2,184)       186
Net loss........      $(551) $(1,991)  $(5,999)  $(11,303)  $(11,631)


Loss per common
share (1).......                                    (0.91)     (0.75)

Weighted average
of common shares
outstanding.....                               12,395,142  15,576,478



                                   December 31,
                      1992       1993      1994      1995      1996
Balance Sheet
Data:
Cash and short-
term investments.  $   14     $18,705   $12,544    $3,536   $19,600
Working capital
(deficiency)....      (34)     17,766    10,470    (1,647)   16,765
Net property and
equipment.......       353        407     3,469     6,322    14,158
Total assets....       559     20,096    16,922    12,995    35,924
Total debt......         -     15,000    16,756    18,871     6,260
Total
liabilities.....       239     16,115    18,861    26,314     8,972
Total equity
(deficit).......       320      3,981    (1,939)  (13,319)   26,952



1).  Historical loss per common  share for the years ended December 31,
1992, 1993, 1994 is not presented as it is not considered indicative of
the on-going entity.

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
          AND RESULTS OF OPERATIONS

      The following should be read in conjunction with the Consolidated
Financial  Statements of the Company and Notes thereto  and  the  other
financial information appearing elsewhere in this Report.

Information Relating to Forward-Looking Statements

      Management's Discussion and Analysis and other sections  of  this
Annual  Report  include  forward-looking statements  that  reflect  the
Company's  current  expectations concerning future results.  The  words
"expects", "intends", "believes", "anticipates", "likely", "will",  and
similar expressions identity forward looking statements. These forward-
looking statements are subject to certain risks and uncertainties  that
could  cause actual results to differ materially from those anticipated
in the forward-looking statements.

General

      The  Company  owns  a multichannel broadband cellular  television
system  in  an  area  which includes New York City under  a  1,000  MHz
commercial license from the FCC. The Company has been operating its 49-
channel  broadband cellular television system in New York on a  limited
basis  since 1992. The December 1995 grant by the FCC of the  Company's
34 applications for additional commercial transmitter sites has now put
the  Company  in  a  position  to expand  its  subscription  television
services  to cover most of the 8.3 million people in the New York  PMSA,  a
region  consisting  of the five boroughs of New  York  City  and  three
suburban  counties.  Currently,  there are  approximately  2.9 million
people in  the  area  covered by the  Company's  ten  commercially
operational  transmitters. The Company intends to have 17  transmitters
in  operation by the end of 1997, which are expected to give it  access
to  subscribers  throughout most of the New York  PMSA.  The  Company's
recently granted transmitter permits are conditional upon, and  subject
to conformance with the final FCC rules for LMDS.

      The  cost  structure of the build-out of the Company's system  is
significantly  different from that of a hard-wire cable company,  which
typically  incurs  substantial amounts of  debt  during  infrastructure
build-out,  without  offsetting  revenues.  The  cost  associated  with
infrastructure,  or the ability to "pass homes," is a relatively  small
portion  of  the Company's total capital expenditure requirements.  The
predominant  share of capital expenditures required to  build  out  the
Company's  system is related to customer premises equipment, consisting
of  a receive antenna and set-top converter which are installed in  the
subscriber's home or office. Other direct costs relating to  subscriber
installation  include  sales  commission and  installation  costs.  The
Company  capitalizes  costs  associated with  subscriber  installation,
including material and labor. These costs are then depreciated over the
shorter  of  the  estimated  average period that  the  subscribers  are
expected  to  remain connected to the Company's system or  five  years.
Installation  revenue,  when charged to a subscriber,  is  recorded  in
current  period  revenue to the extent of direct sales commissions  and
deferred thereafter.

Operations

      The  focus  of  1996  operations  was  the  construction  of  the
CellularVision  system  throughout the PMSA  and  continued  subscriber
growth.  CVNY built eight transmitters, bringing the current  total  to
ten  serving  all of Brooklyn, and parts of Manhattan and Queens.  Five
additional transmitters are under construction and the Company  expects
to   have  17  transmitters  completed  by  the  end  of  1997.   These
transmitters will cover over 85% of the 8.3 million population  in  the
PMSA.

      Sales and Marketing efforts include Door-to-Door, Direct Mail and
Telemarketing   campaigns.  Since  the  launch  of  this  three-pronged
approach in the second quarter of 1996, CVNY has grown each month.  The
subscribers  as of March 24, 1997, totaled approximately  12,500,  more
than triple the number reported at this time in 1996.

     As significant market areas (i.e., boroughs) are passed, CVNY will
incorporate  mass media into the marketing plan. Television  and  radio
advertising  will  follow  a newspaper strategy  designed  to  increase
CellularVision  brand awareness. Currently, CVNY  is  introducing   its
"Business Class Service" in a series of ads running in the Wall  Street
Journal and New York Times.

      "Business  Class Service" is a package of video, voice  and  data
services  developed for delivery to TVs and PCs in New York's financial
institutions  and  corporations. Business Class includes  14  news  and
business  oriented video channels, data services including  high  speed
Internet  access, and future two-way services like telephony and  video
teleconferencing.  In  1996,  CVUS  announced  a  strategic   marketing
alliance with Bloomberg Information Television (BIT). As a result, CVNY
now  delivers Bloomberg Information Television  to hundreds of computer
screens in Manhattan.

      CVUS was among the first to offer high speed Internet access.  In
1996 the Company introduced the first high-speed wireless modem to  the
New  York  market. Field trails of a 500 Kbps modem began in  September
1996 and have been successfully completed. The $200 product operates at
data  rates approximately 20 times faster than conventional  28.8  Kbps
modems,  and  approximately  4  times faster  than  ISDN.  The  Company
recently  began marketing trials that will continue until the  expected
commercial launch later in 1997.

      Twelve  Months Ended December 31, 1996 Compared to Twelve  Months
Ended December 31, 1995. Revenue increased $994,000 from 1,196,000  for
the  twelve months ended December 31, 1995 to $2,190,000 for the twelve
months  ended December 31, 1996. The increase in revenue is due  to  an
increase  in  subscribers, and a full year of premium and  pay-per-view
services which were introduced in April and June 1995, respectively.

      Operating expenses increased $3,692,000 from $10,315,000 for  the
twelve  months  ended December 31, 1995 to $14,007,000 for  the  twelve
months ended December 31, 1996. This increase is attributable to  costs
associated  with  the continued commercial roll-out, including  service
costs,  selling, general and administrative expenses, and  depreciation
and amortization offset in part by the elimination of management fees.

      Service  costs  increased $572,000 from $603,000 for  the  twelve
months  ended  December 31, 1995 to $1,175,000 for  the  twelve  months
ended  December 31, 1996. Service costs are fees paid to  providers  of
television  programming, and royalties paid  to  CT&T  under  the  CT&T
License  Agreement.  These costs increase as the subscriber  count  and
associated revenues increase.

      Selling,  general and administrative expense increased $4,937,000
from  $5,637,000  for  the twelve months ended  December  31,  1995  to
$10,574,000 for the twelve months ended December 31, 1996. The increase
in   selling,   general  and  administrative  expenses   is   primarily
attributable to headcount-related costs (as the Company's employee base
rose  from  55 at December 31, 1995 to 104 at December 31,  1996),  and
increased  payments  in  equipment rentals and  legal  fees  associated
primarily  with  the FCC rulemaking offset in part  by  a  decrease  in
contractor  sales as part of the sales force was brought in-house.  The
Company  expects that its legal costs associated with FCC matters  will
vary  dependent upon the timing and resolution of matters such  as  the
recently  approved transmitter applications and the pending  final  FCC
rules for LMDS. CT&T paid 50% of all such legal costs through the  date
of  the consummation of the Initial Public Offering, at which time  the
Company  assumed  all ongoing legal expenses relating to  FCC  matters.
Following  the  build-out of its network of transmitters,  the  Company
intends to implement a variety of mass marketing programs which  should
result in an increase in total sales and marketing expenses.

      Management  fees  decreased $2,699,000 from  $2,699,000  for  the
twelve months ended 31, 1995 to $0 for the twelve months ended December
31,  1996.  The  decrease  in management fees is  attributable  to  the
termination  of  the  management  agreement  with  the  Bell   Atlantic
Corporation as of December 31,1995.

      Depreciation and amortization increased $882,000 from  $1,376,000
for  the  twelve months ended December 31, 1995 to $2,258,000  for  the
twelve months ended December 31, 1996. The increase in depreciation and
amortization  costs  is  due  primarily to  the  purchase  of  customer
premises equipment and equipment for the Company's transmitter sites.

      Interest  expense  decreased $1,483,000 from $2,588,000  for  the
twelve  months  ended December 31, 1995 to $1,105,000  for  the  twelve
months  ended December 31, 1996. The decrease is due primarily  to  the
conversion  of  $10,000,000  of convertible  exchangeable  subordinated
notes  payable  in  conjunction  with  the  Company's'  Initial  Public
Offering.  Interest  income increased $888,000 from  $404,000  for  the
twelve  months  ended December 31, 1995 to $1,292,000  for  the  twelve
months  ended December 31, 1996. The increase is due primarily  to  the
interest  earned  on  the  proceeds from the Company's  Initial  Public
Offering in 1996.

      The  net  loss for the twelve months ended December 31, 1995  was
$11,303,000 compared to a net loss of $11,631,000 for the twelve months
ended  December  31,  1996. This slight increase is  due  to  increased
service  costs,  selling,  general  and  administrative  expenses,  and
depreciation and amortization expense offset by increased  revenue  and
interest income and decreased management fees and interest expense.

      Twelve  Months Ended December 31, 1995 Compared to Twelve  Months
Ended December 31, 1994. Revenue increased $1,145,000 from $51,000  for
the  twelve months ended December 31, 1994 to $1,196,000 for the twelve
months   ended  December  31,  1995.   The  increase  in  revenue   was
attributable to an increase in subscribers and the addition of  premium
and pay-per-view services during April and June 1995, respectively.

      Operating expenses increased $5,658,000 from $4,657,000  for  the
twelve  months  ended December 31, 1994 to $10,315,000 for  the  twelve
months   ended   December  31,  1995.  This  increase   was   primarily
attributable  to  costs associated with commercial roll-out,  including
service costs, selling, general and administrative expenses, management
fees and depreciation and amortization.

      Service  costs  increased $564,000 from $39,000  for  the  twelve
months ended December 31, 1994 to $603,000 for the twelve months  ended
December  31,  1995. Such costs, primarily fees paid  to  providers  of
television  programming  and royalties paid  to  CT&T  under  the  CT&T
License  Agreement,  increased  with the  growth   in  subscribers  and
revenues.

      Selling, general and administrative expenses increased $2,753,000
from  $2,884,000  for  the twelve months ended  December  31,  1994  to
$5,637,000 for the twelve months ended December 31, 1995. The  increase
in   selling,   general  and  administrative  expenses  was   primarily
attributable to headcount-related costs (as the Company's employee base
rose  from  13 at December 31, 1994 to 55 at December 31, 1995),  sales
and  marketing-related costs and increased legal costs associated  with
the FCC licensing process.

      Management  fees  increased $1,153,000 from  $1,546,000  for  the
twelve  months  ended December 31, 1994 to $2,699,000  for  the  twelve
months  ended  December 31, 1995. The increase in management  fees  was
attributable  to contractual increases in amounts due to Bell  Atlantic
under the terms of a management agreement between the Company and  Bell
Atlantic  (the  "Management Agreement"). Other costs  reimbursed  under
this  agreement,  primarily for salary and benefits were  reflected  in
selling,  general  and  administrative expenses  and  continued  to  be
incurred separately by the Company in  1996.

      Depreciation and amortization increased $1,188,000 from  $188,000
for  the  twelve months ended December 31, 1994 to $1,376,000  for  the
twelve months ended December 31, 1995. The increase in depreciation and
amortization  costs  was  due primarily to  the  purchase  of  customer
premises equipment, equipment for three transmitter sites and the build-
out of the Company's customer service/administrative facility.

     Interest expense increased $669,000 from $1,919,000 for the twelve
months  ended  December 31, 1994 to $2,588,000 for  the  twelve  months
ended  December  31, 1995. This increase was due to  increases  in  the
prime interest rate along with additional interest associated with  the
compounding of previously accrued interest and principal on the  Morgan
Notes.  In  connection  with the consummation  of  the  Initial  Public
Offering, $10 million of the $15 million principal amount of the Morgan
Notes was converted into Common Stock of the Company. Interest accrued,
in  an amount proportionate to the amount of principal converted,  from
the  date  of  issue  of  such notes through the  conversion  date  was
irrevocably  waived  and  classified  to  additional  paid-in  capital.
Interest  income  declined from $527,000 for the  twelve  months  ended
December 31, 1994, to $404,000 for the twelve months ended December 31,
1995.

      The  net  loss for the twelve months ended December 31, 1994  was
$5,999,000 compared to a net loss of $11,303,000 for the twelve  months
ended  December 31, 1995. The increase in net loss is due primarily  to
increased operating expenses and interest expense.

      Twelve  Months Ended December 31, 1994 Compared to Twelve  Months
Ended December 31, 1993. Revenues decreased $4,000 from $55,000 for the
twelve  months ended December 31, 1993 to $51,000 for the twelve months
ended  December 31, 1994. This decrease was attributable to  subscriber
attrition during the testing phase of the Company's operations.

      Operating expenses increased $2,511,000 from $2,146,000  for  the
twelve  months  ended December 31, 1993 to $4,657,000  for  the  twelve
months   ended   December  31,  1994.  This  increase   was   primarily
attributable  to  costs associated with commercial roll-out,  including
selling,  general  and  administrative expenses,  management  fees  and
depreciation and amortization.

      Selling, general and administrative expenses increased $1,085,000
from  $1,799,000  for  the twelve months ended  December  31,  1993  to
$2,884,000 for the twelve months ended December 31, 1994. The  increase
in   selling,   general  and  administrative  expenses  was   primarily
attributable to headcount-related costs (as the Company's employee base
rose  from two at December 31, 1993 to 13 at December 31, 1994),  sales
and  marketing  related  expenses and increased legal  expenses.  Legal
expenses  increased in connection with the LMDS rule making proceeding,
the Company's transmitter applications, litigation regarding access  to
programming and an action to protect certain trade secrets.

      Management fees increased $1,296,000 from $250,000 for the twelve
months  ended  December 31, 1993 to $1,546,000 for  the  twelve  months
ended   December  31,  1994.  The  increase  in  management  fees   was
attributable  to contractual increases due to Bell Atlantic  under  the
terms of the Management Agreement.

      Depreciation and amortization increased $115,000 from $73,000 for
the  twelve  months ended December 31, 1993 to $188,000 for the  twelve
months  ended  December  31,  1994. The increase  in  depreciation  and
amortization costs was primarily attributable to increased purchases of
customer  premises  equipment in anticipation of a commercial  roll-out
and acquisition of equipment for one transmitter site.

      Interest  expense  was  $1,919,000 for the  twelve  months  ended
December  31,  1994 with no interest expense incurred  for  the  twelve
months  ended  December  31,  1993. The increase  in  interest  expense
related  to  the  issuance of the Morgan Notes on  December  29,  1993.
Interest income increased $427,000 from $100,000 for the twelve  months
ended  December  31,  1993  to $527,000 for  the  twelve  months  ended
December  31, 1994. This increase related to the interest  earnings  on
the unexpended portion of the proceeds of the Morgan Notes.

      The  net  loss for the twelve months ended December 31, 1994  was
$5,999,000  compared to a net loss of $1,991,000 for the twelve  months
ended December 31, 1993. The increase in the net loss was due primarily
to increased operating expenses and interest expense.

Liquidity and Capital Resources

     For the year ended December 31, 1996, the Company expended
$9,106,000 on operating activities. During the same period, capital
expenditures were $10,191,000, consisting primarily of transmitter
deployment and the purchase of customer premises equipment.

      In  February  1996,  the Company consummated the  Initial  Public
Offering of 3,333,000 shares of Common Stock (including an aggregate of
333,000  shares  sold by certain shareholders of the  Company)  at  the
initial  offering price of $15.00 per share. The net  proceeds  to  the
Company  from the Initial Public Offering, after deducting underwriting
discounts  and  commissions  of $1.05 per share  and  approximately  $2
million of other expenses, were approximately $39,850,000.

      Prior  to  the  consummation of the Initial Public Offering,  the
Company had financed its cash flow requirements primarily with proceeds
obtained  from  private placements of debt and  equity.  In  1993,  the
Company consummated a $10 million private placement of equity with Bell
Atlantic and the $15 million private placement of the Morgan Notes. The
Company  utilized the proceeds of these private placements  to  finance
operations, build-out its system, purchase customer premises  equipment
and  fund distributions totaling $4 million to the Founders in 1993 and
1994. The Morgan Notes accrued interest at Morgan's prime lending  rate
plus 4%, with a minimum rate of 8% and a maximum rate of 12%. Effective
December  15,  1995, $5 million principal amount of the  Morgan  Notes,
together  with accrued interest thereon of approximately $1.3  million,
was  exchanged  for the Morgan Exchange Notes. Prior to  such  exchange
accrued  interest  on  the Morgan Notes was added  to  the  outstanding
principal  balance.  The  Morgan  Exchange  Notes  accrue  interest  at
Morgan's prime lending rate plus 6%, with a minimum rate of 10%  and  a
maximum  rate of 15%. Interest on the Morgan Exchange Notes is  payable
quarterly,  beginning March 28, 1996. Principal is payable as  follows:
4/15  of  the outstanding balance is payable on June 30, 1997, 5/11  of
the  then  outstanding  balance is payable on June  30,  1998  and  the
remaining  balance  is payable on April 30, 1999. The  Morgan  Exchange
Notes  are  not convertible. Upon the consummation of the Incorporation
Transactions  in  February 1996, the remaining  $10  million  principal
amount  of the Morgan Notes was converted into 604,858 shares of Common
Stock.  Interest accrued, in an amount proportionate to the  amount  of
principal converted, from the date of issue of the Morgan Notes through
the  conversion  date  was  irrevocably  waived  and  reclassified   to
additional paid-in capital upon such conversion.

      On  September  30,  1995,  the Company exercised  its  option  to
terminate  the  Management  Agreement,  effective  December  31,  1995.
Effective December 1, 1995, the Company entered into an agreement  with
Bell  Atlantic  which converted outstanding fees and  related  interest
thereon  due  to Bell Atlantic pursuant to the terms of the  Management
Agreement, totaling approximately $3.5 million, to a senior convertible
note  (the  "Bell Atlantic Note").  From the proceeds  of  the  Initial
Public  Offering,  the  Company paid Bell Atlantic  approximately  $3.5
million  due  under the Bell Atlantic Note together with  approximately
$100,000  of  accrued interest thereon and $675,000  for  fees  accrued
during the fourth quarter of 1995 under the Management Agreement.

      On  December  15,  1995, the Company entered into  two  sale  and
leaseback transactions totaling approximately $2.6 million. The minimum
lease  term  for each piece of equipment under the sale  and  leaseback
facility  in  the amount of $1.1 million is 36 months, with  a  renewal
period of an additional twelve months. The minimum lease term for  each
piece  of equipment under the sale and leaseback facility in the amount
of  $1.5  million is 48 months, with a renewal period of an  additional
twelve months. Rental payments are due monthly in advance.

      The  Company expects that the remaining proceeds from the Initial
Public  Offering and internally generated funds will be sufficient  for
the   continued  build  out  of  its  multichannel  broadband  cellular
television  system. The Company believes that its sources  of  capital,
including  internally generated funds and the remaining  proceeds  from
the  Initial  Public  Offering will be adequate to satisfy  anticipated
capital  needs  and  operating expenses for  the  next  twelve  months.
Additional funding would be required for the Company to expand into the
BTA (if acquired) and to provide additional services such as high-speed
Internet access, telephony and other two-way services.

      The  Company has recorded net losses and negative operating  cash
flow  in  each  period  of its operations since inception.  While  such
losses  and negative operating cash flow are attributable to the start-
up  costs  incurred in connection with the roll-out  of  the  Company's
system,  the Company expects to continue experiencing operating  losses
and negative cash flow for at least one year as a result of its planned
expansion within the New York PMSA.

     The Company is able to control the timing of deployment of capital
resources  based  on the variable cost nature of the business  and  the
incremental fixed cost per transmitter site constructed. The  Company's
current  business strategy is based on rapid subscriber growth.  Should
capital  conservation measures be required, the Company  may  slow  the
rate  of  subscriber growth or delay additional transmitter deployment,
enabling the Company to operate for an extended period of time.

      Transmitter  Deployment.  The Company  anticipates  that  the  17
transmitters it plans to have deployed by the end of 1997 will give  it
access to subscribers throughout most of the New York PMSA. The Company
has leased space on 15 rooftops for its transmitters, and believes that
leased  space on rooftops in New York City and other locations  in  the
New  York  PMSA  will  be  readily available  to  serve  as  additional
transmitter sites. The Company is in negotiations for rooftop space  on
four  additional  sites in  New  York City for transmitter  deployment.
The  Company is actively pursuing over 50 sites for its repeaters.  The
Company  has  letters of intent from landlords to  lease  space  at  an
additional 24 sites throughout the New York PMSA.

      The  average  rental  cost  for  existing  transmitter  sites  is
approximately  $1,000  per month. The average  cost  of  a  cell  site,
including  a  fully redundant transmitter, leasehold  improvements,  an
uninterruptable  power  supply  and an inter-cell  relay  is  currently
approximately  $500,000. The final engineering of a  cell  may  require
deployment of repeaters to provide signal to shadowed areas. The number
of  repeaters required within a cell may vary significantly based  upon
the  topography  of the cell and the location of the  transmitter.  The
Company  anticipates the cost of cell engineering, on  average,  to  be
$150,000 per cell.

      Customer Premises Equipment. Customer premises equipment consists
of  at least one set-top converter and at least one receive antenna. At
December  31, 1996, the Company had outstanding long-term  orders  with
CT&T  for  the  purchase of set-top converters, receive antennas,  high
speed  modems,  transmitters and repeaters,  aggregating  approximately
$11.6  million  (net of deposits) to be delivered to the Company during
1997 and 1998.

      CT&T  License  Agreement. CT&T has licensed its proprietary  LMDS
technology to CVNY pursuant to the CT&T License Agreement to permit the
Company  to  construct and operate its multichannel broadband  cellular
television  system  and sell communications services  on  an  exclusive
basis  for  the New York PMSA and the New York BTA (to the  extent  the
Company  holds or obtains a commercial license from the FCC). CT&T  has
also  agreed to license its technology to the Company in other BTAs  in
which  the  Company  obtains LMDS licenses from the FCC.  The  economic
terms  and  conditions of such licenses will be, in the  aggregate,  at
least  as favorable as the terms of any other license granted  by  CT&T
within the United States. Under the CT&T License Agreement, the Company
pays  CT&T  a  royalty currently equal to 7.5% of gross revenues  on  a
quarterly  basis.  The  Company has also  granted  CT&T  an  exclusive,
royalty-free license to use any improvements the Company makes  in  the
licensed technology. CT&T has the right to sublicense its rights  under
the  agreement with Philips Electronics N.V. and its affiliates and the
unrestricted  right  to  sublicense its rights  outside  the  Company's
service  area  to  other parties. CT&T has also  granted  CVNY  a  non-
exclusive,  royalty-free  sublicense  within  the  Company's   licensed
territory  for  certain  patents and know-how owned  or  controlled  by
Philips.  The royalty rate payable to CT&T may be reduced by  operation
of  the  above-mentioned  "most favored nation"  clause,  and  is  also
subject  to  reduction  in  the  event  of  expiration,  revocation  or
invalidation  of  certain CT&T patent rights.  The  term  of  the  CT&T
License  Agreement  extends through the year 2028, subject  to  earlier
termination upon certain events.

     Other Transactions with CT&T. As of December 31, 1996, the Company
had an amount due from CT&T of approximately $760,000, which represents
the  Company's  allocation  of costs to CT&T,  net  of  royalties.  The
Company  and  CT&T  have  agreed,  as  of  the  consummation   of   the
Incorporation  Transactions, to apply royalties over and above  $80,000
in  each calendar year otherwise due to CT&T to the outstanding amounts
due from CT&T, which will bear interest from and after such date at the
rate  of  6%  per  annum.  Effective  upon  the  consummation  of   the
Incorporation  Transactions in February 1996, the Company  assumed  all
ongoing  legal expenses of FCC counsel in recognition of the  potential
scope  of  the Company's operations outside the New York BTA. Prior  to
the  Initial  Public Offering, because of the common  interest  of  the
Company  and  CT&T  in  the  outcome of  the  FCC's  LMDS  rule  making
proceeding,  the  Company  and CT&T had shared  equally  the  fees  and
disbursements  of joint FCC counsel. Prior to the consummation  of  the
Incorporation  Transactions,  the  Company  paid  certain  general  and
administrative   expenses   which  were  shared   equally   with,   and
subsequently billed to, CT&T.

      Income  Taxes.  The  Company's predecessors were  established  as
partnerships  and  as  a corporation organized under  Subchapter  S  (a
"Subchapter  S Corporation") of the Internal Revenue Code of  1986,  as
amended   (the  "Code").  The  partners  or  Subchapter  S  Corporation
stockholders, as applicable, are required to report their share of  the
Company's losses in their respective income tax returns.

      The  Company has been organized as a Subchapter C Corporation  of
the  Code,  and,  accordingly, is subject to federal and  state  income
taxes. On December 31, 1996, the Company recorded a deferred tax  asset
of  approximately  $13.9  million, primarily related  to  current  year
operating losses and differences between the book and tax basis of  the
Company's  investment in CVNY. Additionally, under  the  provisions  of
Statement  of  Financial  Accounting Standard  No.  109-Accounting  for
Incomes   Taxes  ("SFAS  109"),  the  Company  recorded  an  offsetting
valuation  allowance  of $13.9 million against the  aforementioned  tax
asset  since the Company has no ability to carryback these  losses  and
has a limited earnings history. The Company believes this asset may  be
realized   upon  existence  of  sufficient  taxable  income  or   other
persuasive  evidence as defined by SFAS No. 109. See  the  Consolidated
Financial  Statements  of  the Company and the  related  Notes  thereto
included on pages 30 to 50 of this Report.

      New  Accounting Pronouncements. In February 1997,  the  Financial
Accounting  Standards Board (the "FASB") issued Statement of  Financial
Accounting Standards ("SFAS") No. 128, "Earnings Per Share".  SFAS  No.
128  specifies new standards designed to improve the earnings per share
(EPS)  information provided in financial statements by simplifying  the
existing    computational   guidelines,   revising    the    disclosure
requirements,  and  increasing the comparability  of  EPS  data  on  an
international  basis.  Some of the changes made  to  simplify  the  EPS
computations include:  (a) eliminating the presentation of primary  EPS
and  replacing  it with basic EPS, with the principal difference  being
that  common  stock equivalents (CSEs) are not considered in  computing
basic  EPS, (b) eliminating the modified treasury stock method and  the
three  percent  materiality provision, and (c) revising the  contingent
share  provisions and the supplemental EPS data requirements. SFAS  No.
128 also makes a number of changes to existing disclosure requirements.
SFAS  No. 128 is effective for financial statements issued for  periods
ending  after December 31, 1997, including interim periods. The Company
has  not  yet determined the impact of the implementation of  SFAS  No.
128 on its financial statements and related disclosures.

ITEM 8.   CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The   consolidated  financial  statements  and  related  financial
information required to be filed herewith are included on pages  30  to
50 of this Report.

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
          AND FINANCIAL DISCLOSURE

     None.

                               PART III


              The information called for by Item 10, Directors and
Executive Officers of the Registrant (except for the information
regarding executive officers called for by Item 401 of Regulation S-K
which is included in Part I hereof in accordance with General
Instruction G(3)), Item 11, Executive Compensation, Item 12, Security
Ownership of Certain Beneficial Owners and Management, and Item 13,
Certain Relationships and Related Transactions, is hereby incorporated
by reference to the Registrant's definitive Proxy Statement for its
Annual Meeting of Stockholders.

                                PART IV

ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
8-K

(a)  Financial Statements and Financial Schedules

 (1) Consolidated Financial Statements                                 Page(s)

     Report of Independent Accountants.                                  30

     Consolidated Balance Sheets as of December 31, 1995 and
     December 31, 1996                                                   31

     Consolidated Statements of Operations for the years ended
     December 31, 1994, 1995 and 1996 and for the period January 1,
     1992 (date of inception) to December 31, 1996                       32

     Consolidated Statements of Changes in Partners' Capital and
     Stockholders' Equity (Deficit) for the years ended December 31,
     1994, 1995 and 1996 and for the period January 1, 1992 (date of
     inception) to December 31, 1996                                     33

     Consolidated Statements of Cash Flows for the years ended
     December 31, 1994, 1995 and 1996 and for the period January 1,
     1992 (date of inception) to December 31, 1996                    34-35

     Notes to Consolidated Financial Statements                       36-50

(2)  Financial Statement Schedule

     Schedule II _ Valuation and Qualifying Accounts                    S-1

(b)  Reports on Form 8-K

     None.

(c)  Exhibits

3.1*  Certificate of Incorporation.

3.2*  By-laws.

4.1*  Form of Common Stock Certificate.

4.2*  Stockholders Agreement, dated as of January 12, 1996,  by
      and  among  CellularVision USA, Inc., Shant S. Hovnanian,
      Bernard B. Bossard and Vahak S. Hovnanian.

4.3*  Registration  Rights Agreement, dated as of  January  12,
      1996,  by  and  among  CellularVision  USA,  Inc.,   Bell
      Atlantic  Ventures XXIII, Inc., Philips PGNY Corp.,  Inc.
      and  Morgan  Guaranty  Trust  Company  of  New  York,  as
      Trustee  of  the  Commingled Pension Trust  Fund  (Multi-
      Market  Special  Investment)  of  Morgan  Guaranty  Trust
      Company of New York, and as Investment Manager and  Agent
      for an Institutional Investor.

10.1* Amended  and  Restated License Agreement,  together  with
      Addendum to License Agreement, each dated as of  July  7,
      1993, by and  between  CellularVision  Technology   &
      Telecommunications, L.P. and CellularVision of New  York,
      L.P. and certain amendments and supplements thereto.

10.2* Reserved  Channel Rights Agreement, dated as of  July  7,
      1993,  by  and  between  Vahak  S.  Hovnanian,  Shant  S.
      Hovnanian,  Bernard  B.  Bossard, CellularVision  of  New
      York, L.P. and Bell Atlantic Ventures XXIII, Inc.

10.3* Restructuring  Agreement, dated as of January  12,  1996,
      by  and  among the Company, CellularVision of  New  York,
      L.P.,  Hye  Crest Management, Inc., Suite 12 Group,  Bell
      Atlantic  Ventures  XXIII,  Inc.,  Philips  PGNY   Corp.,
      Morgan Guaranty Trust Company of New York, as Trustee  of
      the  Commingled Pension Trust Fund (Multi-Market  Special
      Investment)  of  Morgan Guaranty  Trust  Company  of  New
      York,  and  as  Investment  Manager  and  Agent  for   an
      Institutional  Investor, Shant S. Hovnanian,  Bernard  B.
      Bossard and Vahak S. Hovnanian.

10.4* CellularVision USA, Inc. 1995 Stock Incentive Plan.

10.5* Employment  Agreement,  dated as  of  October  18,  1995,
      between CellularVision USA, Inc. and Bernard B. Bossard.

10.6* Employment  Agreement,  dated as  of  October  18,  1995,
      between CellularVision USA, Inc. and Shant S. Hovnanian.

10.7* Employment  Agreement,  dated  as  of  January  1,  1996,
      between CellularVision USA, Inc. and John Walber.

      Employment Agreement, dated as of July 31, 1996,  between
10.8** CellularVision USA, Inc. and Charles N. Garber.


10.9* Intercompany  Agreement, dated January 12, 1996,  by  and
      among    CellularVision    USA,   Inc.,    CellularVision
      Technology & Telecommunications, L.P., CellularVision  of
      New  York,  L.P., Shant S. Hovnanian, Bernard B.  Bossard
      and Vahak S. Hovnanian.

10.10* Second  Addendum  to  License  Agreement,  dated  as   of
      January   12,   1996,   by  and  between   CellularVision
      Technology  & Telecommunications, L.P. and CellularVision
      of New York, L.P.

10.11* Corporate  Name  License  and Grant  of  Future  Licenses
      Agreement,  dated as of January 12, 1996, by and  between
      CellularVision Technology & Telecommunications, L.P.  and
      CellularVision USA, Inc.

10.12* Amended and Restated Agreement of Limited Partnership  of
      CellularVision of New York, L.P., dated  as  of  July  7,
      1993,  by  and between Hye Crest Management,  Inc.,  Bell
      Atlantic  Ventures, XXIII, Inc. and the limited  partners
      set forth on the signature page thereto.

10.13* Master Amendment Agreement, dated as of October 8,  1993,
      by  and  among  Vahak S. Hovnanian, Shant  S.  Hovnanian,
      Bernard B. Bossard, Hye Crest Management, Inc., Suite  12
      Group,  CellularVision of New York, L.P.,  CellularVision
      Technology  &  Telecommunications,  L.P.,  Bell  Atlantic
      Ventures XXIII, Inc. and Philips PGNY Corp.

10.14* Second  Master Amendment Agreement, dated as of  December
      29,  1993, by and among Hye Crest Management, Inc., Suite
      12    Group,   CellularVision   of   New   York,    L.P.,
      CellularVision  Technology  &  Telecommunications,  L.P.,
      Bell  Atlantic Ventures XXIII, Inc., Philips PGNY  Corp.,
      Morgan Guaranty Trust Company of New York, as trustee  of
      the  Commingled Pension Trust Fund (Multi-Market  Special
      Investment)  of  Morgan Guaranty  Trust  Company  of  New
      York,  and  as  Investment  Manager  and  Agent  for   an
      Institutional Investor.

10.15*+ Note  Purchase Agreement, dated as of December 29,  1993,
      between  CellularVision  of New  York,  L.P.  and  Morgan
      Guaranty  Trust  Company of New York, as trustee  of  the
      Commingled  Pension  Trust  Fund  (Multi-Market   Special
      Investment) of Morgan Guaranty Trust Company of New  York
      with  respect  to  the issuance and sale  of  $12,000,000
      principal     amount    of    Convertible    Exchangeable
      Subordinated Notes of CellularVision of New York, L.P.

10.16* Agreement  of  Lease, dated May 9, 1994, by  and  between
      Cellular  Vision of New York and New York  City  Economic
      Development  Corporation  and Sublease,  dated  March  8,
      1995,  between  CellularVision  of  New  York,  L.P.  and
      Harvard Fax, Inc.

10.17* Communications Antenna Site Agreement, dated December  6,
      1994,  between CellularVision of New York L.P. and  Tower
      Owners, Inc., as amended.

10.18* Master  Lease  Agreement  No. 6035,  dated  December  12,
      1995,  between  Linc Capital Management,  a  division  of
      Scientific Leasing Inc., and CellularVision of New  York,
      L.P.,  together  with the Schedules and  Addendum  No.  1
      thereto;  Warrant  Certificate Nos. 1,  2  and  3,  dated
      December 14, 1995, issued to Linc Capital Partners,  Inc.
      by the Company.

10.19* Master  Equipment Lease, dated December 14, 1995  between
      Boston  Financial & Equity Corporation and CellularVision
      of  New  York, L.P., together with the Schedules and  the
      Addendum  thereto;  Warrant Certificate  Nos.  4  and  5,
      dated  December  14, 1995, issued to Boston  Financial  &
      Equity Corporation by the Company.

10.20* Senior Convertible Term Note, dated December 1, 1995,  in
      the   principal  amount  of  $3,521,257  issued  to  Bell
      Atlantic  Ventures XXIII, Inc. by CellularVision  of  New
      York,   L.P.  and  CellularVision  USA,  Inc.   and   the
      Agreement,  dated as of December 1, 1995,  by  and  among
      CellularVision  USA, Inc., CellularVision  of  New  York,
      L.P., and Bell Atlantic Ventures XXIII, Inc.

10.21* Warrant, dated June 1, 1994, issued by CellularVision  of
      New York, L.P. to Alex. Brown & Sons Incorporated.

10.22* Warrant, dated June 1, 1994, issued by CellularVision  of
      New York, L.P. to Mark B. Fisher.

10.23* Warrant,    dated   December   29,   1993,   issued    by
      CellularVision of New York, L.P. to Peter Rinfret.

10.24* Warrant,  dated  October  8, 1993,  issued  by  Vahak  S.
      Hovnanian   and  Shant  S.  Hovnanian  to   Alex.   Brown
      Financial Corporation.

10.25* Warrant,  dated  October  8, 1993,  issued  by  Vahak  S.
      Hovnanian and Shant S. Hovnanian to Mark B. Fisher.

10.26* Non-qualified   Stock   Option   Agreement   under    the
      CellularVision  USA,  Inc.  1995  Stock  Incentive  Plan,
      dated  as of January 15, 1996, by and between the Company
      and John Walber.

10.28* Agreement,  dated as of January 12, 1996,  by  and  among
      CellularVision  USA, Inc., CellularVision  of  New  York,
      L.P.,  Hye  Crest Management, Inc., Shant  S.  Hovnanian,
      Vahak  S. Hovnanian, Bernard B. Bossard and Bell Atlantic
      Ventures XXIII, Inc.

10.29* Exchange  Notes,  dated  as  of  December  15,  1995,  of
      CellularVision USA, Inc. issued to Morgan Guaranty  Trust
      Company  of  New  York,  as  trustee  of  the  Commingled
      Pension  Trust Fund (Multi-Market Special Investment)  of
      Morgan  Guaranty  Trust  Company  of  New  York,  and  as
      Investment   Manager  and  Agent  for  an   Institutional
      Investor, in the principal amounts of approximately  $5.0
      million  and $1.3 million, respectively (form of Exchange
      Note included as Exhibit A-2 to Exhibit 10.15 above).

 21*  Subsidiaries of CellularVision USA, Inc.

23.1* Consent of Coopers & Lybrand L.L.P.

23.2  Consent  of Willkie Farr & Gallagher (included in Exhibit 5).

 24*  Power of Attorney.

__________________

*  Incorporated by reference to the Company's Registration Statement in
 Form  S-1 (File No. 33-98340) which was declared    effective  by  the
 Commission on February 7, 1996.
**  Incorporated  by  reference  to the Company's  Form  10-Q  for  the
 quarterly period ended June 30, 1996 filed by the Registrant on August
 12, 1996.
+ An  identical note purchase agreement has been entered  into  by
 CellularVision of New York, L.P. and Morgan Guaranty Trust Company  of
 New  York,  as  Investment  Manager and  Agent  for  an  Institutional
 Investor with respect to the issuance and sale of $3,000,000 principal
 amount    of   Convertible   Exchangeable   Subordinated   Notes    of
 CellularVision of New York, L.P.


                   REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of
CellularVision USA, Inc.:

     We have audited the accompanying consolidated financial statements
and  the financial statement schedule of CELLULARVISION USA, INC.  (the
"Company,"  a Development Stage Company) listed in Item 14(a)  of  this
Form  10-K.  These consolidated financial statements and the  financial
statement  schedule are the responsibility of the Company's management.
Our  responsibility  is  to express an opinion  on  these  consolidated
financial statements and the financial statement schedule based on  our
audit.

     We  conducted  our  audit  in accordance with  generally  accepted
auditing  standards. Those standards require that we plan  and  perform
the  audit  to obtain reasonable assurance about whether the  financial
statements  are  free  of  material  misstatement.  An  audit  includes
examining,  on  a  test  basis, evidence  supporting  the  amounts  and
disclosures  in  the  financial  statements.  An  audit  also  includes
assessing the accounting principles used and significant estimates made
by  management,  as well as evaluating the overall financial  statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.

     In  our opinion, the consolidated financial statements referred to
above  present  fairly,  in  all material  respects,  the  consolidated
financial position of CellularVision USA, Inc. as of December 31,  1995
and  1996, and the consolidated results of its operations and its  cash
flows for the years ended December 31, 1994, 1995 and 1996 and for  the
period  January 1, 1992 (date of inception) to December  31,  1996,  in
conformity with generally accepted accounting principles.  In addition,
in  our  opinion, the financial statement schedule referred  to  above,
when considered in relation to the basic financial statements taken  as
a  whole,  presents fairly, in all material respects,  the  information
required to be included therein.



                                         Coopers & Lybrand L.L.P.
New York, New York
February 14, 1997,
except for Note 4, as to which the date is
March 17, 1997


                       CELLULARVISION USA, INC.
                     (A Development Stage Company)

                      CONSOLIDATED BALANCE SHEETS


                                             December 31,
           ASSETS                     1995                     1996

Current assets:
Cash and cash equivalents...      $3,536,354                $19,600,070
Accounts receivable, net of
allowance for doubtful
accounts of $133,730 and
$124,370....................         410,141                    530,333
Prepaid expenses and other..         228,803                    255,800
Due from affiliates.........               -                    759,527
Deferred offering costs.....       1,619,972                          -
Total current assets               5,795,270                  21,145,73
Property and equipment, net of
accumulated depreciation of
$981,466  and $2,753,841...        6,321,768                 14,157,666
Intangible assets, net of
accumulated amortization of
$39,564 and $77,383........           97,177                    187,160
Debt placement fees........          622,678                    181,069
Notes receivable from related
parties....................                -                     91,275
Other noncurrent assets              158,594                    160,982
Total assets...............     $ 12,995,487               $ 35,923,882


            LIABILITIES  AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable...........          $355,490                 $ 893,861
Accrued liabilities........         2,246,349                 1,562,982
Due to affiliates..........         1,294,812                         -
Note payable to affiliate..         3,521,257                         -
Current portion of Exchange
notes......................                 -                 1,669,244
Other current liabilities..            24,799                   255,008
Total current liabilities..         7,442,707                 4,381,095
Convertible exchangeable
subordinated notes payable.        12,576,324
Exchange notes.............         6,295,017                 4,590,421
Total liabilities..........        26,314,048                 8,971,516
Commitments and contingencies
(Note 7)
Stockholder's (deficit)
equity:
Common Stock, ($.01 par value;
40,000,000 shares authorized;
12,395,142 and 16,000,000
shares issued and outstanding)        123,951                   160,000
Preferred Stock, ($.01 par
value; 20,000,000 shares
authorized; none issued and
outstanding)..............                  -                         -

Additional paid-in capital...       6,401,454                58,267,533
Deficit accumulated during
the development state........     (19,843,966)              (31,475,167)
Stockholders' equity
(deficit)....................     (13,318,561)               26,952,366
Total Liabilities and
Stockholders' equity
(deficit)..... ..............     $12,995,487               $35,923,882



   The accompanying notes are an integral part of these consolidated
                         financial statements.

                       CELLULARVISION USA, INC.
                     (A Development Stage Company)

                 CONSOLIDATED STATEMENTS OF OPERATIONS

                                                       January 1, 1992
                                                       (date of inception)
                   Year Ended  December 31,             to December 31,

                       1994       1995        1996           1996
Revenue             $ 50,743  $ 1,195,593  $ 2,189,766  $ 3,492,983

Expenses:
 Service costs        38,710      602,995    1,174,619    1,843,313
 Selling, general
 and
 administrative    2,884,005    5,637,066   10,574,362   21,393,173
Management fees    1,546,377    2,698,564            -    4,494,941
Depreciation and
amortization         187,925    1,376,140    2,258,415    3,946,832
Total
operating
expenses.........  4,657,017   10,314,765   14,007,396   31,678,259
Operating
loss............. (4,606,274)  (9,119,172) (11,817,630) (28,185,276)
Interest income..     526,546     403,914    1,291,516    2,322,054
Interest expense  (1,918,942)  (2,587,916)  (1,105,087)  (5,611,945)
Loss before
provision for
Income Taxes..... (5,998,670) (11,303,174) (11,631,201) (31,475,167)

Provision  for
Income Taxes.....          -            -            -            -

Net Loss......... (5,998,670) (11,303,174) (11,631,201) (31,475,167)

Loss per common
share............                  $(0.91)      ($0.75)

Weighted average
of common shares
outstanding.......              12,395,142  15,576,478



   The accompanying notes are an integral part of these consolidated
                         financial statements.


<TABLE>


                       CELLULARVISION USA, INC.
                     (A Development Stage Company)

        CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
                  AND STOCKHOLDERS' EQUITY (DEFICIT)

         For the years ended December 31, 1994, 1995 and 1996
                  and for the period January 1, 1992
                (date of inception) to December 31, 1996

<CAPTION>
                                                                                         Total
                                                                                         Partners'
                                                               Net          Deficit      Capital and
                                                               Unrealized   Accumulated  Stock-
                                                   Additional  Gain on      During the   Holders'
                               Partners'   Common  Paid-in     Marketable   Development  Equity
                               Capital     Stock   Capital     Securities   Stage        (Deficit)


<S>                            <C>         <C>     <C>         <C>          <C>          <C>
Balance,January 1, 1992..       26,152     100                                               26,252
Contributions............    1,019,688                                                    1,019,688
Distributions............     (175,156)                                                    (175,156)
Net Loss.................                                                    (550,997)     (550,997)
Balance December 31, 1992      870,684     100                               (550,997)      319,787
Contributions............    9,707,728                                                    9,707,728
Advance to HCM
stockholders.............   (3,000,000)                                                  (3,000,000)
Distribution.............   (1,054,947)                                                  (1,054,947)
Net Loss.................                                                   (1,991,125)  (1,991,125)
Balances
December 31, 1993........    6,523,465     100                              (2,542,122)   3,981,443
Contributions............       94,462                                                       94,462        (3,038
Distributions............   (3,038,889)                                                  (3,038,889)
Repayment from HCM
stockholders.............    3,000,000                                                    3,000,000
Net unrealized gain on
marketable securities....                                          22,574                    22,574
Net Loss.................                                                   (5,998,670)  (5,998,670)
Balances,
December 31, 1994........    6,579,038     100                     22,574   (8,540,792)  (1,939,080)
Distributions............      (53,733)                                                     (53,733)
Change in net unrealized
gain on marketable
securities...............                                         (22,574)                  (22,574)
Restatement of equity
to reflect issuance of
Common Stock (12,385,142
shares)..................    (123,851)   123,851                                                  0
Net Loss.................                                                   (11,303,174) (11,303,174)
Balance,
December 31,1995.........    6,401,454   123,951                        0   (19,843,966) (13,318,561)
Conversion of Stock
existing prior to IPO....                   (100)                                               (100)
Common Stock issued
at IPO (3,614,858
shares)..................                 36,149                                              36,149
Conversion of Partners
Capital to Additional
paid-in Capital at
IPO......................   (6,401,454)                6,401,454                                   0
Additional paid-in
capital..................                             51,866,079                          51,866,079
Net Loss.................                                                   (11,631,201)  (11,631,201)
Balances,
December 31, 1996........            0    160,000     58,267,533        0   (31,475,167)  26,952,366
</TABLE>





   The accompanying notes are an integral part of these consolidated
                         financial statements.

                       CELLULARVISION USA, INC.
                     (A Development Stage Company)

                 CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                          January 1, 1992
                                                         (date of inception)
                              Year Ended December 31,     to December 31,


                            1994         1995         1996         1996

Cash flows from
operating activities:
Net loss.............   (5,998,670)  (11,303,174)  (11,631,201)  (31,475,167)
Adjustments to
reconcile net loss to
net cash used in
operating activities:
Depreciation and
amortization.........     187,925      1,376,140     2,258,415     3,946,832
Amortization of
placement fees.......     163,128        189,507        98,783       451,418
Provision for
doubtful accounts....           -        202,108       351,839       553,947
Stock option
compensation expense            -              -       150,000       150,000
Changes in assets and
liabilities:
Accounts receivable..      (5,521)      (604,413)     (472,031)   (1,084,283)
Prepaid expenses
and other............     149,392       (204,232)      (26,997)      (67,346)
Notes Receivable from
Related Parties
Accounts payable and
accrued liabilities..    (309,242)       622,277      2,077,817   3,025,309
Other current
liabilities..........      33,181         (8,382)       230,209     252,758
Due to affiliates        1,191,753     3,203,046     (2,054,339)  2,595,501
Accrued interest         1,755,814     2,115,527          4,955   3,876,296
Other noncurrent
assets...............      (88,234)      (57,340)        (2,388)   (160,982)
Net cash used in
operating actiities..   (2,920,474)   (4,468,936)    (9,106,213) (18,026,992)
Cash flows from
investing activities:
Intangibles..........     (135,838)         (903)      (127,802)    (264,543)
Property and equipment
additiions...........   (3,163,310)   (6,809,719)   (10,191,494) (20,629,861)
Proceeds from sale of
property and
equipment............            _     2,608,261        135,000    2,743,261
Purchase of available-
for-sale securites...  (20,008,383)   (6,907,826)             _  (26,916,209)
Maturities of
available-for-sale
securities...........   14,908,612    12,007,597              -   26,916,209
Net cash used in
investing activities.   (8,398,919)      897,410    (10,184,296) (18,151,143)
Cash flows from
financing activities:
Advance to HCM
stockholders.........            _             _              _   (3,000,000)
Contributions               94,462             _              _   10,821,878
Distribution               (38,889)      (53,733)       (13,889)  (1,336,614)
Convertible
exchangeable
subordinated
notes payable........            -             -              -   15,000,000
Proceeds from sale of
stock................            _             _      41,850,000  41,850,000
Repayment of note
payable to affiliate
Deferred offering
costs................                    (99,862)    (2,960,629)  (3,060,491)
Placement costs......      (20,000)     (159,696)             _     (975,311)
Net cash provided
by financing
activities
Net increase
(decrease) in cash and
cash equivalents......  (11,283,820)   (3,884,817)   16,063,716   19,600,070
Cash and cash
equivalents, beginning
of period.............   18,704,991     7,421,171     3,536,354            -
Cash and cash
equivalents, end of
period................    7,421,171     3,536,354    19,600,070   19,600,070



   The accompanying notes are an integral part of these consolidated
                         financial statements.


                       CELLULARVISION USA, INC.
                     (A Development Stage Company)

                 CONSOLIDATED STATEMENTS OF CASH FLOWS

                        Year Ended December 31,

                                                         January 1,1992
                                                         (date of inception)
                                                          to December 31,
                               1995            1996             1996
Supplemental Cash Flow
Disclosures:
Cash paid for interest
during the period                -         $ 1,100,133     $ 1,100,133

Cash paid for income
taxes during this
period                           -                   -               -

Noncash transactions:

Common Stock issued
for convertible debt             -         $12,731,450     $12,731,450


   The accompanying notes are an integral part of these consolidated
                         financial statements.

                      CELLULARVISION USA, INC.
                   (A Development Stage Company)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  Company Background

     CellularVision  USA,  Inc.  ("CVUS")  was  formed  on  October  3,
1995,  as  described  below,  to combine the  ownership  of  Hye  Crest
Management,  Inc.  ("HCM")  in July, 1996,  HCM  changed  its  name  to
CellularVision  Capital  Corporation  ("CVCC")  and  CellularVision  of
New  York,  L.P.  ("CVNY")  which are companies  under  common  control
(herein referred to on a consolidated basis as the "Company").

     The   Company   owns   and   operates  a  multichannel   broadband
cellular  television  system (the "System")  within  the  28  Gigahertz
("GHz")   spectrum   using   Local  Multipoint   Distribution   Service
("LMDS")   technology  licensed  from  CellularVision  Technologies   &
Telecommunications,  L.P.  ("CT&T"),  an  affiliate  of  the   Company.
The   Federal  Communications  Commission's  (the  "FCC")  final  rules
for  LMDS  authorize  the  Company and  future  providers  of  LMDS  to
offer  a  variety  of  two-way  broadband services,  such  as  wireless
local   loop   telephony,  high  speed  data  transmission   (including
Internet    access),   video   teleconferencing   (including   distance
learning   and   telemedicine)   and   interactive   television.    The
initial  service  territory licensed to the  Company  on  a  commercial
basis   is   the   New  York  Primary  Metropolitan  Statistical   Area
("PMSA"),  encompassing  New  York City and  three  suburban  counties.
In   addition,   the  FCC  may  grant  to  the  Company   a   Pioneer's
Preference   pursuant  to  which  the  Company  would  be  allowed   to
expand  its  service  area  to  include  the  entire  New  York   Basic
Trading  Area  ("BTA"),  of which the New  York  PMSA  is  a  part,  by
paying  a  fee  representing the difference  between  the  value  of  a
license  to  serve  the  New York BTA and the value  of  the  Company's
current  commercial  license to serve the New  York  PMSA,  subject  to
a  15%  discount  from  the average auction  price  paid  at  the  LMDS
auctions for licenses in comparable service areas.

Predecessor Companies and Basis of Presentation

     The   consolidated  financial  statements  for  the  years   ended
December  31,  1994,  1995 and 1996 include the accounts  of  CVCC  and
CVNY.  All  significant  intercompany accounts  and  transactions  have
been   eliminated  in  consolidation.  HCM  and  Suite  12  Group   are
collective  by  referred  to  herein  as  the  "Predecessor".   Certain
prior   year  amounts  have  been  reclassified  to  conform   to   the
current year's presentation.

      Suite  12  Group  was  formed as a general partnership  in  1986,
and  its  principal  operations  from  1986  until  1992  consisted  of
the  development  of the LMDS technology licensed  from  CT&T  for  use
by  the  Company  in  its  System.  The  accounts  of  Suite  12  Group
included    in   the   consolidated   financial   statements    consist
primarily  of  legal  and  related  costs  associated  with   the   FCC
licensing  procedures  and  costs  associated  with  the  head-end  and
transmitter  facilities  which  were subsequently  contributed  to  the
Company.   The  FCC  commercial  license  for  use  of   the   28   GHz
spectrum  was  obtained  in 1991 by HCM. The  build-out  of  the  head-
end   and   transmitter  facilities  began  in   January   1992,   with
service  to  the  first subscribers beginning in  July  1992.  In  July
1993,  the  Predecessor,  along  with  Bell  Atlantic  Ventures  XXIII,
Inc.  ("Bell  Atlantic"),  an  indirect  wholly  owned  subsidiary   of
Bell   Atlantic   Corporation,  formed  CVNY   to   market   and   sell
telecommunications  services. Upon the  inception  of  CVNY,  Suite  12
Group   contributed  an  experimental  license  and  certain  equipment
to   CVNY   in   exchange   for   a   limited   partnership   interest,
contributed  its  head-end  and certain  other  equipment  to  HCM  and
contributed  its  LMDS  technology to  CT&T,  which  in  turn  licensed
the   LMDS   technology   to   CVNY.  As   such,   these   consolidated
financial   statements   present   the   Company   as   if   it   began
operations  on  January  1, 1992, and exclude all  costs  of  Suite  12
Group related to the development of the LMDS technology.

2.  Summary of Significant Accounting Policies

 Cash and Cash Equivalents

     The    Company    considers   all   highly   liquid    investments
purchased  with  original maturities of three  months  or  less  to  be
cash   equivalents.  Cash  and  cash  equivalents  consisted   of   the
following:

                                   December 31,
                                 1995         1996
Cash in bank                 $ 165,816     $ 312,218
Cash equivalents                     -             -
Overnight reverse
repurchase agreements        3,370,538    19,287,852

Total                      $ 3,536,354  $ 19,600,070


     Securities  purchased  under agreement  to  resell  (reverse
repurchase   agreements)  result  from  transactions   that   are
collateralized by U.S. Government securities and are  carried  at
the amounts for which the securities will subsequently be resold.
The  overnight repurchase agreements are collateralized  by  U.S.
Government  securities at approximately 130%  of  the  investment
amount.  The  collateral securities are  held  by  the  Company's
designated custodian.

     At  December 31, 1995 and 1996, the Company had the majority
of  its cash deposits with two banking institutions.  The Company
reviews  the  credit  ratings of its banking  institutions  on  a
regular basis.

Revenue Recognition

     Revenue  is  primarily derived from subscriber fees,  billed
one  month  in advance, and recorded as revenue in the period  in
which  the service is provided. Deferred revenue associated  with
advanced billings is recorded as a current liability.

     Installation revenue is recognized as revenue to the  extent
of  direct selling costs incurred. The remainder is deferred  and
amortized  to income over the estimated average period  that  the
subscribers  are  expected to remain connected to  the  Company's
System.

Property and Equipment

     Property  and  equipment, consisting of head-end  equipment,
customer   premises   equipment,  transmitters,   furniture   and
fixtures,  and leasehold improvements, are recorded at  cost  and
depreciated  on  a straight-line basis over the estimated  useful
lives   of  the  assets,  ranging  from  three  to  seven  years.
Transmitters   are  not  depreciated  until   such   assets   are
constructed  or  placed  in  service.  Depreciation  on  customer
premises equipment commences the month following receipt  of  the
equipment. When assets are fully depreciated, it is the Company's
policy  to  remove the costs and related accumulated depreciation
from  its  books  and  records.  Advance  payments  for  customer
premises  equipment and transmitters approximating  $645,000  and
$3,358,000  at  December  31, 1995 and  1996,  respectively,  are
recorded as property and equipment.

     The  Company  capitalizes subcontractor labor and  materials
incurred in connection with the installation of customer premises
equipment  and depreciates them over the shorter of the estimated
average  period  that  the subscribers  are  expected  to  remain
connected to the Company's System, or five years.

Intangible Assets

     The  costs  of  field  studies  to  determine  line-of-sight
transmission capabilities are capitalized and amortized over five
years  by  the  straight-line method. If a site is  abandoned  or
deemed  inoperable,  all  costs associated  with  that  site  are
charged to expense.

 Income Taxes

     As  a  result  of  the  consummation  of  the  Incorporation
Transactions  (as  defined in Note 10),  HCM's  status  as  an  S
Corporation terminated, and the Company and HCM became subject to
federal and state income taxes. The Company has adopted Statement
of  Financial Accounting Standards No. 109 "Accounting for Income
Taxes" ("SFAS No. 109"). As required by SFAS No. 109, the Company
is  required  to  provide for deferred tax assets or  liabilities
arising  due  to temporary differences between the book  and  tax
basis  of  assets  and liabilities existing at the  time  of  the
consummation  of the Incorporation Transactions. As  of  December
31,  1996,  the  Company recorded a deferred tax asset  of  $13.9
million  primarily related to operating losses and the difference
between  the  book and tax basis of the Company's  investment  in
CVNY.  An  offsetting valuation allowance of  $13.9  million  was
established as the Company has no ability to carryback its losses
and has limited earnings history.

Debt Placement Fees

     Unamortized debt issuance costs are amortized over the  term
of the related debt by the effective interest rate method.

Estimates

     The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the dates of the financial statements and the
reported amounts of operating revenues and expenses during the
reporting periods.  Actual results could differ from those
estimates.

Net Loss Per Share

     Net Loss per common share for the years ended December 31,
1995 and 1996, is computed by dividing net loss by weighted
average number of common shares outstanding during the year,
including common stock equivalents (unless anti-dilutive).

     Presentation of earnings per share is not presented for the
year ended December 31, 1994 as it is not considered indicitive
of the on-going entity.

Fair Value of Financial Instruments

     Fair value is a subjective and imprecise measurement that is
based on assumptions and market data which require significant
judgment and may only be valid at a particular point in time.
     The Company's financial instruments at December 31, 1995 and
1996 consist of overnight reverse repurchase agreements and long-
term debt.  The carrying value of each of these financial
instruments approximates its market value, since the overnight
reverse repurchase agreements mature daily and the interest rate
on the long-term debt is a floating rate based on the prime rate,
which periodically adjusts.

Deferred Offering Costs

      Expenses  associated with the Initial Public  Offering  (as
defined  in  Note 10)  (e.g., legal fees, filing fees, accounting
and  printing costs) were capitalized as deferred offering  costs
at  December  31,  1995. Upon the successful  completion  of  the
Initial  Public Offering in 1996, such costs were  deducted  from
the  proceeds  of the Initial Public Offering and recorded  as  a
reduction to additional paid-in capital.

New Accounting Pronouncements

      In  February 1997, the Financial Accounting Standards Board
(the  "FASB") issued Statement of Financial Accounting  Standards
("SFAS")  No.  128, "Earnings Per Share". SFAS No. 128  specifies
new  standards designed to improve the earnings per  share  (EPS)
information  provided in financial statements by simplifying  the
existing   computational  guidelines,  revising  the   disclosure
requirements, and increasing the comparability of EPS data on  an
international basis. Some of the changes made to simplify the EPS
computations  include:   (a)  eliminating  the  presentation   of
primary  EPS and replacing it with basic EPS, with the  principal
difference  being that common stock equivalents  (CSEs)  are  not
considered  in computing basic EPS, (b) eliminating the  modified
treasury   stock   method  and  the  three  percent   materiality
provision,  and (c) revising the contingent share provisions  and
the supplemental EPS data requirements. SFAS No. 128 also makes a
number  of changes to existing disclosure requirements. SFAS  No.
128  is  effective  for financial statements issued  for  periods
ending  after  December 15, 1997, including interim periods.  The
Company  has  not yet determined the impact of the implementation
of   SFAS  No.  128  on  its  financial  statements  and  related
disclosures.

3.  Property and Equipment

     Property and equipment consisted of the following:

                                    December 31,
                                   1995         1996

Transmission and head-end
equipment                     $   740,227    $ 4,240,899
Customer premises equipment     4,186,685      6,891,570
Leasehold improvements            519,483        643,586
Office equipment                  461,619        768,487
Equipment deposits                645,000      3,357,864

Capitalized installation
costs                             750,220      1,009,101
Subtotal                        7,303,234     16,911,507
Less-Accumulated
depreciation                      981,466      2,753,841
Total                         $ 6,321,768    $14,157,666


Depreciation expense was 176,000, 1,349,000 and 2,221,000 for
December 31, 1994, 1995 and 1996 respectively.

4.  FCC Matters

     CVNY holds a fixed station commercial license granted by the
FCC in January 1991 which authorizes the Company to use the 27.5-
28.5  GHz  frequency  band  to operate  a  multicell  LMDS  video
delivery  system  throughout the New  York  PMSA.  The  Company's
license  is the only commercial license for this service  granted
by  the  FCC. Moreover, on December 7, 1995, the FCC granted  the
Company's  34  transmitter applications,  conditional  upon,  and
subject to conformance with the final actions taken by the FCC in
the  LMDS  rulemaking  proceeding.  The  commercial  license  was
granted  in 1991, with an initial term of five years, and expired
in  February  1996.  An  application for renewal  of  this  fixed
station  license was filed on December 29, 1995.  The FCC  stated
in  the  Second Report and Order that it will commence processing
the  Company's renewal application by placing the application  on
Public  Notice  not later than 30 days after the March  13,  1997
release date of the Order. The new LMDS service rules will  apply
to this renewal application. While the Company has an expectation
of renewal of this license, as a result of its deployment efforts
since  1992  and  the  FCC's adoption  of  a  renewal  expectancy
provision  in the Second Report and Order, there is no  guarantee
that  the  FCC will renew the license. Under the FCC's  rules,  a
license  automatically stays in effect pending FCC  action  on  a
timely filed renewal application.

     In  the  First  Report and Order the FCC  grandfathered  the
Company's  continued  operations in the  27.5-28.5  GHz  spectrum
(which the Company currently is licensed to use) for a period  of
two  years  from the release date of the First Report and  Order,
July  22, 1996, or until the first GSO/FSS satellite intended  to
operate in the 28.35-28.50 GHz band is launched, whichever occurs
later.  Additionally, under the grandfather provision adopted  by
the  FCC,  the Company is authorized to use the newly  designated
150 MHz at 29.1-29.25 GHz for hub-to-subscriber operations during
the grandfathered period, thus allowing the Company currently  to
use  1,150  MHz  in the New York PMSA. At the conclusion  of  the
grandfathered period, the Company will be required to  cease  its
operations  in the 28.35-28.50 GHz spectrum thus maintaining  its
1,000  MHz  spectrum allocation, at 27.5-28.35 GHz and 29.1-29.25
GHz, along with an additional 150 MHz in the 31 GHz band.

     CVNY  also holds an experimental license authorizing limited
market  tests which was granted by the FCC in 1988 and  has  been
renewed  for full two year terms on a bi-yearly basis. In  August
1993,  the  FCC  approved the modification  of  this  license  to
authorize  two-way  video and voice and data  transmissions  with
variable  modulation and bandwidth characteristics. On  June  30,
1995,  the Company filed a timely application for renewal of  its
experimental license which had an expiration date of September 1,
1995.   The   FCC  granted  the  renewal  application,  effective
September  1, 1995, for a new two-year license term. In addition,
on  November  26,  1996, the Company filed  for  an  experimental
license in the 31.0-31.3 GHz band in the New York BTA in order to
conduct  limited  market studies of various  packages  of  video,
telephony  and /or data services delivered through  31  GHz  LMDS
technology. This application currently is pending before the FCC.

      On  March 13, 1997, the FCC adopted the LMDS Second  Report
and  Order, which includes service, auction and eligibility rules
for LMDS. This Second Report and Order largely concludes the LMDS
rulemaking  proceeding  except for  unresolved  issues  regarding
disaggregation  and  partitioning, which is subject  to  a  Fifth
Notice of Proposed Rulemaking ("Fifth NPRM"). FCC officials  have
stated their intent to commence the nationwide licensing of  LMDS
through spectrum auctions by the summer of 1997.

     The FCC in the Second Report and Order provides for two LMDS
licenses  per Basic Trading Area ("BTA"):  one license for  1,150
MHz,  the other for 150 MHz, amounting to 1,300 MHz allocated  to
LMDS.  In addition to the non-contiguous 1 GHz of 28 GHz spectrum
allocated  to  LMDS in the First Report and Order,  the  FCC  has
allocated an additional 300 MHz in the 31 GHz band for LMDS,  150
MHz of which will be allocated to one LMDS license, the other 150
MHz will be combined with the 1,000 MHz in the 28 GHz band.

     The 1,150 MHz license will consist of:  850 MHz in the 27.5-
28.35 GHz band on a primary protected basis; 150 MHz in the 29.1-
29.25  GHz  band,  at the present time for LMDS hub-to-subscriber
transmissions  only, on a co-primary basis with Mobile  Satellite
Service (MSS) systems; and 150 MHz in the 31.075-31.225 GHz  band
on  a protected basis. The 150 MHz license will consist of two 75
MHz  bands located at each end of the 300 MHz block in the  31.0-
31.075  GHz  and 31.225-31.3 GHz bands on protected basis.   LMDS
licensees  operating  in this bifurcated  31  GHz  band  will  be
required   to   afford  interference  protection   to   incumbent
licensees.  Also, this second 150 MHz block can be combined  with
the 1,150 MHz license to create a 1.3 GHz LMDS system.

     In order to encourage competition in the video and telephony
markets, the FCC decided to substantially restrict local exchange
carriers  ("LECs") and cable companies from acquiring  the  1,150
MHz  LMDS  license. Under the rules adopted in the Second  Report
and Order, LECs and cable companies will be ineligible to acquire
a  20% or greater ownership interest in an 1,150 MHz LMDS license
in  their  service  region  for a period  of  three  years.  This
eligibility restriction may be extended or eliminated by the  FCC
upon a future review of its regulations. Also, upon a showing  of
good  cause  by a petitioning LEC or cable company, the  FCC  may
waive  the eligibility restriction on a case-by-case basis. Cable
companies and LECs will be able to bid on the 150 MHz license  in
their service area as there is no such eligibility restriction on
this LMDS license.

      The  FCC has adopted several opportunity enhancing measures
for  qualifying  small businesses. The FCC will define  a  "small
business"  as  an  entity  whose average annual  gross  revenues,
together with controlling principals and affiliates for the three
preceding  years  does not exceed $40 million. A  small  business
will  be  entitled to a 25% bidding credit. Small businesses  are
also  entitled to installment payments at an interest rate  based
on  the  rate for U.S. Treasury obligations of maturity equal  to
the  license  term (10yrs) fixed at the time of  licensing,  plus
2.5%.  Payments shall include interest only for  the  first   two
years  and payments of interest and principal amortized over  the
remaining  eight  years.  The rate of  interest  on  ten-year  US
Treasury obligations will be determined by taking the coupon rate
of interest on ten-year US Treasury notes most recently auctioned
by  the  Treasury  Department before licenses  are  conditionally
granted.  Moreover,  entities with gross revenues  exceeding  $40
million but not exceeding $75 million will be entitled to  a  15%
bidding  credit  and the same ten-year repayment  plan  as  small
businesses, except interest and principal will be amortized  over
the whole ten-year period.

     The FCC also initiated a Fifth NPRM to address the issues of
disaggregation and partitioning which will enable a  licensee  to
partition  a portion of its bandwidth or geographic service  area
to  another  entity.  The  FCC  tentatively  concluded  to  allow
disaggregation  and  partitioning  without  imposing  substantial
regulatory  requirements and issued the  Fifth  NPRM  to  solicit
public  comment  regarding the most effective  way  to  implement
partitioning and disaggregation for LMDS licensees.

     In the LMDS Second Report and Order, The FCC deferred action
on the Company's tentative Pioneer's Preference award and instead
ordered  a "peer review" process, whereby the FCC would select  a
panel  of  technical,  non-FCC experts to  review  the  Company's
technology  and  advise the FCC whether the Pioneer's  Preference
should  be  granted.  The Company believes,  based  on  the  1994
General  Agreement on Tariffs and Trade ("GATT") legislation  and
the  FCC's  prior determinations not to subject parties  to  peer
review whose Pioneer's Preference applications were accepted  for
filing  before  September 1, 1994, that this  is  an  unnecessary
regulatory  requirement.  The Company is  currently  seeking  FCC
clarification  on  this  issue.  Accordingly,  there  can  be  no
assurance  that  the  FCC  will  grant  the  Company's  Pioneer's
Preference.

      Based  on  the  Second Report and Order,  wherein  the  FCC
confirms   that   it  will  commence  processing  the   Company's
commercial  license renewal application for  the  New  York  PMSA
within  30  days of the March 13, 1997 release of the Order,  the
outcome  of the Pioneer's Preference award has no impact  on  the
Company's  License to operate in the New York PMSA. As previously
stated by the FCC in the Third Notice of Proposed Rulemaking, the
Pioneer's Preference would apply only to the outer portion of the
New  York  BTA not covered by the Company's existing license  for
the  PMSA.  If  the Company ultimately is awarded  the  Pioneer's
Preference  award,  the  Company would be  licensed  to  use  the
portion  of the New York BTA  outside the New York PMSA  pursuant
to  the   FCC's band segmentation plan (i.e., 27.5-28.35 GHz  and
29.1-29.25  GHz and 30.0-30.3 GHz).  While the remainder  of  the
New  York  BTA  would  be  awarded to the Company  without  being
subject  to  a  spectrum  auction, under the  FCC's  most  recent
proposal,  the Company would have the exclusive right  to  extend
its  license to add the portion of the New York BTA not  included
in  the  1,000-plus  square mile area covered  by  the  Company's
existing  license  for  the  New  York  PMSA  by  paying  a   fee
representing  the difference between the value of  a  license  to
service  the New York BTA and the value of the Company's  current
commercial license to serve the New York PMSA, subject to  a  15%
discount  from  the average price paid at the LMDS  auctions  for
licenses  in comparable service areas. In addition,  the  FCC  is
considering the adoption of conditions on the Company's Pioneer's
Preference  similar to those placed on the Pioneer's  Preferences
granted to Personal Communications Service licensees. If adopted,
these  conditions may require the Company to construct the system
subject to the Pioneer's Preference using substantially the  same
technology upon which its Pioneer's Preference award is based.

5.  Related Party Transactions

CT&T License Agreement

     In  July  1993,  CVNY entered into a license agreement  with
CT&T  for use of certain patented technologies owned by CT&T  and
for  CT&T  know-how related to the LMDS technology.  The  license
agreement  grants to CVNY the right to utilize the licensed  LMDS
technology  to  construct  and  operate  its  system   and   sell
communications services on an exclusive basis for  the  New  York
PMSA  and  the New York BTA (to the extent the Company  holds  or
obtains a commercial license from the FCC). CT&T has also  agreed
to  license the LMDS technology to the Company in other  BTAs  in
which  the  Company  obtains  LMDS licenses  from  the  FCC.  The
economic  terms and conditions of such licenses will be,  in  the
aggregate,  at  least  as favorable as the  terms  of  any  other
license  granted  by  CT&T within the United  States.  Under  the
license  agreement,  the Company pays CT&T  a  royalty  currently
equal to 7.5% of gross revenues on a quarterly basis. The license
will remain in effect until either the expiration, revocation  or
invalidation  of  CT&T  patent rights  directly  related  to  the
operation of the Company's system, or the year 2028. The  license
fees  were  $4,000  $79,000  and $149,000  for  the  years  ended
December 31, 1994, 1995 and 1996.

       Under  the  license  agreement, the Company's  ability  to
procure  capital  equipment relating to its system  from  sources
other  than CT&T had been limited. Pursuant to an amendment dated
January  12, 1996, subject to certain conditions and  except  for
outstanding  purchase  orders, CVNY is  under  no  obligation  to
continue to purchase equipment or supplies from CT&T, although it
may  continue  to  do  so.  The total amount  of  such  equipment
purchased  from CT&T for the years ended December  31,  1995  and
1996  was  $5,595,000 and $6,198,000, respectively. CT&T  entered
into  certain purchase commitments during 1996 on behalf of  CVNY
for   the   manufacture  of  antennas,  receivers,   modems   and
transmitters,   and  CVNY  intends  to  fulfill   the   remaining
obligations  under these commitments which totaled  approximately
$11.6  million, net of deposits of $3.4 million, at December  31,
1996.  Over 83% of the deposits are covered by a pledge agreement
which   collateralizes  CT&T's  security  interest  in  equipment
ordered from its vendors.

Management Agreement

     In  July 1993, CVNY entered into a management agreement with
Bell Atlantic (the "Management Agreement") pursuant to which Bell
Atlantic,  under  the  control and  direction  of  the  Board  of
Directors  of  the  Company, performed  certain  operational  and
technical  functions including, without limitation, installation,
engineering  and  network  operations,  accounting,  procurement,
business  planning, marketing, government relations  and  related
services  in  order  to  develop  the  commercial  infrastructure
necessary  to deploy the LMDS technology licensed from CT&T.  The
Company   exercised  its  option  to  terminate  the   Management
Agreement  with  Bell Atlantic on September 30,  1995,  effective
December  31,  1995.  The terms of the agreement  were  for  five
years  and  provided for management fees at agreed upon scheduled
amounts, a percentage of gross revenue, 0.5% of aggregate average
Bell   Atlantic   equity   from  the  preceding   quarters,   and
reimbursement   of   salary-related  and  benefit-related   costs
incurred by Bell Atlantic. Since January 1, 1996, the Company has
been  responsible for hiring all of its own employees,  including
senior management, and administering its own services.

     For  the  years  ended  December 31,  1994  and  1995,  CVNY
incurred  $1,546,000 and $2,699,000  respectively, of  management
fees  from  Bell Atlantic. The reimbursed costs are  included  in
selling, general and administrative expenses and totaled $640,000
and   $1,949,000 for the years ended December 31, 1994 and  1995,
respectively. For the year ended December 31, 1996, there are  no
costs  as the management agreement was terminated by CVNY at  the
end of 1995.

Bell Atlantic Senior Convertible Note

     Effective  December  1,  1995, the Company  entered  into  a
senior  convertible  note  agreement  with  Bell  Atlantic  which
converted  outstanding fees and related interest thereon  due  to
Bell   Atlantic   under   the  Management   Agreement,   totaling
approximately  $3.5  million to a senior  convertible  note  (the
"Bell  Atlantic  Note").  Interest accrued on the  Bell  Atlantic
Note  at  a  per annum rate equal to the lesser of  (a)  Morgan's
prime  lending  rate plus 3% or (b) 12%. Interest was  compounded
monthly. Principal plus accrued interest would have been  payable
as follows:  one-third of the outstanding balance would have been
payable  on  June  30,  1997, one-third of the  then  outstanding
balance  would  have  been  payable on  June  30,  1998  and  the
remaining balance would have been payable on June 30, 1999.

     In  February  1996, from the proceeds of the Initial  Public
Offering,  the  Company  paid  Bell Atlantic  approximately  $3.5
million   due  under  the  Bell  Atlantic  Note,  together   with
approximately $100,000 of accrued interest thereon, and  $675,000
in  fees  accrued  during the fourth quarter of  1995  under  the
Management Agreement.

Other Transactions with CT&T

     In   the   past,  CVNY  paid  certain  legal,  general   and
administrative  expenses on behalf of CT&T.  The  total  of  such
expenditures for the years ended December 31, 1994 and  1995  was
$754,000  and $612,000, respectively. Similarly, CVNY  reimbursed
certain legal, general and administrative expenses paid by  CT&T.
The  total of such expenditures for the years ended December  31,
1994   and   1995   were  $503,000  and  $268,000,  respectively.
Commencing  on  January 1, 1996 there were no  such  payments  or
reimbursements  as  the  Company  and  CT&T  now  pay  their  own
expenditures.  In addition, all "joint use" costs which  resulted
in  benefits to both parties (e.g., salaries and benefits for the
limited personnel performing functions for both entities,  office
rent  and  related expenses, office equipment and supplies)  were
allocated  to  the respective parties on a cost-causative  basis.
The  Company  also  paid to CT&T an annual royalty  amount  which
totaled  $80,000 for each of the years ended December  31,  1994,
1995 and 1996.

     The Founders are parties to an agreement with CVNY, pursuant
to  which they have the nontransferable right to require CVNY  to
make available 60 MHz of continuous spectrum per polarization  in
the  spectrum  awarded  to CVNY by the FCC  for  the  purpose  of
providing  certain  programming (other  than  telephony,  two-way
voice or data communication services) developed by them.

Other Transactions

     In 1996, CVNY entered into agreements with certain
executives of CVNY and the Company to loan them money for the
purpose of purchasing Common Stock of the Company. The amount due
to CVNY is $91,275 at December 31, 1996.

     An   affiliate   of  certain  directors  of   HCM   provided
administrative, legal and operational functions  to  CVNY.  These
costs  aggregated  $131,000  and  $94,000  for  the  years  ended
December 31, 1994 and 1995. There were no related costs  for  the
year ended December 31, 1996.

     In  July 1993, CVNY entered into compensation and consulting
agreements,  aggregating $480,000 annually plus 0.291%  of  gross
revenues, with certain executive officers and directors  of  CVNY
which  were terminated upon the consummation of the Incorporation
Transactions  (as  defined  in  Note  10).   These  officers  and
directors are also partners in CT&T.

     On  December 29, 1993, concurrently with the closing of  the
issuance of the convertible exchangeable notes discussed in  Note
6, CVNY advanced $3,000,000 to the managing general partner. This
advance was interest-free. In June 1994, this advance was settled
through  a non-cash capital distribution to the HCM stockholders.
This amount was presented as a reduction in partners' capital  at
December 31, 1993.

     Amounts  due  to certain partners of CVNY consisted  of  the
following:

                                              December 31,
                                        1995             1996
Due (to) from Bell Atlantic         $(1,116,480)   $        0
Due (to) from CT&T                     (178,332)      759,527
     Total                          $(1,294,812)   $  759,527


      CVNY  has  entered into an agreement with the International
CellularVision   Association  ("ICVA"),  whose  members   include
licensees  of  CT&T's  proprietary  LMDS  technology  and   other
interested  members,  to fund, along with all  other  members  of
ICVA,  operating expenses of ICVA. CVNY funded $72,500,  $179,434
and  $286,934  of such expenses for the years ended December  31,
1994,  1995  and  1996 respectively. The Company  also  subleases
certain  office space for ICVA on a month-to-month basis.  As  of
December 31, 1996, the monthly charge was $2,884.

6.  Long-term Notes

     On  December  29, 1993, CVNY issued convertible exchangeable
subordinated notes aggregating $15,000,000 ("Convertible Notes").
Interest on the Convertible Notes was at a floating rate equal on
any given date to the prime rate plus 4% per annum, subject to  a
minimum of 8% per annum and a maximum of 12% per annum.

     A  portion  of  the  notes  was  subject  to  mandatory  and
automatic  conversion  into  shares  of  Common  Stock  upon  the
consummation  of  a  public offering pursuant to  a  registration
statement  on  Form S-1 with minimum aggregate  proceeds  of  $35
million (a "qualified public offering").

     Prior  to  the exchange of the notes, interest  was  accrued
quarterly  and  added  to the principal balance  and  treated  as
principal.  For the year ended December 31, 1995,  $2,116,000  of
accrued interest was added to principal.

     In   conjunction  with  the  Initial  Public  Offering  that
occurred  in  1996,  $10  million of Convertible  Notes  and  the
associated  accrued interest of approximately  $2.7  million  was
converted  into shares of Common Stock and recorded primarily  as
Additional Paid in Capital. Also, in conjunction with the IPO and
effective   December  15,  1995  the  remaining  $5  million   of
Convertible  Notes  and  approximately $1.3  million  of  accrued
interest  was  converted into Exchange Notes. The Exchange  Notes
bear  interest at the prime rate plus 6% per annum, subject to  a
minimum  of 10% and a maximum of 15% per annum. Interest  on  the
Exchange Notes is payable quarterly and began on March 28, 1996.

     The  scheduled  repayment dates in respect of  the  Exchange
Notes are as follows:

     Date                           Amount Payable
June 30, 1997         4/15 of the aggregate outstanding principal balance
June 30, 1998         5/11 of the aggregate outstanding principal balance
June 30, 1999         Remaining amounts outstanding

7.  Commitments and Contingencies

     The   Company  has  entered  into  various  operating  lease
arrangements for automobiles, office equipment and rent  expiring
at various dates.
     On  December 15, 1995, the Company entered into two sale and
leaseback transactions totaling approximately $2.6 million  which
reflected  the  net  book  value of assets  sold  on  that  date.
Accordingly,  there  was  no  gain  or  loss  recorded  on  these
transactions. The minimum lease term for each piece of  equipment
under  the  sale  and leaseback facility in the  amount  of  $1.1
million  is  36  months, with a renewal period of  an  additional
twelve  months.   The  minimum  lease  term  for  each  piece  of
equipment under the sale and leaseback facility in the amount  of
$1.5 million is 48 months, with a renewal period of an additional
twelve  months.  Rental payments are due monthly in advance.  The
Company  has a firm commitment under the first of these sale  and
leaseback facilities for additional lease financing in the amount
of  $400,000.   In  connection  with  these  sale  and  leaseback
facilities,  the  Company  issued  to  the  lessors  warrants  to
purchase an aggregate of 20,000 shares of common stock, par value
$.01  per  share  (the "Common Stock"), of  the  Company  at  the
initial public offering price of $15.00 per share.

     At  December  31,  1996,  future minimum  rental  and  lease
payments due under these arrangements are as follows:

               1997                       $1,815,975
               1998                        1,664,430
               1999                          868,956
               2000                          293,990
               2001                          265,290
               Thereafter                    562,439
                    Total                 $5,471,080

     Rent  expense  was  approximately   $120,000,  $180,000  and
$432,000  for  the years ended December 31, 1994, 1995  and  1996
respectively.

     CT&T  entered into certain purchase commitments during  1996
on  behalf  of  CVNY for the manufacture of antennas,  receivers,
modems  and  transmitters,  and  CVNY  intends  to  fulfill   the
remaining  obligations  under  these  commitments  which  totaled
approximately  $11.6 million (net of deposits)  at  December  31,
1996. See Note 5.

     The  Company  has  entered  into a series  of  noncancelable
agreements  to purchase entertainment programming for rebroadcast
which  expire  through  the year 2001. The  agreements  generally
require monthly payments based upon the number of subscribers  to
the   Company's  system,  subject  to  certain  minimums.   Total
programming   costs,   including  but   not   limited   to,   the
aforementioned minimums were approximately $35,000, $510,000  and
$1,026,000 for the years ended December 31, 1994, 1995 and  1996,
respectively.

     The Company obtained an irrevocable standby letter of credit
in  April  1995, in the amount of $90,000, for which  no  amounts
have  been  drawn  upon.  The standby letter  of  credit  expires
December  1,  1999, and collateralizes the Company's  programming
rebroadcast agreement with one of its programming providers.  The
fair  value of this standby letter of credit is estimated  to  be
the  same  as the contract value based on the nature of  the  fee
arrangement with the issuing bank.

8.   Stock Options and Warrants

     In  October  1995, the Financial Accounting Standards  Board
issued  Statement  of Financial Accounting Standards  (SFAS)  No.
123,  "Accounting for Stock-Based Compensation."   SFAS  No.  123
establishes  financial  accounting and  reporting  standards  for
employee  stock-based compensation plans and to  transactions  in
which an entity issues its equity instruments to acquire goods or
services  from non-employees. Under this statement,  the  Company
has  the  option of either charging against income the  estimated
fair  value of stock-based compensation, or in lieu of  a  direct
charge, disclosing the effect on earnings and earnings per  share
as  if  the  charge had been applied. The Company has elected  to
follow the disclosure-only alternative and to continue to account
for  its  stock-based compensation in accordance with  Accounting
Principles Board Opionion No. 25 and its related interpretations.

     In  October  1995,  the Board of Directors  of  the  Company
adopted the CellularVision 1995 Stock Incentive Plan (the "Plan")
which provides for the grant of non-qualified and incentive stock
options.  The Plan has reserved authorized, but unissued,  shares
of  common  stock for issuance of both Qualified Incentive  Stock
Options  and  Non-Qualified Stock Options to employees,  officers
and  directors of the Company. The minimum purchase price in  the
case of non-qualified stock options granted under the Plan is the
par value of the Common Stock and, in the case of incentive stock
options  granted  under  the Plan is the fair  market  value,  as
defined  in the Plan, of the Common Stock on the date the  option
is granted. The vesting period and expiration dates of any option
granted may vary. As of December 31, 1996, a total of 103,700 non-
qualified  stock options have been granted under  the  plan.  All
such  options have a ten-year term and are exercisable at  9.875,
the market price per share on the date of  grant.

      The  purpose  of  the Plan is to attract  and  incent  able
persons  to  remain  with  the Company and  its  Subsidiaries  by
providing a means whereby employees, directors and consultants of
the  Company and its Subsidiaries can acquire and maintain Common
Stock  ownership, or be paid incentive compensation  measured  by
reference  to  the  value of Common Stock, thereby  strengthening
their   commitment  to  the  welfare  of  the  Company  and   its
Subsidiaries and promoting a common identity of interest  between
stockholders and these employees, directors and consultants.

     In  connection with the employment agreements  discussed  in
Note  9, non-qualified options to purchase an aggregate of 40,000
shares  of Common Stock were issued pursuant to the Plan  to  two
officers  of  the Company.  The options, which  have  a  ten-year
term,  were  immediately exercisable at  the  date  of  grant  at
exercise prices ranging from $10.50 to $15.00 per share.

     In  February  1996,  the  Company granted  options  to  each
director  who  is  not  employed by the Company  or  any  of  its
affiliates  to  purchase  5,000 shares of  Common  Stock  at  the
initial  public offering price of $15.00 per share.  A  total  of
35,000  options were granted to directors in February  1996.  The
options have a ten-year term and were immediately exercisable  at
the date of grant.

      As  of  January 1, 1996 there were no outstanding  options.
During  the year 188,700 options were granted and 10,000  options
were  terminated leaving a balance of 178,700 as of December  31,
1996.

     Exercise  price per share ranges from $9.875 to $15.00.  The
weighted  average exercise price at December 31, 1996 was  $11.31
per  share. All options issued have a ten-year term. A  total  of
75,000  options issued to Board members and two officers  of  the
Company  were  exercisable at the date of grant. The  balance  of
103,700  outstanding  options were issued to  employees  and  are
exercisable  as  follows:  34,566 at August 1,  1996,  34,568  at
April 1, 1997 and 34,566 at April 1, 1998.

     At  December  31,  1996 and 1995, there were  1,071,300  and
1,250,000 shares available for future grants, respectively.

     Since  the exercise price of all stock options granted under
the  1995  Plan in 1996 were equal to the closing  price  of  the
Common  Stock on the NASDAQ on the date of grant, no compensation
expense  has  been recognized by the Company for its  stock-based
compensation  plans during the year. Compensation  expense  would
have  been  $1,365,000 in 1996, had compensation cost  for  stock
options  awarded  in  1996  under  the  Company's  stock   option
agreements been determined based upon the fair value at the grant
date  consistent with the methodology prescribed under  SFAS  No.
123, "Accounting for Stock-Based Compensation," and the Company's
pro  forma net loss and earnings per share would have been a  net
loss of $12,996,000 and $0.83 loss per share for 1996.

     The stock options were valued using the Black-Scholes option
pricing  model.  Key  assumptions used  in  valuing  the  options
included: risk free interest rates of 5.3%-6.8%, an expected life
of five years and a volatility factor of 80%.

     At  December  31, 1995, the Company had issued  warrants  to
purchase  up  to  190,862 shares of Common Stock.  No  additional
warrants  were issued in 1996. At December 31, 1995, an aggregate
(i)  up to 113,256 shares were issuable by the Company, and  (ii)
77,606  shares  were issuable by Suite 12 Group from  its  Common
Stock  holdings.  The warrants issued by the Company have a  ten-
year  term and are exercisable at a price per share ranging  from
$12.50  to  $15.03. The holders of all outstanding warrants  have
registration  rights  in respect of the shares  of  Common  Stock
issuable upon exercise.

9.  Employment Agreements

     The  Company  has entered into an employment agreement  with
Mr.  Shant  S.  Hovnanian, dated October 18, 1995. The  agreement
provides  that  Mr.  Hovnanian will act as  President  and  Chief
Executive  Officer  of the Company and will devote  substantially
all  of  his  working time and efforts to the Company's  affairs.
Pursuant to the agreement, Mr. Hovnanian may devote such  working
time  and  efforts  to CT&T and its affiliates  as  the  due  and
faithful  performance  of  his obligations  under  the  agreement
permits. The agreement has a one year term  and provides  for  an
annual  salary  of  $250,000, effective  February  7,  1996.  Mr.
Hovnanian  is currently negotiating an extension of his  contract
with  the  Company,  and  is continuing  to  serve  as  Chairman,
President  and  CEO  pending the successful conclusion  of  these
discussions.

     The  Company  has also entered into an employment  agreement
with the inventor of the LMDS technology licensed from CT&T,  Mr.
Bernard  B.  Bossard,  dated  October  18,  1995.  The  agreement
provides  that  Mr. Bossard will act as Executive Vice  President
and  Chief Technical Officer of the Company and will devote  such
substantial portion of his time and effort to the affairs of  the
Company  as the Company's Board of Directors reasonably requires.
The  agreement has a three year term and provides for  an  annual
salary  of  $170,000, the use of an automobile  and  one  of  the
Company's New York City apartments, effective February 7, 1996.

      The  Company has entered into an employment agreement  with
Mr.  Charles  N.  Garber,  dated July  31,  1996.  The  agreement
provides that Mr. Garber will serve as Chief Financial Officer of
the Company and Vice President - Finance of CVNY, effective as of
July  15,  1996. The agreement has a three year initial term  and
provides  for  an annual salary of $175,000, a signing  bonus  of
$50,000, a relocation allowance of $50,000, an annual bonus of no
less   than  $50,000  subject  to  review  based  on  executive's
attainment  of performance goals established by the  Compensation
Committee, 25,000 options exercisable at the market value  as  of
the agreement date, a monthly commuting allowance of $350, and  a
bonus of $50,000 upon completion of a financing by the Company or
CVNY  in excess of $50 million. The agreement also provides  that
Mr.  Garber's  compensation shall be  reviewed  for  a  potential
increase no less frequently than annually.

      The  Company has entered into an employment agreement  with
Mr.  John  Walber, dated January 1, 1997. The agreement  provides
that  Mr. Walber will continue to serve as Vice President of CVUS
and  as  President  and  Chief Operating  Officer  of  CVNY.  The
agreement  has an initial term of two years and provides  for  an
annual  salary of $195,000, a monthly commuting expense allowance
of  $1,500, an annual bonus in the amount of up to $195,000 based
on  the  executive's  attainment of  certain  performance  goals.
Pursuant  to the terms of this agreement, Mr. Walber was  granted
50,000 options to purchase CVUS shares at the market value as  of
the   effective  date  of  the  agreement.  25,000  options   are
exercisable  on  December 31, 1997 and 25,000 are exercisable  on
December 31, 1998.

10.  Initial Public Offering

Initial Public Offering

     The   Company   filed  with  the  Securities  and   Exchange
Commission   a   Registration  Statement   on   Form   S-1   (the
"Registration  Statement") in connection with the initial  public
offering  (the "Initial Public Offering") of 3,333,000 shares  of
Common  Stock, including 333,000 shares sold by certain  existing
shareholders  of the Company.  The initial public offering  price
per share of Common Stock was $15.00.  The Registration Statement
was declared effective on February 7, 1996 and the Initial Public
Offering  was consummated on February 13, 1996. The net  proceeds
to  the Company from the Initial Public Offering, after deducting
underwriting  discounts and commissions of $1.05  per  share  and
approximately $2 million in other expenses, were $39,850,000.

     Immediately  prior  to  the  Initial  Public  Offering,  the
Company   effected   the  following  events  (collectively,   the
"Incorporation  Transactions"): (i) $10 million principal  amount
of  the convertible exchangeable subordinated notes was converted
into  4,547  shares of Common Stock pursuant to their  conversion
provisions, (ii) the Company issued an aggregate of 93,180 shares
of  Common  Stock to the stockholders of HCM (the "Founders")  in
exchange  for  all  outstanding capital stock  of  HCM,  and  the
holders of certain partnership interests of CVNY in exchange  for
all of their partnership interests in CVNY, and (iii) the Company
effected  a  133.0236284-for-1 stock  split  of  the  outstanding
shares  of  Common  Stock and issued an aggregate  of  13,000,000
shares of Common Stock to the holders thereof. As a result of the
consummation  of the Incorporation Transactions, the  Company  is
the  sole  stockholder of HCM, the managing  general  partner  of
CVNY,  and CVNY continues to carry on its business as an indirect
wholly owned subsidiary of the Company. In December 1995, the FCC
approved  the  pro  forma transfer of control  of  HCM  from  the
Founders  to  the  Company.  The capital  stock  of  the  Company
consists  of  Common  Stock, $.01 par  value,  40,000,000  shares
authorized,   and   16,000,000  shares  issued  and   outstanding
immediately prior to the Initial Public Offering. The Company has
also  authorized 20,000,000 shares of Preferred Stock,  $.01  par
value. No shares of Preferred Stock have been issued.

     Stockholders' equity has been restated at December 31, 1995
to give retroactive recognition to the stock split of the 93,180
shares of Common Stock issued to the stockholders of HCM.

11.  Legal Proceedings

     In  February  1996,  a  suit was filed against  the  Company
alleging  that  the  Company caused the U.S.  Army  to  breach  a
contract with the plaintiff wherein the plaintiff was to have  an
exclusive right to provide cable television services at  an  army
base  located  in Brooklyn, New York.  The suit alleges  that  by
entering  into a franchise agreement with the Army  which  grants
the Company the right to enter the army base to build, construct,
install,   operate  and  maintain  its  multi-channel   broadband
cellular  television  system, the Company  induced  the  Army  to
breach its franchise agreement with the plaintiff.  The Army  has
advised  the Company that it has the right to award the franchise
to  the  Company and the Company is continuing to provide service
at the army base.  The suit seeks $1 million in damages and is in
its  preliminary stages.  The Company cannot make a determination
at  this time as to the possible outcome of the action or whether
the  case  will go to trial. A summary judgment motion  has  been
filed  by  the Company and is currently pending, requesting  that
the court dismiss the case. The Company does not believe that  in
the  event an adverse judgment is rendered, the effect  would  be
material to the Company's financial position but it could have  a
material  effect on operating results in the period in which  the
matter is resolved.

     In  November 1995, a purported class action suit  was  filed
against the Company in New York State Supreme Court alleging that
the  Company  had engaged in a systematic practice of  installing
customer  premises equipment in multiple dwelling  units  without
obtaining  certain landlord or owner consents allegedly  required
by  law.  The  suit  seeks injunctive relief and  $4  million  in
punitive  damages.  The Company believes, based  upon  advice  of
counsel,  that  this  suit is likely to  be  resolved  without  a
material  adverse  effect  on  the  financial  condition  of  the
Company, but could have a material effect on operating results in
the period in which the matter is resolved.

     Prior  to  1992,  Vahak and Shant Hovnanian  were  officers,
directors and principal shareholders of Riverside Savings Bank, a
state-chartered  savings  and  loan  association   that   entered
receivership  in  1991. In certain civil litigation  against  the
Hovnanians and others that ensued, which is pending in  the  U.S.
District  Court  for the District of New Jersey,  the  Resolution
Trust  Corporation  has alleged simple and gross  negligence  and
breaches of fiduciary duties of care and loyalty on the  part  of
the  defendants. Although this action is still in its preliminary
stages,   the  defendants  have  obtained  dismissal  of  certain
allegations  and  intend  to continue to  vigorously  defend  the
action.
                           SIGNATURES

   Pursuant  to  the requirements of Section 13 or 15(d)  of  the
Securities  Exchange Act of 1934, the Registrant has duly  caused
this  report  to  be  signed on its behalf  by  the  undersigned,
thereunto  duly authorized, in New York, New York  on  March  28,
1997.

                                 CELLULARVISION USA, INC.


                                 /s/ Shant S. Hovnanian
                                  Shant S. Hovnanian
                                  President, Chief Executive
                                  Officer and
                                  Chairman of the Board of
                                  Directors

   Pursuant to the requirements of the Securities Exchange Act of
1934,  this report has been signed below by the following persons
on  behalf  of the Registrant in the capacities and on the  dates
indicated.

      Signature                 Title                  Date

                         President and Chief           March 28, 1997
/s/ Shant Hovnanian      Executive Officer and
Shant Hovnanian          Chairman of the Board of
                         Directors



/s/ Charles N. Garber    Chief Financial Officer        March 28, 1997
Charles N. Garber

/s/ Bernard B. Bossard   Executive  Vice President,     March 28, 1997
Bernard B. Bossard       Chief Technical Officer
                         and Director


/s/ Vahak S. Hovnanian   Director                       March 28, 1997
Vahak S. Hovnanian

/s/ William E. James     Director                       March 28, 1997
William E. James

/s/ Bruce G. McNeill     Director                       March 28, 1997
Bruce G. McNeill

/s/ Roy H. March         Director                       March 28, 1997
Roy H. March

/s/ Matthew J. Rinaldo   Director                       March 28, 1997
Matthew J. Rinaldo

/s/ Dennis G.  Spickler  Director                       March 28, 1997
Dennis G. Spickler



                       CELLULARVISION USA, INC.
                    (A Development Stage Company)

        SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

      For the Years Ended December 31, 1994, 1995 and 1996


                       Balance at    Charged to                  Balance at
                       Beginning of  Costs and                   end of
       Description     Period        Expenses     Deductions     Period

1996
Allowance for
doubtful
accounts........       $133,730       $351,839     $361,199      $124,370

1995
Allowance for doubtful
accounts........         $2,402       $202,108      $70,780      $133,730

1994
Allowance for doubtful
accounts........        $ 1,000        $ 1,402         $  0        $2,402




1996
Deferred Tax Asset
Valuation Reserve....       $ 0    $13,900,000          $ 0    $13,900,000

1995
Deferred Tax Asset
Valuation Reserve....       $ 0            $ 0          $ 0            $ 0

1994
Deferred Tax Asset
Valuation Reserve....       $ 0            $ 0          $ 0            $ 0





















[ARTICLE]  5
<TABLE>
<S>                      <C>        <C>
[PERIOD-TYPE]            12-MOS
[FISCAL-YEAR-END]                  DEC-31-1996
[PERIOD-END]                       DEC-31-1996
[CASH]                              19,600,070
[SECURITIES]                                 0
[RECEIVABLES]                          654,703
[ALLOWANCES]                           124,370
[INVENTORY]                                  0
[CURRENT-ASSETS]                    21,145,730
[PP&E]                              16,911,507
<ACCUMULATED-DEPRECIATION>           2,753,841
[TOTAL-ASSETS]                      35,923,882
[CURRENT-LIABILITIES]                4,381,095
[BONDS]                              4,590,421
[PREFERRED]                                  0
[COMMON]                               160,000
[OTHER-SE]                          26,792,366
[TOTAL-LIABILITY-AND-EQUITY]        35,923,882
[SALES]                                      0
[TOTAL-REVENUES]                     2,189,766
[CGS]                                        0
[TOTAL-COSTS]                        1,174,619
[OTHER-EXPENSES]                    12,832,777
[LOSS-PROVISION]                       351,839
<AMORTIZATION-DEBT >                    98,783
<INCOME-PRETAX-OTHER>              (11,817,630)
[INCOME-TAX]                                 0
[INCOME-CONTINUING]                (11,631,201)
[DISCONTINUED]                               0
[EXTRAORDINARY]                              0
[CHANGES]                                    0
[NET-INCOME]                       (11,631,201)
[EPS-PRIMARY]                            (0.75)
[EPS-DILUTED]                             0.00
</TABLE>