[Federal Register Volume 61, Number 80 (Wednesday, April 24, 1996)]
[Rules and Regulations]
[Pages 18092-18098]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-9874]



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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 21

[Gen. Dockets Nos. 90-54 and 80-113, MM Docket No. 94-131 and PP Docket 
No. 93-253, FCC 96-130]


Private Operational-Fixed Microwave Service, et. al.; 2.1 and 2.5 
GHz Frequency Use

    Use of the Frequencies in the 2.1 and 2.5 GHz Affecting Private 
Operational-Fixed Microwave Service, Multipoint Distribution Service, 
Multichannel Multipoint Distribution Service, Instructional Television 
Fixed Service, and Cable Television Relay Service; Filing Procedures in 
the Multipoint Distribution Service and in the Instructional Television 
Fixed Service and Implementation of Section 309(j) of the 
Communications Act--Competitive Bidding.

AGENCY: Federal Communications Commission.

ACTION: Final rule; Third Order on Reconsideration and Order to 
Clarify.

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SUMMARY: This Third Order on Reconsideration and Order to Clarify 
resolves the issues raised in reconsideration petitions filed against 
the Second Order on Reconsideration in Gen. Dockets No. 90-54 and 80-
113. The Second Order on Reconsideration essentially adopted three 
changes. First, it enlarged the protected service area for Multipoint 
Distribution Service (MDS) stations from 710 square-miles (the area of 
a circle with a 15-mile radius) to approximately 3,848 square-miles 
(the area of a circle with a 35-mile radius). Second, it revised the 
rules for serving interference studies upon potentially affected 
stations in the Instructional Television Fixed Service (ITFS). Third, 
it clarified the use of frequency offset interference protection and 
the MDS cut-off rule. In this Third Order on Reconsideration and Order 
to Clarify, the Commission also provides clarification of provisions 
set forth in the MDS Report and Order in MM Docket No. 94-131 and PP 
Docket No. 93-253, including the interference study requirements for 
pending ITFS applications and the statement of intention to be filed by 
some winning bidders in the MDS auction. This Commission action is 
intended to expedite more service to the public and enhance 
opportunities for wireless cable to reach its potential as a competitor 
to wired cable.

EFFECTIVE DATES: June 24, 1996, except that the new or modified 
paperwork requirements contained in Section 21.902(i), which are 
subject to approval by the Office of Management and Budget (OMB), will 
go into effect upon OMB approval. The Commission will issue at a later 
date a public notice with this effective date.

FOR FURTHER INFORMATION CONTACT: Jerianne Timmerman at (202) 416-0881 
or Sharon Bertelsen at (202) 416-0892.
    The complete text of the Third Order on Reconsideration and Order 
to Clarify follows. It is also available for inspection and copying 
during normal business hours in the MDS public reference room, Room 
207, at the Federal Communications Commission, 2033 M Street, N.W., 
Washington, D.C., and it may be purchased from the Commission's copy 
contractor, International Transcription Service, Inc., 2100 M Street 
NW., Suite 140, Washington, D.C. 20037, (202) 857-3800.

I. Introduction and Background

    1. The Commission has before it three petitions for reconsideration 
of the Second Order on Reconsideration in Gen. Docket Nos. 90-54 and 
80-113, 10 FCC Rcd 7074 (1995), 60 FR 36737 (July 18, 1995) (``Second 
Order on Reconsideration''), which revised the definition of the 
protected service area of Multipoint Distribution Service (``MDS'') \1\ 
stations. In the Second Order on Reconsideration, the protected service 
area for MDS stations was enlarged from 710 square-miles (the area of a 
circle with a 15-mile radius) to approximately 3,848 square-miles (the 
area of a circle with a 35-mile radius). Also revised were the rules 
for serving interference studies upon potentially affected stations in 
the Instructional Television Fixed Service (``ITFS''). In addition, 
clarification was provided regarding frequency offset interference 
protection and the MDS cut-off rule. Three petitions for 
reconsideration of various aspects of the Second Order on 
Reconsideration were timely filed with the Commission. The 
reconsideration petitions include a request for clarification of 
certain provisions of the order and a request for reconsideration of a 
Commission public notice issued after the order was released, which 
cited the order. Two oppositions were received, and no replies were 
filed.
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    \1\ Unless otherwise indicated, ``MDS'' includes single channel 
Multipoint Distribution Service stations and Multichannel Multipoint 
Distribution Service stations.
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    2. The petitions for reconsideration principally raise issues 
regarding the expanded protected service area for authorized and 
previously proposed MDS stations. The major factors that prompted 
adoption of the expanded protected service area in the Second Order on 
Reconsideration included: (1) the many MDS operators that have been 
serving areas larger than the 710 square-mile service area formerly 
provided by the MDS rules; (2) the technological innovations in 
reception equipment that have contributed to a significant increase in 
the geographic area to which reliable MDS service can be provided; and 
(3) the potential overcrowding of the MDS spectrum that would result 
from continued use of the smaller service area. See Second Order on 
Reconsideration at 7077-78. We also noted that the desirability of an 
expansion of the protected service area had been enhanced by two 
separate rulemakings: a 1995 ITFS rulemaking which established a fixed 
35-mile distance as one of several criterion for ITFS receiver site 
protection,\2\ and the Report and Order in Amendment of Parts 21 and 74 
of the Commission's Rules With Regard to Filing Procedures in the 
Multipoint Distribution Service and in the Instructional Television 
Fixed Service and Implementation of Section 309(j) of the 
Communications Act-Competitive Bidding, 10 FCC Rcd 9589 (1995), 60 FR 
36524 (July 17, 1995) (``MDS Report and Order''), recon. granted in 
part and denied in part, Memorandum and Order on Reconsideration, 
Amendment of Parts 21 and 74 of the Commission's Rules With Regard to 
Filing Procedures in the Multipoint Distribution Service and in the 
Instructional Television Fixed Service and Implementation of Section

[[Page 18093]]

309(j) of the Communications Act-Competitive Bidding, FCC 95-445, MM 
Docket No. 94-131 and PP Docket No. 93-253 (released October 27, 1995), 
60 FR 57365 (Nov. 15, 1995), in which the Commission established 
competitive bidding procedures to select among mutually exclusive MDS 
applications. See Second Order on Reconsideration at 7079.\3\
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    \2\ Report and Order, Amendment of Part 74 of the Commission's 
Rules with Regard to the Instructional Television Fixed Service, 10 
FCC Rcd 2907, 2921 (1995), 60 FR 20241 (April 25, 1995) (``ITFS 
Filing Procedures Order''). A combination of ITFS and MDS 
frequencies are used to provide a video entertainment service 
popularly known as ``wireless cable.'' The rules for these two 
services were initially developed independently. However, with the 
increasing combined use of both service frequencies to provide a 
single video service to consumers and to provide a competitor to 
wired cable operators, coordination of the rules and policies for 
both services has been encouraged. See Notice of Proposed Rulemaking 
and Notice of Inquiry, Amendment of Parts 21, 43, 74, 78, and 94 of 
the Commission's Rules, Pertaining to Rules Governing Use of the 
Frequencies in the 2.1 and 2.5 GHz Bands Affecting: Private 
Operational-Fixed Microwave Service, Multipoint Distribution 
Service, Multichannel Multipoint Distribution Service, Instructional 
Television Fixed Service, and Cable Television Relay Service, 5 FCC 
Rcd 971 (1990), 55 FR 7344 (March 1, 1990).
    \3\ In the Second Order on Reconsideration, we noted that ``[i]n 
view of the competitive bidding procedures we are adopting * * *, we 
have decided that it is even more important that an MDS station's 
protected service area boundary be `easy to use and understand so 
that the spectrum use rights of licensees are clear.' '' Second 
Order on Reconsideration at 7079 (citing Amendment of Parts 21, 74 
and 94 of the Commission Rules and Regulations with regard to the 
technical requirements applicable to the Multipoint Distribution 
Service, the Instructional Television Fixed Service and the Private 
Operational-Fixed Microwave Service (OFS), 98 FCC 2d 68, 105-106 
(1984), 49 FR 25456 (June 21, 1984)). As part of the new licensing 
scheme, the Commission developed a plan under which MDS 
authorizations would be auctioned for geographic areas called Basic 
Trading Areas (BTAs). High bidders in the auction would be entitled 
to seek authorizations to construct MDS stations on any usable 
channels within their BTAs. Previously proposed and authorized MDS 
stations within the BTAs would continue to provide service within 
the expanded 35-mile protected service area provided in the Second 
Order on Reconsideration.
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    3. In addition to resolving the petitions for reconsideration filed 
in response to the Second Order on Reconsideration in this order, we, 
on our own motion, provide clarification of certain provisions set 
forth in the MDS Report and Order, including the interference study 
requirements for pending ITFS applications and the 30-day period for 
the filing of either a MDS long-form application or a statement of 
intention by winning bidders in the MDS auction. We also provide 
guidance in respect to the instances that permit a winning bidder in 
the MDS auction to file a statement of intention for an encumbered BTA. 
See 47 CFR 21.956(a), Appendix C, MDS Report and Order, 10 FCC Rcd at 
9702. We deal first with the petitions for reconsideration filed in 
response to the Second Order on Reconsideration.

II. Discussion

    4. Effective Date of Second Order on Reconsideration. A petition 
for reconsideration was filed by the Law Offices of John D. Pellegrin, 
Chartered (``Pellegrin''), on ``behalf of clients,'' in which Pellegrin 
seeks clarification of the effective date of the revision of 47 CFR 
21.902(d), which expanded the protected service areas for MDS stations, 
as provided in the Second Order on Reconsideration. In the Second Order 
on Reconsideration, the effective date of the revision of 
Sec. 21.902(d) was stated as the ``60th day after publication of a 
summary of [the] order in the Federal Register.'' Second Order on 
Reconsideration at 7096.4 A summary of the Second Order on 
Reconsideration was published at 60 FR 36736 (July 18, 1995). Pursuant 
to 47 CFR 1.4 (e) and (j), the 60th day after July 18, 1995 is 
September 18, 1995.
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    \4\ 47 CFR 1.427(a) provides that ``[a]ny rule issued by the 
Commission will be made effective not less than 30 days from the 
time it is published in the Federal Register.''
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    5. Pellegrin concedes that September 18, 1995, is the effective 
date for this specific Sec. 21.902(d) revision. However, Pellegrin 
claims that, although the effective date of the expanded protected 
service area can be discerned from reading the text of the order 
itself, clarification is sought in light of the use of dates other than 
September 18, 1995, in the MDS Report and Order. We confirm Pellegrin's 
understanding that the Second Order on Reconsideration provided that 
the effective date of the revision of Sec. 21.902(d), which expanded 
protected service areas for MDS stations, was September 18, 1995.
    6. Delay of the Effective Date of Second Order on Reconsideration. 
Pellegrin also requests that the Commission postpone the effective date 
of the revision of Sec. 21.902(d) to a minimum of 120 days after the 
July 18, 1995, publication date of the summary of the Second Order on 
Reconsideration in the Federal Register. The effective date suggested 
by Pellegrin would be November 15, 1995, 36 days after the October 10, 
1995, deadline for the filing of applications to participate in the MDS 
auction and two days after November 13, 1995, the first day of 
competitive bidding in the MDS auction.5 Pellegrin argues that, 
due to limited engineering resources, additional time is needed to 
prepare modification applications which would be filed with the 
Commission prior to September 18, 1995. Pellegrin concludes, without 
elaboration, that a later effective date ``will not delay any 
prospective MDS auction.''
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    \5\ Public Notice, FCC Announces Auction of Multipoint 
Distribution Service, Report No. AUC-95-06 (released September 5, 
1995), 60 FR 48110 (Sept. 12, 1995) (``MDS Auction Public Notice''), 
at 1-2.
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    7. In selecting an effective date for the revision of 
Sec. 21.902(d), the Commission balanced two goals: (1) affording the 
expanded protected service area to previously proposed and authorized 
stations as soon as possible; and (2) providing additional time to file 
modification applications under the former protected service area 
rules. The effective date was fully considered in the Second Order on 
Reconsideration. We also note that the record strongly supported the 
selection of an effective date prior to the first application filing 
opportunity provided under the new competitive bidding licensing 
procedures. The party who filed the petition for partial 
reconsideration that initiated the Second Order on Reconsideration, 
argued persuasively that the expanded protected service area should 
become effective before the Commission lifted the freeze on the filing 
of new applications.6 Pellegrin did not file an opposition or any 
type of response to that petition for partial reconsideration.7 In 
addition, the majority of the parties filing responses to a 1993 public 
notice, in which we announced our then-future intention to lift the 
freeze on the filing of new MDS applications,8 also requested that 
the effective date of any expanded protected service area be prior to 
the Commission's lifting of the freeze on the filing of new 
applications.9 Pellegrin also did not file a response to this 1993 
Public Notice, although responses were encouraged.10 The 
Commission announced on September 5, 1995, that the filing deadline for 
short-form applications (FCC Form 175-M) to participate in the MDS 
auction would be October 10, 1995.11
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    \6\ See December 13, 1991 Petition for Partial Reconsideration 
of the Wireless Cable Association International, Inc. (``WCA''). In 
its December 13, 1991 petition, WCA argued:
    The current [protected service area] is a ticking time-bomb set 
to explode in the wireless [cable] industry's future. So far, the 
Commission's temporary freeze on new MMDS applications has protected 
wireless cable operators from the inadequacy of the [protected 
service area] definition. Once that temporary freeze is lifted, the 
only protection a wireless cable system operator will have to 
protect its subscriber base against harmful interference is the 
[protected service area] definition--a definition that is woefully 
inadequate.
    WCA Petition for Partial Reconsideration at 2-3.
    \7\ See Second Order on Reconsideration at 7075 n. 1.
    \8\ Public Notice, MDS/MMDS Applications Filing Freeze, Mimeo 
No. 34165 (released July 28, 1993) (``1993 Public Notice'').
    \9\ See Response of WCA to 1993 Public Notice at 8-15; Response 
of the Coalition of Wireless Cable Operations to 1993 Public Notice 
at 10. See also Response of United Telephone Mutual Aid Corp., et 
al. to 1993 Public Notice at 4. Parties filing comments in response 
to the Notice of Proposed Rulemaking for the MDS Report and Order, 
which raised the issue of interference protection, also requested an 
effective date prior to the lifting of the freeze against the filing 
of MDS applications for new stations. See Comments of WCA to NPRM 
for MDS Report and Order at 10-25; Reply Comments of CAI Wireless 
Systems, Inc. at 2; Reply Comments of Hardin and Associates, Inc. at 
2-3; and Reply Comments of Heartland Communications at 2.
    \10\ The public was asked to file responses to the MDS issues 
raised and the approaches and resolutions suggested in the notice. 
1993 Public Notice at 2.
    \11\ MDS Auction Public Notice at 2.

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[[Page 18094]]

    8. Moreover, we find that the September 18, 1995, effective date of 
the expanded protected service area did provide an adequate amount of 
time for conditional licensees and licensees to prepare and file 
modification applications based on the former 710 square-mile protected 
service area. The release date of the Second Order on Reconsideration, 
June 21, 1995, provided licensees with nearly three months within which 
to file modification applications. In response to Pellegrin's claim 
that a ``log jam of orders for consulting services'' will be created 
due to the ``short FCC deadline'' and the limited number of qualified 
consulting engineers who can prepare the engineering analyses required 
for modification applications, WCA asserts that it has ``informally 
canvassed consulting engineers and wireless cable operators and has 
uncovered no evidence that those who acted promptly in response to the 
release of the [order] are encountering the difficulties in securing 
consulting services that [Petitioner] predicts.'' 12 Indeed, 
Pellegrin's complaint was voiced by no other commenter. Thus, we find 
Pellegrin's claims of hardship to be speculative and belied by the 
evidence before us.
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    \12\ WCA Opposition to Pellegrin Petition at 3.
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    9. MDS conditional licensees and licensees were in no way 
prohibited from filing MDS modification applications after September 
18, 1995. No freeze has been imposed upon the filing of MDS 
modification applications. A conditional licensee or licensee may file 
an application requesting the same type station design, location or 
status modifications that were permissible prior to the September 18, 
1995, effective date of the Sec. 21.902(d) revision provided in the 
Second Order on Reconsideration. We, therefore, reject Pellegrin's 
argument that the effective date may not have provided licensees an 
adequate amount of time to prepare modification applications. Pellegrin 
has failed to persuade us to reverse our earlier determination and 
further delay implementation of this new interference protection 
standard.
    10. We also reject Pellegrin's arguments that postponing the 
effective date would not have delayed the MDS auction. Although 
delaying the effective date of the revision of Sec. 21.902(d) to expand 
the MDS protected service area would not have made it technically 
impossible to begin the MDS auction on November 13, 1995, it would have 
made it commercially impracticable. We do not agree with Pellegrin's 
characterization that the Commission adopted a ``caveat emptor'' policy 
for the MDS auction. The record reflects that the Commission advised 
potential bidders in the MDS auction that they were responsible for 
investigating the status of markets due to the heavily encumbered 
nature of the service. Over the past several months, we have repeatedly 
encouraged interested bidders to thoroughly review all Commission 
orders, public notices, MDS file information and other documentation 
prior to making a final determination to bid on authorizations for 
BTAs.13 Because high bidders in the auction must choose 
transmitter sites and design stations so as to protect each point 
within the protected service area of all previously proposed and 
authorized stations from harmful interference, it is important that the 
Sec. 21.902(d) revision which expanded the MDS protected service area 
become effective on a date well before the first day of bidding. 
Delaying the effective date of the expanded service area to a date 
beyond the first day of bidding in the MDS auction would cut against 
the goal of market certainty and would be incongruent with the auction 
licensing scheme. Accordingly, and for all the reasons discussed, we 
deny Pellegrin's request for a delay of the effective date of the 
revision of Sec. 21.902(d) to expand the protected service area for MDS 
stations.
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    \13\ See, e.g., MDS Report and Order at 9604; MDS Auction Public 
Notice at 4; MDS Bidder Information Package at 21-22.
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    11. Filing of Applications for New ITFS Stations. On August 3, 
1995, the Commission announced by public notice that the Mass Media 
Bureau would accept ITFS applications for major modifications for a 
limited period of time from August 3, 1995, through September 15, 
1995.14 In a separate petition for reconsideration, Pellegrin 
requests that for applicants who would file pursuant to 47 CFR 
Sec. 74.990(a), the Commission permit the filing of applications for 
new ITFS stations during this filing window for modification 
applications by defining the term ``major change'' to include new 
applications filed pursuant to Sec. 74.990(a).
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    \14\ Public Notice, Notice of Limited Period to File 
Instructional Television Fixed Service Applications for Major 
Changes in Existing Facilities, Report No. 23564A (released August 
3, 1995).
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    12. It appears, however, that Pellegrin's request for an 
opportunity to file applications for new ITFS stations was addressed 
and resolved by the public notice released the day after the August 3, 
1995, public notice was issued. On August 4, 1995, the Commission 
announced by public notice that the Mass Media Bureau would open a 
window from October 16, 1995, through October 20, 1995, for the filing 
of applications for new ITFS stations.15 All those eligible to 
file applications for new ITFS stations, including those filing 
pursuant to 47 CFR 74.990(a), were permitted to file during that time. 
Therefore, Pellegrin's concern about having a filing opportunity before 
the issuance of the first BTA authorization has been addressed. We, 
therefore, dismiss as moot Pellegrin's reconsideration petition on this 
issue as the relief sought was previously granted.
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    \15\ Public Notice, Notice of Instructional Television Fixed 
Service Filing Window From October 16, 1995 Through October 20, 
1995, Report No. 23565A (released August 4, 1995).
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    13. Strict application of requirements for ITFS requests for 
extension of time to construct. The Commission announced in the Second 
Order on Reconsideration that it would strictly scrutinize requests for 
extensions of time to construct ITFS and MDS stations in order to 
address concerns over the ``economic blackmail'' 16 that allegedly 
occurs when construction permittees and conditional licensees 
repeatedly delay station construction over substantial periods of time, 
while demanding protection from potential harmful electromagnetic 
interference caused by subsequently proposed neighboring licensees. 
Second Order on Reconsideration at 7081. The Law Firm of Schwartz, 
Woods & Miller (``Schwartz, Woods''), on behalf of its ITFS clients, 
requests reconsideration of this policy as it applies to ITFS extension 
applicants, suggesting that the Commission has not set out a public 
interest reason sufficient to justify the new strict review 
policy.17 Schwartz, Woods argues that the Commission has 
recognized that, due to the nature of educational institutions, it 
generally takes ITFS construction permittees longer than it would 
commercial entities to raise funds for construction, thereby causing a 
delay in completion of construction.18 ITFS construction

[[Page 18095]]

permittees rely heavily upon MDS operators for construction financing, 
Schwartz, Woods argues, and MDS operators frequently delay ITFS 
construction financing until their own MDS systems generate profit. 
Therefore, Schwartz, Woods asserts, ITFS construction extension 
applications should be routinely granted.
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    \16\ In response to the 1993 Public Notice, WCA commented: [A] 
few * * * entities are abusing the ITFS interference protection 
rules * * * and proposing stations that appear to have no other 
purpose than to frustrate the ability of wireless cable systems in 
adjacent communities to add ITFS stations to their systems. Clearly, 
the word is out that the interference protection rules permit 
economic blackmail.* * * [T]he legitimate wireless cable operator 
will have to reach an accommodation if it is to continue providing a 
viable service to the public.
    Comments of WCA to the 1993 Public Notice at 9.
    \17\ Schwartz, Woods filed the petition on behalf of 26 
educational institutions, many of which hold multiple ITFS station 
licenses.
    \18\ See Schwartz, Woods Petition at 13.
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    14. Section 73.3534(c) of the Commission's rules provides that:

    Applications for extension of time to construct * * * 
Instructional TV Fixed stations will be granted upon a specific and 
detailed showing that the failure to complete was due to causes not 
under the control of the permittee, or upon a specific and detailed 
showing * * * sufficient to justify an extension.

47 CFR 73.3534 (1994). As recently as February 1995, in an ITFS 
rulemaking order, we explained with greater particularity the type of 
showing an educator must make to obtain an extension of time within 
which to construct, including showings that: ``(1) construction is 
complete and testing of facilities has begun; (2) substantial progress 
has been made; or (3) reasons clearly beyond the applicant's control, 
which applicant has taken all possible steps to resolve, have prevented 
construction.'' ITFS Filing Procedures Order, 10 FCC Rcd at 2921. In 
denying a request to shorten the 18-month ITFS station construction 
period to 12 months in order to prevent speculative filings, we 
responded that application of our existing rules have ``operated 
sufficiently to prevent abuses by frequency speculators.'' Id. Our 
statement in the Second Order on Reconsideration that we intend to 
strictly apply the ITFS extension requirements merely underscores our 
previous statements.
    15. It has long been Commission practice to consider a request for 
extension of time within which to construct ITFS stations ``on its 
merits.'' Applications of Public Broadcasting Service, 96 FCC 2d 555, 
558 (1983). In keeping with the priorities of maximum utilization of 
ITFS frequencies and expeditious licensing of ITFS stations, Amendment 
of Part 74 of the Commission's Rules and Regulations in regard to the 
Instructional Television Fixed Service, 98 FCC 2d 925, 935 (1984), 49 
FR 32590 (Aug. 15, 1984), we will continue to process or grant ITFS 
extension requests that meet the requirements of Sec. 73.3534. When we 
stated that the requirements for ITFS extensions of time to construct 
would be strictly applied, we did not change our rules to heighten the 
requirements for extension requests. The Commission will continue to 
apply our extension rules fairly, including denying and dismissing 
those applications that do not demonstrate compliance with our rules.
    16. Schwartz, Woods argues that the Report and Order, Amendment of 
Parts 2, 21, 74 and 94 of the Commission's Rules and Regulations in 
regard to frequency allocation to the Instructional Television Fixed 
Service, the Multipoint Distribution Service and the Private 
Operational Fixed Microwave Service, 94 FCC 2d 1203 (1983), 48 FR 33873 
(July 26, 1983) (``MMDS Allocation Order'') recognizes the Commission's 
responsibility to take into consideration funding complexities when 
reviewing extension requests. However, the Commission was actually 
discussing the rationale for creating a spectrum reserve for ITFS and 
was not discussing the reasons ITFS construction extension requests 
should be granted. MMDS Allocation Order, 94 FCC 2d at 1224-25. 
Nevertheless, we agree that public funding complexities are the type of 
circumstances, when proven by a specific and detailed showing as 
required by Sec. 73.3534, that are likely to be sufficient to support 
grant of an extension request. Indeed, a public educational institution 
which is denied funding by a state legislature should provide a 
detailed and specific showing of the circumstances and a showing that 
the lack of funding is beyond its control (e.g., that it submitted a 
budget request). In the alternative, an educator can submit a showing 
that it attempted to solicit funding from other sources by providing 
copies of grant proposals.
    17. Schwartz, Woods argues that the greatest difficulty in meeting 
ITFS construction requirements results from financing arrangements with 
MDS operators. However, MDS operators are accustomed to construction 
requirements and extension request standards that are more stringent 
than the ITFS requirements.\19\ Therefore, MDS operators should be 
cooperative in ensuring that ITFS permittees meet construction 
deadlines, especially if the MDS operator's lease arrangement will be 
impacted by denial of an ITFS extension request, which subsequently 
results in a cancellation of the ITFS authorization for failure to 
construct. As we stated in the ITFS Filing Procedures Order, 10 FCC Rcd 
at 2907, it is our intention to continue to follow our existing 
processing standards and methods, which complement our new wireless 
cable licensing scheme and related new procedures. We intend to grant 
ITFS requests for extension of time within which to construct ITFS 
stations that meet the stated standards, and deny those that do not. 
We, therefore, deny Schwartz, Woods' request to exempt ITFS stations 
from our policy of stricter application of the requirements for 
extension requests.
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    \19\ The MDS station construction period is 12 months. 47 CFR 
21.43(a)(2). Lack of financing is specifically listed in the MDS 
rules as an unacceptable basis for a grant of a extension request. 
47 CFR 21.40(b). In addition to other showings, MDS licensees must, 
with every extension request, submit a verified statement outlining 
the actions taken to construct the facility. Id.
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    18. Other Issues and Clarification of the MDS Report and Order. 
Finally, on our own motion, we amend our rules to require service of 
new MDS station applications (long-form applications) filed by BTA and 
Partitioned Service Area authorization holders, as well as modification 
applications filed by incumbent MDS licensees, upon ITFS applicants 
with applications pending. In the Second Order on Reconsideration, we 
changed the date on which MDS long-form applications must be served 
upon ITFS licensees and construction permittees to on or before the 
date an application is filed. Second Order on Reconsideration at 7089-
90. In the MDS Report and Order, we adopted a rule that prohibits BTA 
and Partitioned Service Area authorization holders from proposing and 
operating stations that would cause harmful electromagnetic 
interference to ITFS station sites (and these stations' protected 
service areas) proposed in pending ITFS applications. See 47 CFR 
21.938(b)(3), Appendix C, MDS Report and Order at 9696. We did not in 
either order, however, require that MDS applicants prepare studies of 
the potential interference to facilities previously proposed in ITFS 
applications, or serve ITFS applicants with a copy of the long-form 
applications and interference studies. We take this opportunity to 
amend Sec. 21.902 to require such service and to require the 
preparation of studies of the potential interference to the facilities 
proposed in pending ITFS applications by BTA and Partitioned Service 
Area authorization holders filing long-form applications and by 
incumbent MDS applicants filing modification applications. We believe 
that this ITFS service requirement will further our goal of providing 
notice to all parties potentially affected by new or modified MDS 
facilities. See MDS Report and Order at 9624 (MDS applicants required 
to prepare interference analyses and serve them on ``potentially 
affected parties'').
    19. Also on our own motion, we correct 47 CFR 21.956(a) to clarify 
that the period within which a winning bidder in the MDS auction must 
file

[[Page 18096]]

either an initial long-form application or a statement of intention 
after being notified of its status as a winning bidder is 30 business 
days. Section 21.956(a) provides that the period is ``30 days'' from 
the time a bidder is notified of its status as a high bidder, 47 CFR 
21.956(a), Appendix C, MDS Report and Order at 9702, whereas the text 
of the MDS Report and Order provides that the period is ``thirty 
business days.'' MDS Report and Order at 9655-56. Through this 
amendment, we clarify that only business days will count toward the 
completion of this 30-day filing period.
    20. We next provide guidance regarding the filing of a ``statement 
of intention.'' In particular, we want to give examples of situations 
in which the Commission will consider a BTA so heavily encumbered that 
the winning bidder for that BTA would not be required to file a long-
form application for a new MDS station within the prescribed 30 
business day period, but rather would be permitted to file a statement 
of intention, describing the encumbrances and the plan to make possible 
the filing of a long-form application. See 47 CFR 21.956(a) in Appendix 
C, MDS Report and Order at 9702. In the MDS Report and Order, we noted 
that:

    [A] number of BTA service areas may be so encumbered that the 
winning bidder for such a BTA may be unable to file a long-form 
application proposing another MDS station within the BTA while 
meeting the Commission's interference standards as to all previously 
authorized or proposed MDS and ITFS facilities * * *. The winning 
bidder for a BTA service area so heavily encumbered that it believes 
it cannot file an acceptable long-form application proposing an MDS 
station with average transmitted power within its BTA * * *. Must 
file with the Commission, in lieu of a long-form application for an 
MDS station license, a statement of intention with regard to the BTA 
service area, showing the encumbered nature of the BTA, identifying 
the incumbents, and describing in detail its plan for obtaining the 
previously authorized or proposed MDS stations within the BTA.

    MDS Report and Order at 9656-57. The degree to which encumbrances 
preclude new MDS stations in a BTA varies widely and depends on factors 
such as the size and shape of the BTA, proximity of accessible 
transmitting antenna sites to unserved communities in the BTA, and 
proximity to neighboring MDS and ITFS facilities in adjacent BTAs, 
which also must be protected. Additionally, terrain conditions are an 
important factor, as are the relative locations of multiple protected 
areas slicing through a BTA, perhaps preventing the use of antenna 
cross polarization as an interference abatement technique. Thus, we 
cannot, nor do we wish, to prescribe rigid technical criteria from 
which we would accept or reject statements of intention. Rather, each 
statement of intention will reflect the unique geographic and 
demographic conditions in that BTA, and the existing and proposed use 
of MDS and ITFS channels in that region. We will examine statements of 
intention on a case-by-case basis, working with auction winners to 
obtain any needed clarification or supporting documentation.
    21. We believe it would be helpful for the Commission to offer 
examples of what we would normally consider to be heavily encumbered 
situations for which we would likely approve statements of intention. 
BTA auction winners for whom these situations apply need only document 
their applicability. This approach will simplify the showing in 
statements of intention, easing the burden on applicants and the 
Commission's MDS processing staff. We offer as an example of an 
encumbered BTA for which a statement of intention could be filed one 
that is entirely covered by the 56.33 kilometer (35 mile) service area 
of a previously authorized or proposed (``protected'') cochannel or 
adjacent channel incumbent MDS or ITFS facility, which will preclude 
the use of at least one of the 13 MDS channels. We will also consider a 
BTA to be heavily encumbered where all communities in the BTA are 
located: (1) Within 64.4 kilometers (40 miles) of the 56.33 kilometer 
(35 mile) service area of a protected MDS or ITFS facility or within 
64.4 kilometers of the boundary of an adjacent BTA not held by the same 
BTA winner, or (2) within 24.4 kilometers (15 miles) of the 56.33 
kilometer (35 mile) service area of a protected station operating on an 
adjacent D- or G-group channel; provided further, that there are no 
intervening terrain barriers that would completely shield such 
protected service areas or adjacent BTAs. A BTA winner may file a 
statement of intention if the use of at least one MDS channel is 
precluded by such encumbrances throughout that BTA. We note that the 
64.4 kilometer distance is merely a guideline, and, as such, does not 
necessarily preclude the filing of statements of intention where the 
service areas of protected stations are further away from a BTA. We 
chose this distance because it is the distance to the otherwise 
unobstructed horizon for a transmitting antenna height of 159 meters 
(522 feet), an ample antenna height for serving most communities.\20\ 
The 24.4 kilometer (15 mile) distance guideline for adjacent channels 
assumes line-of-sight transmissions within a protected 56.33 kilometer 
(35 mile) service area, copolarized antennas, and a desired-to-
undesired signal strength ratio of 0 dB. These conditions would be met, 
for example, from an MDS station radiating 350 watts toward the 
protected service area and protecting a weak desired signal level of 
-108 dBw. Obviously, as the distance from the protected area increases 
beyond 24.4 kilometers, there is greater flexibility to operate an MDS 
facility without causing adjacent channel interference.
---------------------------------------------------------------------------

    \20\ Site location and antenna height are the major MDS station 
design factors that determine the line-of-sight distance to the 
horizon, beyond which the potential for interference is greatly 
reduced.
---------------------------------------------------------------------------

    22. Our distance guidelines notwithstanding, there may be 
situations where communities in a BTA are located more than 64.4 
kilometers from protected service areas, but cannot be adequately 
served without possibly interfering with other MDS or ITFS 
operations.\21\ BTA auction winners may use any means to show the 
preclusive effects of encumbrances in such cases. A statement of 
intention may be supported by showing that any one of the MDS channels 
could not be used by a new station to serve a community in that BTA. 
The BTA auction winner's analysis may include desired-to-undesired 
signal strength calculations, using the authorized or previously 
proposed facilities of protected stations. A BTA winner may assume that 
any hypothetical station it would operate would require sufficient 
power and antenna height to not only serve a community, but also 
support an economically feasible operation. A BTA winner who is also an 
incumbent MDS operator in the same BTA may use the authorized 
parameters of the incumbent system to show that it could not add an 
additional channel to that system.\22\ In addition to interference-
related encumbrances, BTA winners (particularly for the smaller BTAs) 
might be able to show that no reasonable facility could be operated in 
conformance with the limiting signal strengths at the BTA boundaries. 
See 47 CFR 21.938, Appendix C, MDS Report and Order at 9696.
---------------------------------------------------------------------------

    \21\ A community in an area characterized by large heights above 
average terrain may be an example of such a situation.
    \22\ We note that any such additional channel would be 
encompassed by the BTA authorization, and the protected service area 
for that channel would extend to the borders of the BTA.
---------------------------------------------------------------------------

    23. There may be situations where there are one or more communities 
within a BTA for which an MDS station

[[Page 18097]]

could be constructed and operated on all MDS channels in full 
compliance with the Commission's MDS interference rules (excluding 
channel 2 outside of the cities where its use is permitted, see 47 CFR 
21.901), but that the winning bidder is unable to provide service for 
other reasons.\23\ In such cases, the winning bidder's statement of 
intention should detail those reasons, together with factual 
documentation.
---------------------------------------------------------------------------

    \23\ For example, any such MDS facility complying with our 
interference rules would be too small to serve the community 
effectively, or the community or other populated area might be too 
small to support an economically viable wireless cable system.
---------------------------------------------------------------------------

    24. With regard to the showings in support of statements of 
intention, we would like to clarify that, at a minimum, specific and 
detailed narrative descriptions are required and must include the 
information and supporting documentation outlined in the MDS Report and 
Order, 10 FCC Rcd at 9657, including identification of encumbering 
stations or applications for all MDS channels (even though the 
statement of intention may be filed if only one channel is encumbered). 
Statements of intention that detail a winning bidder's objective to 
purchase previously authorized or proposed stations and/or ITFS leases 
within a BTA should include such information as the estimated date for 
conclusion of negotiations and consummation of sales, and should 
identify the parties with whom the winning bidders are engaged in 
negotiations. We encourage BTA auction winners to file maps, charts, 
diagrams, sketches, technical analyses or any other documents that, 
together with the narrative descriptions, would best explain the status 
of a BTA and the BTA winner's plan for initiating service in the BTA.
    25. We emphasize that we do not want statements of intention to 
become a regulatory burden for BTA auction winners or the Commission's 
MDS processing staff. We will make every effort to issue BTA 
authorizations on the basis of factually supported statements of 
intention, and, as deemed necessary, we may request additional 
information from a BTA winner, such as a map of the BTA showing the 
protected circles of encumbering MDS and/or ITFS facilities. We note 
that the five-year build-out period for the BTA begins with the 
granting of the BTA authorization, whether such authorization is 
granted on the basis of a long-form application or a statement of 
intention. See MDS Report and Order at 9613; 47 CFR 21.930, Appendix C, 
MDS Report and Order at 9692. We believe that the running of the five-
year build-out period from the date of the BTA authorization grant will 
encourage auction winners who obtain BTA authorizations by initially 
filing statements of intention to resolve encumbrances, file long-form 
application(s), and initiate service in their BTAs in a timely fashion.

III. Final Regulatory Flexibility Analysis

    26. Pursuant to the Regulatory Flexibility Act of 1980 (Pub. L. No. 
96-354, 94 Stat. 1164, 5 U.S.C. Section 601 et seq. (1981)), the 
Commission's final analysis is as follows:
    27. Need and purpose of this action: This third reconsideration 
order upholds the Commission's decision to make effective on September 
18, 1995, revisions of the rule governing the Multipoint Distribution 
Service, in order to expand the area within which MDS stations will be 
protected from harmful electromagnetic interference, and to increase 
the efficiency of processing MDS applications. This action also 
maintains the Commission policy of strict application of the 
requirements for requests for extensions of time within which to 
construct ITFS stations. In adopting this order, the Commission's goals 
of promoting efficiency in the allocation, licensing and shared use of 
the electromagnetic spectrum are furthered.
    28. Summary of the issues raised by the public comments in response 
to the Initial Regulatory Flexibility Analysis: There were no comments 
submitted in response to the Initial Regulatory Flexibility Analysis 
and none in connection with this third reconsideration order.
    29. Significant alternatives considered: The Commission considered 
all the alternatives raised by petitioners and discussed herein. In 
response to these petitions, we decided to maintain the September 18, 
1995, effective date of the expanded protected service areas provided 
to MDS stations in order to enhance the potential for effective 
competition with traditional wireline cable systems. On 
reconsideration, it was also requested that we reverse our policy of 
strict application of the requirements for requests for extensions of 
time within which to construct ITFS stations. We decided to maintain 
our strict application policy.
    30. The Secretary shall send a copy of this Third Order on 
Reconsideration, including the Final Regulatory Flexibility Analysis, 
to the Chief Counsel for Advocacy of the Small Business Administration, 
in accordance with paragraph 603(a) of the Regulatory Flexibility Act.

IV. Ordering Clauses

    31. In view of all the foregoing, we affirm our adoption of the 
Second Order on Reconsideration. Reconsideration of the order is not 
justified. Accordingly, it is ordered that pursuant to the authority 
contained in Secs. 4(i) and 303(r) of the Communications Act of 1934, 
as amended, 47 U.S.C. Secs. 154(i) and 303(r), and Sec. 1.429(i) of the 
Commission's rules, 47 CFR 1.429(i), and for the reasons set forth 
above, petitioners' requests for reconsideration are hereby denied in 
part, and dismissed as moot in part, as discussed herein. Clarification 
of the Second Order on Reconsideration, where requested, has been 
provided.
    32. It is further ordered that Sections 21.902(i) and 21.956(a) of 
the Commission's rules, 47 CFR 21.902(i) and 21.956(a), are amended, as 
discussed herein and as provided below.
    33. It is further ordered that the rule amendments set forth below 
will become effective June 24, 1996, except that the new or modified 
paperwork requirements contained in Section 21.902(i), 47 CFR 
Sec. 21.902(i), which are subject to approval by the Office of 
Management and Budget (``OMB''), will go into effect upon OMB approval. 
The Commission will issue at a later date a public notice with this 
effective date.

List of Subjects in 47 CFR Part 21

    Communications common carriers, Communications equipment, Radio, 
Reporting and recordkeeping requirements, Television.

Federal Communications Commission.
William F. Caton,
Acting Secretary.

Rule Changes

    Part 21 of Chapter I of Title 47 of the Code of Federal Regulations 
is amended as follows:

PART 21--DOMESTIC PUBLIC FIXED RADIO SERVICES

    1. The authority citation for Part 21 continues to read as follows:

    Authority: Secs. 1, 2, 4, 201-205, 208, 215, 218, 303, 307, 313, 
314, 403, 404, 410, 602; 48 Stat. 1064, 1066, 1070-1073, 1076, 1077, 
1080, 1082, 1083, 1087, 1094, 1098, 1102, as amended; 47 U.S.C. 151, 
154, 201-205, 208, 215, 218, 303, 307, 313, 314, 403, 602; 47 U.S.C. 
552, 554.

    2. Section 21.902 is amended by revising paragraphs (i)(1) and 
(i)(2) to read as follows:

[[Page 18098]]

Sec. 21.902  Frequency interference.

* * * * *
    (i) (1) For each application for a new station, or amendment 
thereto, or modification application, or amendment thereto, proposing 
Multipoint Distribution Service (MDS) facilities on the E, F, or H 
channels, filed on October 1, 1995, or thereafter, on or before the day 
the application or amendment is filed, the applicant must prepare, but 
is not required to submit with its application or amendment, an 
analysis demonstrating that operation of the MDS applicant's 
transmitter will not cause harmful electrical interference to each 
registered receive site of any existing D, E, F, or G channel 
Instructional Television Fixed Service station licensed, with a 
construct permit, or proposed in a pending application on the day such 
MDS application is filed, with an ITFS transmitter site within 50 miles 
of the coordinates of the MDS station's proposed transmitter site.
* * * * *
    (2) For each application described in paragraph (i)(1) of this 
section, the applicant must serve, by certified mail, return receipt 
requested, on or before the day the application or amendment described 
in paragraph (i)(1) of this section is initially filed with the 
Commission, a copy of the complete MDS application or amendment, 
including each exhibit and interference study, described in paragraph 
(i)(1) of this section, on each ITFS licensee, construction permittee, 
or applicant described in paragraph (i)(1) of this section.
* * * * *
    3. Section 21.956 is amended by revising the introductory portion 
of paragraph (a)(1) to read as follows:


Sec. 21.956  Filing of long-form applications or statements of 
intention.

    (a)(1) Within 30 business days of being notified of its status as a 
winning bidder, each winning bidder for a BTA service area will be 
required to submit either:
* * * * *
[FR Doc. 96-9874 Filed 4-23-96; 8:45 am]
BILLING CODE 6712-01-P