[Federal Register Volume 63, Number 37 (Wednesday, February 25, 1998)]
[Rules and Regulations]
[Pages 9443-9448]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-4750]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 101

[CC Docket No. 92-297; FCC 98-15]


Reconsideration of the Rules and Policies for Local Multipoint 
Distribution Service

AGENCY: Federal Communications Commission.

ACTION: Final rule; petitions for reconsideration.

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SUMMARY: The Federal Communications Commission has adopted a Third 
Order on Reconsideration (Third Reconsideration Order) in the Local 
Multipoint Distribution Service (LMDS) proceeding, reaffirming its 
commitment to the rapid implementation of LMDS and the broad range of 
one-way and two-way voice, video, and data service capabilities that 
LMDS offers. LMDS is a fixed, point-to-multipoint wireless service that 
has the flexibility and potential to promote competition in the 
telephony and cable distribution marketplaces, as well as to introduce 
new and innovative services to the public. The action is taken to 
resolve petitions for reconsideration of the service rules, except the 
competitive bidding rules, adopted in the Second Report and Order, 
Order on Reconsideration, and Fifth Notice of Proposed Rulemaking 
(Second Report and Order) to implement LMDS in the 27.5-28.35 GHz, 
29.1-29.25 GHz , and 31.0-31.3 GHz frequency bands. The limited 
revisions to the Commission's rules adopted in this Third 
Reconsideration Order will permit certain point-to-point operations on 
a secondary basis to LMDS in the 31 GHz band under the previous service 
rules replaced by LMDS without adversely affecting LMDS or the 
initiation of the auction and licensing of LMDS under the LMDS service 
rules.

EFFECTIVE DATE: April 27, 1998.

FOR FURTHER INFORMATION CONTACT: Barbara Reideler or Jay Whaley, Policy 
Division, Wireless Telecommunications Bureau, (202) 418-1310.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Third 
Reconsideration Order in CC Docket No. 92-297, FCC 98-15, adopted on 
February 3, 1998, and released on February 11, 1998. The complete text 
of this decision is available for inspection and copying during normal 
business hours in the FCC Reference Center (Room 239), 1919 M Street, 
N.W., Washington, D.C., and also may be purchased from the Commission's 
copy contractor, International Transcription Service, (202) 857-3800, 
1231 20th Street, N.W., Washington, DC 20036.

Synopsis of Third Reconsideration Order

    1. On March 11, 1997, the Commission adopted a Second Report and 
Order, Order on Reconsideration, and Fifth Notice of Proposed 
Rulemaking (Second Report and Order) 1 in this proceeding, 
which designated the 31.0-31.3 GHz frequency band (31 GHz band) for 
Local Multipoint Distribution Service (LMDS) and adopted competitive 
bidding and service rules to implement LMDS in the 27.5-28.35 GHz and 
29.1-29.25 GHz frequency bands (28 GHz band) and the 31 GHz band. In 
this Third Order on Reconsideration (Third Reconsideration Order), the 
Commission addressed petitions for reconsideration and clarification of 
the Second Report and Order, except petitions for reconsideration of 
the LMDS competitive bidding rules.2 The petitions were 
denied, with one exception that resulted in limited revisions to the 
rules adopted in the Second Report and Order. The Third Reconsideration 
Order deferred consideration of the comments filed in response to the 
Fifth Notice of Proposed Rulemaking, which was issued in conjunction 
with the Second Report and Order, to a separate Report and Order to be 
issued in the near future.
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    \1\ Rulemaking To Amend Parts 1, 2, 21, and 25 of the 
Commission's Rules To Redesignate the 27.5-29.5 GHz Frequency Band, 
To Reallocate the 29.5-30.0 GHz Frequency Band, To Establish Rules 
and Policies for Local Multipoint Distribution Service and for Fixed 
Satellite Services, Petitions for Reconsideration of the Denial of 
Applications for Waiver of the Commission's Common Carrier Point-to-
Point Microwave Radio Service Rules, CC Docket No. 92-297, Suite 12 
Group Petition for Pioneer Preference, PP-22; Second Report and 
Order, Order on Reconsideration, and Fifth Notice of Proposed 
Rulemaking, 12 FCC Rcd 12545 (1997), 62 FR 23148, April 29, 1997, 
and 62 FR 16514, April 7, 1997.
    \2\ The petitions for reconsideration of the LMDS competitive 
bidding rules were considered in the Second Order on Reconsideration 
at 62 FR 48787, September 17, 1997.
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    2. The Second Report and Order adopted an ownership rule that 
imposed a three-year restriction on the eligibility of incumbent local 
exchange companies (LECs) and incumbent cable companies to hold an 
attributable interest in the larger LMDS license of 1,150 megahertz 
whose geographic service area significantly overlaps such incumbent's 
authorized or franchised service area. The Third Reconsideration Order 
reviewed the portion of the eligibility restriction that permits 
incumbent LECs and incumbent cable companies to bid

[[Page 9444]]

on and acquire such an in-region LMDS license, so long as they 
subsequently come into compliance with the eligibility restriction 
through divestiture of the ineligible interests or areas within 90 days 
of the grant of such license.
    3. The Commission affirmed that the divestiture rule is consistent 
with similar rules in similar ownership eligibility restrictions and 
would not undermine the restriction. Ineligible incumbents would not be 
able to distort the auction process, which is protected by several 
provisions that prevent various anticompetitive strategies. The rule 
also is consistent with the Commission's goal to structure the 
eligibility restriction as flexibly as possible to minimize potential 
adverse limitations on incumbent LECs and incumbent cable companies by 
permitting them to compete for the LMDS license and then decide which 
business to pursue or divest.
    4. The Third Reconsideration Order also reviewed the portion of the 
eligibility rule that defines an ownership interest of 20 percent or 
higher as an attributable interest for eligibility purposes. The 
Commission affirmed that the 20 percent attribution level better serves 
the competitive goals for LMDS than a 10 percent attribution level for 
several reasons. The 20 percent level maximizes the opportunity for 
competition and increases the availability of financing by permitting a 
wide variety of players to enter the markeplace and provide financing, 
while preventing anticompetitive activities of incumbents. The 20 
percent level was reasonably based upon a market analysis and 
predictive judgments that weighed and balanced several competing 
interests, and was adopted because it is more reasonable than other 
levels in achieving the goals of the eligibility restriction. In 
addition, there are safeguards in the LMDS attribution rule that make 
incumbent cable companies ineligible to hold a controlling interest in 
an LMDS licensee, even if their attributable ownership interest is less 
than 20 percent.
    5. The Commission found that the 20 percent level is consistent 
with the ownership restriction that applies to similar wireless 
services and that was adopted to achieve similar goals to promote 
competition and prevent the concentration of spectrum among entities 
with the incentive to prevent competition. Although the Commission uses 
a 5 percent level in another ownership restriction, the circumstances 
are different and require a more restrictive approach than LMDS. 
Different ownership attribution standards have been adopted in the 
context of different rulemakings, depending on the particular 
circumstances and objectives in each case.
    6. The Commission also reviewed the portion of the eligibility rule 
that does not treat debts, warrants and similar convertible interests 
as attributable interests until conversion is effected. The Third 
Reconsideration Order affirmed the rule, which is consistent with 
similar ownership restrictions adopted by the Commission. The different 
treatment of such debts and interests in the attributable interest 
provisions of the LMDS designated entity auction rules also adopted in 
the Second Report and Order was based on the different circumstances 
and objectives of the designated entity rules and was consistent with 
the auction rules adopted in other services. The Third Reconsideration 
Order found that existing Commission rules prevent incumbent LECs and 
incumbent cable companies that hold such convertible instruments from 
engaging in anticompetitive activities and undermining the eligibility 
restriction. In addition, the Commission has adopted ownership 
disclosure requirements that the Third Reconsideration Order directs 
LMDS applicants to address in the long-form applications to be filed by 
the LMDS auction winners and that provide additional safeguards to 
ensure that anticompetitive conduct does not materialize.
    7. The Third Reconsideration Order determined that the policies and 
criteria used in establishing ownership restrictions in various 
rulemakings for different services would benefit from a comprehensive 
evaluation. Accordingly, the Commission decided to initiate a 
proceeding to examine the various ownership restrictions, including 
their ownership attribution standards and their treatment of 
convertible interests, later this year.
    8. The Third Reconsideration Order reviewed the decision to apply 
the eligibility restriction to all incumbent LECs and incumbent cable 
companies, including rural incumbent LECs. The Commission affirmed that 
the rule is consistent with the policy objectives of section 309(j) of 
the Communications Act to promote competition in all areas, ensure 
prompt delivery of service to rural areas, and provide opportunities 
for rural telephone companies. Rural incumbent LECs have the same 
incentives for anticompetitive use of LMDS licenses as other incumbent 
LECs to bar the entry of new competitors. The eligibility restriction 
reserves the initial licensing of LMDS for entrants without market 
power to ensure new competitors to all areas, including rural areas.
    9. The Commission also concluded that the eligibility restriction 
does not subject rural incumbent LECs to greater disqualification under 
its definition of a significant overlap, which occurs when the service 
area of an incumbent LEC or incumbent cable company includes at least 
10 percent of the population of the LMDS licensed service area. Whether 
applied to an entire licensed area or a smaller partitioned licensed 
area, a significant overlap was determined to create the potential for 
exercise of undue market power by incumbent LECs, including rural 
incumbent LECs. The Commission affirmed that if an incumbent LEC or 
incumbent cable company, including a rural incumbent LEC, is prevented 
from acquiring an LMDS license that significantly overlaps its service 
area, it is not barred altogether from acquiring an LMDS license and 
several alternatives are available. The incumbent LEC or incumbent 
cable company may acquire an LMDS license that does not significantly 
overlap, that overlaps so long as it divests the overlapping area 
within 90 days of a grant of the license, or that is partitioned from a 
larger LMDS license and complies with the eligibility restriction. 
Incumbents also may acquire the 150 megahertz LMDS license to which the 
eligibility restriction does not apply.
    10. The Third Reconsideration Order noted that in the Second Report 
and Order, the Commission has committed to initiate a review of the 
eligibility restriction in the year 2000, in order to determine whether 
the restriction should be extended to promote competition. The 
Commission determined, on reconsideration, to begin this review prior 
to 2000 and to provide a framework for the use of the Commission's 
resources in carrying out the review. Therefore, the Chief Economist, 
the Chief of the Cable Services Bureau, the Chief of the Common Carrier 
Bureau, the Chief of the Mass Media Bureau, the Chief of the 
International Bureau, the General Counsel, and the Chief of the 
Wireless Telecommunications Bureau were instructed to prepare jointly a 
study examining whether there has been sufficient entry and increases 
in competition to sunset the eligibility restriction on incumbent LECs 
and incumbent cable companies. The results of this study, together with 
a joint recommendation, are to be submitted to the Commission no later 
than June 30, 1999. Based on the report and joint

[[Page 9445]]

recommendation, the Commission intends to determine whether to initiate 
a rulemaking proceeding to extend the date for the termination of the 
eligibility restriction.
    11. The Third Reconsideration Order identified safeguards that 
exist, even after the eligibility restriction is terminated, to ensure 
that proposed license acquisitions by incumbent LECs or incumbent cable 
operators will not be inconsistent with the pro-competitive policies on 
which the restriction is based. After the initial auctioning of LMDS 
licenses, licenses are acquired under the Commission's transfer and 
assignment rules, which require prior Commission approval. The Third 
Reconsideration Order determined that the Commission would consider 
whether a particular market is sufficiently competitive before granting 
approval, and would rely on an examination of the same factors 
identified in the Second Report and Order for determining whether a 
market is sufficiently competitive to grant a waiver of the eligibility 
restriction under section 101.1003(a)(2) of the Commission's Rules (47 
CFR 101.1003(a)(2)).
    12. The Third Reconsideration Order granted a petition for 
clarification of the LMDS technical rules concerning frequency 
coordination and emission masks. The Second Report and Order imposed a 
frequency coordination requirement on LMDS licensees that requires 
licensees to initiate the coordination procedures in the Commission's 
rules to avoid interference problems with any neighboring LMDS licensee 
located within 20 kilometers of the boundaries of its service area. The 
Commission clarified that the identity of any such neighboring 
licensees is readily available in the Commission's database in order 
for the LMDS licensee to fulfill its obligation to provide notification 
of its operations to such neighbors. The Commission further clarified 
that such neighbor is required to respond to the notification with 
specific information concerning any problem, providing the LMDS 
licensee with sufficient information to further enable it to fulfill 
its obligation to complete the coordination process. The Third 
Reconsideration Order also clarified that the emission mask 
requirements in part 101 of the Commission's Rules apply to LMDS and 
that LMDS will be governed by the emission specifications set out in 
section 101.111 of the Rules (47 CFR 101.111(a)(2)).
    13. The Third Reconsideration Order reviewed whether the flexible 
LMDS construction rule, which requires LMDS licensees to demonstrate 
substantial service during the 10-year licensed period in order to be 
granted license renewal, adversely impacts rural LECs and is 
inconsistent with section 309(j) of the statute. The Commission 
affirmed that the flexibility of the rule will promote efficient use of 
the spectrum, encourage service to rural areas, and prevent the 
warehousing of spectrum, which are consistent with the policies in 
section 309 (j). The Commission affirmed that specific construction 
benchmarks were not devised because of the broad range of new and 
innovative LMDS services, many of which are in the design stage. 
Stricter requirements could discourage participation in LMDS because 
the services and equipment are under development.
    14. The Third Reconsideration Order upheld the decision to 
designate the entire 300 megahertz in the 31 GHz band for LMDS and to 
terminate licensing under the previous service rules, which provided a 
point-to-point localized service in the 31 GHz band. In denying the 
petition for reconsideration to designate only 150 megahertz in the 31 
GHz band plan for LMDS, the Commission found that there was adequate 
support for its finding that the entire 300 megahertz should be 
designated to LMDS to ensure its potential for development of a full 
range of broadband telecommunications and video distribution services 
and to fulfill the Commission's obligation to designate spectrum for 
the most effective and efficient use.
    15. The Third Reconsideration Order reviewed the decision to 
dismiss the applications that were filed under the previous point-to-
point 31 GHz service rules and were pending at the Commission when the 
LMDS service rules were adopted for the 31 GHz band on March 11, 1997, 
in the Second Report and Order. On reconsideration, the dismissed 
applicants were allowed to refile the dismissed applications within 60 
days of the effective date of the Third Reconsideration Order under 
existing application rules in part 101 of the Commission's Rules (47 
CFR 101.1, et seq.). Operating rules were modified to permit the 31 GHz 
operations under the technical parameters that applied to previously 
authorized 31 GHz licenses.
    16. The Third Reconsideration Order permitted authorization of the 
same stations and services requested in the dismissed applications, but 
prohibited expansion of the authorized operations beyond the scope of 
the initial license. The new licensees and the existing 31 GHz 
licensees were directed to share the band with each other consistent 
with such authorizations under the previous rules. However, all 
operations in the new licenses will be authorized on a secondary basis 
to LMDS operations, and any such new 31 GHz operations are required not 
to interfere with LMDS operations and to accept any interference from 
LMDS. The Commission concluded that these unique circumstances 
prevented any adverse impact on LMDS operations to be provided in the 
31 GHz band and on the future licensing of the band under the LMDS 
service rules.
    17. Only entities that had applications dismissed when the Second 
Report and Order was adopted were eligible to refile such applications 
under the previous 31 GHz application rules for secondary authorization 
to LMDS. Similar treatment was not accorded to entirely new 
applications for future licensing under the previous 31 GHz services, 
because that would not alleviate concerns of potential harm to LMDS or 
benefit such future licensees in the face of incompatible LMDS 
operations. The Third Reconsideration Order, however, recognized the 
important public interest objectives of governmental entities that 
requested ongoing licensing of the 31 GHz band under the previous 31 
GHz service rules for traffic control systems that meet Federal goals 
to reduce vehicular traffic congestion and air pollution. Several 
alternative means were identified by which such governmental entities 
may still acquire authorization for spectrum use or can otherwise 
obtain the traffic services they need.
    18. The Third Reconsideration Order reviewed the Order on 
Reconsideration issued in conjunction with the Second Report and Order 
that upheld the decision to dismiss several hundred waiver applications 
for authority to provide LMDS in the 28 GHz band under the previous 28 
GHz service rules. The Commission denied petitioners' claims on further 
reconsideration that dismissal of their 28 GHz waiver applications was 
the result of retroactive rulemaking and disparate treatment, and 
should not have been summarily dismissed. The Commission explained that 
an applicant has no vested right to a continuation of the substantive 
standards in effect at the time an application was filed and, thus, the 
waiver applicants had no vested rights that were affected. In addition, 
unless a waiver of the rules was granted as the applicants requested, 
applications that failed to comply with the 28 GHz licensing rules 
under which they were filed may be dismissed summarily.

[[Page 9446]]

Supplemental Final Regulatory Flexibility Analysis

    19. As required by the Regulatory Flexibility Act, see 5 U.S.C. 603 
(RFA), a Final Regulatory Flexibility Analysis (FRFA) was incorporated 
in the Second Report and Order, Order on Reconsideration, and Fifth 
Notice of Proposed Rulemaking (Second Report and Order) in this 
proceeding. The Commission's Supplemental Final Regulatory Flexibility 
Analysis (SFRFA) in this Third Reconsideration Order reflects revised 
or additional information to that contained in the FRFA. The SFRFA thus 
is limited to matters raised in response to the Second Report and Order 
that are granted on reconsideration in the Third Reconsideration Order. 
This SFRFA conforms to the RFA, as amended by the Contract with America 
Advancement Act of 1996 (CWAAA), Public Law 104-121, 110 Stat. 846 
(1996), codified at 5 U.S.C. 601 et seq.

I. Need For and Objectives of the Action

    20. The actions taken in this Third Reconsideration Order are in 
response to petitions for reconsideration or clarification of the 
service rules, except competitive bidding rules, adopted in the Second 
Report and Order to implement the new Local Multipoint Distribution 
Service (LMDS) in the 28 GHz and 31 GHz frequency bands. The petitions 
are denied, except the petitions seeking reconsideration of the 
decision to dismiss the pending applications requesting authorization 
of 31 GHz services under the previous service rules. The rule changes 
adopted in the Third Reconsideration Order allow the dismissed 
applicants to refile their applications for the same 31 GHz 
authorization, but on a secondary basis to LMDS. The rule changes are 
intended to permit the limited 31 GHz services requested in the 
dismissed applications that include traffic control systems, among 
other services in the public interest, while reaffirming the 
Commission's decision to terminate future licensing of new applications 
under the previous 31 GHz service rules and designate the 31 GHz band 
for LMDS, which offers a wide array of telecommunications and video 
programming distribution services.

II. Summary of Significant Issues Raised by the Public in Response 
to the Final Regulatory Flexibility Statement

    21. No comments were received in direct response to the FRFA. In 
response generally to the Second Report and Order, the Commission 
received petitions, as well as ex parte letters and letters in support, 
that seek reconsideration, and also received oppositions to those 
petitions. Sierra Digital Communications, Inc (Sierra) requests that 
the dismissed 31 GHz applications be reinstated and the licensees given 
the same interference protections and relocation procedure that the 
Commission accorded incumbent 31 GHz licensees when it redesignated the 
31 GHz band for LMDS. Sierra argues that the potential public interest 
benefits in authorizing the requested services in the dismissed 
applications, which include public safety services and public 
expenditures, outweigh any benefits that may come from licensing 31 GHz 
for LMDS free of the requested services. Nevada Department of 
Transportation (Nevada DOT) requests that its applications and the 
applications of the Las Vegas Cities (Cities) for a traffic control 
system be granted on a temporary basis and secondary to LMDS in order 
to allow the implementation of equipment that was purchased and 
installed and to provide public safety services while the licensees 
seek an alternative technology or frequency band.
    22. CellularVision USA, Inc. (CellularVision) and Texas Instruments 
(TI) oppose the requests. They contend that authorization of the 31 GHz 
operations in the dismissed applications is inconsistent with the 
decision to designate the 31 GHz for LMDS and that the operations would 
interfere with LMDS, result in enforcement problems for LMDS, and 
precipitate other applications for similar relief.

III. Description and Estimate of the Number of Small Entities to 
Which Rules Will Apply

    23. The rule changes adopted in the Third Reconsideration Order 
would apply to a specific number of entities that had pending 
applications for authorization of 31 GHz services on file that were 
dismissed when the Commission adopted the Second Report and Order on 
March 11, 1997. We estimate that there are approximately 10 dismissed 
applicants with several dismissed applications, based on Commission 
records. The dismissed applicants are permitted to refile the dismissed 
applications and obtain a license to provide the 31 GHz services 
designated in the band before the Commission designated the band for 
LMDS. No new applicants may request such 31 GHz authorization. Also, no 
new applications may be filed by the dismissed applicants, which may 
only refile the dismissed applications.
    24. The FRFA found that the rules adopted at that time would apply 
to all incumbent 31 GHz licensees providing 31 GHz services under the 
previous 31 GHz service rules. The Commission determined the 
description and estimate of the number of small entities among the 
total number of 31 GHz licensees based on the licensed services and 
their qualifications as small entities. Of the total number of 86 
licensees, 59 were Local Television Transmission Service (LTTS) 
licensees, 8 were private business licensees, and 19 were governmental 
entities. To determine which of the licensees qualified as small 
entities, the Commission estimated the number of governmental entities 
with populations less than 50,000, but was unable to determine which of 
LTTS licensees or private business licensees were small. To ensure that 
no small interests were overlooked, the Commission assumed that most of 
the licensees were small entities and estimated that at least 50 of the 
86 licensees to be small entities.
    25. Since the revisions adopted in the Third Reconsideration Order 
do not apply to incumbent 31 GHz licensees, the estimates of small 
entities in the FRFA is not affected and does not need to be adjusted. 
The revisions instead apply to the small and specific number of 
dismissed applicants that requested 31 GHz licenses and are permitted 
to refile for the same services requested in the dismissed 
applications. There are a variety of dismissed applicants, including 
governmental entities and private businesses. Inasmuch as the total 
number of dismissed applicants is very small and only ten are 
estimated, the Commission assumed that all of these are small entities 
in order to ensure that no small interests are overlooked.

IV. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements

    26. The dismissed applicants have the option to refile applications 
for the same services requested in the dismissed applications within 60 
days following the effective date of the Third Reconsideration Order. 
Not all of the dismissed applicants may decide to refile their 
dismissed applications. The filing fees were refunded to the dismissed 
applicants that paid fees. The applicants may only apply for the same 
stations and services contained in the dismissed applications, and the 
licenses will be secondary to LMDS licenses. All of the dismissed 
applications requested service authorizations that are governed by the 
established licensing, operating, and technical rules and procedures in 
part 101 of the Commission's Rules (47 CFR 101.1 et seq.). Thus, the 
data

[[Page 9447]]

required for refiling the dismissed applications were collected on the 
dismissed applications and the refiling requirement does not require 
new information nor impose any undue burdens on the dismissed 31 GHz 
applicants, including small businesses.

V. Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    27. The rule changes adopted in the Third Reconsideration Order are 
in response to petitions for reconsideration filed by entities that, 
for purposes of this analysis, we have considered to be small entities. 
The changes minimize any significant economic impact on small entities 
consistent with our objectives in adopting the rule changes and 
consistent with the comments we received.
    28. The requests of Sierra, Nevada DOT, and other commenters are 
granted to permit the 31 GHz operations requested in the dismissed 
applications. Although the Commission determined that terminating 
future licensing under the 31 GHz rules is consistent with the public 
interest in designating the 31 GHz band for LMDS, the Commission found 
that permitting the operations reflected in the dismissed applications 
and modified by the Order is an exception based on unique circumstances 
that is in the public interest. Nevada DOT demonstrates that dismissal 
of the considerable number of applications to implement the Las Vegas 
traffic control system would not spare the unnecessary expenses 
identified in the Second Report and Order, but rather would prevent the 
use of purchased and installed equipment until a replacement technology 
is found. To the extent that applicants have already invested in 
constructing these systems, the system could be implemented during the 
inception of LMDS without substantial additional investment for 
retooling or relocation at this time.
    29. Although Sierra requests that the Commission reinstate the 
dismissed applications, the Commission decided that providing the 
dismissed applicants with the opportunity to refile the applications is 
a more reasonable approach to licensing the dismissed applications. The 
filing fees were returned to the dismissed applicants that paid fees. 
The Third Reconsideration Order reaffirmed the dismissal of the pending 
applications, but without prejudice to their being refiled within 60 
days of the effective date of the Third Reconsideration Order to 
provide applicants time to consider whether to refile. Circumstances 
have changed since the pending applications were filed and reinstated 
applications may not reflect the applicant interests or intentions. The 
new licenses will be secondary to LMDS licenses and limited to the 
scope of the services authorized, without modification for expansion. 
Dismissed applicants that do not wish to operate in this manner have 
the option to not reapply.
    30. The Commissioners decided to permit the dismissed applicants to 
refile the applications for licensed authorization under the 
established licensing procedures in part 101, which governed the 
dismissed applications. Licenses will be issued for a 10-year period 
and may be renewed, which provides Nevada DOT more opportunity to 
implement its services than the temporary license it requested. As for 
CellularVision's concern that allowing the refiling of the dismissed 
applications will encourage the filing of similar applications, only 
the applications that were dismissed in the Second Report and Order may 
be refiled and they are limited to the same stations and services 
contained in the pending applications. The number of applicants are 
very few and the scope of their services is already identified in the 
dismissed applications, so that uncertainties about the impact of the 
refiling opportunity should be reduced.
    31. The Commission decided to authorize any licenses based on the 
dismissed applications on a secondary basis to LMDS, so that such 31 
GHz licensees may not interfere with LMDS and must accept any 
interference from LMDS. As noted, the Commission considered the 
concerns of CellularVision and TI about potential interference with 
LMDS operations. Under a license that is secondary to LMDS licenses, 
the licensees are prevented from adversely impacting LMDS and are 
required to modify their systems to eliminate interference or seek 
alternative access to frequencies. As the Commission concluded, it is 
in the public interest to allow these important traffic control 
facilities to continue to operate as long as they do not interfere with 
future LMDS operations. In addition, the new licensees may provide 
service to the full extent permitted under the license, but are not 
permitted any expansion or increase in operations, further minimizing 
any impact of the new 31 GHz services on LMDS.
    32. Thus, the Commission declined to grant Sierra's request to 
accord the new licensees the same interference protection against LMDS 
that the Commission adopted in the Second Report and Order for non-LTTS 
licensees in the outer 150 megahertz segment of the 31 GHz band. That 
protection was based on the needs of existing 31 GHz licensees that had 
well-established traffic control systems or private business services 
that were licensed before LMDS was designated for the band, 
circumstances which do not apply here. Moreover, Nevada DOT requests 
that the dismissed applications, including the considerable number of 
its own and those of the Cities, be subject to secondary status to LMDS 
to accommodate LMDS concerns and facilitate the authorization of the 
dismissed applications in light of the redesignation of the band for 
LMDS. On balance, permitting the licensing of the limited operations 
requested in the few dismissed applications on a secondary basis to 
LMDS will prevent the undue economic hardships to small entities that 
seek to implement the proposed services, while preventing any chilling 
effect on the potential development of LMDS in 31 GHz by new LMDS 
licensees that are small entities.

VI. Report to Congress

    33. The Commission will send a copy of this Supplementary Final 
Regulatory Flexibility Analysis, along with the Third Reconsideration 
Order, in a report to Congress pursuant to the Small Business 
Regulatory Enforcement Fairness Act of 1996, see 5 U.S.C. 801(a)(1)(A). 
A copy of the Third Reconsideration Order and this SFRFA (or summary 
thereof) be sent to the Chief Counsel for Advocacy for the Small 
Business Administration.

Ordering Clauses

    34. Accordingly, it is ordered that the actions of the Commission 
herein are taken pursuant to sections 4(i), 257, 303(r), and 309(j) of 
the Communications Act of 1934, 47 U.S.C. 154(i), 257, 303(r), 309(j).
    35. It is further ordered that the late-filed letters of CommPare, 
Inc., CSG Wireless, Inc., State of Nevada Department of Transportation, 
Parsons Transportation Group, Inc., and Westec Communications, Inc., 
are accepted.
    36. It is further ordered that the Petitions for Reconsideration 
filed by the Independent Alliance, LBC Communications, LDH 
International, Inc., M3 Illinois Telecommunications Corporation, the 
Rural Telecommunications Group, Sierra Communications, Inc., and Webcel 
Communications, Inc., are granted to the extent indicated herein and 
otherwise are denied.
    37. It is further ordered that the Motion for Stay Pending Review 
of Petition for Reconsideration filed by LDH International, Inc., is 
denied.

[[Page 9448]]

    38. It is further ordered that the Commission's Rules are amended 
as set forth in the Rule Changes.
    39. It is further ordered that the applications that were dismissed 
in the Second Report and Order are permitted to be refiled under the 
terms and conditions in this Third Reconsideration Order and shall be 
filed no later than 60 days following the effective date of this Order.
    40. It is further ordered that the provisions of this Order and the 
Commission's Rules, as amended in the Rule Changes, shall become 
effective 60 days after publication in the Federal Register.
    41. It is further ordered that the Director, Office of Public 
Affairs, shall send a copy of this Order, including the Supplemental 
Final Regulatory Flexibility Analysis, to the Chief Counsel for 
Advocacy of the Small Business Administration in accordance with 
section 603(a) of the Regulatory Flexibility Act, 5 U.S.C. 603(a).

List of Subjects in 47 CFR Part 101

    Radio, Reporting and recordkeeping requirements.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.

Rule Changes

    Part 101 of Chapter I of Title 47 of the Code of Federal 
Regulations is amended as follows:

PART 101--FIXED MICROWAVE SERVICE

    1. The authority citation for part 101 continues to read as 
follows:

    Authority: 47 U.S.C. 154, 303, 309(j), unless otherwise noted.

    2. Section 101.57 is amended by revising paragraph (a)(1) to read 
as follows:


Sec. 101.57  Modification of station license.

    (a)(1)(i) Except as provided in paragraph (a)(1)(ii) of this 
section and in Sec. 101.59, no modification of a license issued 
pursuant to this part (or the facilities described thereunder) may be 
made except upon application to the Commission.
    (ii) The provisions of paragraph (a)(1)(i) of this section shall 
not apply in the case of:
    (A) Licenses authorized for operation in the 31,000-31,300 MHz band 
prior to March 11, 1997;
    (B) Non-Local Multipoint Distribution Service licenses authorized 
for such operation in the band pursuant to applications refiled no 
later than April 27, 1998; and
    (C) The Local Multipoint Distribution Service as provided in 
Sec. 101.61(c)(10).
* * * * *
    3. Section 101.103 is amended by adding paragraph (b)(3) as 
follows:


Sec. 101. 103  Frequency coordination procedures.

* * * * *
    (b) * * *
    (3) Non-LMDS operations in the entire 31,000-31,300 MHz band 
licensed after March 11, 1997, based on applications refiled no later 
than April 27, 1998 are unprotected with respect to each other and 
subject to harmful interference from each other.
    (i) Such operations and any operations licensed prior to March 11, 
1997, in the band are unprotected with respect to each other and 
subject to harmful interference from each other.
    (ii) Such operations are licensed on a secondary basis to LMDS 
operations licensed in the band, may not cause interference to LMDS 
operations, and are not protected from interference from LMDS 
operations.
    (iii) Such operations licensed on a point-to-point basis may not be 
extended or otherwise modified through the addition of point-to-point 
links. Such operations licensed on a point-to-radius basis may add 
additional stations within the licensed area.
* * * * *
    4. Section 101.107 is amended by revising footnote 8 in paragraph 
(a) to read as follows:

Sec. 101.107  Frequency tolerance.

    (a) * * *
    \8\ For stations authorized prior to March 11, 1997, and for 
non-Local Multipoint Distribution Service stations authorized 
pursuant to applications refiled no later than April 27, 1998, the 
transmitter frequency tolerance shall not exceed 0.030 percent.
* * * * *
    5. Section 101.113 is amended by revising footnote 8 in paragraph 
(a) to read as follows:

Sec. 101.113  Transmitter power limitations.

    (a) * * *
    \8\ For stations authorized prior to March 11, 1997, and for 
non-Local Multipoint Distribution Service stations authorized 
pursuant to applications refiled no later than April 27, 1998, the 
transmitter output power shall not exceed 0.050 watt.
* * * * *
    6. Section 101.147 is amended by revising footnote 16 in paragraph 
(a) and by revising the introductory text of paragraph (u) to read as 
follows:

Sec. 101.147  Frequency assignments

    (a) * * *
    \16\ As of June 30, 1997, frequencies in these bands are 
available for assignment only to LMDS radio stations, except for 
non-LMDS radio stations authorized pursuant to applications refiled 
no later than April 27, 1998.
* * * * *
    (u) 31,000-31,300 MHz. Stations licensed in this band prior to 
March 11, 1997, may continue their authorized operations, subject to 
license renewal, on the condition that harmful interference will not be 
caused to LMDS operations licensed in this band after June 30, 1997. 
Non-LMDS stations licensed after March 11, 1997, based on applications 
refiled no later than April 27, 1998 are unprotected and subject to 
harmful interference from each other and from stations licensed prior 
to March 11, 1997, and are licensed on a secondary basis to LMDS. In 
the sub-bands 31,000-31,075 MHz and 31,225-31,300 MHz, stations 
initially licensed prior to March 11, 1997, except in LTTS, and LMDS 
operations authorized after June 30, 1997, are equally protected 
against harmful interference from each other in accordance with the 
provisions of Sec. 101.103(b). For stations, except in LTTS, permitted 
to relocate to these sub-bands, the following paired frequencies are 
available: * * *
* * * * *
    7. Section 101.803 is amended by revising note 7 of paragraph (a) 
and revising note 9 of paragraph (d) to read as follows:

Sec. 101.803  Frequencies.

    (a) * * *
    \7\ As of June 30, 1997, frequencies in this band only are 
available for assignment to LMDS radio stations, except for non-LMDS 
radio stations authorized pursuant to applications refiled no later 
than April 27, 1998. Stations authorized prior to June 30, 1997, may 
continue to operate within the existing terms of the outstanding 
licenses, subject to renewal. Non-LMDS stations authorized pursuant 
to applications refiled no later than April 27, 1998 shall operate 
on an unprotected basis and subject to harmful interference from 
similarly licensed stations or stations licensed prior to June 30, 
1997, and on a secondary basis to LMDS radio stations.
    (d) * * *
* * * * *
    \9\ As of June 30, 1997, frequencies in this band only are 
available for assignment to LMDS radio stations, except for non-LMDS 
stations authorized pursuant to applications refiled no later than 
April 27, 1998. Stations authorized prior to June 30, 1997, may 
continue to operate within the existing terms of the outstanding 
licenses, subject to renewal. Non-LMDS stations authorized pursuant 
to applications refiled no later than April 27, 1998 shall operate 
on an unprotected basis and subject to harmful interference from 
each other or stations licensed prior to June 30, 1997, and on a 
secondary basis to LMDS radio stations.
* * * * *
[FR Doc. 98-4750 Filed 2-24-98; 8:45 am]
BILLING CODE 6712-01-P