[Federal Register Volume 64, Number 244 (Tuesday, December 21, 1999)]
[Proposed Rules]
[Pages 71373-71377]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-33005]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 101

[CC Docket No. 92-297; FCC 99-379]


Local Multipoint Distribution Service

AGENCY: Federal Communications Commission

ACTION: Notice of proposed rule making.

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SUMMARY: The Commission's rules for the Local Multipoint Distribution 
Service (LMDS) prohibit an incumbent local exchange carrier (LEC) or 
incumbent cable company, or any entity with an attributable interest in 
these incumbents, from having an attributable interest in an A-block 
LMDS license whose geographic service area significantly overlaps the 
incumbent's service area. This LMDS eligibility rule will sunset on 
June 30, 2000, unless the Commission extends it. This document seeks 
comment on whether to allow the restriction to sunset, or to extend the 
restriction.

DATES: Submit comments on or before January 21, 2000; submit reply 
comments on or before February 11, 2000.

ADDRESSES: Send comments and reply comments to the Office of the 
Secretary, Federal Communications Commission, 445 12th St SW, 
Washington, DC 20554. See Supplementary Information for information 
about electronic filing.

FOR FURTHER INFORMATION CONTACT: Stacy Jordan or John Spencer, 202-418-
1310.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Sixth 
Notice of Proposed Rule Making (Sixth NPRM) in CC Docket No. 92-297 
(including the associated Initial Regulatory Flexibility Analysis), FCC 
99-379, adopted December 1, 1999, and released December 13, 1999. The 
complete text of the Sixth NPRM and Initial Regulatory Flexibility 
Analysis is available on the Commission's Internet site, at 
www.fcc.gov. It is also available for inspection and copying during 
normal business hours in the FCC Reference Information Center, 
Courtyard Level, 445 12th Street, SW, Washington, DC, and may be 
purchased from the Commission's copy contractor, International 
Transcription Services, Inc., CY-B400, 445 12th Street SW, Washington, 
DC. Comments may be sent as an electronic file via the Internet to 
http://www.fcc.gov/e-file/ecfs.html, or by e-mail to [email protected].

Synopsis of the Sixth NPRM

    1. The LMDS allocation consists of two primary blocks of spectrum: 
an A block consisting of 850 MHz at 27.5 GHz, 150 MHz at 29 GHz, and 
150 MHz at 31 GHz; and a B block consisting of 150 MHz at 31 GHz. The 
LMDS allocation is unusual in both the size of the allocation and the 
extent to which the spectrum is unencumbered.
    2. When the Commission adopted final LMDS rules in 1997, it assumed 
that the LMDS spectrum allocation provided a rare opportunity for 
facilities-based providers of local exchange services, multi-channel 
video programming distribution (MVPD) services, broadband data 
services, or all of the above. In order to foster competition, the 
Commission imposed in 47 CFR 101.1003 a short-term ownership 
eligibility rule prohibiting incumbent local exchange carriers (LECs) 
or cable companies from having an attributable interest in an LMDS A-
block license that overlaps with ten percent or more of the population 
in their service areas. This decision was based on four considerations: 
the most likely uses for LMDS; the then-current market structure for 
local exchange services and MVPD services, and whether the incumbent 
operators in these markets would have the incentive to attempt to 
forestall competition in their respective markets; whether an 
eligibility restriction would be the best means to promote competition; 
and whether efficiencies would be lost if the LMDS spectrum were 
operated by

[[Page 71374]]

providers other than the incumbent cable operators and local exchange 
carriers.
    3. The first LMDS products are just now becoming available in the 
United States, and LMDS remains a nascent market whose evolution is 
uncertain. Our research suggests that in the near term, LMDS may be 
used primarily to provide high-speed data and Internet services to 
small and medium-sized businesses rather than to provide services, 
especially MVPD services, to single-family residences. Possible other 
services include: video conferencing, tele-medicine, distance learning, 
closed-circuit applications, and backhaul or backbone applications. An 
industry segment aiming to provide service akin to typical landline 
service (including lifeline telephone service with directory 
assistance) has yet to emerge. CLEC holders of LMDS licenses plan to 
bundle local exchange services with high-speed data and Internet access 
services.
    4. A number of factors may affect the development and deployment of 
these markets and the types of services offered using the LMDS 
spectrum. The characteristics of LMDS spectrum and equipment help 
determine the uses to which it will be put. Due to propagation 
limitations, LMDS will likely be used not as a stand-alone network, but 
as a ``roof-top'' means to complement or extend other existing 
networks. Compared to fiber, LMDS's lower cost and shorter deployment 
time make it an effective means of reaching the last mile. At the end 
of that last mile are likely to be small and medium-sized businesses in 
urban and suburban areas, as the propagation characteristics of LMDS 
favor taller buildings.
    5. While multiple dwelling units may be served by LMDS in three to 
five years, there is a significant question whether the cost of the 
customer premises equipment (CPE) will forestall a business case for 
single-family homes for many years. Estimates for the cost of the CPE 
range from $5,000 to $7,000. The radio frequency hazard potential of a 
microwave service like LMDS may always require professional 
installation, precluding cost-saving consumer installation. The 
subscribers would also have to generate enough revenue to establish a 
hub from which their remote would receive a signal. The costs to 
establish a hub range from $300,000 to $400,000, which could become 
prohibitive given that the range for LMDS is limited to one-to-three 
miles.
    6. Service affordability is another issue for the residential 
market. A residential market demand for broadband services at prices 
profitable to LMDS licensees may not exist if consumers are unwilling 
to pay substantially higher prices for the advantages of broadband. 
Early cable broadband services have experienced low penetration rates, 
which may indicate a reluctance of residential consumers to pay a high 
subscriber fee for high-speed Internet access. However, these early 
figures may underestimate the actual residential market for high-speed 
data and Internet access.
    7. Deployment of LMDS systems could be delayed or hampered by lack 
of building access. LMDS licensees are encountering difficulties 
negotiating roof right-of-way agreements and overcoming inside-wiring 
issues. Another possible source of delay is the lack of equipment for 
the 150 MHz LMDS B block and the upper 300 MHz of the LMDS A block. The 
A-and B-block allocations are unique to the U.S. The lack of 
international frequency harmonization and the potential interference 
between the A and B blocks have been blamed for increased equipment 
development time and costs. Once production commences, the shorter 
production runs on specialized equipment may frustrate the attainment 
of scale economies.
    8. Finally, several competing technologies are capable of 
delivering broadband services. Most residential and small business 
consumers access the Internet via the ILEC and relatively slow modems. 
The residential market is beginning to see high-speed services via 
coaxial cable, ILEC xDSL, and satellite. The rules for LMDS, MMDS, 24 
GHz, and 39 GHz allow point-to-point and point-to-multipoint services, 
and these licensees appear to be targeting the same populations, small 
and medium-sized businesses. These frequencies, however, vary somewhat 
in their propagation characteristics, distance limitations, and 
spectrum allocations.
    9. The Sixth NPRM seeks comment broadly on the question whether the 
LMDS restriction should be allowed to sunset on June 30, 2000, or 
should be extended. The rule provides that the restriction will 
terminate unless we ``extend its applicability based on a determination 
that incumbent LECs or incumbent cable companies continue to have 
substantial market power in the provision of local telephony or cable 
television services.'' Consistent with our findings that incumbent LECs 
and cable television providers continue to hold dominant positions in 
the local telephony and MVPD services markets, this standard would 
suggest that we extend the applicability of the eligibility 
restriction. We have significant questions, however, about whether this 
standard remains the appropriate one for evaluating whether we should 
extend the restriction, or whether a different standard is more 
appropriate.
    10. We therefore seek comment generally on the standard that we 
should apply in making this decision, as well as on alternative 
standards. For example, our analysis in the LMDS Report and Order \1\ 
suggests that the true harm to competition may lie not in the incumbent 
local exchange carriers' or cable companies' power in their respective 
markets, but in the incumbents' incentive and ability to foreclose LMDS 
as a source of competition in their own or related markets. Thus, we 
could extend the sunset of the eligibility rule upon a finding that the 
incumbent local exchange carriers and cable companies possess the 
incentive and ability to purchase the LMDS block to prevent entry of a 
competitor. Alternatively, we seek comment on whether we should use the 
test adopted in the 39 GHz Report and Order.\2\ There, we ``inquired 
whether open eligibility poses a significant likelihood of substantial 
competitive harm in specific markets, and, if so, whether eligibility 
restrictions are an effective way to address that harm.'' We seek 
comment on whether we should require that this test be met before 
extending the LMDS eligibility restriction. Finally, we seek comment on 
the sufficiency of case-by-case review of license transfers and 
assignments to safeguard against anti-competitive acquisition of LMDS 
licenses if the eligibility rule is allowed to sunset.
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    \1\ 62 FR 23148, Apr. 29, 1997.
    \2\ 63 FR 3075, Jan. 21, 1998.
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    11. We seek comment on the likely course of LMDS market 
development, particularly LMDS licensees' and equipment manufacturers' 
current expectations for LMDS and the markets most likely to be 
targeted by the licensees. More specifically, we seek comment on the 
characteristics, technical and otherwise, of the services most likely 
to be provided over LMDS. We seek comment on whether LMDS will be used 
to provide typical landline service in some geographic areas and to 
what consumer groups. We seek comment on whether LMDS licensees expect 
to use LMDS to deliver MVPD services to single-dwelling residential 
customers and/or multi-dwelling residential customers in any geographic 
areas. Further, we seek comment on the characteristics of the consumers 
to which these services will be directed. Finally, we seek comment on 
what broadband applications, if any, are

[[Page 71375]]

likely to be provided by LMDS licensees, and the characteristics of the 
consumers that will be targeted.
    12. We also plan to evaluate whether we should extend the 
eligibility restriction to avert the possibility of incumbent LECs and 
cable companies acquiring LMDS to forestall new facilities-based 
competition for broadband services. The net benefits of extending the 
eligibility restriction will depend on a number of factors, including 
whether the LMDS A block can serve as a facilities-based medium for 
broadband services, and whether this spectrum is unique in both its 
size and extent to which it is unencumbered. We seek comment on whether 
the net benefits of extending the eligibility restriction may be 
greater than the net benefits of permitting the incumbents to acquire 
the LMDS A block.
    13. We seek comment on the extent and robustness of residential 
consumer demand for broadband services. We invite comment on the extent 
the cost and line-of-sight limitations of LMDS might hamper the ability 
of LMDS to provide effective competition to either the ILECs' or the 
cable operators' broadband means of access into the home or very small 
businesses. We seek comment on whether technological advances and 
increasing deployment will improve equipment range and lower equipment 
costs. We also seek comment on the extent to which affordability 
enhancing innovations like equipment leasing may emerge as an 
alternative to outright equipment purchase, particularly for CPE.
    14. We seek comment on whether the capability of LMDS to provide 
high-speed data and Internet telecommunications would give incumbents a 
strategic incentive to acquire LMDS spectrum to forestall the use of 
LMDS as a means of access for another facilities-based provider of 
broadband services, and whether we should retain the LMDS eligibility 
restriction for at least some period in order to prevent such a result. 
With respect to cable, if the cable industry primarily serves 
residential areas and likely LMDS service will be to small-and medium-
sized businesses, we seek comment on whether we should restrict 
incumbent cable companies' use of the LMDS spectrum to serve business 
needs for high-speed data and Internet access.
    15. We invite comment about the extent to which LMDS, MMDS, 24 GHz, 
39 GHz, and other media that might offer consumers broadband access are 
substitutable. We seek comment on the degree to which LMDS, MMDS, 24 
GHz, 39 GHz, and other frequencies could be used to offer consumers 
similar services at similar prices; whether the size of the LMDS 
allocation and its lack of encumbrances provide advantages to the 
license holder over alternative frequencies; and whether the 
limitations and the cost of LMDS will hamper the ability of LMDS to 
provide effective competition for services provided by either the 
incumbent LECs or cable operators. We seek comment on the limitations 
(capacity, rain fade, and line of sight) of these other wireless 
services relative to LMDS. We seek comment on the extent to which the 
time-to-market leads of the 24 MHz and 39 MHz licensees yield 
competitive advantages in high-speed data and Internet access that 
could handicap LMDS licensees. Given the similarities between LMDS and 
24 GHz and 39 GHz spectrum, we seek comment on the implications of the 
lack of eligibility restrictions at the latter two frequencies.
    16. We seek comment on whether the broadband offerings by ILECs and 
incumbent cable operators justifies extending the restriction to either 
ILECs or incumbent cable companies, or both. We seek comment on the 
likelihood that LMDS, if used for broadband, will provide effective 
competition against incumbent LECs' and cable operators' broadband 
offerings. Specifically, we invite comments on the incumbent LECs' and 
cable operators' most likely footprints for broadband services. Cable 
operators' current coverage areas do not lend themselves to providing 
broadband access to businesses. We invite comment on the present reach 
of cable networks and the ease with which these networks could be 
extended to reach business subscribers. In addition, we seek comment on 
whether the ILECs are likely to provide xDSL services to a large 
segment of residential or business customers. We seek comment on 
whether the equipment cost and deployment cost of LMDS relative to 
ILECs' T-1 leased lines or xDSL will disadvantage LMDS in the market. 
To the extent LMDS and a T-1 line are substitutes, the falling prices 
for T-1 leased lines may diminish the profitability of LMDS service.
    17. We seek comment on the significance of uncertainty in the 
market for the eligibility restriction. There are uncertainties 
regarding how LMDS equipment will continue to evolve; how fast LMDS 
equipment costs will fall; how much difficulty licensees will encounter 
negotiating roof right-of-way agreements, interconnection agreements, 
and other necessary negotiations to provide services; and how the 
domestic LMDS market will develop. These uncertainties may have led 
firms to hold off investments until there is less uncertainty in the 
market, and may warrant delaying the sunset of the eligibility 
restriction. We seek comment on these concerns and on whether the 
Commission should extend the eligibility restriction to allow the 
market more time to reveal how LMDS and competing media will be 
marketed and deployed.
    18. Finally, we note that uncertainty in the market impacts bond 
and stock market activity. The uncertainty surrounding LMDS may spill 
over into the capital markets and impede the efforts of LMDS licensees 
to raise debt and equity capital. We seek comment on the effect of 
extending, or not extending, the eligibility restriction on LMDS 
licensees' access to capital. While extending the eligibility 
restriction might encourage investment, lifting the restriction could 
have a similar effect: that is, large investors currently prohibited 
from doing so might acquire significant stakes in LMDS licensees, 
stimulating investment therein. We seek comment on both scenarios. We 
also seek comment on the concerns of small entities on the various 
issues discussed above.

Summary of Initial Regulatory Flexibility Analysis

    19. As required by the Regulatory Flexibility Act (RFA),\3\ the 
Commission has prepared an Initial Regulatory Flexibility Analysis 
(IRFA) of the possible economic impact on small entities by the 
policies and rules suggested in this Sixth NPRM. Written public 
comments are requested on the IRFA. Comments should be identified as 
responses to the IRFA, and must be filed by the deadlines for comments 
on the Sixth NPRM provided above. The Commission will send a copy of 
the Sixth NPRM, including this IRFA, to the Chief Counsel for Advocacy 
of the Small Business Administration (SBA).
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    \3\ U.S.C. 603. The RFA, 5 U.S.C. 601 et seq., has been amended 
by the Contract with America Advancement Act, Pub. L. 104-121, 110 
Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the Small 
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).
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    20. Need for and Objectives of the Proposed Rule: In this Sixth 
NPRM, the Commission seeks comment on whether to allow the eligibility 
restriction for the Local Multipoint Distribution Service (LMDS) set 
out in 47 CFR 101.1003(a) to sunset as scheduled, or to extend the 
restriction. As discussed in detail above, various policy reasons might 
dictate action for or against the sunset.
    21. Legal Basis: See Authority section, below.
    22. Description and Estimate of the Number of Small Entities to 
Which the

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Actions Taken May Apply: The RFA directs agencies to provide a 
description of and, where feasible, an estimate of the number of small 
entities that may be affected by the action taken. The RFA generally 
defines the term ``small entity'' as having the same meaning as the 
terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' \4\ In addition, the term ``small 
business'' has the same meaning as the term ``small business concern'' 
under the Small Business Act.\5\ A small business concern is one that: 
(1) Is independently owned and operated; (2) Is not dominant in its 
field of operation; and (3) Satisfies any additional criteria 
established by the Small Business Administration (SBA).\6\ Below, we 
further describe and estimate the number of small business concerns 
that may be affected by the actions taken in this Sixth NPRM.
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    \4\ 5 U.S.C. 601(6).
    \5\ U.S.C. 601(3) (incorporating by reference the definition of 
``small business concern'' in 15 U.S.C. 632). Pursuant to the RFA, 
the statutory definition of a small business applies ``unless an 
agency, after consultation with the Office of Advocacy of the Small 
Business Administration and after opportunity for public comment, 
establishes one or more definitions of such term which are 
appropriate to the activities of the agency and publishes such 
definition(s) in the Federal Register.'' 5 U.S.C. 601(3).
    \6\ Small Business Act, 15 U.S.C. 632.
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    23. The SBA has defined a small business for Standard Industrial 
Classification (SIC) categories 4812 (Radiotelephone Communications) 
and 4813 (Telephone Communications, Except Radiotelephone) to be small 
entities when they have no more than 1,500 employees.\7\ We first 
discuss the number of small telecommunications entities falling within 
these SIC categories, then attempt to refine further those estimates to 
correspond with the categories of telecommunications companies that are 
commonly used under our rules, and that may be affected by this Sixth 
NPRM.
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    \7\ 13 CFR 121.201.
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    24. Total Number of Telecommunications Entities Affected. The 
Census Bureau reports that, at the end of 1992, there were 3,497 firms 
engaged in providing telephone services, as defined therein, for at 
least one year.\8\ This number contains a variety of different 
categories of entities, including local exchange carriers, 
interexchange carriers, competitive access providers, cellular 
carriers, mobile service carriers, operator service providers, pay 
telephone operators, PCS providers, covered SMR providers, and 
resellers. It seems certain that some of those 3,497 telephone service 
firms may not qualify as small entities or small incumbent LECs because 
they are not ``independently owned and operated.'' For example, a PCS 
provider that is affiliated with an interexchange carrier having more 
than 1,500 employees would not meet the definition of a small business. 
It seems reasonable to conclude, therefore, that fewer than 3,497 
telephone service firms are small entity telephone service firms or 
small incumbent LECs that may be affected by the actions taken in this 
Second Report and Order.
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    \8\ 1992 Census of Transportation, Communications, and 
Utilities: Establishment and Firm Size, Bureau of the Census, U.S. 
Dept. of Commerce, at Firm Size 1-123 (1995) (1992 Census).
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    25. The most reliable source of current information regarding the 
total numbers of common carrier and related providers nationwide, 
including the numbers of commercial wireless entities, appears to be 
data the Commission publishes annually in its Carrier Locator report, 
derived from filings made in connection with the Telecommunications 
Relay Service (TRS).\9\ According to data in the most recent report, 
there are 3,604 interstate carriers. These include, inter alia, local 
exchange carriers, wireline carriers and service providers, 
interexchange carriers, competitive access providers, operator service 
providers, pay telephone operators, providers of telephone toll 
service, providers of telephone exchange service, and resellers.
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    \9\ Carrier Locator: Interstate Service Providers, Fig. 1 (Jan. 
1999) (Carrier Locator). See also 47 CFR 64.601-.608.
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    26. We have included small incumbent local exchange carriers (LECs) 
in this RFA analysis. As noted above, a ``small business'' under the 
RFA is one that, inter alia, meets the pertinent small business size 
standard (e.g., a telephone communications business having 1,500 or 
fewer employees), and ``is not dominant in its field of operation.'' 
The SBA's Office of Advocacy contends that, for RFA purposes, small 
incumbent LECs are not dominant in their field of operation because any 
such dominance is not ``national'' in scope.\10\ We have therefore 
included small incumbent LECs in this RFA analysis, although we 
emphasize that this RFA action has no effect on FCC analyses and 
determinations in other, non-RFA contexts.
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    \10\ Letter from Jere W. Glover, Chief Counsel for Advocacy, 
SBA, to William E. Kennard, Chairman, FCC (May 27, 1999). The Small 
Business Act contains a definition of ``small business concern,'' 
which the RFA incorporates into its own definition of ``small 
business.'' See 15 U.S.C. 632(a) (Small Business Act); 5 U.S.C. 
601(3) (RFA). SBA regulations interpret ``small business concern'' 
to include the concept of dominance on a national basis. 13 CFR 
121.102(b). Since 1996, out of an abundance of caution, the 
Commission has included small incumbent LECs in its regulatory 
flexibility analyses. Implementation of the Local Competition 
Provisions of the Telecommunications Act of 1996, CC Docket No. 96-
98, First Report and Order, 11 FCC Rcd 15499, 16144-45 (1996).
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    27. Wireline Carriers and Service Providers (SIC 4813). The Census 
Bureau reports that there were 2,321 telephone communications companies 
other than radiotelephone companies in operation for at least one year 
at the end of 1992.\11\ All but 26 of the 2,321 non-radiotelephone 
companies listed by the Census Bureau were reported to have fewer than 
1,000 employees. Thus, even if all 26 of those companies had more than 
1,500 employees, there would still be 2,295 non-radiotelephone 
companies that might qualify as small entities or small incumbent LECs. 
Although it seems certain that some of these carriers are not 
independently owned and operated, we are unable at this time to 
estimate with greater precision the number of wireline carriers and 
service providers that would qualify as small business concerns under 
SBA's definition. Consequently, we estimate that there are fewer than 
2,295 small entity telephone communications companies other than 
radiotelephone companies that may be affected by the actions taken in 
this Sixth NPRM.
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    \11\ 1992 Census, supra, at Firm Size 1-123.
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    28. Local Exchange Carriers. Neither the Commission nor SBA has 
developed a definition of small LECs. The closest applicable definition 
for these carrier-types under SBA rules is for telephone communications 
companies other than radiotelephone (wireless) companies.\12\ The most 
reliable source of information regarding the number of these carriers 
nationwide of which we are aware appears to be the data that we collect 
annually in connection with the TRS. According to our most recent data, 
there are 1,410 LECs. Although it seems certain that some of these 
carriers are not independently owned and operated, or have more than 
1,500 employees, we are unable at this time to estimate with greater 
precision the number of these carriers that would qualify as small 
business concerns under SBA's definition. Consequently, we estimate 
that there are fewer than 1,410 small entity LECs or small incumbent 
LECs that may be affected by the actions taken in this Sixth NPRM.
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    \12\ 13 CFR 121.210, SIC Code 4813.
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    29. A-Block LMDS Providers. The total number of A-block LMDS 
licenses is limited to 493, one for each Basic

[[Page 71377]]

Trading Area.\13\ The Commission has held auctions for all 493 
licenses, in which it defined ``very small business'' (average gross 
revenues for the three preceding years of not more than $15 million), 
``small business'' (more than $15 million but not more than $40 
million), and ``entrepreneur'' (more than $40 but not more than $75 
million) bidders.\14\ There have been 99 winning bidders that qualified 
in these categories in these auctions, all of which may be affected by 
the actions taken in this Sixth NPRM.
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    \13\ 47 CFR 101.1005, 101.1007.
    \14\ 47 CFR 101.1107(a)-(c), 101.1112.
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    30. Cable Services or Systems. The SBA has developed a definition 
of small entities for cable and other pay television services, which 
includes all such companies generating $11 million or less in revenue 
annually.\15\ This definition includes cable systems operators, closed 
circuit television services, direct broadcast satellite services, 
multipoint distribution systems, satellite master antenna systems and 
subscription television services. According to the Census Bureau data 
from 1992, there were 1,788 total cable and other pay television 
services and 1,423 had less than $11 million in revenue.
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    \15\ 13 CFR 121.201, SIC 4841.
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    31. The Commission has developed its own definition of a small 
cable system operator for the purposes of rate regulation. Under the 
Commission's rules, a ``small cable company'' is one serving fewer than 
400,000 subscribers nationwide.\16\ Based on our most recent 
information, we estimate that there were 1,439 cable operators that 
qualified as small cable system operators at the end of 1995. Since 
then, some of those companies may have grown to serve over 400,000 
subscribers, and others may have been involved in transactions that 
caused them to be combined with other cable operators. Consequently, we 
estimate that there are fewer than 1,439 small entity cable system 
operators.
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    \16\ 47 CFR 76.901(e). The Commission developed this definition 
based on its determination that a small cable system operator is one 
with annual revenues of $100 million or less. Implementation of 
Sections of the 1992 Cable Act: Rate Regulation, Sixth Report and 
Order and Eleventh Order on Reconsideration, 10 FCC Rcd 7393 (1995), 
60 FR 10,534 (Feb. 27, 1995).
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    32. The Communications Act also contains a definition of a small 
cable system operator, which is ``a cable operator that, directly or 
through an affiliate, serves in the aggregate fewer than 1 percent of 
all subscribers in the United States and is not affiliated with any 
entity or entities whose gross annual revenues in the aggregate exceed 
$250,000,000.'' \17\ The Commission has determined that there are 66 
million subscribers in the United States. Therefore, we found that an 
operator serving fewer than 660,000 subscribers shall be deemed a small 
operator, if its annual revenues, when combined with the total annual 
revenues of all of its affiliates, do not exceed $250 million in the 
aggregate.\18\ Based on available data, we find that the number of 
cable operators serving 660,000 subscribers or less totals 1,450. We do 
not request nor do we collect information concerning whether cable 
system operators are affiliated with entities whose gross annual 
revenues exceed $250 million, and thus are unable at this time to 
estimate with greater precision the number of cable system operators 
that would qualify as small cable operators under the definition in the 
Communications Act. It should be further noted that recent industry 
estimates project that there will be a total of 66 million subscribers.
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    \17\ 47 U.S.C. 543(m)(2).
    \18\ 47 U.S.C. 76.1403(b).
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    33. Description of Projected Reporting, Recordkeeping and Other 
Compliance Requirements: In this Sixth NPRM we seek comment on whether 
to allow the existing LMDS eligibility restriction to sunset. These 
actions impose no reporting, recordkeeping or other compliance 
requirements.
    34. Steps Taken to Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered: This Sixth NPRM is a 
broad inquiry into whether there continues to be a need for an LMDS 
ownership restriction. It seeks comment on the present and likely 
future nature of the marketplace for various services that may be 
offered using LMDS spectrum, the costs and benefits of a restriction, 
and appropriate criteria for evaluating whether to extend the 
restriction. It also seeks the views of small businesses on the various 
issues raised.
    35. Federal Rules That May Overlap, Duplicate, or Conflict with the 
Proposed Rules: There are no federal rules that overlap, duplicate or 
conflict with 47 CFR 101.1003(a).
    36. Report to Congress: The Commission will send a copy of this 
Sixth NPRM, including this IRFA, in a report to Congress pursuant to 
the Small Business Regulatory Enforcement Fairness Act of 1996.\19\ In 
addition, the Commission will send a copy of this Sixth NPRM, including 
this IRFA, to the Chief Counsel for Advocacy of the Small Business 
Administration. Summaries of this Sixth NPRM and IRFA will be published 
in the Federal Register.
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    \19\ See 5 U.S.C. 801(a)(1)(A).
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List of Subjects in 47 CFR Part 101

    Communications, local multipoint distribution service.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 99-33005 Filed 12-20-99; 8:45 am]
BILLING CODE 6712-01-P