DA 01-1072 April 25, 2001 IN THE MATTER OF EXTENSION OF THE FIVE-YEAR BUILD-OUT PERIOD FOR BTA AUTHORIZATION HOLDERS IN THE MULTIPOINT DISTRIBUTION SERVICE Comment Date: May 9, 2001 Reply Comment Date: May 16, 2001 By the Chief, Mass Media Bureau: 1. Pursuant to Sections 1.3 of the Commission's rules, 47 C.F.R.  1.3, the Mass Media Bureau ("Bureau"), on its own motion, hereby seeks comment on a proposal to extend the current five-year build- out requirement imposed upon Basic Trading Area ("BTA") authorization holders in the Multipoint Distribution Service ("MDS") by two years. In March 1996, the Commission completed its auction of the remaining unused MDS spectrum with the expectation that such spectrum would be used for the provision of wireless cable services. The United States was divided into 493 BTAs and these markets were auctioned to the highest bidders. Pursuant to 47 C.F.R.  21.930, BTA authorization holders have five years from the grant date of the initial BTA authorization to construct, develop and expand MDS station operations in their respective protected service areas. Specifically, within five years of the grant, the BTA authorization holder must construct MDS stations to provide signals that are capable of reaching at least two-thirds of the population of the service area, excluding the populations within protected service areas of incumbent stations. The purpose of this requirement was to ensure that service was promptly delivered to the public. See 47 U.S.C.  309(j)(4)(B). On August 16, 1996, the Commission granted 334 of the 493 BTA authorizations to 54 different entities. These BTA authorization holders will be the first entities to reach the five-year build-out date of August 16, 2001. By this Public Notice, we seek comment on our proposal to extend the five-year build-out requirement set forth in 47 C.F.R.  21.930 by two years, as described below. 2. Traditionally, MDS spectrum has been used to deliver multichannel video programming services similar to cable television. As noted above, the Commission auctioned 493 BTAs for the provision of these wireless cable services. Since the 1996 auction, the MDS industry has been rapidly evolving. In July 1996, the Commission's Digital Declaratory Ruling permitted licensees to digitize their MDS spectrum. In October 1996, the Commission allowed MDS operators to use their spectrum for high-speed digital data applications, including Internet access. 3. In March 1997, the Wireless Cable Association International, Inc., along with over 100 participants, petitioned the Commission to grant the industry the right to use MDS and Instructional Television Fixed Service ("ITFS") spectrum for two-way services. Two-way authorization would effectively enable voice, video, and data over the spectrum. In 1998, the Commission approved the use of two-way transmissions on MDS and ITFS frequencies. In the two-way proceeding, the Commission decided to: (1) permit both MDS and ITFS licensees to provide two-way services on a regular basis; (2) permit increased flexibility on permissible modulation types; (3) permit increased flexibility in spectrum use and channelization, including combining multiple channels to accommodate wider bandwidths, dividing 6 MHz channels into smaller bandwidths, and channel swapping; (4) adopt a number of technical parameters to mitigate the potential for interference among service providers and to ensure interference protection to existing MDS and ITFS; (5) simplify and streamline the licensing process for stations used in cellularized systems; and (6) modify the ITFS programming requirements in a digital environment. 4. In the initial filing window for two-way service, which was held August 14 - 18, 2000, MDS and ITFS licensees filed approximately 2,267 applications. On April 6, 2001, the Bureau released its first Public Notice announcing the grant of 1,024 of these applications. The Bureau will continue to grant additional two-way applications and on April 16, 2001, the Bureau began the transition to the rolling one- day filing window procedure. 5. Section 21.930(c)(1) of the Commission's rules, 47 C.F.R.  21.930(c)(1), provides that within five years of the grant of a BTA authorization, the authorization holder must construct MDS stations to provide signals pursuant to Section 21.907, 47 C.F.R.  21.907, that are capable of reaching at least two- thirds of the population of the applicable service area, excluding the populations within protected service areas of incumbent stations. In addition, sixty days prior to the end of the five-year build-out period, the BTA authorization holder must file with the Commission proof that demonstrates that the holder has met the build-out requirements. 47 C.F.R.  21.930(c)(2). 6. The build-out benchmarks were originally established in order to ensure that BTA authorization holders would promptly deliver their anticipated video programming service to the public. We propose to extend the five-year build-out requirement as set forth in Section 21.930(a)(1) of the Commission's rules, 47 C.F.R.  21.930(a)(1), by two years. In light of the service rule changes promulgated in the Two-Way Order, the timing of the initial filing window, the recent two-way application grants allowing BTA authorization holders to provide broadband service, the forthcoming grants of other pending two-way applications, and the upcoming August 16, 2001 build-out deadline for many BTAs, we tentatively conclude that extension of the five-year build-out requirement by two years for all BTAs will promote the maximization of efficient and effective use of this service. We believe that it would be inequitable to require authorization holders to follow build-out criteria applicable to rules governing wireless cable operations since many of them are now providing high-speed broadband services. We tentatively conclude that requiring BTA authorization holders to meet the five-year construction build-out requirement would be unreasonable, would not promote efficient use of the spectrum, and would be contrary to the public interest. 7. Accordingly, by this Public Notice, we propose to extend the five-year build-out requirement by two years. For MDS BTA authorization holders whose build-out requirement ends on August 16, 2001, the new build-out deadline would be August 16, 2003. For BTA authorization holders whose build-out requirement ends after August 16, 2001, the new build-out deadline would be two years from the date that the original five-year deadline was to have taken place. 8. Persons making oral ex parte presentations are reminded that memoranda summarizing the presentations must contain summaries of the substance of the presentations and not merely a listing of the subjects discussed. More than a one or two sentence description of the views and arguments presented is generally required. See 47 C.F.R.  1.1206(b). Other rules pertaining to oral and written ex parte presentations in permit-but disclose proceedings are set forth in Section 1.1206(b) of the Commission's rules, 47 C.F.R.  1.1206(b). 9. Comments must be filed on or before May 9, 2001, and reply comments by May 16, 2001. All documents filed in this proceeding should indicate in the caption that this matter is before the Mass Media Bureau and reference Public Notice DA No. 01-1072. Comments may be filed via the Commission's Electronic Comment Filing System (ECFS) via the Internet to http:/ www.fcc.gov/e - file/ecfc.html>. In completing the transmittal screen, commenters should include their full name and Postal Service mailing address, and reference Public Notice DA No. 01-1072. Parties may also submit electronic comments by Internet e-mail. To get filing instructions for e-mail comments, commenters should send an e-mail to: ecfs@fcc.gov, including "get form '' in the body of the message. A sample form and directions will be sent in reply. Interested parties who choose to file by paper must file an original and four copies of their comments with the Office of the Secretary, Federal Communications Commission, 445 Twelfth Street, S.W., Room TW-A325, Washington, D.C. 20554. In addition, parties should send: one paper copy to Brad Lerner, Room 2-A733, Mass Media Bureau, Federal Communications Commission, 445 Twelfth Street, S.W., Washington, D.C. 20554; one paper copy to the Reference Information Center, Federal Communications Commission, 445 Twelfth Street, S.W., 20554; and one paper copy and one diskette copy to ITS, Room CYB-400, 445 Twelfth Street, S.W., Washington, D.C. 20554. For further information, contact Brad Lerner of the Mass Media Bureau, at 202-418-7066 (email: blerner@fcc.gov). - FCC -