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The HomePhone unit looks and functions like a conventional telephone and supports call waiting, conference calling, call transfer, voice mail,  X14one-touch redial, and other features."1& yO'ԍIn addition to an AC power adapter, the phone comes with a 12-volt DC power pack that can be used  yOH'during power outages or, for example, when the customer wants to take the phone outside. Centennial de Puerto  {O'Rico, Centennial Scores a First with CDMA Fixed Wireless Phones (visited Feb. 26, 1999)  HomePhone service costs $29.95 per month for 250  X 4offpeak minutes and 30 peak minutes.F\ & {OS'ԍUn Telefone Que Se Activa Con Solo Enchufarlo, Promotional Flyer, Centennial de Puerto Rico, Mar. 3, 1999. Additional minutes cost extra. There is also a plan costing $39.95 per month, which includes 500 off {O'peak minutes and 90 peak minutes.  Id.F This rate is for fixed use only: subscribers incur  X 4additional charges if they use the phone as a mobile unit. & {O`'ԍUn Telefone Que Se Activa Con Solo Enchufarlo, Promotional Flyer, Centennial de Puerto Rico, Mar. 3, 1999. The phone can either be leased or  X 4purchased. & {O'ԍId. There is a $69.95 activation charge if you lease the phone. The unit costs $299. Id.ġ All calls within Puerto Rico are local and incoming calls are free. Z & {O5 'ԍBringing Local Loop to Puerto Rico, Wireless Business & Technology, Jan. 1998, at 27. Centennial does not charge for incoming calls because it is compensated by Puerto Rico Telephone Co., the local LEC, for connecting them.  X 4Western Wireless Co.("WWC") ĩ WWC is operating fixed wireless systems in Nevada and North Dakota using its cellular licenses. Under an agreement reached between Nevada Bell, the Nevada Public Service Commission, and WWC to expand basic telephone service to a previously unserved region, WWC provides dialtone service to two small rural communities,"y ,O(O(  "  X4Antelope Valley and Reece, using its cellular infrastructure. $& yOy'ԍAccording to the WWC, it was able to bring service to the region with approximately $100,000 worth of infrastructure improvements. WWC claims it would have cost over $1 million to provide wired service to the  {O 'approximately 50 customers in the region.  Western Wireless Seeks Universal Service Fund Subsidies for Rural  {O'Operations, PCS Week, Jul. 22, 1998. Operating basically as a subcontractor to Nevada Bell, WWC provides service at the regular tariffed wireline local rate  X4to the 50 residents of the region._ Z& {O7'ԍWestern Wireless Seeks Universal Service Fund Subsidies for Rural Operations, PCS Week, Jul. 22, 1998. Nevada Bell makes up the difference between the tariffed rate and WWC's cellular rates. Conversation with Christopher Johnson, Manager, Regulatory Affairs, Western Wireless Corp., Mar. 18, 1999._ Users connect to the PSTN by way of a laptopsized unit  X4provided by WWC. The unit is basically a cellular phone with a phone jack. & yOB 'ԍThe prototype unit, made by Telular Corp., costs approximately $500, but is expected to be about half  yO 'that price in mass production. Sound quality and data rates are those of WWC's AMPSbased cellular system in  yO 'that area. Conversation with Christopher Johnson, Manager, Regulatory Affairs, Western Wireless Corp., Mar. 18, 1999. In the small town of Regent, North Dakota, WWC set up a similar network, but as a CLEC  Xv4and without support from the state.$v & yO'ԍWestern Wireless spent $350,000 building a cell site near town and leased 2,000 phone numbers from  {O'the local telephone company for $320 per month. Bryan Gruley, Battle Lines: As Phone Wars Move to Rural Towns, Tactics Are Growing Rougher; Fighting for Clients, Cash from Subsidies, Upstart Finds Its Main Cable  {O?'Cut; 'Not the 900-Pound Gorilla,' The Wall Street Journal, Feb. 10, 1999 ("Gruley"). Inaugurated on January 7, 1999,v& yO'ԍNorth Dakota Governor Edward Shafer and Western Wireless CEO John Stanton placed the inaugural calls on Regent's new system to North Dakota Senator Byron Dorgan and Federal Communications Commission  yOa'Chairman William Kennard. Regent, ND is the home town of Sen. Dorgan. WirelessNow, Jan. 8, 1999. WWC picked Regent because Sen. Dorgan, addressing an industry conference two years ago, challenged Mr. Stanton to demonstrate that he could provide competition in Regent and thereby show that wireless technology can provide  {O'competition anywhere. Gruley. it was turned off four  X_4days later by Consolidated Telephone Cooperative ("CTC"), the ILEC for the area._$& {O4'ԍIncumbent Shuts Down Competitive Wireless LEC: Service Is 'Unauthorized,' Communications Daily, Jan. 12, 1999. CTC, through which WWC connected to the PSTN, disconnected WWC's customers, claiming that WWC's interconnection agreement permitted "cellular calls and not . . . competitive local  X 4exchange service."7 ~& {OI"'ԍId.7 After a phone conference with the North Dakota Public Service Commission and the Federal Communications Commission, CTC agreed to reconnect WWC's  X 4customers.f\ & {O%'ԍND LEC Cuts Western Wireless Service, WirelessNow, Jan. 18, 1999 .  {Ow&'However, litigation in this case continues.  See, e.g., Expedited Motion for Preliminary Injunctive Relief of Western Wireless Corp., Western Wireless Corp. v. Consolidated Telephone Cooperative, Case No. PU156499"A',O(O(M'"ԫ yO'17 (N.D. P.S.C. filed Jan. 15, 1999); Complaint of Western Wireless Corp., Western Wireless Corp. v. Consolidated Telephone Cooperative (FCC filed Jan. 29, 1999).f As of February 8, 1999, WWC had signed up 40 customers, 20 percent of the"  ,O(O(  F "  X4town's 268 residents.f & yO'ԍCTIA Notebook, Communications Daily, Feb. 9, 1999.f WWC's fixed local loop service is priced at $14.99 per month versus  X4$16.00 for CTC5& {OJ'ԍGruley.5 and the local calling area includes 15 communities versus two communities  X4for CTC.6XB& yO 'ԍCTIA Notebook, Communications Daily, Feb. 9, 1999. WWC CEO John Stanton claims that WWC  yO 'provides service at a fraction of the $200 monthly per subscriber subsidy covered by the Universal Service Fund.   {MU 'Id.6  X4AT&T In February 1997, AT&T announced the development of a "revolutionary fixed  X4wireless technology," codenamed "Project Angel."b & {O'ԍAT&T's Breakthrough Wireless Technology New Alternative for Local Service, News Release, AT&T Corp., Feb. 25, 1997. The system, operating on AT&T's broadband PCS spectrum, was to provide subscriber households with two phone lines and the  X_4capability for high-speed Internet access at 128 kbps."_ & yO'ԍThe new system was designed to connect a consumer's home to an AT&T digital switching center via a neighborhood antenna mounted on a utility pole or other structure. A single antenna could serve up to 2,000 homes. The only new equipment required on the customer's house is a transceiver about the size of a pizza box  {O$'that can be mounted on the side or back of a house.  Id.ľ After running field trials of the  XH4system in Chicago in late 1997,H& {O'ԍFixed Wireless Service: Questions & Answers, AT&T Corp. Promotional Brochure, May 1997. AT&T put the project on hold, reportedly because of  X14concern over high implementation costs.18& {O'ԍPeter Elstrom, AT&T's Wireless Path to Local Service: "Project Angel" Will Back Up Ma Bell's Cable  {O'Forays, Business Week, Dec. 28, 1998. In February 1999, AT&T announced that it would  X 4resume tests of Project Angel.e & {O_'ԍCell Phones, PDAs Merge, PCS Week, Feb. 15, 1999.e In May, the company began offering free fixed wireless  X 4service in Dallas a part of its testing of the system. && {O 'ԍDallas Tapped for Project Angel Fixed Wireless Trial, WirelessNow, May 20, 1999. AT&T plans to introduce local  X 4commercial voice and data services in select cities by 2000. & {O$'ԍCell Phones, PDAs Merge, PCS Week, Feb. 15, 1999. There are other trials as well. For example, in October 1998, Pioneer Holdings, LLC, owned by Long Line Limited, MCI, and Northwest Iowa Power Cooperative (NIPCO), joined two other companies in launching a fixed wireless access trial to 25 customers  {Ow&'outside of Hayward, IA. Karissa Todd, The Road to Local Competition, Wireless Review, Nov. 30, 1998. See  {OA''also, Pioneer Holdings, LLC, Projects (visited Feb 28, 1999)"A',O(O(C'" ." X,O(O(   "Ԍ  X4 ` ` 2. 2 GHz to 4 GHz Commercial and trial services in these bands, primarily by wireless cable licensees, target both business and residential customers.  Xv4` `  a. Wireless Cable  XH4MMDS licensees, also referred to as "wireless cable" operators,~HX& yOQ 'ԍMultichannel Video Programming Distributors ("MVPD") that use microwave frequencies in the multichannel multipoint distribution service ("MMDS"), multipoint distribution service ("MDS"), and instructional television fixed service ("ITFS") to transmit video programming to subscribers equipped with special rooftop  {O 'antennas are typically referred to as MMDS or wireless cable systems. See Annual Assessment of the Status of  {Os'Competition in the Market for the Delivery of Video Programming, Third Annual Report, 12 FCC Rcd 4358, 4386 n. 152 (1997).~ originally purchased licenses in the 2 GHz spectrum band to provide television programming to residential customers. However, many MMDS operators found it difficult to compete with cable in this market due  X 4to the high capital costs of building out wireless cable systems & {O'ԍHeartland Wireless and Wireless One Dropping Video Focus, Communications Daily, Mar. 22, 1999  {OR'("Comm. Daily 3/22/99"). and the lower channel capacities of MMDS relative to those of wireline cable and directtohome satellite  X 4companies.& 0 & {O'ԍSee Annual Assessment of the Status of Competition in Markets for the Delivery of Video  {O'Programming, Fifth Annual Report, FCC 98335 (rel. Dec. 23, 1998), at  82. The maximum capacity of analog MMDS is 33 channels, while 62 percent of all cable television subscribers received at least 54 channels in  {O'October 1998. See Id., at  1921, 82. These difficulties resulted in low subscriber numbers and financial strain for  X 4several MMDS companies.  & yO'ԍIn April 1998, Standard & Poor's lowered its debt rating on all wireless cable companies to CCC+ or  {OU'lower, stating that analog wireless was not a viable competitor to cable. S&P Says Analog Wireless Cable Isn't  {O'Viable, Downgrades Industry, Communications Daily, Apr. 17, 1998. On July 30, 1998, CAI Wireless Systems, Inc. declared bankruptcy. CAI Wireless Systems, Inc., Form 8K, Aug. 4, 1998. On October 7, 1998, Heartland  {O'Wireless Systems, Inc. declared bankruptcy.  S&P Says Analog Wireless Cable Isn't Viable, Downgrades  {O{ 'Industry, Communications Daily, Apr. 17, 1998. However, as an innovative business opportunity, many wireless  X 4cable companies have begun to focus on offering highspeed Internet access! & {O"'ԍSee Table 1 at F16 for a summary of Internet access offerings by wireless cable operators. Heartland's  {O#'Bankruptcy May Set Back 2Way Wireless Internet, Communications Daily, Oct. 9, 1998; Wireless Cable Told to  {O$'Focus on Wholesaling, Internet, Communications Daily, Oct. 27, 1998; MMDS Companies Realign Their  {OT%'Interests; Announce Cooperation on Flexible 2Way Use of Their Spectrum, News Release, Heartland Wireless  yO&'Communications, Inc., Dec. 3, 1998.#x6X@`7X@#э and telephony" V!,O(O(   "  X4instead of television programming, and have shown early success in these endeavors."Z& {Oy'ԍSee Wireless Communications Association International Comments, at 21, Annual Assessment of the Status of Competition in Markets for the Delivery of Video Programming, CS Docket No. 98102 (Jul. 31, 1998). The Commission's September 1998 order authorizing wireless cable operators to offer twoway services cleared the way for another major competitor to enter the broadband services  X4market.'#\& {O? 'ԍSee Amendment of Parts 1, 21, and 74 to Enable Multipoint Distribution Service and Instructional  {O 'Television Fixed Service Licensees to Engage in Fixed TwoWay Transmission, Report and Order, FCC 98231 (rel. Sep. 25, 1998).' The Commission's Order established a framework for allowing MMDS operators to offer, quickly and easily, twoway highspeed Internet access service, as well as other two Xv4way services, such as telephony, video conferencing, and distance learning.$^v& {O5'ԍSee Mike Farrell, Wireless Ops Hope TwoWay Ruling Helps, Multichannel News, Sep. 28, 1998, at 3,  {O'32 ("Farrell"); Annual Assessment of the Status of Competition in Markets for the Delivery of Video  {O'Programming, Fifth Annual Report, FCC 98335 (rel. Dec. 23, 1998). Prior to the Order, MMDS operators sought waivers from the Commission to provide Internet access and used a telephone line modem for the upstream connection. In March 1999, Wireless One, Inc. ("Wireless One") and Heartland Wireless Systems, Inc. (which changed its name to Nucentrix on April 1, 1999) announced that they would emerge from bankruptcy with business plans focused on offering highspeed Internet access mainly to  X 4small businesses and home offices.H% 4 & {O'ԍComm. Daily 3/22/99.H The companies stated they would not expand their video operations, but would continue operating their existing systems through partnerships with  X 4directtohome satellite companies.H& & {O'ԍComm. Daily 3/22/99.H Later that month, MCI WorldCom invested $200 million in four wireless cable companies including Wireless One, CAI Wireless Systems, Inc. ("CAI  Xy4Wireless"), People's Choice TV Corp., and CS Wireless Systems, Inc._'\yX & {O'ԍRebecca Blumenstein and Nicole Harris, MCI WorldCom Purchases the Debt of Group of Wireless {OL'Cable Concerns, The Wall Street Journal, Mar. 30, 1999; MCI WorldCom's Wireless Cable Plans Seen Widening  yO 'Broadband Options, Communications Dialy, Mar. 31, 1999._ Industry observers speculated that the investment would become a core part of MCI WorldCom's strategy for  XK4offering highspeed Internet access to consumers.1(K|& {Ox#'ԍId.1 In April 1999, MCI WorldCom acquired the remaining equity of CAI Wireless. During that same month, Sprint acquired People's"4(,O(O(  U"  X4Choice TV Corp. and American Telecasting.)& {Oy'ԍNicole Harris, Sprint to Purchase WirelessCable Firm American Telecasting for $167.8 Million, The  yOC'Wall Street Journal, Apr. 28, 1999. Almost all MMDS operators have stated that  X4they plan to offer more data and telephony services in 1999.{*"& {O'ԍ MMDS Industry Facts, Private Cable & Wireless Cable, Dec. 1998, at 13.{ In addition to the traditional wireless cable operators, there are several wireless cable licensees who were not previously video programming distributors, but instead provide Internet access. These entities tend to be startup companies using MMDS or lowpower television licenses. For example, IJNT International (formerly InterJetNet, Inc.) was founded  X_4in 1997 and now offers wireless Internet access in six cities.+_& {O 'ԍIJNT International/UrJet InterNet, UrJet Internet (visited Jun. 14, 1999) . SkyLynx Communications, Inc., operating at 2.4 GHz, was formed in 1996 and offers twoway, highspeed, advanced  X14data services in Florida and California.#,\1F& {O('ԍSkyLynx Communications, Inc. Announces Commencement of Trading, News Release, SkyLynx  {O'Communications, Inc., Jul. 30, 1998; SkyLynx Communications, Inc., Wireless Markets (visited Jun. 14, 1999) .# The company is focusing on small to medium sized businesses and Multiple Dwelling Units, such as apartment buildings and condominiums, in  X 4secondtier cities.'-\ j & {O'ԍSkyLynx Communications Enters Sarasota Wireless Market, News Release, SkyLynx Communications,  {O'Inc., Dec. 16, 1998; SkyLynx Communications, Inc., Welcome to SkyLynx (visited Feb. 23, 1999) .'  X 4` `  b. Other Providers  X 4CFW Communications ("CFW")ĩ CFW conducted a wireless local loop trial in 1998 using its MMDS spectrum. It was able to broadcast from a central cell site to terminals up to 30 miles away and obtained twoway voice capabilities with the quality of a landline connection.  Xb4CFW is considering building a WLL for commercial purposes..b & {O'ԍMarcia Martinek, Rural Regional & Remunerative, Wireless Review, Feb. 1, 1999.  X44Salt River PimaMaricopa Reservation On December 11, 1998, Arizona Senator McCain placed the inaugural call on an experimental fixed wireless system located on the Salt River  X4PimaMaricopa Reservation, a 56,000-acre Indian reservation near Scottsdale, AZ./ & {O#'ԍCarol Sowers, High-Tech Phones for Tribe Salt River Reservation 1st to Use Small Dish, The Arizona  {O$'Republic, Dec. 12, 1998 ("Sowers"). The system, using Nortel's "Proximity I" Fixed Wireless Access technology, operates at 3.5 GHz "|/,O(O(  "  X4and connects to users through a pizzasized dish.0\& {Oy'ԍDavid Trinkwon, Director Market development, Fixed Wireless Access, Nortel Networks, New Fixed  {OC'Wireless Access Solutions . . . Now "Alive" in the USA, Presentation to NARUC, Orlando, Florida, Nov. 6, 1998.  Attached to the exterior of a building, the  X4dish receives signals from a central 163-foot tall transmitter.51& {O'ԍSowers.5 The new system has been  X4installed in about 100 homes on the reservation of 6,000 people.2$~& {O 'ԍId. The service is operated by a tribal telecommunications division, Saddleback Communications, and its subcontractor, Mountain Telecommunications, Inc. David Trinkwon, Director Market Development, Fixed  {O 'Wireless Access, Nortel Networks, New Fixed Wireless Access Solutions . . . Now "Alive" in the USA, Presentation to NARUC, Orlando, Florida, Nov. 6, 1998. Monthly service for the  X4system costs about $13 and long distance calls are 10 cents a minute.;3j & {O 'ԍSowers.; The service includes  X4call waiting, voice mail, and three-way calling.14 & {OQ'ԍId.1 Antenna installation costs $60 and takes  X4about two hours.15 & {O'ԍId.1  X_4 ` ` 3. Upperbands (24 to 39 GHz) The largest commercial deployment of fixed wireless systems has occurred in the "upperbands" of the spectrum, in the 24 GHz (DEMS), 28 GHz (LMDS), and 39 GHz  X 4ranges.6Z & yO'ԍDEMS spans 24.25 25.25 GHz; LMDS spans 27.5 31.3 GHz; 39 GHz spans 38.6 - 40.0 GHz. 39  {O'GHz is often referred to as 38 GHz. See Table 2 at F18 for a summary of current service offerings by upperband operators. The most significant operators in these bands, Teligent, Inc. ("Teligent") and WinStar Communications, Inc. ("WinStar"), are concentrating on business customers.  X 4However, the recently auctioned LMDS spectrum may create more residential services.7 B& {O'ԍJeff Bounds, Uncertain Future: Will the Market Accept LMDS? Bosch, Others Gamble on New  {O'Technology, Dallas Business Journal, Jul. 3, 1998.  X 4  ` `  a. 24 GHz (DEMS)  Xy4Teligent Teligent provides a bundle of broadband fixed wireless telecom services to small  Xb4and medium sized businesses using its 24 GHz licenses.8b& {O%'ԍTeligent, Inc., New! Local Private Line Keeps Your Business Connected (visited Feb. 27, 1999) . Teligent has also made significant  XK4strides in its business since the writing of the Third Report. As of June 1999, the company"K8,O(O(  " had entered 28 markets covering 83 million people and plans to enter 12 additional markets  X4by the end of 1999.9& {Ob'ԍTeligent Brings More Bandwidth at Lower Cost to Seattle Small and MidSized Businesses, News  {O,'Release, Teligent, Inc., Jun. 8, 1999. See Appendix H, Map 13 at H13. Teligent's licenses cover 74 markets nationwide and the company plans  X4to enter all these markets by the end of 2001.:$& {O'ԍTeligent Reports Third Quarter Financial Results, Completes Launch of First 15 Markets, News Release, Teligent, Inc., Nov. 11, 1998. By the end of 1998, the company had  X4secured access rights to nearly 2,400 buildings and had installed 13 Nortel DMS switches.E;\~& {O 'ԍTeligent Reports 1998 Financial Results, Sets Operating Benchmarks for 1999, News Release, Teligent,  {O 'Inc., Mar. 1, 1999; Teligent Reports Third Quarter Financial Results, Completes Launch of First 15 Markets, News Release, Teligent, Inc., Nov. 11, 1998.E  X4` `  b. 28 GHz (LMDS)  X_4A Local Multipoint Distribution Service system is capable of offering subscribers a variety of one and twoway broadband services, such as video programming distribution, video teleconferencing, and wireless local loop telephony, as well as Internet access and other high speed data transmission services. Because of its multipurpose applications, LMDS has the potential to become a major competitor to local exchange carriers and cable television providers, although it appears that LMDS operators plan to concentrate on voice and data  X 4services.< & {O('ԍSee, e.g., Ken Freed, NextLink Slowly Positions for Big Wireless Play, Interactive Week, Feb. 15, 1999. There is currently only one operational, commercial LMDS provider: SPEEDUS.COM, Inc. (formerly Cellularvision USA). SPEEDUS.COM offers highspeed Internet access, up to 48 Mbps downstream, to business and residential users in Manhattan, Brooklyn, and Queens, NY.  Xb4The Commission completed an LMDS auction in March 1998.=b4 & {OG'ԍSee Appendix A, Tables 1 and 2 for summaries of the auction's design and outcome and Third Report  {O'Appendixes, at A6 for a list of high bidders. LMDS licensees plan to offer a mix of the fixed wireless services mentioned above, especially highspeed Internet  X44access and other data services.)>\4 & {Ou 'ЍSee WinStar Wins 15 LMDS Licenses in FCC Auction, News Release, WinStar Communications, Inc.,  {O?!'Mar. 26, 1998; Jeannine Aversa, Licenses for Wireless Service Auctioned, The Washington Post, Mar. 26, 1998, at C3.) While many are waiting for the technological standards and  X4specifications to be set and for the LMDS technology to mature,?& {O$'ԍCathy Stephens, Jumpstarting LMDS, Private Cable & Wireless Cable, Oct. 1998, at 18. some licensees have taken the first steps in building their networks. Some have signed contracts with equipment" F?,O(O(  " manufacturers, run trials of their networks, and/or have announced plans for service  X4offerings.@& {Oy'ԍSee Table 3 at F19 for a summary of current activity by recent LMDS auction winners. Most of these licensees are either established telecommunications companies that plan to expand their networks and enhance their service offerings or business ventures of utility companies that want to bring advanced services to rural areas not served by fiber. In October 1998, nine percent of LMDS licensees stated they planned to deploy their networks  X4within a year and 50 percent plan to offer services in the next three to five years.Aq& {O'ԍCathy Stephens, Jumpstarting LMDS, Private Cable & Wireless Cable, Oct. 1998, at 18. LMDS  Xv4operators are expected to offer their services mainly to small and medium sized businesses.B^v& {O* 'ԍCathy Stephens, Weighing the LMDS Architecture Options, Private Cable & Wireless Cable, Jan. 1999,  {O 'at 32 (quoting Phil Goetz, the chief architect for Lucent's broadband fixed wireless products); Q&A with Thomas  {O 'H. Jones of WNP Communications, Private Cable & Wireless Cable, Nov. 1998, at 50. Analysts predict that nine percent of broadband users will access the Internet via LMDS in  XH42003~CH)& {O"'ԍInternet Industry Facts, Private Cable & Wireless Cable, Dec. 1998, at 16.~ and that LMDS revenues will total $241 million in 1999 and over $6 billion by 2007.zDH& {O'ԍLMDS Industry Facts, Private Cable & Wireless Cable, Dec. 1998, at 11.z  X14The Commission has scheduled an auction of additional LMDS licenses for April 27, 1999.[EZ1M & yO/'ԍ"Auction of Local Multipoint Distribution Service Spectrum, Auction Notice and Filing Requirements for 168 Local Multipoint Distribution Service Licenses Scheduled for April 27, 1999, Minimum Opening Bids  {O'and Other Procedural Issues," Public Notice, DA 99-266 (rel. Jan. 29, 1999).[ In one of the major developments since the close of the first LMDS auction, Nextlink Communications, Inc. ("Nextlink") a CLEC currently operating 25 fiber networks in 15 states  X 4and the District of Columbia,F o & {O'ԍNextlink Communications, Inc., Cities We Serve (visited Jun. 14, 1999) . announced two major acquisitions. In January 1999, Nextlink announced its acquisition of WNP Communications, Inc. ("WNP") and completed the  X 4acquisition in April 1999.G & {O!'ԍNEXTLINK Communications To Acquire WNP Communications for $695 Million, News Release, Nextlink Communications, Inc., Jan. 14, 1999. On March 30, 1999, the FCC approved the assignment of WNP's licenses to Nextlink. "Wireless Telecommunications Bureau Public Safety and Private Wireless Division Grants  {O{ 'Consent to Assign Authorizations of WNP Cmmunications, Inc. and PCO Aquisition Corp.," Public Notice, DA  {OE!'99-610 (rel. Mar. 30, 1999); Nextlink Closes WNP Acquisition; Becomes Largest Holder of Fixed Wireless  {O"'Spectrum in North America, News Release, Nextlink Communications, Inc., Apr. 27, 1999. WNP was the largest bidder in the LMDS auction, having acquired 40 licenses covering 114 million POPs. In addition, Nextlink announced an agreement with Nextel to purchase Nextel's interest in LMDS licensee Nextband Communications, LLC ("Nextband"). Nextlink and Nextel each own 50 percent of Nextband, which purchased 42 licenses in the LMDS auction. This aquisition will make Nextlink the sole owner of Nextband. When the two deals are completed, Nextlink will own spectrum"4 IG,O(O(  U"  X4covering all of the top 30 U.S. markets, most of which it plans to enter by the end of 1999.MH& {Oy'ԍSee Appendix H, Map 14 at H14.M  X4The company plans to use the spectrum as a complement to its fiber networks.WI\Z& {O'ԍMcCaw's BigPicture Strategy Comes into Clearer Focus as Nextel Chief Consolidates Domestic LMDS  {O'Holdings, PCS Week, Jan. 27, 1999; McCaw Aims to Consolidate Domestic LMDS Spectrum Holdings,  yO'Communications Today, Jan. 15, 1999.W In June  X41999, Nextlink also purchased two million shares of SPEEDUS.COM, Inc.J~& {O 'ԍSPEEDUS.COM, Inc., SPEEDUS.COM, Inc. and Nextlink Sign $40 Million Pact, Nextlink Agrees to  {O 'Purchase Two Million Shares at $10 Per Share, News Release, SPEEDUS.COM, Inc., June 14, 1999.  X4` `  c. 39 GHz  Xv4WinStar WinStar uses its 28 GHz and 39 GHz licenses to provide a package of WLL services, which it collectively calls "Wireless Fiber." WinStar sells local, long distance, high speed data, Internet access, and information services to business customers and resells its  X14networks to other telecommunications carriers.K1& yO'ԍThese other carriers include CLECs, Competitive Access Providers ("CAPs"), interexchange carriers ("IXCs"), LECs, and Internet Service Providers ("ISPs"). WinStar has grown significantly since the  X 4writing of the Third Report. The company now offers wireless CLEC services in the top 30  X 4markets in the United StatesL 2 & {O'ԍ Winstar Communications, Inc., Business Services (visited Feb. 27, 1999)  {O'. See Appendix H, Map 15 at H15. and had 380,000 lines in service as of March 31, 1999.M & {OD'ԍWinStar Reports OnNet Building Penetration Jumps to 14 Percent, News Release, WinStar Communications, Inc., May 12, 1999. WinStar plans to compete in 40 markets by the end of 1999 and states that it has the financial  X 4capabilities to enter 50 cities in the U.S. and another 50 around the world.N$ & {Op'ԍ$2 Billion Winstar / Lucent Strategic Agreement to Expand Winstars Broadband Network, News Release, WinStar Communications, Inc., Oct. 22, 1998. In April 1998, WinStar purchased a 15 percent stake in  {O'Advanced Radio Telecom. WinStar to Purchase 14.9% of Advanced Radio Telecom Corp., Business Wire, Apr. 27, 1998. WinStar adopted a strategy of not only connecting individual businesses but entire buildings to its network by contracting with owners of corporate real estate. WinStar had obtained  X{4access rights to more than 4,800 commercial buildings nationwide by March 1999O{& {O$'ԍWinstar Reports First Quarter Results, News Release, WinStar Communications, Inc., May 12, 1999. and has plans to obtain access to a total of 8,000 buildings by the end of 1999. These access rights enable WinStar to provide a buildings tenants with a wide range of telecommunications"M fO,O(O(  x"  X4services.P& {Oy'ԍWinstar Achieves Access Rights to More Than 4,200 Commercial Buildings Nationwide, News Release, WinStar Communications, Inc., Dec. 17, 1998.  X4   X4Advanced Radio Telecom, Inc. ("ART") ART uses its 39 GHz licenses, as well as frame  X4relay and ATM technology, to offer highspeed Internet access and other Internet services.Q"& {O'ԍAdvanced Radio Telecom, Inc., Technical Information (visited Mar. 1, 1999) . Internet services include web hosting and ecommerce. ART began offering these services to business customers in Seattle, WA in September 1998,  X4and in Portland, OR and Phoenix, AZ in December 1998.MR|& {O 'ԍSee Appendix I, Map 16 at I16.M At the end of 1998, ART had access to 155 buildings, offered full network connectivity to 85 buildings, and had received 142 customer orders. In June 1999, Qwest Communications International Inc. purchased a 19 percent stake in ART. ART claims the investment will help the company fulfill its goal of building broadband wireless highspeed networks in 40 of the top 50 metropolitan areas over the next two years. ART plans to provide a full array of communications services including Internet access, Internet services, data transmission, fax, video conferencing, electronic  X 4commerce, and voice over IP.S & {O'ԍAdvanced Radio Telecom Corp. Announces Operating Results for Fourth Quarter 1998, News Release,  {Ou'Advanced Radio Telecom, Inc., Jan. 12, 1999; Advanced Radio Telecom Launches Internet Services in Portland,  {O?'News Release, Advanced Radio Telecom, Inc., Dec. 21, 1998; Advanced Radio Telecom Corp. Announces  {O 'Operating Results for Fourth Quarter 1998, News Release, Advanced Radio Telecom, Inc., Jan. 12, 1999;  {O'Advanced Radio Telecom, Inc., Who We Are (visited Mar. 1, 1999) . ART has stated that its spectrum licenses combined with Qwest's 18,500mile fiber network will allow ART to reach more than 50 percent of U.S.  X 4businesses.T & {O7'ԍQwest Communications and Investor Group Commit $251 Million to Advanced Radio Telecom To  {O'Expand Its HighSpeed Local Wireless Network, News Release, Advanced Radio Telecom Corp, June 1, 1999. ARTs nationwide 38 GHz licenses cover 49 of the top 50 and 90 of the top 100 U.S.  Xy4markets. In total, the licenses cover 210 markets with a population of over 186 million.Uy$& {ON'ԍAdvanced Radio Telecom Corp. Announces Operating Results for Fourth Quarter 1998, News Release, Advanced Radio Telecom, Inc., Jan. 12, 1999. In June 1998, ART purchased 23 additional 39 GHz licenses from Columbia Capital Corp. that  XK4cover 22 million POPs in 13 markets.bVK~& yOz#'ԍTelephony, Communications Daily, Jun. 4, 1998.b  X4 AT&T  Although AT&T owns 39 GHz licenses, there is little public information concerning" V,O(O(  2"  X4how the company is using them.MW& {Oy'ԍSee Appendix I, Map 17 at I17.M AT&T obtained the licenses through its acquisition of  X4Teleport Communications Group, Inc. ("TCG") , completed in July 1998.XZ& {O'ԍAT&T Completes TCG Merger; TCG Now Core of AT&T Local Services Network Unit, News Release, AT&T Corp., Jul. 23, 1998. At that time, TCG ,  X4now AT&T's business local services unit,Y& {O7'ԍTeleport Communications Group, Inc., TCG Home Page (visited Mar. 1, 1999) . was the largest fiberbased CLEC in the United States and had obtained the licenses through its acquisition of Biztel Communications, Inc. in 1996. TCG primarily used its digital, fiber optic networks to deliver services, but would rely on its 39 GHz spectrum to connect customers to its fiber networks, to provide temporary installation when its fiber networks were down, and to provide standalone facilities where the  X_4company did not have fiber networks.pZ_F& yOV'ԍTeleport Communications Group, Inc., Form 10K405, Dec. 31, 1996, at 10.p AT&T has said it plans to expand TCG's wireless  XH4local loop bypass business.[H& {O'ԍBill Menezes, MCI WorldCom Discovers Fixed Wireless, Wireless Week, Feb. 8, 1999, at 25.  X 4   C. Competitive Analysis  X 4` ` 1. Strengths In addition to providing new competition in existing markets, fixed wireless systems have the potential to provide new services and expand capacity into areas considered too expensive to enter using available wireline technologies. WLLs afford new entrants in a market direct access to an individual customer's building, limiting the reliance on LECs.  XK4Lower Network Deployment Costs Fixed wireless operators claim that their networks have a  X64significantly lower cost structure than wireline systems for two primary reasons.\6h & yOO'ԍAccording to a WinStar, it can cost up to 85 percent less to provide phone service through the air than  {O'through a fiber network. Suzanne King, Gaining a Foothold, Kansas City Business Journal, Nov. 13, 1998. First, wireless networks are free of the installation and maintenance costs incurred with wires. Second, unlike a wireline network in which an entire market must be wired before initiating service, the capital expenditures of a wireless network can be incrementally incurred as more customers are added. Because of this lower cost structure, operators have been able to charge significantly lower prices than wireline competitors for business services. Teligent, for example, offers its subscribers a flat monthly rate which is up to a 30 percent discount" \,O(O(  \"  X4compared to wireline providers.]|& yOy'ԍTo qualify for the maximum discount, customers switch their existing service -- local, long distance or Internet -- and sign up with Teligent for a minimum of one year. Teligent averages several representative bills from the customer's current carriers and deducts up to 30 percent. That figure becomes the customer's new flat monthly rate. Local and Internet service are unlimited. If customers wish to increase their long distance usage  {O'over current levels, they can purchase more service at what the company believes are attractive prices.  Teligent  {Oc'Introduces Revolutionary, Lower-Cost Communications Services In New Orleans, News Release, Teligent, Inc., Feb. 25, 1999.  X4High Capacity of Upperbandsĩ Upperband licensees have large blocks of spectrum at their disposal, permitting highcapacity services, such as video conferencing and superhighspeed Internet access. Winstar claims to offer 200 Mbps speeds on its multipoint systems, 1500  X4times faster than an ISDN line (128 Kbps).^ & {OL 'ԍSee Ex Parte presentation materials of Winstar Communications, Inc., CC Docket No. 9698; CS Docket 95184; CCBPol 979; CC Docket 98146; IB Docket No: 9795 (FCC filed Nov. 20, 1998). This capacity also permits providers to offer packages of local, longdistance, and Internet services.  XJ4Underserved Markets There are a number of market segments with low penetration by existing broadband wireline systems. For example, only a small percentage of office  X 4buildings have broadband access._ f & yO5'ԍEstimates of this large market vary. Teligent estimates that fiber networks today reach only 3 percent of the 750,000 office buildings in the U.S. (although the company conditions that that 3 percent actually reaches 35  {O'percent of "fiber-addressable businesses"). Nancy Gohring, Wireless Networks: Broadband Wireless Operators  {O'Build Their Case, Telephony, Jul. 6, 1998. Roberta Woods, director of Wireless Market Research at Pioneer Consulting, claims that 99 percent of the estimated 4.6 million commercial buildings in the United States are not  {O!'served by fiber. Charles Mason, LMDS: Huge Niche Technology, America's Network, Sep. 1, 1998. Fixed wireless operators can act as strategic partners with wireline CLECs who wish to extend their fiber networks more cheaply to such buildings. Many small and medium sized businesses, too low volume for expensive fiber connections,  X 4are also potential customers.6`X & yOn'ԍWinStar believes small and medium sized businesses constitute 60 percent of all businesses in the  yO6'United States and represent a market opportunity in excess of $30 billion per year.  Winstar Communications, Inc., Form 10K, Dec. 31, 1997, at 6.6 In addition, wireless access has the potential to improve competition and broadband services for residential customers in both urban and rural  X 4markets.xaZ & yO`!'ԍInquiry Concerning the Deployment of Advanced Telecommunications Capability to All Americans in a Reasonable and Timely Fashion, and Possible Steps to Accelerate Such Deployment Pursuant to Section 706 of  {O"'the Telecommunications Act of 1996, Report, CC Docket No. 98146 (rel. Feb. 2, 1999), at  4546.x  X}4 ` ` 2. Challenges Along with the competitive advantages described above, fixed wireless providers face a "O&a,O(O(  *" number of challenges in establishing service. The challenges mentioned below are in addition  X4to those faced by all CLECs such as obtaining interconnection agreements.bb& yOb'ԍAs for all CLECs, the successful negotiation of these agreements on favorable terms is essential to the success of WLL. In addition, in the near term, providers of WLL will still need to rely on LECs for many of  {O'the unbundled network elements required to provide telephone service (e.g., switching and operator services). As fixed wireless access providers expand their operations and begin to take customers from incumbent LECs, disputes such as the one between Western Wireless and Consolidated Telephone (see above) may become more common.b  X4  X4Access Barrier Issues Fixed wireless providers have noted a number of barriers to access to customers' premises. Such barriers include roof rights as well as related inside building facilities and inside wiring. Fixed wireless providers need rooftop access on apartment and office buildings to place their transmitting and receiving antennas. Providers also need access to inside conduits and physical pathways from the building owner. In addition, providers require access to the building's inside wiring and riser cables to connect to the customer's telephone system. Obtaining access can represent a long and tedious process, as individual contracts must be negotiated. Moreover, WinStar, Teligent, and others have claimed that certain building owners and managers have started to charge excessive fees, not based on a reasonable cost for access to roof and inside facilities, but as an opportunity to gather revenues. Such prices are discriminatory, they claim, as established incumbent LECs and cable providers are not asked  X4to pay such fees.`c\B& {O'ԍSee WinStar Communications, Inc.'s Comments at 5; Teligent, Inc.'s Comments at 68, filed in response to "Common Carrier Bureau Seeks Recommendations on Commission Actions Critical to the Promotion of  {O'Efficient Local Exchange Competition," Public Notice, 12 FCC Rcd 10,343 (1997).`  Xd4State and Local Government RightofWay Requirements Certain state and local governments have started to assess rightofway franchise requirements and rightofway fees  X84on broadband fixed wireless licensees.d8f & yOO'ԍWinStar argues it should not have to pay rights of way fees because its network is deployed on  {O'rooftops, which are private property, rather than the public rightsof way. See id. Wireless carriers argue that because they do not use  X!4the public rightsofway, they should be exempt from franchise requirements.e"! & yO 'ԍIn July 1998, a federal district court ordered the city of Dallas to halt imposition of franchise fees or linking payment of right-of-way charges with certifying new wireless carriers, saying such actions exceed  {O""'regulatory limits under state and federal law. U.S. Judge Rejects Dallas Bid to Impose Fees on Wireless Carriers,  yO"'Communications Daily, Jul. 8, 1998. WinStar believes the effect of such actions will delay and possibly prohibit the provision of  X4competitive local exchange service by new wireless entrants.  X4Universal Service Funding Wireline local exchange carriers offer residential service discounted by the receipt of universal service funds. In order to receive funding, a fixed"e,O(O(  " wireless operator, like all carriers, has to be designated an "Eligible Telecommunications  X4Carrier" ("ETC") by the state in which it plans to operate.<f& yOb'ԍ47 U.S.C. 214(e)(2).< Some wireless providers  X4consider some of these state rules as discriminating unfairly against them.gX& yO'ԍWestern Wireless Corp., Petition for Preemption, Pursuant to Section 253 of the Communications Act, of Kansas Statutes and Rules that Discriminate Against New Entrants, Jul. 20, 1998, at n. 18.  X4Technical Issues The propagation and technical characteristics of upperband frequencies present two major challenges. First, high frequency signals behave much more like visible light than cellular or PCS signals when obstacles such as terrain, buildings, and vegetation are  Xa4encountered. These signals require lineofsight between transmitter and receiver in order for a prospective customer to receive an adequate signal. To increase coverage, operators must increase the height of cell antennas or move cells closer together. Second, high frequency  X 4signals are easily scattered and absorbed by rain. An afternoon thunderburst, for example, can significantly reduce the effective range of an upperband system. Raising transmitter power output during these events helps reduce signal fading. " g,O(O(  d "  X'  X'TABLE 1: INTERNET ACCESS OFFERINGS BY MMDS LICENSEES Đ\ Y ddx !ddxPP4 Y  P  E " yOC'4E#C\  P6Qo^P#Wireless Cable OperatorsP P  EE "/Company[E"Location[E"Launch Date[E"(XDownstream SpeedP    E  American Telecasting (acquired by Sprint)s Colorado Springs, CO Denver, CO; Portland, OR Eugene, OR; Seattle, WA#  Sep. 1997 Feb. 1998 Trial Demonstration 1998#  750 kbps downstream, telephone return path 750 kbps downstream, telephone return path Twoway  [   CAI Wireless Systems, Inc. (acquired by MCI WorldCom) Washington, DC N/A Up to 27 Mbps downstream, telephone return path  #    CFW CommunicationsSE Charlottesville, VASE Sep. 1997SE Up to 27 Mbps downstream, telephone return path     CS Wireless Systems, Inc. Dallas/Fort Worth, TX Nov. 1997 Up to 4 Mbps downstream; telephone, ISDN, or T1 return path     Nucentrix (formerly Heartland Wireless Systems, Inc.) Sherman, TX Jun. 1998 768 kbps (one and twoway)     MagnaVision Corp.E New York, NYE Successful 6month trial completed 1.5 Mbps or greater downstream p  Q  People's Choice TV Corp. (acquired by Sprint) Detroit, MI Phoenix, AZ+Q Oct. 1997 Mar. 1998+Q Up to 36 Mbps downstream, telephone or ISDN return path Samep   Q  Sioux Valley Wireless{E Sioux Falls, SD{E Dec. 1997{E Up to 10 Mbps downstream, telephone or ISDN return path   +   Wireless One, Inc.k"R Jackson, MS Baton Rouge, LA Memphis, TN' 1998 1998 Dec. 1998' MDS spectrum downstream, WCS return path Same Same"C&g,O(O(  % "  p  ! _   yO'T Other Providers p P  _E "/CompanyE"LocationE"Launch DateE"(XDownstream SpeedP  p E  Cache Valley AIRNETE Cache Valley, UTE N/AE Up to 10 Mbps downstream, telephone or ISDN return path     DirectNetE South FloridaE Aug. 1997E 12 Mbps downstream, telephone return path    i   IJNT International (formerly InterJetNet)  Salt Lake City, UT Beaumont, TX Houston, TX Orange County, CA San Francisco Bay Area, CA ProvoOrem, UThi Aug. 1997 Sep. 1997 N/A Dec. 1998 Dec. 1998 Apr. 1999hi Up to 10 Mbps (one and twoway) Same Same Same Same Same    i   Le Groupe Videotron/Wavepath  San Francisco, CA Dec. 1998 384 kbps (twoway)  h   Metro.NetE Northern CaliforniaE N/AE Up to 10 Mbps downstream, telephone or ISDN return path p  Q  SkyLynx Communications, Inc.x Tampa, FL Fresno, CAQ 4th Q 1998 N/AQ Up to 30 Mbps downstream, up to 11 Mbps upsteam Samep   ` Q  UltimateCom, LLC0R Atlanta, GA Denver, CO Mar. 1998 N/A N/A , telephone return path  yO'3 Mbps (twoway)#XP\  P6Q_XP#  "g,O(O(  "  X'  X' TABLE 2: UPPERBAND FIXED WIRELESS OPERATORS   c !ddxPP4 Addx^@` c   P  E " yOC'zM#C\  P6Qo^P#Company E"l Spectrum E"1Rollout Areas E"Subscribers E"<UServicesP   E  WinStar[E 28 and 38 GHz# Top 30 markets in the U.S.# 380,000 lines in service# Voice, high speed data, Internet access, and information services      Teligent   24 GHz  28 markets nationwide  Access rights to 2,400 buildings  Voice, high speed data, Internet access, and information services     ART   38 GHz  Seattle, WA Portland, OR Phoenix, AZ  Access rights to 155 buildings  Highspeed Internet access and Internet services      AT&T (Biztel/TCG) 38 GHz   TCG used as backup and extension of fiber network; AT&T use unclear.      SpeedUs.com (formerly Cellularvision){ 28 GHz (LMDS){ New York City Metro Area{ 2,000{ Internet access (up to 48 Mbps downstream, telephone return  yO'path)#XP\  P6Q_XP#   "dg,O(O(  "   X'+  TABLE 3: RECENT LMDS AUCTION WINNERS   c Addx^@` addx c     " yOC'w'#C\  P6Qo^P#Company E"K POPs E"L-Major License ggAreas"eAnnounced Plans     Nextlink Communications, Inc." 50.8 million (A)  35.8 million (B) most major U.S. cities Acquired licenses of WNP and Nextband; plans to offer LMDS commercially as a complement to its CLEC fiber networks by end of 1999 p  Q  WinStar E" 14.7 million (A)  2.3 million (B)  San Francisco, New Orleans, Salt Lake City, Norfolk, Orlando, other parts of California Q Use of LMDS in conjunction with its 38 GHz spectrum to extend its reach to other citiesp 8 { Q  Touch America, Inc." 2.1 million (A)  2.1 million (B) parts of Montana, Wyoming, Utah, Colorado, Idaho, North Dakota, Washington, Minnesota# Begin LMDS buildout in Helena and Billings, MT; use spectrum to link 30 cities to its 10,000 mile fiber network; and equipment contract with Nortel8      BTA AssociatessE" 3.0 million (A) z 675,000 (B); Colorado; Begin offering LMDS services by the end of 1999  #   Liberty Cellular, Inc.S" 1.0 million (A)  1.0 million (B)S throughout KansasS Begin offering LMDS service by late 1999; equipment contract with Nortel  ;   US UnwiredE" 1.8 million (A) z 325,000 (B)k Louisiana, eastern Texask Use of LMDS licenses to expand and complement its existing CLEC network and services  S   Virginia Tech Foundation, Inc.K" 1.5 million (A)K Southwest VirginiaK Began LMDS deployment in Blacksburg, VA in May 1999; equipment donated by Wavtrace.  3   Home Telephone Company, Inc.+"u 624,000 (A)+ Charleston, SC+ Begin deploying network in mid1999; equipment contract with Newbridge Networks      TriCorner Telecommunications, Inc.!" 163,000  (A and B)! Durango, CO, Farmington, NM! Begin offering LMDS services by the end  yOC 'of 1999#XP\  P6Q_XP#    \(A) indicates BTA A Block which consists of 1,150 MHz (B) indicates BTA B Block which consists of 150 MHz