Report No. MM 98-52                      MASS MEDIA ACTION              September 17, 1998

    TWO-WAY DIGITAL ITFS AND MDS COMMUNICATIONS APPROVED;  
  NEW SERVICES, FASTER INTERNET ACCESS AVAILABLE FOR CONSUMERS
                        (MM Docket 97-217)

     The Commission has cleared the way for Multipoint Distribution Service (MDS)  and
Instructional Television Fixed Service (ITFS) licensees to offer two-way digital services. 

      As a result of today's action, a new, competitive group of players may emerge for
delivery of high speed two-way communications service to consumers.  Both individual and
business consumers will be able to use the high-speed and high-capacity data transmission and
Internet service that will be available through the new systems.  Consumers will be able to take
advantage of new video-conferencing,  distance learning and continuing education offerings.

     MDS typically provides video programming to subscribers and is often called "wireless
cable."  ITFS licensees are typically educational institutions that use the service for distance
learning.   Both are currently one-way services, in which a transmitter sends a signal
downstream to subscribers.

     The changes adopted today further the mandate of Section 257 of the
Telecommunications Act of 1996, which requires the Commission to identify and eliminate
market entry barriers for entrepreneurs and other small businesses to promote diversity of
media voices, vigorous economic competition, technological advancement and promotion of
the public interest.

       The new rules permit licensees to use all or part of any of their 6 MHz channels for
two-way service.  Licensees will be able to use "response station hubs," which will serve as
collection points for response station signals, and for which the operators will be issued
blanket licenses, and will not have to apply for each license individually.

     The Order adopted today provides for flexibility in two-way system design by
permitting licensees to combine multiple channels to accommodate wider bandwidth uses and
the "subchannelizing" of 6 MHz channels for smaller bandwidth uses, and by allowing
response stations and boosters to operate up to maximum permitted MDS and ITFS power
levels. 

                              (over)

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     ITFS licensees will have greater flexibility both in using their channels for educational
purposes and for leasing excess channel capacity to wireless cable operators.  This flexibility
enhances the symbiotic relationship between wireless cable operators and most ITFS 
licensees, by allowing wireless cable operators greater access to lease spectrum in a digital
environment, while at the same time enabling educators to derive greater revenues or other
benefits from such lease arrangements.  Specifically, the Order retains the existing 20 hour
per-channel per-week requirement for educational usage of ITFS channels, but relaxes content
restrictions by allowing for fulfillment of these requirements through data, voice, or video
transmissions, and by requiring only that the usage be in furtherance of the educational mission
of an accredited institution offering formal educational courses.  

     The Order also requires that ITFS licensees operating digital systems retain at least five
percent of the capacity of their licensed spectrum for educational usage.   In light of increasing
use of digital compression techniques, the Commission assumes that this will be  adequate to
allow ITFS licensees both to meet their educational usage obligations and to have capacity for
future educational usage.  Of course,  ITFS licensees may retain more than five percent of
their spectrum capacity for educational usage, and may opt not to lease any of  their capacity.
  
     Furthermore, all ITFS licensees will be accorded interference protection on the basis of
a 35 mile radius protected service area, in addition to the registered receive site protection that
they currently enjoy, which will enhance their ability to expand their systems on an
interference-free basis.  ITFS licensees will receive additional interference protection through
rules requiring prior notification of the activation of a response station transmitter located
within 1960 feet of a registered ITFS receive site, prompt remedy of any interference caused
to an ITFS user, and immediate shut down of any transmitter causing interference that is not
remedied promptly.

     Because contiguous channels may need to be devoted to response transmissions for
purposes of spectrum efficiency, the Order permits ITFS licensees to swap channels and to
satisfy some or all of their educational usage requirements on other channels in the wireless
cable system of which their stations are part.  In addition, the Order increases permissible
lease term limits from 10 to 15 years, enhancing certainty for ITFS licensees, and placing
wireless cable operators on a more equal footing with other services with comparable franchise
periods. 

     Action by the Commission Sepember 17, 1998, by Report and Order (FCC 98-231). 
Chairman Kennard, Commissioners Ness, Furchtgott-Roth, Powell and Tristani.
 
                             - FCC -

     News Media contact: Rosemary Kimball at (202) 418-0500.
     Mass Media contacts: Charles Dziedzic and Dave Roberts at (202) 418-1600; Michael
Jacobs at (202) 418-7066; and Keith Larson at (202) 418-2600.
     TTY: (202) 418-2555  (FCC Public Service Division)