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Federal Communications Commission
1919 - M Street, N.W.
Washington, D.C. 20554
News media information 202 / 418-0500
Fax-On-Demand 202 / 418-2830
Internet: http://www.fcc.gov

This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).


(CC Docket No. 92-297)

Today the Commission, responding to petitions for reconsideration, generally affirmed key provisions of the Local Multipoint Distribution Service (LMDS) service rules that it adopted in March 1997. The action paves the way for the auctioning and licensing of LMDS, a fixed, broadband point-to-multipoint wireless service that has significant potential in offering a broad range of one-way and two-way voice, video, and data service capabilities, and a substantial amount of capacity that is larger than currently available wireless services.

Among other things, the Third Reconsideration Order generally denied the petitions for reconsideration, rejecting requests to modify the LMDS eligibility restrictions on incumbent cable systems and local exchange carriers (LECs). Currently, the restrictions prohibit incumbent LECs and incumbent cable companies (for a three-year period expiring June 30, 2000) from holding attributable interests in an in-region LMDS licensee. The rule, however, permits incumbent LECs and cable operators to participate in the LMDS auction, subject to post-auction requirements to divest holdings that would violate the restrictions. The Commission, in the Third Reconsideration Order, rejected arguments that incumbent LECs and cable operators should be barred completely from participating in LMDS auctions, concluding that the post-auction divestiture provisions are a sufficient means to enforce the eligibility restriction. In addition, the Commission affirmed that an "attributable interest" for purposes of the eligibility restriction is an ownership level of 20 percent or higher, and rejected arguments that the triggering threshold should be lower than 20 percent or should include certain convertible non-equity investments. The Commission also denied claims that rural LECs should be excluded from the eligibility restriction.

The Commission noted, however, that its general policies regarding marketplace competition, ownership diversity, and the prevention of anticompetitive behavior may benefit from an evaluation of the criteria that should be used in establishing ownership restrictions and ownership attribution standards in a variety of services, and indicated that it plans to initiate a proceeding later this year to examine these issues.

The Commission also upheld the band-use plan adopted for spectrum at 31.0-31.3 GHz (31 GHz band) that designates the entire 300 megahertz for LMDS and terminates licensing under the previous point-to-point 31 GHz service rules. However, the Commission decided that 31 GHz applicants that had pending applications that were dismissed in the LMDS Second Report and Order, would be allowed to refile for the same authorization, but secondary to LMDS. These operations may not cause interference to an LMDS licensee and must accept any interference from an LMDS licensee.

In addition, the Commission affirmed its flexible construction rule, which requires that licensees must provide "substantial service" during the 10-year license period. In connection with its reconsideration of the LMDS service rules, the Commission also denied petitions to further reconsider its decision to deny applications for waiver of the 28 GHz point-to-point microwave rules that existed before the adoption of LMDS.

The LMDS auction begins on February 18, 1998.

Action by the Commission February 3, 1998, by Third Order on Reconsideration (FCC 98-15). Chairman Kennard, Commissioners Ness, Powell, and Tristani, with Commissioner Furchtgott-Roth concurring in part and dissenting in part. Chairman Kennard and Commissioners Ness, Furchtgott-Roth, and Powell issuing separate statements.


News Media contact: Elizabeth Lyle at (202) 418-0654.
Wireless Telecommunications Bureau contact: Barbara Reideler at (202) 418-1310.