WPC/ 2MBERKZ3|j  X-#Xj\  P6G;߈XP#"i~'^09CSS999S]+9+/SSSSSSSSSS//]]]Ixnnxg]xx9?xgxx]xn]gxxxxg9/9MS9ISISI9SS//S/SSSS9?/SSxSSIP!PZ9+ZM999+999999S9S/xIxIxIxIxIlnIgIgIgIgI9/9/9/9/xSxSxSxSxSxSxSxSxSxSxIxSxRxSxSxS]SxIxIxInInInZnIxigIgIgIgIxSxSxSxZxSxZxS9/9S999Su]ZZxSg/gCg9g9g/xSbxSxSxSxSxn9n9n9]?]?]?]ZgFg/gMxSxSxSxSxSxSxxZgIgIgIxSg9xS]?g9xSi+SS88WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNR>CxxxxxxxxxxRRx⭞[x⭻𭭞RCRxRxjjRxCRCʆxj[Rxxxj`5`}R>}RRR>RRRRRRxRCxxxxxjjjjjYCYCYCYCxxxxxxxxxxxxxjj}jjjjjxxx}x[C[[R[†}}ClR`Cxxjjj[[[}zR}jjjR[Rx>xxPAPWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNVVxRxxxxxxHRxHRxHRRxxxRRxxVVņRxxH"x𐎂x됐x"i~'^BMqqMMMq;M;?qqqqqqqqqqMMqգVqգ㣣M?MqMqddMq?M?qdVMqqqd[2[vM;vMMM;MMMMMMqM?qqqqq㣣dddddT?T?T?T?qqqqqqqqqqqqqddvdddddqqqvqV?VVMVvv?fM[?qqࣣdddVVVvtM㣣vdddMVMq;qqL=LWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNRRxqMqqqqqqDMqDMqDMMqqqNNqq㈬R㈈RMqqD"q㈆zqވq2K#lnKi"i~'^BM[qqMMMq;M;?qqqqqqqqqq??dѣMVǣգM?MhqMdqdqdMqq??q?qqqqMV?qqqqdm-mzM;zhMMM;MMMMMMqMq?dddddǓdddddM?M?M?M?qqqqqqqqqqdqoqqqqdddddzdddddqqqzqzqM?MqMMMqzzq?[MM?qqqqqǣMMMVVVz_?hqqqqqqգzdddqMqVMq;qqL)LWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNRRhqMdqqqqq?IqDIqDMMddqNNqqވR㈈RMdqD"q㈃zqވq_Equation Cactio V ZStyle 1S7#)a [ P`Q}2)P# dddn "i~'^.6@PP}666PZ*6*-PPPPPPPPPP--ZZZFsjjscZss6=scssZsjZcssssc6-6JP6FPFPF6PP--P-}PPPP6=-PPsPPFM MV6*VJ666*666666P6P-sFsFsFsFsFhjFcFcFcFcF6-6-6-6-sPsPsPsPsPsPsPsPsPsPsFsPsNsPsPsPZPsFsFsFjFjFjVjFsecFcFcFcFsPsPsPsVsPsVsP6-6P666PpZVVsPc-c@c6c6c-sP^sPsPsPsPsj6j6j6Z=Z=Z=ZVcCc-cJsPsPsPsPsPsPssVcFcFcFsPc6sPZ=c6sPe*PP55WppppppppppppppppppppppppppppppppppppppppppppppppxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN:``:JP6FPPPPP-3zzP03zzPz066FFP77`PP`y:``:_ZZ6FP0"jjjjzzPz`]VPZ``P2!KK1X|K"i~'^:DPddDDDdp4D48dddddddddd88pppX|pDL|pp||D8D\dDsjjscZss6=scssZsjZcssssc`(`lD4l\DDD4DDDDDDdDd8XXXXXX|X|X|X|XD8D8D8D8ddddddddddXdbdddpdXXXXXlX~|X|X|X|XdddldldD8DdDDDdplld|8|P|D|D|8dvddddDDDpLpLpLpl|T|8|\ddddddl|X|X|Xd|DdpL|Dd~4ddC$CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxH\dDXddddd8@d<@d<DDXXdDDxddxHxxHvppDXd<"dxtldpxxd"i~'^.6ZPP666PZ*6*-PPPPPPPPPP66ZZZPsjssjc}}=P}js}c}sZjssssj6-6]P6PZFZF6PZ-6Z-ZPZZF=6ZPsPPF@#@S6*S]666*666666P6Z-sPsPsPsPsPssFjFjFjFjF;-;-;-;-sZ}P}P}P}PsZsZsZsZsPsPsZ{P}PsPsPbZsPsPsPsFsFsSsFsvjFjFjFjF}P}P}P}S}P}Z}]=-=Z=6=ZZSS}Zj-jHj6j@j-sZssZsZ}P}PssFsFsFZ=Z=Z=ZSjRj6j]sZsZsZsZsZsZssSjFjFjFsZj6sZZ=j6sPu*PP5+5WppppppppppppppppppppppppppppppppppppppppppppppppxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN:``:UP6PPPPPP06zzP06vvPz066PPP77`PP`y:``:eZZ6PP0"jjjjzzPz`^VPZ``Pcompetitively an"i~'^:DpddȨDDDdp4D48ddddddddddDDpppd|Ld|pȐD8DtdDsjssjc}}=P}js}c}sZjssssjP,PhD4htDDD4DDDDDDdDp8dddddȐXXXXXJ8J8J8J8pddddppppddpddddzpdddXXhXXXXXdddhdptL8LpLDLpphhp8ZDP8pppddƐXXXpLpLpLphfDtppppppȐhXXXpDppLDd4ddC6CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxHjdDdddddd2>WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNCppCc]?]]]]]]8?]8?]8??]]]@@p]]pCppCvii?]]8"{{{{]pne]ipp]"i~'^DOuuOOOu=O=AuuuuuuuuuuOOuۨYuۨ騨OAOuO{{tG]{ti{{]3]yO=yOOO=OOOOOOuOAuuuuu騨gggggVAVAVAVAuuuuuuuuuuuuuggyggggguuuyuYAYYOYyyAiO]Auu稨gggYYYywO騨ygggOYOu=uuN?NWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNTT|uOuuuuuuFOuFOuFOOuuuPPuu錱T錌TOuuF"u錊~u匌u23K*K,KE/K1"i~'^:DTddDDDd4D48ddddddddddDDd||||DXp||dp||ppL8LTdDddXdX8dd88X8ddddLL8dXXXLP8PlD4lTDDD4DDDDDDdDd8|d|d|d|d|dX|X|X|X|XD8D8D8D8dddddddddpX|ddddpXd|d|d|d|dXXlXx|X|X|X|XdddldldD8DdDDDddllXp8pHpDp@p8dtdddd|L|L|LdLdLdLllpHp8pTddddddplpLpLpLdpDddLpDpdx4ddC,CWddddddddddddddddddddddddddddddddddddddddNHxxHhdLdddddd8@d<@d<DDppdDDxddxHxxHkddDpd<"dxtldxxd"i~'^#)0<8HH"&H>XHH8HB8>HH^HH>"".2",2,2,"222N2222"&22H22,006"6."""""""""2"2H,H,H,H,H,XAB,>,>,>,>,""""H2H2H2H2H2H2H2H2H2H2H,H2H1H2H2H282H,H,H,B,B,B6B,H?>,>,>,>,H2H2H2H6H2H6H2""2"""2F866H2>>(>">">H2;H2H2H2H2XHB"B"B"8&8&8&86>*>>.H2H2H2H2H2H2^HH6>,>,>,H2>"H28&>"H2?22!!WFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN$<<$.2",2222`2 LL2 LL2L"",,2d""rrcBc,j}jrjruBuBuru\u\u\urrIrBrrijrrji~rnXnXnXrrrrurrr~fy=\\===WddddddddddddddddddddddddddddddddddddddddN\rr=_ffrrsKKrFF\\rF==\\sDDsspp\\\~pp=\\F"\a\4 \==m=\rfs\=s\siwbzpNm\QQ====fsbf\biUpNib3,z\_ffsNiimbmmQsU~bX~i=s~~bf~~==sssssss~~~=i\Q=Tgnj}}ccyyTjcc;T;TXFu",^WfxfffNfNTTTfrfTfffTTTfrT<fNfffNfffffffTfTfTfTfTfTffffTxffTfffrrr~TfrfNd6dWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNllf T`Z`Zff,gg,&,l,l,f,Z",,,&,2et/Pf T ` t`",^Wf,fffNfNTffr,fTfffTfTrfxBxfNfffNfffffffT,oToToToTrTrrfrTfxT)rrrf,frfNdQdWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNllf ZfZfZff,gg,,,l,l,f,Z",,,&,",tB^ f ^CCd||CCC|CCCC||||||||||CCh|so8okv|xCCCddCkskskHss00k0ssssFdHsooo`YdY|9|||||C||||||d|x0kkkkkksksksksk80808080sssssssssoktssosvsl|lll||tl||||tlt||||||80||||9x`|||l0lD||lHl0tt|t|HH|ddd||P|H||st||ts|x`x`x`|||||||oCddCCCWddddddddddddddddddddddddddddddddddddddddNd||Choo||~QQ|LLdd|LCCdd~JJ~~zzdddzzCddL"djd9 dCCvCd|o~dC~d~skzUvdYYCCCCo~kodks]zUsk80dhoo~UssvkvvY~]k`sC~koCC~~~~~~~CsdYC\   pxtll\tll@\@\`LBibliogrphyBBȲoLhq(#  yOy[",^Wf,fffNfNTffr,fTff[xxBxfNfffNfffffffT,oToToToTrTrrfrTfxT)rrrf,frfNdQdWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNllf ZfZfZff,gg,,,l,l,f,Z",,,&,2}f 7e tp tu ty",tB^ f ^CCh||CCC|CCCC||||||||||CCh|so8okv|xCCCddCkskskHss00k0ssssFdHsooo`ddd|8|||||C||||||d|x0kkkkkksksksksk80808080sssssssssoktssosvsl|lll||tl||||tlt||||||80||||8x`|||l0lP||lNl8tt|t|HH|ddd||\|H||st||ts|x`x`x`|||||||oCddCCCWddddddddddddddddddddddddddddddddddddddddNd||Choo|||QQ|LNdd|LCCdd|HH||xxdddxxCddL"dod9 dCCxCd|v|`C|o|sdxUvdddCCCCs|vodssdx]sx84ddvo`sxvsx]|]vosC|sCC|||||||CxdYC\   pxtll\tll@\@\`L",^R`q```J`JOOO}`l `O``}}}`OOO`lO}9`J```J```````O}}}}}}}}}}`O`O`O`O}}}}}}}}}}}`O````Oq``O```lllwO }}}`l`J^3^WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNff`}O[U[U``}}aaff`}U"",^R````J`JO`` l `O``}}`O`O}l`}q>q`J```J```````O}}}}}iOiOiOiO}}}}}}}lOll`lO`qO}}}lll`}}}`l`J^M^WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNff`U`U`U``aaff`U"",^R````J`JO`` l `O``Vqq>q`J```J```````O}}}}}iOiOiOiO}}}}}}}lOll`lO`qO}}}lll`}}}`l`J^M^WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNff`U`U`U``aaff`U"2t+~"c#f '",^R`q```J`JOOO}`l `O``MV9`J```J```````O}}}}}}}}}}`O`O`O`O}}}}}}}}}}}`O````Oq``O```lllwO }}}`l`J^3^WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNff`}O[U[U``}}aaff`}U""i~'K2^,,ESSe,,,S,,,,SSSSSSSSSS,,EcS^`MJc`%JYHx`eOhUUS```[P,,,CC,HMHMH0MM H sMMMM/C0MJsJJ@CCCS%SSSSS,SSSSSSCSP cHcHcHcHcHp^HMHMHMHMH% % % % `MeMeMeMeM`M`M`M`M[JcH`MeMeM[J`MOMcHcScH]H]H^S^S`cMHSSSSMHcMcScScScS`S`S% SSSS%Pm@SSYSH H5SSH4H%`M``M`SeMeSyU0U0USUCUCUCUSS=S0SS`M`M`S`S`M`Ms[SP@P@P@`SSS`SUSSS[Jc,CC,,,WddddddddddddddddddddddddddddddddddddddddN```CSS,EJJSSS66S34CCS3,,CCS00SSPPeCC`C[{{PP,CC3"``C`J``C充&C,,`P``````````,CcSOSmc@,S`JSM`h[``````````C``````sYPh`9O```````C```````C````C````````````````````````````````````````````,```,```,```,`````````````cMSOJCcMMCP>`MeP%#YCcCyO`J`@eMmPOMPV>S>[O{``J{`mhcM`,Se[[mMVh[`b,,SSSSc`SSS[[[m,PC;,x=x]]xKP}}xxxxxxMk[[}}HHxpppXpuuXmcc`]kuxxx}}}{hccxxxx=cxMxxxHHxxxxxxxxxxxxxxxxxxxxxx+=+xxxxx=xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxkkxxxxxxxxhhhhxxuuuuxxmmmhhhh@3Uhxx"i~'K2^88Vgg888g8888gggggggggg88V{gux`]{x.]oYxckkgxxxrd888SS8Y`Y`Y<``((Y(````;S<`]]]PSSSg/ggggg8ggggggSgd({Y{Y{Y{Y{YuY`Y`Y`Y`Y.(.(.(.(x`````x`x`x`x`r]{Yxa``r]x`c`{Z{g{ZuZuZugugx{aZggggaZ{a{g{g{g{gxgxg/(gggg/dPggogZ(ZCggZAZ/xaxxaxgagk}LB,Լ}4  pG; M^R,R4  pG;R >xLB,_x\  P6G;P M^R,R\  P6G;RP t,U5.,vU\  P6G;P7jC:,߈Xj\  P6G;XP&t,X5.,'X4  pG;7nC:,TXn4  pG;X@|ND,|\  P6G;P&@ND,tK4  pG;&3g>6,0g4  pG;0@ND,tK4  pG;5hC:,:Xh*f9 xr G;XX!W!@(#,^#h@\  P6G;hPH5!,~v,5\  P6G;,P{,W80,:W*f9 xr G;X$ d!T,,,-nTps72b=5,׻)b\  P6G;)P1`=5,:')`*f9 xr G;)Xa$G,',_G\  P6G;Py.X80,qX\  P6G;P d6jC:,QSXj9 xOG;X$ }*i88,-7bips7$ .t==,-&tps7&VJ)")7<)5<5<5)<<""<"^<<<<)."<-ԍ Rulemaking To Amend Parts 1, 2, 21, and 25 of the Commission's Rules To Redesignate the 27.529.5 GHz Frequency Band, To Reallocate the 29.530.0 GHz Frequency Band, To Establish Rules and Policies for Local Multipoint Distribution Service and for Fixed Satellite Services, Petitions for Reconsideration of the Denial of Applications for Waiver of the Commission's Common Carrier PointtoPoint Microwave Radio Service Rules, CC Docket No. 92297, Suite 12 Group Petition for Pioneer Preference, PP22; Second Report and Order,  {O&-Order on Reconsideration, and Fifth Notice of Proposed Rulemaking, 12 FCC Rcd 12545 (1997) (Second Report  {O-and Order) (Fifth NPRM); appeal pending sub nom. Melcher v. F.C.C., Case Nos. 931110, et al. (D.C. Cir.,  {O-filed Feb. 8, 1993) (Melcher v. F.C.C.); Order on Reconsideration, 12 FCC Rcd 6424 (1997) (First  {O-Reconsideration); Second Order on Reconsideration, 12 FCC Rcd 15082 (1997) (Second Reconsideration); Third Report and Order, FCC 97378, released Oct. 15, 1997. N1V LMDS is a fixed, broadband, pointtomultipoint wireless service assigned a total of 1,300 megahertz of spectrum in the 27.528.35 GHz, 29.129.25 GHz, and 31 GHz frequency bands. LMDS licensees may offer a wide array of telecommunications and video programming distribution services that could provide wireless competition to cable television systems and local exchange carriers (LECs). "Rh 0*%%^^|"Ԍ X-x2.ؠ In this Third Order on Reconsideration, we address petitions for reconsideration  X-and clarification of the Second Report and Order, except petitions for reconsideration of the  X-competitive bidding rules adopted in the Second Report and Order. Those petitions were  X-considered in the Second Order on Reconsideration in which we modified the competitive  X-bidding rules affecting small business participation in the LMDS license auction.n {O!-ԍ Second Reconsideration, 12 FCC Rcd at 1508283 (para. 1).n The  X-remaining petitions for reconsideration and clarification, which are identified in Appendix A,Z yO-ԍ Each petitioner is listed in Appendix A with an abbreviated name, which is used in this Order. generally are denied, with one exception. We grant reconsideration of the decision to dismiss the pending applications that were filed under the 31 GHz service rules and were held in  XL-abeyance pending the outcome in the Second Report and Order. We will permit the dismissed applicants to refile applications requesting the same authorization to provide 31 GHz services, but subject to the limitations the Commission imposed on the majority of the  X -incumbent 31 GHz licensees when the band was designated for LMDS in the Second Report  X -and Order. Thus, operations authorized in response to the refiled applications will be secondary to LMDS. Such operations will not be protected from harmful interference from LMDS and may not interfere with LMDS, and they may not be expanded. We defer  X -consideration of the comments filed in response to the Fifth NPRM issued in conjunction with  X-the Second Report and Order to a separate Report and Order to be issued in the near future.  Xp- II. BACKGROUND ׃  XB-x3.P2נ This proceeding was initiated when the Commission released a First NPRM on January 8, 1993, in response to petitions for rulemaking to redesignate the use of two gigahertz of spectrum in the 27.529.5 GHz frequency band (28 GHz band) from pointtopoint, common carrier microwave service to local multipoint distribution service (LMDS) that  X-includes a pointtomultipoint areawide service and noncommon carrier services.| yO-ԍ Rulemaking to Amend Part 1 and Part 21 of the Commission's Rules to Redesignate the 27.529.5 GHz Frequency Band and to Establish Rules and Policies for Local Multipoint Distribution Service; Applications for Waiver of the Commission's Common Carrier PointtoPoint Microwave Radio Service Rules; RM7872, RM7772; Suite 12 Group Petition for Pioneer's Preference; University of Texas Pan American Petition for Reconsideration of Pioneer's Preference Request Denial; PP22; Notice of Proposed Rulemaking, Order,  {Ok-Tentative Decision and Order on Reconsideration, 8 FCC Rcd 557 (1993) (First NPRM), appeal pending sub  {O5 -nom. Melcher v. F.C.C. The Commission proposed licensing and operating rules to implement LMDS and provide licensees with sufficient flexibility to satisfy consumer demand for broadband services, expedite service to the public, and make more efficient use of underused spectrum. The  X-Commission also adopted an Order denying 971 pending applications for waiver of the existing 28 GHz rules in order to provide LMDS."u. 0*%%^^"Ԍ X-ԙx4.ؠ The Commission requested further comment in the Third NPRM on a proposal to  X-segment the two gigahertz in the 28 GHz band between LMDS and certain satellite systems. yOd-ԍ Rulemaking to Amend Parts 1, 2, 21, and 25 of the Commission's Rules To Redesignate the 27.529.5 GHz Frequency Band, To Reallocate the 29.530.0 GHz Frequency Band, and To Establish Rules and Policies for Local Multipoint Distribution Service and for Fixed Satellite Services, CC Docket No. 92297, Suite 12 Group Petition for Pioneer Preference, PP22; Third Notice of Proposed Rulemaking and Supplemental Tentative  {O-Decision, 11 FCC Rcd 53 (1995) (Third NPRM). With respect to LMDS, additional comments also were sought on revised proposals for service rules and on competitive issues concerning the potential impact of the entry of existing local exchange companies (LECs) and cable companies in the new LMDS market. The Commission proposed technical rules and competitive bidding procedures to award licenses from among mutually exclusive applications that were similar to procedures adopted for other wireless services.  X3-x5. The Commission subsequently adopted the proposed band segmentation plan for the  X -28 GHz band in the First Report and Order and Fourth NPRM, and designated 1000  X -megahertz of spectrum for LMDS. z yO2-ԍ Rulemaking To Amend Parts 1, 2, 21, and 25 of the Commission's Rules To Redesignate the 27.529.5 GHz Frequency Band, To Reallocate the 29.530.0 GHz Frequency Band, To Establish Rules and Policies for Local Multipoint Distribution Service and for Fixed Satellite Services, CC Docket No. 92297; First Report and  {O-Order and Fourth Notice of Proposed Rulemaking, 11 FCC Rcd 19005 (1996) (First Report and Order) (Fourth  {OT-NPRM). Specifically, 850 megahertz was designated in the 27.528.35 GHz band for LMDS on a primary basis, while 150 megahertz was designated in the 29.129.25 GHz band to be shared by LMDS on a coprimary basis with certain mobile satellite service (MSS) feeder links. An additional 300 megahertz of spectrum was proposed for LMDS on a primary basis in the 31.031.3 GHz band (31 GHz band). The Commission sought further comment on whether to restrict the eligibility of existing LECs and cable  X}-operators to obtain LMDS licenses in the geographic areas they serve.\}.  {O\-ԍ Id. at 1904758 (paras. 105136).\  XO-x6. The Commission next adopted the Second Report and Order in which it adopted  X:-the proposal to redesignate the entire 300 megahertz in the 31 GHz band for LMDS, as modified to require LMDS licensees to protect all incumbent licensees except incumbent Local Television Transmission Service (LTTS) licensees from harmful interference in the  X-outer 150 megahertz segment of the band. The Commission also adopted the service rules to implement LMDS and govern the licensing and operations of LMDS under a flexible regulatory framework. Among the rules are provisions for the licensing of LMDS on an areawide basis using the 493 Basic Trading Areas (BTAs) and for each BTA to be assigned two license blocks, one for 1,150 megahertz of spectrum and the other for 150 megahertz." 0*%%^^"Ԍ  X-x7. A licensee may be authorized to provide common carrier or noncommon carrier services, or both services, under a single license in order to accommodate the wide variety of telecommunications and video distribution services. The Commission adopted a threeyear eligibility restriction prohibiting incumbent LECs and incumbent cable companies from having an attributable interest in the larger 1,150 megahertz LMDS license whose geographic service area significantly overlaps such incumbent's authorized or franchised service area.  X_-Competitive bidding procedures also were adopted to award licenses among applications that are mutually exclusive.  X -x8.ؠ In addition, in the Second Report and Order, the Commission permitted LMDS  X -licensees to partition or disaggregate portions of their authorizations, but issued the Fifth  X -NPRM in conjunction with the Order to obtain comments on the necessary modifications to the newly adopted service rules to ensure effective implementation of partitioning and disaggregation in the new service. The Commission also adopted an Order on Reconsideration that denied the petitions for reconsideration of the Order issued in  X-conjunction with the First NPRM denying 971 pending waiver applications filed under the existing 28 GHz pointtopoint rules to provide LMDS. The Commission deferred a final Order on the pending pioneer preference requested by CellularVision and directed the Office  XS-of Engineering and Technology to initiate a peer review process. S yO-ԍ Subsequently, the Commission adopted an Order on August 29, 1997, that terminates the Commission's pioneer's preference program and dismisses all pending pioneer's preference requests, including the request of CellularVision in this proceeding. This action was in response to the provision in the Balanced Budget Act of 1997 signed into law on August 5, 1997, that terminated on that date the Commission's authority to provide preferential treatment in its licensing procedures for pioneers. Dismissal of All Pending Pioneer's Preference Requests, CC Docket No. 92297, RM7872, PP22, ET Docket No. 94124, RM8784, GEN Docket No. 90314,  {O|-PP68, GEN Docket No. 90357, PP25, IB Docket No. 9795, RM8811, RM7784, PP23, RM7912, PP34 et  {OF-al., Review of the Pioneer's Preference Rules, ET Docket No. 93266, Order, 12 FCC Rcd 14006 (1997). Thus, the matter of CellularVision's pioneer preference is now moot.  X%-x9.ؠ In response to the Second Report and Order, petitions for reconsideration of certain  X-service rules were filed by Alliance, LBC, RTG, Sierra, and Webcel.  yO]-ԍ Public Notice, Report No. 2196, released May 15, 1997; Public Notice, Report No. 2203, released June 12,  yO%-1997.ı Letters in support of  X-Sierra's petition were filed by Commpare, CSG, Sunnyvale, Videolinx, and Westec.   yO!-ԍ The letters of Commpare, CSG, and Westec are latefiled, after the period for filing petitions for reconsideration and clarification under Section 1.429(e) of the Commission's rules had expired. 47 C.F.R.  1.429(e). We will include the letters for consideration, inasmuch as they will not delay the proceeding and otherwise ensure a complete record. Commpare Letter of June 2, 1997; CSG Letter of June 13, 1997; Westec Letter of June 2, 1997.  Nevada" 0*%%^^s"  X-DOT submitted an ex parte letter, and Parsons submitted a letter in support.9 Z yOy-ԍ We accept these latefiled letters for consideration, and find that their consideration will not delay the  {OA-proceeding and ensure that all relevant issues are considered. Nevada DOT ex parte Letter of May 29, 1997; Parsons Letter of May 28, 1997.9 Letters requesting clarification were filed by Alcatel and TI. A petition for reconsideration of the  X-Order on Reconsideration was filed by LDH._  yOo-ԍ Public Notice, Report No. 2196, released May 15, 1997._ Celltell Communications Corporation and CT Communications Corporation jointly filed the petition with LDH, but they subsequently filed a  X-letter pursuant to Section 1.41 of the Commission's Rules= z yO -ԍ 47 C.F.R.  1.41.= withdrawing their request for  X-reconsideration.  yOJ -ԍ Letter to W. Kennard, General Counsel, from Infinite Telesis, Inc. (formerly LDH International, Inc.), Celltel Communications Corporation, and CT Communications Corporation, dated Aug. 1, 1997. LDH also filed a motion for stay of implementation of the Order until we  Xx-review the petition.xb  yO-ԍ The court proceeding initiated by LDH and other affected applicants for review of the Order dismissing  {OS-the 971 waiver applications remains pending. See note  N1V1 , supra. M3ITC filed an application for review that also seeks further reconsideration of the Order on Reconsideration. Opposition to petitions were filed by Bell Atlantic, CellularVision, RTG, and TI.  X -x 10.ؠ On July 30, 1997, the Commission issued a Public Notice announcing that the  X -date for the LMDS auction would begin on December 10, 1997.  yOr-ԍ Public Notice, FCC Announces Upcoming Spectrum Auction Schedule, DA 971627, 12 FCC Rcd 11544 (1997). On November 10, 1997, the Bureau issued a Public Notice postponing the auction until February 18, 1998, in order to ``further opportunities for businesses to access additional sources of capital to further the  X -advent of new competition in the cable television and local telephony marketplaces.''x  yO-ԍ Public Notice, Report No. AUC9717C (Auction No. 17), released Nov. 10, 1997.x In view of these developments, we deny the motion for stay filed by LDH, inasmuch as we consider its petition at this time before the scheduled auction. We also deny the request of Webcel to set a fixed date for commencement of the LMDS auction within six months of  Xd-release of the Second Report and Order, because Webcel requested a delay of the December  XO-10 auction date.BO yO"-ԍ Webcel Petition at 2324.B  X!- III. DISCUSSION ă"!40*%%^^e"Ԍ X-ԙX` hp x (#%'0*,.8135@8: -ԍ LBC Petition at 12; Webcel Petition at 1218.W Bell Atlantic and RTG oppose their request and any further limitation  X -on the ability of such incumbents to participate in the LMDS auction.`  yO-ԍ Bell Atlantic Opposition at 24; RTG Opposition at 47.`  X -X` hp x (#%'0*,.8135@8: -ԍ 47 C.F.R.  101.1003(f)(6).G Sanctions for violations of antitrust laws include treble damages, among other penalties. Furthermore, a divesting incumbent would have no control over the buyer's use of the LMDS license unless it entered into anticompetitive agreements, and such agreements violate antitrust laws. We find that these factors make it less likely that the activities Webcel describes will occur, and that Webcel has failed to address them or otherwise demonstrate why reliance upon general antitrust law would not be effective. X` hp x (#%'0*,.8135@8: yO-ԍ 47 C.F.R.  101.1003(f)(1)(C).J Webcel contends that it will not be possible to find a buyer at the high prices incumbents will bid to retain their monopoly status. Contrary to Webcel's assertion, we do not believe the trustee provision will provide incumbents with incentives to avoid divestiture or engage in other anticompetitive activity. The provision is available only as a means of divestiture and thus must be accomplished within 90 days of a grant, so that no delay will be involved in its use. Moreover, it requires that the applicant have no interest in or control of the trustee and provides that the trustee may dispose of the license as it sees fit. Inasmuch as the trustee is independent from the incumbent and may dispose of the interest freely, we find that the trustee would have no reason to consider an incumbent's interests and could not be manipulated by the incumbent to protect its monopoly. X` hp x (#%'0*,.8135@8:0*%%^^<"Ԍ X-p` P @ 0 p`P@0  !"#$%p&`'X` hp x (#%'0*,.8135@8:-ԍ Id. at 12612 (para. 161).H The Commission balanced its competing objectives to maximize the opportunity for competition in the telephone and cable markets with the desire to encourage and facilitate the entry of LMDS providers. It determined that a lower attribution threshold would compromise the Commission's goals to encourage all potential LMDS providers to enter the market, while a higher threshold would permit the type of anticompetitive activities from monopolist incumbents that it sought to prevent. In our judgment, the 20 percent level is reasonable based upon our analysis of these factors. We disagree with Webcel that the 20 percent level, in light of all these considerations, will undermine the eligibility restriction.  X-x453.ؠ Fourth, as with the CMRS spectrum cap, the Commission found that the 20 percent attribution standard would encourage capital investment and business opportunities in LMDS, increase the flexibility afforded to LMDS providers to meet customer demand, and  XT-promote the competitive delivery of wireless services.  Webcel argues that these findings are not dispositive in the context of an eligibility restriction that is adopted to keep incumbents"=W0*%%^^" from acquiring inregion LMDS licenses and that does not limit their ability to acquire outof X-region LMDS licenses. We disagree. In relying on these factors in the PCS Remand Order to support the 20 percent attribution level in connection with the 45 megahertz CMRS spectrum cap placed on certain CMRS licensees, the Commission stated that cellular providers should be given ample opportunity to compete in the CMRS market, particularly given the accelerated changes and growth in technology and services, and to seek business opportunities  Xx-and capital investment in CMRS.`Xx {O-ԍ PCS Remand Order, 11 FCC Rcd at 7881 (para. 119).` Maintaining a 20 percent attribution level was found to allow a wide variety of players, including broadband PCS and cellular providers, to enter the marketplace, while still preventing anticompetitive practices that could harm consumers. As there, we do not want to bar incumbent LECs and incumbent cable companies altogether from acquiring LMDS licenses, but rather to prevent anticompetitive practices.  X -x554.ؠ Fifth, setting the threshold attribution level at 20 percent is consistent with our  X -overall objective in the Second Report and Order " to design a shortterm LMDS eligibility restriction on inregion, incumbent LECs and inregion, incumbent cable companies that will  X -maximize competition.hY Z {O-ԍ Second Report and Order, 12 FCC Rcd at 12624 (para. 177).h The restriction was structured as flexibly as possible to minimize adverse consequences of such restrictions. The Commission recognized that restrictions may prevent incumbents from experimenting with certain technology or market combinations and might unnecessarily foreclose or delay desirable entry by incumbents into new markets.  X8-x655.ؠ Thus, the Commission determined that the restrictions should be temporary, ending when the likelihood of anticompetitive behavior has abated. Similarly, the 20 percent attribution level is designed to afford maximum flexibility for incumbents to provide financing and the benefits of their technological experience to LMDS licensees without controlling the LMDS system. For example, a 20 percent threshold is more likely than the 10 percent threshold suggested by Webcel to increase the availability of financing for new LMDS  X-services because incumbents will have greater latitude to provide financing. We also recognize that the factual circumstances and policy considerations that may prevail in other markets and with respect to other products and services may justify different attribution thresholds. We intend to examine these issues in greater detail in our comprehensive review  XR-of ownership restrictions and attribution standards.^ZR {O -ԍ See para.  P52PZ49 , supra.^  X$-x756.ؠ Finally, a primary concern considered in adopting an overall regulatory framework for LMDS was to make this service as flexible as possible and to avoid erecting unnecessary barriers to marketplace entry. LMDS has significant potential in offering a broad range of"~Z0*%%^^<" oneway and twoway voice, video, and data service capabilities, and a substantial amount of  X-capacity that is larger than currently available wireless services.h[ {Ob-ԍ Second Report and Order, 12 FCC Rcd at 12621 (para. 170).h The goal was to maintain an open and flexible approach in implementing LMDS that would allow the business judgments of individual LMDS applicants and licensees to shape the nature and components  X-of the services to be offered.H\Z {O-ԍ Id. at 12643 (para. 221).H Thus, a particular concern is that the Commission not take regulatory action that would prevent LMDS licensees from obtaining the financing required to acquire an LMDS license and to establish the technology needed to offer service to the public. Although the Commission was compelled to place some restrictions on LMDS license holdings by inregion LECs and cable companies in the interests of increasing competition in the telephony and video distribution services, it narrowly tailored the restriction because it recognized the potential for adverse impacts on implementation of LMDS.  X -x857.ؠ Thus, in balancing the integrity of the eligibility restriction against our desire to increase the likelihood that licensees could satisfy their capital requirements, we seek to be as liberal as possible in setting the permissible ownership interest of incumbent LECs or cable companies. In adopting the provisions of the rule, the Commission decided that, as a threshold matter, if less than 10 percent of the population of the LMDS licensed service is within the incumbent's authorized or franchised service area, there would no eligibility  Xb-restriction on the incumbent LEC or incumbent cable company.]b {O-ԍ Id. at 1262829 (paras. 186188), adopting 47 C.F.R.  101.1003(d), as modified in First Erratum, released Apr. 7, 1997. That is, if the population overlap is less than 10 percent, the incumbent LEC or incumbent cable company could own as much as 100 percent of the LMDS license for that area. On the other hand, if the population overlap is 10 percent or higher, we then look to the ownership structure of the involved entities. The Commission decided to establish an attribution level of 20 percent, rather than 10 percent, so as not to unduly constrict the flow of capital to LMDS licensees. As we discuss above, although there is nothing in the current record that convinces us that this balancing of factors and objectives should be revisited in this case, we also believe that it is appropriate for us to examine what steps may be necessary to ensure that this analysis is done in a consistent, integrated fashion in the context of different markets, products, and services. This belief has prompted our decision to initiate a more comprehensive proceeding later this year.  X7-x958.ؠ In sum, we believe that the 20 percent attribution level and the prohibition against an incumbent LEC or incumbent cable company holding a controlling interest in a licensee, taken in combination, provide an effective barrier against anticompetitive conduct. While we" F]0*%%^^[" have affirmed the 20 percent attribution level based on the weighing and balancing of all of the competing interests we have discussed, we cannot predict with certainty that the level is an absolute bar to the anticompetitive conduct that the rule is designed to prevent. That is not what we reasonably can seek to achieve in relying on a bright line standard as we do here. Instead, we believe that the 20 percent level is reasonably based to promote the objectives we seek to achieve and that no other level is established in the record to be any better.  X_-x:59.ؠ Webcel attacks the policy of flexibility by arguing that, with a 20 percent attribution limit, incumbent LECs and incumbent cable operators will have unlimited flexibility to pursue competitive foreclosure strategies by forming bidding consortia and other ventures to bid on LMDS licenses. Webcel submits as an example the possibility that the five Regional Bell Operating Companies (RBOCs) may form a whollyowned joint venture for LMDS and be the high bidders for the LMDS licenses in the members' markets, solely for the  X -purpose of foreclosing competition in each RBOC's region.?^  yON-ԍ Webcel Petition at 19.? Bell Atlantic, in reply, argues that such concerns are theoretical and unsupported and that the Commission's rules already proscribe any anticompetitive auction tactics.  Xy-x;60.ؠ We agree with Bell Atlantic. We rejected earlier in this Order similar claims of Webcel that participation by incumbent LECs or incumbent cable operators in the LMDS  XK-auction will result in anticompetitive activities to prevent entry from new competitors.h_KX {OT-ԍ See paras.  P2425 ש P39H39 , supra.h We discussed the auction rules that proscribe such activities and we agreed with Bell Atlantic that there is no need for additional rules. We point out that the anticollusion rules permit license applicants to enter into partnerships, joint ventures, and consortia for the purpose of pursuing  X-a license at auction, but prohibit the kind of collusion Webcel describes.` {O-ԍ Second Report and Order, 12 FCC Rcd at 1268586 (paras. 338339), adopting 47 C.F.R.  1.2105.  X-X` hp x (#%'0*,.8135@8:63.ؠ As Webcel acknowledges, Section 652 prohibits inregion LECs and cable  X-companies from acquiring attributable interests in each other. The Fourth NPRM sought comment generally on what should constitute an attributable interest and pointed out that the  Xd-Commission has used several different formulations in different contexts._ed {O-ԍ Fourth NPRM, 11 FCC Rcd at 1905657 (para. 133)._ Thus, although the Commission stated that it would consider the 10 percent level used in Section 652, it neither relied exclusively on the statute nor otherwise indicated that its deliberations in  X-adopting a final rule would be somehow limited to that proposal. Although the general goals may be the same in seeking to achieve competition by imposing ownership limitations on  X-potentially dominant entities, we sought in the Second Report and Order to establish a new broad service to be implemented as soon as possible. Thus, the Commission sought to avoid establishing an attribution standard that would forestall desirable financial interests in LMDS licenses. In contrast, Section 652 is a prohibition on acquisition of cross interests in established businesses, so there is little danger that use of a lower attribution level in that context will deprive nascent services and technologies of needed capital.  XR-X` hp x (#%'0*,.8135@8: | yO-ԍ 47 C.F.R.  27.14.> RTG points out the many differences between WCS and LMDS, and argues that LMDS licensees should be held to more rapid delivery of service. Yet the Commission did not rely on similarities between the services in finding the same standard appropriate. Instead, it considered the standard in the context of LMDS and found a number of reasons why it was appropriate for  XK-implementing LMDS and meeting the requirements of Section 309(j).pK  {O-ԍ Second Report and Order, 12 FCC Rcd at 1265960 (paras. 267268).p Specifically, the Commission rejected stricter construction requirements as neither practical nor desirable in meeting the objectives of Section 309(j) because the broad range of new and innovative services in LMDS, many of which remain in the design stage awaiting issuance of licenses, makes it difficult to devise specific construction benchmarks.  X-x~127. The Commission also found that stricter requirements could discourage participation in LMDS because of the new nature and broad definition of the service, and because equipment is under development, and there may be licensees able to conduct certain operations that have to await further technological developments. The Commission adopted safeharbor examples to demonstrate substantial service under an LMDS license at the end of the 10year period, including as factors whether a licensee is serving niche markets or"N90*%%^^"  X-populations outside of areas served by other licensees.K {Oy-ԍ Id. at 1266061 (para. 270).K In all respects, the Commission found that the construction standard it adopted promoted the goals of Section 309(j) and the goals for LMDS.  X-x128.ؠ As a final matter, RTG argues that reliance on the effectiveness of competitive bidding to assign licenses to those most willing to use the license, the availability of partitioning and disaggregation of LMDS licenses, and the broad universal service policies do  X_-not establish that the liberal construction rule is consistent with Section 309(j).?_Z yOj -ԍ RTG Petition at 1314.? Contrary to RTG's suggestion, the Commission identified these as additional Commission policies and practices that, together with the LMDS construction requirements, it believes will be effective  X -in promoting service to rural areas.h  {O-ԍ Second Report and Order, 12 FCC Rcd at 12661 (para. 271).h The Commission did not rely on these policies and practices to justify the construction rule or otherwise find it consistent with Section 309(j)(4)(B). As discussed at length above, the Commission found that geographic partitioning of LMDS licenses will be useful in expediting delivery of services to rural  X -areasZ | {O-ԍ See para. P110KD103, supra.Z and that the mission of universal service to rural areas as well as urban areas will be  X -promoted through competition.Z  {Of-ԍ See para. P117GS110, supra.Z  X-X` hp x (#%'0*,.8135@8:~0*%%^^<"Ԍ X-x140.ؠ Additionally, as CellularVision notes, the licensing blocks do not provide any single LMDS license with more than 1,000 megahertz of unencumbered spectrum. The Commission adopted two license blocks for the LMDS spectrum in the 28 GHz and 31 GHz  X-bands.P {O4-ԍ Id. at 1260001 (paras. 125127).P The larger LMDS license of 1,150 megahertz has 150 megahertz of spectrum encumbered by satellite interests in the 28 GHz band, while the smaller license of 150 megahertz consists of the outer segment of the 31 GHz band where incumbent licensees are protected. This is a substantial reduction from the 2,000 megahertz of unencumbered  X_-contiguous spectrum proposed in the 28 GHz band in the First NPRM to provide for two  XJ-LMDS licenses.WJZ {OU -ԍ First NPRM, 8 FCC Rcd at 560 (para. 20).W  X -x141.ؠ Although satellite demands required the Commission to authorize initially only  X -850 megahertz for LMDS on an unencumbered basis in the First Report and Order, it was found that without additional unencumbered spectrum, some proposed LMDS systems would  X -not be able to provide the full panoply of twoway services anticipated.v  {Ov-ԍ First Report and Order and Fourth NPRM, 11 FCC Rcd at 19043 (para. 97).v In the Fourth  X -NPRM issued in conjunction with the First Report and Order, the Commission made plain the intention to designate the additional spectrum necessary to satisfy the significant consumer demand for the telephone and video services of LMDS and the belief that the 300 megahertz of spectrum in the 31 GHz band would ensure consumers access to these new and competitive  Xj-services and technologies.Oj~ {O-ԍ Id. at 1904445 (paras. 98100).O Sierra does not demonstrate on reconsideration that the extensive record that was relied upon in adopting the proposal is without any foundation for finding a need by LMDS for the additional 300 megahertz of spectrum.  X-x b. NearTerm Use and Growth of Incumbent Services  X-x142. P127G נ Sierra argues that the Second Report and Order underestimated the extent of  X-current use of the 31 GHz band and of the demand for future use.A yO-ԍ Sierra Petition at 610.A Sierra argues that the Commission considered only incumbent licensees when it provided for their protection in the outer 150 megahertz segments, and that the evidence of rapid future growth by existing services was ignored. Sierra contends that the Commission cannot fairly balance the growth prospects of LMDS against the present implementation of incumbent services without taking their future growth into account. Sierra asserts that it and several other commenters presented extensive data to show that current use is neither light nor sparse and that future growth will"A?0*%%^^" be prodigious. CellularVision and TI argue that, in addressing similar claims by Sierra, the Commission fully considered the extent of current and future 31 GHz services and that  X-Sierra's claims remain unsupported on reconsideration. yOK-ԍ CellularVision Opposition to Sierra's Petition at 45; TI Opposition to Sierra's Petition at 67. CellularVision and TI claim that Sierra ignores the Commission's responsibility to revisit spectrum use to determine its most efficient and effective use in the public interest and the record analysis demonstrating only minimal, scattered spectrum use over the past 12 years under the existing pointtopoint 31 GHz rules, as compared to the demand for the new broadband services of LMDS.  XH-x143.ؠ We disagree with Sierra that the decision to designate the 31 GHz band rested on only a presumption that use of the 31 GHz band is relatively light and concentrated in a few  X -sparsely populated areas, and that the reality is otherwise. X {O# -ԍ Sierra Petition at 9, citing Fourth NPRM, 11 FCC Rcd at 1903537 (paras. 75, 99). In making the decision, the Commission undertook an extensive analysis of the number of incumbent licensees, the types of services they are licensed to provide, and the nature and scope of all the services that  X -operate in the band.n  {Op-ԍ Second Report and Order, 12 FCC Rcd at 1256873 (paras. 4456).n That was done to address the arguments of Sierra, Sunnyvale, and others that the number of licensees is extensive, particularly insofar as there are governmental licensees using the spectrum for traffic control services. Based on this review, the Commission concluded that, despite the nationwide availability of the spectrum, the number of entities licensed under the existing rules for 31 GHz services is small and the locations are  Xb-very few and confined._b| {O-ԍUSUS Id. at 12573 (para. 56).US??_  X4-x144.ؠ Although Sierra does not contend that the figures and analyses are wrong, it nevertheless addresses certain aspects of the Commission's findings that it argues would show that current use is not light and that there could be a prodigious rate of growth under the existing 31 GHz pointtopoint rules, particularly by governmental entities to provide traffic control systems. Specifically, Sierra notes that the Commission corrected the total number of  X-licensees from the numbers reflected in the Fourth NPRM to 86 licensees. Sierra, however, fails to acknowledge the breakdown and analysis of the licensed services and that, of the total,  X-only 19 are governmental licensees, of which 14 are municipal licensees.J {OT!-ԍ Id. at 1256970 (para. 47).J  Xg-x145.ؠ Of the remaining licensees, 59 are licensed under the LTTS procedures to provide service on a temporary, asneeded basis anywhere in a broad area, have alternative"P@0*%%^^"  X-spectrum available, and did not submit comments.t {Oy-ԍUSUS Id. at 1257273 (para. 55), 12585 (para. 89).US??t The final eight licensees are private business licensees that use the service within a business or group. The Commission considered all of the evidence presented by Sierra and in other comments that the numbers are higher, particularly for governmental entities, but could verify only 19 as licensed. The remainder were found to be duplicates, manufacturers or dealers that are not subject to the service rules, unlicensed users that cannot be taken into account, or users whose nature and  Xv-status could not be determined based on the evidence presented by Sierra.rvZ {O -ԍ Id. at 12569 (para. 45), 1257071 (paras. 4850), 12571 (para. 52).r Sierra does not demonstrate that the figures or analyses of current use are mistaken or otherwise in error.  X1-x146.ؠ In further support of its claims of extensive use, Sierra notes that the list the  X -Commission set out in Appendix B to the Second Report and Order identifying the existing governmental and private business licensees shows licensees in 11 states scattered across every  X -part of the country, plus the Gulf of Mexico region.N  yO-ԍ Sierra Petition at 7 nn.24, 25.N It argues that there are several governmental licensees whose populations considerably exceed 50,000. Sierra then identifies the entire population figures of the three states that are licensees, namely California, Washington, and Wisconsin, as well as some of the city and county licensees. Sierra, however, does not explain how these figures support its contention that the use of the 31 GHz band is extensive and nationwide. In identifying the nonLTTS licensees, Appendix B confirms the identity of the 19 governmental licensees and the 19 municipalities in which they operate, as well as the identity of the eight private business licensees and the eight municipalities in which they operate, plus the private business licensee in the Gulf of  X-Mexico.l| {OL-ԍ Second Report and Order, 12 FCC Rcd at 1276365 (Appendix B).l Of the governmental licensees, the largest number are located in California and their operations are in 12 municipalities of varying sizes. Of the remaining seven governmental licensees, they operate in a single municipality in six states, except for two municipalities in Washington. The eight private business licensees operate in the remaining four states noted by Sierra, but their operations also are very localized and limited to locations within eight municipalities.  X~-x147.ؠ We find that Sierra's reliance on entire populations of the states in which the governmental licensees are located bears no relationship to either the nature of their licensed  XP-service areas or the geographic areas they are authorized to serve. The Second Report and  X;-Order examined the Commission's goals in implementing the 31 GHz service rules in 1985 and the scope of the licensed services as part of the Commission's responsibility to determine"&A0*%%^^"  X-whether spectrum is being put to the most efficient and effective use in the public interest.N {Oy-ԍ Id. at 1257173 (paras. 5455).N As the Commission pointed out, the 31 GHz services are licensed on a pointtopoint basis or within an area defined by a point and radius under simplified rules that were to encourage various shortrange services. The Commission examined all the comments from governmental entities, both licensed and unlicensed, that included such municipalities as Palm Springs, San Diego, Topeka, Honolulu, and Long Beach and that described 31 GHz service in terms of the  Xv-number of traffic signals and intersections with the respective municipalities.NvZ {O -ԍ Id. at 1257375 (paras. 5861).N Both from the described services and the locations identified in Appendix B, it is clear that neither the governmental entities nor the remaining licensees provide service on a statewide or countywide basis as Sierra contends, but rather are limited to a few shortrange communication operations as part of various traffic control systems or private businesses within specific municipalities.  X -x148. Moreover, we disagree with Sierra that the Second Report and Order failed to consider the evidence of rapid growth in 31 GHz services and the future needs for the  X -incumbent services.A  yOF-ԍ Sierra Petition at 710.A Contrary to Sierra's assertion, the Commission considered not only ``all incumbent licensees and interests'' as Sierra claims in determining the correct number  X{-and extent of existing services,g{| {O-ԍ Second Report and Order, 12 FCC Rcd at 12571 (para. 51).g but the extent to which the record supported arguments by Sierra and others of substantial growth. Sierra repeats its claims that, as the provider of most of the 31 GHz transmitters, it has shipped 75 percent more transmitters in 1996 than 1995,  X6-and expects to ship four times more in 1997 than 1996.G6 {O-ԍ Id. at 12571 (para. 53).G But it submits no information in support of its claims to indicate how such claims are reflected in the small number of existing licensees or pending applicants that are governmental entities. Sierra repeats the claim that a list of 42 customer sites being installed or planned submitted by Sunnyvale is further proof of growth. The Commission found, however, that only 12 on the list were licensees and the status of the remainder as future licensees would be unpredictable.  X-x149. The Commission fully considered the number of pending applications and we disagree on reconsideration that they are further evidence of pressure for growth in the  Xg-band.Hg {O$-ԍ Id. at 12589 (para. 100).H As the Commission pointed out, they were filed after the Fourth NPRM when we"gB2 0*%%^^" proposed to redesignate the 300 megahertz in the 31 GHz band to LMDS and specifically requested comments on whether to accept any new applications, modifications, or renewal  X-applications under the 31 GHz rules._ {OK-ԍ Fourth NPRM, 11 FCC Rcd at 1904647 (para. 103)._ The Commission thoroughly considered the extent to which the comments, which were from the traffic control interests, addressed the plans by  X-states and municipalities to expand existing systems or establish new traffic control systems.kZ {O-ԍ Second Report and Order, 12 FCC Rcd at 12587 (paras. 9596).k Yet all of the applications were from new applicants that are not licensees and, thus, no existing licensees sought during that period to expand their systems as Sierra claims. Moreover, with the exception of Nevada DOT, none of the comments addressed new or planned systems that were the subject of pending applications. Nevada DOT, together with the Cities of Las Vegas and North Las Vegas (Cities), had filed applications to initiate a  X -traffic signal control system for the Las Vegas metropolitan area._  {O-ԍ Id. at 12587 (para. 95), 12589 (paras. 100101)._ The Commission noted that the remaining applicants essentially were nongovernmental entities. None of the evidence supports Sierra's repeated contentions of rapid growth of services in the 31 GHz band under the previous service rules. We find that its comparison to future growth of LMDS is misleading, since LMDS is being authorized for the first time and the only existing service from CellularVision was established under a onetime waiver of the existing rules that led to the initiation of this proceeding.  Xb-x c. Public Interest Issues  X4-x150. P133G נ Sierra argues that the Commission did not give proper weight to the public interest in the incumbent 31 GHz services and the need to preserve their licensing in the outer  X-150 megahertz segment, rather than redesignate that segment for LMDS.B~ yO5-ԍ Sierra Petition at 1014.B Sierra argues that, although the Commission acknowledged the public interest in the traffic control systems provided by the governmental licensees and properly extended frequency protection to them, the Commission eliminated all further licensing under the rules without any explanation of why their expanding use of the band should be ignored. Sierra asserts that the disregard for future users makes no sense in view of the recognition of the public interest and the pressure for expanded services. Sierra further argues that the alternative methods that the Commission suggested were available for governmental entities to obtain spectrum are not acceptable. CellularVision and TI disagree with Sierra. They argue that the Commission was careful to thoroughly examine the public interest associated with the incumbent services and to balance that interest against the public interest in favor of LMDS to satisfy the Commission's" C0*%%^^"  X-obligation to determine the most efficient use of the spectrum. yOy-ԍ CellularVision Opposition to Sierra's Petition at 56; TI Opposition to Sierra's Petition at 78. CellularVision and TI contend that the Commission accorded more than sufficient weight to the public interest in the incumbent licensees and gave them ample deference when the Commission modified our proposal to grant them protected status from LMDS interference in the outer 150 megahertz.  X-x151. P151GH נ We disagree that the Commission ignored the public interest in preserving the 31 GHz band for the continued use by governmental entities for traffic control systems. Sierra cites to numerous comments from governmental entities, IMSA, and equipment dealers; yet  XH-the Commission fully considered them all in the Second Report and Order. Based on these comments, the Commission concluded that traffic control systems are an important category of incumbent services that currently make the most extensive use of the 31 GHz spectrum and are increasingly being used by governments to meet Federal goals to reduce congestion and  X -air pollution.n X {O-ԍ Second Report and Order, 12 FCC Rcd at 1257375 (paras. 5762).n Accordingly, the Commission determined that incumbent licensees should  X -continue to operate free from interference and could require protection from LMDS.G  {Or-ԍ Id. at 12577 (para. 67).G For these reasons the Commission modified its proposal and adopted, in part, the band plan proposed by Sierra to segment the 300 megahertz in the 31 GHz band to provide an outer subband of 150 megahertz that allows incumbent governmental licensees to continue their  X{-traffic signal operations with protections from LMDS.N{| {O-ԍ Id. at 1258187 (paras. 7995).N  XM-x152. P152PD נ The Commission, however, did not find persuasive evidence to preserve the outer 150 megahertz segment for the continued and exclusive licensing of 31 GHz services, including traffic control systems. The Commission pointed out that, in weighing the public interest, incumbent interests must be balanced against the interests in promoting LMDS as an important new technology with a wealth of innovative services that are expected to compete  X-with local telephone and cable service to enhance customer choice.G {O-ԍ Id. at 12577 (para. 68).G This careful balancing led to the band plan we adopted for incumbent licensees. The Commission fully considered the comments in response to its inquiry whether to accept any applications for new service under the 31 GHz rules, including the arguments from Sierra, governmental entities, and  X~-licensees that seek to preserve the existing rules for licensing.N~ {O#-ԍ Id. at 1258788 (paras. 9497).N It then balanced the"~D2 0*%%^^2" competing interests in continuing 31 GHz licensing and implementing LMDS under an entirely different licensing scheme, based on all the record evidence.  X-x153. P153WE נ Contrary to Sierra's assertion, the Commission did explain the basis for terminating future licensing under the 31 GHz rules. Based on this extensive record, the Commission found several reasons why further growth and development of the 31 GHz services to the exclusion of LMDS in the outer 150 megahertz segment of the band would be inconsistent with the record. These included the need to fully accommodate LMDS as it develops, the incompatibility of 31 GHz services with LMDS that could have a chilling effect on the development of LMDS, and the uncertainties of the described plans for future growth  X -of traffic systems in light of the rapidly changing technology for traffic systems.N  {O -ԍ Id. at 1258889 (paras. 9899).N As we demonstrate, Sierra does not refute the determination that LMDS would benefit from the additional spectrum and that incumbent services are not extensive. Thus, the Commission properly concluded that use of this spectrum under the existing rules over the past 12 years has been minimal and that designating future licensing on the 31 GHz band for LMDS fulfills  X -our obligation to designate spectrum for the most effective and efficient use.K Z {O-ԍ Id. at 1258990 (para. 101).K  X-  Xy-x154. P154RF נ We disagree with Sierra that governmental entities cannot obtain an acceptable  Xb-level of service from spectrum obtained through the alternative means described in the Second  XM-Report and Order.KM {O-ԍ Id. at 1259495 (para. 114).K First, Sierra argues that bidding on the 150 megahertz license in their BTAs is not an option for most local governmental entities. Sierra contends that they only need a tiny fraction of the BTA, it is not practical for them to engage in the business of selling or leasing excess spectrum, the BTA encompasses several cities with separate  X-installations, and few have the resources or time to participate collaboratively in the auction.B~ yO"-ԍ Sierra Petition at 1213.B We do not find these arguments persuasive. The 150 megahertz license was adopted in order  X-to assign the outer 150 megahertz of the 31 GHz band as a separate and smaller license that is  X-more easily available to smaller operators.m {Om -ԍ Second Report and Order, 12 FCC Rcd at 12601 (paras. 128129).m The Commission concluded that this smaller license addressed the needs of commenters for a smaller bandwidth to provide for smaller operators, niche markets, and services that are economically viable under cheaper, narrower bandwidth licenses. The Commission sought to make it easier for any incumbent licensee or entity interested in continuing to have access to the 31 GHz band for incumbent services to acquire a license for the redesignated spectrum under the LMDS licensing rules. Thus, the";E0*%%^^" smaller license is available as an option to those small entities that are interested in providing service under the LMDS rules to gain access to 31 GHz spectrum.  X-x155.ؠ Sierra next asserts that acquiring spectrum from the local LMDS licensee through spectrum disaggregation or geographic partitioning of the LMDS license is not  X-feasible.E yO-ԍ Sierra Petition at 13.E As Sierra points out, the Commission adopted its proposal to divide the 31 GHz band into the two outer 75 megahertz segments to accommodate the traffic control systems described by Sierra, which require a full 150 megahertz for each intersection or stretch of  XH-highway and thereby occupy all of the outer segments.HX {OQ -ԍ Second Report and Order, 12 FCC Rcd at 1258283 (paras. 8283).V_Equation Ca#[ Z_Equation Ca# Sierra contends that disaggregation would not provide enough spectrum and geographic partitioning would transfer rights to far more area than the local entity can use, inasmuch as a system occupies only a small fraction of an area. We disagree. Although the procedural rules governing disaggregation or  X -partitioning are pending, the Second Report and Order determined to provide licensees the flexibility to disaggregate and partition their licenses to encourage use of the spectrum and  X -leave the size of licenses to the marketplace.H  {O[-ԍ Id. at 12608 (para. 145).H The Commission proposed that the parties be given the flexibility to define the partitioned license area. A governmental entity would be able to do so, based on its pattern of usage, so that it would hold spectrum for a license area  X{-appropriately defined to meet its needs.H {| {O-ԍ Id. at 12595 (para. 413).H Whether or not disaggregation is a viable option, the entity may use partitioning both to acquire the portion of an area it wants from the LMDS licensee or to sell off the excess areas of its own license.  X-x156. P156TY נ As for the remaining alternatives, Sierra argues that transferring to a different transmission medium and leasing service or transmission capacity from a common carrier would require leaving the 31 GHz band for more expensive equipment, put public safety services in the hands of a commercial provider, and may result in reliance on wired systems  X-that are prohibitively expensive.H  yO-ԍ Sierra Petition at 1314.H We do not find Sierra's arguments persuasive. The expense and availability of equipment or bands useful to governmental entities are variables that cannot be predicted, in light of the rapid development of equipment and the flexibility in our rules that allow licensees to craft the service that is in demand. As the Commission stated, we cannot predict that 31 GHz will continue to offer the best technology, or that LMDS technology will not be developed to suit some of the incumbent services. The Commission further noted that LMDS supporters indicated a desire to provide access to any"9F 0*%%^^" licensed spectrum they may acquire either through leasing or other means through which  X-similar traffic control systems could grow.j  {Ob-ԍ Second Report and Order, 12 FCC Rcd at 1258889 (para. 99).j  X-x157.ؠ Sierra requests clarification of the footnote that states, after the discussion of the alternatives to licensing under the existing 31 GHz rules, that most of the nation's  X-metropolitan areas do not rely on wireless technology for their traffic control systems.N Z {O-ԍ Id. at 12595 (para. 114 n.158).N Sierra argues that any implication that wireless systems are not essential for traffic control is wrong and that, instead, most areas have inadequate signal coordination and its purchase  XH-orders show the demand for the 31 GHz wireless systems.? H yO -ԍ Sierra Petition at 14.? The footnote is clear. It is prefaced by the information that only 19 governmental entities are licensed under the existing rules for 31 GHz service to provide traffic control operations. In light of this record of 31 GHz usage, and taking into account the large number of local jurisdictions across the Nation, it can certainly be stated that most cities do not use 31 GHz spectrum for wireless traffic control. This is another factor that the Commission weighed in determining the impact of a decision to close the band to new licensing under the 31 GHz rules, together with the other factors discussed above.  Xy-X` hp x (#%'0*,.8135@8:Z  yO -ԍ Application of Hye Crest Management, Inc., for License Authorization in the PointtoPoint Microwave Service in the 27.529.5 GHz Band and Request for Waiver of the Rules, File No. 10380CFP88, Memorandum  {O% -Opinion and Order, 6 FCC Rcd 332 (1991) (Hye Crest Order).L Subsequent to this grant, a total of 971 applications were filed for similar waivers of the rules in order to operate LMDS facilities. The Commission implemented a freeze on the acceptance of applications for common carrier pointtopoint microwave service in the 28 GHz band in an order released  X -October 29, 1992, to stop the filing of additional waiver applications.?  yO[-ԍ Petitions for Redesignation of the Common Carrier PointtoPoint Microwave Radio Service Frequency Band 27.529.5 GHz, RM7722, RM 7872, Order, 7 FCC Rcd 7201 (1992). In an Order issued in  X -conjunction with the First NPRM, the Commission denied the pending waiver applications because the Commission found it more appropriate to establish service rules for the licensing  X}-and operation of LMDS, rather than granting waivers of the existing rules.Z@}B {Op-ԍ First NPRM, 8 FCC Rcd at 56465 (para. 51).Z Several of the LMDS waiver applicants filed petitions for reconsideration of this dismissal.  X8-x191.ؠ In the Order on Reconsideration released in conjunction with the Second Report  X#-and Order, the petitions for reconsideration were denied.vA# {O-ԍ Second Report and Order, 12 FCC Rcd at 1270511 (paras. 388406).v The Commission stated that it has wide latitude in choosing whether to proceed by adjudication, such as a waiver proceeding, or by rulemaking. Because the waiver applications were found to have raised issues of general applicability, the Commission pointed out that their disposition was better suited to a  X-rulemaking as determined in the First NPRM. The Commission alternatively considered whether, on reconsideration, petitioners showed that the waiver applications met the applicable"Tf A0*%%^^R"  X-standards that govern waiver of frequency allocation in Big Bend Telephone.~BZ yOy-ԍ #Tps7n##X\  P6G;qP#Big Bend Telephone Company, Inc. and Dell Telephone Cooperative, Inc., File Nos. 14850CFP84 through 14949CFP84, File Nos. 14811CFP84 through 14848CFP84, Memorandum Opinion and Order, 2  {O -FCC Rcd 2413 (1986) (Big Bend Telephone).~ The Commission concluded that, under the standards, the applications also would not be granted because the proposed use of frequencies was detrimental to the assigned users at the time they#VZ_Equation Ca#V_Equation Ca were filed, they did not meet the public interest standards for waiver of frequency designation, and any unique aspects of a service or an applicant do not outweigh the countervailing public interest in the resolution of the fundamental service issues by rulemaking rather than  Xx-adjudication. #Z_Equation Ca#  XJ-x192.ؠ LDH and M3ITC submit petitions for further reconsideration of the Order on  X3-Reconsideration that request that the Commission reinstate their applications for processing.VC3 yO -ԍ LDH Petition at 3 n.2; M3ITC Petition at 2. V They argue that they raise numerous issues that the Commission did not consider previously on reconsideration, such as the rights of previously cutoff applicants, and that the Commission has a statutory obligation to consider these issues. They seek to ensure that all relevant issues are addressed before final action is taken to dismiss their applications for waiver under the previously existing 28 GHz service rules. We consider the issues more fully below, and deny the requests.  X{-X` hp x (#%'0*,.8135@8:-Order to implement the new Local Multipoint Distribution Service (LMDS) on the 28 GHz and 31 GHz frequency bands. The petitions are denied, except the petitions seeking reconsideration of the decision to dismiss the pending applications requesting authorization of 31 GHz services under the previous service rules. The rule changes adopted in the Third  X-Order on Reconsideration allow the dismissed applicants to refile their applications for the same 31 GHz authorization, but on a secondary basis to LMDS. The rule changes are intended to permit the limited 31 GHz services requested in the dismissed applications that include traffic control systems, among other services in the public interest, while reaffirming the Commission's decision to terminate future licensing of new applications under the previous 31 GHz service rules and designate the 31 GHz band for LMDS, which offers a wide array of telecommunications and video programming distribution services. x` ` "Ca, 10*''^^{"Ԍ X-X` hp x (#%'0*,.8135@8: