SEPARATE STATEMENT OF COMMISSIONER KATHLEEN ABERNATHY

Today the Commission affirms and expands the bundle of rights of MMDS/ITFS licensees to continue to operate in the 2500-2690 MHz band. Although I would have preferred a decision sooner, our Order resolves the lingering uncertainty for these licensees and allows the parties to move forward with their operations. As for the flexibility afforded by today's Order, I trust the MMDS/ITFS licensees will exercise or decline to utilize these rights responsibly and as they see fit. I do not believe that government is better positioned than these licensees to assess what is in their interest or how best to deliver their services. Nonetheless, the FCC will remain vigilant to ensure that the bundle of spectrum usage rights, including interference protections, afforded to our licenses in these bands will remain intact for all licensees.

Since the World Radio Conference (WRC) in Istanbul designated the 2500-2690 MHz band as a possible location for advanced wireless services⁽¹⁾, the MMDS/ITFS community has faced the difficult uncertainty of possible relocation at a critical time in their development. The evolution of this service - from an analog one-way point-to-point microwave system for video distribution to a dynamic two-way wireless digital broadband pipe - has been long and difficult. Then last year, on the cusp of the first significant MMDS broadband deployments, the WRC's cloud of relocation uncertainty settled over the MMDS bands. While some licensees were adding broadband wireless customers at a rate of 2000 a week, the FCC looked at plans to take substantial chunks of spectrum away from MMDS.⁽²⁾ For ITFS, the difficulties were no less acute. These bands had been used for decades to provide needed distance learning services to schools, hospitals, and universities around the nation. ITFS licensees had navigated the potentially difficult shoals of a relationship with their MMDS brethren to form a symbiotic and productive partnership in these bands. The specter of forced relocation slowed interest and investment. The Commission's Office of Engineering and Technology issued an Interim and then Final Report that found relocation would be extremely difficult and result in costs estimated at $10-30 billion. In the end, these facts led me to the inevitable conclusion that these licensees should not be subject to forced relocation. I regret that it took us almost six months after the Final OET staff report to come to this conclusion - but I believe it is the right one.

Today's Order also concludes that adding a mobile allocation to this band is consistent with Section 303(y) of the Communications Act. That provision grants the Commission authority to allocate spectrum to provide for flexible use if:

(1) such use is consistent with international agreements to which the United States is a party; and

(2) the Commission finds, after notice and an opportunity for public comment, that -

(A) such an allocation would be in the public interest;

(B) such use would not deter investment in communications services and systems, or technology development; and

(C) such use would not result in harmful interference among users.

Consistent with International Agreements: A mobile allocation is consistent with international agreements to which the United States is a party. The 2500-2690 MHz band is allocated in Region 2 (which includes the U.S.) on a primary basis to the Fixed, Fixed Satellite, Mobile except aeronautical mobile, and Broadcasting-Satellite Services.⁽³⁾

Serves the Public Interest: Adding a mobile allocation to this band continues an evolutionary trend in the 2500-2690 band. This evolution has been most dramatic in the commercial portion of the band. Originally conceived as a wireless competitor to multi-channel video service providers, the Commission eventually granted the MMDS licensees, along with their ITFS partners, flexibility to provide two-way digital services, including broadband. The additional flexibility granted here continues this trend, is consistent with the Commission's Spectrum Policy Statement, and recognizes that a flexible approach to spectrum allocation affords licensees the ability to keep pace with new technologies and respond to changing market conditions.⁽⁴⁾

I wish to emphasize that this prong of the statutory test is the "public interest" - not solely the "incumbents' interests." Although I believe our decision in this case is consistent with both, there is an inherent danger in equating the two concepts - as the dissenters appear to do. Indeed if we were to have followed such an approach five years ago, we still might only have one-way analog video services in these bands today. Our interests must be broader than those of any one set of licensees; our interests must encompass the totality of the "public" interest.

There is no question that the ITFS and MMDS licensees in these bands currently provide extremely valuable services to the public. At the recent WCA conference in Boston, I visited with the dozens of service providers, manufacturers, and licensees in these bands.⁽⁵⁾ The ITFS licensees told me about the schools and hospitals that relied on ITFS-based services in order to complete their missions. These licensees also spoke eloquently about the support they received through the leasing arrangements with their MMDS colleagues. The MMDS industry updated me on their rollout plans and the success they were having in the marketplace. I expressed my strong support for clearing any regulatory hurdles or uncertainty that could inhibit the creation of the all-important third broadband pipe to the home. Particularly because MMDS may well provide such services in areas where cable and DSL service are not yet fully deployed. I would not support any decision that would undermine these services.

My colleagues in the minority seem to suggest that our decision here would damage these incumbent operations and that somehow the majority does not appreciate the contributions of these licensees. This is not the case. Nothing in today's Order will inhibit the ability of incumbents to continue to offer their services for as long as they wish. Instead it simply provides another option that these licensees may utilize to achieve their goals - whether those goals be in the classroom, the operating room, or the boardroom.⁽⁶⁾ It may well be that ten years from now there will not be a single mobile use in these bands - but I will still regard flexibility as the right policy.

Fundamentally I believe in these licensees and their ability to exercise sound judgment. I believe in their ability to make choices about their spectrum usage. I believe they can best decide whether to deploy a mobile service - or to continue with their current applications. I believe in their record of working together to achieve their common goals. I believe they will continue to serve the public interest through whatever range of services they chose to offer. I do not agree that government is best positioned to decide how these licensees use their spectrum - or that government should deny these licensees (and thus their end users) a mobile service choice.

There has been some concern raised about the nature of the record support for a mobile allocation in this band. There is no disputing that the weight of the record provided by the incumbents opposes a flexible allocation. This is hardly surprising given the political posture of this proceeding. The primary focus of this proceeding has always been a possible relocation plan for these licensees - that is, MMDS/ITFS would be forced to give up all or part of their existing spectrum to make way for new mobile service providers to be determined at auction. In short, MMDS/ITFS licensees were fighting for their spectrum lives. With the stakes so high, it is no surprise that MMDS/ITFS focused their sights on maintaining the status quo rather than expanding their rights.⁽⁷⁾ It's a bit like a politician asking for a pay raise while immersed in a difficult re-election campaign. First, the pay raise request does not help her case on re-election. Second, it is simply not a great time to ask for a pay increase, regardless of the merits of such a claim. I believe our decision here cuts through to the merits of the claim for mobile flexibility - even if perhaps the timing may have hindered active advocacy of such an approach by most parties.

I also believe that advocacy of flexibility may have been seen as inconsistent with permitting incumbents to maintain their existing allocations. In other words, the accusation goes, why should incumbents be permitted to provide a mobile service while a new entrant cannot. I do not believe there is any inconsistency in these approaches. By our decision today, we indicate that the existing ITFS/MMDS uses in these bands are too valuable to disrupt through the government-mandated relocation that would be required in order for new entrants to begin offering mobile services. Alternatively, if incumbents can continue to provide those services or chose to modify their offerings to allow for mobility, those policy outcomes do not disrupt via government fiat the important operations in these bands. In the end, our goal is only to provide licensees the opportunity to enhance their value through mobile use, if the licensees wish to initiate such a service.

Would Not Deter Investment In Communications Services And Systems, Or Technology Development: Nothing in today's order should hinder technological development for ITFS and MMDS uses. In fact, today's decision may well provide the impetus for new and innovative services in these bands by removing the cloud of uncertainty from this band and harmonizing the allocation with the rest of the Region 2. Regionally harmonized allocations lend themselves to the type of scale and scope which leads to research and product development. Moreover, in light of our conclusions about the need to protect incumbent users, our decision may well spur development of integrated service offerings that allow mobile and fixed services to share more readily.

One might argue that the item's flexibility analysis on this prong would always result in flexibility. In other words, when would flexibility deter investment? It is a difficult question, given my general comfort with spectrum flexibility and the marketplace. However, there may indeed be situations where flexibility could inhibit investment and innovation. For example, the Commission recently set aside significant amounts of spectrum for wireless medical telemetry.⁽⁸⁾ Adding flexibility to that band could very well chill investment in medical telemetry services without any corresponding up-tick in investment for the flexible service offerings.

Would Not Result In Harmful Interference Among Users: Today's decision does not alter in any way the existing interference protection afforded to licensees in these bands - which, coupled with private "interference contracts," have proven effective in protecting all users from harmful interference. Therefore, future mobile uses in this band can only happen if the use will "not result in harmful interference among users."

Interference protection lies at the core of the Commission's responsibilities. Regardless of the extensive nature of the spectrum usage rights that we distribute, we will always be called upon to prevent licensees from externalizing costs (through interference) onto their neighbors. Today's Order contemplates a further rulemaking to assess whether modifications of our interference rules in these bands are appropriate in light of the additional mobile allocation. I look forward to a full record in that proceeding. My colleagues in dissent suggest that we are required under our Upper 700 MHz First Report and Order to assess the impact of interference "before [the FCC] approves such flexible use."⁽⁹⁾ The minority misconstrues that Order. Prior to that Order, the Commission had already reallocated the 700 MHz band for use on a flexible basis by the fixed, mobile and broadcasting services.⁽¹⁰⁾ The quoted Order addressed the service rules necessary to control interference under the flexible allocation. Similarly, the majority now finds that the 2.5 GHz band can be allocated for mobile service on a flexible basis and any potential interference issues can be addressed in a future service rule proceeding. Moreover in this band - unlike the new service to be provided in the cleared spectrum at 700 MHz - there are existing interference protections that allow for continued operations. For now, these interference rules and the obligation of any new services to operate on a non-interference basis ensure that the addition of the new capability will not result in harmful interference among users. That is what every licensee has the right to expect.

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MMDS/ITFS licensees and the public are now well positioned to enjoy the fruits of a decade of technological advances and the Commission's regulatory labor. We have removed technical restrictions, increased commercial flexibility, made more spectrum available, and encouraged technological innovation. Again, today we take another substantial step towards providing licensees with one more choice on how to further develop and deploy services that meet their and the public's needs. The history of this band over the last thirty years has been one of great promise, false starts, rebirth, and success. As the communications world moves from static analog one-way services to a dynamic digital two-way mobile environment, the ITFS and MMDS licensees in this band will now have the tools for another cycle of innovation, investment and creative new services to better meet the needs of their users. I look forward to the public's opportunity to fully enjoy the benefits of these licensees' entrepreneurship, dedication to community, and innovation in the marketplace.