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February 3, 1998


Re: Rulemaking to Amend Parts 1, 2, 21, and 25 of the Commission's Rules to Redesignate the 27.5-29.5 GHz Frequency Band, to Reallocate the 29.5-30.0 GHz Frequency Band, To Establish Rules and Policies for Local Multipoint Distribution Service and for Fixed Satellite Services.

Petitions for Further Reconsideration of the Denial of Applications for Waiver of the Commission's Common Carrier Point-to-Point Microwave Radio Service Rules.

I support much of today's Third Order on Reconsideration, and I am excited about the opportunities that this spectrum will provide to entrepreneurs to provide new and innovative services to the public. In addition, I look forward to additional competition in the local telephone and multichannel video programming markets that these new services may provide. I must take issue, however, with the Commission's decision today to initiate a separate proceeding to determine whether or not we will allow the eligibility restrictions to sunset on June 30, 2000 as originally promised.

In the Second Report and Order, the Commission imposed a temporary but severe eligibility restriction on incumbent LEC and cable operators. I fully agree with Commissioner Chong's Dissent in that Order, in which she pointed out the speculative nature of the harms this restriction was trying to prevent. Eligibility restrictions on an innovative new service are a draconian measure; such bans on competition should be used only to prevent a substantial competitive harm to a specific market. Here, the eligibility restrictions are imposed not to prevent a specific harm, but in an attempt to enhance the mere possibility of competition. As Commissioner Chong correctly pointed out in her Dissent, "by precluding the participation of incumbent LEC and cable operators, competition in these markets may well be harmed by arbitrarily denying some of the strongest competitors the ability to branch out into new markets." Despite these concerns, however, the Commission adopted these restrictions based on the notion that restricting eligibility for a limited time would enhance competition.

I am gravely concerned by the Commission's decision today to revisit the current sunset date of the restrictions. I believe there is no need for these restrictions at all. If there must be restrictions, I certainly support the intended sunset of these provisions. Instead, prior to this auction even taking place, the Commission has already decided that it will be necessary to undertake an extensive evaluation of the effectiveness of the restrictions on mere speculative harms. I am unclear as to why six months in 2000 would not provide sufficient time to review a provision that we have already indicated should be temporary in nature, and if such a time frame is infeasible, why we should not address the provision in this year's requisite biennial review. Indeed, any review should take place in conjunction with the 1998 biennial review of all the Commission's rules under Section 11 of the Communications Act.

In defending this restriction before the D.C. Circuit recently, this Commission argued that "the FCC premise, again, is that you gain competition by excluding the big players temporarily." Communications Daily, January 20, 1998 Vol. 18, No. 12 (emphasis added). The Court expressed its appreciation for the context that this statement added, pointing out that it added a certain "richness to the argument." Id. Similarly, I believe that the Commission's decision today, -- i.e. to open an extensive review of the restriction, to conduct that review outside of the biennial review process where the Commission is attempting to find rules that it can eliminate, and to require that the results of that study be presented to the Commission more than a year before the restriction is to sunset -- likewise provides context and a certain "richness" to the Commission's claims regarding the temporary nature of this restriction. I fear that the Commission is headed in the wrong direction in attempting to build a record to keep these restrictions in place and therefore must respectfully dissent from that section of today's Third Order on Reconsideration.