December 15, 1995

Re: Amendment of the Commission's Rules Regarding the 37.0-38.6 GHz and 38.6-40.0 GHz Bands

Today, we propose new service and licensing rules for the 37 and 39 GHz bands which advance our goal of efficient use of the spectrum and further our Congressional mandate to place licenses in the hands of those that most value them. I strongly support that decision. However, I must dissent from that portion of today's decision which frustrates those goals by permitting the processing and licensing of pending applications.

I do not favor auctions at all costs and in every instance. But absent a showing of unique and compelling circumstances -- a showing which is not made here -- pending applications should be dismissed if and when we decide to change our licensing rules, and processing should cease in the interim. It is fundamental to me that applicants seeking to use the radio spectrum not be accorded rights or expectancies that outweigh the Commission's responsibilities to serve as a responsible steward of the spectrum and to effectuate Congressional mandates.

The Commission plays a critical role in spectrum management. The public benefits of new technologies and innovative services can be realized only if the Commission can identify appropriate spectrum and modify its rules to facilitate development of those new services. Congress expands the Commission's authority to award spectrum licenses to include competitive bidding; again, we change our rules to implement Congress' mandate. Failure by the Commission to modify our rules to respond to these and other changes as they arise would clearly be irresponsible.

The Notice of Proposed Rulemaking we adopt today is an example of the Commission's exercise of these responsibilities. We seek to ensure that a portion of the spectrum -- specifically the 37 GHz and 39 GHz bands -- will be made available for use in a manner that best serves the advancement of new wireless services and to devise appropriate rules for channeling plans, service areas and licensing methods that carry out that purpose. These actions are fundamental to carrying out our spectrum management responsibilities.

The majority decision to process several hundred pending applications for channels in the 39 GHz band, however, frustrates the future direction our Notice proposes for that band. Both the service areas and the licensing methods we use today for the 39 GHz band are inconsistent with the changes we propose, changes that we believe will be critical to the development of services using these frequencies. By awarding these hundreds of licenses, we will be carving out that many more "holes" in the service areas we ultimately license, obviously impairing the value of the licenses at auction. We will also be rewarding entities that filed large numbers of preemptive applications, anticipating our transition to competitive bidding, in order to obtain as many channels as possible before the Commission auctions the "leftovers".

Our legal authority to dismiss the pending applications is not in doubt. It is well established that the Commission may apply new rules to pending applications. The Commission has previously done so and has dismissed pending applications, without prejudice to the applicants' right to re-file, as a result of rule changes.

Further, our Congressional mandate to employ competitive bidding clearly requires us to adopt new licensing rules for auctionable services. We have tentatively concluded in the Notice we unanimously adopt today that auctioning the remaining channels in the 39 GHz band as well as the 37 GHz band will best accomplish Congress' objectives. Our licensing rules must promote "the development and rapid deployment of new technologies, products and services", ensure "efficient and intensive use of the electromagnetic spectrum", and assure "recovery for the public of a portion of the value of the public spectrum resource..." Section 309(j)(3). Licensing the pending 39 GHz applications does not meet these goals. The entities who have filed the pending applications should instead have the opportunity to participate -- along with everyone else -- in the auction of licenses for these frequencies.

Of course, it would be preferable if we could change our rules only at times when no applicant would be affected. But in this time of transition, as we move from lotteries and comparative hearings to auctions, from small site-specific service areas to wide area licensing, our ultimate policy goals outweigh the impact on pending applicants.

The frequencies at 39 GHz, once hardly noticed, have now become highly desirable, largely due to the development of innovative technologies and services. It is precisely circumstances such as these that make it essential that the Commission have the flexibility to change its rules to encourage the most efficient use of spectrum. The service rules put in place in the past do not properly reflect the uses envisioned for this spectrum today. Our old licensing methods were adopted over twenty years ago -- long before our Congressional mandate to auction and prior to development of innovative new uses for this spectrum.

The old rules neither encourage efficient spectrum use nor recover for the public the value of this spectrum. That is why I strongly agree with the proposal to change the rules but I must disagree with the majority's decision to issue new licenses in the 39 GHz band before our new rules are in place.