97-29346. MDS and ITFS Two-Way Transmissions  

  • [Federal Register Volume 62, Number 215 (Thursday, November 6, 1997)]
    [Rules and Regulations]
    [Pages 60025-60034]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 97-29346]
    
    
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    FEDERAL COMMUNICATIONS COMMISSION
    
    47 CFR Parts 1, 21 and 74
    
    [MM Docket No. 97-217; FCC 97-360]
    
    
    MDS and ITFS Two-Way Transmissions
    
    AGENCY: Federal Communications Commission.
    
    ACTION: Proposed rule.
    
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    SUMMARY: In this Notice of Proposed Rulemaking (``NPRM''), the 
    Commission seeks comment on the proposed amendment of its rules to 
    enable Multipoint Distribution Service (``MDS'') and Instructional 
    Television Fixed Service (``ITFS'') licensees to engage in fixed two-
    way transmissions. The Commission seeks comment on its proposals to 
    enhance the flexibility of MDS and ITFS operations through facilitated 
    use of response stations, use of booster stations with program 
    origination capability in a cellular configuration, and use of variable 
    bandwidth (``subchanneling'' or ``superchanneling''). Comment is sought 
    regarding the technical, procedural and economic effects of 
    implementing the proposed rule changes.
    
    DATES: Comments must be filed on or before December 9, 1997, and reply 
    comments on or before January 8, 1998. Written comments by the public 
    on the Initial Regulatory Flexibility Analysis are due December 9, 
    1997.
    
    ADDRESSES: Office of the Secretary, Federal Communications Commission, 
    1919 M Street, N.W., Washington, D.C. 20554.
    
    FOR FURTHER INFORMATION CONTACT: Michael J. Jacobs, (202) 418-7066 or 
    Dave Roberts, (202) 418-1600, Video Services Division, Mass Media 
    Bureau.
    
    SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
    Notice of Proposed Rulemaking, MM Docket No. 97-217, adopted October 7, 
    1997, and released October 10, 1997. The full text of this NPRM is 
    available for inspection and copying during normal business hours in 
    the FCC Reference Center (Room 239), 1919 M Street, N.W., Washington, 
    D.C., and also may be purchased from the Commission's copy contractor, 
    International Transcription Services, Inc., (202) 857-3800, 1231 20th 
    Street, N.W., Washington, D.C. 20036.
    
    Synopsis of Notice of Proposed Rulemaking on MDS and ITFS Two-Way 
    Transmissions
    
        1. This NPRM was issued in response to a petition for rulemaking 
    filed by a group of 111 educators and participants in the wireless 
    cable industry (collectively, ``Petitioners''), comprised of MDS and 
    ITFS licensees, wireless cable operators, equipment manufacturers, and 
    industry consultants and associations. In this proceeding, Petitioners 
    are asking that we implement a series of technical rule changes that 
    would give MDS and ITFS licensees the needed flexibility to fully 
    exploit digital technology in delivering two-way communications 
    services. Currently, MDS and ITFS licensees are authorized to use 
    digital technology in order to increase the number of usable one-way 
    channels available to them, leased ITFS frequencies and MDS channels 
    may be used for asymmetrical high speed digital data applications so 
    long as such usage complies with the Commission's technical rules and 
    its declaratory ruling on the use of digital modulation by MDS and ITFS 
    stations (``Digital Declaratory Ruling,'' 11 FCC Rcd 18839 (1996)), and 
    MDS licensees have been permitted to provide two-way service on a 
    limited basis. While 125 kHz response channels are currently allocated 
    for use in association with most MDS and ITFS stations, Petitioners 
    anticipate that many MDS and ITFS licensees and wireless cable 
    operators engaging in two-way transmissions will require more capacity 
    for return paths than is available through such 125 kHz channels. 
    Moreover, because these 125 kHz response channels must be individually 
    licensed under the
    
    [[Page 60026]]
    
    Commission's existing rules, Petitioners argue that the existing rules 
    are too cumbersome and impose too great a financial burden on licensees 
    seeking to implement two-way wireless services. Instead, Petitioners 
    propose a system under which MDS and ITFS licensees would be permitted 
    to utilize all or part of a 6 MHz channel for return path transmissions 
    from subscriber premises, to cellularize their transmission systems to 
    take advantage of spectrally efficient frequency reuse techniques, and 
    to employ modulation schemes consistent with bandwidths either larger 
    or smaller than 6 MHz, all while providing incumbent MDS and ITFS 
    licensees interference protection equivalent to what they currently 
    receive.
        2. Petitioners emphasized that they are not seeking a reallocation 
    of spectrum, but instead are seeking to modify the technical rules 
    governing the spectrum already allotted to MDS and ITFS. We placed the 
    petition for rulemaking on public notice, and received comments and 
    reply comments from wireless cable industry participants that generally 
    supported Petitioners' proposals. While many ITFS commenters expressed 
    concern over the details of Petitioners' proposals, the comments and 
    reply comments reflected a consensus in the MDS and ITFS communities 
    that the concept of two-way offerings would greatly aid both services. 
    We believe that several of Petitioners' proposals may be in the public 
    interest in that they would enhance the MDS and ITFS services by 
    providing licensees additional flexibility in order to implement two-
    way services. Such flexibility would be facilitated by changing certain 
    of our technical rules, amending some of our programming rules, and 
    modifying some of our current application procedures for MDS and ITFS 
    facilities. The NPRM seeks comment on the various issues raised by 
    these proposals, and puts forth some counter-proposals to those 
    proffered by Petitioners.
        3. Revised Definitions of Service. The ITFS/MDS spectrum is used 
    primarily for the provision of either one-way video service to 
    students, in the ITFS context, or, in the MDS context, wireless cable 
    service to subscribers, which likewise historically has constituted 
    primarily the provision of one-way video services. While our Rules 
    already permit MDS licensees to provide non-video services, under our 
    current regulatory scheme, MDS operators typically only provide two-way 
    service to subscribers using telephone return links or individually 
    licensed subscriber premises stations. This is an outgrowth of the 
    basic one-way approach to MDS transmission from which our current rules 
    originated.
        4. We propose changes to MDS and ITFS service definitions to fully 
    incorporate the concept of two-way transmission and which reflect the 
    reorientation of the regulatory approach to a flexible service, from 
    that of an essentially one-way service. A regulatory system would be 
    created authorizing the use of response stations and response station 
    hubs to enable the two-way operation of wireless cable systems. We 
    solicit comment on this new service paradigm.
        5. Specifically, we propose to amend the definition of a ``response 
    station'' to indicate that licensees may use all or part of any of 
    their 6 MHz channels as a response channel. Response stations would be 
    the means of transmission from a subscriber's premises, and could use 
    either separate transmitting antennas for return paths or combined 
    transmitting/receiving antennas. The concept of a response station hub 
    is added, and these hubs would serve as the collection points for 
    signals from the response stations in a multipoint-to-point 
    configuration for upstream signal flow. Thus, response stations would 
    not need to be licensed individually, and they could operate at lower 
    power because the response station hubs would be located closer to 
    subscriber premises than are current transmitter sites. Commenter 
    Caritas Telecommunications, Inc. (``Caritas'') proposed that we limit 
    the availability of response channels to MDS channels 1, 2 and 2A, 
    converting those channels from their current use for point-to-
    multipoint transmissions to subscribers' homes to use for transmission 
    return paths. We tentatively decline to adopt this counter-proposal and 
    agree with Petitioners that it would both artificially limit the amount 
    of spectrum that could be used for return paths and unnecessarily 
    prevent ITFS licensees from using their own channels for return paths. 
    We solicit comment on the response station hub concept and its 
    implications. We also solicit comments on our proposals regarding the 
    expanded definition of response stations, including provision for 
    transmissions on all available MDS and ITFS channels, and on Caritas' 
    counter-proposal.
        6. We further propose to amend the definition for ``signal booster 
    stations'' to allow such stations to originate transmissions, as well 
    as to relay transmissions from other stations. Booster stations would 
    be used to cellularize wireless cable operations, which now may operate 
    in areas too large to be served by a single station. Permitting 
    boosters to originate as well as relay programming would facilitate 
    frequency reuse cellular configurations and two-way high speed Internet 
    access and other services. We seek comment on the proposal to expand 
    the role of booster stations in this manner. Flexible subchannelization 
    (i.e., the division of a channel of a particular bandwidth into 
    multiple channels of smaller bandwidth) also would be permitted to 
    allow more efficient channel reuse within a given service area, and 
    superchannelization (i.e., the combining of more than one channel into 
    a single, wider channel) would be allowed and could be used for the 
    transmission of high data rates and/or the use of spread spectrum 
    emissions. Superchannels also would be licensed to multiple entities in 
    many instances, due to the fact that the interleaved, non-contiguous 
    channels in this band generally are licensed to different entities.
        Subchannels and superchannels would be limited to digital 
    transmissions with uniform spectral power density across the bandwidth, 
    in order to make possible the use of spectral density analysis as part 
    of the interference analysis process. We seek comment on these 
    channelization proposals.
        7. Finally, as noted above, 125 kHz channels are currently 
    allocated as response channels for use in association with most MDS and 
    ITFS stations, and as such they would provide further capacity as 
    return paths in the cellularized two-way scheme. In their Comments, 
    Petitioners add that the Commission should also permit the use of the 
    125 kHz channels for point-to-multipoint transmissions. Petitioners 
    explain that for systems using digital technologies, there is a need to 
    transmit downstream control signals over side channels that require 
    less than a full 6 MHz channel, for instance for control over digital 
    set top decoders or control over two-way communication systems. 
    Petitioners maintain that use of the 125 kHz channels for such 
    applications is beneficial in that it preserves the 6 MHz channels for 
    transmissions that require greater bandwidth, and it can lead to 
    reduced equipment costs. Petitioners also propound that to further 
    offer flexibility to create channels with bandwidths exceeding 125 kHz, 
    the Commission should remove the current rule provisions which require 
    that the 125 kHz channels only be used in conjunction with their 
    associated 6 MHz channels. While also proposing that the 125 kHz 
    channels be used for additional point-to-multipoint spectrum, Caritas 
    goes a step further than Petitioners, advancing that the Commission 
    should
    
    [[Page 60027]]
    
    reallocate the 125 kHz channels to be combined into one continuous 
    piece of spectrum to be used for such purposes. We are proposing rules 
    in accordance with the most flexible framework ultimately requested by 
    Petitioners for use of the 125 kHz channels, including allowing 
    superchannelization or subchannelization of these stations regardless 
    of whether they are used as response stations or for point-to-
    multipoint transmissions. We believe that these changes are sufficient 
    to derive the benefits explained by Petitioners, and that a 
    reallocation and the complications associated with that is not 
    necessary. We solicit comment on these proposals regarding use of the 
    125 kHz channels.
        8. Interference Considerations. In the Digital Declaratory Ruling, 
    we waived our rules with respect to out-of-band emissions and permitted 
    the use of a somewhat relaxed spectral mask for digital transmission 
    modes. This action was taken because the Commission concluded that the 
    application of the current analog emission mask to digital emissions 
    would be unnecessarily restrictive and could increase the cost of 
    digital equipment while providing no benefit. In addition, the results 
    of laboratory tests submitted in connection with the Commission's 
    consideration of this issue demonstrated that a digital station using 
    the relaxed mask is less likely to cause interference than an analog 
    station using the existing, more restrictive, mask.
        9. In the NPRM, we propose to permanently incorporate into the 
    Rules the spectral mask waiver provisions of the Digital Declaratory 
    Ruling, specifically for primary system transmitters and single channel 
    booster transmitters with a power greater than -9 dBW EIRP; masks are 
    further specified, albeit with certain modifications, for sub-and 
    superchannels, response stations, and booster stations transmitting on 
    multiple non-contiguous channels carrying separate signals and with an 
    EIRP greater than -9 dBW (``broadband boosters''). As an exception to 
    the spectral masks for the 125 kHz channels, discrete spurious 
    emissions above the upper and below the lower authorized channel edges 
    would be permitted under certain conditions. And Petitioners request 
    that no spectral mask whatsoever be applicable to booster stations with 
    an EIRP of -9 dBW or less. Petitioners argue that such low power 
    stations have only a very limited potential for interference, and that 
    applying strict emission limitations to them would significantly 
    increase the price of equipment with no benefit to the user or nearby 
    licensees in terms of added interference protection. We seek comment on 
    whether the degree of attenuation proposed for these various schemes is 
    sufficient to provide adequate adjacent channel interference 
    protection. We also request comment on whether eliminating a spectral 
    mask for low power boosters presents an undue interference risk, and, 
    if so, which additional interference safeguards should be adopted.
        10. As in the Digital Declaratory Ruling, all spectral mask 
    calculations involving digital emissions will use the average power of 
    the emission across its bandwidth, and steps must be taken to ensure 
    substantially uniform power density across the bandwidth in use, 
    including constant power per unit of bandwidth for sub-and 
    superchannels. We also propose to place a limit of 18 dBW EIRP on 
    response station transmitters in cellularized systems, and that higher 
    power facilities be authorized separately and require a site specific 
    interference analysis. Given the extremely complex interference 
    situation attendant to cellularized operations and the heavily 
    encumbered nature of MDS and ITFS environments, we do not believe that 
    it would be prudent to permit essentially unlimited numbers of response 
    station transmitters with 2000 watts (33 dBW EIRP) of radiated power, 
    as Petitioners requested. However, while current MDS and ITFS rules 
    limit booster power to 18 dBW EIRP, we propose to allow boosters to 
    operate up to 33 dBW EIRP, the maximum power level for MDS and ITFS. We 
    seek comment on this approach to transmitter power within the two-way 
    scheme. We also seek comment on rule proposals with respect to 
    frequency tolerance requirements for digital transmissions, type 
    acceptance of response station transmitters and boosters, and radio 
    frequency (``RF'') emissions for MDS/ITFS return path transmissions.
        11. The Commission's current regulations in ITFS and MDS for 
    interference protection were designed to minimize the potential for 
    destructive cochannel and adjacent channel interference between systems 
    located in proximity to each other. The specific criteria for 
    protection are of two forms, namely, (1) cochannel and adjacent channel 
    desired-to-undesired signal (D/U) ratios and (2) limits on the 
    magnitude of a station's free space field as measured at the edge of 
    the station's protected service area. For cochannel interference 
    protection, an applicant must configure its system so that the signals 
    from each of its transmitters are at least 45 dB weaker than the 
    signals of the existing licensee's transmitters within the licensee's 
    protected service area and/or, in the case of ITFS licensees, at the 
    licensee's protected receiver sites. For adjacent channel protection, 
    the ratio must be at least 0 dB. In order to meet the second form of 
    protection, an applicant generally must be able to demonstrate that the 
    magnitude of the free space radiated field from each transmitter does 
    not exceed a particular limit (i.e., a power flux density -73 dBW/
    m2) at the boundary of the applicant's service area.
        12. Petitioners propose to apply the existing interference criteria 
    in essentially unchanged form, and to supplement them with similar new 
    criteria to be applied to hub, booster, and response stations. 
    Petitioners further propose to aggregate the power from a primary 
    station and all associated booster stations for one set of interference 
    calculations, and that a separate set of interference calculations be 
    performed using the aggregated power from response stations. However, 
    we counter-propose that a calculation of the combined field produced by 
    the primary station transmitter, all boosters, and the aggregated power 
    from response stations within a system be utilized to determine 
    compliance with interference standards. We seek comment on the relative 
    merits of Petitioners' proposed approach and our counter-proposal. We 
    also emphasize that where an interfered-with receive antenna meets the 
    antenna characteristics set forth in our MDS and ITFS rules, the 
    station causing the harmful interference is responsible for curing it.
        13. Interference Prediction Methodology. In order to predict the 
    interference potential of response stations in the proposed 
    cellularized scheme, Petitioners seek to employ a three-step process 
    using statistical analysis and worst-case assumptions. In step one, the 
    hub station response service area (``RSA'') is defined and a grid of 
    points is located within this area representative of the expected 
    actual distribution of response station transmitters within the area. 
    Regions within the area are defined so that an adequate population 
    uniformity exists for purposes of predicting interference from a 
    distribution of response station transmitters. Population uniformity is 
    determined using a complex formula involving evaluation of the 
    population density within each ZIP Code within the planned boundaries 
    of a region. Population uniformity is an important facet of each region 
    because Petitioners assume, a priori, that the distribution of response 
    station transmitters will be
    
    [[Page 60028]]
    
    closely matched to population distribution within each region.
        14. In step two, Petitioners propose to identify the technical 
    characteristics of response stations which will be associated with each 
    point in the RSA grid. One or more classes of response stations would 
    be identified within the RSA and its regions, with each class being a 
    function of several variables, such as transmitted power (EIRP), 
    antenna height, frequency, bandwidth, and maximum number of assumed 
    simultaneously operated response stations in the regional class; these 
    characteristics and others would be specified in the response hub 
    application. Differentiating between classes is asserted by Petitioners 
    to be essential for accurately calculating the interference potential 
    of the response stations within an RSA, because differentiable 
    technical characteristics between classes likely will lead to 
    differentiable potentials for causing interference to neighboring 
    systems.
        15. The final step in calculating response station interference 
    would require combining the radiated fields of all response stations of 
    all classes, regions and RSAs within the primary station's protected 
    service area. In order to simplify this calculation, the statistical 
    population uniformity within each region would be used as a basis for 
    grouping response stations of all classes in proximity at the grid 
    points laid out within each RSA; multiple classes could share the same 
    grid points. For each class of response stations assigned to a grid 
    point, a set of worst-case assumptions would be made concerning the 
    transmitting antenna radiation pattern, transmitter power (EIRP) and 
    antenna height. Several complex calculations, including procedures for 
    checking the initial calculations, combining the radiated field for all 
    of the transmitters for each class of response station at each grid 
    point from all RSAs would then be used to evaluate compliance with the 
    interference criteria. Thus, whereas under current rules such 
    compliance is calculated on a per-transmitter basis, Petitioners' 
    proposed system would necessitate that it be calculated on an 
    aggregated basis, covering hundreds or thousands of transmitters and 
    their combined interference potential to neighboring systems. 
    Petitioners argue that licensees should be free, upon notification to 
    the Commission, to continue adding response station transmitters within 
    their systems until calculations indicate that permissible interference 
    values would be exceeded, and that using worst-case assumptions in 
    their methodology has built in an interference protection buffer for 
    situations where more stations or a different mix of stations than 
    anticipated are activated in an RSA.
        16. In the NPRM, we caution that the interference prediction 
    methodology is based solely on assumptions, thus leading to a 
    statistical picture of response station interference potential which 
    gives an uncertain approximation of the operating environment, although 
    Petitioners also claim that this approximation is conservative. In 
    addition, we discuss how the small scale test conducted by Petitioners 
    in the flat and relatively unimpeded terrain of Tucson, AZ, while 
    useful, may not be generally applicable to the very diverse 
    geographical and interference environments in which MDS and ITFS 
    systems operate. We also express concern that the proposed methodology 
    is so complex that it may be very difficult to implement and enforce, 
    and may lead to numerous filings updating system configurations, which 
    would present severe burdens upon existing licensees and operators 
    needing to analyze these filings in order to verify that no harmful 
    interference will result to their systems. Notwithstanding these 
    reservations, however, we express our belief that Petitioners' overall 
    goal of facilitating cellularization of the services is very forward-
    looking, and warrants an opportunity to proceed despite the 
    complications and uncertainties which could arise. Thus, we propose to 
    adopt the methodology and seek comment on it, but we also specifically 
    solicit suggestions for alternative methods for prediction of 
    interference to and from cellularized systems. For example, we ask to 
    what extent ``worst case'' analysis could serve a sufficient 
    approximation to a more exact analysis, such as a determination of 
    noninterference based solely on terrain shadowing, and to what 
    geographical extent individual response station areas should be 
    aggregated in large BTAs.
        17. Modulation Methods. In the Digital Declaratory Ruling, we 
    authorized the use of Quadrature Amplitude Modulation (``QAM'') and 
    Vestigial Sideband (``VSB'') modulation. While we declined to consider 
    the use of other digital modulation methods in the context of that 
    proceeding, we stated that we would consider future requests for 
    declaratory rulings where the requesters submit appropriate data to 
    demonstrate that other modulation techniques could be used in a manner 
    that would not interfere with MDS and ITFS analog and digital 
    operations. In the current rulemaking proceeding, Pace 
    Telecommunications Consortium (``Pace'') commented that the Commission 
    should immediately grant ITFS and MDS licensees the flexibility to use 
    whatever digital techniques best serve their needs, with interference 
    controlled through the use of power spectral density limits and 
    spectral masks.
        18. As in the Digital Declaratory Ruling, in the NPRM we decline to 
    adopt one or more ``standard'' digital technologies. We will retain or 
    add provisions for accommodating the use of different modulation types, 
    as requested by Petitioners. In addition, because we wish to encourage 
    parties to continue to identify different digital modulation schemes 
    that could be useful in MDS and ITFS, we emphasize that we remain open 
    to considering future requests for declaratory rulings in accordance 
    with the Digital Declaratory Ruling, upon submission of appropriate 
    data. We further invite comment on whether there is a basis for 
    concluding that use of particular digital modulation types by MDS and 
    ITFS stations other than VSB and QAM would not be prone to 
    interference, based on the current 45 dB/0 dB protection ratios for 
    cochannel and adjacent channel interference respectively, i.e. that 
    such modulation formats should be permitted without requiring test 
    data. For example, one modulation type may be a subset of VSB and QAM 
    and, therefore, is covered under the industry tests used to support the 
    Digital Declaratory Ruling. 
        19. Application Procedures. Petitioners set forth an application 
    processing scheme, governing the filing of applications for new or 
    modified response station hubs or boosters, that would substantially 
    shift review of applications from Commission staff and leave much of 
    the interference environment to be worked out among licensees. 
    Petitioners propose that we adopt a rolling, one-day filing window 
    system. While each applicant would be required to demonstrate 
    protection of existing or previously proposed facilities, all 
    acceptable applications filed on the same day would be granted and the 
    filers left to resolve incompatibilities amongst themselves with little 
    or no intervention by Commission staff. Specifically, Petitioners 
    propose that applications would be placed on public notice without 
    prior staff review of interference studies, and that the applications 
    would be automatically granted on the 61st day after that notice unless 
    a petition to deny was filed or the Commission notified the applicant 
    prior to that date that a grant would not be made.
    
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        20. Petitioners speculate that a large number of applications are 
    likely to be filed once the new rules become effective and that many of 
    the applications submitted at that time will conflict with others filed 
    simultaneously. In order to smooth the transition to the rolling one-
    day filing window application processing system, Petitioners propose 
    that a special one-week window be employed when the new rules first go 
    into effect, and that all applications filed during this window be 
    deemed filed as of the same day. Following the publication of a public 
    notice announcing the tendering for filing of applications submitted 
    during that window, applicants would have a period of 60 days to amend 
    their applications to resolve conflicts. During this 60-day period, no 
    additional applications could be filed, affording those who filed 
    during the one-week window an opportunity to resolve any conflicts 
    without fear that, during the pendency of settlement discussions, third 
    parties will propose facilities that will have to be protected if the 
    original applicants amend their applications. After this initial 60 day 
    period, public notice and automatic grant procedures akin to those 
    proposed by Petitioners for the rolling one-day filing windows would be 
    implemented. Following Petitioners' plan, on the 61st day after the 
    publication of the second public notice, applications for 
    authorizations for response station hubs and for booster stations 
    henceforth would be accepted and processed under the rolling one-day 
    filing window approach.
        21. Although we tentatively accept Petitioners' proposal to place 
    the applications on public notice without prior staff review of the 
    interference studies, we tentatively reject their proposal for 
    automatic grant of the applications. We believe that placing the 
    applications on public notice without prior interference analysis will 
    serve to speed the review process by making the relevant data available 
    to all interested parties as quickly as possible. However, we believe 
    that an automatic grant at the end of the proposed 60 day public notice 
    period will not provide an adequate opportunity for interested parties 
    or, where necessary, for Commission staff, to review the interference 
    studies or for the Commission to make a reasoned determination in 
    complex cases. We solicit comment on our conclusions.
        22. In addition, while Petitioners' proposal in this area presents 
    a promising start, it still leaves a number of concerns and questions 
    unresolved. Commenter Catholic Television Network (``CTN'') raised the 
    concern that the one-day rolling filing window will create an undue 
    burden on ITFS licensees, who may find themselves required to evaluate 
    a continuing stream of applications. We solicit comment on how such a 
    concern could be resolved in the context of the one-day rolling filing 
    window. We also solicit comment on whether we should retain our current 
    periodic filing window system used for ITFS applications and what 
    advantages and disadvantages exist between the existing system and the 
    proposed system. Furthermore, Petitioners' proposal leaves a number of 
    significant questions unresolved regarding the processing of 
    conflicting applications. For example what should be the result in the 
    event that same-day filers of closely-spaced conflicting applications 
    cannot resolve their differences? Should the applicants be ordered into 
    binding arbitration for which they will assume the cost and whose 
    outcome will be finally subject to Commission approval? Should the 
    Commission simply freeze the applications until the parties are able to 
    resolve their differences? Should the Commission's staff function as a 
    referee in such cases and, if so, should it adopt any sort of 
    comparative criteria to guide its decisions? Should the staff adopt 
    some type of point system to rate competing applicants? We seek comment 
    on these questions.
        23. We tentatively propose the following processing rules, taking 
    into consideration the concerns of the various commenters. Under these 
    rules, applicants would file an original and two copies of their system 
    proposal and serve a copy of the proposal on any party whose MDS/ITFS 
    interests may be affected by the proposal. A complete application would 
    then be placed on public notice for a 60-day initial comment period. 
    Prior to the expiration of the 60-day period, interested parties could 
    file comments, petitions to deny or requests for extension of time to 
    file comments or petitions to deny. Although it is our policy that 
    requests for extension of time shall not be granted, and we do not 
    propose to change that policy, we anticipate that the limited resources 
    available to an ITFS party to review a potentially complex two-way 
    service proposal will be a factor considered in whether we grant a 
    request for extension of time. In the alternative, we would consider 
    adopting a 120-day initial comment period, with requests for extensions 
    of time considered only in extraordinary circumstances. We seek comment 
    on these proposals and solicit detailed alternate proposals. We 
    especially seek comment on what time period parties believe would be 
    necessary to adequately review a service proposal without unduly 
    delaying the processing of such a proposal.
        24. We believe that the adoption of the one-week initial filing 
    window will lessen the burden on all affected parties, including the 
    Commission's staff, during the first round of application filing. We 
    also believe that providing parties with an initial 60-day period 
    during which they can resolve any apparent conflicts and then amend 
    their applications without prejudice will provide for quicker and 
    easier processing. We believe that issuing a public notice announcing 
    the acceptance for filing of all applications as amended will serve an 
    important notice function for all potentially affected parties. As 
    discussed above, however, we do not propose to accept Petitioners' 
    automatic grant proposal. Rather than adopt Petitioners' proposed 
    automatic grant, we tentatively conclude that, at the end of any 
    comment period that we may adopt and following any further staff 
    review, the Commission staff, pursuant to delegated authority, would 
    issue a grant or denial of any authorization pursuant to the revised 
    rules. If no oppositions have been filed in a particular proceeding and 
    the Commission staff has determined that a service proposal would not 
    cause interference in violation of our Rules, we anticipate that such a 
    grant would be accomplished quickly. We seek comment on both our 
    proposed approach and on Petitioners' proposed automatic grant.
        25. We also solicit comment on ways to make information on actual 
    system operating parameters available to third-party applicants who 
    need such information for analysis of the interference environment, and 
    on how to conform our MDS and ITFS rules to provide for amendment of 
    booster station and response station hub applications. Finally, in 
    their Comments, Petitioners urge that we adopt a system whereby an 
    applicant, once authorization for service has been granted, may switch 
    from common carrier to non-common carrier service and back without 
    seeking subsequent authorization. We seek comment on this aspect of 
    Petitioners' proposal, and on whether operators should be required to 
    give the Commission notice when they are switching back and forth 
    between common carrier and non-common carrier service, even if prior 
    approval is not required.
        26. Issues Specific to ITFS. Under Sec. 74.931 of the Commission's 
    Rules, ITFS stations are operated by
    
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    educational organizations and are ``intended primarily to provide a 
    formal educational and cultural development in aural and visual form,'' 
    to students enrolled for credit in accredited secondary schools, 
    colleges and universities. An ITFS licensee who leases excess channel 
    capacity to a wireless cable operator must provide a total average of 
    at least 20 hours per channel per week of ITFS programming on its 
    authorized channels. ITFS licensees in such lease arrangements also 
    retain the right to recapture ``an average of an additional 20 hours 
    per channel per week for simultaneous programming on the number of 
    channels for which it is authorized.'' In addition, an ITFS licensee 
    may shift its required educational programming onto fewer than its 
    authorized number of channels via channel loading or channel mapping. 
    The licensee may further agree to transmission of recapture time on 
    channels not authorized to it but which are included in the wireless 
    cable system of which it is a part.
        27. Petitioners propose changes which would revise the absolute 20 
    hours per channel per week recapture time requirement to provide that 
    the ITFS programming requirements constitute a total of 40 hours per 
    channel per week, including both actual programming and recapture time. 
    The Petition does not contemplate any changes to the required minimum 
    of 20 hours per channel per week of actual ITFS programming. Thus, 
    under the proposed changes, if an ITFS licensee actually provides more 
    than an average of 20 hours per channel per week of ITFS programming, 
    reserved recapture time would only need to make up the difference to 
    achieve a total of 40 hours per channel per week. CTN commented that 
    retaining the 20 hour minimum actual programming requirement is 
    inadequate, and insisted that as digital compression increases the 
    number of channel paths, there must be a proportionate increase in the 
    number of paths available for education, including data services. In 
    their reply, Petitioners claimed that many ITFS licensees are finding 
    it difficult to satisfy the existing ITFS minimum programming 
    requirements. Petitioners further posed that adoption of CTN's proposal 
    would create a disincentive for ITFS licensees to introduce the new 
    technologies contemplated by the Petition. We solicit comment from ITFS 
    licensees on these comments. In the NPRM, we find no grounds for 
    retreat from the absolute 20 hour recapture time requirement, 
    especially at this juncture when several wireless cable systems 
    currently enjoy or imminently stand to reap the benefits of increased 
    spectrum capacity through use of digital compression techniques. While 
    we acknowledge the great value to wireless cable operators of 
    maximization of spectrum available for leasing, we also emphasize the 
    primary educational purpose of ITFS and the importance of maintaining 
    sufficient capacity for programming by ITFS licensees which fulfills 
    that purpose.
        28. In the NPRM, we specifically seek comment on several issues 
    related to the question of whether to change our ITFS programming 
    requirements in light of the use of digital technology by ITFS 
    licensees. Should there be different rules depending on whether the 
    wireless cable system employs digital transmissions? Should a change 
    take the form of an increase in required levels of actual ITFS 
    programming, an increase in ready recapture time, or both? How should 
    any increased requirements be measured, e.g., additional hours or 
    additional paths? With the flexibility in implementation of ITFS 
    programming requirements currently allowed or proposed, such as channel 
    loading and shifting of required programming onto other channels within 
    a wireless cable system, should we retain our existing program content 
    requirements and, if not, how should they be modified? For example, 
    should data transmission count towards minimum ITFS programming 
    requirements? Should voice transmission count? If data and/or voice 
    transmission were to count, how would they be measured with respect to 
    fulfillment of minimum ITFS programming requirements? Should time-of-
    day requirements be instituted for these uses to help ensure that they 
    are really being put towards ITFS programming? Furthermore, should 
    counting one or both of them have an effect on the amount of actual 
    programming or ready recapture time required? We also invite comment on 
    whether education-related uplink transmissions should be applied 
    towards satisfaction of minimum ITFS programming requirements. While we 
    note our initial impression that counting uplink transmissions will be 
    overly complicated and impractical, given the anticipated multitudes of 
    response stations and the difficulty in predicting or tracking exactly 
    when they are being used for educational purposes, we nonetheless 
    welcome suggestions on how they would be measured with respect to 
    fulfillment of minimum ITFS programming requirements.
        29. Petitioners anticipate that system developers will attempt to 
    utilize contiguous 6 MHz channels for two-way services in order to 
    minimize the amount of spectrum that would be lost to the proposed 
    spectral mask whenever a return path is adjacent to a downlink channel. 
    Furthermore, entire ITFS channel groups may need to be devoted for 
    return paths. Thus, Petitioners propose that we allow ITFS licensees to 
    satisfy their programming requirements on other channels within the 
    wireless cable system. This proposal would be the next step in a 
    progression of rule changes, following our allowance of channel mapping 
    and channel loading, that have afforded ITFS licensees increased 
    flexibility in the implementation of their minimum programming 
    requirements. Because this proposal would enhance the two-way scheme, 
    and because it would not call for any dilution or elimination of 
    minimum ITFS programming requirements, we are considering implementing 
    it. The flexibility that the suggested changes would accord to ITFS 
    licensees to lease their channel capacity, along with the maintenance 
    of minimum ITFS programming requirements, could also encourage 
    educators to apply for new ITFS stations and lead to more educational 
    programming. Several commenters put forth ideas for refinements to this 
    proposal. Arizona State Board of Regents, et al. (``Arizona'') 
    suggested that each ITFS licensee be required to preserve at least one 
    downstream video channel, and that the Commission institute a procedure 
    whereby it would routinely grant applications by ITFS licensees to 
    exchange individual ITFS channels between channel groups. Instructional 
    Telecommunications Foundation, Inc. (``Foundation'') would require that 
    each ITFS licensee devote at least half of its capacity for downstream 
    use. Schwartz, Woods & Miller (``SWM'') prompted the Commission to 
    facilitate the ``trading'' of channels between the ITFS and MDS bands.
        30. Several of the ITFS commenting parties expressed concern that 
    the proposed two-way scheme presents threats to the independence of 
    ITFS licensees and their future ability to use spectrum capacity for 
    instructional purposes. Pace, for instance, cautioned that because the 
    Petition proposes a massive shift towards industry control over ITFS 
    applications, the Commission must ensure that individual ITFS licensees 
    ``do not lose their freedom of choice'' over the use of their channels, 
    through coercion by neighboring licensees or strong wireless cable 
    operators. However, Charlotte-Mecklenburg Public Broadcasting Authority 
    (``CMPBA''), an ITFS licensee, took the view that the proposed rules
    
    [[Page 60031]]
    
    adequately protect the interests of ITFS entities, primarily because 
    the rules do not obligate ITFS licensees to take part in the two-way 
    system, enter into a lease agreement, file FCC applications, or accept 
    harmful signal levels. Some of the concerned ITFS commenting parties 
    focused on the effect that the proposed rules may have on the 
    engineering autonomy of ITFS licensees. Arizona posed the question of 
    what would happen if an excess capacity agreement comes to an end, and 
    the ITFS licensee has previously converted its channels to two-way use 
    and has shifted some or all of its programming onto other channels in 
    the wireless cable system. Similarly, CTN asked what the impact of 
    cellularization of a market would be on one or more ITFS licensees 
    within it who elect not to cellularize, as well as whether a single 
    ITFS licensee who strives to cellularize its operations would be 
    dependent on other licensees in the market.
        31. In the NPRM, we emphasize that cellularization by ITFS 
    licensees would be permissive only, and not mandatory. We particularly 
    seek comment on the effects of allowing complete flexibility in the 
    number of channels ``turned around'' for return paths, and in the 
    shifting of required ITFS programming onto other channels in the 
    wireless cable system and what restrictions, if any, should be adopted. 
    We also seek comment on whether we should require ITFS licensees to 
    retain one or more channels for downstream transmissions and the 
    ramifications of such a requirement. Further, we seek comment on 
    whether ITFS channel swaps should only be just between ITFS channels, 
    or whether ITFS licensees should be able to swap their spectrum for 
    channels in the MDS band. We seek additional comment on specific 
    potential threats to the engineering autonomy of ITFS licensees which 
    could result from institution of the proposed two-way framework; in 
    conjunction with such comment, we further seek proposed solutions. Some 
    proposed solutions include channel swapping and reimbursement of costs 
    of channel changes, upholding that participation of ITFS licensees in 
    cellularization is not mandatory, and potentially increasing 
    reservation of ready recapture time for ITFS programming. Do any of 
    these ideas individually, or a combination of them, provide a 
    sufficient foundation for meeting the expanding needs of some ITFS 
    licensees? Commenters are also encouraged to address the general 
    question of whether the Commission should establish solutions by rule, 
    or whether solutions should be achieved by contract, as advocated by 
    Petitioners.
        32. Several commenters also addressed the degree of oversight the 
    Commission should maintain in regulating the wireless cable industry 
    and ITFS. In the past, the Commission has adopted rules and procedures 
    to accommodate and protect the special needs of educational 
    institutions and organizations, believing that educational institutions 
    should be treated differently from commercial entities in many 
    situations due to limited financial and staff resources. In addition, 
    ITFS licensees and applicants are required to file their excess 
    capacity lease agreements, which are reviewed by the staff for overly 
    restrictive provisions affecting the licensee's rights and obligations, 
    and compliance with the Commission's leasing policies.
        33. In order to ensure that educators retain control of their 
    facilities and to protect their interests, the Foundation proposed that 
    the Commission require that two-way digital applications and 
    interference consents be reviewed by legal and engineering counsel that 
    do not represent commercial interests, and that these independent 
    advisors ``certify that in their professional opinion the submission 
    will not be harmful to future instructional service.'' We have declined 
    in the past to require all leasing parties to hire separate counsel, 
    finding this ``safeguard'' unnecessary and relying instead on the 
    staff's review and monitoring of leases. We see no reason to change our 
    position on this issue and seek comment on this issue. SWM also 
    proposed that in order to protect the rights of incumbent ITFS 
    licenses, the Commission require that leases approved or submitted 
    under the previous rules ``be amended to make clear that the wireless 
    cable lessee and the ITFS licensee have together considered the rule 
    changes adopted and made any appropriate changes to lease terms, prior 
    to the commencement of commercial operations on the frequencies using 
    cellularization, sectorization or differing channelization plans.'' 
    Petitioners opposed this proposal, stating that the parties to the 
    excess capacity lease agreements, and not the Commission, are best 
    positioned to determine whether proposed system changes require 
    contract revisions. Accordingly, we seek comment on SWM's proposal.
        34. We also seek comment on what impact the proposed rule changes 
    would have on our requirements regarding excess capacity lease 
    agreements. For example, the Commission consistently has maintained 
    that an ITFS licensee should be permitted to purchase the ITFS 
    equipment necessary to maintain its operation in the event the lease is 
    terminated. In addition, we also require that the licensee maintain 
    ultimate control over its licensed facilities. Several commenters have 
    expressed concern that given the complexity and cost of Petitioner's 
    proposal, ITFS licensees will be unable to sever their relationship 
    with the wireless cable operator and acquire the equipment to either 
    continue cellular operations or return to non-two-way transmissions. We 
    particularly seek comment on this matter and on what type of equipment 
    MDS lessees of ITFS channels should be required to make available to 
    the ITFS licensees upon termination of a lease. For example, should it 
    only be digital equipment comparable to that in use on the system at 
    the time the lease is terminated or should it be equipment that would 
    make it possible for the ITFS licensee to restore analog video 
    operation, if necessary? Furthermore, with respect to Petitioners' 
    proposal that ITFS licensees be allowed to utilize their entire channel 
    for return paths and shift their ITFS programming to other channels, we 
    request comment on whether the parties should be required to file 
    written agreements governing the ITFS licensee's lease of an ITFS 
    programming channel, and whether our present requirements for excess 
    capacity leases, including those dealing with control issues, length of 
    lease, and rights on termination, should apply.
        35. We also revisit our channel loading rules, and propose to 
    retain them. We request that interested parties comment on whether 
    these rules have been beneficial to ITFS licensees and wireless cable 
    operators, or whether they have been detrimental. Because we believe 
    that they have provided additional much-needed flexibility to ITFS 
    licensees and wireless cable operators, any parties commenting that 
    these rules have been detrimental should also focus on solutions to 
    permit the continued application of them while rendering them more 
    universally beneficial. Finally, we also consider issues related to 
    retention of ITFS call sign transmission requirements and 
    accountability of ITFS licensees.
        36. In this NPRM, we propose to amend our rules to give MDS and 
    ITFS licensees the needed flexibility to fully exploit digital 
    technology in delivering two-way communications services. Growth in the 
    wireless cable industry has remained slow despite the increased channel 
    capacity offered by digital compression and facilitated by the Digital 
    Declaratory Ruling. Meanwhile, convergence of different information
    
    [[Page 60032]]
    
    delivery systems, including video and Internet access, is occurring in 
    other industries, such as cable and DBS. Thus, one of our primary goals 
    in instituting this proceeding is to enhance the competitiveness of the 
    wireless cable industry. Another of our chief underlying goals in this 
    proceeding is to provide benefits to the educational community through 
    the use of two-way services, such as high speed Internet service. 
    Besides proposing to amend our technical rules to facilitate such usage 
    over ITFS frequencies, we note that the growth of wireless cable has 
    led to the continued development of ITFS by supporting and funding 
    approximately 95 percent of all new ITFS applicants. Thus, we believe 
    that enhancing the competitive viability of wireless cable service 
    through maximization of flexibility and service offerings promotes the 
    underlying educational purpose of ITFS.
        37. This is a permit-but-disclose notice and comment rulemaking 
    proceeding. Ex parte presentations are permitted, except during the 
    Sunshine Agenda period, provided they are disclosed as provided in the 
    Commission's Rules. See generally 47 CFR 1.1202, 1.1203, and 1.1206(a).
        38. For information regarding proper filing procedures for 
    comments, see 47 CFR 1.415 and 1.419. To file formally in this 
    proceeding, participants must file an original and five copies of all 
    comments, reply comments, and supporting comments. If participants want 
    each Commissioner to receive a personal copy of their comments, an 
    original plus ten copies must be filed. Comments and reply comments 
    will be available for public inspection during regular business hours 
    in the FCC Reference Center (Room 239) at the Federal Communications 
    Commission, 1919 M Street, N.W., Washington, D.C. 20554.
        39. Authority. This NPRM is issued pursuant to authority contained 
    in Sections 4(i) and (j), 301, 303(g) and (r), and 403 of the 
    Communications Act of 1934, as amended, 47 U.S.C. Secs. 154(i), 154(j), 
    301, 303(g), 303(r), and 403.
    
    Initial Regulatory Flexibility Analysis
    
        As required by the Regulatory Flexibility Act (RFA),1 
    the Commission has prepared this present Initial Regulatory Flexibility 
    Analysis (IRFA) of the expected significant economic impact on small 
    entities by the policies and rules proposed in this Notice of Proposed 
    Rulemaking in MM Docket No. 97-217 (``NPRM''). Written public comments 
    are requested on this IRFA. Comments must be identified as responses to 
    the IRFA and must be filed by the deadlines for comments on the NPRM 
    provided above. The Commission will send a copy of the NPRM, including 
    this IRFA, to the Chief Counsel for Advocacy of the Small Business 
    Administration (SBA). See 5 U.S.C. Sec. 603(a). In addition, the NPRM 
    and IRFA (or summaries thereof) will be published in the Federal 
    Register. See id.
    ---------------------------------------------------------------------------
    
        \1\ See 5 U.S.C. Sec. 603. The RFA, see 5 U.S.C. Sec. 601 et 
    seq., has been amended by the Contract With America Advancement Act 
    of 1996, Public Law 104-121, 110 Stat. 847 (1996) (CWAAA). Title II 
    of the CWAAA is the Small Business Regulatory Enforcement Fairness 
    Act of 1996 (SBREFA).
    ---------------------------------------------------------------------------
    
    Need for, and Objectives of, the Proposed Rules
    
        The Commission is instituting this rulemaking to determine whether, 
    and if so, how, to amend its rules to promote the ability of MDS and 
    ITFS licensees to provide two-way digital services. The objective of 
    this proceeding is to encourage the efficient use of the spectrum 
    allotted to MDS and ITFS by simplifying our current two-way licensing 
    system and providing greater flexibility in the use of the allotted 
    spectrum where such flexibility would best serve the needs of the 
    public. In addition, we intend to enhance the competitiveness of the 
    wireless cable industry and the resultant choices available to 
    consumers, and to increase Internet access for educational institutions 
    and their students via ITFS frequencies.
    
    Legal Basis
    
        Authority for the action proposed in this proceeding may be found 
    in Sections 4(i) and (j), 301, 303(g) and (r), and 403 of the 
    Communications Act of 1934, as amended, 47 U.S.C. Sections 154(i), 
    154(j), 301, 303(g), 303(r), and 403.
    
    Description and Estimate of the Number of Small Entities to Which 
    the Proposed Rules Will Apply
    
        The RFA generally defines ``small entity'' as having the same 
    meaning as the terms ``small business,'' ``small organization,'' and 
    ``small business concern.'' 2 In addition, the term ``small 
    business'' has the same meaning as the term ``small business concern'' 
    under the Small Business Act.3 A small business concern is 
    one which: (1) is independently owned and operated; (2) is not dominant 
    in its field of operation; and (3) satisfies any additional criteria 
    established by the SBA.4
    ---------------------------------------------------------------------------
    
        \2\ 5 U.S.C. Sec. 601(6).
        \3\ 5 U.S.C. Sec. 601(3) (incorporating by reference the 
    definition of ``small business concern'' in 15 U.S.C. Sec. 632). 
    Pursuant to 5 U.S.C. Sec. 601(3), the statutory definition of small 
    business applies unless an agency after consultation with the Office 
    of Advocacy of the Small Business Administration and after an 
    opportunity for public comment, establishes one or more definitions 
    of such term which are appropriate to the activities of the agency 
    and publishes definitions in the Federal Register.
        \4\ Small Business Act, 15 USC Sec. 632.
    ---------------------------------------------------------------------------
    
    MDS
    
        The Commission has defined ``small entity'' for the auction of MDS 
    as an entity that, together with its affiliates, has average gross 
    annual revenues that are not more than $40 million for the preceding 
    three calendar years.5 This definition of a small entity in 
    the context of MDS auctions has been approved by the SBA.6 
    The Commission completed its MDS auction in March 1996 for 
    authorizations in 493 basic trading areas (BTAs). Of 67 winning 
    bidders, 61 qualified as small entities.7
    ---------------------------------------------------------------------------
    
        \5\ 47 CFR 21.961(b)(1).
        \6\ See Amendment of Parts 21 and 74 of the Commission's Rules 
    With Regard to Filing Procedures in the Multipoint Distribution 
    Service and in the Instructional Television Fixed Service and 
    Implementation of Section 309(j) of the Communications Act--
    Competitive Bidding, MM Docket No. 94-31 and PP Docket No. 93-253, 
    Report and Order, 10 FCC Rcd 9589 (1995), 60 FR 36524 (July 17, 
    1995).
        \7\ One of these small entities, O'ahu Wireless Cable, Inc., was 
    subsequently acquired by GTE Media Ventures, Inc., which did not 
    qualify as a small entity for purposes of the MDS auction.
    ---------------------------------------------------------------------------
    
        MDS is also heavily encumbered with licensees of stations 
    authorized prior to the auction. The SBA has developed a definition of 
    small entities for pay television services, which includes all such 
    companies generating $11 million or less in annual 
    receipts.8 This definition includes multipoint distribution 
    systems, and thus applies to MDS licensees and wireless cable operators 
    which did not participate in the MDS auction. Information available to 
    us indicates that there are 832 of these licensees and operators that 
    do not generate revenue in excess of $11 million annually. We 
    tentatively conclude that for purposes of this IRFA, there are 
    approximately 892 small MDS providers as defined by the SBA and the 
    Commission's auction rules, and some of these providers may be impacted 
    by the outcome of this NPRM. We seek comment on this tentative 
    conclusion.
    ---------------------------------------------------------------------------
    
        \8\ 13 CFR 121.201.
    ---------------------------------------------------------------------------
    
    ITFS
    
        There are presently 2032 ITFS licensees. All but 100 of these 
    licenses are held by educational institutions (these 100 fall in the 
    MDS category, above). Educational institutions may be included in the 
    definition of a small entity.9 ITFS is a non-pay, non-
    
    [[Page 60033]]
    
     commercial broadcast service that, depending on SBA categorization, 
    has, as small entities, entities generating either $10.5 million or 
    less, or $11.0 million or less, in annual receipts.10 
    However, we do not collect, nor are we aware of other collections of, 
    annual revenue data for ITFS licensees. Thus, we tentatively conclude 
    that up to 1932 of these educational institutions are small entities. 
    We seek comment on this conclusion.
    ---------------------------------------------------------------------------
    
        \9\ See 5 U.S.C. Secs. 601 (3)-(5).
        \10\ See 13 CFR 121.210 (SIC 4833, 4841, and 4899).
    ---------------------------------------------------------------------------
    
    Description of Reporting, Recordkeeping and Other Compliance 
    Requirements
    
        The Commission seeks comment on proposals to amend its rules to 
    promote the ability of MDS and ITFS licensees to provide two-way 
    digital services, including implementation of simplified procedures 
    governing application for, and authorization of, booster stations and 
    response station hubs. Because the proposed rule changes would enable 
    licensees to apply for and receive authorizations for new types of 
    booster stations and for response station hubs, certain commensurate 
    new reporting and recordkeeping obligations would follow as part of 
    this process, though the nature of the obligations and the MDS and ITFS 
    rules directly addressing them 11 would remain the same. At 
    the same time, however, the proposed rule changes would make the 
    overall licensing process for two-way digital services much less 
    cumbersome than the current process, which requires individual 
    licensing of each response station and booster station. In the NPRM, we 
    request comment on whether we should increase ITFS programming 
    requirements, and if so, in which way and to what degree. While the 
    proposed two-way scheme would result in more complicated interference 
    analysis requirements for MDS and ITFS entities seeking to establish or 
    modify service, regardless of whether the entities themselves choose to 
    engage in fixed two-way transmissions, these interference safeguards 
    are necessary to promote the objectives of this proceeding. We seek 
    comment on these conclusions and how we can modify any proposed new 
    requirements so as to reduce the burden on small entities and still 
    meet the objectives of this proceeding.
    ---------------------------------------------------------------------------
    
        \11\ See, e.g., 47 CFR 21.911.
    ---------------------------------------------------------------------------
    
    Steps Taken to Minimize Significant Economic Impact on Small 
    Entities, and Significant Alternatives Considered
    
        As described in the NPRM, in response to a March 31, 1997 Public 
    Notice soliciting comment on the Petition, several of the ITFS 
    commenting parties express concern that the proposed two-way scheme 
    presents threats to the independence of ITFS licensees and their future 
    ability to use spectrum capacity for instructional purposes. Pace, for 
    instance, cautions that because the Petition proposes a massive shift 
    towards industry control over ITFS applications, the Commission must 
    ensure that individual ITFS licensees ``do not lose their freedom of 
    choice'' over the use of their channels, through coercion by 
    neighboring licensees or strong wireless cable operators. Other 
    commenting ITFS parties, however, do not perceive such a threat. For 
    instance, CMPBA believes that the proposed rules adequately protect the 
    interests of ITFS entities, primarily because the rules do not obligate 
    ITFS licensees to take part in the two-way system, enter into a lease 
    agreement, file FCC applications, or accept harmful signal levels. 
    Nevertheless, in order to find solutions that would allay the concerns 
    of some ITFS licensees, in the NPRM we seek suggestions on ways to 
    provide maximum flexibility in usage of ITFS channels while ensuring 
    that capacity is reserved for downstream ITFS programming, pose the 
    question of whether solutions should be established by rule or by 
    contract and what role the Commission or other third parties should 
    play in reviewing excess capacity lease agreements, and confirm that 
    cellularization by ITFS licensees would be permissive only, and not 
    mandatory.
        CTN raises the concern that Petitioners' one-day rolling 
    application filing window plan and automatic grant proposal will create 
    an undue burden on ITFS licensees who may find themselves required to 
    evaluate a continuing stream of applications. We solicit comment on how 
    such a concern could be resolved in the context of a one-day rolling 
    filing window or whether we should retain a periodic filing window 
    system. Furthermore, we tentatively reject the automatic grant 
    component of Petitioners' application processing proposal, and instead 
    propose a ``comment period'' of 60 or 120 days, after which 
    applications would be processed pursuant to current procedures. In 
    proposing the comment period alternative, we acknowledge the complexity 
    of the engineering information in the response hub or booster station 
    applications, and the substantial number of affected parties, 
    particularly ITFS licensees, that frequently have very limited 
    resources and that often would not be able to file a petition against 
    an application before the application is automatically granted. Thus, 
    in the NPRM, we particularly solicit comment from small ITFS operators. 
    Similarly, we express concern that the proposed interference prediction 
    methodology is so complex that it may lead to numerous filings updating 
    system configurations, which would present considerable burdens upon 
    existing licensees and operators needing to analyze these filings. We 
    therefore solicit suggestions for other possible prediction 
    methodologies.
        In some instances, a proposed rule will impact different classes of 
    small entities in different ways. For instance, in considering whether 
    to increase ITFS programming requirements, including ready recapture 
    time, we acknowledge in the NPRM the balance which underlies the 
    existence and substance of the ready recapture provisions of 47 CFR 
    74.931(e): the great value to wireless cable operators of maximization 
    of spectrum available for leasing, and the importance of maintaining 
    sufficient capacity for programming by ITFS licensees which fulfills 
    the primary educational purpose of ITFS. We decline to retreat from the 
    current recapture time requirements of Sec. 74.931(e), but we solicit 
    comment in the NPRM on whether we should adopt any changes to the 
    number of hours required for ready recapture by ITFS licensees.
        Other proposals, tentative conclusions, or questions that we pose 
    in the NPRM are designed to minimize the impact on all small entities 
    involved. For example, we tentatively reject Caritas' proposal to limit 
    the availability of response channels to MDS channels 1, 2, and 2A, 
    because it would both artificially limit the amount of spectrum that 
    could be used for return paths and unnecessarily prevent ITFS licensees 
    from using their own channels for return paths, while providing no 
    interference protection benefits that cannot be derived in other ways.
        CTN and SWM both put forth procedural suggestions for this 
    proceeding. CTN proposes that rather than proceeding with the instant 
    rulemaking, we pursue a negotiated rulemaking procedure and convene a 
    federal advisory committee to evaluate Petitioners' proposals and work 
    out the most effective method to implement them. CTN asserts that this 
    would provide substantial, useful information and facilitate the 
    process initiated by Petitioners. We believe that the instant 
    rulemaking process will provide us with sufficient information to 
    adequately
    
    [[Page 60034]]
    
    evaluate Petitioners' proposals. In addition, the need for swift 
    consideration of these proposals, in order to enhance the 
    competitiveness of the wireless cable industry and expedite educational 
    institutions' access to the Internet via ITFS frequencies, may be 
    defeated by implementing a potentially lengthy negotiated rulemaking 
    procedure. Thus, we reject CTN's proposal for a negotiated rulemaking 
    at this time. Should circumstances warrant, however, we reserve the 
    option to revisit our decision on this issue at a later date. 
    Conversely, SWM requests the issuance of an NPRM in this proceeding, 
    and noting that many of the parties which filed comments in the initial 
    round of this proceeding are ITFS entities, requests an early Fall 
    comment date in light of the academic schedules which predominate 
    amongst these entities. The comment period that we establish here, 
    therefore, should enhance the ability of ITFS entities to file 
    carefully considered comments and reply comments. We solicit comment in 
    the NPRM on other substantive and procedural alternatives to adoption 
    of the proposed two-way digital transmission scheme.
    
    Federal Rules that Overlap, Duplicate or Conflict With the Proposed 
    Rule
    
        None.
    
    List of Subjects
    
    47 CFR Part 1
    
        Environmental impact statements
    
    47 CFR Part 21
    
        Communications common carriers, Communications equipment, Reporting 
    and recordkeeping requirements, Television.
    
    47 CFR Part 74
    
        Communications equipment, Education, Reporting and recordkeeping 
    requirements, Television.
    
    Federal Communications Commission.
    William F. Caton,
    Acting Secretary.
    [FR Doc. 97-29346 Filed 11-5-97; 8:45 am]
    BILLING CODE 6712-01-P
    
    
    

Document Information

Published:
11/06/1997
Department:
Federal Communications Commission
Entry Type:
Rule
Action:
Proposed rule.
Document Number:
97-29346
Dates:
Comments must be filed on or before December 9, 1997, and reply comments on or before January 8, 1998. Written comments by the public on the Initial Regulatory Flexibility Analysis are due December 9, 1997.
Pages:
60025-60034 (10 pages)
Docket Numbers:
MM Docket No. 97-217, FCC 97-360
PDF File:
97-29346.pdf
CFR: (3)
47 CFR 1
47 CFR 21
47 CFR 74