Order To Permit Operation of NGSO FSS Systems Co-Frequency With GSO and Terrestrial Systems in the Ku-Band Frequency Range; Authorize Subsidiary Terrestrial Use of the 12.2-12.7 GHz Band by Direct Broadcast Satellite Licensees and Their Affiliates; and in Re Applications of Broadwave USA, PDC Broadb

Sec. 101.1411 Regulatory status and eligibility.

(a) MVDDS licensees are permitted to provide one-way video programming and data services on a non-common carrier and/or on a common carrier basis. MVDDS is not required to be treated as a common carrier service unless it is providing non-Internet voice and data services through the public switched network. (b) MVDDS licensees in the 12.2-12.7 GHz band are subject to the requirements set forth in Sec. 101.7. (c) Any entity, other than one precluded by Secs. 101.7 and 101.1412, is eligible for authorization to provide MVDDS under this part. Authorization will be granted upon proper application filing in accordance with the Commission's rules.

Sec. 101.1412 MVDDS eligibility restrictions for cable operators.

(a) Eligibility for MVDDS license. No cable operator, nor any entity owning an attributable interest in a cable operator, shall have an attributable interest in an MVDDS license whose geographic service area significantly overlaps such cable operator's service area, as defined in paragraph (d) of this section. (b) Definition of cable operator. For the purposes of paragraph (a) of this section, the term ``cable operator'' means a company that is franchised to provide cable service. (c) Waiver of restriction. Upon completion of the initial award of MVDDS licenses, a cable operator may petition for a waiver of the restriction on eligibility based upon a showing that the petitioner no longer has market power in its service area as the result of the entry of new competitors, other than an MVDDS licensee, into such service area. (d) Significant overlap with service area. For purposes of paragraph (a) of this section, significant overlap occurs when cable operator's subscribers in a CEA make up thirty-five percent or more of the households in that CEA. (e) Definition of attributable interest. For purposes of paragraph (a) of this

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section, an entity shall be considered to have an attributable interest in a cable operator or MVDDS licensee pursuant to the following criteria: (1) A controlling interest shall constitute an attributable interest. Controlling interest means majority voting equity ownership, any general partnership interest, or any means of actual working control (including negative control) over the operation of the entity, in whatever manner exercised. (2) Any general partnership interest in a partnership; (3) Partnership and similar ownership interests (including limited partnership interests) amounting to 20 percent or more of the total partnership interests, calculated according to both the percentage of equity paid in and the percentage of distribution of profits and losses; (4) Any stock interest amounting to 20 percent or more of the outstanding voting stock of an entity; (5) Any stock interest, (including non-voting stock) amounting to 20 percent or more of the total outstanding stock of an entity; (6) Stock interests held in trust that exceed the limit set forth in paragraph (e) of this section shall constitute an attributable interest of any person who holds or shares the power to vote such stock, of any person who has the sole power to sell such stock, and, in the case of stock held in trust, of any person who has the right to revoke the trust at will or to replace the trustee at will. If the trustee has a familial, personal, or extra-trust business relationship to the grantor or the beneficiary, the stock interests held in trust shall constitute an attributable interest of such grantor or beneficiary, as appropriate. (7) Debt and interests such as warrants and convertible debentures, options, or other interests (except non-voting stock) with rights of conversion to voting interests shall not constitute attributable interests unless and until conversion is effected. (8) An interest in a Limited Liability Company (LLC) or Registered Limited Liability Partnership (RLLP) amounting to 20 percent or more, shall constitute an attributable interest of each such limited partner. (9) Officers and directors of a cable operator, an MVDDS licensee, or an entity that controls such cable operator or MVDDS licensee, shall be considered to have an attributable interest in such cable operator or MVDDS licensee. (10) Ownership interests that are held indirectly by any party through one or more intervening corporations or other entities shall be determined by successive multiplication of the ownership percentages for each link in the vertical ownership chain and application of the relevant attribution benchmark to the resulting product, except that, if the ownership for any interest in any link in the chain exceeds 50 percent or represents actual control, it shall be treated as if it were a 100 percent interest. (11) Any person who manages the operations of a cable operator or an MVDDS licensee pursuant to a management agreement shall be considered to have an attributable interest in such cable operator or MVDDS licensee, if such person or its affiliate has authority to make decisions or otherwise engage in practices or activities that determine, or significantly influence: (i) The nature or types of services offered by such entity; (ii) The terms upon which such services are offered; or (iii) The prices charged for such services. (12) Any person or its affiliate who enters into a joint marketing arrangement with a cable operator, an MVDDS licensee, or an affiliate of such entity, shall be considered to have an attributable interest in such cable operator, MVDDS licensee, or affiliate, if such person or its affiliate has authority to make decisions or otherwise engage in practices or activities that determine: (i) The nature or types of services offered by such entity; (ii) The terms upon which such services are offered; or (iii) The prices charged for such services. (f) Divestiture. Any cable operator, or any entity owning an attributable interest in a cable operator, that would otherwise be barred from acquiring an attributable interest in an MVDDS license by the eligibility restriction in paragraph (a) of this section, may be a party to an MVDDS application (i.e., have an attributable interest in the applicant), and such applicant will be eligible for an MVDDS license, pursuant to the divestiture procedures set forth in paragraphs (f)(1) through (f)(6) of this section. (1) Divestiture shall be limited to the following prescribed means: (i) An MVDDS applicant holding an attributable interest in a cable operator may divest such interest in the cable company. (ii) Other MVDDS applicants disqualified under paragraph (a) of this section, will be permitted to: (A) Partition and divest that portion of the existing service area that causes it to exceed the overlap restriction in paragraph (a) of this section, subject to applicable regulations of state and local governments; or (B) Partition and divest that portion of the MVDDS geographic service area that exceeds the overlap restriction in paragraph (a) of this section. (iii) Divestiture may be to an interim trustee if a buyer has not been secured in the required period of time, as long as the MVDDS applicant has no interest in or control of the trustee and the trustee may dispose of the license as it sees fit. (2) The MVDDS applicant shall certify as an exhibit to its short form application that it and all parties to the application will come into compliance with paragraph (a) of this section. (3) If such MVDDS applicant is a successful bidder in an auction, it must submit with its long-form application a signed statement describing its efforts to date and future plans to come into compliance with the eligibility restrictions in paragraph (a) of this section. (4) If such an MVDDS applicant is otherwise qualified, its application will be granted subject to a condition that the applicant shall come into compliance with the eligibility restrictions in paragraph (a) of this section, within ninety (90) days of final grant of such MVDDS license. (5) An MVDDS applicant will be considered to have come into compliance with paragraph (a) of this section if: (i) In the case of the divestiture of a portion of an MVDDS license, it has successfully completed the assignment or transfer of control of the requisite portion of the MVDDS geographic service area. (ii) In all other cases, it has submitted to the Commission a signed certification that it has come into compliance with paragraph (a) of this section by the following means, identified in such certification: (A) By divestiture of a disqualifying interest in a cable operator, identified in terms of the interest owned, the owner of such interest (and, if such owner is not the applicant itself, the relationship of the owner to the applicant), the name of the party to whom such interest has been divested, and the date such divestiture was executed; or (B) By divestiture of the requisite portion of the cable operator's existing service area, identified in terms of the name of the party to whom such interest has been divested, the date such divestiture was executed, the name of any regulatory agency that must approve such divestiture, and the date on which

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an application was filed for this purpose with the regulatory agency. (6) If no such certification or application is tendered to the Commission within ninety (90) days of final grant of the initial license, the Commission may cancel or rescind the license automatically, shall retain all monies paid to the Commission, and, based on the facts presented, shall take any other action it may deem appropriate.

Note to paragraph (f): Waivers of Sec. 101.1014(e) may be granted upon an affirmative showing: that the interest holder has less than a fifty percent voting interest in the licensee and there is an unaffiliated single holder of a fifty percent or greater voting interest; that the interest holder is not likely to affect the local market in an anticompetitive manner; that the interest holder is not involved in the operations of the licensee and does not have the ability to influence the licensee on a regular basis; and that grant of a waiver is in the public interest because the benefits to the public of common ownership outweigh any potential anticompetitive harm to the market.

Sec. 101.1413 License term and renewal expectancy.

(a) The MVDDS license term is ten years, beginning on the date of the initial authorization grant. (b) Application of a renewal expectancy is based on the substantial service requirement which is defined as a service that is sound, favorable, and substantially above a level of mediocre service which might minimally warrant renewal. At the end of the license term, the Commission will consider factors such as: (1) Whether the licensee's operations service niche markets or focus on serving populations outside of areas serviced by other MVDDS licensees; (2) Whether the licensee's operations serve populations with limited access to telecommunications services; and (3) A demonstration of service to a significant portion of the population or land area of the licensed area. (c) The renewal application of an MVDDS licensee must include the following showings in order to claim a renewal expectancy: (1) A coverage map depicting the served and unserved areas; (2) A corresponding description of current service in terms of geographic coverage and population served or transmitter locations in the served areas; and (3) Copies of any Commission Orders finding the licensee to have violated the Communications Act or any Commission rule or policy and a list of any pending proceedings that relate to any matter described by the requirements for the renewal expectancy.

Sec. 101.1415 Partitioning and Disaggregation.

(a) MVDDS licensees are permitted to partition licensed geographic areas along county borders (Parishes in Louisiana or Territories in Alaska). Disaggregation will not be permitted by MVDDS licensees in the 12.2-12.7 GHz band. ``Partitioning'' is the assignment of geographic portions of a license along geopolitical or other boundaries. ``Disaggregation'' is the assignment of discrete portions or ``blocks'' of spectrum licensed to a geographic licensee or qualifying entity. (b) Eligibility. (1) Parties seeking approval for partitioning shall request from the Commission an authorization for partial assignment of a license pursuant to Sec. 1.948 of this chapter. (2) MVDDS licensees may apply to the Commission to partition their licensed geographic service areas to eligible entities and are free to partition their licensed spectrum at any time following the grant of a license. (3) Any existing frequency coordination agreements shall convey with the assignment of the geographic area or spectrum, and shall remain in effect for the term of the agreement unless new agreements are reached. (c) Technical standards. (1) Partitioning. In the case of partitioning, applicants and licensees must file FCC Form 603 pursuant to Sec. 1.948 of this chapter and list the partitioned service area on a schedule to the application. (2) The geographic coordinates must be specified in degrees, minutes, and seconds to the nearest second of latitude and longitude and must be based upon the 1983 North American Datum (NAD83). (d) Unjust enrichment. 12 GHz licensees that received a bidding credit and partition their licenses to entities not meeting the eligibility standards for such a bidding credit, will be subject to the provisions concerning unjust enrichment as set forth in Sec. 1.2111 of this chapter. (e) License term. The MVDDS license term is ten years, beginning on the date of the initial authorization grant. The license term for a partitioned license area shall be the remainder of the original licensee's license term as provided for in Sec. 101.1413. (f) Construction requirements. Applications requesting approval for partitioning must include a certification by each party stating that one or both parties will satisfy the construction requirement set forth in Sec. 101.1413. Failure by a party to meet its respective construction requirement will result in the automatic cancellation of its license without further Commission action.

Sec. 101.1417 Annual report.

Each MVDDS licensee shall file with the Public Safety & Private Wireless Division of the Wireless Telecommunications Bureau of the Commission two copies of a report by March 1 of each year for the preceding calendar year. This report must include the following: (a) Name and address of licensee; (b) Station(s) call letters and primary geographic service area(s); and (c) The following statistical information for the licensee's station (and each channel thereof): (1) The total number of separate subscribers served during the calendar year; (2) The total hours of transmission service rendered during the calendar year to all subscribers; (3) The total hours of transmission service rendered during the calendar year involving the transmission of local broadcast signals; and (4) A list of each period of time during the calendar year in which the station rendered no service as authorized, if the time period was a consecutive period longer than 48 hours, and

Sec. 101.1421 Coordination of adjacent area MVDDS stations and incumbent public safety POFS stations.

(a) MVDDS licensees in the 12.2-12.7 GHz band are required to develop sharing and protection agreements based on the design and architecture of their systems, in order to ensure that no harmful interference occurs between adjacent geographical area licensees. MVDDS licensees shall: (1) Engineer systems to be reasonably compatible with adjacent and co-channel operations in the adjacent areas on all its frequencies; and (2) Cooperate fully and in good faith to resolve interference and transmission problems that are present on adjacent and co-channel operations in adjacent areas. (b) Harmful interference to public safety stations, co-channel MVDDS stations operating in adjacent geographic areas, and stations operating on adjacent channels to MVDDS stations is prohibited. In areas where the CEAs are in close proximity, careful consideration should be given to power requirements and to the location, height, and radiation pattern of the transmitting and receiving antennas. Licensees are expected to cooperate fully in attempting to resolve problems of potential interference before bringing

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the matter to the attention of the Commission. (c) Licensees shall coordinate their facilities whenever the facilities have optical line-of-sight into other licensees' areas or are within the same geographic area. Licensees are encouraged to develop operational agreements with relevant licensees in the adjacent geographic areas. Incumbent public safety POFS licensee(s) shall retain exclusive rights to its channel(s) within the relevant geographical areas and must be protected in accordance with the procedures in Sec. 101.103. A list of public safety incumbents is attached as Appendix I to the Memorandum Opinion and Order and Second Report and Order, Docket 98-206 (released May 23, 2002). Please check with the Commission for any updates to that list.

Sec. 101.1423 Canadian and Mexican coordination.

Pursuant to Sec. 2.301 of this chapter, MVDDS systems in the United States within 56 km (35 miles) of the Canadian and Mexican border will be granted conditional licenses, until final international agreements are approved. These systems may not cause harmful interference to stations in Canada or Mexico. MVDDS stations must comply with the procedures outlined under Sec. 101.147(p) and Sec. 1.928(f)(1) and (2) of this chapter until final international agreements concerning MVDDS are signed. Section 1.928(f) of this chapter states that transmitting antennas can be located as close as five miles (eight kilometers) of the border if they point within a sector of 160 degrees away from the border, and as close as thirty-five miles (fifty-six kilometers) of the border if they point within a sector of 200 degrees toward the border without coordination with Canada. MVDDS licensees shall apply this method near the Canadian and Mexican borders. No stations are allowed within 5 miles of the borders.

Sec. 101.1425 RF safety.

MVDDS stations in the 12.2-12.7 GHz frequency band do not operate with output powers that equal or exceed 1640 watts EIRP and therefore will not be subject to the routine environmental evaluation rules for radiation hazards, as set forth in Sec. 1.1307 of this chapter.

Sec. 101.1427 MVDDS licenses subject to competitive bidding.

Mutually exclusive initial applications for MVDDS licenses in the 12.2-12.7 GHz band are subject to competitive bidding. The general competitive bidding procedures set forth in part 1, subpart Q of this chapter will apply unless otherwise provided.

Sec. 101.1429 Designated entities.

(a) Eligibility for small business provisions. (1) A very small business is an entity that, together with its controlling interests and affiliates, has average annual gross revenues not exceeding $3 million for the preceding three years. (2) A small business is an entity that, together with its controlling interests and affiliates, has average annual gross revenues not exceeding $15 million for the preceding three years. (3) An entrepreneur is an entity that, together with its controlling interests and affiliates, has average annual gross revenues not exceeding $40 million for the preceding three years. (4) A consortium of very small businesses is a conglomerate organization formed as a joint venture between or among mutually independent business firms, each of which individually satisfies the definition in paragraph (a)(1) of this section. A consortium of small businesses is a conglomerate organization formed as a joint venture between or among mutually independent business firms, each of which individually satisfies the definition in paragraph (a)(2) of this section. A consortium of entrepreneurs is a conglomerate organization formed as a joint venture between or among mutually independent business firms, each of which individually satisfies the definition in paragraph (a)(3) of this section. (5) For purposes of determining whether an entity meets any of the definitions set forth in paragraphs (a)(1), (a)(2), (a)(3), or (a)(4) of this section, the gross revenues of the entity, its controlling interests and affiliates shall be considered in the manner set forth in Secs. 1.2110(b) and (c) of this chapter. (b) Bidding credits. A winning bidder that qualifies as a very small business or a consortium of very small businesses as defined in this section may use the bidding credit specified in Sec. 1.2110(f)(2)(i) of this chapter. A winning bidder that qualifies as a small business or a consortium of small businesses as defined in this section may use the bidding credit specified in Sec. 1.2110(f)(2)(ii) of this chapter. A winning bidder that qualifies as an entrepreneur or a consortium of entrepreneurs as defined in this section may use the bidding credit specified in Sec. 1.2110(f)(2)(iii) of this chapter.

Sec. 101.1440 MVDDS protection of DBS.

(a) An MVDDS licensee shall not begin operation unless it can ensure that the EPFD from its transmitting antenna at all DBS customers of record locations is below the values listed for the appropriate region in Sec. 101.105(a)(4)(ii). Alternatively, MVDDS licensees may obtain a signed written agreement from DBS customers of record stating that they are aware of and agree to their DBS system receiving MVDDS signal levels in excess of the appropriate EFPD limits specified in Sec. 101.105(a)(4)(ii). DBS customers of record are those who had their DBS receive antennas installed prior to or within the 30 day period after notification to the DBS operator by the MVDDS licensee of the proposed MVDDS transmitting antenna site. (b) MVDDS licensees are required to conduct a survey of the area around its proposed transmitting antenna site to determine the location of all DBS customers of record that may potentially be affected by the introduction of its MVDDS service. The MVDDS licensee must assess whether the signal levels from its system, under its deployment plans, would exceed the appropriate EPFD levels in Sec. 101.105(a)(4)(ii) at any DBS customer of record location. Using EPFD calculations, terrain and building structure characteristics, and the survey results, an MVDDS licensee must make a determination of whether its signal level(s) will exceed the EPFD limit at any DBS customer of record sites. To assist in making this determination, the MVDDS provider can use the EPFD contour model developed by the Commission and described in Appendix J of the Memorandum Opinion and Order and Second Report and Order, ET Docket 98-206 or on the OET website at http://www.fcc.gov/oet/dockets/et98-206. (c) If the MVDDS licensee determines that its signal level will exceed the EPFD limit at any DBS customer site, it shall take whatever steps are necessary, up to and including finding a new transmit site, to ensure that the EPFD limit will not be exceeded at any DBS customer location. (d) Coordination between MVDDS and DBS licensees. (1) At least 90 days prior to the planned date of MVDDS commencement of operations, the MVDDS licensee shall provide the following information to the DBS licensee(s): (i) Geographic location (including NAD 83 coordinates) of its proposed station location; (ii) Maximum EIRP of each transmitting antenna system; (iii) Height above ground level for each transmitting antenna;

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(iv) Antenna type along with main beam azimuth and altitude orientation information, and description of the antenna radiation pattern; (v) Description of the proposed service area; and (vi) Survey results along with a technical description of how it determined compliance with the appropriate EPFD level at all DBS subscriber locations. (2) No later than forty-five days after receipt of the MVDDS system information in paragraph (d)(1) of this section, the DBS licensee(s) shall provide the MVDDS licensee with a list of any new DBS customer locations that have been installed in the 30-day period following the MVDDS notification. In addition, the DBS licensee(s) could indicate agreement with the MVDDS licensee's technical assessment, or identify DBS customer locations that the MVDDS licensee failed to consider or DBS customer locations where they believe the MVDDS licensee erred in its analysis and could exceed the prescribed EPFD limit. (3) Prior to commencement of operation, the MVDDS licensee must take into account any new DBS customers or other relevant information provided by DBS licensees in response to the notification in paragraph (d)(1) of this section. (e) Beginning thirty days after the DBS licensees are notified of a potential MVDDS site under paragraph (d)(1) of this section, the DBS licensees have the responsibility of ensuring that all future installed DBS receive antennas on its system are located in such a way as to avoid the MVDDS signal. These later installed receive antennas shall have no further rights of complaint against the notified MVDDS transmitting antenna(s). (f) In the event of a major modification as defined in Sec. 1.929 of this chapter, such as the addition of an antenna, to an MVDDS station, the procedures of paragraphs (d) and (e) of this section and rights of complaint begin anew. Exceptions to this are renewal, transfer of control, and assignment of license applications. (g) Interference complaints. The MVDDS licensee must satisfy all complaints of interference to DBS customers of record which are received during a one year period after commencement of operation of the transmitting facility. Specifically, the MVDDS licensee must correct interference caused to a DBS customer of record or cease operation if it is demonstrated that the DBS customer is receiving harmful interference from the MVDDS system or that the MVDSS signal exceeds the permitted EPFD level at the DBS customer location.

[FR Doc. 02-15779 Filed 6-25-02; 8:45 am] BILLING CODE 6712-01-P