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 Federal  Communications  Commission  FCC  02-  149 
 Before  the  Federal  Communications  Commission 
 Washington,  D.  C.  20554 


 In  the  Matter  of: 
 Amendment  of  Eligibility  Requirements  in  Part  78  Regarding  12  GHz  Cable  Television  Relay 
 Service 


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 )  ) 
 )  ) 


 CS  Docket  No.  99-  250 
 RM-  9257 


 REPORT  AND  ORDER 
 Adopted:  May  16,  2002  Released:  May  21,  2002 
 By  the  Commission: 


 I.  INTRODUCTION 
 1.  In  this  Report  and  Order,  we  amend  Part  78  of  the  Commission’s  rules  to  expand  the  class  of  entities  eligible  for  licenses  in  the  Cable  Television  Relay  Service  (“  CARS”)  to  include  all 


 multichannel  video  programming  distributors  (“  MVPDs”).  1  This  amendment  will  permit  all  MVPDs  to  use  frequencies  in  the  12.70  to  13.20  GHz  band  (“  12  GHz  CARS  band”)  to  support  the  delivery  of  video 
 programming  for  their  systems.  Currently,  franchised  cable  systems  and  wireless  cable  systems  are  eligible  for  CARS  licenses,  but  private  cable  operators  (“  PCOs”)  and  other  currently  Non-  eligible 
 MVPDs  (“  NMVPDs”)  are  not.  This  action  will  enhance  opportunities  for  additional  competition  to  incumbent  cable  operators  by  making  NMVPDs  eligible  to  use  all  CARS  frequencies,  including 
 frequencies  in  the  12  GHz  CARS  band.  It  will  also  increase  the  number  of  frequencies  available  to  NMVPDs  for  video  programming  distribution  in  the  18  GHz  band  (17.70  to  18.58  GHz),  in  addition  to 
 those  on  which  they  may  currently  operate  under  Part  101  of  the  Commission’s  rules.  Thus,  all  MVPDs  will  have  the  opportunity  to  use  CARS  frequencies  to  provide  video  services  in  a  balanced  competitive 
 environment  in  which  all  MVPDs  share  microwave  spectrum. 
 II.  BACKGROUND 
 2.  In  July  1999,  the  Commission  released  a  Notice  of  Proposed  Rulemaking  (“  NPRM”)  in  this  proceeding,  which  sought  comment  on  whether  to  amend  the  Commission’s  rules  to  allow  PCOs  and 


 other  MVPDs  to  use  frequencies  in  the  12  GHz  CARS  band  for  the  delivery  of  video  programming.  2 
 1  “Multichannel  video  programming  distributor”  means  a  person  such  as,  but  not  limited  to,  a  cable  operator,  a 
 multichannel  multipoint  distribution  service,  a  direct  broadcast  satellite  service,  or  a  television  receive-  only  satellite  program  distributor,  who  makes  available  for  purchase,  by  subscribers  or  customers,  multiple  channels  of  video 


 programming.”  47  U.  S.  C.  §  522(  13).  2 
 Amendment  of  Eligibility  Requirements  in  Part  78  Regarding  12  GHz  Cable  Television  Relay  Service,  14  FCC  Rcd  11967  (1999)  (“  NPRM”).  Fourteen  parties  filed  comments  and  five  parties  filed  reply  comments.  A 


 list  of  parties  filing  comments  and  reply  comments  is  attached  as  Appendix  A. 
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 Federal  Communications  Commission  FCC  02-  149 
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 Initially,  the  proposal  to  expand  CARS  eligibility  to  include  only  PCOs  was  submitted  by  OpTel,  Inc.  (“  OpTel”)  in  a  Petition  for  Rulemaking  (“  Petition”).  3  On  our  own  motion,  we  broadened  the  NPRM  to 
 include  consideration  of  the  expanded  use  of  the  12  GHz  CARS  band  by  other  NMVPDs.  As  we  stated  in  the  NPRM,  one  of  the  Commission's  most  important  goals  is  to  promote  and  facilitate  competition  in  the 
 video  programming  distribution  market.  4  We  therefore  sought  comment  on  whether  other  types  of  MVPDs  could  use  the  CARS  band  to  compete  more  effectively  with  cable  systems  and  the  other  MVPDs  that  are 
 currently  eligible  to  use  the  CARS  band.  The  NPRM  also  sought  comment  on  the  possible  drawbacks  of  expanding  CARS  eligibility,  particularly  with  respect  to  the  impact  on  incumbent  cable  operators’  usage  of 
 CARS  links  to  provide  service  within  their  franchise  areas.  The  NPRM  also  noted  that  this  proceeding  is  interrelated  with  other  ongoing  proceedings,  such  as  the  18  GHz  Redesignation  Proceeding,  5  and  that 
 decisions  to  be  made  in  those  proceedings  might  affect  the  proposed  usage  of  the  12  GHz  CARS  band  by  PCOs  and  MVPDs. 


 3.  OpTel  is  a  PCO  providing  video  and  other  services  to  residential  users  primarily  in  multiple  dwelling  units  (“  MDUs”).  In  its  Petition,  OpTel  stated  that  it  operates,  through  subsidiaries, 
 private  cable  telecommunications  systems  and  franchised  cable  systems  that  provide  service  to  over  314,000  homes  in  nine  cities.  6  In  the  Petition,  OpTel  requested  that  PCOs  be  eligible  to  use  frequencies 
 on  the  same  basis  as  eligible  MVPDs  such  as  franchised  cable  systems  in  the  12  GHz  CARS  band.  OpTel  also  asked  to  be  eligible  to  operate  on  frequencies  in  the  13.20  GHz  to  13.25  band  GHz  used  by  Broadcast 
 Auxiliary  Stations  ("  BAS").  7  The  12  GHz  CARS  band  and  the  segment  from  13.20-  13.25  GHz  are  also  shared  with  the  Fixed  Satellite  Service  ("  FSS")  for  earth-  to-  space  communications.  8 


 4.  Franchised  cable  systems  and  other  eligible  services  use  the  12  GHz  and  18  GHz  CARS  bands  for  microwave  relays  pursuant  to  Part  78  of  the  Commission’s  Rules.  9  Part  78  governs  the 
 licensing  and  operations  of  fixed  or  mobile  CARS  stations.  10  CARS  is  principally  a  video  transmission  service  used  for  intermediate  links  in  a  distribution  network.  Section  78.11  authorizes  CARS  stations  to 
 relay  signals  for  and  supply  program  material  to  cable  television  systems  and  other  eligible  entities  using  point-  to-  point  and  point-  to-  multipoint  transmissions.  11  These  relay  stations  enable  cable  systems  and 
 other  CARS  licensees  to  transmit  television  broadcast  and  low  power  television  and  related  audio  signals,  AM  and  FM  broadcast  stations,  ITFS  signals,  and  cablecasting  from  one  point  (e.  g.,  on  one  side  of  a  river 


 3  Petition  for  Rulemaking  (filed  April  1,  1998)  (“  Petition”). 
 4  NPRM,  14  FCC  Rcd  at  11969. 
 5  IB  Docket  No.  98-  172. 
 6  NPRM,  14  FCC  Rcd  at  11970-  71.  In  a  November  6,  2001,  submission  in  this  docket  styled  as  a  “Request  for 
 Action,”  OpTel  states  that  it  filed  for  Chapter  11  bankruptcy  protection  in  October  1999.  (“  OpTel  November  6  Request”).  OpTel  notes  that  it  is  now  ready  to  exit  Chapter  11,  and,  when  it  does  so,  it  plans  to  focus  exlusively  on 


 providing  video  and  Internet  access  services  primarily  in  the  MDU  marketplace  in  direct  competition  with  incumbent  cable  operators.  OpTel  November  6  Request  at  2. 
 7  47  C.  F.  R.  §§  74.600  –  74.690. 
 8  Id.  §§  2.106,  78.106  &  101.101. 
 9  Id.  §§  78.1  –  78.115. 
 10  A  CARS  station  is  a  “fixed  or  mobile  station  used  for  the  transmission  of  television  and  related  audio  signals, 
 signals  of  standard  and  FM  broadcast  stations,  signals  of  instructional  television  fixed  stations,  and  cablecasting  from  the  point  of  reception  to  a  terminal  point  from  which  the  signals  are  distributed  to  the  public.”  Id.  §  78.5(  a). 


 11  Id.  §§  78.11(  a),(  c),  &  (d). 
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 or  mountain)  to  another  point  (e.  g.,  the  other  side  of  the  river  or  mountain)  or  many  points  ("  multipoint")  via  microwave.  In  this  way,  for  example,  they  allow  a  cable  system  to  link  a  community  divided  by  a 
 geographic  barrier  without  building  additional  headends  or  laying  costly  cable  or  optical  fiber  in  urbanized  areas.  Section  78.13  of  the  Commission's  rules  specifies  that  a  license  for  a  CARS  station  can 
 only  be  issued  to  owners  and  operators  of  cable  television  systems  and  qualified  cable  network-  entities,  licensees  and  conditional  licensees  of  channels  in  the  MDS  or  MMDS,  and  certain  ITFS  operators.  12  A 
 primary,  original,  and  continuing  use  of  the  12  GHz  CARS  band  is  to  deliver  signals  over  long  distances  between  reception  points  and  communities.  CARS  is  not  used  to  provide  service  or  relay  signals  directly 
 to  subscribers.  The  12  GHz  CARS  band  is  also  used  for  FM,  as  well  as,  AM  links  (“  AML”). 
 5.  Television  broadcasters  use  BAS  pursuant  to  Part  74,  Subpart  F.  13  BAS  uses  the  spectrum  from  12.70  –  13.25  GHz  for  both  fixed  and  short-  range  mobile  transmissions.  In  electronic 


 news  gathering  (“  ENG”)  operations,  for  example,  these  frequencies,  together  with  2  GHz  (1990  to  2110  MHz)  and  7  GHz  (6875  to  7125  MHz)  frequencies,  may  be  used  to  transmit  a  signal  from  the  scene  of  an 
 event  to  a  nearby  vehicle,  where  the  signal  is  relayed  to  the  TV  station.  14 
 6.  OpTel  and  other  PCOs  provide  service  that  is  similar  to,  and  competitive  with,  that  provided  by  franchised  cable  systems.  PCOs,  however,  do  not  use  hard-  wired  crossings  of  public  rights-of- 


 way  and,  therefore,  are  not  considered  cable  systems  under  the  statutory  definition.  15  Typically,  microwave  facilities  of  PCOs,  such  as  OpTel,  use  a  hub-  and-  spoke  architecture.  In  its  simplest  form, 
 some  cable  headends  are  located  at  a  hub,  and  microwave  spokes  are  used  to  deliver  video  and  telecommunications  services  to  MDUs.  For  the  microwave  links  to  distribute  video  programming,  OpTel 
 and  other  PCOs  currently  transmit  under  authorizations  in  the  Private  Operational  Fixed  Point-  to-  Point  Microwave  Service  (“  OFS”)  16  in  the  band  from  18.142  GHz  to  18.580  GHz,  which  is  part  of  the  18  GHz 
 band  shared  by  CARS  and  other  services.  PCOs  are  also  eligible  to  use  some  frequencies  in  the  band  from  21.20  GHz  to  23.60  GHz  (“  23  GHz  band”).  In  its  petition,  OpTel  sought  to  use  the  12  GHz  CARS 
 band  as  an  efficient  means  for  hub-  to-  hub  communications.  17  OpTel  also  stated  that  interconnecting  hubs  would  eliminate  or  substantially  reduce  the  need  for  duplicative  headend  and  switching  facilities,  thus 
 reducing  costs  and  enabling  PCOs  to  compete  more  effectively  with  franchised  cable  systems.  18  We  note  that  amending  Part  78  to  make  PCOs  eligible  for  12  GHz  CARS  licenses  would  also  make  them  eligible  for 
 CARS  licenses  in  the  18  GHz  band,  as  are  other  current  CARS  licenses.  19  In  addition,  OpTel  also  requested  use  of  the  BAS  frequency  band  segment  from  13.20  to  13.25  GHz  for  delivery  of  video  programming. 


 12  Id.  §  78.13. 
 13  Id.  §§  74.600-  74.690. 
 14  Id.  §  74.602(  a). 
 15  47  U.  S.  C.  §  522(  7). 
 16  47  C.  F.  R.  §§  101.101-  151  &  101.601-  3. 
 17  Petition  at  2.  OpTel  also  filed  a  separate  petition  requesting  a  waiver  of  Section  101.603  in  order  to  allow  OpTel 
 to  transmit  video  programming  in  the  10.70  GHz  -  11.70  GHz  band  (“  11  GHz  band”).  The  Commission  denied  OpTel's  waiver  request.  See  Petition  for  Waiver  of  Section  101.603  of  the  Commission's  Rules,  14  FCC  Rcd  3762 


 (1999).  OpTel  noted  that  its  waiver  request  involved  different  frequencies  (11  GHz  band)  and  issues  different  from  those  raised  in  this  proceeding. 
 18  Petition  at  3.  See  also  RCN  Comments  at  4,  14. 
 19  47  C.  F.  R.  §  78.18(  a)(  4).  Thus,  a  PCO  could  choose  between  applying  for  an  OFS  license  to  use  18.142-  18.580 
 GHz  for  data  and  voice,  as  well  as  video,  or  applying  for  a  CARS  license  to  use  17.70  to  18.580  GHZ,  which  must  (continued…) 
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 7.  The  NPRM  sought  comment  on  issues  raised  by  OpTel's  petition,  including  the  technical  criteria  necessary  to  ensure  that  use  of  the  12  GHz  CARS  band  by  PCOs  or  other  MVPDs  would  not 
 interfere  with  existing  users  or  unduly  constrain  future  growth  of  incumbent  CARS  users.  20  The  NPRM  sought  comment  on  the  need  of  NMVPDs  for  access  to  the  12  GHz  CARS  band.  21  The  NPRM  did  not 
 propose  any  changes  in  the  technical  and  operational  characteristics  of  CARS,  which  is  a  point-  to-  point  and  point-  to-  multipoint  service  used  to  relay  signals  within  the  system  and  not  to  the  ultimate  end  users  or 
 subscribers.  Rather,  it  sought  comment  on  whether  PCOs  and  other  MVPDs  can  operate  successfully  in  the  12  GHz  CARS  band  under  the  existing  technical  and  operational  requirements.  22  The  NPRM  also 
 sought  comment  on  the  appropriate  eligibility  criteria  for  PCOs  or  other  MVPDs  who  wish  to  obtain  a  CARS  license  and  whether,  after  becoming  a  CARS  licensee,  PCO  systems  or  other  MVPDs  should  be 
 designated  as  co-  primary  users  with  incumbent  cable  system  operators  or  as  secondary  users.  23 
 III.  DISCUSSION 
 A.  Expanding  Eligibility  for  CARS  Licenses  to  All  MVPDs 
 8.  Current  NMVPDs  supported  the  proposal  to  expand  eligibility  for  CARS  licenses  to  all  MVPDs.  For  example,  RCN,  EchoStar,  SkyBridge,  and  KaStar  are  generally  supportive.  24  Incumbent 


 users  of  CARS  were  less  concerned  with  expanded  eligibility  per  se  than  with  the  effect  of  the  proposed  expansion  on  their  own  operations.  25  NCTA  expresses  generalized  concern  that  in  acting  on  OpTel’s 
 Petition,  the  Commission  do  nothing  that  impedes  the  ability  of  cable  systems  to  employ  the  12  GHz  CARS  band  “to  perform  the  critical  role  that  it  has  been  playing  in  cable  transmission  systems  for  many 
 years.”  26  The  majority  of  commentary,  as  discussed  more  fully  below,  is  directed  to  the  questions  of  need,  cost  justification  and  technical  criteria. 


 9.  The  NPRM  also  asked  whether  we  should  distinguish  between  PCOs  and  other  NMVPDs  in  our  consideration  of  expanding  eligibility  for  use  of  the  CARS  frequencies.  27  We  received  no 
 comments  on  this  question.  We  conclude  that  there  is  no  reason  to  make  this  distinction  and,  therefore,  will  treat  all  NMVPDs,  including,  but  not  limited  to,  PCOs,  equally  in  terms  of  CARS  eligibility. 


 (…  continued  from  previous  page)  be  used  principally  for  video.. 
 20  NPRM,  14  FCC  Rcd  at  11975. 
 21  Id.  at  11974. 
 22  Id.  at  11979. 
 23  Id.  at  11974. 
 24  See  EchoStar  Comments  at  1-  2;  SkyBridge  Comments  at  1-  3;  KaStar  Commentss  at  5;  RCN  Comments  at  2-  7. 
 25  See,  e.  g.,  Sprint  Comments  at  2-  5:  SBE  Comments  at  1-  4  (addressing  proposed  use  of  13.20  to  13.25  GHz);  Walt 
 Disney  Co.  Comments  at  1-  3  (concurring  with  SBE  Comments).  26 
 NCTA  Comments  at  2.  NCTA  also  argued  that  it  would  reserve  judgement  on  this  question  until  it  could  assess  the  record  produced  in  this  proceeding.  In  its  Reply  Comments,  NCTA  challenged  the  sufficiency  of  the  evidence 


 produced  on  specific  issues  such  as  cost  savings  and  whether  the  NMVPDs  should  be  granted  equal  status  in  obtaining  access  to  12  GHz  frequencies.  NCTA  Reply  Comments  at  2-  8.  See  also  Time  Warner  Comments  at  2-  17, 
 raising  questions  of  competitive  parity,  lack  of  evidence  of  cost  savings,  and  the  need  to  grant  only  secondary  status,  if  any  to  NMVPDs.  We  address  these  specific  challenges  below. 
 27  See  NPRM,  14  FCC  Rcd  11967,  11969  (1999). 
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 10.  Previously,  the  Commission  extended  CARS  eligibility  to  MDS,  MMDS,  and  ITFS  entities  in  the  Wireless  Cable  Order,  reasoning  that  the  “use  of  the  microwave  spectrum  should  be 
 governed  by  the  type  of  use  rather  than  the  type  of  licensee.”  28  NMVPDs  arguably  have  the  same  use  for  the  spectrum  as  those  currently  using  it.  29  In  the  case  of  wireless  cable  operators,  the  Commission 
 concluded  that  “because  cable  and  wireless  cable  have  similar  needs  for  CARS,”  the  Commission’s  rules  should  not  favor  one  set  of  providers  over  another.  30  The  reasoning  of  the  Wireless  Cable  Order  suggests 
 that  all  MVPDs,  whatever  their  primary  means  of  program  distribution  or  system  architecture  and  regardless  of  whether  they  hold  a  local  franchise,  should  be  eligible  to  hold  CARS  licenses  upon  a 
 demonstrated  need  for  such  spectrum  and  absent  a  finding  of  adverse  consequences  to  currently  eligible  users  of  CARS. 


 11.  We  consider  in  the  following  sections  whether  PCOs  and  other  NMVPDs  have  demonstrated  a  need  for  access  to  the  CARS  frequencies,  and  the  BAS  band,  and  whether  access  to  the 
 CARS  and  BAS  frequencies  would  create  an  adverse  impact  on  the  current  users  of  the  bands  in  question.  For  the  reasons  discussed  in  detail  below,  we  conclude  that  PCOs  and  other  NMVPDs  should  generally 
 be  eligible  for  CARS  licenses,  and  we  do  not  anticipate  undesirable  effects  on  current  CARS  licensees. 
 1.  Need  for  access  to  12  GHz  CARS  frequencies  by  NMVPDs 
 12.  The  NPRM  sought  comment  on  assertions  that  the  signal  propagation  characteristics  (for  example,  the  distance  over  which  the  signal  remains  strong)  of  the  18  GHz  band  make  it  unsuitable  for 


 widely  distributed  systems  and  limits  growth  within  the  PCO  industry.  The  NPRM  also  sought  to  examine  assertions  that,  absent  access  to  the  12  GHz  band,  PCO’s  costs  to  provide  service  over  a  large 
 area  would  be  substantially  greater.  31  We  sought  comment  on  estimates  of  effective  range  and  the  assertion  that  PCOs  need  additional  range.  We  also  requested  comment  on  the  impact  to  CARS 
 operations,  including  franchised  cable  systems  that  are  currently  CARS  licensees  or  may  need  access  to  CARS  in  the  future  if  PCO  entities  are  allowed  access  to  the  12.75-  13.25  GHz  band.  We  asked  whether 
 cable  systems'  transition  to  fiber  optics  would  obviate  their  need  for  CARS  stations,  thus  lessening  any  potential  negative  impact  and  making  more  spectrum  available  to  other  applicants,  such  as  PCOs  and 
 other  MVPDs.  32 
 13.  OpTel  contends  generally  that  PCOs  need  access  to  compete  effectively  with  incumbent  franchised  cable  systems.  According  to  OpTel,  the  12  GHz  band  provides  superior  spectrum  for  video 


 delivery,  particularly  as  compared  to  other  bands  of  spectrum  above  21.2  GHz  that  private  microwave  licensees  may  use  for  that  purpose.  OpTel  claims  that  those  bands  have  neither  the  technical 
 characteristics  nor  the  bandwidth  required  to  provide  a  video  service  that  is  comparable  to—  and 


 28  Amendment  of  Parts  21,  43,  74,  78  and  94  of  the  Commission’s  Rules  Governing  Use  of  the  Frequencies  in  the 
 2.1  and  2.5  GHz  Band  Affecting:  Private  Operational-  Fixed  Microwave  Service,  Multipoint  Distribution  Service,  Instructional  Television  Fixed  Service,  and  Cable  Television  Relay  Service,  5  FCC  Rcd  6410,  6423  (1990)  (quoting 


 Spectrum  Utilization  Policy  for  Fixed  and  Mobile  Services  in  the  947  MHz-  40  GHz  Band,  48  Fed.  Reg.  6730,  ¶  31  (1983))  (“  Wireless  Cable  Order”). 
 29  NPRM,  14  FCC  Rcd  at  11967. 
 30  Wireless  Cable  Order,  5  FCC  Rcd  at  6423. 
 31  Petition  at  2. 
 32  NPRM,  14  FCC  Rcd  at  11974  –  75. 
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 competitive  with—  franchised  cable  service.  33  Moreover,  OpTel  states  that  the  useful  range  of  a  12  GHz  path  is  substantially  greater  than  that  of  an  18  GHz  path  and  therefore  can  substantially  increase  the  range 
 of  a  station.  OpTel  believes  this  difference  is  significant  in  a  market  in  which  the  efficiency  of  distribution  is  a  large  factor  in  the  cost  of  operating  a  system.  34  OpTel  also  asserts  that  certain  ongoing 
 rulemaking  proceedings  threaten  to  limit  use  of  the  18  GHz  band  by  PCOs  to  distribute  video  programming  to  their  customers,  thus  necessitating  access  to  the  12  GHz  CARS  band  to  assure  their 
 continued  existence  and  growth.  35  In  its  Request  dated  November  6,  2001,  OpTel  adds  that  allowing  all  MVPDs  access  to  12  GHz  will  spur  competition  by  allowing  them  the  capability  to  offer  more 
 programming  and  a  wider  variety  of  services  and  to  serve  more  customers  in  different  types  of  markets  than  is  possible  using  18  GHz  frequencies.  36 


 14.  We  examine  below  the  effective  range  of  communication  in  the  12  GHz  CARS  band  compared  to  the  18  GHz  band  and  the  associated  cost  differences.  We  also  examine  whether  the  needs  of 
 the  NMVPDS  can  be  met  by  their  current  allocations  in  the  18  GHz  and  23  GHz  bands.  Finally,  we  must  take  into  consideration  the  potential  displacement  of  NMVPDs  from  the  18  GHz  band  because  of  recent 
 Commission  decisions,  including  the  18  GHz  Redesignation  Proceeding  mentioned  above.  Our  analysis  demonstrates  that  there  is  a  need  for  access  to  the  12  GHz  CARS  frequencies  by  NMVPDs.  We  then 
 balance  this  need  against  adverse  impacts  to  existing  users  of  the  spectrum. 
 a.  Range  differences  and  cost  differences 
 15.  The  NPRM  requested  comment  on  the  estimates  of  effective  range  presented  in  the  Petition.  37  The  data  submitted  in  comments  supports  the  assertion  that  the  effective  range  for 


 communications  at  12  GHz  is  significantly  greater  than  at  18  GHz.  We  note  at  the  outset  that  the  discussion  centers  on  AM  links  (“  AML”)  because  of  the  greater  number  of  channels  and  overall 
 bandwidth  involved.  FM  links  require  a  larger  bandwidth  than  AMLs,  thus  limiting  the  number  of  channels  for  video  distribution  and  requiring  more  equipment  to  deliver  the  same  number  of  channels  as 
 AMLs.  FM  links,  however,  can  have  longer  path  lengths  and  are  generally  more  reliable.  Comsearch  and  RCN  assert  that  rain  fade  is  the  determining  factor  for  effective  communications  range.  38  According  to 
 one  model,  39  in  areas  of  moderate  rainfall,  18  GHz  channels  can  achieve  a  99.99%  availability  40  with  a  20  dB  margin  over  a  distance  of  4.8  km  (3.0  mi.)  and  12  GHz  channels  can  achieve  the  same  result  over  a 
 distance  of  11.8  km  (7.3  mi.).  For  areas  that  experience  heavier  rainfall,  the  distances  for  18  GHz  and  12  GHz  are  approximately  2.3  km  (1.4  mi.)  and  4.4  km  (2.7  mi.),  respectively.  For  areas  that  have 
 significantly  less  rainfall,  the  effective  distance  for  18  GHz  is  11.3  km  (7.0  mi.),  and  the  effective  distance 


 33  OpTel  Comments  at  2-  3,  (citing  47  C.  F.  R.  §  101.603). 
 34  Id.  at  3. 
 35  Id.  at  3-  4. 
 36  OpTel  November  6  Request  at  3. 
 37  NPRM,  14  FCC  Rcd  at  11975. 
 38  RCN  Comments  at  6;  Comsearch  Comments  at  3. 
 39  Comsearch  Comments  at  3-  5  (citing  Robert  K  Crane,  Prediction  of  Attenuation  by  Rain,  28  IEEE  Transactions  on 
 Communications  (1980).  40 
 99.  99%  availability  is  the  performance  factor  used  in  the  model.  It  is  not  an  established  value  for  CARS  and  no  such  performance  factor  has  been  set. 
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 for  12  GHz  is  limited  by  factors  other  than  rain  fade,  especially  multipath  fading.  41  This  is  consistent  with  OpTel’s  assertion  that  the  effective  range  at  18  GHz  is  less  than  8  miles  and  at  12  GHz  is  12  miles  or 
 greater.  42  It  is  also  generally  consistent  with  the  assessment  of  RCN  that  the  effective  range  at  18  GHz  is  2  to  3  miles,  and  the  effective  range  at  12  GHz  is  8  to  10  miles.  43  There  is  no  evidence  in  the  record  that 
 contradicts  these  estimates.  Assuming  this  information  is  accurate,  the  effective  link  length  at  12  GHz  is  more  than  twice  that  at  18  GHz  and  typical  values  would  be  3  to  7  miles  for  18  GHz  and  7  miles  and 
 longer  for  12  GHz. 
 16.  The  NPRM  asked  whether  there  are  significant  differences  in  cost,  supported  by  data,  between  use  of  12  GHz  spectrum  and  the  18  GHz  and  23  GHz  spectrum  that  PCOs  already  are  eligible  to 


 use.  The  only  cost  data  offered  in  comments,  supplied  by  RCN,  indicates  that  the  cost  of  equipment  used  for  18  GHz  is  less  than  that  used  for  12  GHz.  44  RCN  asserts  that  the  net  difference  in  cost  between 
 constructing  a  typical  12  GHz  path  and  an  18  GHz  path  is  directly  related  to  the  effective  length  for  each.  45  The  cost  of  a  path  of  given  length  is  attributed  largely  to  the  number  of  repeaters  necessary  to 
 achieve  that  length.  RCN  argues  that  the  signal  will  degrade  beyond  an  acceptable  level  if  there  are  more  than  two  repeaters  (3  links)  in  the  path.  46  Each  path,  therefore,  has  a  maximum  distance  beyond  which 
 systems  cannot  be  connected  by  microwave  thus  necessitating  that  those  systems  have  their  own  headend.  47 


 17.  Using  the  typical  link  lengths  discussed  above  as  an  example,  and  based  upon  the  data  supplied  by  RCN,  it  appears  that  for  paths  greater  than  14  miles  and  less  than  22  miles  there  are 
 significantly  higher  costs  when  using  18  GHz  rather  than  12  GHz.  It  also  appears  that,  for  paths  less  than  6  miles,  costs  are  lower  for  18  GHz  than  for  12  GHz.  The  only  figures  we  have  are  supplied  by  RCN, 
 which  indicate  that  a  12  GHz  link  costs  $95,000  and  an  18  GHz  link  costs  $54,000  48  and  that  a  headend  costs  in  excess  of  $1.5  million.  49  Using  the  range  figures  quoted  above  for  an  area  of  moderate  rainfall 
 and  RCN’s  suggested  costs,  the  following  estimates  result. 


 41  Comsearch  Comments  at  3. 
 42  OpTel  Comments  at  3. 
 43  RCN  Comments  at  6. 
 44  RCN  Reply  Comments  at  n.  21. 
 45  See  RCN  Comments  at  8;  RCN  Reply  Comments  at  5-  6. 
 46  RCN  Comments  at  7. 
 47  Id.  at  8. 
 48  See  RCN  Reply  Comments  at  5.  RCN  provides  the  total  cost  for  a  three  link  path  as  $163,000,  which  gives  an 
 average  per  link  cost  of  approximately  $54,000.  RCN  states  that  18  GHz  equipment  is  cheaper  and  that  a  big  part  of  the  cost  for  additional  links  is  site  rental  of  $2,000  to  $4,000.  RCN  Comments  at  6  and  note  21.  This  indicates  that 


 the  cost  for  the  first  link  is  probably  closer  to  $52,000  and  for  subsequent  links  $55,000  to  $56,000.  For  simplicity,  we  use  the  average  value  as  the  cost  of  equipment  appears  to  be  the  predominant  part  of  the  cost. 
 49  RCN  Comments  at  8. 
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 Distance  (Miles)  18  GHz  12  GHz  Cost  Differential  18  GHz  vs.  12  GHz 
 3  1  link  ($  54,000)  1  link  ($  95,000)  -  $41,000 
 6  2  links  ($  108,000)  1  link  ($  95,000)  +$  13,000 
 7  3  links  ($  162,000)  1  link  ($  95,000)  +$  67,000 
 9  3  links  ($  162,000)  2  links  ($  190,000)  -$  28,000 
 14  New  headend  ($  1.5  million)  2  links  ($  190,000)  +$  1.31  million 
 22  New  headend  ($  1.5  million)  3  links  ($  285,000)  +$  1.215  million 
 >  22  New  headend  ($  1.5  million)  New  headend  ($  1.5  million)  0 


 Thus,  on  the  record  presented,  we  conclude  that  for  some  intermediate  path  lengths  (between  6  and  9  miles  in  our  example)  and  longer  paths  (14  to  22  miles  in  our  example)  costs  are  significantly  less  for 
 operation  in  the  12  GHz  band  than  in  the  18  GHz  band. 
 b.  23  GHz 
 18.  NMVPDs  are  also  eligible  for  OFS  licenses  to  use  the  23  GHz  band.  Consequently,  the  NPRM  also  asked  for  a  cost  analysis  and  usage  comparison  between  the  12  GHz  and  23  GHz  bands.  50 


 The  record  shows,  without  contradiction,  that  the  23  GHz  band  is  unsuitable  for  the  needs  of  NMVPDs.  51  Comsearch  states  that  the  band  is  used  by  PCO’s  for  FM-  Video  and  digital  transmission,  but  there  are  no 
 instances  of  AML  (AM  Video)  transmission.  52  It  is  also  suggested  that  it  would  be  difficult  to  find  500  MHz  of  clean  spectrum,  containing  no  potentially  interfering  signals  or  noise,  in  the  23  GHz  band  in  most 
 major  markets.  53  Further,  AML  equipment  for  23  GHz  is  apparently  not  available.  54  The  23  GHz  band  would  also  be  subject  to  greater  path  length  limitations  than  18  GHz.  55  Therefore,  we  agree  that  the  use 
 of  the  23  GHz  band  is  limited  for  the  transmission  of  a  multitude  of  video  channels,  in  the  range  of  50.  We  continue  to  believe,  however,  that  this  band  can  continue  to  be  viable  for  transmission  of  a  limited 
 number  of  video  channels  and  for  transmission  of  data. 
 c.  Constraints  on  terrestrial  use  of  18  GHz  band 
 19.  OpTel  alleged  in  its  Petition  that  contemporaneous  changes  in  Commission  rules  and  pending  actions  governing  use  of  the  18  GHz  band  created  additional  needs  to  expand  CARS  eligibility 


 50  NPRM,  14  FCC  Rcd  at  11973. 
 51  RCN  Comments  at  n.  2. 
 52  Comsearch  Comments  at  2. 
 53  Id. 
 54  Id.  at  3. 
 55  Id. 
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 for  use  by  NMVPDs.  56  The  NPRM  asked  whether  an  anticipated  increase  of  constraints  on  terrestrial  use  of  the  18  GHz  band  warrants  making  the  12  GHz  CARS  band  available  to  NMVPDs.  Subsequently,  on 
 June  22,  2000,  the  Commission  released  the  18  GHz  Redesignation  Order.  57  In  that  Order,  the  Commission  terminated  co-  primary  status  for  most  users  in  the  band  from  17.70  to  19.70  GHz.  The  band 
 was  segmented  between  terrestrial  fixed  services  (“  FS”)  and  Geostationary  (“  GSO”)  and  Non-Geostationary  Satellite  Services  (“  NGSO”).  The  FS  users,  including  PCOs  and  other  NMVPDS,  were 
 given  primary  status  on  the  600  MHz  at  17.70  to  18.30  GHz.  58  They  were  also  given  co-  primary  status  at  18.30  to  18.58  GHz  and  at  19.30  to  19.70  GHz.  59  Thus,  FS  users  have  access  to  880  MHz  of  contiguous 
 spectrum  from  17.70  to  18.58  GHz.  The  18  GHz  Redesignation  Order  also  declined  to  allow  new  secondary  operations  on  a  non-  interference  basis  anywhere  in  the  17.70  to  19.70  GHz  band.  60  FS 
 operations,  therefore,  have  lost  access  to  18.58  to  19.30  GHz.  The  Commission  rejected  its  original  proposal  to  designate  18.30  to  18.55  GHz  for  use  by  GSO/  FSS  on  a  primary  basis  because  that  would 
 jeopardize  many  FS,  CARS,  and  PCO  operations  in  that  band.  61  In  doing  so,  the  Commission  asserted  that  this  “affords  PCOs  the  ability  to  maintain  and  upgrade  their  existing  systems  to  compete  effectively 
 against  franchised  cable  systems.”  62  The  18  GHz  Redesignation  Order  did  not,  therefore,  change  the  amount  of  spectrum  available  to  PCOs  in  the  18  GHz  band.  Section  101.603  continues  to  allow  use  of 
 18.142  to  18.580  GHz,  in  the  18  GHz  band,  as  the  final  RF  link  in  the  chain  of  transmission  of  programming  material  to  cable  systems,  MDS,  or  master  antenna  systems.  63 


 20.  Hughes  Electronics  Corporation  (“  Hughes”),  64  the  Fixed  Wireless  Communication  Coalition  (“  FWCC”),  65  and  Winstar  Communications,  Inc.,  (“  Winstar”)  66  filed  petitions  for 
 reconsideration  of  the  18  GHz  Redesignation  Order.  The  Commission  addressed  many  of  the  issues  raised  in  these  petitions  in  the  First  Order  on  Reconsideration,  released  on  November  1,  2001.  67  It 
 deferred  resolution,  however,  of  the  issues  that  impinge  directly  upon  this  proceeding—  issues  raised  by 


 56  NPRM,  14  FCC  Rcd  at  11975  –  76  (1999);  Petition  at  5. 
 57  Redesignation  of  the  17.7-  19.7  GHz  Frequency  Band,  Blanket  Licensing  of  Satellite  Earth  Stations  in  the  17.7- 
 20.2  GHz  and  27.5-  30.0  GHz  Frequency  Bands,  and  the  Allocation  of  Additional  Spectrum  in  the  17.3-  17.8  GHz  and  24.75-  25.25  GHz  Frequency  Bands  for  Broadcast  Satellite  Service  Use,  15  FCC  Rcd  13430  (2000)  (“  18  GHz 


 Redesignation  Order”).  58 
 FS  users  cannot  use  the  frequencies  from  17.7  to  18.142  GHz  for  the  final  rf  link  in  the  transmission  chain  of  programming  material  to  cable  systems,  MDS,  or  master  antenna  systems.  47  C.  F.  R.  §  101.603(  b)(  3). 


 59  18  GHz  Redesignation  Order,  15  FCC  Rcd  at  13443. 
 60  Id.  at  13444. 
 61  Id.  at  13446. 
 62  Id.  at  13447  –  48. 
 63  47  C.  F.  R.  §  101.603(  b)(  3). 
 64  Hughes  Electronic  Corporation,  Petition  for  Partial  Reconsideration  (filed  Oct.  6,  2000). 
 65  Fixed  Wireless  Comunication  Coalition,  Petition  for  Reconsideration  (filed  Oct.  10,  2000). 
 66  Winstar  Communications,  Inc.,  Petition  for  Clarification  and  Reconsideration  (filed  Oct.  10,  2000). 
 67  Redesignation  of  the  17.7-  19.7  GHz  Frequency  Band,  Blanket  Licensing  of  Satellite  Earth  Stations  in  the  17.7- 
 20.2  GHz  and  27.5-  30.0  GHz  Frequency  Bands,  and  the  Allocation  of  Additional  Spectrum  in  the  17.3-  17.8  GHz  and  24.75-  25.25  GHz  Frequency  Bands  for  Broadcast  Satellite  Service  Use,  16  FCC  Rcd  19808  (2001). 
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 Hughes  on  the  18  GHz  band  plan  and  blanket  licensing.  68  The  unresolved  issues  are,  specifically,  designation  of  the  18.30  to  18.58  GHz  sub-  band  as  primary  solely  for  GSO/  FSS  rather  than  co-  primary 
 with  FS  operations  such  as  PCOs  and  CARS,  and  Hughes’s  allegation  that  the  Commission  did  not  address  its  proposal  to  move  PCO  and  CARS  operations  altogether  from  18  GHz  to  12  GHz  or  23  GHz.  69 
 We  cannot  conclude  at  this  time,  however,  that  NMVPDs  have  a  need  for  12  GHz  CARS  spectrum  solely  based  upon  their  displacement  from  the  18  GHz  band.  Rather,  our  decision  here  rests  upon  our  findings 
 and  conclusion  that  NMVPDs  need  12  GHz  CARS  spectrum  based  on  their  demonstrated  need  for  longer  path  lengths  and  the  cost  savings  obtained  by  using  12  GHz  for  these  purposes. 


 2.  The  13.20  GHz  to  13.25  GHz  band 
 21.  The  NPRM  also  sought  comment  on  request  of  PCOs  to  use  the  frequency  band  segment  from  13.20  to  13.25  GHz  for  delivery  of  video  programming.  OpTel  argues  that  this  would  allow  it  to 


 provide  more  video  channels,  up  to  82,  making  it  more  competitive  with  cable  systems.  70  The  NPRM  pointed  out  that  13.20  to  13.25  GHz  is  not  designated  for  CARS  use  but  rather  for  BAS,  including  on-  site 
 mobile  transmissions  for  ENG.  The  NPRM  sought  comment  on  any  existing  or  future  impact  sharing  with  CARS  might  have  on  BAS,  especially  as  it  relates  to  the  required  digital  transition  for  broadcasters. 


 22.  Broadcasters  oppose  allowing  use  of  the  13.20  to  13.25  GHz  band  by  PCOs.  71  The  band  is  deemed  necessary  for  transmission  of  contribution  quality  video  72  by  TV  pickup  operations  in  ENG.  73 
 NAB  and  SBE  argue  that  this  quality  of  video  is  necessary  for  High  Definition  Television  (“  HDTV”)  broadcast.  74  Coverage  of  events  at  remote  venues  in  digital  format  is  a  significant  impetus  for  the 
 penetration  of  digital  television  into  the  consumer  market.  75  Further,  the  necessary  bandwidth  for  transmission  of  contribution  quality  video  is  25  MHz  and  such  channels  are  available  to  ENG  TV  pickup 
 operations  only  in  the  13.20  to  13.25  GHz  and  13.15  to  13.20  GHz  bands  in  the  top  100  markets.  76 


 68  Id.  at  19816. 
 69  Id.  If  we  ultimately  decide  that  PCOs  are  no  longer  co-  primary  operations  in  the  sub-  band  from  18.30  to  18.58 
 GHz,  the  spectrum  available  to  PCOs  for  video  distribution  as  OFS  licensees  in  the  18  GHz  band  would  be  reduced  by  64  percent.  We  note,  however,  that  by  making  PCOs  eligible  to  hold  CARS  licenses,  they  will  have  access  to  the 


 full  18  GHz  CARS  spectrum  from  17.70  to  18.58  GHz,  as  currently  allocated,  or  17.70  to  18.3  GHz  under  the  Hughes  relocation  proposal.  PCOs  and  other  NMVPDs  will  now  have  access  to  880  MHz,  or  at  least  600  MHz 
 depending  on  the  decision  on  reconsideration,  in  the  18  GHz  spectrum  rather  than  the  438  MHz  they  currently  use.  Any  use  of  18  GHz  below  18.142  GHz  for  video  distribution  by  PCOs  and  other  NMVPDs,  however,  may  entail 
 replacement  of  existing  equipment  or  acquisition  of  additional  equipment  The  cost  or  compensation  for  any  relocation  will  be  addressed  in  the  reconsideration  of  the  18  GHz  Redesignation  Order  should  we  decide  to 
 reallocate  the  sub-  band  from  18.30  to  18.58  GHz.  We  do  not  know  whether  equipment  currently  used  by  PCOs  can  be  readily  or  inexpensively  modified  for  operation  elsewhere  in  the  18  GHz  band. 
 70  NPRM,  14  FCC  Rcd  at  11972. 
 71  NAB  Comments  at  1;  Walt  Disney  Co.  Comments  at  1;  SBE  Comments  at  2. 
 72  “Contribution  Quality”  is  higher  quality  video  than  that  transmitted  to  viewers.  It  is  edited,  repackaged  and  other 
 wise  processed  for  inclusion  in  the  ultimate  video  output  of  a  station.  NAB  Comments  at  n.  9.  73 
 NAB  Comments  at  5  –  6.  74 
 NAB  Comments  at  5,  SBE  Comments  at  3.  75 
 Walt  Disney  Co.  Comments  at  2.  76 
 NAB  Comments  at  6. 
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 23.  Currently,  BAS  users  have  access  to  the  2,  7,  12,  and  18  GHz  bands,  in  part  shared  with  CARS,  for  ENG  and  other  uses.  The  Commission’s  records  also  indicate  that  the  vast  majority  of  BAS 
 ENG  service  is  performed  at  2  and  7  GHz.  Nevertheless,  during  this  time  of  digital  transition  for  broadcasters,  we  agree  that  ENG  TV  pickup  operations  are  likely  to  need  the  13.20  to  13.25  GHz  sub-band 
 and  should  remain  primary  to  these  users  in  that  sub-  band.  We  are  cognizant,  however,  that  this  50  MHz  of  spectrum  is  also  a  natural  extension  of  the  500  MHz  of  spectrum  from  12.70  to  13.20  GHz 
 allocated  to  CARS.  We  are  aware  that,  under  the  current  competitive  environment,  systems  offering  several  hundred  video  channels  are  increasingly  available  and  that  cable  systems  with  550  MHz  capacity 
 are  common.  OpTel  persuasively  argues  that  use  of  the  frequencies  from  13.20  to  13.25  GHz  would  provide  it  with  more  channels  in  the  12  GHz  CARS  band  to  be  more  competitive  with  cable  systems. 
 We,  however,  must  balance  spectrum  demands  by  MVPDs  against  protection  of  the  broadcast  ENG  TV  pickup  service  and  consider  the  goal  of  efficient  spectrum  usage. 


 24.  We  will  allow  CARS  users,  including  the  NMVPDs  made  eligible  by  this  Order,  to  use  the  sub-  band  from  13.20  to  13.25  GHz  as  secondary  users;  that  is,  CARS  stations  must  accept 
 interference  from  and  not  cause  interference  to  existing  and  future  BAS  users.  Further,  any  applicant  for  a  CARS  license  seeking  use  of  the  13.20  to  13.25  GHz  sub-  band  will  be  required  to  demonstrate  that 
 sufficient  spectrum  is  not  available  to  it  in  the  12.70  to  13.20  GHz  band.  Secondary  status  notwithstanding,  we  do  not  anticipate  that  CARS  users  in  the  13.20  to  13.25  GHz  sub-  band  will 
 experience  loss  of  service  due  to  preemption  by  a  new  primary  user  as  there  are  solutions,  both  technical  and  non-  technical,  that  will  enable  sharing  of  the  frequencies.  This  action  should  afford  adequate 
 protection  for  BAS  ENG  while  providing  more  efficient  use  of  spectrum. 
 3.  Impact  on  competition  in  the  video  distribution  market 
 25.  The  NPRM  asked  whether  the  proposed  expansion  of  CARS  eligibility  would  adversely  affect  competition  in  the  video  distribution  market.  This  question  included  a  request  for  comment  on 


 whether  to  give  PCOs  equal  access  to  CARS  frequencies  notwithstanding  that  the  franchised  cable  systems  currently  eligible  for  CARS  have  service  and  other  requirements  to  which  PCOs  and  other 
 NMVPDs  are  not  subject.  For  example,  cable  systems  must  obtain  a  franchise,  77  which  may  have  a  requirement  to  serve  all  residents  in  the  franchise  area,  and  are  subject  to  a  franchise  fee.  78  They  are  also 
 subject  to  regulation  regarding  leased  access;  79  must  carry;  80  program  access;  81  public,  educational,  and  government  channels;  82  rate  regulation;  83  channel  occupancy  limits;  84  sports  blackout;  85  network 


 77  47  U.  S.  C.  §  541(  b)(  1). 
 78  Id.  §  542. 
 79  Id.  §  532. 
 80  Id.  §§  534  –  35. 
 81  Id.  §  536. 
 82  Id.  §531. 
 83  Id.  §  543. 
 84  Id.  §  533(  f)(  1)(  B);  47  C.  F.  R.  §  76.504(  a). 
 85  47  C.  F.  R.  §  76.67. 
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 nonduplication;  86  and  syndicated  exclusivity.  87  Eligible  MVPDs  such  as  MDS  and  MMDS  operators,  like  PCOs  and  other  NMVPDs  are  not  subject  to  these  requirements. 
 26.  RCN  argues  that  access  to  CARS  frequencies  will  make  market  penetration  easier  for  non-  cable  MVPDs.  88  Laying  fiber  optic  cable  can  be  costly  and  time  consuming.  RCN  asserts  that,  by 
 using  CARS  initially,  NMVPDs  can  establish  a  customer  base  sufficient  to  support  installation  of  a  fiber  optic  network.  89  In  opposition,  Time  Warner  argues  that  all  MVPDs  are  not  equal  and  that  cable 
 operators  have  franchise  requirements  and  other  regulatory  burdens,  such  as  must  carry,  which  are  not  imposed  upon  the  NMVPDS.  90  Time  Warner  asserts  that,  for  true  parity  to  exist,  PCOs  should,  at  a 
 minimum  have  the  “  ‘if  carry  one,  must  carry  all’  obligation  with  respect  to  local  television  broadcast  stations.”  91 


 27.  It  is  undeniable  that  NMVPDs  have  fewer  regulatory  burdens  than  franchised  cable  systems.  It  is  less  clear  why  the  differences  in  franchise  obligations  or  carriage  requirements  have  any 
 relevance  to  limiting  CARS  eligibility.  For  example,  MDS  and  MMDS  providers  currently  have  access  to  CARS  frequencies  and  they  are  subject  to  lesser  or  different  regulatory  requirements  than  franchised 
 cable  operators.  92  The  Commission  has  previously  decided  that  these  differences  in  regulatory  burdens  should  not  limit  CARS  eligibility.  93  The  regulatory  disparities  between  cable  systems  and  other  MVPDs 
 exist  for  historical  and  legitimate  reasons  of  public  policy  and  are  irrelevant  to  the  issue  of  whether  NMVPDs  should  be  excluded  from  using  CARS  frequencies.  We  conclude,  therefore,  that  denying 
 NMVPDs  access  to  CARS  frequencies  based  on  differences  in  regulatory  treatment  would  create  an  arbitrary  distinction  among  MVPDs  that  would  unnecessarily  impede  market  entry  for  competitors  and 
 unnecessarily  restrict  their  flexibility  to  provide  services  in  an  efficient  and  economical  fashion. 
 4.  Adverse  impact  on  the  ability  of  cable  systems  to  serve  their  community 
 28.  The  NPRM  asked  whether  expanding  CARS  eligibility  to  NMVPDs  would  create  an  adverse  impact  on  incumbent  CARS  licensees.  In  particular,  the  NPRM  asked  whether  expanding 


 eligibility  in  the  12  GHz  CARS  band  would  create  spectrum  congestion  harmful  to  incumbent  CARS  licensees.  The  NPRM  speculated  that,  though  all  MVPDs  would  be  equally  eligible  to  use  CARS 
 frequencies,  the  ability  of  a  cable  system  to  serve  its  community  might  be  adversely  affected  because  at  some  point  in  the  future  CARS  frequencies  necessary  for  franchised  cable  use  might  be  occupied  by  an 


 86  Id.  §  76.92. 
 87  Id.  §  76.151. 
 88  RCN  Comments  at  9. 
 89  Id. 
 90  Time  Warner  Cable  Comments  at  7-  10. 
 91  Id.  at  10  (referring  to  requirements  Congress  was  considering  for  satellite  carriers  at  the  time  the  comments  were 
 filed  and  which  Congress  later  imposed.).  92 
 See  47  C.  F.  R.  §§  21.900-  21.961.  93 
 Wireless  Cable  Order,  5  FCC  Rcd  at  6423. 
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 NMVPD.  94  The  NPRM  also  asked  whether  the  transition  to  fiber  optics  by  cable  systems  would  mitigate  any  negative  impact  of  expanding  eligibility  for  CARS  licenses.  95 
 29.  The  record  provides  no  specific  data  on  franchised  cable  systems’  future  needs  for  CARS  links.  RCN  contends  that  congestion  on  the  12  GHz  CARS  band  should  not  be  a  problem  in  densely 
 populated  areas  in  the  future  as  cable  systems  consolidate  headends  and  shift  to  fiber  optic  cable,  thus  reducing  their  demand  for  microwave  links.  96  NCTA’s  comments  tend  to  support  this  conclusion.  NCTA 
 indicates  that  the  cable  industry’s  transition  to  fiber  optics  will  diminish  their  need  to  use  CARS  frequencies.  NCTA,  however,  provides  no  timeframe  for  this  transition,  nor  do  they  conclude  that  it  will 
 necessarily  eliminate  congestion  concerns.  97 
 30.  Sprint  argues  that  adding  new  users  to  the  12  GHz  CARS  band  will  increase  the  likelihood  of  congestion.  98  Time  Warner  insists  there  is  potential  for  interference  from  additional  users 


 and  that  those  users  should  prove  that  interference  would  not  occur.  99  NCTA  states  that  it  may  be  possible  to  accommodate  NMVPDs,  but  it  also  asserts  that  there  should  be  a  burden  on  the  NMVPDs  to 
 show  that  no  problems  would  occur.  The  record,  however,  contains  no  information  to  show  that  frequency  coordination  cannot  be  used  to  accommodate  additional  CARS  facilities  in  all  but  the  most 
 congested  areas.  RCN  asserts  that  congestion  may  be  more  of  a  problem  at  18  GHz  than  at  12  GHz.  100  Further,  RCN  argues  that  congestion  and  difficulties  in  frequency  coordination  are  typically  problems  for 
 newcomers,  which  predominantly  will  be  the  NMVPDs.  101  The  record  does  not  show  that  the  use  of  these  frequencies  cannot  be  engineered  to  accommodate  NMVPDs;  to  the  contrary,  the  record  suggests  that 
 they  can  use  the  frequencies  with  proper  coordination.  102  Therefore,  we  conclude  that  frequency  coordination  will  address  all  potential  interference  problems  and  that  there  is  no  present  danger  of 
 congestion  due  to  limited  use  of  the  band  as  needed  by  NMVPDs. 
 5.  Summary 
 31.  In  summary,  we  conclude  that  it  is  appropriate  to  make  NMVPDs  eligible  for  CARS  licenses  based  on  a  demonstrated  need  for  the  spectrum  by  NMVPDs,  the  eligibility  of  other  similarly 


 situated  MVPDs  for  the  same  licenses,  and  the  lack  of  demonstrable  adverse  impacts  on  existing  users  of  the  spectrum.  We  note  that  our  decisions  regarding  the  12  GHz  CARS  band  in  this  docket  are 
 independent  of  the  issues  pending  in  the  18  GHz  Redesignation  Proceeding  and  are  not  intended  to  prejudge  or  otherwise  alter  the  issues  pending  on  reconsideration.  Allocation  of  the  frequencies  from 
 18.30  to  18.58  GHz  to  the  GSO/  FSS  is  the  remaining  issue  in  the  18  GHz  Redesignation  proceeding. 


 94  NPRM,  14  FCC  Rcd  at  11974. 
 95  Id.  at  11975. 
 96  See  RCN  Comments  at  9. 
 97  See  NCTA  Comments  at  2. 
 98  Sprint  Comments  at  3. 
 99  Time  Warner  Cable  Comments  at  9. 
 100  RCN  Comments  at  11.  We  note  that,  if  PCO  eligibility  for  18  GHz  is  revised,  reduced  or  eliminated,  it  could 
 cause  congestion  in  the  12  GHz  band  that  would  have  to  be  addressed  in  that  context.  101 
 See  id.  at  11  –  12.  102 
 Comsearch  Comments  at  8;  NCTA  Comments  at  3,  5. 
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 Any  relocation  of  PCOs  would  entail  an  evaluation  of  costs  to  the  PCOs  and  reimbursement  for  those  costs.  These  issues  would  be  best  addressed  in  the  18  GHz  Redesignation  Proceeding. 
 B.  Conditions  and  Restrictions  on  NMVPDs 
 32.  The  NPRM  sought  comment  on  whether  we  should  impose  special  technical  criteria  to  insure  that  NMVPDs  would  not  interfere  with  existing  users  or  unduly  constrain  growth  of  incumbent 


 cable  services.  The  NPRM  also  asked  whether  special  eligibility  criteria  should  be  developed  for  NMVPDs,  as  well  as  whether  conditions  or  restrictions  other  than  those  proposed  should  be  imposed  on 
 the  use  of  the  12  GHz  CARS  band  by  NMVPDs. 
 1.  Technical  Criteria 
 33.  Time  Warner  Cable  proposes,  as  a  prerequisite  to  the  grant  of  a  CARS  license  for  operation  in  the  12  GHz  CARS  band,  that  applicants  demonstrate  a  need  to  transmit  more  than  10  miles, 


 as  18  GHz  frequencies  should  be  adequate  for  shorter  distance  links.  103  RCN  asserts  that  this  would  be  nothing  more  than  an  unnecessary  administrative  burden.  104  We  agree  that  such  an  additional 
 requirement,  applicable  only  to  NMVPDs,  would  be  purely  discriminatory  as  others  who  are  similarly  situated,  such  as  wireless  cable  systems,  need  not  make  such  a  showing.  CARS  stations  must  operate 
 with  reduced  power  if  their  path  length  is  less  than  the  minimum  path  lengths  currently  prescribed  in  Section  78.108  of  the  Commission’s  Rules.  105  The  existing  minimum  path  length  restrictions  are 
 rigorously  applied.  Because  all  CARS  stations  must  use  less  power  for  shorter  paths  and  because  18  GHz  equipment  costs  less,  NMVPDs  would  have  a  strong  economic  incentive  to  use  18  GHz  rather  than  12 
 GHz  for  shorter  paths.  Thus,  we  do  not  believe  additional  regulatory  restrictions  or  requirements  are  necessary  in  this  regard. 


 34.  NCTA  recommends  that  NMVPDs  be  limited  to  hub-  to-  hub  operations  on  12  GHz  CARS  because  it  believes  18  GHz  is  adequate  for  hub-  and-  spoke  operation.  106  OpTel  counters  that  to  limit 
 NMVPDs  to  hub-  to-  hub  operation  would  lock  all  NMVPDs  into  one  system  architecture  and  that  the  Commission  should  not  dictate  system  design.  107  OpTel  notes  that  although  its  use  of  the  band  may 
 involve  such  transmissions,  that  is  simply  a  function  of  OpTel’s  particular  system  architecture,  and  that  architecture  should  not  be  arbitrarily  imposed  on  all  other  competitors  desiring  use  of  the  CARS 
 spectrum.  Moreover,  OpTel  itself  may  need  to  use  12  GHz  paths  to  reach  private  communities  or  more  remote  MDUs  that  are  not  serviceable  with  an  18  GHz  path.  Again,  we  see  no  justification  to 
 discriminate  among  non-  cable  system  MVPDs  in  terms  of  use  restrictions,  and  decline  to  impose  system  architecture  on  users.  We,  therefore,  conclude  that  NMVPDs  should  not  be  limited  to  hub-  to-  hub 
 operations  in  the  CARS  band. 


 103  Time  Warner  Cable  Comments  at  17.  See  also  Sprint  Comments  at  5  (showing  of  need  to  transmit  over  10  miles 
 would  not  be  necessary  if  NMVPDs  were  given  secondary  status).  104 
 RCN  Comments  at  16.  105 
 47  C.  F.  R.  §  78.108.  Operation  at  reduced  power  is  required  for  paths  shorter  than  the  minimum  length.  106 
 NCTA  Comments  at  5.  107 
 OpTel  Reply  Comments  at  6. 
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 2.  Eligibility  criteria 
 35.  The  NPRM  asked  whether  CARS  eligibility  should  be  conditioned  on  service  to  a  specified  minimum  number  of  subscribers  to  avoid  having  a  NMVPD  with  a  small  number  of  subscribers 


 occupying  capacity  that  might  be  needed  by  a  cable  system  with  a  large  number  of  subscribers.  108  The  record  offers  no  recommendation  for  a  minimum  number  of  subscribers  that  should  be  required  as  a 
 prerequisite  for  CARS  license  eligibility.  Only  one  commenter,  Sprint,  supports  the  minimum  subscriber  requirement  “to  prevent  a  PCO  with  a  small  number  of  subscribers  from  monopolizing  a  CARS  station 
 that  could  otherwise  be  licensed  to  a  cable  system  serving  a  significantly  larger  subscriber  base.  109  RCN  argues,  however,  that  requiring  a  minimum  number  of  subscribers  prior  to  granting  a  CARS  license 
 would  impede  market  penetration  where  the  CARS  license  is  necessary  for  the  initial  operation  of  the  system.  110  We  are  sensitive  to  the  concern  that  a  NMVPD  should  ultimately  have  a  sufficient  subscriber 
 base  for  efficient  use  of  12  GHz  CARS  frequencies.  On  this  record,  however,  we  can  set  no  minimum  subscriber  number.  We  believe  that  the  economics  of  building  CARS  links  will  militate  against  using 
 them  for  smaller  operations. 
 36.  NCTA  and  Sprint  express  concern  that  spectrum  will  be  hoarded  111  .  Eligibility  criteria  are  not  needed  to  avoid  this  problem  because  warehousing  of  spectrum  is  prohibited  by  operation  of 


 Section  78.27(  b)  of  the  Commission’s  Rules,  which  provides  that  the  CARS  license  is  forfeited  if  the  licensee  does  not  notify  the  Commission  within  one  year  of  the  grant  of  the  license  that  the  station  has 
 commenced  operation.  112 
 3.  Relative  status 
 37.  The  Commission  requested  comment  on  whether  NMVPDs  should  be  designated  as  co-primary  or  secondary  users.  113  Some  commenters  have  proposed  that  the  NMVPDs  be  allowed  to  use  the 


 12  GHz  CARS  band  only  on  a  secondary  basis.  114  The  more  persuasive  argument,  however,  is  that  secondary  status  would  in  effect  preclude  access  to  this  spectrum.  OpTel  and  RCN  argue  that  secondary 
 status  would  deter  investment  in  CARS  equipment  by  NMVPDs.  They  also  contend  that  secondary  status  would  give  other  MVPDs  the  opportunity  to  intentionally  disrupt  NMVPDs’  12  GHz  CARS  operation  by 


 108  NPRM,  14  FCC  Rcd  at  11979. 
 109  Sprint  Comments  at  6. 
 110  RCN  Comments  at  15. 
 111  NCTA  Comments  at  4;  NCTA  Reply  Comments  at  7,  Sprint  Comments  at  4. 
 112  47  C.  F.  R.  §  78.27(  b). 
 113  The  Commission  has  explained  that  "a  secondary  service  is  allowed  to  use  the  band  as  long  as  its  operations  do 
 not  cause  interference  to  any  primary  designated  operations.  If  a  secondary  service  operation  causes  interference  to  a  primary  service,  the  secondary  service  provider  must  cease  operation  [and]  a  service  designated  as  primary  is  the 


 only  service  given  priority  status  to  operate  in  a  frequency  band.  A  service  designated  as  co-  primary  must  share  operations  with  other  services  designated  as  co-  primary  in  the  frequency  band  on  a  co-  equal  basis."  See 
 Redesignation  of  the  17.7-  19.7  GHz  Frequency  Band,  Blanket  Licensing  of  Satellite  Earth  Stations  in  the  17.7-  20.2  GHz  and  27.5-  30.0  GHz  Frequency  Bands,  and  the  Allocation  of  Additional  Spectrum  in  the  17.3-  17.8  GHz  and 
 24.75-  25.25  GHz  Frequency  Bands  for  Broadcast  Satellite  Service  Use,  13  FCC  Rcd  19923  at  n.  4  (1998)  ("  Redesignation  NPRM").  In  addition,  secondary  users  must  accept  interference  from  primary  users. 
 114  NCTA  Comments  at  5;  Sprint  Comments  at  4;  Time  Warner  Cable  Comments  at  19;  Wireless  Communications 
 Association,  International  Comments  at  1. 
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 obtaining  conflicting  licenses  or  designing  their  own  systems  so  that  they  would  receive  interference  from  existing  or  proposed  NMVPD  systems.  115  Therefore,  we  conclude  that,  in  order  that  NMVPDs  may  fairly 
 benefit  from  use  of  the  CARS  bands  and  be  true  competitors,  they  should  be  designated  co-  primary  users. 
 C.  Additional  Changes  to  CARS 
 1.  Voice  and  data 
 38.  The  principle  use  of  CARS  is  for  relaying  video  programming  as  a  component  of  a  larger  system,  for  example,  a  microwave  link  in  a  cable  system  connecting  headends  where  the  system  is 


 predominantly  comprised  of  cable  or  hybrid  fiber  optic  and  cable  connecting  the  headends  to  subscribers.  116  The  NPRM  noted  that  it  is  appropriate,  for  example,  for  a  CARS  station  to  carry  60 
 channels  of  video  programming  and  two  channels  with  non-  video  ancillary  services.  117  The  NPRM  did  not  propose  changing  the  primary  use  of  CARS  from  video  programming,  but  sought  comment  on 
 whether  and  to  what  extent  CARS  could  be  used  to  carry  voice  or  data  on  a  secondary  or  tertiary  basis,  subject  to  existing  technical  restraints.  118  Some  commenters  propose  unlimited  carriage  of  voice  and 
 data.  119  Sprint,  for  example,  proposes  to  use  CARS  to  back-  haul  voice  and  data  traffic  from  MMDS  base  stations  instead  of  using  fiber  optic  cable.  120  Sprint  states  that  this  use  would  allow  for  more  rapid 
 deployment  of  high-  speed  advanced  technological  services.  121  Some  commenters  disagreed  with  the  limitation  described  in  the  NPRM.  122  Others  criticized  the  limited  provision  for  data  transmission  as 
 inadequate,  and  argued  that  failure  to  allow  unrestricted  use  of  CARS  for  voice  and  data  would  frustrate  the  objectives  of  the  MDS/  ITFS  Flexible  Use  Order  and  stunt  the  growth  of  the  MDS  industry.  123  In 
 contrast,  RCN  argues  that  one  6  MHz  channel  used  for  voice  or  data  would  be  sufficient.  124 
 39.  Relaying  video  programming  as  part  of  a  larger  system  that  communicates  by  other  means  or  spectrum  is  the  principle  use  for  CARS.  125  We  did  not  propose  in  the  NPRM  to  change  the 


 fundamental  character  of  the  service.  Rather,  the  NPRM  sought  comment  solely  on  expansion  of  the  types  of  users  eligible  for  CARS  within  the  existing  parameters.  126  Transmission  of  video  requires  large 
 segments  of  contiguous  bandwidth.  Transmission  of  data  requires  relatively  small  channels  and  can  be 
 115  See  OpTel  Comments  at  8;  RCN  Comments  at15. 
 116  47  C.  F.  R.  §  78.11(  b). 
 117  NPRM,  14  FCC  Rcd  at  n.  73. 
 118  Id.  at  11979.. 
 119  Sprint  Comments  at  6  –  8;  OpTel  Comments  at  9;  Wireless  Communications  Association,  International 
 Comments  at  6.  120 
 Sprint  Comments  at  7  –  8.  121 
 Id.  122 
 Wireless  Communications  Association,  International  Comments  at  6.  123 
 Amendment  of  Parts  21  and  74  to  Enable  Multipoint  Distribution  Service  and  Instructional  Television  Fixed  Service  Licensees  to  Engage  in  Fixed  Two-  Way  Transmissions,  13  FCC  Rcd  19112  (1998)  (“  MDS/  ITFS  Flexible 


 Use  Order”).  124 
 RCN  Comments  at  16.  125 
 47  C.  F.  R.  §  78.11(  b).  126 
 NPRM,  14  FCC  Rcd  at  11979. 
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 accommodated  through  other  currently  available  spectrum  services,  which  video  cannot.  Consequently,  the  presence  of  a  few  data  channels  in  a  path  needed  by  an  MVPD  for  video  transmission  may  prevent  the 
 MVPD  from  using  that  path.  Thus,  the  data  channels  would  effectively  occupy  much  more  spectrum  than  needed.  We  believe  the  CARS  band  is  best  suited  for  use  primarily  for  the  transmission  of  video. 
 Moreover,  the  record  we  rely  on  here  for  determining  that  expanded  eligibility  will  not  create  unworkable  congestion  is  based  upon  the  assumption  that  CARS  will  continue  to  be  used  predominantly  for  video 
 transmission.  It  is  beyond  the  scope  of  this  proceeding  to  determine  the  impact  on  current  and  future  users  of  changing  the  dominant  use  of  this  spectrum.  The  MDS/  ITFS  Flexible  Use  Order  was  intended  to 
 allow  MDS  and  ITFS  licensees  to  “provide  a  wide  array  of  new,  enhanced  services  including  new  digital  and  two-  way  communications  services.”  127  It  was  adopted,  however,  in  the  context  of  existing  CARS 
 permissible  use  limitations  and  availability  of  spectrum  in  other  services.  The  MDS/  ITFS  Flexible  Use  Order  did  not  discuss  revisions  to  the  CARS  limitations  on  use.  We  will  continue  to  allow  carriage  of 
 voice  and  data  in  the  same  manner  as  currently  permitted.  128 
 2.  Channel  realignment  and  assignment 
 40.  The  NPRM  also  asked  for  comment  on  the  realignment  and  reassignment  of  channel  frequencies  to  provide  for  more  efficient  use  of  channels  by  facilitating  continuous  channel  transmissions. 


 Specifically,  the  NPRM  sought  comments  on:  1)  designating  the  unassigned  guard  band  (12.9465-  12.9525  GHz)  as  channel  C43,  and  the  unassigned  second  guard  band  (13.0057-  13.0125)  as  channel  D43; 
 and  2)  allowing  CARS  operators  to  slightly  shift  the  frequencies  of  channels  C04-  C10,  channels  D04-  D10,  channels  E04-  E10,  and  channels  F04-  F10  to  produce  6  -  6  MHz  video  channels  for  each  channel 
 group  (i.  e.,  C  group,  D  group,  E  group,  and  F  group).  Currently,  applicants  must  seek  waivers  for  a  change  in  the  frequency  assignments  for  such  minor  frequency  shifts  and  to  use  the  guard  band.  The 
 NPRM  additionally  sought  comment  on  whether  other  changes  in  frequency  assignments  are  necessary  to  provide  for  seamless  and  efficient  use  of  the  CARS  frequency  spectrum. 


 41.  The  comments  support  this  proposed  channel  realignment  and  reassignment  plan.  129  Sprint  also  suggests,  in  conjunction  with  its  proposal  to  permit  unlimited  non-  video  usage,  that  the  rules 
 allow  CARS  licensees  to  combine  or  subdivide  channels  without  regard  to  the  frequency  assignment  plan  in  Section  78.18  of  the  rules  as  long  as  the  spectral  emission  requirements  are  met.  130  As  noted  below  in 
 paragraph  44,  the  scope  of  this  proceeding  is  limited  and  we  intend  to  address  flexible  use  issues  separately.  On  the  basis  of  the  record  before  us,  however,  we  find  efficiency  advantages  to  the  new 
 channelization  plan  proposed  in  the  NPRM  and  will  adopt  it. 
 3.  Reallocation  to  satellite  downlinks 
 42.  The  NPRM  sought  comment  on  expanding  eligibility  for  CARS  licenses  to  entities  such  as  PCOs,  open  video  service  (“  OVS”)  operators  and  others  who  provide  video  as  their  dominant  service, 


 such  as  the  Direct  Broadcast  Satellite  service  (“  DBS”).  131  In  its  comments,  EchoStar  Communications 


 127  MDS/  ITFS  Flexible  Use  Order,  13  FCC  Rcd  at  19113. 
 128  The  Commission's  rules  require  that  a  CARS  station's  principal  use  is  the  transmission  of  television  broadcast 
 material  or  cablecasting.  47  CFR  §  78.11(  b).  129 
 Comsearch  Comments  at  67;  Sprint  Comments  at  67.  130 
 Sprint  Comments  at  7.  131 
 NPRM,  14  FCC  Rcd  at  11973  –  74. 
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 Corporation  (“  EchoStar”)  supported  the  proposed  extension  of  eligibility  to  NMVPDs,  but  requested  also  that  the  Commission  take  it  one  step  further.  As  the  12  GHz  CARS  band  is  adjacent  to  the  12.20  to  12.70 
 GHz  DBS  band,  EchoStar  states  that  the  spectrum  is  of  particular  interest  to  it,  if  it  were  reallocated  to  satellite  downlinks.  132  EchoStar  proposes  that  we  allow  ubiquitous  satellite  service  in  the  12  GHz  CARS 
 band.  Further,  inasmuch  as  it  is  very  difficult  for  ubiquitous  satellite  and  terrestrial  services  to  coexist  in  the  same  spectrum  without  some  form  of  coordination,  EchoStar  argues  that  the  Commission  should 
 award  exclusive  licenses  and  auction  the  spectrum.  133  EchoStar  proposes  that  to  make  this  possible,  the  Commission  could  segment  the  12  GHz  CARS  band  between  satellite  and  terrestrial  users.  134  EchoStar 
 also  urges  that  this  band  be  allocated  for  use  by  other  point-  to-  multipoint  systems,  such  as  Northpoint  Technology,  Ltd.  (“  Northpoint”),  which  at  the  time,  was  being  considered  for  allocation  in  the  DBS  band 
 and  has  now  been  allocated  there.  135  SkyBridge  and  OpTel  strongly  oppose  reallocation  of  the  12  GHz  CARS  band  for  ubiquitous  satellite  use  because  the  result  would  be  to  preclude  current  terrestrial  uses  of 
 the  band.  136  EchoStar’s  proposal  is  entirely  beyond  the  scope  of  this  proceeding.  Our  decision  in  this  Order  is  based  upon  established  needs  for  the  12  GHz  CARS  band  and  our  purpose  is  to  extend  the 
 benefits  of  existing  terrestrial  uses  of  the  spectrum  to  all  classes  of  MVPDs.  We  can  neither  evaluate  the  merits  of  EchoStar’s  proposal  nor  develop  a  regime  to  implement  it  based  upon  the  record  before  us. 


 43.  We  note  that  on  December  3,  2001,  DIRECTV,  Inc.,  and  EchoStar  (“  DBS  Operators”)  filed  a  Petition  requesting  that  the  Commission  “consider  housing  Northpoint’s  proposed  service  in  the 
 Cable  Television  Relay  Service  (“  CARS”)  band,”  and  consolidate  pending  proceedings  relating  to  the  12.20  to  12.70  GHz  DBS  band  and  the  immediately  adjacent  12.70  to  13.20  GHz  CARS  band,  including 
 the  instant  proceeding,  with  the  Multichannel  Video  Distribution  and  Data  Service  (“  MVDDS”)  proceeding.  137  The  DBS  Operators  seek  a  declaration  that  alternate  spectrum,  in  the  CARS  and  MMDS 
 bands,  is  suitable  for  the  proposed  MVDDS.  They  assert  that  such  a  reallocation  would  offer  a  constructive  alternative  to  the  current  proposal  to  put  MVDDS  in  the  DBS  band.  138  Without  expressing 
 an  opinion  on  the  merits  of  the  DBS  Operators’  Petition,  we  reiterate  that  the  current  proceeding  is  limited  to  addressing  the  narrow  question  of  NMVPD  eligibility  to  operate  a  CARS  station  under  the  current 
 technical  parameters  of  this  service.  Our  cost/  benefit  determination  to  expand  eligibility  is  necessarily  limited  to  the  record  before  us.  As  stated  previously  and  as  clearly  noted  in  the  NPRM,  the  issues  related 
 to  spectrum  allocation  for  MVDDS  are  entirely  beyond  the  scope  of  this  proceeding.  139 


 132  EchoStar  Comments  at  2. 
 133  Id.  at  3. 
 134  Id. 
 135  See  Amendment  Of  Parts  2  And  25  Of  The  Commission's  Rules  To  Permit  Operation  Of  NGSO  FSS  Systems  Co-Frequency 
 With  GSO  And  Terrestrial  Systems  In  The  Ku-  Band  Frequency  Range;  Amendment  of  the  Commission’s  Rules  to  Authorize  Subsidiary  Terrestrial  Use  of  the  12.2-  12.7  GHz  Band  by  Direct  Broadcast  Satellite  Licensees 


 and  Their  Affiliates;  and  Applications  of  Broadwave  USA,  PDC  Broadband  Corporation,  and  Satellite  Receivers,  Ltd.  To  Provide  a  Fixed  Service  in  the  12.2-  12.7  GHz  Band,  16  FCC  Rcd  4096  (2000)  (“  MVDDS  Order”). 
 136  SkyBridge  Reply  Comments  at  3-  4;  OpTel  Reply  Comments  at  note  15. 
 137  Petition  for  Consolidation  of  Rulemaking  Proceedings  and  for  a  Declaratory  Ruling  That  Alternative  Spectrum  Is 
 Suitable  for  the  Proposed  “Multichannel  Video  Distribution  Data  Service,”  ET  Docket  No.  98-  206,  CS  Docket  No.  99-  250,  ET  Docket  No.  00-  258  (filed  December  3,  2001). 


 138  Id.  at  5  –  8. 
 139  NPRM,  14  FCC  Rcd  at  11978. 
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 44.  Notwithstanding  that  EchoStar’s  proposal  for  DBS  use  of  the  12  GHz  CARS  band  and  the  DBS  Operators’  proposal  for  MVDDS  are  beyond  the  scope  of  this  proceeding,  they  raise  valid  issues 
 regarding  the  applicability  of  flexible  use  policies  to  the  12  GHz  band,  which  we  intend  to  address  in  a  separate  proceeding.  Allocating  the  12  GHz  spectrum  for  flexible  use  requires  analysis  that  such  use 
 would  be  in  the  public  interest,  would  not  deter  investment  in  communications  services  and  technologies,  and  would  not  result  in  harmful  interference  among  users.  140  Such  analysis  cannot  be  done  on  the  existing 
 record  and  would  require  further  notice  and  comment. 
 4.  Auctions 
 45.  The  NPRM  asked  whether  the  proposed  eligibility  changes  would  create  a  licensing  scheme  in  which  there  would  be  mutually  exclusive  applications  that  should  be  resolved  by  auction.  141 


 The  Commission  has  stated  that,  “[  i]  n  the  majority  of  cases,  efficient  spectrum  markets  will  lead  to  use  of  spectrum  for  the  highest  value  end  use.  Flexible  allocations  may  result  in  more  efficient  spectrum 
 markets.”  142  The  Commission  has  also  recognized  that  where  there  are  competing  applicants  “[  t]  he  assignment  of  spectrum  through  competitive  bidding  has  facilitated  more  efficient  and  rapid  licensing  of 
 spectrum  to  those  who  value  it  most.”  143  There  is  unanimity  among  the  commenters  who  discuss  the  issue  that  the  broadening  the  class  of  entities  eligible  for  CARS  licenses,  in  itself,  will  not  create  mutually 
 exclusive  applications.  144  As  we  have  stated  previously,  this  proceeding  is  limited  to  the  narrow  question  of  NMVPD  eligibility  to  operate  a  CARS  station  under  the  current  technical  parameters  of  that  service. 
 We  intend  to  consider  flexible  use  for  this  frequency  allocation  in  a  separate  proceeding,  and  at  that  time  we  will  consider  whether  a  new  licensing  scheme  involving  a  greater  potential  for  mutually  exclusive 
 applications  would  be  in  the  public  interest.  Pending  changes  in  any  future  proceeding,  we  will  continue  to  use  the  existing  frequency  coordination  system  in  the  application  process  because  we  do  not  have  a 
 record  at  this  time  to  support  changing  the  process.  As  these  frequencies  are  currently  allocated,  CARS  stations  are  used  to  relay  communications  in  support  of  other  communications  systems  and  not  to  service 
 end  users  directly.  Given  this  fact,  and  given  the  coordination  process  prior  to  the  filing  of  applications,  mutual  exclusivity  among  filed  applications  has  not  generally  been  an  issue. 


 46.  Comsearch  suggests  that  the  frequency  coordination  used  for  applications  filed  under  Part  101  of  the  Commission’s  Rules  is  more  comprehensive  and  should  be  used  rather  the  frequency 
 coordination  procedures  currently  used  for  CARS  applications.  145  We  agree.  In  addition,  to  make 


 140  47  U.  S.  C.  §  303(  y)(  2). 
 141  NPRM,  14  FCC  Rcd  at  11978-  79. 
 142  Principles  for  Reallocation  of  Spectrum  to  Encourage  the  Development  of  Telecommunication  Technologies  for 
 the  New  Millenium,  14  FCC  Rcd  19868,  19870  (1999)  [Spectrum  Policy  Statement].  143 
 Principles  for  Promoting  the  Efficient  Use  of  Spectrum  By  Encouraging  the  Development  of  Secondary  Markets,  FCC  00-  401,  para.  10;  22  Communications  Reg.  (P&  F)  791,  2000  WL  1760080  (F.  C.  C.)  (2000)  (Secondary 


 Markets  Policy  Statement).  144 
 Comsearch  Comments  at  8;  Sprint  Comments  at  5;  Time  Warner  Cable  Comments  at  19;  OpTel  Comments  9;  RCN  Comments  at12;  SBE  Comments  at  5;  Wireless  Communications  Association,  International  Comments  at  1. 


 EchoStar  would  have  us  auction  the  spectrum,  but  only  after  reallocating  it  for  satellite  use.  EchoStar  Comments  at  3. 
 145  Comsearch  Reply  Comments  at  2.  See  also  Comments  of  SkyBridge  at  2  (“  So  long  as  such  links  are  subject  to 
 the  standard  coordination  procedures  used  to  coordinate  terrestrial  facilities  and  satellite  earth  stations  .  .  .  .”). 
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 frequency  coordination  procedures  consistent  for  all  users  of  these  frequencies,  we  will  conform  CARS  frequency  coordination  procedures  to  those  of  Part  101. 
 IV.  ADMINISTRATIVE  MATTERS 
 47.  Final  Regulatory  Flexibility  Analysis.  As  required  by  the  Regulatory  Flexibility  Act  (“  RFA”),  146  an  Initial  Regulatory  Flexibility  Analysis  (“  IRFA”)  was  incorporated  in  the  Notice.  The 


 Commission  sought  written  public  comments  of  the  possible  significant  economic  impact  of  the  proposed  policies  and  rules  on  small  entities  in  the  Notice,  including  comments  on  the  IRFA.  Pursuant  to  the 
 RFA,  147  a  Final  Regulatory  Flexibility  Analysis  is  contained  in  Appendix  C. 
 48.  Paperwork  Reduction  Act.  This  Report  and  Order  contains  new  or  modified  information  collection  requirements  subject  to  the  Paperwork  Reduction  Act  of  1995  (“  PRA"),  Public  Law  104-  13.  It 


 will  be  submitted  to  the  Office  of  Management  and  Budget  (“  OMB”)  for  review  under  Section  3507(  d)  of  the  PRA.  OMB,  the  general  public,  and  other  Federal  agencies  are  invited  to  comment  on  the  new  or 
 modified  information  collection  requirements  contained  in  this  proceeding.  Public  and  agency  comments  are  due  60  days  after  the  date  of  publication  in  the  Federal  Register. 


 V.  ORDERING  CLAUSES 
 49.  Accordingly,  IT  IS  ORDERED  that,  pursuant  to  authority  found  in  Sections  4(  i)-(  j)  of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.  §§  154(  i)-(  j),  303(  c),  (f),  and  (r),  and  309(  j),  the 


 Commission’s  rules  ARE  AMENDED  as  set  forth  in  Appendix  B. 
 50.  IT  IS  FURTHER  ORDERED  that  the  amendments  to  Sections  78.18  and  78.36  of  the  Commission’s  Rules,  47  C.  F.  R.  §§  78.18  &  78.36,  as  set  forth  in  Appendix  B  WILL  BECOME 


 EFFECTIVE  30  days  after  publication  in  the  Federal  Register.  The  action  contained  herein  has  been  analyzed  with  respect  to  the  Paperwork  Reduction  Act  of  1995,  Public  Law  104-  13,  and  found  to  impose 
 new  or  modified  information  collection  requirements  on  the  public.  Implementation  of  these  new  or  modified  information  collection  requirements  will  be  subject  to  approval  by  the  Office  of  Management 
 and  Budget  (OMB)  as  prescribed  by  the  Paperwork  Reduction  Act;  consequently,  amendments  to  Section  78.13  of  the  Commission’s  Rules,  47  C.  F.  R.  §§  78.13,  as  set  forth  in  Appendix  B  WILL  BECOME 
 EFFECTIVE  upon  announcement  in  the  Federal  Register  of  OMB  approval  of  the  new  or  modified  information  collecting  requirements. 


 146  See  5  U.  S.  C.  §  603. 
 147  See  id.  §  604. 
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 51.  IT  IS  FURTHER  ORDERED  that  the  Consumer  and  Governmental  Affairs  Bureau,  Reference  Information  Center,  SHALL  SEND  a  copy  of  this  Report  and  Order,  including  the  Final 
 Regulatory  Flexibility  Analysis,  to  the  Chief  Counsel  for  Advocacy  of  the  Small  Business  Administration. 


 FEDERAL  COMMUNICATIONS  COMMISSION 


 Marlene  H.  Dortch  Secretary 
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 APPENDIX  A 
 A.  Petitioner 


 OpTel,  Inc.  (“  OpTel”) 
 B.  Commenters 


 AML  Wireless  Systems,  Inc.  (“  AML”)  Comsearch,  Inc.  (“  Comsearch”) 
 EchoStar  Satellite  Corporation  (“  EchoStar”)  KaStar  Satellite  Communications  Corp.,  KaStarcom.  World  Satellite,  LLC,  and  @  Contact,  LLC 
 (“  KaStar”)  National  Association  of  Broadcasters  (“  NAB”) 
 National  Cable  Television  Association  (“  NCTA”)  OpTel,  Inc.  (“  OpTel”) 
 RCN  Telecom  Services,  Inc.  (“  RCN”)  Skybridge  LLC  (“  Skybridge”) 
 Society  of  Broadcast  Engineers  (“  SBE”)  Sprint  Corporation  (“  Sprint”) 
 Time  Warner  Cable  (“  TWC”)  Walt  Disney  Company,  ABC,  Inc.  (“  ABC”) 
 Wireless  Communications  Association  International,  Inc.  (WCA”) 


 C.  Reply  Commenters 
 National  Cable  Television  Association  (“  NCTA”)  OpTel,  Inc.  (“  OpTel”) 
 RCN  Telecom  Services,  Inc.  (“  RCN”)  SkyBridge  L.  L.  C.  (“  Skybridge”) 
 Time  Warner  Cable  (“  TWC”) 
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 APPENDIX  B 
 Part  78  of  Title  47  of  the  Code  of  Federal  Regulations  is  amended  as  follows: 
 Part  78  –  Cable  Television  Relay  Service 
 1.  The  authority  for  Part  78  continues  to  read  as  follows: 
 AUTHORITY:  Secs.  2,  3,  4,  301,  303,  307,  308,  309,  48  Stat.,  as  amended,  1064,  1065,  1066,  1081,  1082,  1083,  1084,  1085;  47  U.  S.  C.  152,  153,  154,  301,  303,  307,  308,  309. 


 2.  In  Section  78.13,  add  paragraph  (f)  to  read  as  follows: 
 §  78.13  Eligibility  for  license. 
 *  *  *  *  * 
 (f)  To  private  cable  operators  and  other  multichannel  video  programming  distributors  not  specifically  identified  above. 


 3.  In  Section  78.18,  revise  paragraph  (a)(  2)  and  add  paragraph  (m)  to  read  as  follows: 
 §  78.18  Frequency  Assignments. 
 (a)  *  *  * 
 (2)  *  *  * 
 Group  C  Channels 
 Designation  Channel  Boundaries  (GHz)  [C  Channels]  Alternate  Channel  Boundaries  (GHz)  [Ca  Channels] 
 C01  1..............................................................................................................  12.7005  –  12.7065  12.7005  –  12.7065  C02  1..............................................................................................................  12.7065  –  12.7125  12.7065  –  12.7125 
 C03  1..............................................................................................................  12.7125  –  12.7185  12.7125  –  12.7185  C04  1..............................................................................................................  2  12.7185  –  12.7225  12.7185  –  12.7245 
 C05  1..............................................................................................................  12.7225  -  12.7285  12.7225  -  12.7305  C06  1..............................................................................................................  12.7285  –  12.7345  12.7285  –  12.7365 
 C07  1..............................................................................................................  12.7345  –  12.7405  12.7345  –  12.7425  C08  1..............................................................................................................  12.7405  –  12.7465  12.7405  –  12.7485 
 C09  1..............................................................................................................  12.7465  –  12.7525  12.7465  –  12.7545  C10  1..............................................................................................................  2  12.7525  –  12  7545 
 C11  1..............................................................................................................  12.7545  –  12.7605  12.7545  –  12.7605  C12  1..............................................................................................................  12.7605  –  12.7665  12.7605  –  12.7665 
 C13  1..............................................................................................................  12.7665  –  12.7725  12.7665  –  12.7725  C14  1..............................................................................................................  12.7725  –  12.7785  12.7725  –  12.7785 
 C15  1..............................................................................................................  12.7785  –  12.7845  12.7785  –  12.7845  C16  1..............................................................................................................  12.7845  –  12.7905  12.7845  –  12.7905 
 C17  1..............................................................................................................  12.7905  –  12.7965  12.7905  –  12.7965  C18  1..............................................................................................................  12.7965  –  12.8025  12.7965  -  -12.8025 
 C19  1..............................................................................................................  12.8025  –  12.8085  12.8025  –  12.8085  C20  1..............................................................................................................  12.8085  –  12.8145  12.8085  –  12.8145 
 C21  1..............................................................................................................  12.8145  –  12.8205  12.8145  –  12.8205  C22  1..............................................................................................................  12.8205  –  12.8265  12.8205  –  12.8265 
 C23  1..............................................................................................................  12.8265  –  12.8325  12.8265  –  12.8325 
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 C24  1..............................................................................................................  12.8325  –  12.8385  12.8325  –  12.8385  C25  1..............................................................................................................  12.8385  –  12.8445  12.8385  –  12.8445 
 C26  1..............................................................................................................  12.8445  –  12.8505  12.8445  –  12.8505  C27  1..............................................................................................................  12.8505  –  12.8565  12.8505  –  12.8565 
 C28  1..............................................................................................................  12.8565  –  12.8625  12.8565  –  12.8625  C29  1..............................................................................................................  12.8625  –  12.8685  12.8625  –  12.8685 
 C30  1..............................................................................................................  12.8685  –  12.8745  12.8685  –  12.8745  C31  1..............................................................................................................  12.8745  –  12.8805  12.8745  –  12.8805 
 C32  1..............................................................................................................  12.8805  –  12.8865  12.8805  –  12.8865  C33  1..............................................................................................................  12.8865  –  12.8925  12.8865  –  12.8925 
 C34  1..............................................................................................................  12.8925  –  12.8985  12.8925  –  12.8985  C35  1..............................................................................................................  12.8985  –  12.9045  12.8985  –  12.9045 
 C36  1..............................................................................................................  12.9045  –  12.9105  12.9045  –  12.9105  C37  1..............................................................................................................  12.9105  –  12.9165  12.9105  –  12.9165 
 C38  1..............................................................................................................  12.9165  –  12.9225  12.9165  –  12.9225  C39  1..............................................................................................................  12.9225  –  12.9285  12.9225  –  12.9285 
 C40  1..............................................................................................................  12.9285  –  12.9345  12.9285  –  12.9345  C41  1..............................................................................................................  12.9345  –  12.9405  12.9345  –  12.9405 
 C42  1..............................................................................................................  12.9405  –  12.9465  12.9405  –  12.9465  C43  1..............................................................................................................  12.9465  –  12.9525  12.9465  –  12.9525 
 1  See  footnote  1  following  GROUP  A  CHANNELS. 
 2  For  transmission  of  pilot  subcarriers  or  other  authorized  narrow  band  signals. 


 Group  D  Channels 
 Designation  Channel  Boundaries  (GHz)  [D  Channels]  Alternate  Channel  Boundaries  (GHz)  [Da  Channels] 
 D01  1..............................................................................................................  12.7597  –  12.7657  12.7597  –  12.7657  D02  1..............................................................................................................  12.7657  –  12.7717  12.7657  –  12.7717 
 D03  1..............................................................................................................  12.7717  –  12.7777  12.7717  –  12.7777  D04  1..............................................................................................................  2  12.7777  –  12.7817  12.7777  –  12.7837 
 D05  1..............................................................................................................  12.7817  -  12.7877  12.7837  -  12.7897  D06  1..............................................................................................................  12.7877  –  12.7937  12.7897  –  12.7957 
 D07  1..............................................................................................................  12.7937  –  12.7997  12.7957  –  12.8017  D08  1..............................................................................................................  12.7997  –  12.8057  12.8017  –  12.8077 
 D09  1..............................................................................................................  12.8057  –  12.8117  12.8077  –  12.8137  D10  1..............................................................................................................  2  12.8117  –  12  8137 
 D11  1..............................................................................................................  12.8137  –  12.8197  12.8137  –  12.8197  D12  1..............................................................................................................  12.8197  –  12.8257  12.8197  –  12.8257 
 D13  1..............................................................................................................  12.8257  –  12.8317  12.8257  –  12.8317  D14  1..............................................................................................................  12.8317  –  12.8377  12.8317  –  12.8377 
 D15  1..............................................................................................................  12.8377  –  12.8437  12.8377  –  12.8437  D16  1..............................................................................................................  12.8437  –  12.8497  12.8437  –  12.8497 
 D17  1..............................................................................................................  12.8497  –  12.8557  12.8497  –  12.8557  D18  1..............................................................................................................  12.8557  –  12.8617  12.8557  –  12.8617 
 D19  1..............................................................................................................  12.8617  –  12.8677  12.8617  –  12.8677  D20  1..............................................................................................................  12.8677  –  12.8737  12.8677  –  12.8737 
 D21  1..............................................................................................................  12.8737  –  12.8797  12.8737  –  12.8797  D22  1..............................................................................................................  12.8797–  12.8857  12.8797–  12.8857 
 D23  1..............................................................................................................  12.8857  –  12.8917  12.8857  –  12.8917  D24  1..............................................................................................................  12.8917  –  12.8977  12.8917  –  12.8977 
 D25  1..............................................................................................................  12.8977  –  12.9037  12.8977  –  12.9037  D26  1..............................................................................................................  12.9037  –  12.9097  12.9037  –  12.9097 
 D27  1..............................................................................................................  12.9097  –  12.9157  12.9097  –  12.9157  D28  1..............................................................................................................  12.9157  –  12.9217  12.9157  –  12.9217 
 D29  1..............................................................................................................  12.9217  –  12.9277  12.9217  –  12.9277  D30  1..............................................................................................................  12.9277  –  12.9337  12.9277  –  12.9337 
 D31  1..............................................................................................................  12.9337  –  12.9397  12.9337  –  12.9397  D32  1..............................................................................................................  12.9397  –  12.9457  12.9397  –  12.9457 
 D33  1..............................................................................................................  12.9457  –  12.9517  12.9457  –  12.9517  D34  1..............................................................................................................  12.9517  –  12.9577  12.9517  –  12.9577 
 D35  1..............................................................................................................  12.9577  –  12.9637  12.9577  –  12.9637  D36  1..............................................................................................................  12.9637  –  12.9697  12.9637  –  12.9697 
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 D37  1..............................................................................................................  12.9697  –  12.9757  12.9697  –  12.9757  D38  1..............................................................................................................  12.9757  –  12.9817  12.9757  –  12.9817 
 D39  1..............................................................................................................  12.9817  –  12.9877  12.9817  –  12.9877  D40  1..............................................................................................................  12.9877  –  12.9937  12.9877  –  12.9937 
 D41  1..............................................................................................................  12.9937  –  12.9997  12.9937  –  12.9997  D42  1..............................................................................................................  12.9997  –  13.0057  12.9997  –  13.0057 
 D43  1..............................................................................................................  13.0057  –  13.0117  13.0057  –  13.0117  1  See  footnote  1  following  GROUP  A  CHANNELS. 
 2  For  transmission  of  pilot  subcarriers  or  other  authorized  narrow  band  signals. 


 Group  E  Channels 
 Designation  Channel  Boundaries  (GHz)  [E  Channels]  Alternate  Channel  Boundaries  (GHz)  [Ea  Channels] 
 E01  1..............................................................................................................  12.9525  –  12.9585  12.9525  –  12.9585  E02  1..............................................................................................................  12.9585  –  12.9645  12.9585  –  12.9645 
 E03  1..............................................................................................................  12.9645  –  12.9705  12.9645  –  12.9705  E04  1..............................................................................................................  2  12.9705  –  12.9745  12.9705  –  12.9765 
 E05  1..............................................................................................................  12.9745  -  12.9805  12.9765  -  12.9825  E06  1..............................................................................................................  12.9805  –  12.9865  12.9825  –  12.9885 
 E07  1..............................................................................................................  12.9865  –  12.9925  12.9885  –  12.9945  E08  1..............................................................................................................  12.9925  –  12.9985  12.9945  –  13.0005 
 E09  1..............................................................................................................  12.9985  –  13.0045  13.0005  –  13.0065  E10  1..............................................................................................................  2  13.0045  –  13  0065 
 E11  1..............................................................................................................  13.0065  –  13.0125  13.0065  –  13.0125  E12  1..............................................................................................................  13.0125  –  13.0185  13.0125  –  13.0185 
 E13  1..............................................................................................................  13.0185  –  13.0245  13.0185  –  13.0245  E14  1..............................................................................................................  13.0245  –  13.0305  13.0245  –  13.0305 
 E15  1..............................................................................................................  13.0305  –  13.0365  13.0305  –  13.0365  E16  1..............................................................................................................  13.0365  –  13.0425  13.0365  –  13.0425 
 E17  1..............................................................................................................  13.0425  –  13.0485  13.0425  –  13.0485  E18  1..............................................................................................................  13.0485  –  13.0545  13.0485  –  13.0545 
 E19  1..............................................................................................................  13.0545  –  13.0605  13.0545  –  13.0605  E20  1..............................................................................................................  13.0605  –  13.0665  13.0605  –  13.0665 
 E21  1..............................................................................................................  13.0665  –  13.0725  13.0665  –  13.0725  E22  1..............................................................................................................  13.0725–  13.0785  13.0725–  13.0785 
 E23  1..............................................................................................................  13.0785  –  13.0845  13.0785  –  13.0845  E24  1..............................................................................................................  13.0845  –  13.0905  13.0845  –  13.0905 
 E25  1..............................................................................................................  13.0905  –  13.0965  13.0905  –  13.0965  E26  1..............................................................................................................  13.0965  –  13.1025  13.0965  –  13.1025 
 E27  1..............................................................................................................  13.1025  –  13.1085  13.1025  –  13.1085  E28  1..............................................................................................................  13.1085  –  13.1145  13.1085  –  13.1145 
 E29  1..............................................................................................................  13.1145  –  13.1205  13.1145  –  13.1205  E30  1..............................................................................................................  13.1205  –  13.1265  13.1205  –  13.1265 
 E31  1..............................................................................................................  13.1265  –  13.1325  13.1265  –  13.1325  E32  1..............................................................................................................  13.1325  –  13.1385  13.1325  –  13.1385 
 E33  1..............................................................................................................  13.1385  –  13.1445  13.1385  –  13.1445  E34  1..............................................................................................................  3  13.1445  –  13.1505  3  13.1445  –  13.1505 
 E35  1..............................................................................................................  3  13.1505  –  13.1565  3  13.1505  –  13.1565  E36  1..............................................................................................................  3  13.1565  –  13.1625  3  13.1565  –  13.1625 
 E37  1..............................................................................................................  3  13.1625  –  13.1685  3  13.1625  –  13.1685  E38  1..............................................................................................................  3  13.1685  –  13.1745  3  13.1685  –  13.1745 
 E39  1..............................................................................................................  3  13.1745  –  13.1805  3  13.1745  –  13.1805  E40  1..............................................................................................................  3  13.1805  –  13.1865  3  13.1805  –  13.1865 
 E41  1..............................................................................................................  3  13.1865  –  13.1925  3  13.1865  –  13.1925  E42  1..............................................................................................................  3  13.1925  –  13.1985  3  13.1925  –  13.1985 
 1  See  footnote  1  following  GROUP  A  CHANNELS. 
 2  For  transmission  of  pilot  subcarriers  or  other  authorized  narrow  band  signals. 
 3  See  paragraph  (l)  of  this  Section. 
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 Group  F  Channels 
 Designation  Channel  Boundaries  (GHz)  [F  Channels]  Alternate  Channel  Boundaries  (GHz)  [Fa  Channels] 
 F01  1  ..............................................................................................................  13.0125  –  13.0185  13.0125  –  13.0185  F02  1  ..............................................................................................................  13.0185  –  13.0245  13.0185  –  13.0245 
 F03  1  ..............................................................................................................  13.0245  –  13.0305  13.0245  –  13.0305  F04  1  ..............................................................................................................  2  13.0305  –  13.0345  13.0305  –  13.0365 
 F05  1  ..............................................................................................................  13.0345  –  13.0405  13.0365  –  13.0425  F06  1  ..............................................................................................................  13.0405  –  13.0465  13.0425  –  13.0485 
 F07  1  ..............................................................................................................  13.0465  –  13.0525  13.0485  –  13.0545  F08  1  ..............................................................................................................  13.0525  –  13.0585  13.0545  –  13.0605 
 F09  1  ..............................................................................................................  13.0585  –  13.0645  13.0605  –  13.0665  F10  1  ..............................................................................................................  2  13.0645  –  13.0665 
 F11  1  ..............................................................................................................  13.0665  –  13.0725  13.0665  –  13.0725  F12  1  ..............................................................................................................  13.0725–  13.0785  13.0725–  13.0785 
 F13  1  ..............................................................................................................  13.0785  –  13.0845  13.0785  –  13.0845  F14  1  ..............................................................................................................  13.0845  –  13.0905  13.0845  –  13.0905 
 F15  1  ..............................................................................................................  13.0905  –  13.0965  13.0905  –  13.0965  F16  1  ..............................................................................................................  13.0965  –  13.1025  13.0965  –  13.1025 
 F17  1  ..............................................................................................................  13.1025  –  13.1085  13.1025  –  13.1085  F18  1  ..............................................................................................................  13.1085  –  13.1145  13.1085  –  13.1145 
 F19  1  ..............................................................................................................  13.1145  –  13.1205  13.1145  –  13.1205  F20  1  ..............................................................................................................  13.1205  –  13.1265  13.1205  –  13.1265 
 F21  1  ..............................................................................................................  13.1265  –  13.1325  13.1265  –  13.1325  F22  1  ..............................................................................................................  13.1325  –  13.1385  13.1325  –  13.1385 
 F23  1  ..............................................................................................................  13.1385  –  13.1445  13.1385  –  13.1445  F24  1  ..............................................................................................................  3  13.1445  –  13.1505  3  13.1445  –  13.1505 
 F25  1  ..............................................................................................................  3  13.1505  –  13.1565  3  13.1505  –  13.1565  F26  1  ..............................................................................................................  3  13.1565  –  13.1625  3  13.1565  –  13.1625 
 F27  1  ..............................................................................................................  3  13.1625  –  13.1685  3  13.1625  –  13.1685  F28  1  ..............................................................................................................  3  13.1685  –  13.1745  3  13.1685  –  13.1745 
 F29  1  ..............................................................................................................  3  13.1745  –  13.1805  3  13.1745  –  13.1805  F30  1  ..............................................................................................................  3  13.1805  –  13.1865  3  13.1805  –  13.1865 
 F31  1  ..............................................................................................................  3  13.1865  –  13.1925  3  13.1865  –  13.1925  F32  1  ..............................................................................................................  3  13.1925  –  13.1985  3  13.1925  –  13.1985 
 1  See  footnote  1  following  GROUP  A  CHANNELS. 
 2  For  transmission  of  pilot  subcarriers  or  other  authorized  narrow  band  signals. 
 3  See  paragraph  (l)  of  this  Section. 


 *  *  *  *  * 
 (m)  CARS  stations  may  be  authorized  use  of  the  band  from  13.20  to  13.25  GHz  on  a  secondary  basis  to  Television  Broadcast  Auxiliary  Stations.  Any  CARS  application  seeking  authorization  for  use  of  the 
 13.20  to  13.25  GHz  band  must  demonstrate  that  sufficient  spectrum  is  not  available  in  the  12.70  to  13.20  GHz  band. 


 4.  Revise  Section  78.36  to  read  as  follows: 
 §  78.36  Frequency  coordination. 
 Coordination  of  fixed  and  mobile  assignments  will  be  in  accordance  with  the  procedure  established  in  §  101.103(  d)  of  this  chapter. 
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 APPENDIX  C 
 FINAL  REGULATORY  FLEXIBILITY  ANALYSIS 


 1.  As  required  by  the  Regulatory  Flexibility  Act  (“  RFA”),  1  an  Initial  Regulatory  Flexibility  Analysis  (“  IRFA”)  was  incorporated  in  the  Notice  of  Proposed  Rulemaking  (“  Notice”)  in  CS  Docket  No. 
 99-  250,  FCC  99-  166.  The  Commission  sought  written  public  comment  on  the  proposals  in  the  Notice,  including  comment  on  the  IRFA.  2  This  Final  Regulatory  Flexibility  Analysis  (“  FRFA”)  conforms  to  the 
 RFA.  3 
 A.  Need  for,  and  Objectives  of,  this  Report  and  Order. 
 2.  The  Commission  undertook  this  proceeding  in  response  to  a  petition  for  rulemaking  filed  by  OpTel,  Inc.  The  Notice  sought  comment  on  OpTel’s  request  that  we  expand  the  definition  of  entities 


 eligible  to  use  the  12  GHz  Cable  Television  Relay  Service  (“  CARS”)  frequency  band  to  include  private  cable  operators  (“  PCOs”).  CARS  is  a  microwave  radio  service  used  predominantly  by  cable  systems  to 
 provide  video  links  between  portions  of  their  systems.  PCOs  provide  a  video  service  similar  to  cable  systems,  for  example,  to  apartment  buildings,  but  PCOs  do  not  use  public  rights-  of-  way.  By  its  own 
 motion,  the  Commission  expanded  the  Notice  to  include  other  multichannel  video  programming  distributors  (“  MVPDs”).  MVPDs  are  anyone  who  provides  multiple  channels  of  video  programming  to 
 subscribers.  This  Report  and  Order  adopts  rules  which  will  increase  competition  to  incumbent,  franchised  cable  operators,  particularly  with  regard  to  video  programming  service  to  multi-  dwelling  units,  by 
 expanding  eligibility  to  use  the  CARS  band  to  PCOs  and  other  MVPDs,  such  as  direct  broadcast  satellite  (“  DBS”)  and  open  video  systems  (“  OVS”).  This  Report  and  Order  promotes  competition  in  multichannel 
 video  programming  distribution  by  allowing  new  services  to  compete  with  existing  services  by  giving  those  new  services  access  to  the  same  technologies  as  existing  services  while  balancing  the  interests  of 
 incumbent  distributors  by  not  hampering  their  use  of  those  technologies. 
 B.  Summary  of  Significant  Issues  Raised  by  Public  Comments  in  Response  to  IRFA. 
 3.  We  received  one  comment  in  direct  response  to  the  IRFA.  The  Society  of  Broadcast  Engineers  (“  SBE”)  states  that  the  Commission  analysis  in  the  IRFA  of  the  impact  on  small  entities  did  not 


 include  the  needs  for  production  spectrum  of  television  broadcasters  and  Local  Television  Transmission  Service  (“  LTTS”).  4  Although  the  IRFA  did  not  specifically  mention  broadcasters  or  LTTS  providers,  the 
 Commission  did  request  comment  concerning  the  impact  on  small  businesses,  small  organizations,  and  small  business  concerns.  5  In  addition,  the  Notice  requested  comment  on  “the  compatibility  of  shared  use 
 of  the  spectrum  between  fixed  PCOs  and  mobile  [broadcast  auxiliary  stations]”  and  on  “any  existing  or  future  impact  this  sharing  may  have  with  BAS,  especially  as  it  relates  to  the  required  digital  transition  for 


 1  See  5  U.  S.  C.  §  603.  The  RFA,  see  5  U.  S.  C.  §  601  –  612,  has  been  amended  by  the  Small  Business  Regulatory 
 Enforcement  Fairness  Act  of  1996  (SBREFA),  Pub.  L.  No.  104-  121,  Title  II,  110  Stat.  857  (1996).  2 
 NPRM,  14  FCC  Rcd  11967,  11979  (1999).  3 
 See  5  U.  S.  C.  §  604.  4 
 SBE  Comments  at  5.  5 
 NPRM,  14  FCC  Rcd  at  11980. 
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 broadcasters.”  6  SBE  and  others  discussed  this  specific  issue  in  their  comments.  Briefly,  SBE  opposes  use  of  the  spectrum  from  13.20  GHz  to  13.25  GHz  by  PCOs  as  proposed  by  the  PCOs.  The  Order  addresses 
 and  pays  all  due  deference  to  the  concerns  and  issues  raised.  The  PCOs  are  allocated  the  spectrum  only  as  secondary  users  of  the  spectrum  from  13.20  GHz  to  13.25  GHz,  which  means  they  cannot  cause 
 interference  to  television  broadcasters  or  LTTS  providers. 
 C.  Description  and  Estimate  of  the  Number  of  Small  Entities  to  Which  the  Rules  Will  Apply. 


 4.  The  RFA  directs  the  Commission  to  provide  a  description  of  and,  where  feasible,  an  estimate  of  the  number  of  small  entities  that  will  be  affected  by  the  rules  adopted  herein.  7  The  RFA 
 defines  the  term  “small  entity”  as  having  the  same  meaning  as  the  terms  “small  business,”  “small  organization,”  and  “small  governmental  jurisdiction”  under  Section  3  of  the  Small  Business  Act.  8  Under 
 the  Small  Business  Act,  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 
 Small  Business  Administration  (“  SBA”).  9  A  small  organization  is  generally  “any  “not-  for-  profit  enterprise  which  is  independently  owned  and  operated  and  is  not  dominant  in  its  field.”  10  Nationwide,  as 
 of  1992,  there  were  approximately  275,801  small  organizations.  11  “Small  government  jurisdiction”  12  generally  means  “governments  of  cities,  counties,  towns,  townships,  villages,  school  districts,  or  special 
 districts,  with  a  population  of  less  than  50,000.”  13  As  of  1992,  there  were  approximately  85,006  governmental  entities  in  the  United  States.  14  This  number  includes  38,978  counties,  cities,  and  towns:  of 
 these,  37,566,  or  96%,  have  populations  of  fewer  than  50,000.  15  The  Census  Bureau  estimates  that  this  ratio  is  approximately  accurate  for  all  governmental  entities.  Thus,  of  the  85,006  governmental  entities, 
 we  estimate  that  81,600  (96%)  are  small  entities.  Below,  we  further  describe  and  estimate  the  number  of  small  entity  licensees  and  regulatees  that  may  be  affected  by  these  rules. 


 5.  The  rules  we  adopt  as  a  result  of  the  Report  and  Order  will  add  PCOs  and  other  MVPDs  to  those  entities  eligible  to  use  the  12  GHz  CARS  frequency  band.  The  12  GHz  CARS  frequency  band, 
 12.70  GHz  –  13.25  GHz,  is  currently  used  by  franchised  cable,  licensees  and  conditional  licensees  of  channels  in  the  Multipoint  Distribution  Service  (“  MDS”),  Multichannel,  Multipoint  Distribution  Service 


 6  NPRM,  14  FCC  Rcd  at  11971. 
 7  5  U.  S.  C.  §  604(  a)(  3). 
 8  Id.  §  601(  3)(  incorporating  by  reference  the  definition  of  “small  business  concern”  in  15  U.  S.  C.  §  632.)  Pursuant 
 to  the  RFA,  the  statutory  definition  of  a  small  business  applies,  “unless  an  agency,  after  consultation  with  the  Office  of  Advocacy  of  the  SBA  and  after  opportunity  for  public  comment,  establishes  one  or  more  definitions  of  such  term 


 which  are  appropriate  to  the  activities  of  the  agency  and  publishes  such  definition(  s)  in  the  Federal  Register.  9 
 15  U.  S.  C.  §  632.  10 
 5  U.  S.  C.  §  601(  4).  11 
 1992  Economic  Census,  U.  S.  Bureau  of  the  Census,  Table  6  (special  tabulation  of  data  under  contract  to  Office  of  Advocacy  of  the  U.  S.  Small  Business  Administration). 


 12  47  C.  F.  R.  §  1.1162. 
 13  5  U.  S.  C.  §  601(  5). 
 14  U.  S.  Dept.  of  Commerce,  Bureau  of  the  Census,  “1992  Census  of  Governments.” 
 15  Id. 
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 (“  MMDS”),  and  Instructional  Television  Fixed  Services  (“  ITFS”).  16  The  12  GHz  CARS  spectrum,  12  GHz  –  12.35  GHz,  is  also  used  by  television  broadcasters  for  both  fixed  and  short-  range  mobile 
 transmissions  by  Broadcast  Auxiliary  Stations  (“  BAS”).  17 
 6.  Small  MVPDs.  SBA  has  developed  a  definition  of  small  entities  for  cable  and  other  pay  television  services,  which  includes  such  companies  generating  $11  million  or  less  in  annual  receipts.  18 


 This  definition  includes  cable  system  operators,  closed  circuit  television  services,  direct  broadcast  satellite  services,  multipoint  distribution  systems,  satellite  master  antenna  systems,  and  subscription  television 
 services.  According  to  the  Census  Bureau,  there  were  1,423  such  cable  and  other  pay  television  services  generating  less  than  $11  million  in  revenue.  19  We  address  below  services  individually  to  provide  a  more 
 precise  estimate  of  small  entities. 
 7.  The  Commission  has  developed,  with  SBA’s  approval,  its  own  definition  of  a  small  cable  system  operator  for  the  purposes  of  rate  regulation.  Under  the  Commission’s  rules,  a  “small  cable 


 company”  is  one  serving  fewer  than  400,000  subscribers  nationwide.  20  Based  on  our  most  recent  information,  we  estimate  that  there  were  1439  cable  operators  that  qualified  as  small  cable  companies  at 
 the  end  of  1995.  21  Since  then,  some  of  those  companies  may  have  grown  to  serve  over  400,000  subscribers,  and  others  may  have  been  involved  in  transactions  that  caused  them  to  be  combined  with 
 other  cable  operators.  The  Commission’s  rules  define  a  “small  system,”  for  the  purposes  of  rate  regulation,  as  a  cable  system  with  15,000  or  fewer  subscribers.  22  The  Commission  does  not  request  nor 
 does  the  Commission  collect  information  concerning  cable  systems  serving  15,000  or  fewer  subscribers  and  thus  is  unable  to  estimate,  at  this  time,  the  number  of  small  cable  systems  nationwide. 


 8.  The  Communications  Act  also  contains  a  definition  of  a  small  cable  system  operator,  which  is  “a  cable  operator  that,  directly  of  through  an  affiliate,  serves  in  the  aggregate  fewer  than  1%  of 
 all  subscribers  in  the  United  States  and  is  not  affiliated  with  any  entity  or  entities  whose  gross  annual  revenues  in  the  aggregate  exceed  $250,000,000.”  23  The  Commission  has  determined  that  there  are 
 61,700,000  subscribers  in  the  United  States.  Therefore,  a  cable  operator  serving  fewer  than  617,000  subscribers  shall  be  deemed  a  small  operator,  if  its  annual  revenues,  when  combined  with  the  total  annual 


 16  47  C.  F.  R.  §78.13. 
 17  See  id.  §§  74.600  –  690. 
 18  13  C.  F.  R.  §  121.201 
 19  Economics  and  Statistics  Administration,  Bureau  of  Census,  U.  S.  Department  of  Commerce,  1992  CENSUS  OF 
 TRANSPORTATION,  COMMUNICATIONS  AND  UTILITIES,  ESTABLISHMENT  AND  FIRM  SIZE,  Series  UC92-  S-  1,  Firm  Size  1-  123  (1995)  (“  1992  Census”).  See  Memorandum  Opinion  and  Order  and  Notice  of 


 Proposed  Rule  Making,  Implementation  of  Sections  of  the  Cable  Telecommunications  Consumer  Protection  and  Competition  Act  of  1992,  Rate  Regulation  and  Cable  Pricing  Flexibility,  MM  Docket  No.  92-  266  and  CS  Docket 
 No.  96-  157,  11  FCC  Rcd  9517,  9531  (1996).  20 
 47  C.  F.  R.  §  76.901(  e).  The  Commission  developed  this  definition  based  on  its  determination  that  a  small  cable  system  operator  is  one  with  annual  revenues  of  $100  million  or  less.  See  Sixth  Report  and  Order  and  Eleventh 


 Order  on  Reconsideration,  MM  Docket  No.  92-  266  and  93-  215,  10  FCC  Rcd  7393  (1995).  21 
 Paul  Kagan  Associates,  Inc.,  Cable  TV  Investor,  Feb.  29,  1996  (based  on  figures  for  Dec.  30,  1995).  22 
 47  C.  F.  R.  §  76.901(  c).  23 
 47  U.  S.  C.  §  543(  m)(  2). 
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 revenues  of  all  of  its  affiliates,  do  not  exceed  $250  million  in  the  aggregate.  24  Based  on  available  data,  we  find  that  the  number  of  cable  operators  serving  617,000  subscribers  or  less  totals  approximately  1450.  25 
 Although  it  seems  certain  that  some  of  these  cable  system  operators  are  affiliated  with  entities  whose  gross  annual  revenues  exceed  $250,000,000,  we  are  unable  at  this  time  to  estimate  with  greater  precision 
 the  number  of  cable  system  operators  that  would  qualify  as  small  cable  operators  under  definition  in  the  Communications  Act.  It  should  be  further  noted  that  recent  industry  estimates  project  that  there  will  be  a 
 total  of  64,000,000  subscribers  and  we  have  based  our  fee  revenue  estimates  on  that  figure. 
 9.  Private  Cable  Operators/  Satellite  Master  Antenna  Systems.  Based  on  our  most  recent  information,  we  estimate  that  there  are  3400  private  cable  operators  serving  multiple  dwelling  units  that 


 qualify  as  small  cable  companies.  26  Some  of  those  companies  may  have  grown  to  serve  from  800,000  to  1.6  million  subscribers,  27  and  others  may  have  been  involved  in  transactions  that  caused  them  to  be 
 combined  with  other  cable  operators.  Consequently,  we  estimate  that  there  are  fewer  than  3,400  small  entity  private  cable  system  operators  that  may  be  affected  by  the  decisions  and  rules  we  are  adopting. 


 10.  Open  Video  System  (“  OVS”).  The  Commission  has  certified  eleven  OVS  operators.  Of  these  eleven,  only  two  are  providing  service.  Affiliates  of  residential  Communications  Network,  Inc. 
 (“  RCN”)  received  approval  to  operate  OVS  systems  in  New  York  City,  Boston,  Washington,  D.  C.,  and  other  areas.  RCN  has  sufficient  revenues  to  assure  us  that  they  do  not  qualify  as  small  business  entities. 
 Little  financial  information  is  available  for  the  other  entities  authorized  to  provide  OVS  service  that  are  not  yet  operational.  Given  that  other  entities  have  been  authorized  to  provide  OVS  service  but  have  not 
 yet  begun  to  generate  revenues,  we  conclude  that  at  least  some  of  the  OVS  operators  qualify  as  small  entities. 


 11.  Multichannel,  Multipoint  Distribution  Service  (“  MMDS”).  The  Commission  refined  the  definition  of  “small  entity”  for  the  auction  of  MMDS  as  an  entity  that,  together  with  its  affiliates,  has 
 average  gross  revenues  that  are  not  more  than  $40  million  for  the  proceeding  three  calendar  years.  28  This  definition  of  a  small  entity,  in  the  context  of  the  Commission’s  decision  concerning  MMDS  auctions,  has 
 been  approved  by  the  SBA.  29 
 12.  The  Commission  completed  its  MMDS  auction  in  March  1996  for  authorization  in  493  basic  trading  areas  (“  BTAs”).  Of  the  67  winning  bidders,  61  qualified  as  small  entities.  Five  winners 


 indicated  that  they  were  minority-  owned  and  four  winners  indicated  that  they  were  women-  owned  businesses.  MMDS  is  an  especially  competitive  service,  with  approximately  1573  previously  authorized 
 and  proposed  MMDS  facilities.  Information  available  to  us  indicates  that  no  MMDS  facility  generates 


 24  47  C.  F.  R.  §  76.1403(  b). 
 25  Paul  Kagan  Associates,  Inc.,  Feb.  29,  1996  (based  on  figures  for  Dec.  30,  1995). 
 26  Annual  Assessment  of  the  Status  of  Competition  in  Markets  for  the  Delivery  of  Video  Programming,  Fourth 
 Annual  Report,  13  FCC  Rcd  1034,  1087  (1998).  27 
 Annual  Assessment  of  the  Status  of  Competition  in  Markets  for  the  Delivery  of  Video  programming,  Fifth  Annual  Report,  13  FCC  Rcd  24284,  24301  (1998). 


 28  47  U.  S.  C.  §  21.961(  b)(  1). 
 29  In  The  Matter  of  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,  10 


 FCC  Rcd  9589  (1995). 
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 revenue  in  excess  of  $11  million  annually.  We  conclude  that  there  are  approximately  1634  small  MMDS  providers  as  defined  by  the  SBA  and  the  Commission’s  auction  rules. 
 D.  Description  of  Projected  Reporting,  Record  Keeping  and  other  Compliance  Requirements. 
 13.  This  Report  and  Order  makes  an  additional  class  that  will  be  eligible  for  CARS  licenses.  As  such,  they  will  be  subject  to  the  reporting,  record  keeping,  and  other  compliance  requirements  of 
 CARS.  These  newly  eligible  entities  will  be  required  to  file  an  application,  FCC  Form  327,  to  obtain  a  license  and  to  modify  or  renew  that  license.  They  will  also  be  required  to  maintain  certain  station  records 
 related  to  maintenance  of  the  technical  parameters  of  the  station,  as  specified  in  Section  78.69  of  the  Commission’s  Rules.  30 


 E.  Steps  Taken  to  Minimize  the  Impact  on  Small  Entities,  and  Significant  Alternatives  Considered. 
 14.  The  RFA  requires  an  agency  to  describe  any  significant  alternatives  that  it  has  considered  in  developing  its  approach,  which  may  include  the  following  four  alternatives  (among  others):  “(  1)  the 
 establishment  of  differing  compliance  or  reporting  requirements  or  timetables  that  take  into  account  the  resources  available  to  small  entities;  (2)  the  clarification,  consolidation,  or  simplification  of  compliance 
 and  reporting  requirements  under  the  rule  for  such  small  entities;  (3)  the  use  of  performance  rather  than  design  standards;  and  (4)  an  exemption  from  coverage  of  the  rule,  or  any  part  thereof,  for  such  small 
 entities.”  31 
 15.  This  Report  and  Order  creates  opportunities  for  small  entities,  such  as  PCOs  and  other  MVPDs,  to  compete  with  incumbent  providers  of  video  programming  in  the  12  GHz  CARS  frequency 


 band.  The  Commission’s  decision  will  allow  new  entrants,  many  of  whom  are  deemed  to  be  small  entities,  to  have  access  to  the  12  GHz  CARS  frequency  band  on  an  equal  basis  with  franchised  cable 
 operators  and  other  users. 
 16.  No  significant  alternatives  were  considered  other  than  to  examine  whether  the  options  currently  available  to  the  entities  currently  not  eligible  for  CARS  licenses  are  adequate  for  their  needs. 


 These  options  are  use  of  18  GHz  frequencies  or  23  GHz  frequencies  under  Part  101  of  the  Commission’s  Rules.  32  In  the  Order,  the  Commission  has  decided  that  because  the  12  GHz  CARS  band  provides  greater 
 range  at  a  reduced  cost,  that  the  petitioning  PCOs  should  be  given  the  relief  requested.  On  its  own  motion,  the  Commission  extended  the  eligibility  to  use  the  12  GHz  CARS  band  to  all  MVPDs.  Further, 
 the  Commission  made  these  entities  eligible  to  use  all  CARS  frequencies,  rather  than  just  the  12  GHz  band.  This  will  eliminate  a  significant  barrier  to  entry  into  the  MVPD  market  for  small  entities  and  will 
 lessen  the  cost  of  expansion  for  others.  Small  entities,  from  a  regulatory  standpoint,  will  now  be  on  a  par  with  wireless  cable  operators  and,  in  this  sense,  with  cable  systems.  33 


 30  47  C.  F.  R.  §  78.69. 
 31  5  U.  S.  C.  §  603(  c)(  1)  –  (c)(  4). 
 32  Id.  §§  101.601  –  603. 
 33  Cable  systems  have  franchising  requirements  and  other  responsibilities  to  which  they  alone  are  subject.  For 
 example,  cable  systems  must  obtain  a  franchise,  47  U.  S.  C.  §  541(  b)(  1),  which  may  have  a  requirement  to  serve  all  residents  in  the  franchise  area,  and  are  subject  to  a  franchise  fee.  Id.  §  542.  They  are  also  subject  to  regulation 


 regarding  leased  access;  Id.  §  542;  must  carry;  Id.  §§  534  –  5;  program  access;  Id.  §  536;  public,  educational,  and  (continued…) 
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 17.  Report  to  Congress.  We  will  send  a  copy  of  this  Report  and  Order,  including  this  FRFA,  in  a  report  to  Congress  pursuant  to  the  Congressional  Review  Act  of  1996,  5  U.  S.  C. 
 §  801(  a)(  1)(  A).  A  copy  of  this  report  and  Order  and  FRFA  (or  summary  thereof)  will  also  be  published  in  the  Federal  Register,  pursuant  to  5  U.  S.  C.  §  604(  b),  and  will  be  sent  to  the  Chief  Counsel  for  Advocacy 
 of  the  Small  Business  Administration. 


 (…  continued  from  previous  page)  government  channels;  Id.  §  531;  rate  regulation;  Id.  §  543;  channel  occupancy  limits;  Id.  533(  f)(  1)(  B);  sports 
 blackout;  47  C.  F.  R.  §  76.67;  network  nonduplication;  Id.  §  76.92;  and  syndicated  exclusivity,  Id.  §  76.151. 
32