presently licensed operations and will not be authorized to obtain additional point-to-point licenses. 111. Although our present approach does not permit governmental licensees to expand their traffic monitoring and control operations through more extensive use of 31 GHz spectrum acquired by applications for point-to-point licenses, we emphasize that current operations are not disturbed by this limitation, such that the protection and preservation of the environment resulting from these governmental traffic systems will continue on the same basis and to the same extent as they do today. Thus, we conclude that our plan, taken as a whole, will occasion minimum disruption for most incumbent governmental operations. 112. We also note that a question exists whether there is sufficient causal connection between our LMDS licensing decision and ambient air quality to say that our actions in this proceeding could be the "proximate cause" of any impact on the human environment. We note that, under the present licensing scheme, an incumbent governmental licensee's expansion of its traffic monitoring systems and a new governmental applicant's ability to use the 31 GHz spectrum for such functions, are contingent upon their applying for and being granted a license. Furthermore, the removal of this opportunity cannot be said to be the proximate cause of the vehicular and other pollution factors that have precluded their attainment of ambient air quality standards established under the Clean Air Act. Our action merely limits, to some extent, a governmental entity's choice of methodologies for addressing one source of pollution and consequent non-attainment vehicular pollution.156 113. The number of incumbent licensees engaged in traffic control operations and thus affected by this limitation on incumbent expansion is small. Traffic control operations are provided by governmental licensees, of which there are a total of 19 spread across seven States. It appears from our database that less than half of these governmental licensees are authorized on a point-to-point basis. Of these, only four are located in non-attainment areas requiring plans to improve air quality in order to comply with the standards established by the Environmental Protection Agency. 157 114. A number of alternatives are available to these incumbents, if they wish to expand their operations. Specifically they could bid for and purchase the smaller, significantly less costly 150 megahertz license in the competitive bidding process we are es 156 See Metropolitan Edison Company v. People Against Nuclear Energy, United States Nuclear Regulatory Commission v. People Against Nuclear Energy, 460 U.S. 766 (1983). 157 Non-attainment areas are those areas designated by the Environmental Protection Agency (EPA) as being in non-compliance with those air quality standards established by EPA for various pollutants under the Clean Air Act, 42 U.S.C. §§ 7401 et seq. See Consolidated Non-Attainment Areas List, EPA, Dec. 3, 1996. tablishing in this Order. They also could acquire the use of spectrum from an LMDS licensee through spectrum disaggregation or geographic partitioning of the LMDS license. Furthermore, they could transfer their operations to a different transmission medium, lease service or transmission capacity from a common carrier, or expand their wired traffic control systems. 158 These alternatives are also available to governmental entities that are not presently licensed in the 31 GHz band and whose applications to commence such service are barred by the action we take here today. These are significant factors when weighing the impact of a regulatory action on the environment. 115. In sum, we do not believe that the LMDS licensing plan, as modified and adopted herein, raises environmental concerns or otherwise affects incumbent governmental licensees' continued operation of traffic monitoring and control operations, or the air quality controls for which they are responsible. Current operations are not disturbed by our licensing plan, and the present level of air quality protection afforded by these operations is preserved. We believe that the impact of limiting the expansion of existing systems, and any resulting effect on air quality, is minimal very few governmental licensees will be affected, and most of these are not located in nonattainment areas. Furthermore, all of these licensees have recourse to some other option for monitoring and controlling traffic and minimizing air pollution. B. Licensing of Spectrum - 1. Number of Licenses per Geographic Area a. Background; Comments 116. In the First NPRM, Third NPRM, and Fourth NPRM we sought comment on the number of LMDS licenses we should authorize in each geographic licensing area. In the First NPRM, we proposed to designate 1,000 megahertz in the 28 GHz band for LMDS and, based on the existing technology, proposed that the 28 GHz band be licensed in two blocks of 1,000 megahertz each to two different carriers. 159 In the Third NPRM we proposed that 150 megahertz of the 1 gigahertz in the 28 GHz band be licensed on a co-primary basis with MSS feeder links and sought comment on the number and size of licenses to make available in light of the proposed change in designation. 160 We had noted that LMDS may be competing 158 We have licensed only 19 governmental entities that use the 31 GHz band for traffic control operations. Most of the Nation's metropolitan areas do not rely on wireless technology for their traffic control systems. in a multichannel video programming distribution market (MVPD) that is dominated by cable television, but that is poised for the entry of several alternative distribution technologies, and sought comment on whether, from a competitive standpoint, it would be advisable to authorize only one LMDS license for 1,000 megahertz in each market. We also asked whether the advent of digital technology should affect our assessment of the minimum amount of spectrum needed by a licensee to compete in the MVPD environment. 162 We discussed alternative licensing schemes, and sought comment on the specific spectrum amounts that would be required, were we to decide to license more than one LMDS provider in each market. 163 117. In the First Report and Order, we adopted our proposal to designate the 1,000 megahertz in the 28 GHz band for LMDS and to require that 150 megahertz be shared on a co-primary basis with MSS feeder links. Specifically, LMDS was accorded the primary designation in the 850 megahertz located in the 27.5-28.35 GHz segment, while the segment of 150 megahertz at 29.1-29.25 GHz in the band is shared on a co-primary basis and limited to LMDS hub-to-subscriber transmissions. 164 Because of the encumbrance of the 150 megahertz, we proposed to designate an additional 300 megahertz of spectrum on a primary protected basis in the 31 GHz band for LMDS. We sought comment on how to assign this additional spectrum and whether to treat it as a separate block or combine it with spectrum in the 28 GHz band to be assigned as a single block. We tentatively concluded to assign the proposed 31 GHz band and the designated spectrum in the 28 GHz band as a single license block. 165 161 Id. at 82-83 (paras. 77-78). We observed that the MVPD market includes cable operators, Direct Broadcast Satellite (DBS) providers, wireless cable systems, and satellite master antenna television systems. Id. We also observed that LMDS "may provide services that compete with local exchange carriers in the provision of local exchange service. . . ." Id. at 64 (para. 27). We based our assumptions regarding the ability of LMDS to provide competition in both local telephony and cable markets on the following factors: Hub transceivers create small cells, typically of six miles diameter, which transmit to subscriber locations, and which can receive subscriber transmissions on a return path. Because the cells are small, and arranged in a typical cellular pattern, a very high level of frequency reuse is possible. This pattern, combined with the availability of broadband microwave spectrum, results in sufficient capacity in the proposed LMDS system designs to provide wireless competition to local exchange carriers or cable television systems even in urban areas. 162 Id. at 83 (para. 78). 163 Id. at 83 (para. 79). 164 Fourth NPRM, at para. 97. 165 Fourth NPRM, at paras. 95, 101. 118. The majority of parties responding to our initial inquiry in the Third NPRM argue that if LMDS providers do not receive a sufficient amount of spectrum, they cannot provide competitive services in either the MVPD marketplace or in the local telephony marketplace.166 Many of these commenters contend that approximately 1,000 megahertz of spectrum is the minimum amount necessary to create a commercially viable system that will enable LMDS licensees to compete with "wired" cable television systems and other MVPD providers.' 167 119. Because, in the First Report and Order, 150 of the 1,000 megahertz in the 28 GHz band was allocated on a co-primary basis with MSS and LMDS subscriber-to-hub transmissions were precluded in this segment, many of these commenters and others support our proposal to designate the entire 300 megahertz in the 31 GHz band to LMDS and to auction it with the 1,000 megahertz at 28 GHz as a single license block. They reason that this will enable LMDS providers to take full advantage of technical innovation and offer the full panoply of services to respond to marketplace needs. 168 No commenter focuses on or explains why it would be necessary to assign all 300 megahertz (rather than 150 megahertz) to a single licensee, in order to compensate for the encumbered nature of the 150 megahertz in the 28 GHz band. 120. Bell Atlantic points out that a few parties seek to use the designated spectrum in smaller blocks. It notes that some, such as Emc3, seek to use this spectrum for "niche products," while others, such as NYNEX and WCA, seek to supplement their Multipoint 166 Bell Atlantic Comments to Third NPRM at 1-2; BellSouth Comments to Third NPRM at 6; Cellular Vision Comments to Third NPRM at 13-18; ComTech Comments to Third NPRM at 5; Endgate Comments to Third NPRM at 4; GEC Comments to Third NPRM at 2; HP Comments to Third NPRM at 5-6; M3ITC Comments to Third NPRM at 3; NorTel Comments to Third NPRM at 3-4; PTWBS Comments to Third NPRM at 1-2; TI Comments to Third NPRM at 15; Titan Comments to Third NPRM at 2-3. 167 See, e.g., Cellular Vision Comments to Third NPRM at 14; Endgate Comments to Third NPRM at 4-5; GEC Comments to Third NPRM at 2; HP Comments to Third NPRM at 5; PTWBS Comments to Third NPRM at 1-2; M3ITC Comments to Third NPRM at 3; TI Comments to Third NPRM at 15; Titan Comments to Third NPRM at 2-3. TI states that their digital system requires a minimum of 1,000 megahertz to provide a full range of video distribution and telephony services. 168 See, e.g., CellularVision Comments to Fourth NPRM at 9-10; ComTech Comments to Fourth NPRM at 5-6; HP Comments to Fourth NPRM at 4-5; RioVision Comments to Fourth NPRM at 2; HP Reply Comments to Fourth NPRM at 3; M/A-COM Reply Comments to Fourth NPRM at 4; Titan Reply Comments to Fourth NPRM at 2. Cellular Vision argues that licensing LMDS spectrum in smaller blocks could needlessly confine LMDS to a particular frequency plan, thereby impeding the development of the service. Cellular Vision Comments to Fourth NPRM at 10, n.16. Distribution Service (MDS) spectrum. 169 In addition to Emc3, NYNEX, and WCA, several other parties advocate segmenting the LMDS spectrum to create smaller blocks. For example, Ad Hoc RTG, PRTC, and WCA support our proposal to designate spectrum in the 31 GHz band for LMDS but maintain that the 31 GHz block should be licensed as a separate unit in each LMDS service area. These parties contend that licensing the 31 GHz band as a separate block would facilitate market entry by a greater number of LMDS providers and would increase market competition. 170 172 121. Should the Commission decide otherwise, however, Ad Hoc RTG requests that the Commission afford rural telephone companies and other designated entities bidding credits and installment plans, as in previous auctions, as a means of facilitating market entry by a greater number of LMDS providers.17 WCA recommends, as an alternative, that LMDS auction winners be authorized to disaggregate their spectrum. As we have discussed, Sierra states that governmental licensees' vehicle control operations presently requiring 200 megahertz of capacity could be conducted using only 150 megahertz of spectrum, with modifications to existing equipment that would require only modest financial investments by these licensees. 122. Commenters also addressed the issue of smaller license blocks in the context of our inquiry in the Third NPRM about the relevance of impending digital technology in formulating a spectrum plan for LMDS. NYNEX and others argue that, with the advancement of digital technology, assignments of less than 1,000 megahertz of spectrum per licensee can be channelized into viable commercial operations. Emc3 argues that the 1,000 megahertz of spectrum proposed for LMDS under the Third NPRM band plan could be divided into four licenses of 212.5 megahertz each within the 27.5-28.35 GHz band, and three 174 169 Bell Atlantic Reply Comments to Third NPRM at 6. 170 Ad Hoc RTG Comments to Fourth NPRM at 7-8; PRTC Comments to Fourth NPRM at 4; WCA Comments to Fourth NPRM at 3-4. 172 WCA Comments to Fourth NPRM at 5. See also Ad Hoc RTG Comments to Fourth NPRM at 8. 173 Ex Parte Sierra Letter of Sept. 10 at 2. See paras. 82-83, supra. 174 See, e.g., Emc3 Comments to Third NPRM at 4-6; GTE Comments to Third NPRM at 4-5; NYNEX Reply Comments to Third NPRM at 6-10. |