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This paper presents the effects of rain on the performance of a Ka-band local multipoint distribution system (LMDS) in Taiwan. The rain distribution statistics, from 2-yr measurements with 1-mm temporal resolution and 12-yr measurements with a 1-h temporal resolutions, were analyzed. The rain-attenuation model that takes local rain effects is established statistically. These statistical data are used to analyze the performance of the LMDS in terms of its signal-to-interference (S/I) ratio, bit-error rate (HER), and channel capacity at various service distances. From the analysis, it is found that the light rain events induce better S/I for cellWar network service, because other base transceiver station (Hi'S) interference signals around the main BTS are likely to be blocked by rain. The probability that below the nominal value of the channel capacity, when there is rain fading without cellular interference, meets a margin of HER = 10-6 in a 6-km cell using quaternary phase-shift keying (QPSK) modulation. However, when the cellular interference is presented, the effective BTS service distance greatly shrinks to 2-3 km. In summary, in a cellular network environment, as the cell coverage radius is reduced, the effective BTS service range will be correspondingly compressed, suggesting that the cellular interference is even more serious than the rain attenuation itself. [ABSTRACT FROM AUTHOR]