Frequency and polarisation reuse for optimum spectral efficiency in local multipoint distribution system (LMDS) networks generate co- and adjacent-channel inter-and intra-cell interference because of the line-of-sight constraints among transmitting and receiving antennas. Such operational constraints limit the system capacity and affect link performance. Measurements at 40 GHz from a number of possible interference scenarios for two different LMDS reuse cellular plans of dual-frequency and dual-polarisation discriminations are presented. An electromagnetic-stochastic propagation model is employed. The model successfully predicts the interference parameters and takes into account the effects of multiple paths and depolarisation caused by reflection and scatter from building surfaces at millimetre-wave frequencies. The probability density function of the signal-to-interference ratio and the statistical channel parameters, such as the average signal strength and the Rician K-factor, are extracted from the measured data and compared with model predictions.