A wireless broadband communications system that can maintain high data rates while taking into account channel interference resulting from operating in shared frequency bands, signal fading resulting from dynamic channel degradation, and signal distortion resulting from compliance with maximum power output regulations. In one mode of operation, the system performs adaptive modulation by transmitting a first signal over a selected channel using a first modulation mode having a level of distortion associated therewith resulting from operating the system at a predetermined maximum power output level. Next, a SINAD level is measured on the first channel. The level of distortion associated with the first modulation mode is then subtracted from the measured SINAD level to obtain a first noise level. In the event the first noise level is less than a noise level required to achieve an acceptable error rate in a next modulation mode, a second signal is transmitted over the selected channel using the next modulation mode.