Opinion ID: 3030701
Heading Depth: 4
Heading Rank: 2

Heading: Service Gap

Text: Several circuits have held that, even in the absence of a “general ban” on wireless services, a locality can run afoul of the TCA’s “effective prohibition” clause if it prevents a wireless provider from closing a “significant gap” in service coverage. This inquiry generally involves a two-pronged analysis requiring (1) the showing of a “significant gap” in service coverage and (2) some inquiry into the feasibility of alternative facilities or site locations. Currently there is a clear circuit split as to what constitutes a “significant gap” in coverage, and the Ninth Circuit has yet to rule on the issue.7 7 The high stakes involved for both wireless service providers and local governments are reflected in the fact that most of the Amicus briefs filed in this case focus on this issue. 2736 METROPCS, INC. v. SAN FRANCISCO
The test employed by the Second and Third Circuits holds that a “significant gap” in service exists only if no provider is able to serve the “gap” area in question. See Omnipoint, 331 F.3d at 398; Unity Township, 282 F.3d at 265; Penn Township, 196 F.3d at 478-80; Willoth, 176 F.3d at 643. One district court in the Ninth Circuit has also adopted this test. El Cajon, 83 F. Supp. 2d at 1167. This test is sometimes referred to as the “one provider” rule since, if any single provider offers coverage in a given area, localities may preclude other providers from entering the area (as long as the preclusion is a valid, nondiscriminatory zoning decision that satisfies the other provisions of the TCA). This rule has been touted as proceeding from the consumer’s perspective rather than the individual service provider’s perspective, which the Third Circuit argues is more in keeping with the regulatory goals of the TCA — as long as some provider offers service in the area, consumers will be adequately served and the TCA’s goal of establishing nationwide wireless service will be achieved. See Omnipoint, 331 F.3d at 39798; Unity Township, 282 F.3d at 265. Under this view, the TCA protects only the individual user’s ability to receive service from one provider or another; it does not protect each service provider’s ability to maintain full coverage within a given market. Omnipoint, 331 F.3d at 397-98; Unity Township, 282 F.3d at 265; cf. Willoth, 176 F.3d at 641-43. [16] The First Circuit has recently rejected the “one provider” approach and held that a local regulation creates a “significant gap” in service (and thus effectively prohibits wireless services) if the provider in question is prevented from filling a significant gap in its own service network. See Second Generation Props., 313 F.3d at 631-33. This approach formally takes the perspective of the individual service provider in assessing coverage gaps, but, as the Second Generation Properties court persuasively explains, this approach actually betMETROPCS, INC. v. SAN FRANCISCO 2737 ter serves both individual consumers and the policy goals of the TCA.8 The Second Generation Properties court notes that the TCA “aims to secure lower prices and better service for consumers by opening all telecommunications markets to competition.” Id. at 631 (citing H.R. Conf. Rep. No. 104-458, at 113 (1996)). The court then warns against the dysfunctional implications of the Second and Third Circuits’ “one provider rule”: A flat “any service equals no effective prohibi- tion” rule would say that a town could refuse permits to build the towers necessary to solve any number of different coverage problems . . . . Such a rule would be highly problematic because it does not further the interests of the individual consumer. To use an example from this case, it is of little comfort to the customer who uses AT & T Wireless (or Voice- stream, Verizon, Sprint, or Nextel) who cannot get service along the significant geographic gap which may exist along Route 128 that a Cingular Wireless customer does get some service in that gap . . . . The result [of such a rule] would be a crazy patchwork quilt of intermittent coverage. That quilt might have the effect of driving the industry toward a single carrier. When Congress enacted legislation to promote the construction of a nationwide cellular network, such a consequence was not, we think, the intended result. Id. at 633 (footnote omitted). In short, the First Circuit’s multiple provider rule better facilitates the robust competition 8 It should be noted that there is a difference between the interests of local residents — who may prefer fewer providers to limit the number of antennas in the area — and those of wireless service subscribers who may be frustrated that their particular provider cannot offer coverage in a given neighborhood. Both of these may be categorized as the “consumer perspective,” though they lead to different results. Our use of the term “consumer” in the discussion here refers to wireless service subscribers. 2738 METROPCS, INC. v. SAN FRANCISCO which Congress sought to encourage with the TCA, and it better accommodates the current state of the wireless services market. The district court also found these arguments persuasive, since it formally adopted the First Circuit rule in its decision below. 259 F. Supp. 2d at 1013-14. For its part, MetroPCS does not object to the district court’s adoption of the First Circuit “multiple provider rule” (in fact MetroPCS and its Amici argue strenuously in favor of the First Circuit’s approach), though it argues that the City’s zoning “criteria,” which allow for CUP denials based on findings that a given facility is “not necessary” for the community, are “impossible for any non-incumbent carrier to meet” and thus constitute an effective prohibition of wireless services. Once again, the large number of permits already granted by the City — to providers new and old — belies this assertion. Additionally, we emphasize that MetroPCS’s concerns regarding zoning decisions based on “necessity” can be accommodated by the First Circuit’s version of the significant gap test. Under this rule, zoning decisions explicitly based on redundancy of service are not per se invalid, but they are subject to the crucial limitations that (1) they cannot discriminate between similarly situated facilities and (2) they cannot result in a significant gap in service for the provider in question. As will be discussed shortly, the First Circuit’s interpretation also fully meets the preemption and supremacy arguments advanced by MetroPCS.9 [17] Having considered both the avowed policy goals of the TCA and the practical implications of the various constructional options, we elect to follow the district court’s lead and formally adopt the First Circuit’s rule that a significant gap in service (and thus an effective prohibition of service) exists whenever a provider is prevented from filling a significant 9 See discussion of MetroPCS’s supremacy and preemption arguments, infra at Section III, Part E. METROPCS, INC. v. SAN FRANCISCO 2739 gap in its own service coverage. With the correct legal standard thus clarified, we now turn to the merits of MetroPCS’s prohibition claim. In applying the First Circuit’s provider-focused notion of “significant gap,” the district court denied both parties summary judgment, holding that significant questions of fact still exist as to whether the Board’s decision actually perpetuates a significant gap in MetroPCS’s coverage. This conclusion is amply supported by the existing record and, therefore, we affirm the district court’s ruling on this issue. Both parties confidently assert that the current record unequivocally supports their respective positions. But to the contrary, the record is replete with contradictory allegations as to MetroPCS’s need for the Geary site. Compare Statements of Suki McCoy, SER at 223-36 (stating that MetroPCS has adequate coverage in the Richmond District); Statements of Martin Signithaler, SER at 134-36 (stating that the Geary site would not improve MetroPCS’s effective coverage); MetroPCS Marketing Materials, SER 225, 234 (advertising that MetroPCS has full coverage around the Geary site), with Statements of MetroPCS Technological Expert, SER at 200-02 (stating that MetroPCS coverage is not adequate without the Geary site); Declaration of Lisa Nahmanson, ER 32 (stating that MetroPCS coverage is insufficient without the Geary site); Testimony of Deborah Stein, SER 191-200(same); Declaration of John Schwartz, ER 49 (challenging basis of City’s contention that existing MetroPCS service is adequate). In urging us to grant it summary judgment on this issue, the City cites a bevy of cases that, collectively, are meant to demonstrate that “[t]he TCA does not assure every wireless carrier a right to seamless coverage in every area it serves,” and that the inability to cover a “a few blocks in a large city” is, as a matter of law, not a “significant gap.” While we recognize that the TCA does not guarantee wireless service providers coverage free of small “dead spots,”10 the existing case law 10 The district court correctly notes that the relevant service gap must be truly “significant” and “not merely individual ‘dead spots’ within a greater 2740 METROPCS, INC. v. SAN FRANCISCO amply demonstrates that “significant gap” determinations are extremely fact-specific inquiries that defy any bright-line legal rule. Moreover, the City’s assertion as to the size of MetroPCS’s alleged service gap merely assumes the very fact in issue here — the existence and geographic proportions of a gap in MetroPCS’s coverage. [18] Given the conflicting contents of the record, there is simply no basis for granting either party summary judgment on this issue. We affirm the district court’s ruling to that effect.
[19] Under all existing versions of the “significant gap” test, once a wireless service provider has demonstrated that the requisite significant gap in coverage exists, it must then make some showing as to the intrusiveness or necessity of its proposed means of closing that gap. Here again, the circuits are split as to the required showing. The Second and Third Circuits require the provider to show that “the manner in which it proposes to fill the significant gap in service is the least intrusive on the values that the denial sought to serve.” Penn Township, 196 F.3d at 480 (emphasis added); see also Omnipoint, 331 F.3d at 398; Unity Township, 282 F.3d at 266; Willoth, 176 F.3d at 643. The First and Seventh Circuits, by contrast, require a showing that there are “no alternative sites which would solve the problem.” Second Generation Props., 313 F.3d at 635; see also St. Croix County, 342 F.3d at 834-35 (adopting the First Circuit service area.” 259 F. Supp. 2d at 1014. Courts applying both versions of the “significant gap” test appear to agree on this proposition. See e.g., Second Generation Props., 313 F.3d at 631; 360o Communications Co., 211 F.3d at 87; Willoth, 176 F.3d at 643-44. METROPCS, INC. v. SAN FRANCISCO 2741 test and requiring providers to demonstrate that there are no “viable alternatives”) (citing Second Generation Properties).11 After concluding that material issues of fact remain as to the presence (or absence) of a significant gap in MetroPCS’s coverage, the district court attempted to reconcile competing interpretations of the intrusiveness inquiry by creating its own “fact-based test that requires the provider to demonstrate that its proposed solution is the most acceptable option for the community in question.” 259 F. Supp. 2d at 1015 (emphasis added). Since there is no controlling legal authority on the issue, our choice of rule must ultimately come down to policy considerations. The district court’s “most acceptable option” rubric seems a hopelessly subjective standard, and one wonders how a proposed site could ever be proven “the most acceptable” if a zoning proposal with respect to it had already been denied by local authorities. On the other hand, the First and Seventh Circuit requirement that a provider demonstrate that its proposed facility is the only viable option seems too exacting. As the case at bar demonstrates, there may be several viable means of closing a major service gap, (see MetroPCS Alternative Site Analysis, SER 26-35), and in such a situation, this “only viable option” rule would either preclude the construction of any facility (since no single site is the “only viable” alternative) or require providers to endure 11 The district court also notes that, in the Fourth Circuit, “ ‘[a] community could rationally reject the least intrusive proposal in favor of a more intrusive proposal that provides better service or that better promotes commercial goals of the community.’ ” 259 F. Supp. 2d at 1014 (quoting 360o Communications Co., 211 F.3d at 87). This rule is inapposite to the case at bar since the Fourth Circuit, as discussed above, does not recognize either version of the “significant gap” test. Instead, it holds that the TCA prohibits only general or “blanket” bans on wireless services. Under such a rule, denials of individual siting requests can never run afoul of the TCA, and so the relative intrusiveness of different siting proposals is irrelevant. 2742 METROPCS, INC. v. SAN FRANCISCO repeated denials by local authorities until only one feasible alternative remained. This seems a poor use of time and resources for both providers and local governments alike. [20] The Second and Third Circuit “least intrusive” standard, by contrast, allows for a meaningful comparison of alternative sites before the siting application process is needlessly repeated. It also gives providers an incentive to choose the least intrusive site in their first siting applications, and it promises to ultimately identify the best solution for the community, not merely the last one remaining after a series of application denials. [21] For these reasons, we now adopt the “least intrusive means” standard and instruct the district court to apply this rule as necessary in its consideration of the prohibition issue on remand.