Opinion ID: 3030701
Heading Depth: 5
Heading Rank: 1

Heading: Definition of “Significant Gap”

Text: 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.