Court Opinion

ID: 9496110
Source: CourtListenerOpinion
Date Created: 2023-08-05 16:18:19.591517+00
Date Added: 2024-06-11T17:57:22.564144
License: Public Domain

ROSENN, Circuit Judge,
dissenting.
I believe that the majority decision in this case thwarts the policies and purposes of the Federal Telecommunications Act of 1996(TCA). I fear that it will impede the inevitable progress of personal wireless services. I am, therefore, constrained to dissent.
As the majority points out, Congress had two sets of priorities in enacting the amended Telecommunications Act in *4011996.1 Congress sought to create a “pro-competitive, deregulatory national policy-framework designed to rapidly accelerate private sector deployment of advanced telecommunication and information technologies and services to all Americans by opening all telecommunications markets to competition.” H.R. Conf. Rep. No. 104-458, at 113 (1996), reprinted in 1996 U.S.C.C.A.N. 124. At the same time, Congress attempted to balance this goal against the legitimate concerns of state and local governments in regulating the siting of wireless facilities. H.R. Conf. Rep. No. 104-204, at 94-95 (1995), reprinted in 1996 U.S.C.C.A.N. 61.
With respect to personal wireless service facilities, Congress limited state and local zoning authority to some degree. When regulating the placement, construction, and modification of personal wireless service facilities, state and local governments: (I) shall not unreasonably discriminate among providers of functionally equivalent services; and (II) shall not prohibit or have the effect of prohibiting the provision of personal wireless services. 47 U.S.C. § 332(c)(7)(B)(i). The scope of the latter limitation, known as the “prohibition of service” clause, is the genesis of the difference of opinion here.
We have previously considered the scope of the prohibition of service clause. APT Pittsburgh Ltd. P’ship v. Penn Township, Butler County, 196 F.3d 469 (3d Cir.1999), established a test to determine if the decision of a local zoning authority has “the effect of prohibiting the provision of personal wireless services.” 47 U.S.C. § 332(c)(7)(B)(i)(II). A service provider must first “show that its facility will fill an existing significant gap in the ability of remote users to access the national telephone network.” Penn Township, 196 F.3d at 480.2 The question is what services are available to the remote users of all service providers in the specific area where the challenging provider asserts that there is a significant gap. A gap is a gap in the service offered to remote wireless users by the existing providers.
There is no dispute that the gap must be from the users’ perspective, rather than from a particular provider’s perspective. See Nextel W. Corp. v. Unity Township, 282 F.3d 257, 265 (3d Cir.2002). Omnipoint cannot simply point to the gap in the service it provides to establish a prohibition of service claim under 47 U.S.C. § 332(c)(7)(B)(i)(II). It must show that the telecommunications needs of users in the community as a whole are not being adequately served.
In my view, the proper test for determining whether there is a significant gap is to look at all wireless telephone users, including the plaintiffs customers. Instead, the Magistrate Judge (MJ) looked only at non-Omnipoint users and found that non-Omnipoint users experienced problems only 1.96% of the time in East-town Township. See 189 F.Supp.2d at 265. Based on this finding, the MJ concluded that Omnipoint had failed to carry its burden of proving a significant gap. I believe *402that the relevant figure in the Penn Township analysis is the aggregate, including Omnipoint users and including calls outside Easttown Township, but within each provider’s Wireless Communication Facility’s coverage area. Under this standard, the MJ’s 1.96% figure understates the actual call failure rate. Omnipoint places the number at approximately 5.5%. If this figure is correct, Omnipoint may be able to carry its burden of showing a significant gap in service. Cf. Cellular Tel. Co. v. Zoning Bd. of Adjustment of Harrington Park, 90 F.Supp.2d 557, 565 (D.N.J.2000) (holding that a call failure rate of five to seven percent is a significant gap).3
The difference between the majority and me hinges on what it means to establish a significant gap from the users’ perspective. In my view, the relevant figure to be analyzed in determining whether there is a significant gap is the aggregate of all the existing remote users. Since Omnipoint users are not newcomers, they deserve consideration.4 The test I propose is to look at all wireless telephone users, giving existing Omnipoint users no more and no less consideration than the others. The MJ instead looked only at non-Omnipoint users and concluded that Omnipoint had failed to carry its burden of proving a significant gap. In my view, this approach was flawed because it failed to give any consideration whatsoever to existing Omnipoint users.5 A court should look at the *403record from the perspective of the users, not the providers. A customer who has an existing contract with Omnipoint, who lives in Easttown (or regularly commutes through the township), and who gets reception in 2/3 of Easttown but wants to get reception in the other 1/3 of Easttown logically should be calculated as an existing customer for the purpose of evaluating whether there is a significant gap.
The majority seems to suggest that these users should only be taken into account if there is no service to which they could switch that would give them service in the 1/3 of the township Omnipoint service does not reach. In my opinion, this is an overly restrictive view of existing users, especially because industry practice often requires contracts for service for a certain term, thereby significantly increasing the costs of switching. Additionally, hypothetical Omnipoint users who were not counted in these calculations might be forced by this rule to switch to a provider that did not give them comparable services. By contrast, Omnipoint or another similar digital provider could transmit text, emails, and photographs; a cellular provider can only transmit voice. Thus, denying Omnipoint users consideration in determining whether there is a significant gap is a harsh and regressive result, one that I do not believe Congress envisioned.
As the First Circuit Court of Appeals explained in Second Generation Props. v. Town of Pelham, 313 F.3d 620 (1st Cir.2002):
Such a rule ... does not further the interests of the individual consumer.... [I]t is of little comfort to the customer who uses AT & T Wireless ... who cannot get service along the significant geographic gap ... that a Cingular Wireless customer does get some service ba that gap. Of course, that AT & T customer could switch to Cingular Wireless. But were the rule adopted, the same customer might well find that she has a significant gap in coverage a few towns over, where AT & T Wireless, her former provider, offers service but Cin-gular Wireless does not. The result 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 633-34.
I also differ from the majority as to the meaning of a key statement in Penn Township, which states that proof of a relevant gap in service requires a provider “to include evidence that the area the new facility will serve is not already served by another provider.” Penn Township, 196 F.3d at 480. The difficulty is how to interpret this statement in light of the preceding inconsistent statement that “the provider must show that its facility will fill an existing significant gap in the ability of remote users to access the national telephone network.” Id. In other words, what happens when one provider already provides a service in part of a township, but many of the township’s existing resident users are unable to access the national network in that part of the township? In this case, there is a significant gap in an area of the township when all existing users are taken into account. However, a challenging provider cannot show that “the area the new facility will serve is not already served by another provider,” even though the other provider has inferior functional services.6
*404The majority’s interpretation of Penn Township is at odds with Sprint Spectrum, L.P. v. Willoth, 176 F.3d 630 (2d Cir.1999), a case Penn Township referred to as “the most thoughtful discussion” of the prohibition of service clause. Penn Township, 196 F.3d at 479. The Willoth court described as “untenable” the proposition that “once personal wireless servers are available somewhere within the jurisdiction of a state or local government ... the state or local government could deny any further application with impunity.” Willoth, 176 F.3d at 641.
There is, therefore, tension within Penn Township over what to do with a circumstance in which one user serves part of a township and other existing providers seek to extend their services to that part of the township. On the one hand, Penn Township states without qualification that proof of a relevant gap in service requires a provider to include evidence that the area the new facility will serve is not already served by another provider. On the other hand, Penn Township refers us to the Willoth opinion which states that it is untenable to think that once personal wireless servers are available somewhere within a township, the state or local government could deny any further applications with impunity. The only way to resolve this tension within Penn Township that is consistent with congressional intent is to say that the challenger must show that there is a “significant gap” in that part of the township. If there is a significant gap, then the area the new facility will serve is not already adequately served by another provider. Cf. Willoth, 176 F.3d at 643 (“... once an area is sufficiently serviced by a wireless service provider, the right to deny applications becomes broader ... ”) (emphasis added); Second Generation, 313 F.3d at 633 n. 13 (“[Willoth’s] stress on adequate coverage should logically mean that the circuit would oppose an ‘any coverage equals no gap’ rule”).
In my view, Penn Township did not intend to foreclose proof of a significant gap in service because of the mere presence of one or more telecommunication providers in the jurisdiction.7 Penn Township must be read to mean providers with equal technological services.8 I believe my approach is also consistent with the approach taken in Second Generation by the First Circuit Court of Appeals, the only other circuit to address this question. In a cogently argued opinion, the Second Generation court rejected the rule the majority adopts today, i.e., that coverage by any *405provider precludes all statutory prohibition of service claims. See Second Generation, 313 F.3d at 632-635. Moreover, Second Generation convincingly interprets Willoth to reject the majority’s rule as well. See id. at 632-33 n. 13.
The majority points out that in this case there are seven other cellular providers in Easttown Township. See Maj. Op. at 399. However, the number of service providers already in an area is less important in determining whether there is a gap than the percentage of existing users who cannot connect with the national network. The real question is whether there is a gap from the users’ perspective because of the providers’ limitations of the existing technological facilities. See Nextel, 282 F.3d at 265. In this case, it does not matter how many competitors Omnipoint had. What matters is that a significant percentage of all existing users are unable to access the national network because of the shortcomings of the existing providers’ facilities.
The majority approach today threatens Congress’ goal of promoting the rapid acceleration of private sector deployment of advanced telecommunication and information technologies to all Americans. The existence of older, less functional cellular networks should not be permitted to impede the development of new, digital technologies like PCS and undermine competition in the telecommunications industry. The majority opinion will effectively impede the development of new digital technologies that have a more limited range but superior capabilities.9
I, therefore, respectfully dissent from the sur rehearing portion of today’s opinion.

. Our disagreement today is precipitated in part by the notoriously opaque wording of the TCA. See AT & T v. Iowa Utils. Bd., 525 U.S. 366, 397, 119 S.Ct. 721, 142 L.Ed.2d 835 (1999) ("It would be a gross understatement to say that the Telecommunications Act of 1996 is not a model of clarity. It is in many important respects a model of ambiguity or indeed even self-contradiction.”). In light of this ambiguity, we look to congressional history and subsequent caselaw to guide us.

. In the second prong of the prohibition of service test, the provider challenging the zoning decision must also show that its proposal was the least intrusive on the values the denial sought to serve. See Penn Township, 196 F.3d at 480.

. I agree with the majority that Omnipoint’s other evidence to demonstrate a significant gap is not persuasive. Maj. Op. at 16-17. The MJ held that Omnipoint's expert witness Dugan had failed to establish a correlation between the negative 85 dBm standard and users’ actual ability to access the national telephone network. Dugan’s own tests revealed that cell phone users in the area below negative 85 dBm nevertheless were able to make and receive calls using non-Omnipoint networks. See 189 F.Supp.2d at 264. I agree with the MJ's finding that Omnipoint did not carry its burden of showing that a signal strength of less than negative 85 dBm alone proves a significant gap. Dugan argued that the active portion of one of the tests that he conducted understates the problem with the services’ reliability in that area. Omnipoint was responsible for correcting this proof problem by more closely replicating actual driving habits and equipment. See 189 F.Supp.2d at 264 n. 4.

. Omnipoint already had an existing license in Easttown Township and an existing facility in the business district. This is not a case where a newcomer seeks to have its potential customers calculated as existing users. On the contrary, Omnipoint is a provider that seeks to expand its service to existing customers by remedying a significant gap in the southern area of Easttown Township.

. I would reach this question even though Omnipoint raised this argument for the first time in its Reply Brief. Generally, we do not consider arguments raised for the first time in a Reply Brief, but we do have the discretion to do so in exceptional circumstances. See Hoxworth v. Blinder, Robinson & Co., 903 F.2d 186, 204-05 n. 29 (3d. Cir.1990). Here, because I believe the MJ erred in ignoring Omnipoint users in ascertaining whether there was a significant gap in the Township, I would consider Omnipoint’s argument to avoid a miscarriage of justice. Cf. Aetna Cas. Sur. Co. v. P & B Autobody, 43 F.3d 1546, 1571 (1st Cir.1994) (Courts of Appeals may consider arguments raised for the first time in a Reply Brief if the arguments are "so compelling as virtually to insure the appellant's success” or if the arguments "must be ruled on to avoid a miscarriage of justice”); see also Dufrene v. Browning-Ferris, Inc., 207 F.3d 264, 268 (5th Cir.2000) (Courts of Appeals may review for plain error, where the error is "clear” or "obvious” and affects "substantial rights.”); United States v. Wilson, 962 F.2d 621, 627 (7th Cir.1992) (Courts of Appeals may consider an argument raised for the first time in a Reply Brief when an issue is serious and was overlooked by all concerned). In this case, the forfeited argument affects the fairness, integrity, and public reputation of the judicial proceedings. Cf. Dufrene, 207 F.3d at 268. On remand, I would give East-town Township adequate opportunity to respond to the factual question of whether Omnipoint can show a significant gap under the correct legal standard.

. I am also concerned that today’s interpretation of the prohibition of service clause could *404be applied in other cases in a way that would create a monopoly and hinder Congress' goal of establishing a pro-competitive, de-regulatory national policy framework that opens all telecommunications markets to competition.

. It should be noted that the Penn Township opinion did not have a developed record that necessitated clarification of these questions of proof.

. We have previously addressed the question of functional equivalence in the context of the unreasonable discrimination prong of 47 U.S.C. § 332(c)(7)(B)(i). In Nextel, we explained that "[w]e think the equivalency of function relates to the telecommunications services the entity provides, not to the technical particularities (design, technology, or frequency) of its operations. The TCA clearly does not force competing wireless providers to adopt identical technology or design nor does it compel them to fit their networks of antennae into a uniform, rigid honeycomb of interlocking cells. Indeed, the FCC’s assignment of a different frequency and signal strength to each licensee renders such uniformity impossible.” Nextel, 282 F.3d at 266-67 n. 13. Digital phones can transmit voice, email, text, and photographs. Cellular phones can only transmit voice. In my view, this distinction goes beyond "technical particularities." Rather, it is a functional distinction.

. Imagine the following hypothetical scenario. In a certain township, there are four providers of wireless service. Each provider has 100 existing users, for a total of 400 users. In the southern part of the township, Providers B, C, and D have adequate cellular service because their towers in the center of the township have broader service areas. Provider A also has a tower in the center of the township, but it is digital, and therefore extends less far but provides more advanced capabilities such as text messaging, digital transmission of photos, and email. Provider A’s customers get service in three-quarters of the township (and elsewhere across the country).
The question is whether there is a significant gap in the southern part of the township. Of the 400 existing wireless customers in the township, 100 of them cannot get service and 300 can. Under the majority’s approach, the calculation only includes those 300 and there is no significant gap. Also, the majority holds that Provider A and/or its customers could not bring a prohibition of service claim even if there were a significant gap, because Providers B, C, and D already provide service, although not of equal function.
Under my view, in contrast, the calculation includes all 400 users and therefore there is a significant gap in the southern part of the township because 25% of existing users in the township cannot access the network. In my opinion, Provider A and/or its customers can show a significant gap and assert a prohibition claim.
Now imagine that because digital/PCS service is more advanced and popular, Provider A earns 10,000 new customers and the other three do not earn any additional customers because their technology is antiquated. I submit that under this scenario, the majority’s holding today would undermine clear congressional policy.