Significant Gap:  The Issue of the Next Decade

PlanWireless has a favorite lawyer with whom we have great debates and for whom we have great respect.  She says that a definition of “significant gap” has been put to rest with the U.S. Court of Appeals for the Ninth Circuit in Metro PCS v. City and County of San Francisco.  In that decision, the Ninth Circuit found that any single carrier can have a “significant gap,” even when other carriers already serve the area.  According to this attorney, a carrier can submit an application for a cell site and say to the local government:

·       “We have a hole in our coverage (all carriers have holes in their coverage).

·       We call it a ‘significant gap’ and we need to fill it.

·       Our proposal would fill the significant gap and, if it’s not approved by your city or county, we will sue and ask a court to force your approval.”

This is what PlanWireless calls a “significant gap, single carrier-determined.”

Faithful readers of PlanWireless will recall that the term” significant gap” originated years before the MetroPCS case in the U.S. Court of Appeals for the Third Circuit in APT v. Penn Township.  In that case, the Court found:

First, 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.  In this context, the relevant gap, if any, is a gap in the service available to remote users.  Not all gaps in a particular provider’s service will involve a gap in the service available to remote users.  The provider’s showing on this issue will thus have to include evidence that the area the new facility will serve is not already served by another provider.

Second, the provider applicant must also 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.  This will require a showing that a good faith effort has been made to identify and evaluate less intrusive alternatives, e.g., that the provider has considered less sensitive sites, alternative system designs, alternative tower designs, placement of antennas on existing structures, etc.

This opinion leaned heavily on a previous decision by the U.S. Court of Appeals for the Second Circuit in Sprint v. Willoth.  So it is safe to say that at least two circuits of the U.S. Court of Appeals believe that a significant gap only occurs when no other carrier has service in the area.  That’s what PlanWireless calls a “significant gap, market-determined.”

Our lawyer friend reminds PlanWireless that it doesn’t matter how many circuit courts support the Third Circuit’s decision, the Ninth Circuit’s decision came later and considered the Third Circuit’s reasoning and rejected it.  Besides, the only decision that really matters belongs to the U.S. Supreme Court.

Whereupon, PlanWireless pointed out to our lawyer friend (what do we planners know?) that the Third Circuit has used its definition of a significant gap in many decisions.  One of these decisions, Omnipoint v. Newtown (Pennsylvania), was appealed by Omnipoint to the U.S. Supreme Court.  The key objection by Omnipoint was the Third Circuit’s definition of “significant gap.”  The Supreme Court refused to hear that appeal, thereby letting the Third Circuit’s decision stand.

If you’ve read this issue of PlanWireless up to now, you may be wondering “what does significant gap have to do with the 700 MHz auction?  Here’s your answer:

·       FCC loves auctions (the new spectrum from the AWS auction in 2006 is only now being deployed). 

·       Every time an auction is held, we will see some brand new players in some trade areas.

·       When the new carrier comes to a trade area, all that company has to do is embrace the single carrier-determined definition of “significant gap” to threaten a lawsuit, and the local government will fade like a tulip in July.

·       Each new carrier claims the local government must approve its proposal because “we have no sites and therefore we have a huge significant gap.”

It really doesn’t make much sense for each new carrier to enter the market, knowing there are incumbents (existing carriers) all over the place, and say “I’m here, let’s start the significant gap game all over again.”  So, the Third Circuit was looking ahead with its definition and the Ninth Circuit … well, suffice to say that the Ninth Circuit is different.

Actually, the very first federal wireless court case considered this “late to the party” issue in Sprint v. Medina.  Sprint claimed earlier carriers (incumbents) got different treatment when they entered the Seattle Metro market.  Sprint claimed that it was discriminated against by the City of Medina and sued for, among other things, giving them a more rigorous review than the carriers that have already received approvals.  Here’s what Judge William Dwyer said:

Sprint further argues that the moratorium violates Telecommunications Act Section 704(a)(7)(B)(i)(I), which provides that a local government regulation “shall not unreasonably discriminate among providers of functionally equivalent services.”  But no discrimination has been shown.  Sprint and others seek to enter the Washington market more than ten years after other wireless communications companies began business there.  Medina would consider any new applications by the earlier arrivals under the same rules governing newcomers’ applications.  Whatever Medina does, it could not now place Sprint in the same position as that of the earlier entrants.  All it can do is treat the would-be service providers without discrimination; given the recent dramatic changes to the law and the market, its generally-applicable moratorium is consistent with that requirement.

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Kreines & Kreines, Inc.
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Phone: (415) 435-9214
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