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In a decision that is sure to make it more difficult for wireless phone companies to win court battles against local zoning boards, the 3rd U.S. Circuit Court of Appeals has ruled that the burden is on the phone company to show there was already a “significant gap” in coverage even before it entered the local market. The ruling in Omnipoint Communications Enterprises v. Zoning Hearing Board of Easttown Township is significant because it dictates the calculus courts must use when deciding whether a zoning board’s decision violates the Telecommunications Act of 1996. But the split decision also shows how courts have struggled to interpret the TCA, and how the 3rd Circuit continues to struggle in interpreting some of its own TCA jurisprudence. In February, the court had issued a ruling in favor of Omnipoint. But the three-judge panel later withdrew the opinion and granted panel rehearing. Now, by a 2-1 vote, the 3rd Circuit has reversed itself and upheld the lower court’s ruling in favor of the township. The author of the February opinion, Senior 3rd Circuit Judge Max Rosenn, is now the dissenter. In Wednesday’s decision, Rosenn complained that his colleagues seemed to misunderstand the goals Congress had in mind when it passed the TCA, and that their ruling “will effectively impede the development of new digital technologies that have a more limited range but superior capabilities.” Under the TCA, a local ordinance or ruling is invalid if it would “prohibit or have the effect of prohibiting the provision of personal wireless services.” In 1999, the 3rd Circuit handed down its most significant TCA decision, holding in APT Pittsburgh Ltd. v. Penn Township that a provider whose application to erect a tower has been denied must show both that its facility will fill an existing significant gap in the ability of remote users to access the national telephone network, and that the manner in which it proposes to fill that gap is the least intrusive on the values that the denial sought to serve. At the time, Omnipoint had just recently won the first round of its court battle against Easttown Township when Senior U.S. District Judge Marvin Katz found that zoning officials had relied exclusively on aesthetic concerns in denying a variance and not on substantial evidence supporting rejection. The 3rd Circuit vacated Katz’s decision and remanded for reconsideration in light of Penn Township. On remand, the case was assigned to U.S. Magistrate Judge Jacob P. Hart who concluded that Omnipoint had failed to establish a “significant gap” in coverage. Hart also rejected Omnipoint’s claims that it was the victim of unreasonable discrimination under the TCA, and unconstitutional exclusion under Pennsylvania law. On appeal, lawyers for Omnipoint argued that Hart erred in his method for calculating whether there was any gap in coverage in the township. Hart’s analysis, they said, focused only on the seven other wireless providers already serving Easttown, without including Omnipoint’s data in its calculation. Hart concluded that data from the seven other providers showed there was no significant gap because wireless users suffered from a call failure rate of less than 2 percent. Now the 3rd Circuit has ruled that Hart was correct and that “a fact-finder determining the existence of a significant gap should examine whether other providers already serve the area. The fact that one applicant may have coverage problems is not determinative of whether there is a significant gap.” Omnipoint argued that if Hart had looked at all of the providers in the aggregate — including Omnipoint — he would have determined that the call failure rate was more than 5 percent, which is sufficient to establish a significant gap. But 3rd Circuit Judge Dolores K. Sloviter, in an opinion joined by Circuit Judge Theodore A. McKee, found that the Penn Township ruling requires a provider to show that “the area the new facility will serve is not already served by another provider.” “Here, there are seven other cellular services provided in the area at issue,” Sloviter wrote. “If we were to accept Omnipoint’s argument, we would make Penn Township‘s requirement meaningless.” Sloviter said her conclusion was consistent with the 3rd Circuit’s 2002 decision in Nextel West Corp. v. Unity Township in which the court “reaffirmed the Penn Township test and explained that the first prong (that the provider must show that its facility will fill an existing significant gap in the service available to remote users) requires ‘a gap from a user’s perspective, rather than a particular provider’s perspective.’” As a result, Sloviter said, both Penn Township and Nextel West rejected Omnipoint’s argument that the existence of a significant gap must include the data from the applicant provider. THE DISSENT In dissent, Judge Rosenn said he believes the majority decision “thwarts the policies and purposes of the TCA” and “will impede the inevitable progress of personal wireless services.” “In my view, the proper test for determining whether there is a significant gap is to look at all wireless telephone users, including the plaintiff’s customers,” Rosenn wrote. Rosenn said he differed with the majority on “what it means to establish a significant gap from the users’ perspective.” The proper analysis, Rosenn said, would be to determine whether there is a significant gap in the aggregate of “all the existing remote users.” Omnipoint customers “are not newcomers,” Rosenn said, and therefore “deserve consideration.” “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,” Rosenn wrote. Rosenn criticized Sloviter for focusing on the fact that there are seven other cellular providers in Easttown Township. “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,” Rosenn wrote. “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,” Rosenn wrote. Rosenn complained that the majority’s approach “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.” Omnipoint was represented in the appeal by attorneys Paul J. Lawrence and Jay Carlson of Preston Gates & Ellis in Seattle, along with James C. Dalton and Christopher H. Schubert of Riley Riper Hollin & Colagreco in Paoli, Pa. Easttown Township was represented by attorney Andrew D. H. Rau of Unruh, Turner, Burke & Frees in West Chester, Pa., along with John S. Halsted of Gawthrop, Greenwood & Halsted in West Chester and Paola Tripodi Kaczynski of Holsten & Associates in Media, Pa.

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