On Friday, Jan. 17, 2014, the U.S. Court of Appeals for the Second Circuit affirmed that the Town of Greenburgh, New York, had unlawfully denied Crown Castle’s application to install a 20 node distributed antenna system (DAS) in the public rights of way in the Town. The Second Circuit’s Order affirmed the U.S. District Court for the Southern District of New York’s “thorough and well-reasoned decision” holding that the Town’s denial was not supported by substantial evidence and therefore violated Section 332(c)(7)(B)(iii) of the Communications Act. In so doing, the Second Circuit confirmed the limits on municipal authority under Section 332(c)(7) of the Communications Act and made several notable findings that are important for the DAS and wireless industries.

First, the court rejected the Town’s claim that Crown Castle had not demonstrated a “need” for the facilities, as required under the local code. The Town argued that Crown Castle’s evidence was “speculative” or only for a single customer because, the Town claimed, Crown Castle had no independent right to install the proposed facilities and could not establish a “need” based on its own service. Notably, the Second Circuit established that the “need” for the facilities could be established by Crown Castle’s own business needs. The Second Circuit held that:

Evidence showed that (1) Crown Castle was a public utility authorized by the New York Department of Public Service to operate as a facilities-based provider and reseller of telephone service, (2) Crown Castle did not have any existing sites in the Town, and (3) Crown Castle's client, MetroPCS, likewise had a gap in service in the area. The fact that Crown Castle had only a single client at the time that would benefit from the proposed facilities was not significant, as there still was a need for the proposed facilities.

Crown Castle NG East Inc. v. Town of Greenburgh, 2014 U.S. App. Lexis 925 *6 (2d Cir. Jan. 17, 2014). That holding is important in confirming that DAS providers, such as Crown Castle, are telecommunications providers with an independent right to provide their telecommunications service, and the state authorizations that they typically hold establish their status.

The Second Circuit also rejected the Town’s remarkable position that “need” must be evaluated from the perspective of retail consumers, not the service provider. The Town had claimed that the Second Circuit’s Sprint Spectrum, L.P. v. Willoth decision established the “one provider” rule as the standard in the Second Circuit, and the Town argued that the FCC’s 2009 Order in Petition for Declaratory Ruling to Clarify Provisions of Section 332(c)(7)(B) to Ensure Timely Siting Review, 24 FCC Rcd. 13994, 14016 (2009) (better known as the Shot Clock Order), which explicitly held that the one provider rule was an improper interpretation of Section 332(c)(7)(B), did not control. The Second Circuit, like the district court, rejected the Town’s position that Willoth established the one provider rule as the standard in the Second Circuit.

Second, the Second Circuit held that there was not substantial evidence supporting the Town’s argument that Crown Castle failed to show that its proposed facilities were minimally intrusive under the local antenna law. Although fact-specific to the case, the Second Circuit’s ruling is notable for using a comparison to 100 foot tall towers in finding that the aesthetic intrusion of Crown Castle’s equipment and antenna was de minimis: “photographs in the record show that Crown Castle's installations would be no more intrusive than existing installations of other carriers. In contrast, a more typical cell tower is approximately 100 feet tall.”

The Second Circuit’s decision was in a “Summary Order.” Under Federal Rule of Appellate Procedure 32.1, such orders are citable. Under Second Circuit Local Rule 32.1.1, the decision does not have precedential effect in the Second Circuit.