Small Cell Lawsuits Begin;
Group Seeks Elimination of Right-of-Way Compensation

The City of McAllen is leading a coalition of around two dozen cities that will soon file a lawsuit to challenge the woefully low right-of-way rental fees in S.B. 1004.  That bill, passed during the 2017 regular session and effective September 1, requires a city to allow access for cellular antennae and related equipment (“small cell nodes”) in city rights-of-way, and it also entitles cell companies and others to place equipment on city light poles, traffic poles, street signs, and other poles. 

The bill give cities limited authority over placement, and it caps a city’s right-of-way rental fee at around $250 per small cell node.  The price per node in the current bill is, plainly and simply, a taxpayer subsidy to the cellular industry because it allows nearly free use of taxpayer-owned rights-of-way and facilities. 

Interested city officials can still join the coalition by contacting Kevin Pagan, city attorney for McAllen, at kpagan@mcallen.net or 956-681-1090.

In addition, the City of Austin has filed a separate lawsuit claiming that the federal Telecommunications Act preempts S.B. 1004 because the bill usurps the city’s control over its rights-of-way. 

In related news, the Texas Public Policy Foundation has sought for over a decade to eliminate all right-of-way rental fees.  The Houston Chronicle recently ran an article calling attention to a TPPF study on the issue, and attacks on this city authority are likely in future legislative sessions.

The lawsuit filed by the City of Austin and the pending one from the McAllen coalition should serve as a shot across the bow to utility companies:  Cities want these services, but their taxpayers shouldn’t be on the hook for subsidizing them.

TML member cities may use the material herein for any purpose. No other person or entity may reproduce, duplicate, or distribute any part of this document without the written authorization of the Texas Municipal League. 

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