Texas Cellphone Bill Could Improve Service, But at What Cost for Cities?

The bill would allow cellular companies to place new network nodes in public rights of way but could cost cities millions of dollars.

by Dagney Pruner, The Dallas Morning News / May 18, 2017
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(TNS) -- AUSTIN — Trying to text your friend who's in line for food at the Texas-Oklahoma game could be easier under a bill the Texas House passed Thursday.

 

The bill would allow cellular companies to place new network nodes in public rights of way. The "small cell nodes" would allow Texans to have 5G technology, which allows for faster access to data and helps cellphones work in large crowds.

Putting nodes in rights of way is standard practice for many utility companies, but the bill would standardize it and cap the fees that cities can charge for the use of public property. It needs one more vote in the House before being sent to the governor.

Dallas charges $1,000 a year for cable, gas and cellular companies to use public property and is considering raising the fee to $2,500. Under the bill the Senate passed in April, cities could charge only $250 a year. The city of Dallas estimates that the loss of these fees and taxes could cost over $60 million in annual revenue on its 10,000 nodes, and possibly over $800 million statewide.

"I look at this bill and I see a potential to influence a migration from one technology to the next that's based on avoiding payment of right of way fees," said Don Knight, an attorney for the city of Dallas.

But the network providers spearheading the effort to put the new nodes on public property said that's not the case.

"Texas doesn't have a legal framework for small-cell wireless providers to gain access to public rights of way," said bill author Sen. Kelly Hancock, R-North Richland Hills. "Senate Bill 1004 provides the framework to build a telecom infrastructure that will help our state maintain its status as a global economic leader."

The 5G network could provide better cellphone coverage for attendees at events like Texas-OU or the Austin City Limits Music Festival, said Rep. Charlie Geren, R-Fort Worth, the sponsor of the bill in the House.

Many local officials who testified against the bill say the potential benefits don't outweigh the loss of funding for using the rights of way.

"It's an issue of private companies using taxpayer property for their own gain," said Bennett Sandlin, executive director of the Texas Municipal League. "This bill is completely off the charts in terms of fairness."

Placing nodes on private property typically costs $1,500 to $2,500 in Texas cities. Dallas' charge of $1,000 a year is the smallest fee you can get, Knight said.

"When we lose tens of millions in revenue, we need to raise property taxes or lose that much in public services," he said.

Dallas officials have been on high alert about revenue shortfalls because of a massive funding gap in the city's Police and Fire Pension System and legislation that would limit its ability to raise property taxes.

AT&T argues that the small cell nodes would have the opposite effect, generating revenue for Texas cities. The 5G networks require about five times more nodes than are currently in Texas, according to the Texas Municipal League.

AT&T asserts that the influx of new small cell nodes will offset losses the city might incur from the lower fees per node. AT&T spokeswoman Adrianna Bernal said it's a bill "that will bring tomorrow's technology to Texas quickly."

Other states like Arizona charge $50 annually, while some cities give away the rights for free.

Rep. Tony Tinderholt, R-Arlington, said $250 is "quite generous," and Rep. Lyle Larson, R-San Antonio, accused cities of opposing the bill because of their "greed."

But local officials said $250 isn't enough.

"If we don’t get money for the taxpayers, they end up subsidizing the private companies," Knight said.

The bill specifies that the machinery can't take up more than 28 cubic feet in volume or protrude farther than two feet, and it requires the providers to comply with the city's unique design requirements. The House version also requires the city's approval before placing the nodes in designated historic districts, which can require network providers to use "camouflage measures."

"If you want to use the city's property, we support it, but be respectful of public property and use it in a responsible manner," Sandlin said.

Network providers have told lawmakers that many of the nodes would not be obtrusive aesthetically or physically, but some experts disagree.

"They were telling the Legislature that these small cell sites were size of an iPad, which is ridiculous," Knight said. The legislation does allow the providers to place poles up to 55 feet in height.

"We’re talking about pretty large equipment, additional road hazards and more things for cars to crash into," he added.

House members shot down provisions to give cities more control over where and how the nodes were placed.

"This probably isn't a perfect bill, but we've negotiated with the parties as much as we can," said Rep. Helen Giddings, D-Dallas, who opposed the bill before changes were made.

©2017 The Dallas Morning News Distributed by Tribune Content Agency, LLC.