Dallas, Other Cities to Sue Texas Over Small-Cells Law, as State Spurns Austin Suit

The Texas Municipal League supports suits by Austin and other cities because the new law “unconstitutionally requires cities to subsidize private industry by letting them use public property nearly for free,” TML Executive Director Bennett Sandlin said Wednesday. The coalition suit focuses on the constitutionality, under state law, of the bill capping a city’s right-of-way rental fee at $250 per small cell, Sandlin said. “The Texas Constitution prohibits giving away city-owned property for less than market value. … The bill is unconstitutional because $250 per node is so far below the $1,500 to $2,500 that cities were beginning to negotiate that it’s almost free.” Dallas believes the compensation level set by the legislature is an "unlawful gift" under the Texas Constitution, said Knight.

Texas is fighting a complaint by Austin in the U.S. District Court in Austin. In its Aug. 18 complaint (in Pacer), the city asked for a preliminary injunction to keep the law from taking effect, then a permanent injunction and declaration that SB-1004 is unconstitutional. “By imposing artificially low caps on the fees that cities can charge wireless companies, the State is effectively forcing the City of Austin to subsidize the private cellular industry by several million dollars a year,” an Austin spokesman emailed Wednesday. Texas interfered with the city’s ability to govern use of antennas and other equipment in the public right of way (ROW), he said. Those actions are “overreach” and violate federal law, he said.

Texas tried to swat away the Austin challenge in a Tuesday motion (in Pacer) to dismiss. “This is the wrong case with the wrong parties to resolve a dispute about a new law regarding permits for ‘small cell nodes’ in the public right-of-way,” the state said. Texas has sovereign immunity to the city’s claims and the governor has no role in enforcing SB-1004, it said: Austin’s case misreads SB-1004 and the federal Telecom Act “and thus fails to state a viable claim and has little likelihood of success on the merits.” Small cells are important for preventing congestion and increasing reliability in wireless networks, the state said.

“It is unfortunate the City of Austin has chosen to go this route,” AT&T Assistant Vice President-Texas Public Affairs Adrianna Bernal emailed. The company wants to work collaboratively with Austin to deploy small cells, she said. The Wireless Industry Association “is disappointed in the actions taken by the city of Austin," said President Jonathan Adelstein. The Texas law "promotes the responsible and efficient deployment of wireless infrastructure," he said.

Texas PUC commissioners may act Thursday in a proceeding for declaratory order on network nodes, transport facilities and node support poles constructed by a network provider, an agenda said. The docket addresses Chapter 284 -- enacted by SB-1004 -- and the older governing statute, Chapter 283. Commissioners also may act on similar complaints by ExteNet and Crown Castle against Houston and Austin over fees the cities may charge distributed-antenna-service providers for using the right of way (see 1708100040). Houston sued the PUC over the commission's interim order agreeing with ExteNet that DAS providers need not pay fees because Chapter 283 sets rates based on a company’s number of access lines and wireless infrastructure companies don’t have any (see 1708020036).