If you’ve been reading along lately you may already know about Senate Bill 1004, which is a controversial new state law that further limits the local-control authority of cities. In specific terms, SB 1004 addresses city control over assets like right of way, city-owned street lights and city-owned poles — and the manner in which those assets can be accessed by companies building facilities to transmit wireless communications.

Among other things, SB 1004 restricts the compensation that cities receive for allowing the installation of small cell antennas in right-of-way and on poles and street lights. SB 2004 also significantly limits municipalities in their regulation of the construction, development and maintenance of wireless facilities in the public right-of-way and prohibits municipalities from entering into franchise agreements with wireless companies for the use of public right-of-way.

Although SB 1004 was only recently signed into law, it already has had an impact on cases pending at the Texas Public Utility Commission.

Take for instance disputes between ExteNet, a Chicago-based digital antenna system provider, and the cities of Houston and Beaumont. A second firm, Crown Castle, has similar disputes with the City of Austin and the City of Dallas. Although the details vary, each of these disputes deal with the ability of cities to collect reasonable fees for the use of their assets, as well as the ability of cities to exert meaningful control over those assets.  The cases also raise questions about the interplay of existing rules from the Texas Local Government Code and rules from its new Chapter 284, which was created by SB 1004.

SB 1004 covers right-of-way access for relatively new technology — small cell antenna and wireless network nodes — that had not been specifically contemplated in earlier law. Although SB 1004 does not eliminate the ability of cities to collect fees for the use of their assets by such technology providers, it does obligate cities to grant access with less regulatory control, and at rents well below market value.  City groups have warned that this could negatively impact future municipal budgets.

City coalitions like TCCFUI along with many individual cities have opposed SB 1004. The city of McAllen also has announced plans to challenge the law’s constitutionality in court. In announcing those plans, McAllen Mayor Jim Darling cited figures showing the law could cost Texas municipalities about $813 million annually in lost right-of-way fees. “SB 1004 has pre-empted cities from negotiating reasonable compensation as adequate compensation for the use of public property,” he said.

Cities for more than 100 years have charged private companies for the use of public right of way. This is a mutually advantageous arrangement because it ultimately gives private companies access to broad swaths of property at relatively low costs. Cities, in turn, use their right-of-way authority to guard against chaotic and potentially dangerous uncontrolled development that undermines the public welfare.

— R.A. Dyer