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Technology & Entrepreneurship

Federal Lawsuit Over 5G 'Land Grab' Has Texas Roots

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Official White House Photo by Tia Dufour
President Donald J. Trump listens as Chairman Ajit Pai of the Federal Communications Commission delivers remarks on U.S. 5G deployment technology

San Antonio is readying itself for 5G networks from big telecoms like AT&T and T-Mobile.

Simultaneously, cities across Texas and the country are battling state and federal governments over what they call a corporate giveaway.

The next generation of cellular networks is really fast. The technology makes data networks more than four times faster, and theoretically up to 200 times faster.  But 5G also requires new technology that requires a lot more cellular nodes. The technology doesn’t transmit through walls well and needs significantly denser transmitter networks to overcome the shortfall.

The business friendly Texas legislature, looking to facilitate the quick rollout of the tech, limited many local government powers to regulate who puts the new small cell nodes where, as well as capping the amount that can be charged to access city owned rights-of-way. The lege passed the bill in 2017, and reaffirmed the bill with another that further cut fees for phone providers who also provide cable.

Cities across the state sued arguing they were giving away public property to large corporations, which is unconstitutional in Texas.

According to the Texas Municipal Leagues general counsel Scott Houston, the pricetag of the cap in places like downtown Houston was 90% lower than what the city had negotiated with telecommunication providers.

Across the state, that loss of revenue will add up.

"As they began the rollout of 5G and more and more of these nodes were gonna be put up... It was eventually going to cost city taxpayers over $800 million a year in lost rights-of-way rental revenue,” he said.

The state lawsuit is ongoing and had to be refilled after the last session. It’s since been overshadowed by another challenger, the Federal Communications Commission.

The FCC, using bills like the one in Texas as a template, changed the rules in 2018 around 5G to reflect the same types of fee limitations, mandatory timelines for review and limitations for review, saving large telecoms around $2 billion.

The feds estimated that speeding deployment of 5G by even a year would “unleash an additional $100 billion to the U.S. economy.”

Earlier that same year, the FCC tried to exempt 5G facilities from environmental assessments and historic design review. The order was struck down by the courts.

Cities across the country are now suing the feds despite wanting the technology.

“Requiring a city to give away their property at 10% of what it might be worth on the open market doesn’t make sense to us,” said Houston.

According to cities that are part of the lawsuit, the amount is so low some aren’t able to recoup the amount of money it costs to process the applications.

“They end up shifting the expenses of deploying a new wireless network, or an expansion of an existing wireless network…from shareholders of the individual companies to taxpayers,” said Gerry Lederer who is representing cities in the lawsuit.

Rather than spurring innovation, he argued the pricetag cap builds barriers for new companies wanting to compete down the road because established telecoms are using the low pricetag to take over the best and densest parts of downtown.

"It's a land grab,” said Lederer, “I mean, it's people trying to go out and grab as much property as you can at the lowest possible prices. And again, if it's a subsidized price, you'll grab more than you need, right?"

The FCC declined to comment on the pending litigation, but when it passed the rules limiting fees and other costs it said the changes were necessary and were even requested by local and state government officials.

“We have heard from a number of local officials that the excessive fees or other costs associated with deploying small scale wireless infrastructure in large or otherwise ‘must serve’ cities are materially inhibiting the buildout of wireless services in their own communities,” said the FCC.

The federal case goes to the 9th circuit court of appeals Feb. 10.

Paul Flahive can be reached at Paul@tpr.org and on Twitter at @paulflahive.