Cities argue 5G internet rollout laws violate property rights

Cities across the United States are warning of what they say is an illegal assault on the public's right of way, facilitated by state and federal authorities on behalf of major telecommunications companies.

At issue is the rollout of new infrastructure for the next generation of ultrafast wireless internet.

To operate this fifth-generation (5G) network, companies are developing fleets of antennas that need to be densely arranged and near the ground – around one per city block, often on light poles or traffic signs.

Some of the largest companies in the industry see 5G as integral to their future competitiveness, not only in the US but also in Europe, India, Japan, and many other countries.

But as this process has gotten underway, some say local rights in the US are being trampled.

US state legislators have passed laws stripping local authorities of their ability to decide where the antennas are placed and how much cities can charge companies for the use of public property, legal maneuvers known as "preemption."

"This is absolutely a property rights issue: The public owns that right of way," Debra Socia, executive director of Next Century Cities, an advocacy group, told the Thomson Reuters Foundation. "This is really a gift to big companies."

If cities are forced to accept far lower fees than what many say is fair, Ms. Socia said, they will "end up subsidizing big companies."

Sixteen states enacted 5G-related legislation last year limiting local authorities, according to a tally from Next Century Cities, although two of those measures have been held up by lawsuits and one was vetoed. 

Similar bills are pending in 14 more states.

Rights of way

In the midwestern state of Nebraska, cities say they have seen the discussion on pricing change over the past year despite standing agreements.

The state capital, Lincoln, reached an understanding in 2015 with three companies to rent their light poles for 5G antennas for $2,000 a year – a figure that a city official, David P. Young, said was the result of significant research.

Then last year, telecommunications lobbyists came back to the city with a new figure: $20 a pole, which Lincoln was told was "the new national standard," Mr. Young said.

"We have a responsibility to get fair market value for the public asset," Young said. "It costs us $4,000 per location to put a street light up."

Further, the industry is no longer negotiating with the city, Young said, but rather is expecting Nebraska legislators to mandate a statewide price.

Pending legislation would set the fee at $250 per antenna attachment while giving companies access to "all public property and buildings" to put these up anywhere they see fit.

Part of the problem with not being able to direct where a company puts this infrastructure is that local authorities have little leverage to ensure that companies ensure access in poor and rural communities, Young and others said.

Such lack of local leverage has led many such areas to struggle for years for Internet access, said Christopher Mitchell, director of Community Broadband Networks at the Institute for Local Self-Reliance, a think tank.

AT&T, one of the largest telecom companies in the country, plans to roll out mobile 5G service by the end of this year in a dozen cities.

When asked about concerns being voiced by some cities, a company spokeswoman pointed to a recent corporate blog post detailing three cities – Indianapolis, Little Rock, Ark., and Minneapolis – that the company sees as leaders on 5G, and which AT&T says are now attracting increased investment.

The three cases include legislation or agreements for speeded-up approvals and fees starting at $50 per antenna, according to the post.

As to other concerns raised by cities, the spokeswoman referred questions to CTIA, a telecommunications industry group, which did not offer comment despite several requests by the Thomson Reuters Foundation.

Texas lawsuit

In Texas, where cities get very little funding form the state, the pricing concern is even more immediate.

When state legislators last year passed a law barring Texas cities from negotiating 5G fees and weakening local oversight, cities warned it could cost them hundreds of millions of dollars in lost fees.

"Not only do we have no real discretion on where those go, but the state capped them at $250 per node," said Holly G. McPherson, deputy mayor of Roanoke, Texas.

"And previously, [the city] had already negotiated at $1,500 to $2,000 per node. We believe that's unconstitutional, because the state is giving away our right of way."

The Texas constitution prohibits giving away public property for profit, and also prohibits delegating zoning authority to private entities.

These two points are now at the heart of a lawsuit brought by 31 cities in Texas against last year’s law.

"Our position is that the difference between the fair market value that the small-cell [antenna] providers were paying versus the artificial caps that have now been placed – that constitutes an unconstitutional gift," said Kevin Pagan, city attorney of McAllen, Texas, which is leading the suit.

Federal preemption 

Mr. Pagan and Ms. McPherson say the Texas law is now being seen by some as a national model, and last month McPherson was in Washington to bring her concerns to federal officials.

A year-old federal panel called the Broadband Deployment Advisory Committee (BDAC) is seeking to make recommendations on how to speed up the deployment of high-speed Internet, particularly by removing regulation.

The committee has a particular focus on the local level.

Last month, it released a report identifying "excessive fees" as a key barrier to investment and recommended that "preemption … can play an important role," albeit "only after careful consideration."

One of the few local representatives on the committee is Pagan, who says he has been one of just four from local government out of several dozen across multiple working groups.

This perceived imbalance prompted one city representative to resign and others to draft a "minority report" in January warning that committee recommendations "more often than not reflect only industry's interests while turning a blind eye to the position of municipalities."

City views did influence the recent report, Robert DeBroux, who oversaw that study, told the Thomson Reuters Foundation in an email.

L. Elizabeth Bowles, who heads the BDAC, also said "there is no one constituency on the BDAC that has a voice greater than another."

While Ms. Bowles acknowledged cities are concerned about the potential loss of local control, she noted states are already creating laws on fees and more, superseding local authorities.

The BDAC's remit is to make recommendations "that will encourage broadband deployment without removing local control where local control is necessary," she said.

The committee is to discuss the recommendations next month, eventually compiling a full report for action by the regulator, the Federal Communications Commission.

This articles was reported by the Thomson Reuters Foundation.