Small Cell Bill Spurs Concern Over State Revenue Shortfall Due to Price Cap

In order to accelerate the growth of a burgeoning 5G wireless network, states across the nation are passing bills that make it easier for wireless companies to install equipment in public rights-of-way. Oftentimes, these bills include a price cap that limits the monthly amount municipalities may charge carriers to use public property, like the recently passed Texas small cell bill.

Last week, the Texas House passed this bill, which includes a $250 price cap that municipalities can charge wireless providers for using public equipment, reports The Dallas Morning News. This has some legislators and advocacy groups concerned over decreased revenue as a result of this relatively low rent amount.

For example, the City of Dallas currently charges $1,000 annually for wireless providers to rent space on public property. The $250 amount will result in an estimated $60 million loss in revenue for the city’s 10,000 wireless nodes already installed. Statewide, the loss of revenue could be as high as $800 million.  

“It’s an issue of private companies using taxpayer property for their own gain,” Bennet Sandlin, executive director of the Texas Municipal League, told The Dallas Morning News. “This bill is completely off the charts in terms of fairness.”

But AT&T and several state legislatures contend that the bill is necessary for building a modern network capable of meeting the demands of today’s increasingly wireless world.

“Texas doesn’t have a legal framework for small cell wireless providers to gain access to public rights-of-way,” said Sen. Kelly Hancock, who authored the bill. “Senate Bill 1004 provides the framework to build a telecom infrastructure that will help our state maintain its status as a global economic leader.”

AT&T argues that the loss in revenue will be offset by the rapid deployment of 5G small cell nodes in the coming years. Company spokeswoman told the newspaper the bill “will bring tomorrow’s technology to Texas quickly.”

May 19, 2017      

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