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AT&T boosts McAllen investment; City party to looming senate bill lawsuit over telecom fees

September 9, 2018

McALLEN — A year after the city decided to sue the state over a senate bill that wouldn’t allow them to collect money from telecommunications companies, AT&T announced it has invested more than $45 million in McAllen.

In 2017, AT&T made 36 wireless upgrades in the McAllen area that included boosting network capacity. The multinational telecommunications giant has also recently expanded its mobile technologies in the city.

“High-speed internet connections are pushing changes and innovation, driving opportunities and economic growth,” said J.D. Salinas, AT&T regional vice president and the former Hidalgo County judge. “AT&T is investing in our local network here to expand and enhance coverage and connectivity to ensure McAllen businesses and consumers are ready to leverage the promise and power of the next evolution in wireless communications. The more a city is willing to work with us the quicker we can bring innovation to their community.”

The city has worked regularly with telecommunication companies such as AT&T, but the senate bill has complicated that, Mayor Jim Darling said.

“I’m concerned about making it fair for the city and making sure we served underserved areas with 5G, smart city technology, all that kind of stuff,” Darling said in an interview.

Senate Bill 1004, passed in the 2017 state legislative session and implemented on Sept. 1, 2017, says cities cannot charge telecommunications companies from putting transmitters in public right-of-way. In July 2017, city commissioners authorized the city attorney to sue the state over SB1004.

Filed in August 2017 in Travis County District Court in Austin, the lawsuit argued that SB 1004 grants private wireless providers “the use of public right of way for a gratuitously small fraction of the market rate.”

More than 20 cities joined the lawsuit, including Dallas, Sugar Land, Brownsville, Boerne, Mission, Pharr, Rockport, South Padre Island and Weslaco. The litigation is currently in the discovery stage.

“The bill significantly restricts municipalities from regulating the construction, development and maintenance of network structures and wireless facilities (or nodes) in the public right-of-way, and prohibits municipalities from entering into franchise agreements with these companies for the use of public right-of-way (ROW), creating statutory caps on fees for installing these nodes within the ROW,” the city stated at the time of last year’s vote.

Darling has been disgruntled with the state legislature and its priorities in recent years. He called last summer’s special session an “assault on cities.” SB 1004 fell under that.

“SB 1004 has pre-empted cities from negotiating reasonable compensation as adequate compensation for the use of public property,” Darling said in a statement last year. “According to the Texas Municipal League, the potential loss of right-of-way fees to municipalities is estimated to be $813 million.”

City Manager Roel “Roy” Rodriguez used a similar tone as Darling last year against state leadership.

“The state is trying to control revenues,” Rodriguez said. “They’re taking away cities’ power to govern.”

Darling said Salinas contacted him about a compromise regarding the senate bill and the company’s recent foray into McAllen. Nonetheless, Darling said he’s cautiously excited about AT&T’s expansion in the area. State Sen. Juan “Chuy” Hinojosa, D-McAllen, who was present but did not vote on SB 1004, is, too.

“The city of McAllen is looking forward to a vibrant, connected future and to being part of the next wave of wireless innovation,” Hinojosa said in a statement.

Darling welcomed AT&T’s $45 million investment over the last three years. But said the service should cover the entire city.

“You can’t have half a city of 5G and half a city of no G,” he said.

mferman@themonitor.com

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