Austin has big plans for the future. It's a well connected city -- in broadband terms -- with multiple gigabit providers, and it has several smart city initiatives underway designed to improve transportation and the availability of affordable housing throughout the metropolitan region. Austin was one of seven finalists in the Department of Transportation's Smart City Challenge last year, and it won a smaller Smart Cities Council grant in February to help it refine some of the ideas generated during the DOT challenge process.

The city is also applying to become a test-bed location under the new Platforms for Advanced Wireless Research (PAWR) project funded by the National Science Foundation (NSF) . Administrators of the PAWR (pronounced "power") program are currently evaluating applications from communities and academic institutions with a goal of selecting four host sites to begin testing new wireless networking technologies starting in late 2019 or early 2020. Austin is hoping to be one of the winners. (See $100M at Stake in US Wireless RFP.)

All told, Austin has given its connected future a lot of thought. However, there is one area of telecommunications development where the city is now bumping up against the limits of its legislative control -- small cell deployments and telecom pole attachments.

Figure 1:

The phrase pole attachments is such an innocuous one, but it sits at the center of a huge endeavor to accelerate the deployment of next-generation 5G wireless networks. Network operators desperately want to streamline the process for installing equipment needed to develop and sell new 5G services, but local communities are struggling with how to make deals with operators that work for their own citizens. Because every municipality handles pole attachments differently, operators have pushed for statewide regulations that create consistency. Yet those state laws often don't take into account what individual cities need.

Which brings us back to Austin.

Austin versus the state of Texas
Among Austin's many efforts to improve its telecommunications infrastructure, the city began a pilot project earlier this year to facilitate small cell deployments in one area of the city -- a way of preparing for future 5G network development. Officials adopted a new application process for getting small cell permits approved and created a new fee schedule for rental rates to be charged by the city for operator access to utility poles and other right-of-way structures. The city wanted to make it easier for network providers to deploy small cells, but also to make sure it wasn't subsidizing network buildouts without getting fair service for its citizens in return.

Figure 2: Austin Mayer Steve Adler spoke at the Smart Cities Connect conference in June

The effort to streamline small cell permitting was going well, according to the city's Telecommunications & Regulatory Affairs Officer Rondella Hawkins. But in the middle of the process, the Texas state legislature stepped in and overrode Austin's jurisdiction.

On June 9, Texas passed a new law requiring municipalities within the state to abide by one set of rules when granting permits for operators seeking to deploy new equipment within public right-of-way areas. Among the requirements, cities cannot charge an annual rate of more than $250 for pole access, and they must approve or deny an operator's permit application within 60 days.

For Austin, the statewide law is devastating.

Not only does the city lose its negotiating leverage with telecom providers, but it also now has to commit more resources to the permitting process to meet deadlines imposed by the state.

"We were certainly envisioning ... [being able to] explore partnerships with some providers for helping us to expand our public WiFi throughout the city at the same time they have their commercial mobile radio service deployment," says Hawkins. "And [we're] not sure how that's going to look now. There's not really an incentive for the carriers to do so since they're interested in their commercial service and certainly not public WiFi."

She adds, "We went through this whole process strongly engaging with the carriers. And now these state-imposed fees are much, much, much less ... We're going to have to end up hiring staff to meet the permitting timelines, but then our fees are reduced. So we don't know what that looks like."

Next page: State preemption laws are spreading

State preemption laws are spreading
Texas isn't the only state preempting the local authority of its cities around telecom pole attachment rules.

In fact, the bill signed by Texas is part of a much larger trend. In December, for example, Ohio passed a law capping attachment fees at $200 per year and requiring cities to approve or deny applications within 90 days. And Florida is considering a bill that would cap annual fees at $150 and impose a 60-day time frame for application review.

Unsurprisingly, network operators are in favor of these new state laws. They argue, with justification, that existing permitting practices are cumbersome in many areas of the country and likely to delay 5G network deployments. Some municipalities make unreasonable demands on operators, and some take an unreasonably long time approving permit applications. Consistency is also a major issue, as service providers have no way to know what to expect when moving from one locality to the next. (See Broadband Has a Problem on the Pole.)

However, some operator complaints ring hollow as large incumbent service providers are equally likely to use pole attachment barriers to their advantage when trying to prevent new competition from entering a market. Case in point: AT&T Inc. (NYSE: T) and Charter Communications Inc. filed suit against the local government in Louisville, Ky., for trying to make it easier for new providers to gain access to utility poles already in use. And AT&T and Comcast Corp. (Nasdaq: CMCSA, CMCSK) filed a similar suit in Nashville, Tenn. (See Charter M&A Mishap May Mean $13M Fee.)

For more broadband market coverage and insights, check out our dedicated gigabit/broadband content channel here on Light Reading.

As the battle for pole access continues to grow, the question becomes whether there's room for compromise. The city of Austin believes that an annual rental fee of $250 for small cell pole attachments is too low, and that it doesn't have the resources to meet newly imposed state deadlines for permitting approvals. If that's true, then what conditions might be more reasonable?

Smart city software specialist SmartWorks Partners has been studying pole attachment rates across the country, and it has some guidelines to consider. The company recently reviewed a random sample of pole attachment rental rates and found that the average fee listed by municipalities for a site suitable for a small cell installation ranges between $1,600 and $2,000 annually. That's well above the caps that states like Texas, Ohio and Virginia are legislating, but it's also well below what some more aggressive cities are charging. According to CNX, for example, the city of Duluth, Minn., charges $6,000 annually.

As CNX explains in a white paper, which it shared with Light Reading, there's a danger in both undercharging and overcharging for pole attachment access. "At worse," the company says in the paper, "cities will either inadvertently subsidize private network expansion by under charging for processes and rent (e.g. $50 annual rent), or cities will hamper the expansion of networks by over charging for the same (e.g. $6,000 annual rent)."

What's the right price point? CNX says, "It is not close to $50; nor is it close to $6,000."

Enter the federal government
To complicate matters further, the federal government has now entered the debate over small cells by way of the Federal Communications Commission (FCC) . The FCC is considering actions to accelerate broadband deployment across the country and has formed a Broadband Deployment Advisory Committee (BDAC), which is scheduled to hold its second public meeting today. One thing the agency wants to determine is how to remove "state and local regulatory barriers" to speed up broadband expansion, and that suggests it's willing to consider overriding both state and local authority if necessary. (See FCC Names BDAC Members, Sets 1st Meeting.)

FCC Chairman Ajit Pai put it more plainly in a speech he delivered when he was still just a commissioner last November. "Where states or localities are imposing fees that are not 'fair and reasonable' for access to local rights of way, the FCC should preempt them."

In other words, while states are preempting cities today, the federal government may soon go above both their heads in the name of speeding up the rollout of future broadband networks.

Finding a solution
This pole attachment debate is not one that's going to be resolved quickly. Or rather, rules for pole attachments may be dictated by the government, but it will be far more difficult and time-consuming to implement those rules if local jurisdictions and network operators don't find ways to work together. Without the necessary money or human resources to support an upswing in pole attachment requests, city governments may not be able to comply with new mandates. And while municipalities, state governments and network operators are all in favor of greater network connectivity, they'll end up working at cross purposes if they don't consider each other's needs.

Such is the case in Austin.

The implications of pole attachment decisions are also wide-ranging. This isn't just about determining governmental jurisdiction, or about making it easier for operators to offer new services. This is about figuring out how to build and sustain smart, connected communities.

That's a goal everyone can support, if only they can agree on a common roadmap.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading