AUSTIN (KXAN) – The City of Austin sued the State of Texas in Federal Court over its massive new telecommunications law, SB 1004, which takes effect Sept. 1. This year, lawmakers decided to take away much of city’s power to regulate the installation of cell service and wireless internet, and the City of Austin wants to go to court.

In order to bring faster and better quality internet to cell phones — including preparing for the capability to 5G internet — state lawmakers made it easier for major telecommunications companies to put up small cell towers on public right of way. The new law would allow telecom companies to use streetlights, street signs and utility poles with less oversight from cities in Texas.

The new law would undercut prior agreements the City of Austin had with several companies — including AT&T, which supported the bill. The agreements charged the companies $1,500 per small cell “node” per year. The bill would cap that charge at $250 to $270 per year per node.

The Texas Municipal League estimated cities would lose out on more than $700 million a year.

In a lawsuit filed in the U.S. Western District Court, the City of Austin claims the State violated the Federal Telecommunications Act and the Supremacy Clause of the U.S. Constitution by forcing the city to take “unreasonable low rates” by capping the fees and “frustrating the City’s ability to safety and efficiently manage public rights-of-way.”

Andy Tate, Senior Public Information Specialist wrote to KXAN saying, “the State is effectively forcing the City of Austin to subsidize the private cellular industry by several million dollars a year. At the same time the State is interfering with our ability to govern the use of antennae and equipment on public land.”

The city claims part of the new law also grants telecom companies access to private property, even if the property owner has not given consent. Right now the city comes to an agreement with a landowner while putting a utility pole on their land. This bill would allow a telecom company to put small cell towers on the utility pole without a benefit to the landowner.

In March 2017, Austin began a pilot program to get better cell service and internet downtown by allowing cell providers to put up small cell nodes on the right of way. City leaders plan to take the program city-wide.

SB 1004 also caps the application fee for a new node at $100. In the lawsuit, the city lawyers claim the application process to license, conduct field assessments, monitor and inspect the small cell installation costs the city $1,234. The law also bans any “moratorium” on issuing permits so Austin worries the public right of way will be bombarded and overloaded with small cell nodes that would look terrible and disrupt the city’s “aesthetics.”

The city of Brownsville has also sued the State over SB 1004.

The State’s lawyer, Attorney General Ken Paxton, did not have a comment on the lawsuit at this time.

Industry leaders came to the capitol in early 2017 to explain to lawmakers why this bill is needed for the future of wireless service.

“It’s to give our customers an effortless, wireless customer experience,” Ryan Tidwell from AT&T’s engineering department told lawmakers in a spring committee hearing, “Things like 4K video, the internet of things, connected cars, smart cities. They all start with 5G.”

Nearly every lawmaker agreed. SB 1004 passed the Texas House 140 to 6. It passed the Texas Senate 29 to 0. Governor Abbott signed it into law in June.

The House sponsor, Rep. Charlie Geren, R-Fort Worth, tells KXAN he never comments on pending litigation. Staff for the Senate author, Sen. Kelly Hancock, R-North Richland Hills, told KXAN he could not be reached for comment.