The fight over how much Texas cities can charge telecom and cable companies to use public streets and sidewalks is headed to the state's top court, and local leaders say the stakes are sky high for city budgets. The Texas Supreme Court has agreed to hear a sweeping challenge from dozens of municipalities that argue two state laws, adopted as the industry rolled out 5G, sharply undercut what providers pay for access to public rights-of-way and effectively hand over public assets at a discount.
Supreme Court Sets March Showdown
According to KERA News, the Texas Supreme Court granted review and scheduled oral arguments for March 5. The case is being pushed by a coalition of 59 cities, including Dallas, Austin, San Antonio, Houston and El Paso, which argue the statutes violate the Texas Constitution's prohibitions on gifting public property to private entities.
The Laws At Issue
One key law is Senate Bill 1004, passed in 2017 and now codified in Chapter 284 of state law. It restricts what cities may charge for the placement of small wireless “network nodes” in public rights-of-way and caps the annual fee per node at $250. Local guidance on those changes is laid out by the City of San Antonio.
The second measure, a 2019 statute known as Senate Bill 1152, amended Chapters 283 and 66 so that a company offering both cable and telecommunications services in the same area pays only the higher of the two required fees instead of paying both. The bill text and structure are detailed on the Texas Legislature website.
How The Dispute Developed
Both laws were passed during a broader state push to streamline 5G deployment, just as providers were stepping up small-cell installations along city streets. As those installations spread, cities objected to the reduced payments and potential land-use impacts, and what began as a smaller set of lawsuits ultimately grew into the current coalition of local governments challenging the financial and property implications of the statutes, a trajectory described by GovTech.
What The Cities Say
Municipal officials contend the $250 cap for small-cell nodes and the pay-one-fee structure for companies offering both cable and telecom services leave cities with far less than market value for the use of public land. The Texas Municipal League reports that many local ordinances previously set charges at roughly $1,000 to $2,000 per site and that the 2019 law alone eliminated more than $100 million per year in right-of-way revenue across the state.
Where The Courts Stand
On appeal, the Austin-based Third Court of Appeals concluded that SB 1152 presents constitutional concerns and sent the dispute over SB 1004 back to the trial court. The lower court was directed to determine whether the $250 fee cap provides adequate consideration when compared with market value for the use of public property. In its opinion, the appellate court outlined the legal standards and factual record behind its decision, including evidence on historical market rates and past payments.
What Happens Next
With the Texas Supreme Court now preparing to hear arguments, the justices have several options. They could affirm the appeals court, reverse it outright, or return specific issues for more factfinding in the trial court. If the cities prevail, they could gain leverage to seek higher fees and potentially open the door to larger judgments or adjustments in how rights-of-way are priced. If the state wins, the existing statutory caps would remain in force and local fee revenue would stay constrained under the current framework.
Legal Stakes
The core legal question turns on the state constitution's anti-gifting provisions and whether a statutory fee as low as $250 can count as “sufficient” consideration for private companies to use public property. Lawyers on both sides characterize the fight as a basic dispute over property value and municipal finance that carries policy consequences for communities across Texas.
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