A fight is brewing over how much companies should pay to use public property in Baton Rouge to deploy the next generation of wireless technology.
Telecommunication companies are seeking to place "small cell stations" — shoe box-sized transmitters — on public property around the parish. The stations would provide short-range, targeted signals to wireless devices such as cellphones, computers and televisions in densely packed areas where demand is higher.
The Metro Council is set to vote Wednesday on rates for telecommunication companies that want to build small cell sites in public rights of way.
Councilmen Buddy Amoroso and LaMont Cole have proposed the city-parish assess up to a $1,000 application fee and $250 annual rate for each device in the public right of way, plus an extra $20 to connect to a city-parish utility pole.
That rate is far too low, contended Councilman Matt Watson. He pointed to cities across the country that are able to command thousands of dollars each year for each transmitter they allow on a public right of way. That's money Baton Rouge could use but is leaving on the table, he said.
"We just had a bond initiative (the Better Transportation and Roads proposal) that required serious dollars to repair our roadways that taxpayers did not want to fund. They demanded that I look elsewhere to take care of the infrastructure that our citizens deserve," Watson said.
Cole argued that companies may be reluctant to invest if the city-parish charges too much. The Baton Rouge market "wouldn't lend itself to charging large amounts of money," he said.
Baton Rouge is behind in technological infrastructure and needs the equipment to keep pace with the growing demands for connectivity, such as 5G — fifth-generation mobile networks — Cole added. Companies also have remarked on the proliferation of an ever-expanding array of wireless connected devices in homes around the country.
There simply isn't enough space to build full cell towers in highly populated areas of Baton Rouge, said Eric Romero, city-parish information services director.
Now, companies like AT&T are looking to augment their service by installing the smaller but more limited equipment to boost the signal in areas that have inadequate coverage. That could necessitate the eventual installation of hundreds of devices, Romero said.
But Watson thinks the proposed rates aren't giving residents the best return on their publicly owned property. He wondered how much money would be left over once the city-parish accounts for permitting and information technology staff hours spent administering the new equipment.
"We shouldn't be giving away the farm," Watson said.
However, as municipalities grapple with new technology, no standard rate has arisen. Watson said cities like San Diego, Kansas City and Boston all charge between $2,500 and $4,000 annually for telecommunication companies to operate each small cell tower.
Amoroso said Baton Rouge can't demand as much as a major metropolitan area, but Watson pointed out that even smaller cities can get more than $250. For example, the Phoenix suburb of Glendale, Arizona charges Verizon more than $3,000 per year for each of its small cell sites.
Cole looked closer to home, to cities like Hammond. Authorities there charge $200 annually to put equipment in the public right of way. It's even cheaper in Gonzales, where the yearly rate is just $150, AT&T Louisiana director of external affairs David Aubrey wrote in a Tuesday statement to The Advocate.
The Baton Rouge councilmen modeled their proposal and $250 rate on legislation passed in the Texas legislature earlier this year, Amoroso said.
"I felt that that number was fair," he said.
Aubrey said Hammond, Gonzalez and Texas "have implemented policies that welcome the significant investments that are anticipated from small cell deployment, and it is vital that leaders in East Baton Rouge act quickly to open the door to these same opportunities."
The Texas law on small cell stations provoked considerable controversy.
Dallas had been charging telecom companies $1,000 per year per unit and had been mulling an increase to $2,500 when the state legislature cut the maximum lease to a tenth of that amount.
The city estimated that the Texas legislation cost local governments $800 million in annual revenue, according to the Dallas Morning News.
Louisiana doesn't regulate utilities the same way that Texas does, said Public Service Commission spokesman Colby Cook, so different rules apply here.
Barring a change to the state constitution, he said, localities are free to make their own rules so long as they don't discriminate between providers. The Federal Communications Commission is also generally deferential, so long as equipment doesn't damage historical sites or harm wildlife like birds.
Cole said he was approached by AT&T representatives who wanted Baton Rouge to lay out a policy but didn't talk to him about what an appropriate rate would be. Rather, they emphasized the demand for more technological investment.
"I said, 'Yeah, this is something we need to do,'" Cole recalled.
AT&T declined to speculate on how many small cell units it might place in East Baton Rouge Parish once an ordinance is enacted. Verizon representatives declined to comment for this story, saying they had not been involved in the drafting of the ordinance.
Cox issued a statement saying it was not involved in the draft of the proposed East Baton Rouge ordinance.
"It is our understanding that providers were allowed an opportunity to review the ordinance, but Cox was not asked about rates to charge companies," the statement reads. "Our request has been that any ordinance apply fairly and equitably to all providers and companies doing business in the rights of way."
Cox added that the company does not comment on proprietary information such as the number of potential sites that we may install going forward.
Editor's note: This article was changed on Wednesday, Sept. 27, 2017, to include a statement that Cox Conmmunications issued on Tuesday on the small cell unit issue.