Money lost on pole rentals is your problem, senators tell California cities

by Steve Blum • , , ,

Cities and counties will have to figure out how for themselves how to make up any losses they suffer if senate bill 649 becomes law. That’s the conclusion of a state senate appropriations committee analysis, ahead of a hearing on the measure last week. SB 649 would effectively give mobile carriers open access to city-owned property, such as light poles, at pre-determined, cut rate prices. As it currently reads, instead of charging wireless companies up to $4,000 or more a month in rent, cities could only charge rates set by legislature

Cities and counties currently negotiate lease rates for small cell attachments on publicly owned vertical infrastructure that is market based, and many local governments may use excess lease revenues to pay for other public services or to subsidize the extension of wireless service in underserved areas. This bill limits the fees that a city or county may charge for the installation of a small cell telecommunications facility on publicly owned vertical infrastructure to a range of $100 to $850 per small cell per year. Since these rates are much lower than what some current agreements provide, many local governments will lose significant discretionary revenues. Staff notes that loss of local revenues does not, on its own, constitute a reimbursable mandate.

If potentially chopping thousands of dollars per pole per year in revenue were a reimbursable mandate, then the California legislature would be required to make up the difference for cities and counties. But eliminating revenue isn’t the same as forcing cities to spend money on something, so tough luck.

In the end, the committee put SB 649 into the “suspense file”, where it will sit along with hundreds of other bills until the state budget has been passed, probably sometime in early June. Then, legislative leaders will decide which of those bills will move forward to a full floor vote. The remainder will be dead, by the rules of the senate.