5G wireless data could spur the growth of new wireless devices and applications. (Daniel Acker/Bloomberg News)

Mobile carriers such as AT&T and Verizon are in a race to build brand-new data networks that can deliver ultrafast downloads and support a fresh generation of smart, Internet-connected devices.

But a battle is brewing over how much the companies should pay for access to public utility poles and other rights of way, as federal regulators get ready to vote on the issue this week.

The proposal by the Federal Communications Commission would establish new limits on the use fees that cities and towns can charge wireless carriers as the companies set up their new 5G data networks. And it would require local officials to make decisions more quickly on carriers' permit applications.

As the successor to 4G LTE, 5G is expected to offer download speeds that rival or even exceed what many consumers receive on their home Internet connections. And, its proponents say, it could help open the door to other technologies that today’s data networks can’t support, such as self-driving cars.

Installing the necessary equipment on public poles requires getting clearance from cities and towns. And unlike traditional wireless cells, 5G cells will have a smaller footprint, meaning that many more of them — perhaps hundreds of thousands — will need to be installed in the coming years.

High local fees could add costs and slow the spread of those next-gen networks, according to FCC Chairman Ajit Pai.

“By updating our rules to make it easier to install wireless infrastructure, the Commission is taking another critical step to promote U.S. leadership in 5G wireless services,” Pai wrote in a blog post this month. The FCC proposal would prevent cities and towns from charging more than $270 a year per cell site.

Carriers pay, on average, upward of $500 per pole every year, according to an agency study.

A number of cities and towns, particularly in rural areas, have said they support the proposal because reducing the carriers' costs in big cities could mean more money for building advanced networks in smaller ones. On Monday, Republican FCC Commissioner Brendan Carr released statements from more than a dozen state and local leaders endorsing the proposal.

“I believe that by reducing the high regulatory costs in the urban areas would leave more dollars to development in the rural areas,” Duane Ankney, a Republican state senator for Montana, said in the statement. The proposal is also backed by CTIA, a top wireless trade association said Monday in a statement that the new policies “will enable the wireless industry to build 5G to more communities faster.”

But the proposed requirements for local officials are drawing opposition from critics who say the FCC is hindering the autonomy of cities and towns and preventing them from performing basic oversight tasks. Restricting the fees could also undercut other local programs, they say.

“We are concerned that the proposed language would significantly impede local government’s ability to serve as trustees of public property, safety, and welfare,” wrote J. Brent Fedors, county administrator for Gloucester County, Va., in a letter last week to the FCC. Fedors said the proposal, if approved, would be “severely hindering local governments' ability to fulfill our public health and safety responsibilities during the construction and modification” of the cell sites.

Some cities have struck separate private agreements with wireless carriers to build out 5G cell sites. For example, officials from San Jose in June signed on to a $500 million deal with AT&T, Verizon and the privately held infrastructure company Mobilitie to build a mobile network. The investment includes $24 million in corporate contributions to the city’s “digital inclusion fund,” which aims to close the gap between Internet haves and have-nots.

The FCC proposal could have the unintended effect of slowing down 5G deployment by disrupting those types of existing deals, which were negotiated in a free-market environment free from federal intervention, San Jose officials wrote to the agency last week.

“By limiting the amount of fees, the FCC is unfairly shifting the financial burden to cities,” wrote Sam Liccardo, San Jose’s mayor. “Cities will be forced to absorb the true cost of reviewing the small cell installations by taking funds away from essential services and programs to cover the costs to perform small cell deployment reviews.”

The FCC is expected to vote on the proposal Wednesday.