Internet giants oppose Pharr’s new law on fiber infrastructure

Internet provider giants are pushing back against the city of Pharr’s proposed ordinance change, which would expand the municipal broadband network and penalize developers who don’t install fiber-optic cable in new residential and commercial buildings. 

The city of Pharr is poised to amend its existing ordinance on citywide fiber infrastructure to include residential and commercial buildings and to levy a $500-a-day fine on developers who violate the law. Pharr would also withhold final certificates of occupancy until fiber infrastructure is installed. A third and final reading, followed by a vote, is scheduled for April 20.

Representatives of both AT&T and Charter Communications, which operates Spectrum Internet, spoke out against the proposed rule change at the first two public hearings, saying that the city’s new ordinance would be at odds with state law, which prohibits municipal telecom companies and threatens a competitive market. 

The telecom giants already pay franchise fees to access the public right-of-way, which is meant to provide neutral access to infrastructure. They also argue that the ordinance violates federal free speech and equal protection laws. 

Municipalities argue that fiber internet is a data service, not telecommunications, a distinction that is considered a narrow loophole in Texas after a local district court ruled in favor of Mont Belvieu, a small town outside of Houston. 

“This brings up a lot of legal concerns. The city is statutorily required to provide open, comparable, non-discriminatory, and competitively neutral access to the public right-of-way. Mandating that private developers and builders install this fiber exclusively dedicated to the city’s own competing broadband provider is not a neutral exercise,” Manuel “Ned” Muñoz, vice president at Charter Communications, said during a recent public hearing. “This raises serious questions of self-dealing, regulatory overreach, and potentially an unconstitutional taking of private property.” 

Spectrum, which employs about 900 workers in Pharr and is the city’s largest private-sector employer, sent a letter to city officials about the ordinance on April 14. 

“This amendment is not good for the City of Pharr. It exists only to give Pharr Connect an

illegal competitive advantage over private providers,” wrote Amanda Cottrell, attorney for Sheppard, Mullin, Richter & Hampton LLP. “The council members who vote to adopt this amendment do so in their individual capacities and face personal liability for approving an ordinance that exceeds the city’s lawful authority.” 

In 2023, Pharr passed an ordinance that required some fiber infrastructure for new construction, but it did not include exclusivity or penalties. The newest ordinance would impact nearly all new construction in the city. 

Charter’s attorney argues in the recent letter that the initial ordinance also goes against state law. 

“Pharr Connect serves the same residential and business customers over fiber installed in the same public rights-of-way as private companies who hold [State-Issued Certificate of Franchise Authority]. The city is therefore obligated under [Public Utility Regulatory Act] and federal law to treat Pharr Connect the same as it treats other internet service providers, including Spectrum,” Cottrell continued. 

On Monday, Charter issued a strongly worded statement against the ordinance in Pharr. 

“Pharr families and businesses deserve real competition and choice in internet providers, but the proposed ordinance amendment would do the opposite by forcing private companies to pay for infrastructure that would prop up and benefit only the City’s inferior broadband network, contrary to Texas law and at the expense of residents and local businesses,” the statement said. “To fund its network, the city of Pharr has already taken resources away from core priorities like public safety, education, road infrastructure, and open spaces, and now risks saddling taxpayers — including the almost 200 Spectrum employees who call Pharr home — with even higher costs and fewer opportunities. Texas law is crystal clear: cities cannot tilt the playing field to favor their own services or restrict consumer choice, and this ill-advised, unlawful ordinance does both.”

What the ordinance would require

The ordinance language says it would require all new subdivisions, multi-family developments, and any residential or commercial buildings with concrete foundations to install conduit and fiber-optic cable that would then be dedicated “exclusively” to the city’s network — and to complete that installation during the construction phase.

Charter argues that fiber installed in such a way would require it to be encased in concrete, meaning a competitor would have to break that concrete to install its own infrastructure. 

“Our concern with this ordinance and the proposed amendment is that it goes beyond reasonable construction standards, effectively steering new developments towards the city’s network,” Mario Barragan, external and legislative affairs leader with AT&T, said during a public hearing. 

AT&T submitted an additional statement to the Rio Grande Valley Business Journal. The company claims that its infrastructure investment “has been constrained by the city of Pharr’s actions and policies that make it harder for private providers to invest and compete.” 

AT&T asserts that the new ordinance conflicts with both state and federal law. 

“It goes far beyond a typical construction standard by requiring conduit, fiber, and dedicated equipment for the City’s municipal network as a condition of occupancy. In effect, it uses the City’s authority to advantage its own broadband system, shifts costs to developers and ultimately families, and makes it harder for private providers to compete,” the statement continued. “We remain ready to work with the City on a lawful, balanced approach that promotes investment, preserves competition, and expands connectivity for Pharr residents and businesses.”

What internet service looks like in Pharr

AT&T added that it has entered into public-private partnerships with cities across Texas to expand fiber connectivity. In El Paso, AT&T expanded fiber to 57 colonias in a $3.9 million deal with the county. 

AT&T Fiber did not appear to be available in Pharr. Instead, the company offers AT&T Internet Air, a 5G-powered mobile network. The potential speeds for such a service would range from 90 to 300 megabits per second, according to AT&T’s website. The introductory cost of AT&T and Spectrum services for various Pharr addresses ranges from $50 to $60 per month, according to their websites. 

Spectrum offers internet tiers with speeds of 100 megabits per second, 500 megabits per second, and 1 gigabit per second in the city of Pharr, touting fiber-powered internet. But the fiber-to-the-home isn’t provided; it’s a hybrid fiber-coaxial cable instead. 

Pharr Connect, the city’s municipal broadband network, is nearly 400 miles long with 24,000 residential and business connections. Pharr Connect plans for active K-12 school students and low-income households are free, and residential plans range from $25 to $50 per month for 1,000 gigabits per second of fiber-to-the-home internet speed. For 2,000-gigabit residential plans, the cost is $80 per month. Pharr Connect small-business internet costs between $70 and $200 per month for speeds ranging from 300 megabits per second to 2 gigabits per second. 

Why the city built its own network

City leaders, such as Mayor Dr. Ambrosio Hernandez, said he’s not against a public-private partnership but was previously informed that the internet providers were not interested in expanding their infrastructure — especially into South Pharr — because it would not be a profitable decision. 

Instead, the city of Pharr issued $40 million in low-interest bonds, in addition to $18 million from COVID-19-era federal grants under the American Rescue Plan Act, to fund the fiber internet effort, which began on the city’s south side and has expanded to the central and northern neighborhoods. The internet service profits would help repay those bonds. As of 2025, Pharr Connect serves more than 50% of identified residential accounts within city limits, according to the city’s annual financial audit. 

As of September 2025, the city of Pharr generated $5.5 million in revenue from its Pharr Connect program and incurred $5.4 million in operating expenses, resulting in a profit of $82,912. 

“We’ve always been in compliance with federal, state, and municipal law. We’re fine. We’ll continue to do what’s in the best interest of Pharr,” Dr. Hernandez said. “Nobody stops you from putting your infrastructure in. We have no problem working with the private sector, but it must be in the best interest of Pharr.” 

Business support and regional concerns

Some local businesses supported the city’s fiber internet backbone during Mponday’s meeting. 

Joaquin Spamer, CEO of CIL Group, testified that he supports the city’s internet infrastructure. 

“Thank you for taking the initiative of bringing the internet for everybody here. The way we look at it is that the future and prosperity for any young people is going to depend on his or her ability to connect to the internet,” Spamer said. 

Mentor Cantu, chief safety officer for M.A.S. Logistics, short for maquila automotive services, said that the city’s fiber network has been more reliable for the company, which operates three warehouses in South Pharr. 

“We were among the first in the area to put our trust in the city’s network. Before this, we struggled quite a bit with other companies during inclement weather. The central connection would fail, leaving us without service,” Cantu said. “However, since we’ve been with you, we’ve only had one single incident, and the response was immediate.”

The internet contract for M.A.S Logistics’ second location recently expired, and it has switched to the city’s service, he said. The company has more than 400 employees in the city, Cantu said. 

Gerardo Higareda, the chief financial officer of Aldape Development, which is developing a 20,000-square-foot retail plaza on South Cage Boulevard, and has developed three other multi-family and townhome subdivisions in the city, supported the city’s internet service. 

“It just gave us confidence to keep investing in this area,” Higareda said. “We really like that Pharr is looking forward with this type of infrastructure because we do believe that the future is going to push the residents and tenants here to do better.” 

But there’s also pushback from some business associations in the Valley — the Rio Grande Valley Partnership and the Rio Grande Valley Hispanic Chamber of Commerce — which sent letters to Pharr city leaders.

“Competition is a key driver of innovation, service quality, and reasonable pricing. The proposed amendment, as drafted, risks limiting that competition,” said Paco Sanchez, CEO of the Rio Grande Valley Partnership. “The revised development requirements could introduce higher project costs and construction delays, creating added burdens for developers, businesses, and prospective investors. These impacts may discourage investment and slow economic growth within the city.” 

A similar sentiment was echoed by the Rio Grande Valley Hispanic Chamber, asking for the city and internet providers to continue open dialogue and amend the ordinance before passage. 

“We appreciate the intent behind strengthening broadband access; however, we would like to share thoughtful concerns regarding the potential impact of the proposed ordinance as currently presented,” CEO Cynthia M. Sakulenzki said. “From a business perspective, maintaining a competitive environment with multiple service providers is essential. Choice not only supports innovation and service quality but also helps ensure pricing remains fair and accessible for businesses of all sizes. We’re concerned that, over time, reduced flexibility or limited provider options could unintentionally hurt business growth, investment, and long-term economic vitality.”