City officials earlier this year offered to let NextG place its equipment on five already-installed city poles on East Coast Highway for the $1,500 monthly fee. That equated to between $900,000 and $1 million in revenue over 10 years for the city, company officials said.
Newport Beach is trying to exploit the company's ambitions for profit, the lawsuit claims.
NextG rents out infrastructure in other cities, but for far less, said Patrick Ryan, the company's vice president of government relations and regulatory affairs.
With other cities, NextG pays $500 annually per pole and 5% of that pole's revenue, or about $500 more, Ryan said.
At the July 27 City Council meeting, NextG officials asked for an exemption to install five of its own poles above ground along Coast Highway, where utilities are zoned to be underground. The council rejected the request but did approve the company's equipment on two existing poles.
Officials in July said they expected the city to be sued.
NextG came onto the city's radar in May when it installed one of its poles near Crystal Cove State Park without getting the OK from the California Coastal Commission. The poles are about 30-feet high and smaller than cell phone towers. Poles have been installed in other cities under permits different than those needed for larger structures.
NextG is one of several companies to sprout up in recent years that act as middlemen between major cell phone companies and their users. The company sets up a distributed antennae system, a smaller, more nimble cell phone antenna that expands a major company's cell phone coverage. Major cell phone companies contract out with the smaller companies to use their equipment, or "nodes," to improve their coverage.
City spokeswoman Tara Finnigan said the city attorney's office is reviewing the lawsuit and could not immediately comment. The complaint was delivered to the city Tuesday, court records show.