As Legacy notes, there is no penalty for having equipment in the team area or near the sideline (which, IMHO, we should interpret as being within the limit lines). But, if a team brought to my attention that their opponent had such equipment in the their team area or near the sidelines, I would instruct the opponent to remove such equipment from the team area, or from within the limit lines. If they comply, that's the end of it. I would not continue the game until they remove such equipment from within the limit lines (12' off the sideline), including within the team area, as any type of equipment like that within the limit would clearly be a safety hazard, and we are obligated to have game management resolve all such safety issues.
For NCAA, I would be obliged to notify my coordinator. As for high school, depending on the level of cooperation from the opponent, I might feel the need to notify the governing body for the school (such as the UIL in Texas). If I could determine that they were using the equipment on approved game balls, I might also consider de-approving those game balls that I witnessed being affected by such equipment.
I would hope for immediate compliance, and we just move on.