Right-of-Way and Property Rights
Fiber-Optic Cable versus Land Owners
| Here is our retelling/analysis of a recent article on the clash between land owners and companies laying fiber-topic cable. The original article was by Roger Fillion and appeared in the Industry Standard. |
Tim Elzinga said no when a man came to his farm last year, asking to bore beneath Elzinga's drainage ditch. Norfolk Southern Railroad was seeking to bury fiber-optic cable next to its railway track and a representative wanted Elzinga's signature.
Instead, Elzinga refused permission and contacted an attorney. Later, he and other landowners brought a class-action lawsuit accusing T-Cubed, the subsidiary of Norfolk Southern that is running the cable, of trespassing.
A settlement has been proposed and is now before a judge. If approved, the settlement would give some 20,000 landowners in 16 states payments of $40,000 per mile of cable laid, plus a cut of T-Cubed's revenues. The landowners would also become owners of a new company controlling perhaps 2,750 miles of fiber.
Sounds like a mighty nice deal for the landowners, and indeed, telecom companies fear that this could stoke the fire of land owner resistance to their plans of laying cable for little cost.
During the last 20 years, about 85 million miles of fiber optic cable were installed in the United States, 33 million of them in just the last year. And until now, the landlords making profit from fiber optic have been railroad companies. They quietly lease their rights of way to telecom carriers. But do they have a right to do that?
Land owners say no, and have filed at least 36 different class action lawsuits already.
This creates a three-way battle as individual land owners seek a cut of the action that had been going on between railroads and telecoms.
Railroad companies, which received huge corporate welfare handouts from US taxpayers during the last 150 years, want the benefits to continue. But the US public never signed away fiber optic rights of way, just the right for railroad train tracks to be installed and used. The taxpaying public could make a good claim for the fiber optic pathways, and could auction off leases for these pathways, to private telecom companies at full market value. In that way, Americans would be better off and no special deals would bestow unfair privileges on some companies over others.
However, the taxpaying public has not heard about this issue. At this stage, the only contenders for the market value of fiber optic cable rights-of-way are the individual land owners and the railroads.
So, if the taxpayers remain in the dark on this issue, who will win? Will land owners get richer, or will railroads? Danaya Wright, a law professor at the University of Florida, favors the railroads. "A single landowner who has had this fiber cable wrongfully installed on his land hasn't suffered a tremendous loss in terms of market value," she says. "So what's the harm?"
But Wright's own argument can be used against her. Suppose a telecom illegally ran cable along a railroad right of way without paying anything -- the same argument could be made, that the railroad's market value has not been damaged.
Wright seems to be missing the point. Stealing from the rich might cause little harm, too, but it is still stealing.
And, more importantly for the telecom companies, if their fiber is placed illegally, don't landowner have the right to cut and remove it? Imagine what a mess that could cause!
It is in the best interests of all parties to work out a sensible solution, without secrecy. But without secrecy, American citizens might notice that they are about to make, by default, another huge corporate welfare giveaway to a privileged few.
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