Eastern Railroad Discussion > NS to pay lots of $$$ for cable runs

Wednesday June 6 5:41 PM ET
Landowners Get Paid for Cable Lines

PITTSBURGH (AP) - Conceding that digital information is not freight, a subsidiary of Norfolk Southern Corp. (NYSE:NSC - news) has agreed to pay landowners along its tracks when it installs underground fiber-optic lines.

Tuesday's class-action settlement could include about 60,000 landowners along 2,500 miles of railroad track. Some landowners could get more than $31,000 for every mile of cable laid through their property.

Thoroughbred Technology and Telecommunications Inc. - also known as ``T-Cubed'' - is the telecommunications subsidiary of Norfolk Southern.

The railroad had contended that since it already owned property rights of way along its tracks, it could install fiber optic cable without further payment to landowners. But the plaintiffs had argued those rights of way were limited to rail traffic.

``We think the law is clear. The landowner has the legal right for compensation for the use of a corridor of land,'' Kathleen C. Kauffman, the plaintiffs' attorney, said Wednesday.

She said she believes the settlement is the largest ever in a fiber-optic property rights case.

Norfolk spokesman Rudy Husband predicted the settlement will cost the company ``several million dollars.''

Landowners will also receive more money as T-Cubed revenues grow from the fiber optic lines' expansion - up to $31,875 per mile of property used.

Notices have been mailed to landowners who might be eligible in Pennsylvania, Alabama, Florida, Georgia, Illinois, Indiana, Maryland, Michigan, Mississippi, North Carolina, Ohio, South Carolina, Tennessee, Virginia and West Virginia.

Norfolk Southern owns more than 21,000 miles of track on the East Coast, Southeast and Midwest.

Why can't the railroad lay fiber optic wire on the right-of-way? If it's theirs shouldn't they be able to lay anything they want to? Like the saying I heard earlier everyone gets a free ride to heaven because lawyers put everybody through hell when they were living.
-Happy Fanning!

If the original post is correct and NS has to pay out $$$$ for use of the right of way on fiber-optic lines to land owners then I am here to tell you heads should roll on this one. That is unless they knew it was a possibility and they had these costs built into the original proposal for this project. If not,then at the very least,whos ever brain storm this was and those that supported them should resign!

Somebody didn't do their homework on this one! Good Grief!

NSSpike

NS doesn't have to worry about this.Heck, BNSF will pick up the tab when they buy NS...Roadrat

"Why can't the railroad lay fiber optic wire on the right-of-way?"

Permit me to explain further. You will understand how I know so much about this in a moment...

Back in the distant past, landowners gave the railroads free land to get them to locate in the area. The deed says it is for operation of a railroad only. For example, if the RR is abandoned the land goes back to the original owner.

T-Cubed/NS installed these cables without the permission of the original landowners in direct violation of the original deed.

Now, how do I know so much about this? I am one of the landowners covered in the settlement. There are 50,000 of us included in this case. This installation has been nothing but a headache for the adjoining landowners. My neighbor had large hole torn in his fence by the backhoes doing the install work. His horses nearly got out onto the railroad. They had to get the checkbook out for that one too.

The settlement hearing is August 21. I still don't have an exact figure for how much I will receive.

Peachfuzz is correct. However, not all railroad right-of-way was given in order to induce the railroad to build through the community.

I saw the reverse of the above happen a few years ago in which the railroad owned the property and when the railroad was abandoned, it sold the right-of-way to "enterprising" indivdual A. Well, it so happens that many years before, the railroad's predecessor allowed businesses to build on its property to increase car-loads.

Well, after indivdual A bought the property he informed the businesses that they were on his property and they owed him $$$. Of course, it went to court, and after an appeal he finally won. How's that for turning the tables? (Incidentally, he was known in the community as a "crook" long before he pulled this one.) I suppose it boils down to who has the better lawyer.

Inevitably, this issue will go deeper. States like Virginia, North Carolina and Masssachusetts have enacted what is known as "Dark Fiber" laws. Like the telecommunications industry, can be rather technical however; Dark Fiber basically enables outside registred telecommunications carriers to file petition and have access to host company fiber optic facilities. In this case Norfolk Southern (T-Cubed); the tenant company has to pay lease rates for access, but, the host company still loses as the tenant only pays for access and not the debt service to build the facilities in the first place!
So far to my knowlege, there have only been a few companies that have filed petitions in respective states with the purpose of expanding market share. Still surprised large companies like NS (T-Cubed), AT&T and Sprint have not tried to maintain the soverignty of their fiber optic systems by appealing the Constitutional issues before the U.S. Supreme Court.

Very sure I spelled that one incorrectly. Access and the whole fiber optic issue made me think of a thread listed below by BobE relative to Norfolk Southern Hollidayburg shops in Pennsylvania. And without delving into the debate, the issue really is giving private corporations a free reign v. regulatory rules which, although tend to serve the public and economic development are not neccessarilly the best for private business.

The pole line along railroad rights of way have supported non railroad functions for years. Western Union and Postal Telegraph were large users of railroad pole lines (you can still find Postal insulators on poles today). Why should a buried cable be any different?

Good point. And NS ain't the only railroad with fibre optic cable laid on its right-of-way.

Contrary to some opinions expressed above from those who think this is a surprise, here's an article I posted to this board back in 1999 from Fortune Magazine.

http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=27098

Fiber-Optic Cable: Where Does It Lie?
Telephone companies are in a frenzy of laying fiber-optic cable all across America. Justone problem: Who really owns all that land?

FORTUNE
Thursday, June 24, 1999
By Geoffrey Colvin

Peer out the window of a moving train, and you might notice small warning signs posted along the track. Fiber-optic cables, owned perhaps by AT&T, MCI, Sprint, or Qwest, are buried here, the signs announce, and woe betide anyone who rips them up. Trouble is, the railroads often don't own the land they blithely leased to the telecoms for as much as $25,000 per mile. In some cases, all the railroad ever had was an easement to lay track and run trains over Farmer Brown's land. Farmer Brown, it seems, often still owns the land for any other use.

For telecom companies, that could be a pricey complication. AT&T has agreed to pay $45,000 per mile to landowners along 70 miles of abandoned Penn Central tracks in Indiana. Just how expensive this will be for the telecom industry is anybody's guess. But as a legal headache, it's about to attain migraine status. A lawyer is filing nationwide class-action suits against a dozen big railroads, pipelines, utilities, and telecom companies. If judges in a few more states approve class-action suits against the utilities and railroads, telecom companies will likely move quickly to settle.

How embarrassing for the lawyers who run NS. NSSPIKE, did you mean to say "Goode grief"?

With all due respect....BS. T-Cubed was founded *after* the problem of ROW ownership and easement rights was already well-known. Doubtless they factored in the cost of paying property owners before laying any fiber.

http://www.nscorp.com/nscorp/html/releases99/tcubed.html

Note that the release date is October 1999, some five months after the Fortune article was printed that I attached to the last post I made.

It's entirely likely that T-Cubed decided that it would be easier and cheaper to go lay fiber and deal with lawsuits that established a uniform price per mile via the class-action process than to negotiate individually with hundreds or thousands of landowners. If they had gone the negotiation route, it could have happened that one or two landowners could have held out against granting the easement until the price got ridiculously high.

BobE

In other words "It is easier to get forgiveness than to get permission."

well, I would say it would be easier to lay the cable and get sued...rather than try to line up all those landowners beforehand and come out with an equitable deal. some landowners would likely never give NS permission...then what do you do? yes, build, then settle the lawsuit...

interesting to note that 97 percent of the fiber optics laid in the US is not being used....lots of companies laid lots of fiber.....oh well...

I agree that it would be easier to build and then settle a price, and congratulations to BobE for his diagnosis of the future.

In NJ, several of the early railroad charters granted the operator the right to provide railroad, freight, telegraph, and even canal services. Camden & Amboy (an ancestor of the PRR) and the Morris Canal Company had these powers in their charters. MCC even had banking powers, and had that in its original name.

Erie Railroad in NY received a charter which included operation of a telegraph company. It would be tough to argue that an easement to a railway and telegraph company didn't permit them to operate a fiber optic line. The easement granter would have a good claim on a change in the rental amount, though...

It would be very tough to argue that an easement granted to a compnay authorized to provide these services prohibited them from operating a substantially similar service (telegraph to fiber optic line) a hundred years later.

Lackawanna484 wrote:

> It would be very tough to argue that an easement granted to a
> compnay authorized to provide these services prohibited them
> from operating a substantially similar service (telegraph to
> fiber optic line) a hundred years later.

A lot of property owners along NS are getting a windfall that they don't deserve. Basically NS decided that it was best to pay the money to all and clear up the issue, rather than to research the title on all of the individual pieces of real estate. I'm disappointed that NS did not go to the mat on this one for the right of ways that they owned outright, but having these liability issues cleared up does give them a certain advantage in marketing their fiberoptic ducts.

Lackawanna484 wrote:
>
> I agree that it would be easier to build and then settle a
> price, and congratulations to BobE for his diagnosis of the future.

It does not appear that BobE has made a diagnosis of anything, in typical fundamental fashion, BoBE posted a couple of subjective magazine articles, which I guess to some, passes as legitimate authority. Good comments about the unlit fiber though. Give you an example of how backward various phone companies are: When asked why so much unlit fiber exists, a response has been "ISDN service works just fine, more cost competitive." Then why was the fiber laid in the first place?!!!
This would be an interesting answer indeed.

Thanks for the Paraphrasing post. I was thinking the same thing about the forgivness part after I read Bob E's post. BTW I do have a great amount of respect and awareness to Bob E's contributions to this board. However, do keep in mind my second sentence...That is unless the possibilities that this would happen and they had it built into the proposal of this project...da da da da. Bottom line my initial response might have been a little harse and quick.

What would be of interest is:
Was this a jury trial or just a judge?
Either way I guess they settled this without completed trail?
Am I correct is assuming that that no law (local state or Federal)was violated here? If during this trail or judgement it was determined that NS was fully aware of what it was doing, then I expect to might have cost them even more?

Bob E With all do respect, I'll overlook the BS part. Can you provide any answers to the questions I asked and possibly provide any other insight?

I guess I am just getting sick and tired of hearing about out landish settlements in law suits. The monies NS has had to pay everybody and their uncle on the new IM yard in Austell is another example. When will it all end? I guess when the libs acomplish their goal! When we are all equal! Drive the same cars, dress the same, eat the same. etc. Now that is BS for sure!

The BS that I refer to is the constant management bashing that always goes on here at trainorders. People who don't wear suits always seem to think that people who do wear suits are stupid and incapable of thinking of anything for themselves (so why is that the suits make the most money, have the nicest cars, live in the biggest houses and send their kids to the best schools if they're all so stupid?). Some of you people need to sit down, take a stress pill and think things through before you assume you know more from reading a three-line news clipping than people who spend 50 to 70 hours a week working on a particular job.

Further, there is a strong, persistent and distasteful bashing of NS management by NS employees on this board, and you guys know your rulebook better than I do, but consider the glass construction of the house you live in when you bash your own management....consider just how much your trainmaster will be willing to look the other way at a rules violation if he knows you're the one hammering at management stupidity in a public forum.

Back to the real topic...

Given that the cost of acquiring easement was already known to be an issue that was so obvious that even the press had figured it out by June of '99, there's no way that T-Cubed didn't factor in some cost.

Beyond that, Spike asked some questions for which I have no answers i.e. judge/jury etc. Consider that Fortune said that AT&T paid $75,000 a mile and that T-Cubed paid $31,000 and change.....so who's stupid?

BobE (frustrated at Devils losing 3-0 at home with now no chance to win the Stanley Cup tonight)