Landowners to be paid for fiber optic cable work

Owners of more than 2,600 parcels of land in Allegheny, Armstrong and Westmoreland counties could be eligible for part of a multimillion-dollar settlement reached by a subsidiary of the railroad firm Norfolk Southern.

Thoroughbred Technology and Telecommunications, the subsidiary also known as T-Cubed, settled a class-action lawsuit, effective Tuesday, that could include about 60,000 property owners along 2,500 miles of active railroad track.

The agreement, which will be completed Aug. 21, allows the company to install fiber optic cable in 15 states, as long as it pays.

The lawsuit argued that property owners should be compensated when the company lays fiber optic lines.

Some landowners could receive more than $31,000 for every mile of cable laid through their property, depending on whether T-Cubed sells the dozen or so conduits it plans to install, said Kathleen Kauffman, the plaintiffs' Washington, D.C.-based attorney.

There are 2,196 parcels on 34 miles in Allegheny County, 117 parcels on two miles in Armstrong County and more than 350 parcels on 27 miles in Westmoreland County, she said.

Although some of the land adjacent to the railroad might be owned by local, state or federal governments, those entities are not part of the settlement, Kauffman said.

'Municipalities are not included in the settlement,' she said. 'There are some governmental entities excluded from the settlement - Indian tribes, states, municipalities, federal government and railroads.'

Before the settlement, the railroad argued it could use property rights of way it uses for railroad traffic to 'ship' digital information on the cables, without further payment to landowners.

'We think the law is clear. The landowner has the legal right for compensation for the use of a corridor of land,' Kauffman said.

The suit started last summer when Tim Elzinga, a farmer from Dyer, Ind., refused to sign a waiver to let T-Cubed dig on his land and contacted an attorney.

The lawsuit was filed in August and two months later both sides were working on a settlement, said Rudy Husband, spokesman for Norfolk Southern.

Husband would give few details about the settlement Wednesday, saying only that it will cost the company 'several million dollars.'

'We're generally satisfied,' Husband said. 'The settlement will allow T-Cubed to develop its business plan without being encumbered with further litigation.'

Compensation to property owners will be done on a per-mile basis.

'Some of it comes up front and some of it comes as T-Cubed sells more conduits,' Kauffman said.

The settlement is unique because the more successful T-Cubed becomes, the more the plaintiffs will receive.

After the company lays the first three conduits - hollow pipes filled with fiber optic wire - property owners will receive $6,000 per mile.

If the company grows beyond that, adjacent landowners get a percentage of the sales and could receive as much as $31,875 per mile depending on company revenues, Kauffman said.

T-Cubed is installing lines in Allegheny, Armstrong and Westmoreland counties and the checks to landowners in these areas will go out in the fall, she said.

Kauffman said she believes the settlement is the largest ever in a fiber optic property rights case, but it's difficult to estimate how much the company will pay out because many eligible property owners have not yet joined the suit.

If there is a road between a property and the railroad right of way, that landowner still is considered an adjacent landowner and is part of the settlement class, she said.

Settlement notices were mailed May 29 to more than 50,000 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.

But Kauffman said some property owners, who could be eligible, inadvertently might have been missed. Anyone who believes they are part of this class should call the settlement center, she said.

Landowners affected by line installment have until July 13 to join the settlement and until July 28 to opt out of it.

Norfolk Southern formed T-Cubed in 1999 to be a wholesaler of fiber optic and microwave capacity to telephone, Internet and cable television service along its railway system.

'We have 32 similar suits pending' against other fiber optic companies on behalf of landowners, Kauffman said. 'The law is on our side. We're trying to get compensation to people whose land they use.'

Contributing: Staff writer Ramesh Santanam and The Associated Press