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Transmission Rights Row

Fiber optic lines expose grid companies to class action lawsuits.

Fortnightly Magazine - March 2008

of current use, highest and best use, size, shape, topography, access, soil conditions, market, and orientation to the rights-of-way. The number and scope of the differences between the properties abutting the easements are many and significant. To determine the incremental value of the additional use within the subject transmission easement, it’s necessary to consider that the property already is encumbered and that the fiber-optic line essentially is restricted to the aerial portion of the existing infrastructure. Also, sales of easements with more than one permitted use demonstrate there are generally no significant incremental costs to the grantee as long as the burden on the adjacent property doesn’t increase.

The methodology employed for determining the market value of the alleged damage involves valuing the right that the plaintiffs were denied. A good way to do that is to consider the differential in cost for a utility company to purchase an easement allowing it the rights to electrical and commercial fiber-optic communications on its own infrastructure. Research shows that where such rights have been negotiated, there tends to be almost no difference in cost for the additional fiber-optic right.

ROW Arguments

The current class-action lawsuits against utility companies are a direct result of conflicting perceptions regarding property rights. The plaintiffs in the litigation neither have the right nor the ability to enter into the fiber-optic communications business. Defendants can bring a series of arguments against such lawsuits. Namely:

• Utility companies are the sole owners of transmission corridors that traverse the individual plaintiff’s land. Communications occur through the easement, which is not to be confused with the adjacent properties belonging to the individual plaintiffs. The corridor is the assemblage of those individual easements owned by the electric transmission company.

• Each of the individual plaintiffs did not grant and could not grant the ability to transmit electricity or communications from one critical end point to another.

• It’s not reasonable to assume that any land owner adjacent to the transmission right of way has the ability to assemble its land with hundreds, thousands, or millions of other parcels, and collectively erect an infrastructure capable of transmitting communications.

• Adjacent land owners can’t reasonably claim the loss of an opportunity when they never had it in the first place.

• When a utility wishes to expand the approved uses within its easement, unless there are additional physical or economic burdens placed on the land owner, the costs are nominal.

Capitulating to the plaintiff’s corridor argument can be unjustly expensive. Treating each plaintiff’s property as a separate non-corridor holding dramatically, and most importantly appropriately, reduces damages.