Internet providers cross railway lines, while courts determine new law’s validity

A Virginia law streamlining broadband deployment across railroads is in courthouse limbo. The law is in effect, however, and the electric cooperatives it was meant for are using it.

Virginia’s electric co-ops have completed work at about 37 crossings since the law went into effect on July 1, 2023, according to the Virginia, Maryland and Delaware Association of Electric Cooperatives.

Mecklenburg Electric Cooperative CEO Casey Logan said that, prior to the law, railroads were fighting the nonprofit company and its subsidiary, Empower Broadband, “tooth and nail, keeping the fees high, just making it almost like a barrier for us to get across their right of ways.”

The same issues plagued other co-ops, state legislatures said in passing legislation that they said makes railroads — particularly Norfolk Southern and CSX — more accountable for allowing internet into some of the commonwealth’s most remote locations. The law reduced the approval process time and lowered costs to internet service providers.

Logan said that his company has received approval for about 20 crossings since the law passed. He credited Norfolk Southern’s contractor, Texas-based Railpros, with responding more quickly to the process. Railpros, based in Texas, provides multiple services to railways, including flagging, a process that ensures worker and traffic safety.

“I talked with somebody at their Texas corporate office, and they told me that they’re actually trying to hire additional resources for Virginia, given the scale of the fiber builds we have going on up here, just trying to ensure everything gets done,” Logan said. “So we’ve seen a tremendous turnaround from Railpros, themselves.”

The approvals came so soon that Mecklenburg’s contractors aren’t ready to do construction yet, he added.

Calls to a Railpros representative for this story were not returned.

The broadband deployment needs — and subsequent work orders — increased after the COVID-19 pandemic’s apex, when governments realized that interconnectivity was not only crucial in extreme lockdown situations but possible via internet connections. Billions of federal dollars have gone into deployment, along with state, local and private funds.

That created a work backlog that has affected ISPs, the electric utilities that own poles, and, in this case, railroads under whose tracks workers often bore holes to pass fiber. In Virginia, about $750 million in federal money must be spent by the end of 2026, or the treasury will take it back.

Legislators have passed laws related to both utility pole access and railroad crossings, meant to speed the process and answer questions about the cost . In both instances, the General Assembly has designated the State Corporation Commission as arbiter.

The railroad law requires railways to acknowledge that they received an application to do work, and to request any additional information within 15 days. They must approve the applications within 35 days or petition the SCC with any disagreements.

The law requires applicants to pay a $2,000 license fee per crossing, or no more than $1,000 to cross an abandoned track section. Crossing over a public right of way is free. Internet providers must reimburse railway companies no more than $5,000, after the license fee.

It has been subject to state and federal actions, with none yet resolved.

A railway industry group, the Association of American Railroads, filed suit last year in the Eastern District of Virginia, but U.S. District Judge David Novak dismissed the association’s case in April . In an opinion closing the case, Novak wrote that the association didn’t have standing, but he left open the possibility that two of the industry group’s clients, Norfolk Southern and CSX, could file suit on their own. The association has taken its case to the Fourth U.S. Circuit Court of Appeals.

The same month, Norfolk Southern and CSX sued Cox Communications , after Cox notified them it would use the new law to cross three tracks in New Kent County and Chesapeake. At about the same time, the railways petitioned the State Corporation Commission to stop Cox from doing the work. The SCC found in Cox’s favor, but Norfolk Southern and CSX appealed the decisions to the Virginia Supreme Court, which has yet to put the matter on its docket.

The railroads’ federal suits, also heard in Novak’s courtroom, aim to have the law declared unconstitutional. But Novak has ruled that he would stay further proceedings, pending resolution at the state level, where the claims are similar.

The SCC, in orders filed in June, found that the proposed crossings will not cause undue hardship to the railways, and that compensation should be addressed after the work is done and the parties understand better how much it cost Norfolk Southern and CSX.

Still unanswered in the current lawsuits are questions that include whether existing federal law preempts the Virginia legislation, whether the state law violates the federal and state constitutions’ takings clauses, and whether reducing the compensation limit is constitutional.

Both companies, through spokespeople, declined to comment on the litigation.

“Working through our established approvals process, Norfolk Southern has, for years, worked with communities to facilitate safe access to railroad property by those who need it,” a  statement from the railroad read. “That engagement has continued in the normal course since July 1, 2023, including with applicants involved in broadband projects throughout the Commonwealth.”

Costs remain an issue at times, said Logan, the Mecklenburg Co-op leader. For one crossing in the Nathalie community of Halifax County, Norfolk Southern wanted to charge $70,000 for an underground cable to reach about 20 residences.

“We can’t afford $70,000 for a single crossing,” he said.

The co-op found an overhead crossing about 2 miles down the road that would not cost nearly that much, he said.

“Now, was it the most efficient route we could have taken? Absolutely not. Is it going to take us more time? Yes, because we got to change poles out and do some make-ready work, to get it done. But economically, it’s a better option for us to do that and also accomplish getting the internet to those homes that we want to serve.”

Norfolk Southern did not respond to questions about the charge.

“The Virginia legislature and co-ops have worked together to do everything we can to solve this problem,” Sadie Gary, public affairs director for the Virginia, Maryland and Delaware Association of Electric Cooperatives, said in a written release. “While timelines for crossings have improved, co-ops are still facing outsized cost burdens from the railroad companies — with rural Virginians paying the price.”

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