Set pole attachments aside. The next contentious topic for internet providers is railroad crossing fees, which also appear to have caught the attention of some state governments. Virginia is the most recent state to address the issue; this week, a new law was approved by the state Senate and is now being considered by the House of Delegates.
For some perspective, Fiber Broadband Association CEO Gary Bolton told Fierce that train crossings are a “problem” for fiber carriers, much as pole attachments. This is due to the fact that if a railroad crossing is desired but there is no existing conduit, the operator must get in touch with the railroads that cross the desired tracks and arrange for flagmen to arrive so they may finish their directional boring. And then there are the fees railroads charge for said crossings.
The Virginia, Maryland, and Delaware Association of Broadband Cooperatives (VMDABC) and the Virginia Association of Counties, which have been pushing for legislation to address the issue, have said crossing fees can total as much as $20,000 per crossing. The Senate bill working its way through Virginia’s legislature aims to cap railroad fees at $750 for each crossing, though a House version of the same measure calls for a $1,500 cap.
Virginia’s legislation would also set a 30-day timeline for railroads to review crossing requests. The process currently can take up to 18 months in extreme cases.
Of course, there are railroads everywhere. The number of freight train route miles in the United States is estimated to be 136,729, according to data from the U.S. Department of Transportation. Seven top-tier railroad firms own and operate 92,190 miles of this total, while the other 44,539 miles are controlled by 626 additional local and regional train businesses. According to data from the American Public Transportation Association, there were 30 additional commuter trains operating in the nation as of March 2021.
Railroad crossings are a problem for broadband providers in virtually every state, according to Bolton. Though the fee caps differ, many have recently taken action on the matter. The maximum railroad crossing fee in Iowa is $750. Minnesota adopted a standard crossing fee of $1,250 back in 2016, and Nebraska in 2022. Illinois allows for a one-time standard fee of $1,500 for each crossing.
But neither railroads nor fiber are exactly new. So why is this issue grabbing headlines now? Well, it seems to be due to an influx of broadband funding and the rise of universal broadband initiatives.
By 2024, every Virginian would have access to broadband, according to a $2 billion effort proposed by the state’s then-governor in 2021 and supported by more than $722 million in state financing. President Joe Biden launched a national campaign to provide “Internet for All” a few months later, in May 2022, with $45 billion in federal funding.
Through the Virginia Telecommunication Initiative (VATI) grant program, Virginia distributed the aforementioned $722 million to connect 278,550 locations in its fiscal year 2022 (July 1, 2021 through June 30, 2022). It set aside $49.7 million in its FY 2023 (July 1, 2022, to June 30, 2023) for further VATI grants. These awards don’t seem to have been given yet.
As Virginia seeks to connect its remaining unserved over the next few years, VMDABC said the number of railroad crossings is expected to jump from one to five per year to 50 to 100 crossings per project. It is unclear whether this is due to an increase in the number, extent, and location of the expected projects or some other factor. But using the upper limit of current passing fees ($20,000), that means crossing fees could run between $1 million and $2 million per project in a worst-case scenario if the legislation doesn’t pass.
The cost per passing in hard-to-reach rural and remote areas can range into the tens of thousands of dollars, so even though it may not seem like much in comparison to the billions of dollars in funding available for broadband, it is important to note that those grant dollars may not go as far as one might think.
Following Thursday’s Senate vote in Virginia, VMDABC Chair Casey Logan told Fierce that the measure is “very critical” to ensure that every Virginian who wants broadband can access the internet. “This law will enable us to complete the task and solidify Virginia’s role as a national leader in reducing the digital divide,” he continued.
Delaware and Maryland, the other two states where VMDABC has members, do not yet appear to have railroad crossing fee legislation on the books. Delaware, like Virginia, has a universal broadband initiative and recently awarded grant funding to Verizon, Comcast and Mediacom to reach more than 11,000 unserved locations.