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Estimates vary, but it is commonly assumed that at least one significant communications cable interruption is caused every day by excavation accidents, usually by contractors not working for the communications service provider whose facilities are damaged.  California certainly experiences its share of these incidents.  In the garden variety property damage claim, the law is fairly straight forward concerning the amount of recovery the law will provide: the party guilty of the act that caused the damage (or his insurer) must pay for the cost of repair or replacement, and possibly loss of use.  However, the law is not so straight forward in the case of damage to communications facilities.  This is so because those facilities carry communications traffic, and both the state and federal governments recognize the value to the public and the governments themselves in having 24/7/365 access to the information carrying capacity that these facilities provide.  For this reason, the law provides for a higher level of recovery for a carrier in appropriate cases, and a carrier suffering wrongful facilities damage should determine whether the possibility of enhanced recovery exists before settling a claim for mere repair or replacement cost.

The California Legislature has enacted two laws that provide general guidelines for the courts to follow in fixing damages from wrongful destruction of underground communications facilities.  California Government Code §§4216 et. seq. establish a procedure for contractors intending to excavate to follow where it is known, or should be known, that underground communications infrastructure exists where the excavation is to take place.  Government Code §4216.6 provides that a contractor that fails to provide notice to an identified central clearinghouse for such information, and who fails to proceed in accordance with a carrier’s identification of the location of its facilities in response thereto, and who damages facilities, “…shall be liable for resulting damages, costs and expenses.”  California Public Utilities Code §§ 7951 – 3 provides for a similar measure of damages based upon a general negligence standard rather than a specific sequence of required acts by both the contractor and utility.  It also provides for treble damages for malicious destruction of facilities.

The interesting question becomes what will the resulting damages be.  In many situations, this amount (beyond the cost of repair or replacement) will be quantified by the loss of traffic, and the need for the carrier to provide a billing credit to a customer.  In some instances, however, a customer will be lost if it comes to perceive that the carrier is not reliable, and that loss is difficult to quantify.  Another issue is the manner in which communications infrastructure is now engineered and constructed.  A considerable amount of redundancy is now built into robust communications networks, and in the event of a cable cut, traffic may be rerouted almost instantaneously and no traffic lost.  However, due to customer requirements and regulatory oversight concerns, the carrier has lost the insurance that the built in network redundancy had provided, and may immediately choose to purchase capacity on another carrier’s network to provide the desired level of redundancy and seek compensation for that cost.  In appropriate circumstances, the carrier may even argue that the loss of redundancy left it so exposed even if it could not purchase capacity from another carrier and that its business has incurred an unacceptable risk of customer loss or regulatory penalty for which it must be compensated.

None of the foregoing circumstances or arguments should be overlooked by a carrier in the appropriate case, although facts will differ from case to case.

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