Appeals Court Sides With Fiber Provider in Railroad Crossing Dispute
Seventh Circuit says railroads can’t charge fiber providers for access without the property rights to do so
WASHINGTON, August 12, 2026 – A federal appeals court has sided with a fiber provider in a dispute over whether a railroad can control, and charge for, access beneath its tracks.
The U.S. Court of Appeals for the Seventh Circuit ruled Friday that CSX Transportation could not use its Indiana railroad easements to block Zayo Group from running fiber optic cable beneath its corridor.
“At bottom, the scope of CSX’s railroad easements does not include the right to exclude third parties from the air above and the ground below its railroad corridor, at least to the extent those third parties are not disrupting CSX’s railroad operations,” Judge Doris Pryor wrote in the decision for the unanimous panel, which included Judges Frank Easterbrook and Nancy Maldonado.
“CSX’s easements do not necessarily include the right to license the air above and the ground below its railroad corridor. That right remains with the owner of the servient estate,” Pryor wrote.
The panel affirmed a ruling from the U.S. District Court for the Southern District of Indiana that had already dismissed most of CSX’s claims against Zayo.
CSX sued Zayo in 2021
CSX sued Zayo in November 2021, alleging the fiber provider installed underground cable beneath a CSX corridor in Greencastle, Indiana, without CSX’s approval, without paying its licensing fee, and without going through its safety review process.
CSX’s central argument was that its railroad easements necessarily carried an implicit right to exclude third parties from the ground below and air above its tracks.
The Seventh Circuit rejected that theory, applying Indiana case law holding that an easement’s scope is defined by the purpose for which it was granted.
For a railroad, that purpose is operating a rail line to transport goods, not general control over the surrounding land. Anything a landowner does, or permits a third party to do, that doesn’t interfere with rail operations falls outside the railroad’s authority to block, the court found.
The panel’s decision drew on a line of older Indiana Supreme Court cases involving pipelines, gas wells, and utility lines beneath rail corridors, all of which held that landowners retain rights to their land below the surface so long as railroad operations continue undisturbed.
Because CSX did not show that Zayo’s installations disrupted its trains, the court concluded CSX’s easements didn’t reach far enough to bar the cables or justify a licensing fee.
One partial win for CSX: the panel found the district court had erred procedurally in dismissing some of CSX’s claims for lack of standing. CSX had adequately alleged a property interest even though that interest ultimately failed on the merits. That distinction didn’t change the outcome.
The district court had whittled the case down substantially before the federal trial. CSX initially brought 10 counts against Zayo, including criminal trespass, civil trespass, unjust enrichment, and failure to pay rent, and later expanded its claims to cover additional unauthorized installations across the state.
The Seventh Circuit ruling is binding precedent in Indiana and persuasive authority elsewhere in the Seventh Circuit’s jurisdiction, including Illinois and Wisconsin, and it comes down firmly on the side of telecom companies seeking to install or maintain fiber along rail corridors without a railroad’s sign-off.
CSX has not indicated whether it will seek further review.
Providers, railroads have clashed over crossing fees
The ruling lands in the middle of a much larger, ongoing clash between the telecom industry and the freight rail industry over access to rail corridors. Broadband industry groups say unpredictable delays and steep crossing fees routinely block deployment to rural areas.
Industry representatives from NCTA, CTIA, USTelecom, and the Fiber Broadband Association have reported permitting delays of 20 months and fees that can reach hundreds of thousands of dollars for an individual crossing, with no formal way to dispute them.
States have taken different approaches to determining what railroads can charge fiber and telecommunications providers to cross.
Some states have established standardized fees. Utah, for example, requires a fiber optic carrier to pay a one-time crossing fee that is currently based on a $1,250 statutory amount adjusted annually for inflation.
South Dakota and Virginia take a similar approach, having established crossing fees of $750 and $2,000 respectively. West Virginia set the cost for fiber providers to cross at $750 in 2023, but a 2025 bill proposed increasing it to $1,500.
Other states, like Minnesota, leave more room for regulators to determine what constitutes reasonable compensation.
Consultants have warned that providers often lack clarity about what individual states’ laws require, potentially leading them to accept railroad fees or insurance demands that may not be legally mandated.
The issue has caught the attention of Capitol Hill, where lawmakers are weighing a proposal that would create a formal process for resolving disputes over crossing fees and other requirements.
The RAIL Act, introduced by Sens. Marsha Blackburn, R-Tenn., and Ben Ray Luján, D-N.M., would have the Federal Communications Commission set enforceable timelines and dispute resolution rules for railroad crossing permits, working in coordination with the Federal Railroad Administration.
House and Senate versions were introduced in November 2025.The House version advanced out of committee in December; the Senate version has yet to. Neither has reached a floor vote.
