Concerns about potential widespread lead contamination of
residential neighborhoods, schools and drinking water supplies from
lead sheathing in telecommunications wires, fueled by a series of
recent articles in the Wall Street Journal (WSJ),
have prompted governmental investigations that soon may be coming
to your neighborhood if you are a telecommunications company or
other entity that owns or operates old or abandoned copper lines
with lead sheathing.
The WSJ published a series of articles from July 9, 2023
to July 12, 2023 concerning the potential for widespread
contamination of soil, groundwater, surface water, and sediment by
lead from lead-sheathing in copper cable systems. The articles
identified approximately 2,000 wires that were laid in the 1800s
through the 1960s by American Telephone & Telegraph (AT&T)
and other telecommunications companies.
Data regarding the potential impact of these lead wires is
currently limited, as is data as to the cost of removal or
replacement. According to Raymond James analysts, AT&T's
expenses for removing lead-covered cables could range from $264
million to $1.2 billion spread over 15-25 years, resulting in an
annual cost of roughly $84 million. Analysts from Goldman Sachs and
Morgan Stanley have estimated the removal cost for AT&T's
lead-sheathed cables to fall between $2 and $4 billion, based on a
network of approximately 60,000 miles of cables, with varying costs
per mile, ranging from $34,000 to $69,000. Where access to the
cables is more challenging, such as underwater wires, the cost is
greater.
At the Federal level, the U.S. Department of Justice (DOJ) is in
the preliminary stages of an investigation through its Southern
District of New York office, seeking to determine whether telecom
companies were aware of the potential risks related to
lead-sheathed cables concerning their workers and the
environment.
Additionally, the U.S. Environmental Protection Agency (EPA) has
sent letters to some telecommunications firms under its authority
granted by the Comprehensive Environmental Response, Compensation,
and Liability Act (CERCLA), requesting existing sampling data and
future testing plans concerning lead-sheathed cables to be provided
within 10 days.
At the state level, New York Governor Hochul and the Department of
Public Service have directed telecommunications companies within
the state to provide a comprehensive inventory of lead-covered
wiring to assess the extent of its usage. Furthermore, soil
sampling has been ordered to understand the potential impact on
surface soils.
If your company owns or operates older copper telephone cables or
conduit carrying them, you should proactively address these
significant concerns. EPA and State regulators will be actively
evaluating potential for contamination to surface soils,
groundwater, surface water and sediments. Companies that receive
formal information requests, typically issued under EPA's
authority pursuant to Section 103 of CERCLA or similar provisions
under other federal environmental laws, and/or similar state
investigation requests should consult with qualified counsel in
preparing responses to such inquiries. Environmental counsel versed
in advising clients on such information requests can help ensure
that all information provided is correct and crafted so as to
minimize the risk of additional follow-up inquiries.
It is prudent for companies to consider such governmental requests
as akin to formal discovery requests, since responses to them may
be deemed admissions in any subsequent enforcement actions and
subject to penalties for providing incorrect or misleading
information. Specific objections may also be appropriate if
requests are worded in a vague or overbroad manner, effectively
requiring the responder to guess as to the intent of the
request.
To the extent that the information conveyed in the
WSJ's news coverage is indicative of significant
potential future liabilities for companies with holdings involving
lead-sheathed cables, it may also behoove the company's
management to conduct an inquiry into any environmental insurance
coverage they may have pursuant to specific environmental coverages
or old Comprehensive General Liability (CGL) insurance policies
issued prior to the mid-1980s, which insurers adopted absolute
pollution exclusion clauses into CGL policies. If so, notice
letters should be sent to the respective carriers as soon as
possible so as to minimize any potential late notice defense.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.