Phone co. to pay $14.5 mil over Malibu Canyon fire, implement new safety standards

The last of fourth of five companies implicated in the cause of the 2007 Malibu Canyon fire acknowledged partial responsibility for the fire last week, agreeing to a tentative $14.5 million settlement with the state. Part of the settlement would fund inspections of every power pole in Malibu Canyon to determine their ability to meet state safety requirements.

Three other companies— AT&T, Sprint and Verizon— settled last year for $12 million. Edison has yet to settle and faces potential fines of $49.2 million.

In the settlement, NextG Networks of California, now owned by Crown Castle International, Inc., admitted that the fire was partially caused by the collapse of at least one power pole overloaded by its telecommunications equipment. It also acknowledged that an Edison official gave “incorrect” information to state investigators in the wake of the fire.

Under the agreed terms, NextG will pay $8.5 million into California’s general fund. The remaining $6 million will go into a safety enhancement fund to pay for an audit on each of the 60,000 pole attachments NextG owns in the State of California, including those in Malibu Canyon. The state had originally proposed a $24.8 million fine against the company. The settlement must still be approved by the California Public Utilities Commission (CPUC).

On Oct. 21, 2007 three power poles snapped alongside Malibu Canyon Road during high Santa Ana winds, igniting nearby brush. The fire burned 3,836 acres, destroyed 36 vehicles and 14 structures, damaged 19 others and injured three firefighters.

The power lines on the poles that fell were owned and operated by Southern California Edison (SCE) and the poles were jointly owned by Edison, AT&T, Sprint, Verizon and NextG.


Hans Laetz, a Malibu resident who was granted citizen intervenor status during the investigation by the CPUC and has followed the legal proceedings intimately, called the NextG settlement a major win for Malibu. Verizon, AT&T and Sprint paid relatively low settlements and did not take responsibility for involvement in the fire.

“I opposed the … $12 million against three other companies because it did not adequately channel any meaningful protections for Malibu. The CPUC at that time rejected my complaint, and explained that it did not want to alter a legal settlement its staff had already brokered,” Laetz wrote in a statement. “But the Commission and staff both said the points I raised were important and should be addressed in future settlements.”

In the settlement, NextG acknowledges that the Malibu Canyon fire was partially caused by at least one power pole overloaded with NextG attachments. The company also failed to consult with the other phone companies or Edison before latching a heavy fiber optic cable onto at least one Edison pole. In doing so the company ignored the known fire risk posed by heavy Santa Ana winds in Malibu Canyon, according to court documents.

Furthermore, NextG admits that a consultant who testified on behalf of Edison gave “incorrect” information by stating that all items attached to the failed poles had been saved as evidence. Investigators later found that five pieces of equipment related to the investigation, including two NextG cables, had been “discarded.”

The settlement specifies that NextG’s safety audit must begin in Malibu and Los Angeles County. Any of the 60,000 pole found to be overloaded with NextG equipment must be replaced by the pole’s owner, which in most cases will be Southern California Edison.

“Edison has hundreds of thousands of poles, maybe more than a million,” said Laetz. “The NextG settlement is for a tiny fraction of that: 60,000 poles at $100 in inspections costs per pole. Do the math. Edison faces enormous liability here.”

The terms of the deal will have to be reviewed by the CPUC, which means a delay in the trial of Edison for its involvement in the 2007 fire. The remaining case against Edison cannot continue until the CPUC votes on the partial settlement with NextG, removing them as a defendant in the case.

That case was supposed to go to court this week, but could now be delayed at least six months while the CPUC reviews the NextG agreement, according to CPUC spokeswoman Terrie Prosper, unless Edison cuts a deal with the state too.

Edison officials declined comment on the likelihood of a settlement, citing the ongoing legal process.

Malibu City Councilmember Skylar Peak, an electrician by trade, chastised NextG for negligence.

“[NextG] should have installed equipment that was safe in the first place,” Peak said. “It’s frustrating that we have to go back to check now.”

He called the agreement a “step in the right direction” but not enough to fully address power pole safety in the city.

“There’s a lot of old equipment in Malibu that needs to be looked at,” Peak said. “Not just NextG [equipment].”

The Malibu Times is the first newspaper in Malibu, serving the community since 1946.

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