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Rail News: Federal Legislation & Regulation

Railroad antitrust bill back in Congress, AAR back to opposing it


U.S. Sens. Amy Klobuchar (D-Minn.) and David Vitter (R-La.) yesterday introduced the Railroad Antitrust  Enforcement Act, which proposes to remove the rail industry's exemption from certain antitrust laws.

The bill would eliminate railroad antitrust exemptions that "allow freight railroad companies to take advantage of their market dominance, resulting in higher rates" for captive shippers, the senators said in a joint statement.

"This legislation makes common sense reforms that will require the railroad industry to play by the same antitrust rules as other industries and will help keep costs down for businesses, farmers and consumers," said Klobuchar, who chairs the Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights.

Consumers United for Rail Equity (CURE), a national coalition of rail shippers, issued a statement hailing the bill's introduction.

The legislation "proposes appropriate and long-overdue action to better protect shippers and American consumers by placing the nation's freight railroads on the same footing as their customers with respect to the nation's antitrust law. This is simple fairness," said CURE President Steve Sharp.

The American Chemistry Council (ACC) concurs. The bill is a step toward more rail competition and a "level playing field" that will benefit shippers, railroads and the broader economy, ACC officials said in a prepared statement.

"The bipartisan legislation was introduced at the same time the Surface Transportation Board [STB] is investigating an array of rail competition reforms to address a troubling trend in the nation’s freight rail system as rates have soared to the highest level in 20 years," they said. “Outdated exemptions from antitrust laws provide railroads with unique government protections that help shield them from free markets and competition."

However, railroads are subject to most antitrust laws, and in areas where they have limited exemptions, they're regulated by the STB, said Association of American Railroads (AAR) officials — who strongly oppose the bill — in a statement. The association has opposed numerous other bills introduced over the past several years that also sought to eliminate railroads' antitrust exemption.

The Klobuchar/Vitter bill "actually singles out railroads for policies that could undermine the industry’s ability to build, maintain and continuously upgrade the nation’s rail infrastructure without taxpayer assistance," AAR officials said.

"Sections of this bill are designed to override existing regulatory decisions and could potentially roll back government-approved transactions in railroad history. That retroactive application would inevitably create conflicts and uncertainty for railroads, railroad customers and courts," said AAR President and Chief Executive Officer Ed Hamberger. "The resulting regulatory uncertainty could undermine the private freight railroads’ ability to sustain necessary and critical private investments in America’s rail infrastructure."

Contact Progressive Railroading editorial staff.

More News from 3/22/2013