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Railroads view competition bill as potential re-regulation

Railroads oppose Railroad Competition Act of 2003 (S. 919), which was introduced in the Senate April 11. That's the "unofficial" take from Association of American Railroads, which hasn't issued a formal statement on the legislation, says AAR Director of Editorial Services Tom White.

Neither have Class Is, but roads' likely stance is hardly surprising because S. 919 would offer relief to captive shippers and re-regulation to the industry, railroads believe.

Supported by the American Chemistry Council, Alliance for Rail Competition and Consumers United for Rail Competition, the bill would clarify national rail policy under the Interstate Commerce Commission (ICC) Termination Act and require Surface Transportation Board to ensure effective competition among railroads at origins and destinations; enforce reasonable rail rates in the absence of effective competition; and maintain consistent and efficient rail service for shippers, including timely distribution of rail cars.

S. 919 would benefit shippers and the rail industry by promoting "real competition," said Sen. John Rockefeller (D-W.V.) in a recent floor statement.

"I have sponsored legislation in six different Congresses going back to 1985 to try to instill competition in the freight-rail market to invigorate an industry that is essential to the commerce of this nation," he said. "I frequently say that I have worked on this for my entire Senate career, and with little discernible success. Still, I am not dissuaded from pursuing this legislation again because I know our cause is right."

The bill would require STB to:

• provide "final offer" arbitration of certain rail-rate cases;

• remove paper barriers in future line sales or leases to regionals and short lines, and invalidate such provisions that have existed for 10 years;

• eliminate ICC's "anti-competitive conduct" test instituted in the mid-1980s for terminal area and switching agreements;

• place a cap on filing fees in rate cases involving "coal rate guidelines" to federal district court levels;

• mandate that railroads quote rates to customers between any two points where freight moves originate, terminate or transfer, when requested by a shipper; and

• declare that all or part of a state is an inadequate area of rail competition if petitioned by a state.

Co-sponsored by six senators and referred to the Senate Committee
on Commerce, Science, and Transportation, S. 919 also would require U.S. Department of Transportation to issue a tri-annual study on the extent of rail-to-rail competition, and U.S. Department of Agriculture to create a rail customer advocacy office.

Contact Progressive Railroading editorial staff.

More News from 4/22/2003