Tuesday, May 19, 2009

“NIMBY-ism as federal policy”

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In testimony before the House Judiciary Committee, Courts and Competition Subcommittee, Association of American Railroads President and CEO Edward Hamberger warned that H.R. 233, the Railroad Antitrust Enforcement Act of 2009, “would damage the public interest and severely distort the relationship between regulation and antitrust laws.”

mike_hemmer.jpgUnion Pacific Senior Vice President-Law and General Counsel Michael Hemmer (pictured) joined Hamberger in testifying about H.R. 233’s potentially harmful effects. The subcommittee “[should] not consider H.R. 233 in isolation,” he said. “If Congress wants to address rail transportation policies, it should work with colleagues in other committees of jurisdiction to craft a coherent, national rail policy that integrates regulation with antitrust jurisprudence. This bill is not just about antitrust law, it is an attempt to overturn long-established regulatory policies that have provided enormous benefits to shippers and American consumers. The bill even creates new regulatory law on matters unrelated to antitrust—and in doing so, treats railroads differently than other regulated industries.”
 “Of the many provisions within H.R. 233, four actually deal with antitrust law exemptions,” Hemmer noted. “These measures would eliminate the ‘Keogh Doctrine’ for railroads where its current application is unclear, but not for the utility industry where it has been most recently used as means of inoculation from antitrust law; repeal antitrust immunity for rate bureaus, which have been all but eliminated by the railroads over the past few decades; authorize dual agency review of rail mergers, creating additional cost and administrative burden; and allow private antitrust injunctions against railroads, but not other carriers, thus putting regulators and courts at potential conflict.”

Hemmer added that Several H.R. 233 provisions “are designed to override regulatory decisions, rather than repeal antitrust exemptions. In particular, there are provisions that would aim to give communities priority in some regulatory decisions, thus adopting NIMBY-ism as federal policy; allow the Federal Trade Commission to regulate rail carriers, but not other carriers, thereby creating a glaring conflict with the STB; and restrict primary jurisdiction for railroads, but not for other regulated entities.”

Hemmer also noted that H.R. 233 threatens to be retroactive, “which could lead to antitrust attacks on the continuing operation of every ICC-approved, or STB-approved transaction in railroad history.”

“Congress should take a step back and consider the harmful impacts this measure would have on not only railroads, but also our customers and American consumers,” said Hamberger. “The freight rail industry moves the goods we all need every day. We do that cleanly, efficiently, and without public funds—thereby allowing us to invest our own funds back into vital network infrastructure. If enacted, H.R .233 could drag us back to pre-deregulation days of weak investment and withering rail networks.”

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