Thursday, March 05, 2009

AAR sounds alarm on Senate

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The Senate Judiciary Committee Wednesday reported a bill aimed at eliminating the railroads' limited antitrust exemption. The Association of American Railroads said the effort "could alter economic oversight of the railroads."

Meanwhile, the Senate Commerce Committee is crafting legislation that could subject the industry to additional regulation through the Surface Transportation Board, AAR said.

"We face two disparate schemes that spell nothing but confusion for the railroads and those charged with enforcing the regulations," said AAR President and CEO Edward R. Hamberger. "Congress should be promoting policies that help jump-start the economy and regain consumer confidence, not overburden an industry that stands ready to get America back on track.

"Overlapping regulatory schemes could derail the industry's ability to meet the nation's increased need for environmentally sound freight transportation," Hamberger said.

Hamberger pointed out that many industries besides the railroads, including agricultural marketing cooperatives, newspapers, and softdrink bottlers, operate with limited antitrust exemptions.  Congress, however, has specified how to deal with the potential conflict between antitrust law and economic regulation by an independent federal agency, except in the case of the railroad legislation being considered by the Judiciary Committee, he said.

"All aspects of railroad practices exempt from antitrust laws are subject to STB jurisdiction," Hamberger said.  "Eliminating the railroads' exemptions would not fill any void in the law. It would, however, create a scenario where multiple agencies have overlapping authority over railroads. There is no justification for singling out railroads in this manner."

Hamberger noted the proposed legislation could even allow retroactive application, meaning that previously approved mergers, line sales, and related activities could come under antitrust attack. Such action is “unwarranted and could raise constitutional issues," he said.

"The fair and balanced regulatory system introduced by the Staggers Rail Act of 1980 has provided U.S. shippers with the best and most cost-effective rail freight service in the world," Hamberger said. "Today's freight railroads are a true American success story. Knowing the immediate economic, environmental, and energy challenges our nation faces, we cannot afford to subject railroads to a conflicting regulatory system that will make it difficult—if not impossible—to meet the nation's transportation needs."