Wednesday, March 11, 2009

Antitrust bill "terrific," says Obama nominee

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Christine Barney, a former Federal Trade Commissioner who has been nominated by President Obama to be the chief antitrust enforcement officer at the Department of Justice, thinks legislation to take away the railroads' remaining antitrust exemptions is "terrific."

"I support your bill," Barney told Senator Herb Kohl (D-Wis.) at a Senate hearing on her nomination on Tuesday, March 10. Kohl is a sponsor of the legislation, which the Judiciary Committee approved March 5 and sent to the full Senate for consideration.

Barney commended co-sponsor Sen. Russ Feingold (D-Wis.) on the antitrust legislation, and said that she will "enforce" it. She was questioned why the DOJ had not fought any of the railroad mergers during the George W. Bush Administration years—failing to realize that none took place in that time period.

Comments Railway Age Contributing Editor Larry Kaufman: "That's when she lost me once and for all. The last merger between Class I's was the joint purchase of Conrail by Norfolk Southern and CSX—in 1997.  That was during the Clinton Administration. The CN/BNSF proposed combination was killed off by the STB in 2000—also during the Clinton presidency.  Obviously, DOJ's 'good offices' were not needed by STB.  DOJ did not oppose the Santa Fe/Southern Pacific merger in 1986—during the Reagan presidency—but DOJ wasn't needed.  DOJ actually supported that merger, and the ICC killed it on antitrust grounds all by itself. All of the modern-era mergers were supported or accepted by DOJ except for the Union Pacific/Southern Pacific transaction, and DOJ filed a really shoddy, sophomoric brief at the STB on that one."

The Association of American Railroads has said the legislation to repeal the industry's limited antitrust exemptions "creates an unprecedented and confusing regulatory scheme that could alter the current economic oversight of the railroads."

The AAR noted that the Senate committee action came as the Senate Commerce committee was developing legislation "that could subject the railroads to still more economic regulation" by the Surface Transportation Board.

"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.Hasmberger. "Congress should be promoting policies that help jumpstart the economy and regain consumer confidence, not overburden an industry that stands ready to get America back on track."