Amtrak as bully

Written by Frank N. Wilner, Capitol Hill Contributing Editor
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Amtrak President and CEO Richard Anderson.

Amidst extravagant accusations of inhospitable dispatching by host freight railroads of its long-distance passenger trains, taxpayer subsidized Amtrak is aggressively manipulating its privileged position in contravention of a congressional intent to expand private-sector operation of passenger trains. Amtrak’s strong-arm tactics also serve to squeeze monopoly rents from state and regional transit authorities, whose commuter trains share Amtrak-owned facilities.

Currently occurring in Chicago is Amtrak’s second stealth attempt since 2015 to control physical and economic access to Amtrak-owned passenger stations, allegedly to force higher rents on non-Amtrak commuter operators and choke off nascent private-sector competition for long-distance train operation.

As Amtrak has statutory immunity from economic regulation by the Surface Transportation Board (STB), it seeks to extinguish remaining regulatory oversight of subsidiary passenger train stations—acquired from common carrier freight railroads following Amtrak’s creation—by merging the stations and their tracks into Amtrak. This forecloses the ability of current and future users of those essential facilities—publicly and privately owned; commuter and long-distance—from seeking regulatory review should contract disputes arise over access fees and use terms.

In 2015, a slyly buried provision in a 1,030-page highway bill moving through Congress would have redefined Amtrak’s Northeast Corridor (NEC) to include track owned by Washington Terminal Co. and used by Virginia Railway Express (VRE) to reach Washington Union Station (WUS). The provision was removed after being revealed by this “Watching Washington” column.

Had the provision become law, VRE— whose trains are operated by Amtrak competitor Keolis—would have lost the option to protest before the STB all Amtrak demands for higher user fees at WUS. This is because the common carrier status of Washington Terminal Co. would have been eradicated by redefinition of the NEC.

In Chicago, Amtrak allegedly is seeking again to stifle competition—this time by merging its Chicago Union Station (CUS) subsidiary into itself, which purges the common carrier status of CUS. This would place commuter operator Chicago Metra, the primary user of CUS, at Amtrak’s mercy in negotiations over fees and terms for track access and station use. If it works, Amtrak could use the same merger tactic with Washington Terminal Co. to achieve its earlier thwarted objectives at WUS.

Amtrak’s action may also sabotage the intent of the 2015 Fixing America’s Surface Transportation (FAST) Act, which invited private-sector operation up to three of Amtrak’s long-distance routes. As many Amtrak long-distance trains operate to and from CUS, potential private-sector operators would be discouraged by Amtrak’s ability to abuse monopoly control of CUS.

In a defensive first step, Chicago Metra petitioned the STB for a declaration that it retains jurisdiction over CUS; that the STB can mediate any disputes should Amtrak and Chicago Metra reach an impasse; and that the STB can prescribe terms for Chicago Metra’s access to, and use of, CUS should mediation fail. Such a declaration would similarly assuage concerns of poten­tial private-sector competitors of Amtrak that may seek CUS access.

Other defensive action could occur.

Federal and Illinois antitrust laws prohibit monopoly power abuse that affects price and output—and, by extension, limits access to services, stifles innovation or hinders competition. As Amtrak, by statute, “is not a department, agency, or instrumentality of the United States Government,” it may face antitrust exposure. Additionally, Amtrak’s immunity from STB oversight means its CUS merger lacks antitrust immunity that accompanies STB-approved transactions.

Then, there is a legislative alternative. The STB has statutory authority over terminal access, reciprocal switching and track connections. Substantiated allegations that Amtrak is abusing its market power and thwarting congressional intent for greater private-sector involvement in passenger railroading could invite swift and strong support for a statutory amendment.

The legislation could provide simply that disputes involving access to Amtrak-owned passenger train stations be resolved by the STB. This could include subjecting Amtrak to the same STB access and switching remedies as attend STB-regulated freight railroads.

Frank N. Wilner is author of six books, including, Amtrak: Past, Present, Future; Understanding the Railway Labor Act; and, Railroad Mergers: History, Analysis, Insight. He earned undergraduate and graduate degrees in economics and labor relations from Virginia Tech. He has been assistant vice president, policy, for the Association of American Railroads; a White House appointed chief of staff at the Surface Transportation Board; and director of public relations for the United Transportation Union. He is a past president of the Association of Transportation Law Professionals. Wilner drafted the railroad section of the Heritage Foundation’s Mandate for Change (Volumes I and II), which were policy blueprints for the two Reagan Administrations; and was a guest columnist for the Cato Institute’s Regulation magazine. Amtrak: Past, Present, Future is available from Simmons- Boardman Books, 1-800-228-9670; www. transalert.com.

Categories: Commuter/Regional, High Performance, Intercity, Passenger Tags: ,