Rail antitrust legislation passes House judiciary hurdle
The House Judiciary Committee passed legislation Wednesday that would create a dual regulatory system for the U.S. rail industry and retroactively undo agreements, decisions and rulings in effect, argues the American Association of Railroads.
'This legislation will severely hamper the ability of the nation's railroad industry to expand, and to deliver the goods and products our economy depends on,' said Edward R. Hamberger, president and chief executive officer of AAR, in a statement. 'It will force more freight off the railroad and onto the highway, dramatically increasing pollution and traffic congestion.'
The Railroad Antitrust Enforcement Act of 2007 (H.R. 1650) seeks to end antitrust immunity for railroads.
'This legislation is long overdue and absolutely necessary to begin to end the railroad monopolies that are driving consumer prices up and service down,' the bill's author, Rep. Tammy Baldwin, D-Wis., said in February. 'Captive shippers are at the mercy of a single railroad's price increase, which means consumers face not only increased rates in the products they buy, but the increased costs of the electricity consumed by restaurants, hospitals, dry cleaners and other producers of goods and services. This is a vicious cycle of rising rates and it must end.'
The bill would repeal the railroad antitrust exemptions in antitrust and transportation statutes, so that antitrust law fully covers railroads. The bill would also permit the Justice Department and Federal Trade Commission to review railroad mergers under antitrust law and would eliminate antitrust exemptions for mergers, acquisitions, collective ratemaking and coordination among railroads. State attorneys general and other private parties could also sue for treble damages and sue to halt anticompetitive conduct, both of which are not currently allowed under federal law.
'Opening the industry to competition will help break the four major railroad companies' stronghold on American businesses and consumers,' said Consumers United for Railroad Equality (CURE), a group aiming to get the antitrust exemption repealed.
But the AAR claims the legislation's retroactive nature would create tremendous economic uncertainty for the industry, causing the railroads to curtail robust expansion plans underway. This would result in tighter rail capacity and shift more freight to our nation's already overcrowded highways, the association said.
'In addition, provisions that allow dual and potentially conflicting regulatory oversight could cause a 'domino effect' of operational problems for freight and commuter railroads across the country,' AAR said.
AAR spokesman Tom White told American Shipper the bill has passed out of the Senate Judiciary Committee but is still under review by the Senate Commerce Committee, which claimed concurrent jurisdiction over it. He didn't know whether it would face another similar hurdle in the House before going to the floor, but said the bill has a 'long, long ways to go' before formally passing. ' Eric Johnson
Rail antitrust legislation passes House judiciary hurdle
