Senate Judiciary Targets Railroads Unfair Antitrust Exemptions

Committee passes bill to end broad railroad antitrust exemptions

Sep 20, 2007, 01:00 ET from CURE

    WASHINGTON, Sept. 20 /PRNewswire/ -- Rail customers today applauded the
 Senate Judiciary Committee for its passage of legislation aimed at removing
 the railroads' antitrust exemptions to increase competition and fairness in
 the rail industry. The Railroad Antitrust Enforcement Act of 2007 (S. 772)
 was ordered reported to the full Senate by the Committee today by a
 bipartisan voice vote.
     "The railroads enjoy one of the broadest remaining antitrust exemptions
 of any industry," said Glenn English, Chairman of CURE and CEO of the
 National Rural Electric Cooperative Association. "In today's consolidated
 rail world, these exemptions provide cover for the railroads' unrestrained
 monopoly power, unfair pricing schemes and unreliable rail service across
 the board. This legislation will finally shine some light on a rail
 industry that has been allowed to operate in the shadows for far too long.
 We are grateful that the Senate Judiciary Committee is the first
 Congressional committee since 1980 to report legislation improving the
 nation's current railroad policy."
     In August 2006, 17 state Attorneys General sent a joint letter to the
 House and Senate Judiciary Committees asking Congress to remove the
 railroad antitrust exemptions.
     Since 1980, when Congress deregulated the rail industry, consolidation
 and mergers have left just a handful of Class I railroads that operate as
 regional monopolies. In October 2006, the General Accountability Office
 issued a report citing the fact that there was insufficient competition in
 the rail industry. Customers who have no competitive transportation
 alternatives have seen steady increases in prices while service levels have
 continued to erode. Meanwhile, the Surface Transportation Board (STB), the
 regulatory body charged with overseeing the rail industry, has been
 complicit, enabling-and even reinforcing-the railroad's accumulation and
 exercise of monopoly power.
     "The reality is that unrestrained monopoly power and an ineffective STB
 have led to a lack of fairness and competition in the Rail World that would
 not be tolerated under Real World circumstances," English said. "The
 nation's policy must hold rail companies accountable to real world
 standards of fairness and competition."
     The Railroad Antitrust Enforcement Act of 2007, cosponsored by Senate
 Judiciary Committee Chairman Sen. Patrick Leahy (D-VT), Sen. Herb Kohl
 (D-WI) and Sen. Norm Coleman (R-MN), would:
     -- Repeal the railroad antitrust exemptions;
     -- Permit the U.S. Department of Justice and the Federal Trade Commission
        (FTC) to review mergers under antitrust law; and
     -- Allow state Attorneys General and other private parties to sue for
        treble damages and sue for court orders to halt anticompetitive
        conduct, both of which are not currently allowable under federal law
     "Today's action by the Senate Judiciary Committee is an important first
 step in repairing our broken rail policies and ensuring fairness across the
 board," English said. "As we continue to gather supporters from both sides
 of the aisle, we are confident about the legislation's prospect on the
 Senate floor and beyond."
     A companion House bill (H.R. 1650) is currently pending in the House
 Judiciary Committee.