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Preserve Balanced Regulation / Antitrust

In December, the Senate Commerce Committee approved Senate Bill 2889 (S. 2889), a bill that would reauthorize the Surface Transportation Board for the first time since its inception and give the Board a greater role in regulating freight rail rates and authorize up to $256 million in the next five fiscal years for the Board's operations. In addition, the bill would require major railroads to "bottleneck" rates; set standards for reciprocal switching and terminal access rates; create a process for parties to challenge paper barriers; and increase STB scrutiny of future railroad mergers for competitive, service and environmental effects. In addition, the bill proposes to strengthen the STB's oversight of the rail industry by updating rail transportation policy, providing the board independent investigative authority and creating a rail customer advocate to help resolve shipper's concerns. The legislation also would improve rate complaint processes, require railroads to provide service standards to shippers, mandate that the STB review current class exemptions for unregulated railroad traffic and set lower fees for filing complaints with the board.

The big question now is how the Commerce bill will be merged with Senate Bill 146 (S. 146), a bill reported by the Senate Judiciary Committee earlier this year that would take away key parts of the STB's jurisdiction and give the authority to investigate potential antitrust law violations by the railroads to the Justice Department, the Federal Trade Commission and the federal courts. Senator Rockefeller, the sponsor of S. 2889 promised Senator Kohl, the sponsor of S. 146, that he would include portions of his bill into the STB Reauthorization bill.

H.R. 233/S. 146, the Railroad Antitrust Enforcement Act

House Bill 233 (H.R. 233) and Senate Bill 146 (S. 146) would repeal limited antitrust exemptions provided for freight railroads. The bills would allow the federal government, States and private parties to file suit to enjoin anti-competitive mergers and acquisitions. The bills would also move the review of mergers to the Justice Department's Antitrust Division and to the Federal Trade Commission.

H.R. 233 (16 cosponsors) was referred to the House Committee on Judiciary and T & I. On July 30, 2009, the House Judiciary Subcommittee on Courts and Competition Policy approved H.R. 233 and now awaits action by the full House Committee on Judiciary.

S. 146 (11 cosponsors) was reported out of the Senate Committee on Judiciary. However, the Senate Commerce and Judiciary Committees intend to work together on comprehensive rail competition legislation.