Friday, March 22, 2013

Senate railroad antitrust bill introduced; AAR says industry self-sufficiency threatened

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U.S. Senators Amy Klobuchar (D-MN) and David Vitter (R-LA) introduced the Railroad Antitrust Enforcement Act on Thursday, March 21.

The senators say the legislation will address so-called "captive shipping" and promote competition in the industry. However, the Association of American Railroads (AAR) says the bill unfairly targets the rail industry and threatens its self-sufficiency.

Sen. Klobuchar, who chairs the Judiciary Antitrust Subcommittee, said in a press release that the Railroad Antitrust Enforcement Act removes the railroad industry's exemption from the antitrust laws, which would result in more competitive pricing.

AAR strongly objects to the Railroad Antitrust Enforcement Act, saying that while the bill claims to repeal freight railroads' limited antitrust exemptions, it actually singles out railroads for policies that could undermine the industry's ability to build, maintain and continuously upgrade the nation's rail infrastructure without taxpayer assistance.

"This bill proposes sweeping changes that would negatively impact this country's freight rail industry," said AAR President and CEO Edward R. Hamberger. "Sections of this bill are designed to override existing regulatory decisions and could potentially roll back government-approved transactions in railroad history. That retroactive application would inevitably create conflicts and uncertainty for railroads, railroad customers and courts. The resulting regulatory uncertainty could undermine the private freight railroads' ability to sustain necessary and critical private investments in America's rail infrastructure.

Contrary to what bill proponents assert, Hamberger said there is no gap in government oversight of railroad activities. Railroads are subject to most antitrust laws and in areas where limited exemptions exist, railroads are regulated by the Surface Transportation Board.

"There's one thing in Washington that everyone agrees on – and that is our nation's infrastructure needs attention and serious investment. Freight railroads have invested more than $526 billion in private capital over the past three decades – half a trillion dollars – into America's rail infrastructure so taxpayers didn't have to. A regulatory environment that encourages private investment should remain a priority," said Hamberger.

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