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Take a look at the gist of the Gallamore et al study, namely the example of the "stylized rail network" (p 18).  In this example, the authors try to recreate the nuances of a captive shipper using various options for attaining some aspect of competition (e.g. SARR, et al).  Their example shows two parallel railroads between Points B and C, and a captive customer of Railroad A on a line connecting Point A with Point B.  With this example they make the point of Railroad A "needing" to charge captive rates to cover not only incremental costs of the line from Point A to Point B, but also the fixed cost of maintaining the line from Point A to Point B. Make sense.... Except for the fact that most captive customers are actually located on active mainlines, which have plenty of traffic density to cover the network's fixed costs.  A more appropriate example then of a captive shipper would be one located on one of the two railroads' mainlines between Point B and Point C.  Therefore, there are no added fixed costs for serving the captive shipper.  So why do these apologist economists allow for captive rates if the captive shipper in question does not add anything more in costs other than incrementalism? That's the gist of the Montana problem - BNSF has two busy mainlines through Montana, yet because of the government sanctioned fiefdom, BNSF is allowed to charge those 300%+ rates without a corresponding justification for covering fixed costs, because there are no added fixed costs of shipping products in and out of Montana.  All Montana rail shipments add nothing more than incremental costs to the system, yet those Montana rates seem meant for covering incremental and fixed costs of maintaining the BNSF rail network across Montana.  Correspondingly, rates of the import intermodal traffic passing right through Montana are not even covering the incremental costs (e.g. <180% R/VC). It is this market skewing, unmentioned in any such economic rail study, that is best remedied by introducing competitive access.
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