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Was waiting for someone else to post this stuff, but as usual it's left up to me, so here it goes..... At the annual Railroad Day in DC, rr lobbyists stated their support for an as yet unnumbered Senate bill "Freight Rail Infrastructure Capacity Expansion Act" which would provide a 25 percent capacity expansion tax credit to any company (railroad, trucking, et al) that makes a qualified "freight-rail infrastructure" expenditure. At the same time, they voiced their opposition to the "Railroad Competition Improvement and Reauthorization Act of 2005" (HR 2047) and the "Railroad Competition Act of 2005" (S 919), which would either improve the Surface Transportation Board’s rate challenge process and eliminate excessive fees for filing rate cases (the positive spin) or re-regulate the rail industry (the negative spin). Additionally, they oppose the Railroad Antitrust and Competition Act of 2005 (HR 3318), which would remove railroads’ exemptions from antitrust laws (apparently both sides agree on this result). Meantime, the chemical industry was also in DC supporting HR 2047, S 919, and HR 3318. There is no word yet as to if they might support the infrastructure expenditure bill, perhaps they feel they would gain nothing if the railroad monopolies have capacity expansions subsidized by the feds, because they might still be subject to the short end of the differential pricing scheme. What is telling amid all this is that the crux of some of these proposed bills are the same stuff we on the forum had bandied about regarding open access. Hmmmm, tax credits for freight rail infrastructure expansions, introduction of competition based pricing, partial re-regulation, no more antitrust exemption to finally put an end to the anachronism of natural monopoly tendencies of US railroads....... with some minor corrections (aka allow the infrastructure tax credit but also regulate the infrastructure side of the equation), these are the basis for the Open Access experiment proposed by some of us. From these links...... http://www.progressiverailroading.com/freightnews/article.asp?id=8489 http://www.progressiverailroading.com/freightnews/article.asp?id=8490 ....you get the gist of the RR POV, as well as the POV of the American Chemistry Council (ACC). One telling statement made by Ed Hamberger of AAR shows a logical fallicy inherent in the RR position. He states "Supporters of this legislation have been vocal in demanding that railroads increase capacity and improve service. But they have utterly failed to explain how artificially lowering rail rates and rail earnings would lead to increased investments. In fact it wouldn’t. Instead, it would compel railroads to cut back on or eliminate projects aimed at increasing capacity.” Hmmm, isn't the problem right now one of the current monopolistic system's inability to keep up with current capacity needs? This is the inherent flaw of the closed access system - it is predicated on limiting capacity to enhance pricing power. Monopolism is counterintuitive to capacity expansion. Therefore, it is illogical and disingenuous to aver that antitrust remedies would reduce capital expenditures. It is competition that compels capacity expansion, not monopolism. What is important to remember is that the compeition must be market induced, not mandated by government regulation, which is why HR 2047 and S 919 need to be tweaked into an AT&T style breakup of the railroad oligarchy, which would then allow for true market based intramodal competition. In this respect, both the AAR and the ACC are off base. Yet, it is interesting to see what would happen if ALL these bills became law. There would be some form of remedy for captive (aka domestic) shippers, and at the same time incentive for railroads to expend on capacity expansions. It wouldn't be Open Access - the question is, would it be better or worse than OA?
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