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Trouble in open access paradise?
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[quote user="greyhounds"] <P>What FM doesn't get, and the Torries do (I think that's the first time I've ever used that word) is that when you split the infrastructure and train operations you create a monopoly where there was none before. The infrastructure owner will have only one market, the train operators. The train operators will have only one supplier, the infrastructure owner. Only one supplier is, by definition, a monopoly.</P> <P>Monopolies use too few resources, they maximize their returns by restricting supply and driving up prices. That's not good for the people, and economies should be organized for the good of the people, not the good of one monopoly orgainization. (Government owned or privately owned, it makes absolutely no difference.) The Torries see that, the infrastructure controlling orgainization is not expanding capacity (it's using too few resources) and is causing problems for the population. Very typical of any monopoly.</P> <P>An integrated railroad (one that owns track and operates trains) is not a monopoly. This is not only true in the UK where distances are short, but in the US. The US General Accounting Office says the only 6% of US freight is captive. That means 94% is subject to effective competition. No monopoly here.</P> <P>When you split the train operations from track ownership, you make the track owner a monopoly. It has no competition. Only it can supply track capacity. It's best interest (whether it be government owned or privately owned) will be to restrict that capacity to drive up prices.</P> <P>On the other hand, an integrated company, one that owns the track and operates the trains, will see expanding track capacity as a way to increase returns in its competitive train operating environment. That's why the BNSF, operating in a competitive environment, is pouring money into track expansion while the monoploy track owner in the UK has no current expansion plans.</P> <P>FM just doesn't understand this. (Nor does he want to understand this.) He's wedded to his ideology of open access. And when the facts show that it doesn't work, he'll simply reject those facts.[/quote]</P> <P>So, an integrated company that owns the exclusive rights to the track <EM>isn't</EM> a monopoly, but a non-integrated track owner <EM>is</EM> a monopoly?</P> <P>[(-D][(-D][(-D][(-D][(-D][(-D][(-D][(-D]</P> <P>Yet another logical contradiction from the usual suspects.</P> <P>It is only a monopoly if the rail shipper has no other intramodal rail service providers to choose from. If he has more than one rail service provider to choose from, he is not subject to a monopoly.</P> <P>And the effects of monopoly may or may not be engendered in either a nationalized system or privatized system, or in an integrated system or a separated system. It is concievable for a nationalized infrastructure entity to host multiple rail service providers in true open access mode, just as it is concievable for a privatized entity to franchise rail service rights exclusively as a de facto monopoly, with or without integration of operations. The British "Open Access" experience has devolved into something less than the open access credo by allowing exclusivity, and <EM>that</EM> is what is causing the problems with the system. If there is no intramodal competition, it ain't real open access.</P>
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