Wisconsin Ag Connection - Kohl, Baldwin Aim to End Unfair Railroad Monopoly Power

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Kohl, Baldwin Aim to End Unfair Railroad Monopoly Power
Wisconsin Ag Connection - 01/08/2009

U.S. Senator Herb Kohl and Congresswoman Tammy Baldwin unveiled legislation to repeal antiquated antitrust exemptions protecting freight railroads from competition. The two Wisconsin Democrats say only four major Class 1 railroads carry 90 percent of the nation's freight, resulting often in unreliable service and exorbitant fees. Their measure, titled The Railroad Antitrust Enforcement Act, responds directly to concerns that freight railroads are abusing their dominant market power and raising rates for those who rely on them to ship dozens of vital commodities, including coal and agricultural products.

"Freight railroads have the luxury of being protected from the competition other industries face," said Kohl, who is the chairman of the Senate Antitrust Subcommittee. "They can name their price and the consumer pays. We have seen the result of this outdated policy in Wisconsin, where our utilities were forced to absorb staggering cost increases for shipping coal."

"This legislation is long overdue and absolutely necessary to begin to end the railroad monopolies that are driving consumer prices up and service down," said Baldwin. "This virtual monopoly by the freight rail industry is unnecessary, unfair, and unacceptable. It's time for Congress to apply our antitrust laws more equitably and I'm optimistic that this legislation will be on track for passage this session of Congress."

The bill has been introduced in the Senate and House and would result in placing the rail industry under the same antitrust laws that apply to other industries, including trucking, aviation, telecommunications and energy.

Current antitrust law protects a wide range of railroad industry conduct from scrutiny by antitrust enforcers. Railroad mergers and acquisitions are exempt from antitrust law and are reviewed solely by the Surface Transportation Board. Railroads that engage in collective ratemaking are also exempt from antitrust law. Kohl and Baldwin say their policy will eliminate these antitrust exemptions by allowing the federal government, state attorneys general and private parties to file suit to enjoin anti-competitive mergers and acquisitions.

Last year, both Senate and House versions of the legislation, were approved by the respective chambers' Judiciary Committees.

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