Utilities complain to STB about BNSF, UP, CSX, NS

The nations electric generation utility industy presented oral testimony before the STB complaining against the unfair trade practices of many of the railroads with respect to coal deliveries. BNSF, UP, CSX and NS were especially singled out.

There is considerable sentiment in the shipper community for railroads to be re-regulated as competition is no longer present for transport of many commodities since the railroad mergers.

See: http://www.kansascity.com/business/story/195743.html

Wouldnt some form of open access achieve the same thing ?

Open access disregards the basic tenets of private property and is a step toward socialism. The railroad is a private for-profit enterprise, not something operated for the good of the public. Should Burger King be forced to sell Big Macs?

exactly why the track should be open access . there is nothing to stop mcdonalds from opening up a store next to Burger king , and offering competition . A railroad however , often has a monopoly , as its not possile for a competing railroad to build tracks to a customer that is fed by one railroad .
i cant seen anything socialist in it , i would of thought it was the principle free market economies were built on . Competition setting a fair market price .

David Benton wrote:exactly why the track should be open access . there is nothing to stop mcdonalds from opening up a store next to Burger king , and offering competition . A railroad however , often has a monopoly , as its not possile for a competing railroad to build tracks to a customer that is fed by one railroad .
i cant seen anything socialist in it , i would of thought it was the principle free market economies were built on . Competition setting a fair market price .

Well, here's the problem. Since the US has a tradition of private rail ownership of the infrastructure, generally any extension to serve a customer is done by a private railroad company (yes, there are partnerships & joint ventures between railroads, private-public partnerships, access rights granted as a condition by two railroads wanting a merger to a third party, etc, but in general it's private infrastructure run by a single company). OK, so the railroad builds this branch to serve this customer, and now the government's gonna make it share with a competitor? - Nowadays, that'll get shot down in court so fast the lawyers will just phone the case in. If however, the government provides a 'carrot' (say granting tax abatements on the branch if the railroad allows open access), or lots of carrots, then you can have 'open access' for that line - compensation.
I believe the fact that, because imposing open access as a mandate with no corresponding compensation to the affected railroads would be quickly struck down by the courts, is why J D Rockefeller has had no success pushing his various 'Open Access' bill over the decades.

There is nothing to stop MacDonalds from opening up a store next to Burger King - agreed. Open access is like forcing Burger King to sell Big Macs in the store which Burger King owns and operates.

Competition setting a fair market price is fine, but you are suggesting that railroad A must allow railroad B to use A's line to compete with A. Kind of like if you had a car in high school and some guy without a car liked your girl, forcing you to loan your car to that guy to take your girl to the movies.

Yes , there would need to be compensation , preferably the govt buying the line outright .
Where a seconfd track needs to be built to cater for the increased traffic , the govt could pay for that .

David Benton wrote:Yes , there would need to be compensation , preferably the govt buying the line outright .

Well, while the utilities and other rail customers might very well be all
Currently in the US government ownership of lines tend to be limited to a.) state/local authorities buying a line for commuter or other transit service, usually with granting trackage rights to the erstwhile private rail owner b.) state/local authorities buying a line serving important local industries, which the line would otherwise be abandoned.
Now, if one customer demands this government owership, soon every dang customer will demand it, and the government (well, governments including local authorities) would end up owning the entire rail network - simply ain't gonna happen.

"There would need to be compensation". So you are suggesting some sort of eminent domain procedure to forcibly take the property from a railroad to allow its competitors access.

"...with the government buying the line outright". and "...the government could pay for that". Go back, remove the words "the government" and substitute "you and I" and re-read it. The governments - state, federal and local - get their money from taxes. So if we are going to have the government do all this confiscating, compensating, and building, YOU AND I are going to pay for it. And since governments always tend toward bigger and bigger bureaucracies to administer things, you can imagine how much more expensive this would become in the long run.

Our country was build by private enterprise (Yes, I know all about the large amounts of land the railroads were given 150 years ago) and that is what has made us great. To suggest forcibly taking private property from a company using money from our pockets, and setting up competition by such means, goes against the basic principles we live by. If prices are "too high" in Food Lion, should the government compensate them for the use of a couple aisles and allow Winn-Dixie to sell groceries in Food Lion's building?

Well, Mr Benton is from New Zealand, land of Kiwis & All Blacks
Reading the Wiki history of New Zealand railroads, it does seem that, except for a period from the '80s to the mid 00s, that the railroad infrastructure was government owned. The period under Tranz Rail (heh, I just realized that it's spelled Tranz not because it was named by Old Skool Rappaz, but instead TraNZ Rail) it was privatized, and according to Wiki that wasn't the best period for NZ rail.
Anyway, as for NZ open freight access - "As a result, the government has required minimum level of freight tonnages for Toll to keep its monopoly freight rights on most lines, since renationalising the rail network from Tranz Rail in 2003."
Heh

All right, enough razzing on New Zealand rail, the original article is a little unclear on what exactly the utilities are asking for - what does "set service standards" mean? Guidelines? Arbitration Panels? Partial regulation?
They don't seem to be parroting the CURE party line of 'open access' and the 'bottleneck problem' (one of those problems, like the RIAA's 'Analog Hole', which seems only to be a problem to the narrow little group whining about it 'cause it cuts into their excess profits), nor the similar ARC line (which apparently no longer has a website), so I am not sure what to think. I do agree the railroad companies don't smell much like roses in these matters, but generally the clients don't either - mutual suspicion, mutual distrust, mutual dislike - what an excellent business model!

I admit I overlooked Mr. Benton's location. I am arguing issues, not personalities and he has taken no personal offense at my views that I can see and none is intended. There are those in the US who believe the more government we have, the better. My opinion is that the less government involvement in this type of situation, the better.

Coming from a country where railroads are nationalized and it has apparently worked, I understand his view. It should be kept in mind that NZ's political structure may be quite different in various ways from ours, and open access may have made more sense under their ways than under ours. If it works there, that's fine, but I am against it here in the US.

no offense at all ,i love a good debate .
In Nz , the railway was privatized , then the track was brought back . Nz is too small to really provide a profitable railway to an operator . (the entire system is probably akin to a large shortline in the states ).the govt only paid a $ 1 for the track , but agreed to spend $ 200 million to upgrade them . the owner willingly entered into the agreement , the govt was very careful to avoid any ideas of seizure etc . the kicker was , the govt gave the operator monopoly access for 70 years , providing they meet minimum service standards . Many would argue Nz is to small to allow competition , but i would have thought it would have been better to pay more and allow competition .

The US federal government paid for , owns and runs the interstate road network of course .
Here , railways are generally funded as "alternatives to roading" . The idea is that say a $ 1 spent on the railway saves spending $ 2 or $3 on the road network . There may be social or eviromental benefits too , that may be taken into consideration . So there may be an increase in govt spending at first , but eventually that should be offset by less spent on the road network .


all is good , Sir Ray , we beat arch rivals Australia in both the rugby and the netball on the weekend , so there are alot of happy kiwis about .

In the US, the railroads are taxed on their property, and some of that tax money goes to build the interstate highways, airports, and canals which offer competition to the rails. The taxes that trucks pay do not come close to offsetting the damage they do to the highways and the trucking industry is constantly beating the drum to allow longer and heavier trucks.

Sir Ray wrote:Well, here's the problem. Since the US has a tradition of private rail ownership of the infrastructure, generally any extension to serve a customer is done by a private railroad company (yes, there are partnerships & joint ventures between railroads, private-public partnerships, access rights granted as a condition by two railroads wanting a merger to a third party, etc, but in general it's private infrastructure run by a single company). OK, so the railroad builds this branch to serve this customer, and now the government's gonna make it share with a competitor? - Nowadays, that'll get shot down in court so fast the lawyers will just phone the case in. If however, the government provides a 'carrot' (say granting tax abatements on the branch if the railroad allows open access), or lots of carrots, then you can have 'open access' for that line - compensation.
I believe the fact that, because imposing open access as a mandate with no corresponding compensation to the affected railroads would be quickly struck down by the courts, is why J D Rockefeller has had no success pushing his various 'Open Access' bill over the decades.

The US courts upheld the federal government mandate of open access on the electric transmission system over a decade ago. Since then any shipper can utilize any electric transmission to send power to any point in the USA. The electric utility industry is a very close parallel to what you describe for the railroads in the way infrastructure was and continues to be constructed and financed. Historically, many of the state railroad commissions expanded their jurisdiction to regulate electric utilities, and the Federal Power Act that regulated electric transmission at the Federal Level in the mid-1930's was largely based on the Interstate Commerce Act railroad model. The basis for the courts upholding the open access mandate was that the electric transmission companies under the open access legislation were entitled to an opportunity to earn a fair rate of return on their investment. So long as the railroads can charge a reasonsable compensatory rate to use their tracks (and that rate is identical in rates, terms and conditions applied to the railroad's own trains on its own track to avoid unfair trade practice issues) there is no reason to believe that open access would be struck down by the courts.