Senator Backs Off Support For Rail Antitrust Bill

A senator who co-sponsored legislation to strip the railroad industry of antitrust exemptions wants the U.S. Senate to delay action on the bill while he presses ahead with related reforms to the regulatory agency that oversees rail transportation.

The unexpected development comes just days before the railroad bill is scheduled for Senate debate and may give the railroad industry, which strongly opposes the bill, some breathing room to continue pressing for changes.

Despite his earlier support for the antitrust bill, Sen. John Rockefeller, D-W.Va., now is urging his colleagues to block the legislation.

Rockefeller, chairman of the Senate Commerce Committee, and three other leaders on the committee have circulated a letter asking other senators to oppose a procedural motion that must pass before the Senate can take a final vote on the bill's passage.

That key procedural vote is scheduled for Tuesday. Debate on the bill is scheduled to begin Monday afternoon.

Rockefeller said the legislation would undercut a different bill he is working on that would overhaul the Surface Transportation Board, the federal agency that regulates rail competition.

Rockefeller and his Commerce Committee colleagues said they supported "strengthening the application of the antitrust laws to the railroad industry" but said the antitrust bill "would likely undermine many of the reforms we are seeking."

"It would treat the rail carriers differently from other common carriers and make major changes to rail policy without regard to overall rail policy," they said.

Joining Rockefeller on the letter were Sens. Kay Bailey Hutchison, R-Texas, Frank Lautenberg, D-N.J., and John Thune, R-S.D.

The pending antitrust bill is sponsored by Sen. Herb Kohl, D-Wisc., and originated in the Judiciary Committee, which approved it on a 14-0 vote in March.

Kohl's staff sent out a rebuttal Wednesday, arguing the Rockefeller letter was without merit and warning a hold-up of the antitrust bill could end any chance to pass railroad legislation this year.

"By killing this bill, we would be doing a disservice to rail customers who are suffering from anticompetitive actions by railroads today," Kohl's staff said.

Any Senate delay on the antitrust bill would be good news for the railroads.

Four rail companies dominate the rail shipping business: Norfolk Southern Corp. (NSC), Burlington Northern Santa Fe Corp. (BNI), CSX Corp. (CSX) and Union Pacific (UNP).

A Union Pacific executive, testifying before a House panel earlier this month, warned the antitrust bill would create considerable uncertainty in the industry and discourage private investment.

Shippers, including companies in the energy, chemical and agricultural industries, support the bill, complaining rail freight prices have been too high.

The Senate legislation would introduce significant regulatory changes.

The bill would repeal legal provisions that make certain railroad transactions exempt from review by antitrust regulators and that allow freight railroads to engage in collective ratemaking.

And importantly, the legislation would provide that in legal disputes, federal trial judges would not have to defer to the jurisdiction of the Surface Transportation Board, whose oversight has been criticized as too friendly to the railroads.

The legislation also would give private litigants the ability to seek court injunctions to block conduct by the rail companies.

The House is considering a similar bill. It remains pending before the House Judiciary Committee.

-By Brent Kendall, Dow Jones Newswires; 202-862-9222; [e-mail]