[Federal Register Volume 65, Number 19 (Friday, January 28, 2000)]
[Notices]
[Pages 4568-4570]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-1999]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[STB Ex Parte No. 582]


Public Views on Major Rail Consolidations

AGENCY:  Surface Transportation Board.

[[Page 4569]]


ACTION:  Notice of Public Hearing and Request for Comments.

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SUMMARY:  The Surface Transportation Board (Board) will hold a public 
hearing beginning on Wednesday, March 8, 2000, at its offices in 
Washington, DC, to provide interested persons an opportunity to express 
their views on the subject of major railroad consolidations and the 
present and future structure of the North American railroad industry.

DATES:  The public hearing will begin on Wednesday, March 8, 2000, and, 
if necessary, will continue on Thursday, March 9, 2000. Any person 
wishing to speak at the hearing must file with the Board a written 
notice of intent to participate, and must indicate therein a requested 
time allotment, by February 8, 2000. A schedule for the hearing, which 
will include a list of speakers and their allotted times, will be 
issued by the Board by February 18, 2000. Each speaker or commenter 
must file with the Board the text of his/her anticipated written 
statement, and/or a summary thereof, by February 29, 2000.

ADDRESSES:  An original and 10 copies of all notices of intent to 
participate and all written comments and/or summaries must refer to STB 
Ex Parte No. 582, and must be sent to: Surface Transportation Board, 
Office of the Secretary, Case Control Unit, Attn: STB Ex Parte No. 582, 
1925 K Street, N.W., Washington, DC 20423-0001. In addition to 
submitting an original and 10 copies of all paper documents filed with 
the Board, parties must also submit, on 3.5-inch IBM-compatible floppy 
diskettes (in, or convertible by and into, WordPerfect 7.0 format), an 
electronic copy of each such paper document.\1\
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    \1\ Any party may seek a waiver from the electronic submission 
requirement.

FOR FURTHER INFORMATION, CONTACT:  Julia M. Farr, (202) 565-1613. [TDD 
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for the hearing impaired: 1-800-877-8339.]

SUPPLEMENTARY INFORMATION:  The Surface Transportation Board (Board) 
has decided, on its own motion, to hold a public hearing beginning at 
10:00 a.m. on Wednesday, March 8, 2000, at its offices in Washington, 
DC, to provide a forum for the expression of views by interested 
persons, including railroads, rail shippers and other users, rail 
employees, and other elements of the rail sector, on major rail 
consolidations and the present and future structure of the North 
American railroad industry.
    Issues. This public hearing is prompted in part by the initiation 
of, but will be conducted separate and apart from, the ``BNSF/CN'' 
control proceeding in STB Finance Docket No. 33842, which was initiated 
on December 20, 1999, with the filing by Burlington Northern Santa Fe 
Corporation and The Burlington Northern and Santa Fe Railway Company 
(referred to collectively as BNSF) and Canadian National Railway 
Company, Grand Trunk Western Railroad Incorporated, and Illinois 
Central Railroad Company (referred to collectively as CN) of a notice 
indicating their intent to file an application seeking Board 
authorization under 49 U.S.C. 11323-25 and 49 CFR part 1180 for a 
transaction (referred to as the BNSF/CN transaction) under which BNSF 
and CN would be brought under common control.\2\ We are aware that, in 
the wake of the filing of the BNSF/CN notice of intent, there has been 
a great deal of speculation that the strategic responses of the 
remaining North American rail carriers to the proposed BNSF/CN 
transaction will lead to a new round of major railroad consolidations, 
ultimately resulting in the formation of two North American 
transcontinental railroad systems.
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    \2\ See Canadian National Railway Company, Grand Trunk Western 
Railroad Incorporated, Illinois Central Railroad Company, Burlington 
Northern Santa Fe Corporation, and The Burlington Northern and Santa 
Fe Railway Company `` Common Control, STB Finance Docket No. 33842, 
Decision Nos. 1 & 1A (STB served Dec. 28, 1999) (published in the 
Federal Register on January 4, 2000, at 65 FR 318).
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    We are also aware that this speculation has caused concern given 
that the structure of the North American railroad industry has already 
changed dramatically in the past half decade. There remain two major 
western railroads and two major eastern railroads in the United States. 
And, although there have been no major changes in the structure of the 
Canadian rail network following the privatization of CN, the ``CN/IC'' 
transaction represents a significant tightening of the bonds between 
the Canadian and American components of the overall North American rail 
network. Recognizing the restructuring that has occurred and the 
speculation about future restructuring, by joint letter dated January 
14, 2000, Chairman Bud Shuster and Ranking Democratic Member James L. 
Oberstar of the House Committee on Transportation and Infrastructure 
have urged the Board ``to promptly explore all options to ensure an 
early and vigorous debate'' on whether the ``downstream'' effects of 
the proposed BNSF/CN transaction are in the public interest. Given this 
letter and the concerns that have been voiced publicly, there appears 
to be strong sentiment for a public review at this time of what the 
evolving structure of the North American railroad industry is and 
should be.
    In scheduling a hearing now, we intend no prejudgment of the yet-
to-be-filed BNSF/CN application. Rather, we are providing a forum for 
the discussion of broader matters that have been raised since the 
announcement of the proposed BNSF/CN transaction. In this regard, there 
are several issues upon which we seek specific comments, and any other 
relevant comments, as always, are welcome.
    In particular, we note that a majority of the large railroads have 
recently stated that now is the time to concentrate on existing 
opportunities to improve service rather than on further consolidation. 
And, other parties have expressed concern about more restructuring 
while the industry is still recovering from service difficulties and 
other disruptions associated with implementation of the last round of 
major rail consolidations.\3\ Accordingly, we especially wish to 
explore public and, in particular, rail shipper and other user views on 
the timing of any proposed large railroad consolidation.
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    \3\ In this regard, while we would expect commenters to 
reference implementation and other issues that have arisen in the 
wake of mergers that have already been approved, we remind parties 
that we have other proceedings more specifically focused in 
oversight of individual mergers and thus would not expect the use of 
this proceeding to litigate or relitigate issues specifically 
related to those transactions.
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    In addition, we have made reference earlier in this notice to the 
concern publicly expressed that the strategic responses engendered by 
another large railroad consolidation would lead to significant 
additional consolidation, and possibly other changes in the structure 
of the rail industry or in the way in which the industry is regulated. 
The views of all interested persons are invited on these matters, as 
well as on the question of whether or not these eventualities would be 
a good thing for large and small railroads, and for their customers and 
employees, and, more broadly, whether it would be in the public 
interest.
    Views are sought also on fundamental questions related to the 
effects of railroad consolidations on the financial condition of the 
railroad industry and the industry's ability to provide responsive 
service at reasonable prices. In this regard, we seek comments on 
whether the railroad industry has and will have the necessary 
infrastructure, capacity and configuration to meet expected demand for 
freight service now and in the future.

[[Page 4570]]

    The public hearing that will be held beginning on March 8, 2000, 
will allow all interested persons, including railroads, rail shippers 
and other users, rail employees, and other elements of the rail sector, 
to voice their views on rail consolidation in general, and on the 
present and future structure of the North American railroad industry, 
and will give us a better sense of the current thinking of those most 
directly affected by our regulation. The hearing is scheduled for that 
date both because the letter from Chairman Shuster and Ranking 
Democratic Member Oberstar has urged prompt action on our part and 
because the application in the BNSF/CN control proceeding could 
conceivably be filed as early as March 20, 2000.
    It should be emphasized that the comments made at this hearing will 
not be regarded as ``evidence'' in the BNSF/CN control proceeding. That 
application, if and when it is filed, will be judged on its merits, on 
the basis of the record compiled in STB Finance Docket No. 33842, in 
accordance with the evidentiary directives already issued by the Board 
in its decision notifying the public of the future BNSF/CN filing, and 
subject to any other future rulings of the Board regarding that filing.
    Date(s) Of Hearing. The hearing will begin on Wednesday, March 8, 
2000, at 10:00 a.m., in the 7th floor hearing room at the Board's 
headquarters in Washington, DC, and will be conducted as other Board 
hearings have been conducted in recent years: there will be only short 
breaks during the hearing; the hearing can be expected to continue into 
the evening hours; and, if necessary, the hearing will resume on 
Thursday, March 9, 2000, and continue until every person scheduled to 
speak has been heard.
    Notice Of Intent To Participate. Any person wishing to speak at the 
hearing must file with the Board a written notice of intent to 
participate, and must indicate therein a requested time allotment, by 
February 8, 2000.
    Schedule. A schedule for the hearing, which will include a list of 
speakers and their allotted times, will be issued by the Board by 
February 18, 2000.
    Statement and/or Summary. Each speaker or commenter must file with 
the Board the text of his/her anticipated written statement, and/or a 
summary thereof, by February 29, 2000.
    Paper Copies; Electronic Copies. Each person intending to speak at 
the hearing should submit an original and 10 paper copies of his/her 
notice of intent to participate (these must be submitted by February 8, 
2000). Each person intending to speak or to submit written comments 
must submit his/her written comments and/or a written summary thereof 
(these must be submitted by February 29, 2000). Each such person should 
also submit, in addition to an original and 10 copies of all paper 
documents filed with the Board, an electronic copy of each such paper 
document. The electronic copy should be on a 3.5-inch IBM-compatible 
floppy diskette, and should be in, or convertible by and into, 
WordPerfect 7.0. Any person may seek a waiver from the electronic 
submission requirement.
    Coordination Encouraged. We encourage interested persons to 
coordinate the presentation of their views by selecting a single 
individual to appear at the hearing on behalf of their common 
interests. Because of the importance of shipper views on the subject 
matter, however, we encourage individual shippers to appear and express 
their positions.
    Post-Hearing Action. We will take such action, if any, as necessary 
to respond in an appropriate fashion to the views expressed at the 
hearing.
    Federal Register Publication. Notice of the March 8, 2000 hearing 
will be published in the Federal Register.
    Board Releases Available Via The Internet. Decisions and notices of 
the Board, including this notice, are available on the Board's website 
at ``www.stb.dot.gov.''
    This action will not significantly affect either the quality of the 
human environment or the conservation of energy resources.

    Decided: January 21, 2000.
    By the Board, Chairman Morgan, Vice Chairman Burkes, and 
Commissioner Clyburn.
Vernon A. Williams,
Secretary.
[FR Doc. 00-1999 Filed 1-27-00; 8:45 am]
BILLING CODE 4915-00-P