[Federal Register Volume 65, Number 67 (Thursday, April 6, 2000)]
[Proposed Rules]
[Pages 18021-18026]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-8374]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

49 CFR Part 1180

[STB Ex Parte No. 582 (Sub-No. 1)] \1\


Major Rail Consolidation Procedures
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    \1\ A copy of this decision is being served on all persons who 
participated in STB Ex Parte No. 582.
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AGENCY: Surface Transportation Board, DOT.

ACTION: Advance Notice of Proposed Rulemaking.

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SUMMARY: The Surface Transportation Board (Board) seeks public comment 
on modifications to its regulations governing proposals for major rail 
consolidations. We are issuing this advanced notice of proposed 
rulemaking to explore in more detail how our merger rules can and 
should be revised.

DATES: Notices of intent to participate are due on April 20, 2000. 
Comments are due on May 16, 2000. Replies are due on June 5, 2000.

ADDRESSES: An original and 25 copies of all paper documents filed in 
this proceeding must refer to STB Ex Parte No. 582 (Sub-No. 1) and must 
be sent to: Surface Transportation Board, Office of the Secretary, Case 
Control Unit, Attn: STB Ex Parte No. 582 (Sub-No. 1), 1925 K Street, 
NW., Washington, DC 20423-0001. In addition to submitting an original 
and 25 copies of all paper documents, parties must submit to the Board, 
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. Any party may seek a waiver from the electronic submission 
requirement.\2\
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    \2\ Documents transmitted by facsimile (FAX) or electronic mail 
(e-mail) will not be accepted.

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: On January 24, 2000, we initiated a 
proceeding in STB Ex Parte No. 582 to obtain public views on the 
general subject of major rail consolidations \3\ and the present and 
future structure of the North American railroad industry.\4\

[[Page 18022]]

In our recent decision,\5\ which we issued after considering the 
extensive written comments that had been filed as well as the 
statements delivered in person at a 4-day hearing,\6\ we concluded that 
the rail community is not now in a position to undertake what would 
likely be the final round of restructuring of the North American 
railroad industry,\7\ and that our current rules are not adequate for 
addressing the broad concerns associated with reviewing any proposals 
that, if approved, would likely lead to just two large North American 
transcontinental railroads. We therefore announced that we would revise 
our merger rules, and, because we determined that it made no sense to 
develop new merger rules in the middle of what could likely be the 
final round of major rail mergers, we announced that we would decline 
to accept further filings involving a major transaction (defined at 49 
CFR 1180.2(a)) until new merger rules are in place.
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    \3\ Merger or control of at least two Class I railroads. Class I 
railroads are those United States railroads with annual operating 
revenues (in inflation-adjusted 1991 dollars) of at least $250 
million.
    \4\ See Public Views on Major Rail Consolidations, STB Ex Parte 
No. 582 (STB served Jan. 24, 2000) (published in the Federal 
Register on Jan. 28, 2000, at 65 FR 4568).
    \5\ See Public Views on Major Rail Consolidations, STB Ex Parte 
No. 582 (STB served Mar. 17, 2000).
    \6\ Written comments were filed on or about February 29, 2000. 
The hearing was held in our offices in Washington, DC, on March 7-
10, 2000.
    \7\ We explained that the railroad industry has consolidated 
aggressively in recent years and that now only six large railroads 
remain in the United States and Canada: The Burlington Northern and 
Santa Fe Railway Company (BNSF); Union Pacific Railroad Company 
(UP); CSX Transportation, Inc. (CSX); Norfolk Southern Railway 
Company (NS); Canadian National Railway Company (CN); and Canadian 
Pacific Railway Company (CP). Two smaller U.S. Class I railroads 
(Grand Trunk Western Railroad Incorporated and Illinois Central 
Railroad Company (IC)) are affiliated with CN. A third smaller U.S. 
Class I railroad (Soo Line Railroad Company) is affiliated with CP. 
A fourth smaller U.S. Class I railroad (The Kansas City Southern 
Railway Company (KCS)) remains independent but has entered into a 
comprehensive alliance with CN and IC.
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    As indicated in our March 17 decision in STB Ex Parte No. 582 (slip 
op. at 3 n.6), we are not in a position to propose specific rules at 
this time because, while several parties raised broad issues of 
concern, specific rule changes were not the focus of our hearing. 
Instead, we announced that we would be issuing this advance notice of 
proposed rulemaking (ANPR) to explore in more detail how our merger 
rules can and should be revised.
    Our current merger regulations \8\ were adopted soon after passage 
of the Staggers Act of 1980. The widespread financial distress faced by 
our nation's rail carriers in the period leading up to enactment of 
that statute, and the associated deteriorating service levels faced by 
their customers, were due in large measure to an overly restrictive 
regulatory system that unduly limited the ability of railroads to 
effectively rationalize what was at that time a significant degree of 
excess rail infrastructure. The merger regulations--aimed at 
encouraging railroads to formulate proposals that would help 
rationalize excess capacity \9\ so long as competition, access to 
essential service, and other public interest goals were not degraded--
were a proper and reasoned response to the serious problems affecting 
railroads and their customers at that time.
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    \8\ See 49 CFR part 1180, subpart A (49 CFR 1180.0-1180.9).
    \9\ See 49 CFR 1180.1(a) (The Surface Transportation Board 
encourages private industry initiative that leads to the 
rationalization of the nation's rail facilities and reduction of its 
excess capacity. One means of accomplishing these ends is rail 
consolidation).
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    As we explained in our STB Ex Parte No. 582 decision (slip op. at 
6), however:

    The goals of that merger policy have largely been achieved. It 
does not appear that there are significant public interest benefits 
to be realized from further downsizing or rationalizing of rail 
route systems, as there is little of that activity left to do. 
Looking forward, the key problem faced by railroads--how to improve 
profitability through enhancing the service provided to their 
customers--is linked to adding to insufficient infrastructure, not 
to eliminating excess capacity.

    Thus, it appears that further rail mergers now offer limited 
opportunity for additional efficiencies through elimination of excess 
capacity. And while extensions of single-line service can offer 
benefits to railroads and their customers, there is a view that these 
benefits could be better achieved, short of merger, through innovative 
joint marketing arrangements and other cooperative efforts, such as 
joint dispatching to more efficiently move trains through congested 
terminal areas.\10\ Further, our experience has shown that, whether or 
not a particular proposed consolidation holds promise of significant 
service enhancing and cost reducing synergies, the integration task is 
itself quite complex and time consuming, and has, in a number of recent 
instances, been associated with severe service dislocations.
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    \10\ Joint marketing arrangements, which enable railroads to 
offer joint-line service almost as seamless as single-line service, 
could be more practicable and more likely to be in the public 
interest when the carriers connect largely end-to-end, rather than 
competing over broad territories. At the STB Ex Parte No. 582 
hearing, Secretary of Transportation Rodney Slater and the Chief 
Executive Officers of several Class I railroads testified as to the 
benefits of such arrangements.
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    There were four broad concerns discussed at our hearing that 
persuaded us that we should begin a proceeding to revise our rules 
governing major rail mergers now. First, a significant number of 
shippers and smaller railroads stated that we need new rules to ensure 
that competition would not be curtailed by future mergers. Their 
concerns are heightened by the very real prospect that the rail 
industry is on the threshold of making another round of rail merger 
proposals that, if approved, could result in a transcontinental rail 
duopoly. Second, many parties argued that additional safeguards were 
necessary in our merger regulations to ensure that any future mergers 
are not accompanied by the serious service disruptions that have proved 
so costly to shippers, rail employees, and other rail carriers, 
including shortline railroads, and/or to provide suitable compensation 
arrangements if unforeseen disruptions do occur. Third, some parties, 
including Transportation Secretary Slater and representatives of rail 
employees, suggested that revisions to our merger rules are necessary 
to guarantee that railroads continue to be operated in as safe a manner 
as is possible and to provide other employee protections. Finally, 
certain parties raised concerns that would arise if one of the two 
large Canadian carriers, CN or CP, sought to merge with or control a 
large U.S. railroad.
    Our merger regulations must advance our mandate--under which we are 
to approve mergers only to the extent consistent with the public 
interest, and under which we are to promote a safe and sound rail 
system that runs smoothly and efficiently to provide the service needed 
by rail customers--in a manner that is consistent with the overall rail 
transportation policy established by Congress.\11\ In today's 
environment--with the industry far more concentrated than it was when 
our current regulations were fashioned; with the prospect that any 
further major rail merger would trigger strategic responses that could 
lead to a transcontinental rail duopoly; and with only limited 
opportunities remaining for significant merger-related efficiency 
gains--the time has come for us to consider whether we should revise 
our rail merger policy, as many have suggested,

[[Page 18023]]

with an eye towards affirmatively enhancing, rather than simply 
preserving, competition.\12\ Moreover, with serious service concerns 
surrounding major rail mergers, our rules should also address those 
concerns and any other areas where the public interest is involved.
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    \11\ Under 49 U.S.C. 11324, in considering a major rail merger 
proposal, the Board is to be guided by the public interest and must 
consider, at a minimum: the adequacy of transportation to the 
public; inclusion of other rail carriers in particular mergers; and 
financial, employee, and competitive issues. Moreover, the rail 
transportation policy of 49 U.S.C. 10101, which guides us in our 
regulatory activities, directs us, among other things, to promote 
safety, efficiency, good working conditions, an economically sound 
and competitive rail transportation system, and a transportation 
system that meets the needs of the public and the national defense.
    \12\ Agency decisions issued under our existing regulations have 
preserved and sometimes enhanced competition, while promoting 
efficiency-enhancing system rationalizations whose benefits were 
ultimately passed along to shippers in the form of lower rates and 
improved service. Now, however, we see little opportunity for 
substantial further efficiencies to be achieved through additional 
system rationalizations.
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Overview

    As we stated in our March 17 decision in STB Ex Parte No. 582 (slip 
op. at 6), we intend to revisit our approach to competitive issues such 
as the ``one-lump theory'' and the ``three-to-two'' question; 
downstream effects; the important role of smaller railroads in the rail 
network; service performance issues; how we should look at the types of 
benefits to be considered in the balancing test, and how we monitor 
benefits; how we should view alternatives to merger, such as alliances; 
employee issues such as ``cram down;'' and the international trade and 
foreign control issues that would be raised by any CN or CP proposal to 
combine with any large U.S. railroad.

Request for Comments

    We request public comment and more detailed proposals on these 
issues as more fully described below and on any other ways in which our 
merger regulations should be modified to promote and enhance 
competition and/or other public interest goals. We have heard parties 
suggest a variety of rule changes, including those listed below. We 
invite all interested persons to comment on these types of changes and 
any others that commenters would like to propose. We encourage 
commenters to include specific draft rules for their proposed 
changes.\13\ We also request the parties to prioritize the changes that 
they propose or endorse. We should note that it is not our intent to 
``load up'' our rules so as to make them so onerous that they would 
necessarily foreclose all merger proposals. Rather, our objective is to 
identify reasonable means to assure that future merger proposals will 
promote public interest goals.
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    \13\ We also intend in this rulemaking proceeding to propose 
necessary technical updates or corrections to the merger rules at 
the notice of proposed rulemaking (NPR) stage. To that end, we 
invite commenters to identify, and offer textual suggestions for 
modifying, existing provisions within 49 CFR part 1180 that are out-
of-date or otherwise in need of correction.
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Downstream Effects

    One change that we definitely intend to propose is elimination of 
the ``one case at a time'' rule at 49 CFR 1180.1(g). We had previously 
announced our determination to waive this rule in a decision in STB 
Finance Docket No. 33842 for that proceeding,\14\ and the idea of 
modifying our rules to that effect for all future major rail 
consolidation proposals received broad support at the hearing. Under 
such a proposed change, we would examine in all future major merger 
proceedings the likely ``downstream'' effects of a proposed 
transaction, including the likely strategic responses to that 
transaction by non-applicant railroads.
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    \14\ 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 Jan. 4, 2000, at 65 FR 318).
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Maintaining Safe Operations

    Transportation Secretary Slater testified that a primary concern of 
the Department of Transportation is that safety be maintained 
throughout the rail network. We share that concern. Ensuring that 
safety concerns are addressed has been, and will remain, a primary goal 
of our environmental review in railroad merger cases. This process 
works best on a case-by-case basis, however, and we do not see any 
reason to alter our merger rules in this respect.\15\
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    \15\ We note that our environmental rules at 49 CFR part 1105 
are not specific to rail mergers and we therefore do not intend by 
this notice to reopen our environmental rules.
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    Morever, in recent major rail mergers we have required applicants 
to work with the Federal Railroad Administration (FRA) to formulate 
Safety Integration Plans (SIPs) to ensure that safe operations would be 
maintained throughout the implementation process of any merger proposal 
that we approve. We also have instituted a joint rulemaking with FRA in 
which the two agencies, working in conjunction, have proposed 
regulations designed to ensure adequate and coordinated consideration 
of safety integration issues in railroad merger cases.\16\ We have 
already solicited and received comments in that proceeding, and a joint 
hearing was held by the two agencies. Therefore, we see no need to 
address the SIPs process further in this proceeding. We intend to 
continue to require SIPs on a case-by-case basis, where appropriate, 
until the SIPs rulemaking proceeding is concluded.
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    \16\ See Regulations on Safety Integration Plans Governing 
Railroad Consolidations, Mergers, Acquisitions of Control, and Start 
Up Operations; and Procedures for Surface Transportation Board 
Consideration of Safety Integration Plans in Cases Involving 
Railroad Consolidations, Mergers, and Acquisitions of Control, STB 
Ex Parte No. 574, FRA Docket No. SIP-1, Notice No. 1 (Joint Notice 
of Proposed Rulemaking published at 63 FR 72225 (Dec. 31, 1998)).
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Safeguarding Rail Service

    Many of the shipper and shortline railroad parties at our hearing 
explained how the serious service disruptions that have been associated 
with recent mergers have caused significant harm to their businesses. 
These parties seek additional safeguards in our merger review process 
so that any future rail mergers would not cause such harm.
    Many parties emphasized the need for performance measures with 
which post-merger service could be compared. Some parties also 
suggested that merger applicants be required to submit more detailed 
service integration or implementation plans, with enforceable 
penalties, to ensure against merger-related service degradation, and 
mandatory arbitration of post-merger service disputes (perhaps with 
post-arbitration recourse to the Board). Other parties suggested that 
merger applicants be required to submit plans for preserving service 
options available to small shippers (e.g., grain shippers located on 
shortline railroads that cannot handle the newest generation of heavy 
rail cars or load trains of a length/volume as may be required by 
practices of individual Class I carriers.) Others expressed concern 
over the ability of carriers and shippers to acquire new or utilize 
existing infrastructure and capacity. Finally, many parties echoed 
Transportation Secretary Slater's concern that more consolidations in 
the industry could result in carriers that are ``too big to manage, yet 
too big to fail,'' and suggested that, in our assessment of the 
financial viability of a proposed merger, we examine the financial 
terms carefully with a view toward minimizing future service 
disruptions and any harm that could result from any such disruptions.
    We seek comment on how our merger rules might best be revised to 
protect customers and shortline railroads from merger-related service 
disruptions and the loss of adequate infrastructure and capacity.

Promoting and Enhancing Competition

    As explained above, we believe that the time has come to consider 
whether

[[Page 18024]]

we should alter our rail merger policy to place a greater emphasis on 
enhancing, rather than simply preserving, competition. Many of the 
competition-enhancing elements of recent mergers have been proposed by 
the applicants themselves, either in the initial application or in 
voluntary agreements reached with other parties, many of which have 
been encouraged by this agency. For example, in the CSX/NS/Conrail 
transaction, applicants proposed to use ``Shared Assets Areas'' to open 
up competition between CSX and NS for $700 million in rail traffic that 
had been exclusively served by Conrail. In addition, the applicants 
negotiated agreements that contained other pro-competitive elements.
    At our recent hearing in STB Ex Parte No. 582, parties suggested 
various other means by which rail mergers could be used to promote and 
enhance competition in the rail industry. These included:
     Requiring merger applicants to maintain open gateways for 
all major routings.
     Requiring merger applicants to provide switching, at an 
agreed-upon fee, to all exclusively served shippers located within or 
adjacent to terminal areas. (The suggestion was that this measure be 
even broader than the switching condition that we imposed in the CSX/
NS/Conrail proceeding--where we expanded upon the privately negotiated 
agreement that formed the basis of the condition--by including all 
shippers within or adjacent to terminal areas, and not just those 
shippers that had switching available prior to the consolidation, as in 
CSX/NS/Conrail.)
     Requiring merger applicants to offer, upon request, 
contracts for the competitive portion of joint-line routes when the 
joint-line partner has a bottleneck segment. (This would address 
shipper concerns that competitive-segment carriers may be unwilling to 
enter into contracts that would enable shippers to obtain bottleneck 
rate relief before the Board.)\17\
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    \17\ Central Power & Light Co. v. Southern Pac. Transp.Co., Nos. 
41242, et al. (Dec. 31, 1996), clarified (Apr. 30, 1997), aff'd sub 
nom. MidAmerican Energy Co. v. STB, 169 F.3d 1099 (8th Cir. 1999), 
reh'g denied (Apr. 20, 1999), cert. denied sub nom. Western Coal 
Traffic League v. STB, 120 S. Ct. 372 (1999); Union Pac. R.R. v. 
STB, No. 98-1058 (D.C. Cir. Feb. 15, 2000).
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     Requiring merger applicants to provide a new through route 
at a reasonable interchange point whenever they control a bottleneck 
segment and the shipper has entered into a contract with another 
carrier for the competitive segment. (This would permit shippers who 
have entered into such contracts to immediately seek bottleneck rate 
relief, rather than first requiring them to file an access complaint to 
obtain a new through route.)
     Revising the application of the ``one-lump'' theory to 
rail mergers. (Based on that theory, the Board has generally declined 
to require access to additional carriers by exclusively served shippers 
whose sole carrier sought to merge with one of several connecting 
carriers. The Board has applied a rebuttable presumption that such 
shippers would not be competitively harmed. Proponents of this change 
urge the Board to provide such exclusively served shippers with access 
to an additional carrier, through trackage rights, in order to promote 
and enhance, rather than merely preserve, competition.)
    We seek comment on which, if any, of these or any other measures 
should be considered for incorporation into our merger rules.

Shortline and Regional Railroad Issues

    Many of the concerns expressed at our hearing in STB Ex Parte No. 
582 by shortline and regional railroads, and how these might be 
reflected through modifications to our rail merger regulations, are 
subsumed in our discussion of competition and service issues above. 
Certain shortline and regional railroads also suggested that our 
revised merger rules require applicants to submit plans for promoting 
the viability of existing regional and shortline railroads, based on 
the ``Bill of Rights'' advocated by the American Short Line and 
Regional Railroad Association--which includes the right to compensation 
for service failures, the right to interchange and routing freedom 
(including the elimination of so-called paper and steel barriers), the 
right to competitive and nondiscriminatory pricing, and the right to 
fair and nondiscriminatory car supply. We seek comment on whether and 
how the concerns of shortline and regional railroads should be 
reflected in our merger rules.

Employee Issues

    Many of the concerns expressed at our hearing in STB Ex Parte No. 
582 by representatives of rail employees, and how those concerns might 
be reflected in changes to our merger rules, are subsumed in our 
discussion of safety and service issues above, and cross-border issues 
below. In addition, rail labor parties suggested at our hearing that we 
require merger applicants to agree to forgo any effort to ``cram down'' 
post-merger changes in collective bargaining agreements under the 
auspices of 49 U.S.C. 11321(a) and/or 11326, and/or under the auspices 
of Article I, Section 4 of our standard New York Dock labor 
conditions,\18\ and/or to offer their employees expanded labor 
protection (e.g., 10, rather than 6, years of benefits). We seek 
comment on whether and how these and other concerns of rail employees 
should be addressed.
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    \18\ New York Dock Ry.--Control--Brooklyn Eastern Dist., 360 
I.C.C. 60, 85 (1979) (New York Dock).
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``Three-to-Two'' Issues

    Many parties to our STB Ex Parte No. 582 proceeding have suggested 
that the Board should give greater weight to arguments of competitive 
harm in those situations where the number of rail carrier alternatives 
within a corridor would be reduced by a merger from three to two. We 
seek comment on whether and how our assessment of ``three-to-two'' 
effects should be reflected in our new merger rules, or whether this 
issue is best left to a case-by-case examination based on the 
individual circumstances of each case, as it has been in the past.

Merger-Related Public Interest Benefits

    Many parties at our hearing suggested that the Board should be more 
critical and skeptical of merger applicants' estimates of the synergies 
and other public interest benefits that would be produced by a proposed 
merger and that we should conduct post-merger monitoring to help ensure 
that the projected benefits are actually realized. Some have suggested 
that merger applicants be required to show that any claimed synergies 
or other public interest benefits could not be achieved short of 
merger, through marketing alliances or cooperative operating practices. 
We seek comment on how claims of public interest benefits should be 
treated under our merger rules.

Cross-Border Issues

    We were presented, in the recent CN/IC merger proceeding, with a 
few issues relating to the fact that one of the applicant carriers was 
a Canadian railroad.\19\ At our hearing in STB Ex

[[Page 18025]]

Parte No. 582, we heard a far broader array of concerns over potential 
harms to the nation's interests if a Canadian railroad proposed to 
merge with a large U.S. railroad. Transportation Secretary Slater 
testified that such a proposal would lead to ``yet another uncertainty: 
the adequacy, consistency, and effectiveness of extra-territorial 
oversight,'' most notably with respect to FRA's ability to exercise its 
safety authority. In addition, the representative of the U.S. 
Department of Defense, explaining that the U.S. military relies on rail 
transportation in wartime, expressed concern over the possibility that 
predominant foreign control of a large U.S. railroad might adversely 
affect our nation's defense operations.
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    \19\ In that case, we determined that it would not be 
appropriate to require employees to forfeit their New York Dock 
protections if they chose not to move to Canada; we are continuing 
to monitor IC's Chicago gateway to address the concerns of North 
Dakota grain shippers that their product be able to continue to 
compete effectively with Canadian grain moving in new single-line 
service through Chicago over the combined CN-IC; and we also are 
monitoring whether there is any merger-related link to any unfair 
pricing practices in the lumber industry. Canadian National Railway 
Company, Grand Trunk Corporation, and Grand Trunk Western Railroad 
Incorporated--Control--Illinois Central Corporation, Illinois 
Central Railroad Company, Chicago, Central and Pacific Railroad 
Company, and Cedar River Railroad Company, STB Finance Docket No. 
33556, Decision No. 37 (STB served May 25, 1999), slip op. at 43, 
37, and 39, respectively.
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    Also, Transportation Secretary Slater explained that foreign 
control of railroads operating in the United States could lead to 
traffic shifts that could have significant adverse financial impacts on 
U.S. ports and waterway systems. The Port Authorities of New York and 
New Jersey, of Boston, and of Virginia testified at the STB Ex Parte 
No. 582 hearing that a major merger proposal involving CN could, by 
shifting traffic flows away from their ports to the Port of Halifax, 
imperil the significant public investment in their port facilities. 
Similar concerns were raised by the Ports of Seattle and Tacoma with 
respect to shifts of traffic to the Port of Vancouver.
    Finally, we heard concerns by the U.S. Department of Agriculture 
and by parties representing grain and lumber interests that a merger of 
a Canadian carrier with a large U.S. carrier could unfairly 
disadvantage their product in competition with Canadian grain and 
lumber in our domestic markets. They suggest that merger applicants 
would need to submit a more detailed systemwide operating plan and 
competitive impacts analysis that take these concerns into account.
    We seek comments as to whether and how these concerns should be 
addressed in our merger rules.
    Notice Of Intent To Participate. A copy of this decision is being 
served on all persons who participated in STB Ex Parte No. 582; 
however, persons who participated in STB Ex Parte No. 582 will not 
automatically be placed on the service list as parties of record for 
this (Sub-No. 1) rulemaking proceeding. Any persons interested in 
participating in this rulemaking proceeding (and being on the service 
list and receiving copies of filings) must file a written notice of 
intent to participate with the Board by April 20, 2000, in accordance 
with the filing requirements set forth below.
    Service List. A service list, identifying all parties that have 
filed notices of intent to participate, will be issued by the Board by 
April 28, 2000.
    Comments. Comments are due on May 16, 2000. Each party submitting 
comments to the Board also must serve a copy of such comments on each 
person indicated on the service list.
    Replies. Replies are due on June 5, 2000. Each party submitting a 
reply to the Board also must serve a copy of such reply on each person 
indicated on the service list.
    Paper Copies; Electronic Copies; Document Scanning. Each person 
filing a notice of intent to participate, comments, and/or a reply must 
file with the Board an original and 25 paper copies of: The notice of 
intent to participate (these must be filed with the Board by April 20, 
2000); the comments (these must be filed with the Board and served on 
all parties by May 16, 2000); and the reply (these must be filed with 
the Board and served on all parties by June 5, 2000). Each such person 
must also submit, in addition to an original and 25 copies of all paper 
documents filed with the Board, an electronic copy of each such paper 
document.\20\ 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. The Board will not accept facsimile submissions 
in this proceeding because of the additional administrative burden 
required to process such filings. Also, the Board will not accept e-
mail submissions in this or any other proceeding because we have not 
developed policies, procedures, or standards for accepting documents in 
that format.
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    \20\ For one exception, notices of intent to participate, we 
will not require the filing of electronic copies.
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    The Board intends to make available to the public all filings 
submitted in this proceeding by publishing an image of each on the 
Board's website at www.stb.dot.gov under the ``Filings'' link. To 
ensure the highest quality image is captured during the scanning 
process the following filing instructions apply in this proceeding: 
Participants shall submit comments in accordance with existing rules, 
which require that all filings be clear and legible; on opaque, 
unglazed, durable paper not exceeding 8.5 by 11 inches; and able to be 
reproduced by photography. We also will require that only white paper 
be used; that printing appear on only one side of a page; that parties 
not employ color printing, but use only black or dark blue ink; and 
that all pages of filings, including cover letters and any attachments 
be paginated continuously. The original document must be submitted 
unbound and without tabs to reduce possible damage to the document 
during removal of fasteners and to facilitate the use of a high-speed 
mechanism for automated scanning. Multi-page documents may be clipped 
with a removable clip or other similar device. All filings, including 
oversize or other non-scannable items, will be available at the Board's 
Docket Room.
    Subsequent Stages of This Proceeding. As indicated in our STB Ex 
Parte No. 582 decision (slip op. at 3 n.6), we plan: To issue a notice 
of proposed rulemaking (NPR) in this proceeding by October 3, 2000; 
\21\ to provide a total of 100 days (ending January 11, 2001) for 
comments, replies, and rebuttal on the proposals contained in the NPR; 
and to issue final rules by June 11, 2001.
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    \21\ The NPR will set forth our specific proposals for changes 
in our rail merger regulations.
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    Small Entities. Because we have not yet proposed specific rules, we 
need not at this point examine the impacts of any proposed rules on 
small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et 
seq.). We welcome, however, any comments respecting whether any 
suggested revisions to our regulations would have significant economic 
effects on any substantial number of small entities.
    Environment. The issuance of this ANPR will not significantly 
affect either the quality of the human environment or the conservation 
of energy resources. Furthermore, we do not expect that any revisions 
to our regulations would significantly affect either the quality of the 
human environment or the conservation of energy resources. We welcome, 
of course, any comments respecting whether any suggested revisions 
would have any such effects.
    Board Releases Available via the Internet. Decisions and notices of 
the Board, including this ANPR, are available on the Board's website at 
``www.stb.dot.gov.''

    Authority. 49 U.S.C. 721 and 11323-11325.

    Dated: March 30, 2000.


[[Page 18026]]


    By the Board, Chairman Morgan, Vice Chairman Burkes, and 
Commissioner Clyburn.
Vernon A. Williams,
Secretary.
[FR Doc. 00-8374 Filed 4-5-00; 8:45 am]
BILLING CODE 4915-00-P