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Parties Involved:
Interstate Commerce Commission
Respondent
Public Utilities Commission of the State of Colorado
Petitioner
Trailways Lines, Inc.
Intervenor
United States of America
Respondent

Document Text:

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

FILED 

United Stat.es Court of Appeals 

Tenth Circuit 

PUBLIC UTILITIES COMMISSION OF THE 

STATE OF COLORADO, 

Petitioner, 

v. 

) 

) 

) 

) 

) 

) 

) 

UNITED STATES OF AMERICA and INTERSTATE) 

COMMERCE COMMISSION, ) 

Respondents, 

and 

TRAILWAYS LINES, INC., 

Intervenor. 

) 

) 

) 

) 

) 

) 

) 

) 

ORDER AND JUDGMENT 

FEB 2 51988 

ROBERT L. HOECKER 

Clerk 

No. 86-1268 

(On Petition for Review 

from the Interstate 

Commerce Commission) 

Before McKAY, BARRETT and TACHA, Circuit Judges. 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a); 10th Cir. R. 34.1.8. 

submitted without oral argument. 

The cause is therefore ordered 

Public Utilities Commission of the State of Colorado (CPUC) 

petitions for review of a decision of the Interstate Commerce 

Commission (ICC) in Docket No. MC-107586 (Sub No. 36) authorizing 

Trailways Lines, Inc. (Trailways) to discontinue regular round 

trip route passenger and express bus service involving the DenverGlenwood Springs portion of its Denver-Aspen Schedules 5062 and 

Appellate Case: 86-1268 Document: 010110027824 Date Filed: 02/25/1988 Page: 1 
5066, which would necessarily eliminate service of a southern loop 

deviating from what would otherwise essentially be a direct trip 

between Denver and Glenwood Springs, consisting of some 57 miles 

serving the towns of Climax, Leadville and Minturn. Trailways 

would continue to operate four daily round trips between Glenwood 

Springs and Denver. 

Prior to the ICC decision, Trailways had requested permission 

from CPUC to discontinue the above route service. The application 

was opposed by various affected communities and individuals 

located on the so-called Leadville Loop as well as staff of the 

CPUC. The CPUC denied Trailways' petition, finding that the 

Leadville Loop route was profitable and that there was a great 

public need for the service. Following the proceeding before the 

CPUC, Trailways petitioned the ICC pursuant to 49 U.S.C. 10935, 

which requires the ICC to grant a discontinuance unless it is 

found to contravene the public interest or continued service will 

not create an unreasonable burden on interstate commerce. 

In its petition for review of the ICC decision, CPUC contends 

that the ICC decision is arbitrary, capricious and an abuse of 

discretion and unsupported by substantial evidence in the record 

as a whole. Specifically, CPUC argues that the ICC erred (1) in 

accepting revenue and expense figures submitted by Trailways in 

concluding that variable costs exceeded revenues, ( 2 } in 

permitting termination of service justified by the comparison of 

expenses generated over an entire route to revenues generated over 

only the Leadville Loop, and (3) in its reliance upon the 

existence of subst i tute service in authorizing abandonment of 

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Appellate Case: 86-1268 Document: 010110027824 Date Filed: 02/25/1988 Page: 2 
service. 

The Bus Regulatory Reform Act of 1982, 49 U.S.C. 10935, was 

enacted to promote competition, reduce government regulation and 

to render the bus service more responsive to the traveling public. 

Significant to the instant review, the Congress empowered the ICC 

to preempt state regulations applicable to intrastate service. 

The scope of the Act was well articulated in Commissioner of the 

State of New York v. United States, 750 F.2d 163 (2d Cir. 1984), 

cert. denied, 105 S.Ct. 2019 (1985): 

In passing the Bus Act in 1982, Congress was concerned 

that regulation in general and state regulation in 

particular had substantially undermined the financial 

base of the bus industry ••.. Congress realized that 

state regulation often kept intrastate fares at 

artificially low levels and forced bus companies to 

continue operating unprofitable intrastate routes. 

Congress appreciated that these practices effectively 

forced bus companies to subsidize intrastate operations 

by overcharging interstate passengers and realized that 

under the Act, the ICC necessarily would preempt state 

regulation in order to eliminate these burdens on 

interstate commerce.... Thus, Congress has made a 

decision to allow substantial preemption of state 

regulatory authority.... [our] review of the 

Commission's decision herein is governed by 5 U.S.C. § 

706, and we can "set aside agency action, findings, and 

conclusions [only if] found to be ••• arbitrary [or] 

capricious ... " 

750 F.2d at 169. 

We agree with the views of the Second Circuit. In Midwestern 

Transportation, Inc. v. ICC, 635 F.2d 771, 774 (10th Cir. 1980), 

we observed "[T]he ICC's interpretations of its regulations and 

the facts supporting a grant or denial of a certificate require 

recognition of its expertise and our deference thereto." See 

also, C.O.D.E., Inc. v. I.C.C., 768 F.2d 1210, 1212 (10th Cir. 

1985); Curtis, Inc. v. ICC, 669 F.2d 648, 651 (10th Cir. 1982). 

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Appellate Case: 86-1268 Document: 010110027824 Date Filed: 02/25/1988 Page: 3 
We have reviewed the entire record. We hold that there is 

substantial evidence in the record as a whole to support the 

commission's decision and that the decision was not arbitrary nor 

capricious. We decline to set aside the ICC order substantially 

for the reasons set forth in the ICC's order of December 3, 1985, 

a copy of which is attached hereto and by reference made a part 

hereof. 

The relief sought in CPUC's petition for review is denied. 

Entered for the Court: 

JAMES E. BARRETT 

Senior United States Circuit Judge 

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Appellate Case: 86-1268 Document: 010110027824 Date Filed: 02/25/1988 Page: 4 
. 

!-

· EC 

INTERSTATE COMMERCE COMMISSION 

DECISION 

SERVICE DATE (L 

DECt9;8 ( , 

No. MC-107586 (Sub-No. 36) /l,) 

I \ O

nPETITION OF TRAILWAYS BUS SYSTEM, INC., FOR REVIEW . • ,£ali•~ . 

r A DECISION OF THE PUBLIC UTILITIES COMMISSION OF THE 

STATE OF COLORADO PURSUANT TO 49 U.S.C. 10935 

Decided: December J, 1985. 

By petition filed September 6, 1985, Trailways ·aus 

System, Inc. (Trailways or petitioner), seeks permission, 

pursuant to 49 u.s.c. 10935, to discontinue regular-route 

passenger service, as a motor common carrier, in interstate 

or foreign commerce, and in intra~tate commerce, between the 

junction of Interstate Highway 70/U.S. Highway 6 and 

Colorado Highway 91 and the junction of Interstate Highway 

70/U.s. Highway 6 and u.s. Highway 24, over Colorado 

Highways 91 and 24. Trailways recently was denied 

permission by the Public Utilities Commission of the State 

of Colorado (CPUC) to discontinue intrastate operations ove~ 

the route. Objections to the petition have been filed by the CPUC, and jointly by the Boards or County Commissioners 

of Lake and Eagle Counties, the city of Leadville, and the 

towns of Minturn and Red Cliff. Trailways filed rebuttal. 

The petition is filed under Section 16 of the Bus 

Regulatory Reform Act of 1982 (Bus Act), codified at 49 

rr.s.c. 10935. The statute allows private bus operators to 

seek permission from this Commission to discontinue 

intrastate bus service over interstate routes, (1) when they 

are denied such permission by the State regulatory body 

which would otherwise have jurisdiction or (2) when the 

State body has not acted finally on a discontinuance request 

within 120 days. The Commission's ~ules governing such 

petitions are codified at 49 CPR 1169. 

Petitioner's authority to operate over the route in 

question was issued before August 1, 1982. Accordingly, Section 16 of the Bus Act requires the Commission to grant 

the petition for discontinuance of intrastate service unless 

it finds, on the basis of evidence submitted by persons 

objecting to the discontinuance, that such discontinuance is 

not consistent with the public interest or that continuing 

the transportation will not constitute an unreasonable 

burden on interstate commerce. In making this determination, the Commission is directed to accord great weight 

to the extent to which interstate and intrastate revenues 

derived from the involved service ·are less than the variable 

costs. including depreciation for revenue equipment, of 

providing the service. In order to take advantage of the 

great weight accorded the carrier's poor financial performance 

over the route, the pe~itioning carrier has the burden cf 

proving the amount of the revenues and variable costs. 

The Commission is further required to consider, to the extent 

applicable, at least (1) the national transportation policy of 

49 u.s.c 10101, (2) whether the carrier has been offered or is 

receiving financial assistance to provide the transportation service at issue, and (3) whether the transportation is the last 

::i.otor passenger carrier service available to points on the inv:ilved 

~oute and whether a reasonable alternative to such service is 

available. 

BACKGROUND 

Petitioner provides interstate and intrastate passen;~r and ~xpress service between Denver and Aspen, co, via 

,. 

11 

Appellate Case: 86-1268 Document: 010110027824 Date Filed: 02/25/1988 Page: 5 
No. ~C-107586 (Sub-No. 36) 

Glenwood Springs,•CO, pursuant to its Schedules 5065 

(westbound) and 5066 (eastbound). The route segment petitioner proposes .to discontinue serving, u described 

above, can be characterized as a southern loop deviating from what otherwise would be essentially a direct trip between Glenwood Springs and Denver over Interstate Highway 

70/U.S. Highway 6 (hereafter referred to as the Interstate 

Highway 70 route). Trailways' service points on the 

fnvolved 57-mile long loop segment (hereafter the Leadville 

route) are Climax, Leadville, and Minturn. Residents ot the 

town ot Red Clitt, also on the route, apparently travel to 

Minturn or Leadville for bus service. Petitioner's 

pertinent operations in interstate or foreign commerce are 

authorized in Certificate No. MC-107586. Intrastate 

operations are authorized in Colorado PUC Certificate No. 

1635 & I. 

Particularly significant to this proceeding is the 

fact that, in addition to the round trip schedule indicated 

above, petitioner operates four round trip schedules between 

Denver and Grand Junction, co, via Glenwood Springs, over 

Interstate .Highway 70. Petitioner proposes to eliminate the 

Denver-Glenwood Springs portion or its. Denver-Aspen Schedules 5065 and 5066, thereby also eliminating service 

over the Leadville route. Passengers who use Schedules 5065 

and 5066 for transportation along the Interstate Highway 70 

corridor would have available service from petitioner's four 

continuing round trip schedules. Passengers residing on the 

Leadville route would have to travel to a point on . Interstate Highway 70 or to Aspen in order to continue using 

Trailways' service. 

On April a6, 1985, petitioner filed its application with the CPUC seeking permission to discontinue intrastate 

service over the Leadville route. Hearings on the 

application for discontinuance were held before the CPUC on 

July 11, 1985. -On August 2, 1985, the CPUC entered a 

decision denying · the application. 

In reaching its ultimate conclusion, the CPUC 

specifically found the Leadville route to be profitable. It 

accepted petitioner's revenue of figure $45,412, but it 

rejected petitioner's cost figures, primarily on the basis 

that Trailways had greatly overstated the miles to be saved 

by the discontinuance. · Trailways based its calculations on 

a mileage savings or 274 miles a day. Based on the 

assumption that Trailways would continue to travel over the 

Interstate Highway 70 route after the Leadville route would 

be discontinued, the CPUC calculated that petitioner's daily 

mileage savings would be 32 miles westbound and 42 miles 

eastbound, for a total or 74 miles. Purther assuming that 

petitioner operates the involved schedules 7 days a week for 

6 months or the year and 5 days a week for the remainder of 

the year, the CPUC calculated total annual mileage and 

multiplied that mileage by Trailways' actual cost-per-mile figure, which the CPUC reduced slightly owing to an 

adjustment it had made for station expenses. CPUC arrived 

at total coats of $41,258. It thus found that the operating 

ratio for the Leadville route is 90.85. 

CPUC also took note of Tra1lways' assertions that the 

~ublic in the involved area would continue to have service 

~'la1lable as a result of an application filed by Ronald~-

Tiuten, doing business as Resort Express. CPUC found, 

n~wever, that Tauten had been granted temporary authority 

only, that his permanent authority application was beir.g 

protested by at least two other col!Dllon carriers, and 

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Appellate Case: 86-1268 Document: 010110027824 Date Filed: 02/25/1988 Page: 6 
No. MC-107586 (Sub-No. 36) 

that it was speculative as to whether service from 

Taufen would be available in the future. CPUC also found 

that the testimony from residents in the involved area 

demonstrated a great public need for bus service. CPUC 

added that petitioner had allowed the quality of its service 

to decline, in part by failing to replace its agent in 

Leadville, and that losses in revenue could be attributed to 

the decline in the quality of service provided. 

In its petition for review of the CPUC decision, 

Trailways emphasizes that it intends to eliminate entirely 

the round trip between Denver and Glenwood Springs 

(Schedules 5065 and 5066), not simply the service between 

the points on the Leadville route. Trailways asserts that 

the involved round trip schedule has not generated 

sufficient passenger and express traffic to Justify its 

continued operation. It vigorously contests the CPUC 

finding that it is making a profit over and above fully 

allocated costs. If it actually were making a profit, Trailways asserts, it obviously would not have filed the 

instant petition. 

Regarding the CPUC's findings that pertinent cost 

calculations should be based on a figure of 74 miles a day, 

Trailways asserts that the Commission, in numerous prior 

decisions, has approved calculations of expenses based on 

all of the scheduled miles that would be discontinued. 

Trailways indicates that it arrived at its figure of 274 

miles a day in the following manner. The actual round trip distance Trailways travels between Denver and Glenwood 

Springs is 383 miles. Whereas Trailways formerly operated the involved schedule 7 days a week, it currently operates 5 

days a week, and will continue to do so if the discontinuance request is not granted. Trailways thus multiplied the 

figure 383 by 5/7 to arrive at 274. Trailways subsequently arrived at its annual mileage figure of 100,010 by 

multiplying 274 miles a day by 365 days. (A simpler method 

of multiplying 383 miles a day by 261 week-days a year would 

have yielded approximately the same annual mileage figure.) 

In support of its petition, Trailways presents the 

results of December 1984 and August 1985 passenger traffic 

surveys and income and expense statements based on 

annualization of the results of those surveys. The December 

1984 passenger traffic survey covers 30 days of operation 

and reveals that 119 passengers boarded or departed westbound buses and 136 passengers boarded or departed eastbound buses on the Leadville route. All but 11 of the 255 

passengers boarded or departed at Leadville. Trailways calculated total passenger miles for the 255 passengers, 

multiplied by a factor to account for 31 days of operation, 

and then multiplied by a revenue per passenger mile figure 

to arrive at December revenue. Trailways then annualized 

that revenue figure by multiplying by 11.84, the ratio of 

its 1984 system passenger revenue to its December 1984 

system passenger revenue. The resultant figure of $25,341 

for annual passenger revenue was then added to actual annual 

express revenue of $20,071 to yield total operating revenue 

of $45,412. As previously noted, this is the figure presented to, and accepted by, the CPUC. Petitioner's 

income and expense statement for 1984 shows pertinent total 

operating expenses of $193,149. Applying a variability 

factor of approximately 68.4 percent, Trailways shows 

variable costs of $132,133. Variable costs thus are shown 

to exceed revenues by $86,721. 

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Appellate Case: 86-1268 Document: 010110027824 Date Filed: 02/25/1988 Page: 7 
No. MC-107586 (Sub-No. 36) 

During August 1985, following a fare increase, 

petitioner conducted an · additional passenger traffic 

survey. During the 9 days of the survey, a total of 30 

passengers boarded or departed buses on the Leadville 

route. They paid total actual fares of $643.05. Trailways multiplied that revenue by a factor to account for 23 days of maximum possible operations, and then it multiplied 

by a factor of 8.56 (the ratio of 1984 system passenger 

revenue to August 1984 system passenger revenue). The 

resultant figure of $14,037, representing annual passenger 

revenue, was then used in a revised annual income and 

expense statement. Using the same figures as previously for 

express revenues, total operating expenses and variable 

costs, petitioner shows that annual variable costs would 

exceed revenues by $98,025. 

Petitioner indicates that the involved route is even 

more unprofitable than indicated above for the reason that 

certain of its figures for revenues are overstated and for 

expenses are understated. With regard to express revenues, 

petitioner indicates that it included not merely express 

revenues attributable to the Denver-Glenwood Springs 

segment, but total express charges for transportation 

between points on the Leadville route and the actual origins 

or destinations of its packages. Petitioner also assumed 

that all packages which formerly moved in 7-day service 

would continue to move in 5-day service, Regarding 

passenger revenues shown in•the statement based on the 

December survey, petitioner indicates that it assumed that 

passengers boarding or departing a bus at a point on the 

Leadville route traveled from or to points at least as 

distant as Denver or Glenwood Springs and that all 

passengers who formerly traveled in 7-day service would 

continue to travel in 5-day service. Passsenger revenue in 

both of petitioner's income and expense statements is 

overstated additionally because petitioner has made no 

deduction for passengers who might continue to ride its 

buses on schedules other than those being discontinued. 

Expenses for express service, it is asserted, are understated since the distance packages are transported is 

understated. (We note that, whereas petitioner has based 

its expenses on transportation over the entire distance 

between Denver and Glenwood Springs, including the Leadville 

route, it has not included any revenue earned from the 

transportation of passengers moving between the points on 

the entire Denver-Glenwood Springs route and not boarding or 

departing on the Leadville route. It appears that the 

assumption has been made that all such revenue would be 

retained because of the continuing four Denver-Grand 

Junction schedules.) 

Regarding the availability of alternative service on 

the Leadville route, petitioner notes that the involved 

points will continue to be served by a number of motor 

carriers of property, including United Parcel Service, Pony 

Express Courier Corporation, and Denver-Salida-Leadville 

Freight Line. Regarding alternative passenger carrier 

service, Traiiways refers to the pending application of 

Ronald M. Taufen, noted above. Petitioner asserts that if 

the CPUC truly .is concerned about the lack of service in 

Leadville, it should grant Mr. Taufen's application for 

permar.ent authority. Trailways asserts, also, that its own 

servica will continue to be available at points on 

Inte~st~te Highway 70 as well as at Aspen. 

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Appellate Case: 86-1268 Document: 010110027824 Date Filed: 02/25/1988 Page: 8 
No. MC-107586 Sub-No. 36) 

Petitioner indicates that it is not receiving any 

applicable operating subsidy or financial assistance and 

that none has been offered. It asserts that the annual 

subsidy that would be required for it to continue to provide 

service over the involved route would be at least $193,149, 

to cover fully allocated costs, in addition to a 20 percent 

profit, less any operating revenues generated by the 

service. 

In its objection to the petition, the CPUC argues that 

Trailways' tying together of a schedule discontinuance and a 

route segment abandonment is an unfair maneuver that 

distorts the true cost/revenue relationship created by operations over the Leadville route. Considering that the 

actual mileage involved is 74 miles, not 274, the CPUC 

argues, it is clear that petitioner is attempting to 

orchestrate its presentation to show that the involved route 

is unprofitable when, in fact, the evidence is to the 

contrary. Petitione~'s maneuvering1 it is argued, has 

changed a gain of approximately $R,~OO to a loss of 

approximately $87,500. CPUC asserts that, in order to meet 

the variable eKpenses it shows, Trailways would have to 

• transport an average of 47 passengers a day from and to 

points on the Leadville route. 

CPUC assails petitioner's exhibits on several grounds. 

First, it characterizes exhibits based on December 1984 

figures as meaningless in view of a rate increase that went 

into effect in July 1985. CPUC argues that Trailways' 

revenue figures have become greatly understated. It adds 

that, contrary to peti~ioner's assertions, the record shows 

that passengers who have used the Leadville route service 

would not be able to continue using petitioner's service at 

other points. CPUC goes on to query how Trailways could 

develop its ridership information, particularly that 

contained in its August traffic study, when it had testified 

that it is im~ossible to determine where passengers board 

and depart buses. Objector also questions the reliability 

of the August traffic study, considering that the study has 

been produced on short notice, no supporting data has been 

presented, and petitioner has not been subject to 

cross-examination regarding the contents of the study. 

CPUC questions Trailways' interest in making a profit 

on the Leadville route in view of the fact that Trailways has spurned attempts by Leadville residents to replace the 

Trailways Leadville commission agent who has resigned. CPUC 

argues, in addition, that, considering the points that 

Trailways will continue to serve, it appears that Trailways intends to discontinue the Denver-Glenwood Springs portion 

of one of its four Denver-Grand Junction schedules, not that 

portion of its Denver-Aspen schedule. Finally, objector 

argues that it is speculation that Mr. Taufen would 

ultimately obtain operating authority and that, further, 

there is no evidence that Taufen would conduct operations or 

a type that would be a suitable replacement for 

Trailways'service. 

The Joint objectors point out that a total population 

of only 9,208 in the sparsely populated mountains of 

Colorado would be atfected by a discontinuance of service on 

the Leadville route. ~hP. elderly, students, and persons 

desiring to travel durin~ ~he are3 1 S rigorous winters, it is 

argued, depend on ~ra!lway3 for transportation. Persons 

needing to tr1vel to teacv!ll~'s hospital, or to Denver for 

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Appellate Case: 86-1268 Document: 010110027824 Date Filed: 02/25/1988 Page: 9 
No. MC-107586 (Sub-No. 36) 

medical care, objectors argue, also would be adversely 

affected by a discontinuance. Objectors assert, 

additionally, that, if Trailways in fact has losses over the 

involved route, much can be attributed to poor service and 

the failure to maintain a local agent. Regarding the 

proposed service by Mr. Taufen, objectors indicate that 

testimony was to the effect that Taufen planned to provide 

transportation for workers and to base his schedules on work 

schedules, not on bus connections. 

In rebuttal, Trailways reiterates that it intends to 

discontinue its Denver-Glenwood Springs round trip schedule 

and that all points located along Interstate Highway 70, and 

between Glenwood Springs and Aspen, will continue to be 

served on Trailways' other schedules. Trailways indicates 

that Vail and Frisco, service points on Interstate Highway 

70, are approximately 36 miles and 28 miles from Leadville, 

respectively. Regarding the lack of an agent in Leadville, 

petitione~ points out that its appendices based on December 

1984 operations represent a time frame during which an 

agency location existed in Leadville. Trailways adds that, 

as a result of losses on the Leadville route, it determined 

that it would be impractical to establish another agency 

after its Leadville agent .resigned. 

In response to the CPUC's arguments regarding its 

surveys, Trailways indicates that it generally is not 

possible to determine the origin and destination of each 

specific passenger, but that it is possible to determine the 

total number of passengers boarding or departing buses at 

involved points. The August traffic survey, which has more 

specificity, is a study of actual driver trip reports and 

tickets and is not maintained in the ordinary course of 

business. It was made for purposes of this proceeding only, 

at additional expense, in view of the recent rate increase. 

The presentation of new or additional evidence to the 

Commission in exit cases is proper, petitioner asserts. 

Finally, Trailways reiterates its requirements for financial 

assistance. It asserts that the involved round trip 

schedule is extremely unprofitable, that Trailways is not a 

public utility, that it is not subsidized by any 

governmental entity, and that it should not be required to 

operate service at a loss. 

DISCUSSION AND CONCLUSIONS 

We have considered the State record and decision and 

the pleadings before us. We conclude that the request by 

Trailways Bus System, Inc., for permission to discontinue 

intrastate and interstate service over the route involved 1n 

this proceeding should be granted. 

We must grant permission to discontinue intrastate 

service unless we find that discontinuance is not consistent 

with the public interest or that continuing the 

transportation will not constitute an unreasonable burden on 

interstate commerce. In making a determination, we are to 

"accord great weight" to the extent to which interstate and 

intrastate revenues attributable to the services to be 

discontinued are less than the variable costs of providing 

those services. 

Preliminarily, we note that the CPUC has questioned 

the propriety of petitioner's presenting new evidence in its 

petition. As we have stated previously a number of times, 

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Appellate Case: 86-1268 Document: 010110027824 Date Filed: 02/25/1988 Page: 10 
No. MC-107586 (Sub-No. 36) 

the presentation of new · evidence is proper. Our 

deliberations are not confined to the record as made before 

the State. See, No. MC-61599 (Sub-No. 145), Petition of 

Trailways SouTiieastern Lines, Inc., for Review of a Decision - of the North Carolina Utilities Commission Pursuant to 49 

O.s.c. 10935 (not pr1nted), -served March 30, 1984, and 

Humphrey v. ICC, 745 P. 2d 1166 (8th Cir. 1984). Here, 

petitioner was well-advised to conduct a survey, and develop 

an income and expense statement, after a recent rate 

increase. Although we would have preferred a longer study 

period, it appears that time constraints prevented 

petitioner from conducting a more complete survey. 

Nevertheless, the second survey has greater probative value 

when viewed in conjunction with the first survey and the 

data developed from it. 

The primary issue presented for our consideration here 

is whether, in a case in which a petitioner expresses an 

intention to terminate an entire round trip schedule, it 

properly may rely on expenses generated by the entire 

round trip sch~dule when the schedule extends beyond the 

segment to be abandoned. The Commission previously has 

considered this precise issue and has concluded that 1f 

abandonment or the smaller route segment allows petitioner 

to end the longer encompassing run, then it is not 

unreasonable to consider the cost of the round trip schedule 

itself, for these are actual costs that will be saved. 

This is so even though service will continue to be provided 

over part of the route on that schedule pursuant to other 

schedules of petitioner. See, No. MC-1515 (Sub-No. 340), 

Petition of Greyhound Lines;-Inc., for Review of a Decision 

of the Minnesota Public Utilities Commission Pursuant to 49 

O.s.c. 10935 (not printed), served November 7, 1983, aff 1 d 

sub nom. Humphrey v. ICC, supra, and No. MC-109780 (Sub-No. 

83), Petition of Trailways Lines, Inc. for Review of a 

Decision of the State Cor ora~ion Commission of the State of 

ansas Pursuant to 9 •• c. 1 93 not pr nte 

September 29, 1983. 

CPUC contends that petitioner's avowed intention to 

discontinue Schedules 5065 and 5066 between Denver and 

Glenwood Springs is simply a "maneuver" and that petitioner 

plans to make certain schedule adjustments 1n order to 

cootinue serving several points not on the Leadville route. 

There is no reason to doubt that petitioner will, in fact, 

discontinue the involved schedules between Denver and 

Glenwood Springs, and there is no reason to believe that 

petitioner would take such action in order to eliminate 

service over a profitable route. Common sense dictates that 

if petitioner round it profitable to deviate from an 

Interstate Highway 70 route to serve the Leadville route, it 

would continue to do so. Similarly, if sound business 

Judgment dictated that petitioner replace its Leadville 

agent, there is no reason to believe that it would not do 

so. As we have stated in prior decisions, we will not 

attempt to substitute our business Judgment for that of a 

petitioner absent compelling reasons. See, No. MC-1515 

(Sub-No. 353), Petition of Greyhound Lines, Inc., for Review 

of a Decision of the Public Service Commission of South 

Carolina Pursuant to 49 O.s.C. 10935 (not printed), served 

July 11, 1984, and No. MC-1515 (Sub-No. 341), Petition of 

Greyhound Lines, Inc. for Review of a Decision of the 

Tennessee Public Service Commission Pursuant r.o ll9 O.s.c. 

10935 (not printed), served November 21, 1983. Such 

compelling reasons do not appear here. Trailways properly 

may seek to eliminate its Schedules 5065 and 5066 between 

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No, MC-107586 (Sub-No. 36) 

Denver and Glenwood Springs and to modify its other 

schedules to an extent not inconsistent with governing regulations. 

Trailways' cost and revenue figures are not otherwise 

seriously challenged, and, in these premises, we are 

constrained to find that petitioner's figures are reasonably 

calculated and have not been shown to be materially 

flawed.•/ We conclude, then, that the evidence establishes 

that the amount of petitioner's revenues from providing 

transportation over the involved route is significantly below the variable costs of the service and that, therefore, 

continuing the transportation will constitute an unreasonable burden on interstate commerce. 

In addition to considering the profitability of a 

carrier's route, we are directed by the statute to consider 

the national transportation policy of 49 U,S,C, 10101, the 

availability of alternative service, and any financial 

assistance offered to, or received by, the carrier in 

deciding whether an obJector h~s demomstrated that denial of 

an exit request is required by the public interest or would 

not constitute an unreasonable burden on interstate 

commerce, 

Regarding alternative service, petitioner currently is 

the only for-hire motor carrier of passengers holding 

permanent authority to serve points on the Leadville route. 

As previously noted, Ronald M. Taufen holds temporary 

authority to serve points on the Leadville route, and his 

application for permanent authority is pending. While it is 

possible that Mr. Taufen, or persons opposing his 

application, may in the future gain permanent authority to 

serve points on the affected route, for the present, 

discontinuance by petitioner will eliminate the only existing regularly scheduled, permanently authorized, 

regulated passenger service at the involved points. The 

passenger carrier service petitioner will continue to offer 

over its other routes and under its other schedules appears 

not to be a particularly viable alternative for residents of 

Climax or Leadville, though it may be of some value to 

persons living in Minturn and nearby points. Alternative 

package express service for the Leadville route appears to 

be available from several carriers, including well known 

carriers specializing in the transportation of small 

packages, 

The goals of the national transportation policy require 

us to see that the needs of passengers and shippers are met, 

to provide for and maintain intrastate bus services and 

~/ Whereas, viewed as a whole, petitioner's figures present 

a reasonably reliable picture of the viability of the 

involved route, we are displeased with petitioner's use of 

figures which it admits are overstated or understated, 

Similarly, we are concerned with the use or unexplained 

figures, such as those used for revenue per passenger mile, 

in annualizing petitioner's December 1984 ridership. 

Petitioner's preparation or its Augus~ 1985 survey, and its 

derivation of data from it, shows ~ta~ petitioner is able to 

provide reasonably accurate data. In t~e future, petitioner 

should make every effort to p~ovi~e d~ta that ts as fully 

accurate and reliable as possible. 

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Appellate Case: 86-1268 Document: 010110027824 Date Filed: 02/25/1988 Page: 12 
No. MC-107586 (Sub-No. 36) 

service to small communities and shippers, and to provide 

and maintain commuter bus· operations. Authorization of the 

proposed discontinuance may result in a cessation of 

passenger service to points on the affected route and may 

cause hardship for individuals who now use the service and 

for the involved communities. However, it is axiomatic that 

communities may lose service when a discontinuance is 

authorized, and, consequently, the question is not simply 

whether losses of service will result, for then the 

provisions of the Bus Act would be a nullity. Rather, we 

must also consider the additional goals or allowing the most 

productive use of equipment and energy resources, enabling 

efficient and well managed carriers to earn adequate profits 

and attract capital, and improving and maintaining a 

competitive privately owned motor carrier system. To that 

end, petitioner should not be required to continue 

burdensome operations that Jeopardize its ability to provide 

service on its other routes by requiring cross-subsidization 

by successful operations. Consequently, we must consider 

not only the local interest in support of continuing the 

involved service, but also the policy of the Bus Act that 

favors exit from unprofitable routes. 

Actual use of the involved service at Leadville is 

light, and use at Minturn and Climax is quite minimal. Also 

weighing in petitioner's favor is that aspect or the public 

interest requiring elimination or reduction of 

cross-subsidies used to sustain local and intrastate 

services at the expense of the longer haul and interstate 

passengers. Continued cross-subsidy here would be onerous 

to petitioner and is not otherwise required by the public 

interest. 

In the Bus Act, Congress provided a mechanism by which 

States, local communities, or other entities could 

demonstrate that they have a concrete interest in 

maintaining unprofitable services. The mechanism is the 

offer of a subsidy. While we recognize that many factors 

enter into whether to offer a subsidy, we must, under the 

statute, take the lack of such an offer into consideration. 

No subsidies have been offered here. A strong showing of 

public need for continued service, if it were accompanied by 

evidence of an offer or such a subsidy, might have served to 

mitigate the public interest impact of the unprotitability 

of the involved route. However, t here are no such 

mitigating factors here. 

Of particular significance in contemplating the impact 

of our decision is the basic tenet underlying the Bus Act 

that carriers should be able to adjust readily to changing market demands and the diverse requirements of the traveling 

public, consistent with the goals of the national 

transportation policy, by not being unduly hindered either 

in entering new areas in search of opportunities tor profit 

or exiting those that prove to be unsuccessful. If, as 

objectors contend, there is need for transportation service 

over the Leadville route, then new businesses might enter 

the field and provide appropriate services to fill the void 

left by petitioner's abandonment of that route. The record 

shows that a new carrier already is seeking to serve the 

involved market, and it may be that its services, if 

authorized, will prove to be more appropriate than those of 

petitioner to the conditions in the area. 

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Appellate Case: 86-1268 Document: 010110027824 Date Filed: 02/25/1988 Page: 13 
.. No. MC-107586 (Sub-No. 36) 

Considering the record as a whole, then, we cannot find 

that persons objecting to a grant of the petition have borne 

their burden of demonstrating that a continuance will not 

constitute an unreasonable burden on interstate commerce or 

that discontinuance is not consistent with the public 

interest. All things considered, a grant of the petition is 

warranted. 

This decision will not significantly affect either the 

quality of the human environment or the conservation or 

energy resources. 

We find: 

Persons objecting to the granting of permission to 

discontinue intrastate motor passenger transportation in 

this proceeding have not shown either that the 

discontinuance is not consistent with the public interest or 

that continuing the transportation, without the proposed 

discontinuance, will not constitute an unreasonable burden 

on interstate commerce. Permission should be granted to 

discontinue providing transportation, as a motor common 

carrier of passengers, in interstate or foreign commerce, 

and in intrastate commerce, over the route involved in this . proceeding. 

It is ordered : 

Trailways Bus System, Inc., is granted permission to 

discontinue providing transportation as a motor common 

carrier of passengers, in interstate or foreign commerce, 

and in intrastate commerce, over the involved route, as 

described in petitioner's Certificate No. MC-107586 and in 

petitioner's Colorado PUC Certificate No. 1635 & I. 

Those portions of Certificate No. MC-107586 issued 

March 7, 1979, authorizing the interstate transportation 

to be discontinued, are revoked, effective at such time as 

Trailways Bus System, Inc., discontinues service. 

Trailways should, within 60 days after the service date 

of this decision, submit a description of the modifications 

to its certificate necessary to effect this decision, 

accompanied by a draft revised certificate (or portions 

thereof). 

By the Commission, Chairman Taylor, Vice Chairman Gradison, 

Commissioners Sterrett, Andre, Simmons, Lamboley and Strenio. 

Commissioner Lamboley dissented with a secarate expression. 

(SEAL) 

James H. Bayne 

Secretary 

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Appellate Case: 86-1268 Document: 010110027824 Date Filed: 02/25/1988 Page: 14 
. , 

MC-170586 (Sub-No. 36) 

COMMISSIONER LAMBOLEY, dissenting: 

Quite apart from consideration of public interest criteria 

which militates against authorizing exit, the pet1tioning carrier 

has failed to sustain its burden of proof regarding the economic 

consequences of ~oute discontinuance by no~ presenting accurate and 

appropriate revenue cost data. For example, for comparative 

purposes petitioner uses expenses based on the entire route, 

while revenues are limited only to those identified with the 

Leadville route . 

result. 

In my view, this comparison unfairly biases the 

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