[Federal Register Volume 63, Number 95 (Monday, May 18, 1998)]
[Proposed Rules]
[Pages 27253-27255]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-13095]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

49 CFR Part 1146

[STB Ex Parte No. 628]


Expedited Relief for Service Inadequacies

AGENCY: Surface Transportation Board, DOT.

ACTION: Notice of Proposed Rulemaking.

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SUMMARY: Pursuant to its decision in Review of Rail Access and 
Competition Issues, STB Ex Parte No. 575 (STB served Apr. 17, 1998) 
(``Review''), the Board is instituting a proceeding to solicit comments 
on proposed rules that would establish expedited procedures for 
shippers to obtain alternative service from another rail carrier when 
the incumbent carrier cannot properly serve shippers. The Board 
requests that persons intending to participate in this proceeding 
notify the agency of that intent. A separate service list will be 
issued based on the notices of intent to participate that the Board 
receives.

DATES: Notices of intent to participate in this proceeding are due May 
28, 1998. Comments on this proposal are due June 15, 1998. Replies are 
due July 15, 1998.

ADDRESSES: An original plus 12 copies of all comments and replies, 
referring to STB Ex Parte No. 628, must be sent to the Office of the 
Secretary, Case Control Unit, ATTN: STB Ex Parte No. 628, Surface 
Transportation Board, 1925 K Street, NW., Washington, DC 20423-0001.
    Copies of the written comments will be available from the Board's 
contractor, D.C. News and Data, Inc., located in Room 210 in the 
Board's building. D.C. News can be reached at (202) 289-4357. The 
comments will also be available for viewing and self copying in the 
Board's Microfilm Unit, Room 755.
    In addition to an original and 12 copies of all paper documents 
filed with the Board, the parties shall submit their pleadings, 
including any graphics, on a 3.5-inch diskette formatted for 
WordPerfect 7.0 (or in a format readily convertible into WordPerfect 
7.0). All textual material, including cover letters, certificates of 
service, appendices and exhibits, shall be included in a single file on 
the diskette. The diskettes shall be clearly labeled with the filer's 
name, the docket number of this proceeding, STB Ex Parte No. 628, and 
the name of the electronic format used on the diskette for files other 
than those formatted in WordPerfect 7.0. All pleadings submitted on 
diskettes will be posted on the Board's website (www.stb.dot.gov). The 
electronic submission requirements set forth in this notice supersede, 
for the purposes of this proceeding, the otherwise applicable 
electronic submission requirements set forth in the Board's 
regulations. See 49 CFR 1104.3(a), as amended in Expedited Procedures 
for Processing Rail Rate Reasonableness, Exemption and Revocation 
Proceedings, STB Ex Parte No. 527, 61 FR 52710, 711 (Oct. 8, 1996), 61 
FR 58490, 58491 (Nov. 15, 1996).<SUP>1</SUP>
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    \1\ A copy of each diskette submitted to the Board should be 
provided to any other party upon request.

FOR FURTHER INFORMATION CONTACT: Joseph H. Dettmar, (202) 565-1600. 
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[TDD for the hearing impaired: (202) 565-1695.]

SUPPLEMENTARY INFORMATION: In STB Ex Parte No. 575, the Board conducted 
two days of informational hearings, on April 2 and 3, 1998, to examine 
issues of rail access and competition in today's railroad industry, and 
the statutory remedies and agency regulations and procedures that 
relate to those matters. As a result of those hearings, we announced, 
inter alia, that we would begin a rulemaking proceeding to consider 
revisions to our rules to provide shippers receiving poor service 
greater opportunity to obtain service from an additional carrier.

Overview

    While the Board lacks general authority to require an unwilling 
railroad to permit physical access over its lines to the trains and 
crews of another railroad, it may direct that result in certain 
situations: under 49 U.S.C. 11324(c), as a condition to the incumbent's 
merger with another railroad; under 49 U.S.C. 11102(a), to serve 
terminal facilities when it would be in the public interest; or, under 
49 U.S.C. 11123(a), to serve any facilities for a limited period of 
time (not more than 270 days) because of the carrier's inability or 
failure to provide its shippers with adequate service.\2\ The Board may 
also direct an incumbent railroad to afford access indirectly, either 
by prescribing alternative through routes under 49 U.S.C. 10705(a) 
(requiring the incumbent to interline traffic with another railroad 
over a designated interchange and thereby create an alternative route 
and rates for a shipper's traffic) or by requiring reciprocal switching 
under 49 U.S.C. 11102(c) (where, for a fee, the incumbent must switch 
cars to and from another railroad so that the latter, even though it 
cannot physically reach a shipper, can constructively offer alternative 
single-line service).
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    \2\ The using railroad must compensate the incumbent railroad 
for the use of its tracks, at a level to be determined by the 
carriers or fixed by the Board. 49 U.S.C. 11324(c), 11102(a), and 
11123(b)(2).
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    The access remedies under sections 11102 and 10705--terminal 
trackage rights, reciprocal switching, and alternative through routes--
are now invoked through the ``competitive access'' regulations, 49 CFR 
part 1144, and, to obtain relief, parties must show

[[Page 27254]]

that the incumbent rail carrier has acted in a way ``that is contrary 
to the competition policies of 49 U.S.C. 10101[] or is otherwise 
anticompetitive.'' \3\ At the Ex Parte 575 hearings, shippers 
complained that the ``anticompetitive conduct'' standard of the 
regulations is too restrictive and effectively precludes alternative 
service in those situations where it is most urgently needed--where 
shippers (such as those poorly served during the recent service 
emergency in the West) are not receiving the level of service needed 
from their incumbent carrier. At the hearings, the rail industry 
concurred that the Board should be able to remedy such service failures 
more quickly and effectively.
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    \3\ 49 CFR 1144.5(a); Intramodal Rail Competition, 1 I.C.C.2d 
822 (1985), aff'd sub nom. Baltimore Gas & Elec. Co. v. United 
States, 817 F.2d 108 (D.C. Cir. 1987). Under existing case law, 
parties must show that the incumbent carrier has either: (1) Used 
its market power to extract unreasonable terms, or (2) because of 
its monopoly position, shown a disregard for the shipper's needs by 
rendering inadequate service. Midtec Paper Corp. v. Chicago & N.W. 
Transp. Co., 3 I.C.C. 2d 171 (1986), aff'd sub nom. Midtec Paper 
Corp. v. United States, 857 F.2d 1487 (D.C. Cir. 1988).
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    Accordingly, we seek comment on the proposed rules set forth below 
to provide expedited relief for demonstrated poor service.\4\
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    \4\ As we explained in Review, slip op. at 6-7, this decision 
does not address whether to revise the competitive access 
regulations with respect to competitive issues not related to 
quality of service. We have directed the railroads and shippers to 
meet, under the supervision of an Administrative Law Judge, to 
identify mutually acceptable modifications to facilitate greater 
access in appropriate circumstances, and to report back to us by 
August 3, 1998. We are confident that shippers and railroads can 
find common ground on this issue. See Review of Rail Access and 
Competition Issues, STB Ex Parte No. 575 (STB served May 4, 1998).
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Choice of Remedies

    To address these service issues more effectively, we propose rules 
under which parties may seek alternative rail service under either the 
access provisions of sections 11102 and 10705, or the emergency service 
provisions of section 11123. While section 11123 has typically been 
used to address regional service emergencies, such as the one recently 
experienced in the West,\5\ we believe it can also be used to afford 
more localized relief to shippers; that section broadly permits Board 
intervention to remedy service deficiencies having ``substantial 
adverse effects'' on shippers, or where a rail carrier ``cannot 
transport the traffic offered to it in a manner that properly serves 
the public.'' 49 U.S.C. 11123(a).
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    \5\ STB Service Order No. 1518, Joint Petition for Service Order 
(STB served Oct. 31 and Dec. 4, 1997, and Feb. 17 and 25, 1998).
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    Moreover, permitting shippers to proceed either under sections 
11102 or 10705, on the one hand, or section 11123, on the other, 
affords greater flexibility and broadens the potential for regulatory 
relief. For example, trackage rights access under section 11102(a), 
while not statutorily limited in duration, is limited to an incumbent 
railroad's terminal facilities, and therefore is not available for 
shippers that are not located at or near terminal areas. In contrast, 
remedies under section 11123(a), although limited to 270 days, are 
potentially available for shippers located on any part of the incumbent 
carrier's network; this section also affords the Board more latitude to 
craft a variety of measures to remedy any particular service 
situation.\6\
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    \6\ Although the remedies under sections 11102 and 10705 are not 
statutorily limited in duration, we remind commenters that the 
relief contemplated by this proposal is intended to respond to 
service problems, and not to provide permanent responses to 
perceived competitive issues.
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Standard for Relief

    Whichever remedies are sought, however, the predicate for relief 
would be the same: that, over an identified period of time, there has 
been a substantial, measurable deterioration in the rail service 
provided by the incumbent carrier.\7\ We do not think it necessary or 
appropriate to propose a list of particular factors--or a formulaic 
weighing of such factors--that shippers must use to make that 
assessment, or to propose a specific test period. Each shipper has its 
own particular service needs and experiences, and carrier difficulties 
may vary. Our standard of relief must be flexible enough to permit us 
to address varying circumstances. Commenters may wish to address this 
issue.
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    \7\ Because the proposed predicate for relief is different than 
that for ``competitive'' access under 49 CFR 1144.5(a), and to avoid 
confusion, we do not propose to amend the competitive access 
regulations, as we had suggested in Review, but rather to adopt a 
new, discrete set of regulations to address relief for service 
inadequacies, 49 CFR part 1146.
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    We caution that the proposed rules are not meant to redress minor 
service disruptions. Access--particularly that which would compel 
physical access by another railroad over an incumbent's lines--is a 
serious remedy with potentially significant operational, safety, and 
financial consequences for the involved carriers, and we intend that 
the rules be used to remedy only substantial service problems that 
cannot readily be resolved by the incumbent railroad. Accordingly, we 
propose to require shippers to: (1) First discuss and assess with their 
incumbent carrier whether adequate service can be restored within a 
reasonable period of time that is consistent with the shipper's needs 
and, if not, outline in its request for relief why that is the case; 
and (2) obtain from another railroad the necessary commitment--should 
it be afforded access--to meet the shipper's service needs, and 
describe the carrier's plan to do so safely and without degrading 
service to its existing customers or unreasonably interfering with the 
incumbent's overall ability to provide service.

Expedited Procedures

    The proposed rules include expedited procedures because of the 
usually urgent nature of serious service problems. Instead of the more 
time-consuming complaint process, parties may seek relief by 
petition.\8\ We propose that the incumbent carrier be required to reply 
to such a petition within five business days, and that the shipper, if 
it wishes to file a rebuttal, be required to do so no more than three 
business days later.
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    \8\ We note that section 11123(b)(1) gives us broad authority to 
afford relief without regard to the administrative adjudication 
procedures in 5 U.S.C. 551 et seq.
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    If relief is granted under these rules, once the incumbent carrier 
can demonstrate that it has restored, or is prepared to restore, 
adequate service, it may file a petition to terminate that relief. We 
would discourage an incumbent carrier from filing such a petition too 
hastily after the Board's order, however, as the objective in a 
proceeding of this nature is to provide shippers with a needed degree 
of certainty of adequate rail service.
    For the same reason, we propose that satisfying the standard for 
relief under section 11123 ordinarily would establish a presumption 
that the incumbent's inability to provide adequate service will last 
beyond the initial 30-day period, and thus will provide the basis for a 
subsequent order extending relief beyond the initial 30-day period. 
However, if the incumbent carrier can show that it is prepared to 
provide adequate service, it may seek to have the relief terminated 
within the first 30 days.
    Should the incumbent carrier file a petition to terminate relief, 
replies are to be filed in five business days, and the carrier may file 
any rebuttal three business days afterward. The Board will then assess 
all relevant factors in determining what action would be appropriate.

[[Page 27255]]

    We invite comment on all aspects of this proposal. Any person that 
wishes to participate as a party of record in this matter must notify 
us of this intent by May 28, 1998. In order to be designated a party of 
record, a person must satisfy the filing requirements outlined in the 
ADDRESSES section. We will then compile and issue a service list. 
Copies of comments and replies must be served on all persons designated 
on the list as a party of record. Comments on the proposal are due June 
15, 1998; replies are due July 15, 1998.
    A copy of this decision is being served on all parties on the 
service list in Ex Parte No. 575. This decision will serve as notice 
that persons who were parties of record in the Ex Parte 575 proceeding 
will not be placed on the service list in the Ex Parte 628 proceeding 
unless they notify us of their intent to participate therein.
    The Board preliminarily certifies that the proposed rules, if 
adopted, would not have a significant effect on a substantial number of 
small entities. While the proposed rules, if adopted, may ease the 
burdens on obtaining alternative rail service in the limited situations 
described, we do not expect them to affect a substantial number of 
small entities. The Board, however, seeks comments on whether there 
would be effects on small entities that should be considered.
    This action will not significantly affect either the quality of the 
human environment or the conservation of energy resources.

List of Subjects in 49 CFR Part 1146

    Administrative practice and procedures, Railroads.

    Decided: May 12, 1998.

    By the Board, Chairman Morgan and Vice Chairman Owen.
Vernon A. Williams,
Secretary.

    For the reasons set forth in the preamble, title 49, chapter X, 
Part 1146, consisting of Sec. 1146.1, is proposed to be added to read 
as follows:

PART 1146--EXPEDITED RELIEF FOR SERVICE INADEQUACIES

    1. The authority for part 1146 will read as follows:

    Authority: 49 U.S.C. 721, 11102, 11123, and 10705.


Sec. 1146.1  Prescription of Alternative Rail Service

    (a) General. Alternative rail service will be prescribed under 49 
U.S.C. 11102(a), 11102(c), 10705(a), or 11123(a), if the Board 
determines that, over an identified period of time, there has been a 
substantial, measurable deterioration in rail service provided by the 
incumbent carrier.
    (b)(1) Petition for Relief. Parties may seek relief described in 
paragraph (a) of this section by filing an appropriate petition 
containing:
    (i) A full explanation, together with all supporting evidence, to 
demonstrate that the standard for relief contained in paragraph (a) of 
this section is met;
    (ii) A summary of the petitioner's discussions with the incumbent 
carrier of the service problems and the reasons why the incumbent 
carrier is unlikely to restore adequate rail service consistent with 
the shipper's needs within a reasonable period of time;
    (iii) A commitment from another available railroad to provide 
alternative service that would meet the shipper's service needs, and 
how that carrier would provide the service safely without degrading 
service to its existing customers or unreasonably interfering with the 
incumbent's overall ability to provide service; and
    (iv) A certification of service of the petition, by overnight 
delivery, on the incumbent carrier.
    (2) Reply. The incumbent carrier must file a reply to a petition 
under this subsection within five (5) business days.
    (3) Rebuttal. The party requesting relief may file rebuttal no more 
than three (3) business days later.
    (c) Presumption of Continuing Need. Unless otherwise indicated in 
the Board's order, a Board order issued under paragraph (a) of this 
section that prescribes relief under 49 U.S.C. 11123(a) shall establish 
a rebuttable presumption that the transportation emergency will 
continue for more than 30 days from the date of that order.
    (d)(1) Petition to Terminate Relief. Should the Board prescribe 
alternative rail service under paragraph (a) of this section, the 
incumbent carrier may subsequently file a petition to terminate that 
relief. Such a petition shall contain a full explanation, together with 
all supporting evidence, to demonstrate that the carrier is providing, 
or is prepared to provide, adequate service to affected shippers. 
Absent special circumstances, carriers are discouraged from filing such 
a petition less than 90 days after relief is granted under paragraph 
(a) of this section.
    (2) Reply. Parties must file replies to petitions to terminate 
filed under this subsection within five (5) business days.
    (3) Rebuttal. The incumbent carrier may file any rebuttal no more 
than three (3) business days later.
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[FR Doc. 98-13095 Filed 5-15-98; 8:45 am]
BILLING CODE 4915-00-P