28444 Federal Register / Vol. 63, No. 99 / Friday, May 22, 1998 / Notices

14As noted, UTU Committees indicate that, if the

waiver provision is available, it seeks to have us

waive the disk/CD requirement. We are not sure

whether this request is being made on behalf of

UTU Committees, local units, or individual railroad

employees, or some combination of the above. UTU

Committees maintain that in many cases railway

employees lack access to computers. In those

instances where this is true, there would appear to

be valid grounds for a waiver, but each situation is

best addressed on its own merits.

1This decision corrects the decision served

March 31, 1998, and published in the Federal

Register on April 3, 1998 (63 FD 16628) by

designating the docket number for this, the

Houston/Gulf Coast Oversight proceeding, as

Finance Docket No. 32760 (Sub-No. 26), rather than

(Sub-No. 21); designating this decision as Decision

No. 1; and designating the short name of this

proceeding as HOUSTON/GULF COAST

OVERSIGHT. All other aspects of the corrected

decision remain unchanged, including the

procedural schedule.

2This decision embraces the proceeding in

Finance Docket No. 32760, Union Pacific

Corporation, Union Pacific Railroad Company, and

Missouri Pacific Railroad Company—Control and

Merger—Southern Pacific Rail Corporation,

Southern Pacific Transportation Company, St. Louis

Southwestern Railway Company, SPCSL Corp., and

The Denver and Rio Grande Western Railroad

Company.

3 In order for a document to be considered a

formal filing, the Board must receive an original

plus 25 copies of the document, which must show

that it has been properly served. As in the past,

documents transmitted by facsimile (FAX) will not

be considered formal filings and thus are not

acceptable.

liberally construed ‘‘to secure just,

speedy, and inexpensive determination

of the issues presented.’’ Accordingly,

any person may seek a waiver of the

disk/CD requirement in these

proceedings. Parties should file the

waiver request with the paper version of

its filing, and we can rule upon the

waiver even after the filing date.14

Finally, we are not sure how UTU

Committees’ argument that disks can

contain more information than paper

filings relates to the issue of the

hardship of filing disks. In any event, in

Decisions No. 1 and 2, we required that

‘‘copies of all textual materials’’ are to

be submitted on disks. These disks are

the electronic version or counterpart of

the textual paper filing. The paper copy

remains the official record. Thus, for the

reasons discussed above, we are

denying the petitions for

reconsideration.

Board decisions and notices are

available on our website at

‘‘WWW.STB.DOT.GOV.’’

This action will not significantly

affect either the quality of the human

environment or the conservation of

energy resources.

It is ordered:

1. UTU Committees’ petitions for

reconsideration are denied. Parties may

individually seek a waiver from the

disk/CD requirement.

2. This decision is effective on the

service date.

Decided: May 14, 1998.

By the Board, Chairman Morgan and Vice

Chairman Owen.

Vernon A. Williams,

Secretary.

[FR Doc. 98–13776 Filed 5–21–98; 8:45 am]

BILLING CODE 4915–00–P

DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[STB Finance Docket No. 32760 (Sub–No.

26 1) 2]

Union Pacific Corporation, Union

Pacific Railroad Company, and

Missouri Pacific Railroad Company;

Control and Merger; Southern Pacific

Rail Corporation, Southern Pacific

Transportation Company, St. Louis

Southwestern Railway Company,

SPCSL Corp., and the Denver and Rio

Grande Western Railroad Company;

Houston/Gulf Coast Oversight

AGENCY: Surface Transportation Board.

ACTION: Corrected Decision; Decision

No. 1; Notice of Houston/Gulf Coast

Oversight Proceeding. Requests for

Additional Conditions to the UP/SP

Merger for the Houston, Texas/Gulf

Coast Area.

SUMMARY: Pursuant to a petition filed

February 12, 1998, by the Texas

Mexican Railway Company and the

Kansas City Southern Railway Company

(Tex Mex/KCS) and a request filed

March 6, 1998, by the Greater Houston

Partnership (GHP), the Board is

instituting a proceeding as part of the 5-

year oversight condition that it imposed

in Union Pacific Corporation, Union

Pacific Railroad Company, and Missouri

Pacific Railroad Company—Control and

Merger—Southern Pacific Rail

Corporation, Southern Pacific

Transportation Company, St. Louis

Southwestern Railway Company, SCPSL

Corp., and The Denver and Rio Grande

Western Railroad Company, Finance

Docket No. 32760 (UP/SP Merger),

Decision No. 44 (STB served Aug. 12,

1996), to examine their requests, and

others that may be made, for additional

remedial conditions to the UP/SP

merger as they pertain to rail service in

the Houston, Texas/Gulf Coast region.

The Board is establishing a procedural

schedule (attached) for the submission

of evidence, replies, and rebuttal. The

Board requests that persons intending to

participate in this oversight 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: The proceeding will commence

on June 8, 1998. On that date, all

interested parties must file requests for

new remedial conditions to the UP/SP

merger regarding the Houston/Gulf

Coast area, along with all supporting

evidence. The Board will publish a

notice of acceptance of requests for new

conditions in the Federal Register by

July 8, 1998. Notices of intent to

participate in the oversight proceeding

are due July 22, 1998. All comments,

evidence, and argument opposing the

requested new conditions are due

August 10, 1998. Rebuttal in support of

the requested conditions is due

September 8, 1998. The full procedural

schedule is set forth at the end of this

decision.

ADDRESSES: An original plus 25 copies 3

of all documents, referring to STB

Finance Docket No. 32760 (Sub-No. 26),

must be sent to the Office of the

Secretary, Case Control Unit, ATTN:

STB Finance Docket No. 32760 (Sub-No.

26), Surface Transportation Board, 1925

K Street, N.W., Washington, DC 20423–

0001.

Electronic Submissions. In addition to

an original and 25 copies of all paper

documents filed with the Board, the

parties shall also submit, on 3.5 inch

IBM-compatible diskettes or compact

discs, copies all textual materials,

electronic workpapers, data bases and

spreadsheets used to develop

quantitative evidence. Textual material

must be in, or convertible by and into,

WordPerfect 7.0. Electronic

spreadsheets must be in, or convertible

by and into, Lotus 1–2–3 97 Edition,

Excel Version 7.0, or Quattro Pro

Version 7.0.

The data contained on the diskettes or

compact discs submitted to the Board

may be submitted under seal (to the

extent that the corresponding paper

copies are submitted under seal), and

will be for the exclusive use of Board

employees reviewing substantive and/or

procedural matters in this proceeding.

The flexibility provided by such

computer data is necessary for efficient

review of these materials by the Board
Federal Register / Vol. 63, No. 99 / Friday, May 22, 1998 / Notices 28445

4A copy of each diskette or compact disc

submitted to the Board should be provided to any

other party upon request.

5Union Pacific Corporation, Union Pacific

Railroad Company and Missouri Pacific Railroad

Company—Control and Merger—Southern Pacific

Rail Corporation, Southern Pacific Transportation

Company, St. Louis Southwestern Railway

Company, SPCSL Corp., and The Denver and Rio

Grande Western Railroad Company, Finance Docket

No. 32760 (Sub-No. 21), Decision No. 10 (STB

served Oct. 27, 1997) (UP/SP Oversight).

6UP/SP Oversight, Decision No. 10, at 2–3.

7STB Service Order No. 1518, Joint Petition for

Service Order (Service Order No. 1518) (STB served

Oct. 31 and Dec. 4, 1997, and Feb. 17 and 25, 1998).

8The Board directed UP/SP to release shippers

switched by the Houston Belt & Terminal Railway

Company (HB&T) or the Port Terminal Railroad

Association (PTRA) from their contracts so that they

could immediately route traffic over the Burlington

Northern and Santa Fe Railway Company (BNSF) or

Tex Mex, in addition to UP/SP. The agency also

directed UP/SP to permit BNSF and Tex Mex to

modify their operations over UP/SP lines to

minimize congestion over UP/SP’s ‘‘Sunset Line,’’

to move traffic around Houston rather than going

through it, and to have full access to UP/SP’s

Spring, TX dispatching facility as neutral observers.

More generally, the Board required UP/SP to

cooperate with other railroads and to accept

assistance from other railroads able to handle UP/

SP traffic.

UP/SP and BNSF recently have agreed to make

other changes designed to improve service. In

particular, the carriers have agreed to joint

ownership of the Sunset Line between Avondale

(New Orleans), LA and Houston; joint dispatching

in the Houston area; and overhead trackage rights

for UP/SP over the BNSF line between Beaumont

and Navasota, TX.

9Service Order No. 1518, Feb. 17, 1998 decision,

at 5–7; Feb. 25, 1998 decision, at 5. The railroads’

plans are due May 1, 1998; replies are due June 1.

10Service Order No. 1518, Feb. 17, 1998 decision,

at 8; see also Feb. 25, 1998 decision, at 4.

11The Railroad Commission of Texas (RCT) has

previously announced its intent to seek similar

relief. See Service Order No. 1518, Feb. 17, 1998

decision, at 8.

12 In its progress report of March 9, 1998, UP/SP

announced that it would take drastic action in 30

days—including the refusal of new business and the

transfer of existing business to its competitors—if

the steps it has taken to deal with the emergency

are not successful. On March 24, 1998, the carrier

announced an embargo of a significant portion of

its southbound traffic destined for the Laredo, TX

gateway to clear a backlog of 5,500 cars waiting to

cross into Mexico.

and its staff. The electronic submission

requirements set forth in this decision

supersede, for the purposes of this

proceeding, the otherwise applicable

electronic submission requirements set

forth in our 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).4

FOR FURTHER INFORMATION CONTACT:

Joseph H. Dettmar, (202) 565–1600.

[TDD for the hearing impaired: (202)

565–1695.]

SUPPLEMENTARY INFORMATION: In UP/SP

Merger, Decision No. 44, served August

12, 1996, the Board approved the

common control and merger of the rail

carriers controlled by Union Pacific

Corporation (Union Pacific Railroad

Company and Missouri Pacific Railroad

Company) and the rail carriers

controlled by Southern Pacific Rail

Corporation (Southern Pacific

Transportation Company, St. Louis

Southwestern Railway Company, SPCSL

Corp., and the Denver and Rio Grande

Western Railroad Company)

(collectively UP/SP), subject to various

conditions. Common control was

consummated on September 11, 1996.

The Board imposed a 5-year oversight

condition to examine whether the

conditions imposed on the merger

effectively addressed the competitive

concerns they were intended to remedy,

and retained jurisdiction to impose, as

necessary, additional remedial

conditions if the Board determined that

the conditions already imposed were

shown to be insufficient. In its initial

oversight proceeding, the Board

concluded that, while it was still too

early to tell, there was no evidence at

the time that the merger, with the

conditions that the agency had imposed,

had caused any adverse competitive

consequences.5 Nevertheless, the Board

indicated that its oversight would be

ongoing, and that it would continue

vigilant monitoring.6

UP/SP has experienced serious

service difficulties since the merger, and

the Board has issued a series of orders

under 49 U.S.C. 11123, effective through

August 2, 1998, to mitigate a rail service

crisis in the western United States

caused, in large measure, by severely

congested UP/SP lines in the Houston/

Gulf Coast region.7 In acting to relieve

some of the congestion, the Board made

substantial temporary changes to the

way in which service is provided in and

around Houston.8 The Board found that,

although merger implementation issues

were involved, a key factor in bringing

about the service emergency was the

inadequate rail facilities and

infrastructure in the region, and, as

such, also ordered UP/SP, BNSF, and

other involved railroads to submit to the

Board their plans to remedy these

inadequacies.9

Recognizing the limitations on its

authority under the emergency service

provisions of the law, the Board rejected

proposals offered by certain shipper,

carrier, and governmental interests in

the Service Order No. 1518 proceeding

to force UP/SP to transfer some of its

lines to other rail carriers and effect a

permanent alteration of the competitive

situation in the Houston region; it

adopted instead only those measures

designed to facilitate short-term

solutions to the crisis that did not

further aggravate congestion in the area

or create additional service disruptions.

The Board declared, however, that

interested persons could present

proposals for longer-term solutions to

the service situation—including those

seeking structural industry changes

based on perceived competitive

inadequacies—in formal proceedings

outside of section 11123, particularly in

the UP/SP merger oversight process.10

Tex Mex/KCS has now requested that

we invoke our oversight jurisdiction

over the merger for the purpose of

considering such proposals, including

the transfer to it of various UP/SP lines

and yards in Texas.11 GHP has also

requested the Board’s intervention to

provide for Houston’s long-term rail

service needs, including the

establishment of a neutral switching

operation.

That the service emergency in the

Houston/Gulf Coast region remains

ongoing is well known.12 Given these

circumstances, the Board will invoke its

oversight jurisdiction over the UP/SP

merger to consider new conditions to

the merger of the kind proposed here,

and others that may be made. We note

that no party as yet has seriously

suggested that SP’s inadequate

infrastructure would not have produced

severe service problems in the Houston/

Gulf Coast area even if there had been

no merger. Nonetheless, the Board

believes that, given the gravity of the

service situation, it should thoroughly

explore anew the legitimacy and

viability of longer-term proposals for

new conditions to the merger as they

pertain to service and competition in

that region.

UP/SP and BNSF argue that Tex Mex/

KCS’ request for conditions that have

been previously rejected, without any

new evidentiary justification, is

insufficient grounds for the Board to

begin a new oversight proceeding. We

disagree. Our 5-year oversight of the UP/

SP merger is not a static process, but a

continuing one, so that the Board’s prior

rejection of Tex Mex/KCS’ or any other

party’s requested conditions—whether

in the Board’s approval of the merger or

in a subsequent oversight proceeding—

does not preclude their fresh

consideration now. Through our

oversight condition, we have retained

jurisdiction to monitor the competitive

consequences of this merger; to reexamine whether our imposed

conditions have effectively addressed

the consequences they were intended to

remedy; and to impose additional
28446 Federal Register / Vol. 63, No. 99 / Friday, May 22, 1998 / Notices

13 In Decision No. 10, at 18–19, the Board

provided that general oversight would commence

July 1 upon the filing by UP/SP and BNSF of their

quarterly merger progress reports accompanied by

comprehensive summary presentations. We

provided that, as part of that proceeding, UP/SP and

BNSF must make their 100% traffic tapes available

by July 15, 1998; that comments of interested

parties concerning oversight issues are due August

14, 1998; and that replies are due September 1,

1998. The general oversight proceeding will

continue as planned.

14Tex Mex/KCS stated that it would file its

supporting evidence 45 days after its petition.

Petition at 5. If it does so, it need not file its

evidence anew on June 8th, although it may

supplement its filing as appropriate. We decline,

however, petitioner’s request (Petition at 11 n.6) to

incorporate by reference its pleadings in Finance

Docket Nos. 33507, 33461, 33462, and 33463 (titles

omitted). In those proceedings, Tex Mex/KCS has

complained that, after the merger, UP/SP (either

singly or jointly with BNSF) unlawfully acquired

control of HB&T in violation of 49 U.S.C. 11323,

and has petitioned that a series of exemptions the

carriers filed to restructure HB&T’s operations

leading to that control should be voided and/or

revoked. We will proceed to consider the discrete

matters in those cases—including Tex Mex/KCS’

petition for consolidation and motion to compel

discovery, and UP/SP’s motion to dismiss—

separately from our consideration in this oversight

proceeding of requests by Tex Mex/KCS and others

for new remedial conditions to the merger.

remedial conditions if those previously

afforded prove insufficient, including, if

necessary, divestiture of certain of the

merged carriers’ property.

The virtual shutdown of rail service

in the Houston/Gulf Coast area that

occurred after the UP/SP merger—and

which, after many months, has yet to be

normalized—is unprecedented. In our

judgment, those circumstances alone are

sufficient for the Board to commence

this proceeding now. Clearly, our 5-year

oversight jurisdiction permits us to

examine—and, if necessary, re-examine

at any time during this period—whether

there is any relationship between the

market power gained by UP/SP through

the merger and the failure of service that

has occurred here, and, if so, whether

the situation should be addressed

through additional remedial conditions.

UP/SP Merger, Decision No. 44, at 100.

We caution, however, that we will not

impose conditions requiring UP/SP to

divest property that would substantially

change the configuration and operations

of its existing network in the region in

the absence of the type of presentation

and evidence required for ‘‘inconsistent

applications’’ in a merger proceeding;

i.e., parties must present probative

evidence that discloses ‘‘the full effects

of their proposals.’’ UP/SP Merger,

Decision No. 44, at 157. Divestiture is

only available ‘‘when no other less

intrusive remedy would suffice,’’ and

we will impose it only upon sufficient

evidentiary justification. Id.

The Board will confine this

proceeding under its continuing

oversight jurisdiction to examining

requests for new conditions to the

merger relating to rail service in the

Houston/Gulf Coast area. As we have

noted, the service crisis in this region,

and its significant impact on the

regional economy, clearly warrant our

discrete treatment of these matters now.

As a result, the procedures set forth here

will be separate from those in the more

general oversight proceeding that,

pursuant to UP/SP Oversight, Decision

No. 10, will begin July 1, 1998.13

As set forth in the attached schedule,

parties that wish to request new

remedial conditions to the UP/SP

merger as they pertain to the Houston/

Gulf Coast region must file them, along

with their supporting evidence, by June

8, 1998.14 The Board will publish a

notice in the Federal Register accepting

such requests by July 8, 1998. Any

person who intends to participate

actively in this facet of oversight as a

‘‘party of record’’ (POR) must notify us

of this intent by July 22, 1998. In order

to be designated a POR, a person must

satisfy the filing requirements discussed

above in the ADDRESSES section. We will

then compile and issue a final service

list.

Copies of decisions, orders, and

notices will be served only on those

persons designated as POR, MOC

(Members of Congress), and GOV

(Governors) on the official service list.

Copies of filings must be served on all

persons who are designated as POR. We

note that Members of the United States

Congress and Governors who are

designated MOC and GOV are not

parties of record and they need not be

served with copies of filings; however,

those who are designated as a POR must

be served with copies of filings. All

other interested persons are encouraged

to make advance arrangements with the

Board’s copy contractor, DC News &

Data, Inc. (DC News), to receive copies

of Board decisions, orders, and notices

served in this proceeding. DC News will

handle the collection of charges and the

mailing and/or faxing of decisions to

persons who request this service. The

telephone number for DC News is: (202)

289–4357.

A copy of this decision is being

served on all persons designated as

POR, MOC, or GOV on the service list

in Finance Docket No. 32760 (Sub-No.

21). This decision will serve as notice

that persons who were parties of record

in the previous oversight proceeding

(leading to Decision No. 10) will not

automatically be placed on the service

list as parties of record for this facet of

oversight unless they notify us of their

intent to participate further.

Finally, while the requested remedial

conditions (and those reasonably

anticipated from other parties) could, if

imposed, result in a transfer of

ownership of certain UP/SP rail

property or changes in the way that

such properties are operated, they

appear unlikely to produce the kind of

significant operational changes that,

under 49 CFR 1105.6(b)(4), require the

filing of a preliminary draft

environmental assessment (PDEA).

This action will not significantly

affect either the quality of the human

environment or the conservation of

energy resources.

Decided: March 30, 1998.

By the Board, Chairman Morgan and Vice

Chairman Owen.

Vernon A. Williams,

Secretary.

Procedural Schedule

June 8, 1998

Requests for new remedial conditions

(with supporting evidence) filed.

July 8, 1998

Board notice of acceptance of requests

for new conditions published in the

Federal Register.

July 22, 1998

Notice of intent to participate in

proceeding due.

August 10, 1998

All comments, evidence, and

argument opposing requests for new

remedial conditions to the merger

due. Comments by U.S. Department

of Justice and U.S. Department of

Transportation due.

September 8, 1998

Rebuttal evidence and argument in

support of requests for new

conditions due.

The necessity of briefing, oral

argument, and voting conference will be

determined after the Board’s review of

the pleadings.

[FR Doc. 98–13775 Filed 5–21–98; 8:45 am]

BILLING CODE 4910–00–P

DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[STB Docket No. AB–167 (Sub–No. 1183X)]

Consolidated Rail Corporation;

Abandonment Exemption; in

Philadelphia County, PA

Consolidated Rail Corporation

(Conrail) has filed a notice of exemption

under 49 CFR 1152 Subpart F—Exempt

Abandonments to abandon a 0.42-mile

portion of the Berks Street Industrial

Track between milepost 2.98± and

milepost 3.40±, in the City of