The U.S. railroad industry consists mostly of freight railroads but also serves passengers. Freight railroads are divided into classes based on revenue. Class I freight railroads earn the most revenue and generally provide long-haul freight service. Freight railroads operate over approximately 160,000 miles of track and own most of the track in the United States; a notable exception is the Northeast Corridor, between Washington, D.C., and Boston, Massachusetts, which Amtrak predominantly owns. Amtrak provides intercity passenger rail service in 46 states and the District of Columbia and operates on 21,000 miles of track. Commuter railroads serve passengers traveling within large metropolitan areas and most operate over track infrastructure owned by Amtrak or freight railroads for at least some portion of their operations. Specifically, 9 commuter railroads operate over Amtrak-owned infrastructure. Sixteen commuter railroads operate over infrastructure owned by freight railroads. U.S. freight and passenger trains often share track, dispatchers, and signals that control train movement. Some railroads also use additional technologies to improve efficiency and achieve business benefits. Currently, dispatchers in centralized offices issue train movement authorities that allow trains to enter specific track segments, or blocks. These authorities are communicated to train operators through signals alongside the track, or in non-signaled territory through track warrants generally issued by verbal radio communication (see fig. 1).Railroads also use additional technologies to maximize operational efficiencies. These include: Computer-assisted dispatching so dispatchers can, among other things, optimally synchronize schedules, allowing trains on single track to “meet and pass” one another safely and efficiently, thereby minimizing delays and improving on-time performance. Energy management systems that analyze train location and track grade and curvature information to calculate the train’s most fuel- efficient speed throughout the trip. These technologies can lead to business benefits for the railroad as well as benefits for society at large. As we have reported in the past, diversion of freight traffic from highways to rail potentially increases highway safety and reduces highway congestion and energy consumption. Although train accidents have generally been on the decline in recent years, human factors such as train operators missing a red signal or exceeding allowable speeds, or train crews leaving a switch in the wrong position can lead to significant damage and loss of life. Overall, rail safety—measured by the train accident rate per million train miles—has improved markedly since 1980. According to FRA data, 2012 was the safest year in railroad history. Even with the significant reduction in accident rates, on average almost 300 people were reported injured and about 10 people were reported killed in train accidents each year, from 2003 through 2012. PTC is a computer-based technology that uses a communications system to monitor and control train movements to minimize human factor errors. Prior to the enactment of the RSIA in 2008, railroads developed and tested several PTC systems but deployed them on a limited basis. For example, in 1998, while Amtrak was upgrading the Northeast Corridor to enable operation of high-speed passenger trains—a service known today as Acela—FRA directed Amtrak to install a new train control system on some portions of the corridor as a safety measure. Amtrak worked with suppliers to develop a form of PTC—known as Advanced Civil Speed Enforcement System (ACSES)—and deployed this system on the Northeast Corridor. In wake of the Chatsworth rail accident in September 2008 and other high-profile rail accidents, RSIA was enacted. RSIA, among other things, required railroads to install PTC by December 31, 2015, on mainlines used to transport inter-city rail passengers, commuters, or any amount of toxic-by-inhalation materials. RSIA requires railroads to install PTC systems, which are designed to prevent train-to-train collisions and derailments caused by exceeding safe speeds. PTC must also be designed to protect rail workers by preventing trains from entering work zones as well as to prevent the movement of trains through switches left in the wrong position. PTC’s communications-based system links various components, namely locomotive computers, wayside units along the side of the track, and dispatch systems in centralized office locations (see fig. 2). Through these components, PTC is able to communicate a train’s location, speed restrictions, and movement authorities, and can slow or stop a train that is not being operated safely. For example, a PTC system could have prevented the 2008 Chatsworth accident by first alerting the operator that the train was approaching a red signal and then stopping the train before passing the red signal. However, it should be noted that there are types of accidents, such as highway-railroad crossing accidents and trespasser deaths, that PTC technology is not designed to prevent. According to FRA, highway-railroad crossing and trespasser deaths account for 95 percent of all rail-related fatalities. RSIA does not require railroads to implement the same PTC system; however, the various PTC systems must meet the PTC system functionality requirements. There are two primary ways PTC can be implemented—as an overlay or as a standalone system. An overlay system involves installing PTC over existing track equipment to work in conjunction with the existing signal system and the train’s current method of operations. A standalone system involves taking information currently communicated through the signal system and putting it onboard the locomotive, effectively eliminating the need for the existing signal system. Whatever PTC system a railroad implements, RSIA requires that systems be interoperable, meaning they must be able to communicate with one another so trains can seamlessly move across track owned by different railroads with potentially different PTC systems. Interoperability is important given that, according to FRA, there are 37 freight, intercity passenger, and commuter railroads that are required to implement PTC. To implement the requirements of RSIA, FRA has conducted three rulemakings that resulted in: (1) a 2010 final rule, (2) a 2012 final rule, and (3) a 2012 Notice of Proposed Rulemaking (NPRM), which is currently not finalized (see fig. 3). In the original 2010 rule, FRA used facts and data known in 2008 to determine where PTC implementation should occur. Recognizing that traffic levels and routing could change between 2008 and the statutory deadline in 2015, the 2010 rule provided railroads with the option to request an amendment to not equip a track segment where the railroad was initially required to install PTC, but may no longer be required to do so. In order for certain rail segments to be excluded, the segments would need to pass two qualifying tests. After FRA finalized the 2010 rule, the Association of American Railroads (AAR) challenged the two qualifying tests in a lawsuit, and FRA and AAR entered into a settlement agreement in which FRA agreed to propose elimination of the tests. The two qualifying tests were eliminated in the 2012 final rule; as a result, railroads do not have to implement PTC on rail segments that will not transport toxic-by-inhalation materials or passengers as of December 31, 2015. The FRA rulemaking that is currently under way addresses how railroads will handle en-route failures of PTC equipment, among other things. In accordance with Executive Order 12866, FRA prepared economic analyses—also known as regulatory impact analyses—to assess the benefits and costs of PTC before promulgating regulations. Specifically, FRA issued two regulatory impact analyses evaluating final rules—one dated December 2009 evaluating the 2010 final rule and one dated January 2012 evaluating the 2012 final rule. Executive orders and OMB guidance direct agencies to assess the benefits and costs of regulatory alternatives. Agencies should generally select the regulatory approach that maximizes net benefits to society, unless a statute requires otherwise. OMB developed guidelines to encourage good regulatory impact analysis and to standardize the way that benefits and costs of federal regulations are measured and reported. OMB guidelines generally direct agencies, in analyzing the impacts of rules, to, among other things: measure the potential social benefits and costs of regulatory alternatives incremental to a “baseline,” (i.e., the conditions that would exist in the absence of the proposed regulation); analyze a range of alternatives; identify and quantitatively analyze key uncertainties associated with the estimates of benefits and costs; and provide documentation that the analysis is based on the best reasonably obtainable scientific, technical, and economic information available. OMB guidelines further state that a good regulatory analysis includes identifying the regulatory alternative with the largest net benefits to society. It also states that such information is useful for decision makers and the public, even when economic efficiency is not the only or the overriding public policy objective. As part of overseeing railroads’ progress with PTC implementation, FRA is also responsible for reviewing railroads’ PTC-related plans. Railroads must submit and FRA must review and approve three plans: a PTC development plan, a PTC implementation plan, and a PTC safety plan. The PTC development plan describes, among other things, the PTC system a railroad intends to implement to satisfy the PTC regulatory requirements. According to its August 2012 report, FRA’s approval of the development plans took nearly 18 months to complete. The PTC implementation plan describes a railroad’s plan for installation of its planned PTC system. RSIA required railroads to submit these plans within 18 months (by April 16, 2010), and FRA to review and approve or disapprove them within 90 days. The PTC safety plan includes a railroad’s plans for testing the system, as well as information about safety hazards and risks the system will address, among other things. By approving a safety plan, FRA certifies a railroad’s PTC system, a precondition for operating the PTC system in revenue service.