(The following article by Ted Monoson was posted on the Billings Gazette website on October 24.)
WASHINGTON — A top federal official weighed in Thursday against a proposal by Sen. Conrad Burns, R-Mont., to increase competition and lower shipping rates for farmers and other small-scale shippers in those areas.
The bill aims to help Montana farmers and others who are served by a single freight railroad company.
“Taken as a whole, S. 919, would fundamentally change the economic model of the railroad industry and is unwise,” Surface Transportation Board Chairman Roger Nober told members of the Senate Commerce, Science and Transportation Committee on Thursday.
Burns agreed that it would alter the “economic model,” but he said that the change is necessary to keep Montana farmers from going out of business.
“Our intent is to correct the economic model that allows the monopolistic practices to be used,” said Burns, who is a member of the committee.
The issue has been kicked about for several years and Burns and his fellow senators are frustrated it has not been resolved.
“A lot of us are out of patience,” Sen. Byron Dorgan, D-N.D., told Nober. “Nothing ever seems to happen.”
The problem dates back to 1980 when the Staggers Act, which deregulated the railroad industry, was enacted.
Burns and other supporters of his proposal say it is not an effort to re-impose the pricing regulations that existed before the Staggers Act became law.
“It would just reinstate the initial intent of the Staggers Act, which has been diluted by lack of competition and flawed regulatory interpretations,” Burns said.
The bill would authorize arbitration in cases where rail shippers believe they are being charged an unfairly high rate.
Nober, whose agency interprets the law, said that officials needed to reach out to Montana farmers and others who are served by only one railroad.
Sen. Max Baucus, D-Mont., is one of seven senators co-sponsoring Burns’ bill.
Rep. Denny Rehberg, R-Mont., has not signed onto a House version of Burns’ bill. He said he wants to address the issue from a different angle.
Nober also blamed the discontent among farmers and others on the railroads’ poor customer service.
Montana Wheat and Barley Commission representative Terry Whiteside wants congressional action that would increase competition. In 1980 the freight railroad business was a $28 billion industry, but it was only a $34 billion dollar industry in 2002, Whiteside said.
“I am working on a bill from a different perspective,” Rehberg said. “(Burns’) bill has got positive things in it, but it’s not moving.”