CEI Leads Coalition Opposing Freight Rail Reciprocal Switching
Dear Honorable Board Members,
We, the undersigned, maintain a deep interest in free markets and the benefits they provide to the American consumer. We write to restate our opposition to the Board’s proposal to mandate reciprocal switching on American railroads.
As we have stated before, we believe that the proposed regulations will significantly harm the ability of the nation’s freight railroads to continue their strong records of performance and investment since the passage of the Staggers Act in 1980. Those trends have continued without hindrance since the Board considered these proposals in 2011 and 2016.
We consider reciprocal switching to be forced access. Forced access will needlessly complicate an exchange that is already determined by market negotiation. Railroads’ property rights will be overridden to enforce a regime of below-market rates, which will lead to less investment by railroads, diminished competitive advantage against other modes of transportation, and in the end higher prices for consumers. There will also be more strain placed on the nation’s competing transportation networks, such as the interstate highway network. Second order effects on passenger rail, the environment, and safety will also be costly.
We reiterate that it would be perverse to remove the longstanding requirement to find anticompetitive effects before mandating forced access. At a time when the question of competition policy is a matter of significant national debate, it is odd that the Board seeks to remove any discussion of competitive effects from this aspect of rail regulation. Courts have consistently found that the purpose of competition law is to improve consumer welfare. Moreover, the Board has made no findings of anticompetitive practices that would justify any mandated switching. As the Board’s proposals would ultimately reduce consumer welfare, we must protest that the Board is leaving consumers out in the cold with its proposals.
Moreover, we consider it questionable of the Board to bring up this matter again at a time when the nation’s supply chains are under considerable strain.
For further discussion, please see the reply comments of the Competitive Enterprise Institute in the Matter of Petition for Rulemaking to Adopt Revised Competitive Switching Rules, Notice of Public Hearing, Docket No. EP 711, 78 Fed. Reg. 49721 (Aug. 15, 2013), and the comments of the Competitive Enterprise Institute in the Matter of Petition for Rulemaking to Adopt Revised Competitive Switching Rules; Reciprocal Switching, Docket No. EP 711 (Sub-No. 1), 81 Fed. Reg. 51149 (September 26, 2016).
As was said in those 2016 comments, “Continuing down the path laid out in the NPRM would constitute a dangerous reregulatory action, one Congress has rejected and precisely the type of agency conduct under STB’s predecessor that led to the near-collapse of the railroad industry prior to the enactment of the Staggers Act.”
We once again urge the Board to withdraw these proposals.
Sincerely,
Iain Murray
Vice President and Senior Fellow
Competitive Enterprise Institute
James L. Martin
Founder/Chairman
60 Plus Association
Saulius “Saul” Anuzis
President
60 Plus Association
Steve Pociask
President / CEO
American Consumer Institute
Brent Wm. Gardner
Chief Government Affairs Officer
Americans for Prosperity
Robert Alt
President and Chief Executive Officer
The Buckeye Institute
Garrett Ballengee
Executive Director
Cardinal Institute
Ryan Ellis
President
Center for a Free Economy
Andrew F. Quinlan
President
Center for Freedom and Prosperity
Jeffrey Mazzella
President
Center for Individual Freedom
David McIntosh
Vice President of Government Affairs
Club for Growth
Ashley Baker
Director of Public Policy
The Committee for Justice
Jon Decker
Executive Director
Committee to Unleash Prosperity
Yaël Ossowski
Deputy Director
Consumer Choice Center
Matthew Kandrach
President
Consumer Action for a Strong Economy
Douglas Holtz-Eakin
President
American Action Forum*
Annette Thompson Meeks
CEO
Freedom Foundation of Minnesota
Adam Brandon
President
FreedomWorks
Jessica Anderson
Executive Director
Heritage Action for America
David R. Henderson
Research Fellow
Hoover Institution*
Andrew Langer
President
Institute for Liberty
Tom Giovanetti
President
Institute for Policy Innovation
Sal Nuzzo
Vice President of Policy
The James Madison Institute
Alfredo Ortiz
President and CEO
Job Creators Network
Brett Healy
President
The John K. MacIver Institute for Public Policy
Amy O. Cooke
President and CEO
John Locke Foundation
Roslyn Layton, PhD
Visiting Researcher
Aalborg University
Matthew Gagnon
CEO
Maine Policy Institute
Charles Sauer
President
Market Institute
Christopher Summers
President and Chief Executive Office
The Maryland Public Policy Institute
Patrick McLaughlin
Director of Policy Analytics/Sr. Research Fellow
Mercatus Center at George Mason University*
Douglas Carswell
President & CEO
Mississippi Center for Public Policy
David Ridenour
President
The National Center for Public Policy Research
Brandon Arnold
Executive Vice President
National Taxpayers Union
Daniel Erspamer
CEO
Pelican Institute for Public Policy
Mike Stenhouse
CEO
Rhode Island Center for Freedom & Prosperity
Paul Gessing
President
Rio Grande Foundation
Karen Kerrigan
President & CEO
Small Business & Entrepreneurship Council
Christian N. Braunlich
President
Thomas Jefferson Institute for Public Policy
Randal O’Toole
Director
Thoreau Institute
*Affiliation listed for identification purposes only.