A leading rail advocate has urged a Senate subcommittee to reconsider funding--and possibly even eliminate--the Surface Transportation Board (STB), unless the regulatory board takes decisive steps to prevent further erosion of rail-to-rail competition.

Diane Duff, executive director of the Alliance for Rail Competition (ARC), testified before the Subcommittee on Transportation of the Senate Appropriations Committee. Duff stressed ARC plans to scrutinize the STB, which is charged with regulatory oversight of the rail industry, and determine whether the board's soon-to-be-released revision of merger policy procedures meets a specific set of criteria.

"The board's merger policy review probably is the best opportunity it has to achieve the level of rail-to-rail competition Congress fully intended, under rail deregulation," Duff said. "The STB's merger policy review must provide clear guidance for enhancing rail-to-rail competition. Otherwise, the STB will have neglected its obligations under deregulation, and this committee should give serious consideration to specifically directing the use of the board's funding or even eliminating funding."

ARC will judge the board's proposed merger policy rulemaking, due the first week of October, on whether it provides clear and concise guidelines for enhancing competition, recognizes the need for competition between rail carriers and identifies ways in which pro-competitive conditions can be applied throughout the industry.

Since deregulation by Congress in 1980, the number of major Class I railroads has declined from approximately 42 to only four, eliminating potential alternatives once available to otherwise captive shippers. As a result, rail customers are paying higher prices, while receiving deteriorating service. In short, the pro-competitive goals of rail deregulation have not been met.

Duff's testimony is posted on ARC's Website (www.railcompetition.org). Testimony from others appearing at the hearing, including Duff's, will be posted on the subcommittee's Website (www.senate.gov/~appropriations/).

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