ERMUSR INFORMATION 03-19-2013 - Laserfiche WebLink

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AL FRANKEN SUITE MINNESOTA SH-309 202-224-5641 united *taten OSenate WASHINGTON,DC 20510-2309 February 19, 2013 The Honorable Barack Obama President of the United States of America The White House 1600 Pennsylvania Ave NW Washington, DC 20500-0003 Dear Mr. President, I am writing you about a matter of great importance to the economy of my state and the nation: the freight railroad monopoly power over customers that must use a freight railroad for transportation. There are several ongoing executive branch activities regarding our transportation system,and I respectfully request that you direct them to consider the railroad monopoly problem in their proceedings. You mentioned in your Inaugural Address the importance of railroads, highways, and other infrastructure to the strength of our national economy. I agree. But to really serve our nation, that infrastructure must be available to all prospective users on a competitive basis,and unfortunately that is not currently happening. Recent analysis indicates that 78% of the 28,000 "stations" in the continental United States where a major freight railroad picks up or delivers freight are served by a single railroad. Of the remaining 22% of rail stations that are nominally served by a second railroad, a significant number are served by a short line or regional rail carrier that is dominated by the major railroad serving the location. This lack of competition in our national freight rail transportation system and the resulting railroad monopoly power over a significant portion of annual railroad freight movement create significant problems for our state and national economies. The freight railroads are exempt from our nation's antitrust laws for any issue that is jurisdictional to the Surface Transportation Board. This treatment of railroads is different from our treatment of interstate electric transmission lines, interstate natural gas pipelines, and telecommunications companies, all of which must comply with both federal economic regulation and the provisions of the nation's antitrust laws. The Surface Transportation Board is charged with the responsibility of ensuring that the freight railroads do not exercise their market power to the detriment of their customers. This small and under-funded agency is attempting to apply federal law adopted in 1980 that presumes that the relationship between the railroad and its customers will be governed by market competition instead of by regulatory policy. This 1980 presumption does not match current reality, where there are very limited opportunities for rail dependent shippers to have access to more than one major railroad. In March 2011,your Export Council wrote you a letter setting forth federal actions that could be taken to increase American exports that will create more American jobs. Addressing this freight rail monopoly power was listed as one of the five actions that could increase American exports. 1 W\MN FRANKEN SENATE GOV