Expedited Relief for Service Inadequacies

DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

49 CFR Part 1146

[STB Ex Parte No. 628]

Expedited Relief for Service Inadequacies

AGENCY: Surface Transportation Board, DOT.

ACTION: Supplemental Notice of Proposed Rulemaking.

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SUMMARY: In May 1998, the Board instituted a proceeding to solicit

comments on proposed rules that would establish expedited procedures

for shippers to obtain alternative rail service from another carrier

when the incumbent carrier cannot properly serve shippers.1

On September 25, 1998, the American Short Line and Regional Railroad

Association (ASLRRA) asked for similar expedited procedures to be

established for Class II and Class III railroads to obtain temporary

access to an additional carrier under similar circumstances. By this

notice, the Board sets dates for interested persons to respond to the

ASLRRA request.

\1\ Expedited Relief for Service Inadequacies, STB Ex Parte No.

628 (STB served May 12, 1998), 63 FR 27253 (May 18, 1998) (May

Notice).

DATES: Supplemental comments on the ASLRRA request are due October 30,

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1998. Supplemental replies to such comments are due November 6, 1998.

ADDRESSES: An original plus 12 copies of all supplemental comments and

replies, referring to STB Ex Parte No. 628, must be sent to the Office

of the Secretary Case Control Unit, ATTN: STB Ex Parte No. 628, Surface

Transportation Board, 1925 K Street, NW, Washington, DC 20423-0001. In

addition, copies should be served upon all parties included in the

service list issued by the Board in its notices served June 9 and 16,

1998, which are available on the Board's website (www.stb.dot.gov).

Copies of the supplemental comments will be available from the

Board's contractor, DC News and Data, Inc., located in Room 210 in the

Board's building. DC News can be reached at (202) 289-4357. The

comments will also be available for viewing and self copying in the

Board's Microfilm Unit, Room 755.

In addition to the original and 12 copies of all paper documents

filed with the Board, the parties shall submit their pleadings,

including any graphics, on a 3.5-inch diskette formatted for

WordPerfect 7.0 (or in a format readily convertible into WordPerfect

7.0). All textual material, including cover letters, certificates of

service, appendices and exhibits, shall be included in a single file on

the diskette. Each diskette shall be clearly labeled with the filer's

name, the docket number of this proceeding (STB Ex Parte No. 628), and

the name of the electronic format used on the diskette for files other

than those formatted in WordPerfect 7.0. All pleadings submitted on

diskettes will be posted on the Board's website (www.stb.dot.gov). The

electronic submission requirements set forth in this notice supersede,

for the purposes of this proceeding, the otherwise applicable

electronic submission requirements set forth in the Board's

regulations. See 49 CFR 1104.3(a), as amended in Expedited Procedures

for Processing Rail Rate Reasonableness, Exemption and Revocation

Proceedings, STB EX Parte No. 527, 61 FR 52710, 711 (Oct. 8, 1996), 61

FR 58490, 58491 (Nov. 15, 1996).2

\2\ A copy of each diskette submitted to the Board should be

provided to any other party upon request.

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FOR FURTHER INFORMATION CONTACT: Joseph H. Dettmar, (202) 565-1600.

[TDD for the hearing impaired: (202) 565-1695.]

SUPPLEMENTARY INFORMATION: As explained more fully in May Notice, the

proposed rules are designed to enable the Board to remedy railroad

service failures quickly and effectively.3 The proposed

rules would provide expedite

[[Page 55997]]

procedures for parties to seek alternative rail service under 49 U.S.C.

11102, 10705 or 11123 when, over an identified time period, there has

been a substantial, measurable deterioration in the rail service

provided by an incumbent carrier. We did not list particular factors to

be used in making that assessment, or propose a specific test period,

but rather proposed a flexible standard of relief to permit the Board

to address varying circumstances. However, we cautioned that the

proposed rules are not meant to redress minor service disruptions, but

rather are directed only at substantial service problems that cannot

readily be resolved by the incumbent railroad. Accordingly, we proposed

to require petitioning shippers to: (1) first discuss and assess with

their incumbent carrier whether adequate service can be restored within

a reasonable time and, if not, to explain why not; and (2) obtain from

another railroad the necessary commitment--should it be afforded

access--to meet the shipper's service needs, and describe the carrier's

plan to do so safely and without degrading service to its existing

customers and without unreasonably interfering with the incumbent's

overall ability to provide service. Finally, the proposed rules would

provide that, where relief has been granted and the incumbent carrier

can demonstrate that it has restored, or is prepared to restore,

adequate service, it may file a petition to terminate that relief

(although the proposed rules would discourage carriers from filing such

a petition to terminate less than 90 days after relief was granted,

absent special circumstances).

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\3\ The proposed rules are designed only to respond to service

problems, and not to provide permanent responses to perceived

competitive issues. May Notice, at 6 n.6.

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ASLRRA Request

In its request, which it served on all parties to the Ex Parte No.

628 proceeding,4 ASLRRA asserts that small (Class II and

Class III) railroads 5 and their shippers can be seriously

affected by service disruptions of a connecting railroad and that they

need expedited procedures comparable to the proposed Ex Parte No. 628

procedures for obtaining temporary access to a second carrier. ASLRRA

mentions three specific types of access:6

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\4\ ASLRRA also served its request on all parties in Ex Parte

No. 575, the more general informational proceeding that spawned our

proposal in Ex Parte No. 628. See Review of Rail Access and

Competition Issues, STB Ex Parte No. 575 (STB served April 17, 1998)

(Review), at 6; May Notice, at 2-3.

\5\ Railroads are classified by the amount of their annual

operating revenues, measured in 1991 dollars. A Class III railroad's

revenues do not exceed $20 million; a Class II railroad has revenues

of more than $20 million, but less than $250 million; and a Class I

railroad has revenues of at least $250 million. 49 CFR 1201, General

Instruction 1-1.

\6\ ASLRRA Request, at 7-8.

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``(1) Relief from the terms of an existing [so-called paper]

barrier [7] or other impediment to access, to permit direct

access to the additional carrier;

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\7\ ``Paper barriers'' refer to contractual restrictions that

preclude some small carriers from interchanging traffic with

carriers other than their primary connecting carrier. See Review, at

8.

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``(2) Permitting the small railroad access over [the] incumbent

carrier for a reasonable distance in order to reach the additional

carrier; and

``(3) Permitting the additional carrier access over the incumbent

to reach the small railroad.''

ASLRRA further suggests that, for small railroads, severe service

disruptions of 30 days should qualify for relief,8 and that

the access granted should last for 270 days (the maximum time allowed

under current law for emergency orders under 49 U.S.C. 11123). Finally,

ASLRRA asserts that a railroad-petitioner should not need an advance

commitment from the additional carrier, in view of the mandatory

interchange requirements applicable to all railroads.

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\8\ ASLRRA would specifically include serious, continuing car

supply problems as grounds for relief.

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AAR Reply

AAR asserts that the ASLRRA proposal can and should be considered

in the ongoing Ex Parte No. 628 proceeding,9 as it involves

the same subject--expedited relief for service

inadequacies.10 Moreover, AAR does not view the rules

proposed in May as limited to shipper petitions for relief; rather, AAR

takes the position that the expedited procedures, as proposed, would be

available to railroads (of any size) and shippers alike.11

Nevertheless, AAR supports clarifying the Ex Parte No. 628 rules to

specify that railroads, like shippers, could petition for relief, and

that the relief granted could include providing for a connection

between the petitioning railroad and a second railroad.

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\9\ The AAR reply, like the ASLRRA request, was served on all

parties of record in both the Ex Parte No. 575 and Ex Parte No. 628

proceedings.

\10\ Edison Electric Institute (EEI), in a letter dated October

5, 1998, asks that the record in Ex Parte No. 628 be considered in

addressing the ASLRRA request, and that the Board provide for

opening and reply comments in the matter. Our approach here is

consistent with both of EEI's requests.

\11\ Although the proposed rules do not specifically limit

petitioners to shippers, the explanatory discussion in the May

Notice focused on shipper-petitioners.

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Although AAR agrees in principle with the ASLRRA proposal, it does

not concur in all aspects of that proposal. Rather, it argues against

compelling an unwilling second railroad to participate in an emergency

service arrangement,12 establishing preset time frames as

suggested by ASLRRA,13 and using what it describes as

``routine car supply issues'' as a basis for emergency

relief.14

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\12\ AAR asserts that ``the principal if not only reason that a

second railroad would decline to handle additional traffic via a new

connection would be operating considerations.'' AAR Reply at 4 n.3.

Under the proposed rules, operating considerations are a significant

factor in determining whether to grant relief. See Proposed Rule

1146.1(b)(1)(C) (requiring the petition to address whether the

alternative service ``would meet the * * * service needs'' and ``how

that carrier would provide the service safely without degrading

service to its existing customers or unreasonably interfering with

the incumbent's overall ability to provide service.'').

\13\ AAR Reply at 5 n.4, 7.

\14\ AAR argues that ``application of the rules to car supply

issues between small and large railroads would be particularly

inappropriate in light of the fact that the [recent] AAR-ASLRRA Rail

Industry Agreement [a far-reaching agreement encompassing a variety

of issues, negotiated in response to the Board's Review decision]

provides a structured mechanism for working together to improve the

satisfaction of customers' car supply needs.'' AAR Reply at 6 n.6.

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Board Conclusion

We conclude that the ASLRRA proposal should be considered in the Ex

Parte No. 628 proceeding.15 Accordingly, to ensure that all

issues relating to that proposal are fully aired, and that the

inclusion of the ASLRRA proposal does not unduly delay this proceeding,

we are establishing an abbreviated schedule for the submission of

comments on the proposal. Comments on the ASLRRA request will be due

October 30, 1998, and replies to such comments are due November 6,

1998.

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\15\ The Board otherwise takes no position at this time on

either the ASLRRA proposal or the AAR arguments relating to it.

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This action will not significantly affect either the quality of the

human environment or the conservation of energy resources.

List of Subjects in 49 CFR Part 1146

Administrative practice and procedure, Railroads.

Decided: October 15, 1998.

By the Board, Chairman Morgan and Vice Chairman Owen.

Vernon A. Williams,

Secretary.

[FR Doc. 98-28111 Filed 10-19-98; 8:45 am]

BILLING CODE 4915-00-P