ÿWPC�c  
      iÇ    XVlwˆýë™vD¶Å¦i/S€=#SQ£YxBÊY¦wŒý Àia˜‡zõ^xæKr!­½|ú ,ï²O‘jµ3&dÞ˜	Â¸aæP ¨h�œœéÙç^ qiLµøÅ,†Fm¤éÎÌD,Æº–(žä.Y›‘à²›]pm.{dm\6è–Öê�â¿hUçIÉ{4ð~ì½¸†ÒŸ:=Ìeíh=%ìñª|ýXˆ�AA^KÞ:�	Ì¡25Šp‰Z’ûk–?†õ×�r~°�ù
»˜lÁ©i®C˜‘†…ãá‚8¡›¤LXA½ÝÊ?6Áû­p“&d Ê&íW„ç…2\ƒŠ´ŠþVÂ/Ò¦}¦êjÛ¬ˆ?…×á|ßƒz¥‹úŒÁ/£:˜7V¦œã”©|ëÐW"§ã3^ðpÇÁÕkD\®àØ=Ä3hŠ1X)© �³ãßœòô{Óõ0A‘­k}Ÿ›^ý¾üzù	ÍI¨Ût"dj�váýðP£ßxÃN:ýæûoÍâ~/ï˜é¡jTÍ2Þ&x
óýÊÖ1ÔÃà¤ÿn[‚yÑãÈpQ/pËÈç¸3ve
ó3õ»Jk¸fxkQŽsÖÏ£üPc)Fæù»pb#`´›u d            UD  B   x  	%      º     Ž  À  0   û   N
  0	   û   I  0   ø   D  0   ï   <  0   ì   +  0   é     0   æ      0   ã   æ  0   à   É  0   ”   ©  01   ’   =  0?   ‹   Ï  0   Ë   Z  0   �   %  0   Ë   ²  0   k   }  0   ‡   è  0   �   o  0   ‡   ü  0   �   ƒ  0   ‹     0   �   ›  0   �   (  0   ‹   ¸  0   w   C  0   Ä   º  0   Ç   ~  0   Ç   E  0   Ç     0   Ç   Ó  0   Ç   š  0   Ç   a   0   Ç   (!  0   Ç   ï!  0   w   ¶"  0   w   -#  0   w   ¤#  0   w   $  0   w   ’$  0   w   	%  0   w   €%  0   w   ÷%  0   �   n&  0   |   û&  0   W  w'   U   .   Î(     )  ü(  0   �   %+  	D   +   ²+     Æ   Ý+  0   �   £,  0   =   0-  0
   �   m-  	A  Q   ú-     p  K.  	B      »/     o   Û/  	1   m   J0     "   ·0     o   Ù0  	1	   U   H1  	1   U   �1     ´   ò1     ±   ¦2  0   C   W3     1  š3       Ë6  w   (   Ý8     -  9     ·  2;       é<     ž  î>        Œ@     _  ,B     ´   ‹E     ±   ?F     g  ðF       WI     š  vL     ‚  O         ’Q     ±   žQ     H  OR     m  —T     Á  W     ±  ÅX     É  vZ     Ž  ?\        Í^  n     Ý^  0   r   áb         Sc  	B      Sc  4      pc        „c  	m      †c   ô\	  	   `   * T i m e s   N e w   R o m a n       T T     ô '                   Î2        I                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
            s r a c o r p    0    s r a c o r p   
 .      
       
       
           H       \   W        ÿÿ4 h e a d i n g   1   h e a d i n g   1   Ó     ÓÓ8  . ° °  `	 ¸  h À  p È   x Ð  (#8 ÓÔ    ÔÔ    ÔòòóóÔ     ÔÔ     ÔÓ>  4 °    X °  `	 ¸  h À  p È   x Ð  (#> Ó    H       \   W        ÿÿ4 h e a d i n g   2   h e a d i n g   2   Ó     ÓÓ8  . ° °  `	 ¸  h À  p È   x Ð  (#8 ÓÔ    ÔÔ    ÔòòóóÔ     ÔÔ     ÔÓ>  4 °    X °  `	 ¸  h À  p È   x Ð  (#> Ó    H       Y   W        ÿÿ4 h e a d i n g   3   h e a d i n g   3   Ó     ÓÓ5  + ° ° `	 ¸  h À  p È   x Ð  (#5 ÓÔ    ÔÔ    ÔòòóóÔ     ÔÔ     ÔÓ>  4 °    X °  `	 ¸  h À  p È   x Ð  (#> Ó    H       S   T        ÿÿ4 h e a d i n g   4   h e a d i n g   4   Ó     ÓÓ2  ( ° ° ¸  h À  p È   x Ð  (#2 ÓÔ    ÔÔ    ÔÔ     ÔÔ     ÔÓ>  4 °    X °  `	 ¸  h À  p È   x Ð  (#> Ó    H       P   T        ÿÿ4 h e a d i n g   5   h e a d i n g   5   Ó     ÓÓ/  % ° °  h À  p È   x Ð  (#/ ÓÔ    ÔÔ    ÔÔ     ÔÔ     ÔÓ>  4 °    X °  `	 ¸  h À  p È   x Ð  (#> Ó    H       M   T        ÿÿ4 h e a d i n g   6   h e a d i n g   6   Ó     ÓÓ,  " °
 ° h À  p È   x Ð  (#, ÓÔ    ÔÔ    ÔÔ     ÔÔ     ÔÓ>  4 °    X °  `	 ¸  h À  p È   x Ð  (#> Ó    H       J   T        ÿÿ4 h e a d i n g   7   h e a d i n g   7   Ó     ÓÓ)   °	 ° À  p È   x Ð  (#) ÓÔ    ÔÔ    ÔÔ     ÔÔ     ÔÓ>  4 °    X °  `	 ¸  h À  p È   x Ð  (#> Ó    H       G   T        ÿÿ4 h e a d i n g   8   h e a d i n g   8   Ó     ÓÓ&   ° °  p È   x Ð  (#& ÓÔ    ÔÔ    ÔÔ     ÔÔ     ÔÓ>  4 °    X °  `	 ¸  h À  p È   x Ð  (#> Ó    H       D   T        ÿÿ4 h e a d i n g   9   h e a d i n g   9   Ó     ÓÓ#   ° ° p È   x Ð  (## ÓÔ    ÔÔ    ÔÔ     ÔÔ     ÔÓ>  4 °    X °  `	 ¸  h À  p È   x Ð  (#> Ó    h                  ÿÿ: D e f a u l t   P a r a   D e f a u l t   P a r a g r a p h   F o n t   Ô    ÔÔ    ÔÔ     ÔÔ     Ô    `                  ÿÿ: f o o t n o t e   r e f   f o o t n o t e   r e f e r e n c e   Ô    ÔÔ    ÔòòóóÔ     ÔÔ     Ô    T       !           ÿÿ: D o u b l e   S p a c e   D o u b l e   S p a c e   Ó     ÓÔ    ÔÔ    ÔÔ     ÔÔ     Ô    <       ;   T        ÿÿ. f o o t e r   f o o t e r   Ó     ÓÓ   ° °ÀÐ  (# ÓÔ    ÔÔ    ÔÔ     ÔÔ     ÔÓ>  4 °    X °  `	 ¸  h À  p È   x Ð  (#> Ó    V       !           ÿÿ: f o o t n o t e   t e x   f o o t n o t e   t e x t   Ó     ÓÔ    ÔÔ    ÔÔ     ÔÔ     Ô    <       ;   T        ÿÿ. h e a d e r   h e a d e r   Ó     ÓÓ   ° °ÀÐ  (# ÓÔ    ÔÔ    ÔÔ     ÔÔ     ÔÓ>  4 °    X °  `	 ¸  h À  p È   x Ð  (#> Ó    4       !           ÿÿ* L i s t   L i s t   Ó     ÓÔ    ÔÔ    ÔÔ     ÔÔ     Ô    P       !           ÿÿ8 L i s t   B u l l e t   L i s t   B u l l e t   Ó     ÓÔ    ÔÔ    ÔÔ     ÔÔ     Ô    V       !           ÿÿ: L i s t   B u l l e t     L i s t   B u l l e t   2   Ó     ÓÔ    ÔÔ    ÔÔ     ÔÔ     Ô    P       !           ÿÿ8 L i s t   N u m b e r   L i s t   N u m b e r   Ó     ÓÔ    ÔÔ    ÔÔ     ÔÔ     Ô    V       !           ÿÿ: N o r m a l   I n d e n   N o r m a l   I n d e n t   Ó     ÓÔ    ÔÔ    ÔÔ     ÔÔ     Ô    T       !           ÿÿ: S i n g l e   S p a c e   S i n g l e   S p a c e   Ó     ÓÔ    ÔÔ    ÔÔ     ÔÔ     Ô    V       !           ÿÿ: D o u b l e   I n d e n   D o u b l e   I n d e n t   Ó     ÓÔ    ÔÔ    ÔÔ     ÔÔ     Ô    ^                  ÿÿ: e n d n o t e   r e f e   e n d n o t e   r e f e r e n c e   Ô    ÔÔ    ÔòòóóÔ     ÔÔ     Ô    T       !           ÿÿ: e n d n o t e   t e x t   e n d n o t e   t e x t   Ó     ÓÔ    ÔÔ    ÔÔ     ÔÔ     Ô    @       !           ÿÿ0 i n d e x   1   i n d e x   1   Ó     ÓÔ    ÔÔ    ÔÔ     ÔÔ     Ô    8       8   T        ÿÿ, t o c   1   t o c   1   Ó     ÓÓ   ° ° (# ÓÔ    ÔÔ    ÔÔ     ÔÔ     ÔÓ>  4 °    X °  `	 ¸  h À  p È   x Ð  (#> Ó    8       ;   T        ÿÿ, t o c   2   t o c   2   Ó     ÓÓ   ° °  `	(# ÓÔ    ÔÔ    ÔÔ     ÔÔ     ÔÓ>  4 °    X °  `	 ¸  h À  p È   x Ð  (#> Ó    8       ;   T        ÿÿ, t o c   3   t o c   3   Ó     ÓÓ   ° ° `	 ¸(# ÓÔ    ÔÔ    ÔÔ     ÔÔ     ÔÓ>  4 °    X °  `	 ¸  h À  p È   x Ð  (#> Ó    8       ;   T        ÿÿ, t o c   4   t o c   4   Ó     ÓÓ   ° ° ¸ (# ÓÔ    ÔÔ    ÔÔ     ÔÔ     ÔÓ>  4 °    X °  `	 ¸  h À  p È   x Ð  (#> Ó    8       ;   T        ÿÿ, t o c   5   t o c   5   Ó     ÓÓ   ° °  h(# ÓÔ    ÔÔ    ÔÔ     ÔÔ     ÔÓ>  4 °    X °  `	 ¸  h À  p È   x Ð  (#> Ó    8       ;   T        ÿÿ, t o c   6   t o c   6   Ó     ÓÓ   ° ° h À(# ÓÔ    ÔÔ    ÔÔ     ÔÔ     ÔÓ>  4 °    X °  `	 ¸  h À  p È   x Ð  (#> Ó    8       ;   T        ÿÿ, t o c   7   t o c   7   Ó     ÓÓ   ° ° À (# ÓÔ    ÔÔ    ÔÔ     ÔÔ     ÔÓ>  4 °    X °  `	 ¸  h À  p È   x Ð  (#> Ó    8       ;   T        ÿÿ, t o c   8   t o c   8   Ó     ÓÓ   ° °  p(# ÓÔ    ÔÔ    ÔÔ     ÔÔ     ÔÓ>  4 °    X °  `	 ¸  h À  p È   x Ð  (#> Ó    8       ;   T        ÿÿ, t o c   9   t o c   9   Ó     ÓÓ   ° ° p È(# ÓÔ    ÔÔ    ÔÔ     ÔÔ     ÔÓ>  4 °    X °  `	 ¸  h À  p È   x Ð  (#> Ó    @       !           ÿÿ0 i n d e x   2   i n d e x   2   Ó     ÓÔ    ÔÔ    ÔÔ     ÔÔ     Ô    @       !          ÿÿ0 i n d e x   3   i n d e x   3   Ó     ÓÔ    ÔÔ    ÔÔ     ÔÔ     Ô    @       !           ÿÿ0 i n d e x   4   i n d e x   4   Ó     ÓÔ    ÔÔ    ÔÔ     ÔÔ     Ô    @       !           ÿÿ0 i n d e x   5   i n d e x   5   Ó     ÓÔ    ÔÔ    ÔÔ     ÔÔ     Ô    @       !           ÿÿ0 i n d e x   6   i n d e x   6   Ó     ÓÔ    ÔÔ    ÔÔ     ÔÔ     Ô    @       !           ÿÿ0 i n d e x   7   i n d e x   7   Ó     ÓÔ    ÔÔ    ÔÔ     ÔÔ     Ô    @       !           ÿÿ0 i n d e x   8   i n d e x   8   Ó     ÓÔ    ÔÔ    ÔÔ     ÔÔ     Ô    @       !           ÿÿ0 i n d e x   9   i n d e x   9   Ó     ÓÔ    ÔÔ    ÔÔ     ÔÔ     Ô    V       !           ÿÿ: i n d e x   h e a d i n   i n d e x   h e a d i n g   Ó     ÓÔ    ÔÔ    ÔÔ     ÔÔ     Ô    P                  ÿÿ8 p a g e   n u m b e r   p a g e   n u m b e r   Ô    ÔÔ    ÔÔ     ÔÔ     Ô    T       }   †        ÿÿ: D o c u m e n t   M a p   D o c u m e n t   M a p   Ó     ÓÔ €   X      XX ÔÔC €1          % ä2¼  A   `    A r i a l       T T   C ÔÔ    ÔÔ    ÔÔ     ÔÔ     ÔÔ €   X      XX ÔÔW €           ô\	  	   `   * T i m e s   N e w   R o m a n       T T   W Ô% ä2¼  A   `    A r i a l       T T    
     Ý
 ƒ3  Æ/) ÝÔ €  X‹ X  õ ô   ÔÔ €  X‹ X X X‹ ÔÓ     ÓÝ    Ýß| €9 :   F               6 2  x
  (	  x
  0  €   €  @  H          EG°Lð     Lð         G°Lð    | ßâ   	  °G°G°(#°(# âÓ    ÓÓ$   ° °ÀÐ  (#°   œX$ ÓÌÝ ‚  ÿÿÿÿÿÿÿƒ3  Ýâ   	  °(#°(#°G°G âÔ     ÔÔ      ÔÓN  4 °    X °  `	 ¸  h À  p È   x Ð  (#° °ÀÐ  (#N ÓÝ     ÝÓ     ÓÓB  . ° °  `	 ¸  h À  p È   x Ð  (#°   �XB Ó    (   e               2Æ/$ ©   ©   Ý
 ƒ^  ‡! ÝÔ €  X‹ X  õ ô   ÔÔ €  X‹ X X X‹ ÔÓ     ÓÝ    Ý  '                   È È È È    d x    dƒ                                        L e v e l   1                   L e v e l   2                   L e v e l   3                   L e v e l   4                   L e v e l   5                   (   e               2Æ/$ £   £   Ý
 ƒ^  ‡! ÝÔ €  X‹ X  õ ô   ÔÔ €  X‹ X X X‹ ÔÓ     ÓÝ    Ý    (                  ÿÿ$ ”   ”   Ú    ÚÚ
   
 Ú    (   e               2Æ/$ ¢   ¢   Ý
 ƒ^  ‡! ÝÔ €  X‹ X  õ ô   ÔÔ €  X‹ X X X‹ ÔÓ     ÓÝ    Ý 5 8 6 7 4 C    þÿ        <<  
   cÿÿ                  
   f  Ý
 ƒ8  Æ/" ÝÔ €  X‹ X  õ ô   ÔÔ €  X‹ X X X‹ ÔÓ     ÓÝ    ÝÝ  ‚  ÿÿÿ ÝÓ     ÓÓ$   ° °ÀÐ  (#°   œX$ ÓÔ    ÔÔ     ÔÝ     ÝÝ  ‚/  ÿÿÿ ÝÔ    ÔÔ    ÔÝ     Ý„€Ô@
   
 ÔÚ      Ú1Ú
   
 ÚÔA
   
 Ô€„Ý ‚/  ÿÿÿÈ   ƒ8  ÝÔ    ÔÔ    ÔÝ     Ý      þÿ          d@   
   e   Ý
 ƒ8  Ìß" ÝÔ €  X�­ X  ô ô   ÔÔ €  X�­ X X X�­ ÔÓ     ÓÝ    Ý                 # e   3 7 = C I Q Y a g ­   ­   1 .   a .   i .   ( 1 )   ( a )   ( i )   1 )   a )    
      Ñ    ° ÑÑ   X Ñ 
   e   Ý
 ƒ8  Ìß" ÝÔ €  X�­ X  ô ô   ÔÔ €  X�­ X X X�­ ÔÓ     ÓÝ    Ý                 $ÿÿ        3 5 9 = A E I M Q 1                                      $ÿÿ        3 5 9 = A E I M Q 2     "  "  "  "  "  "  "  "   
   ª   Ý
 ƒ8  Ìß" ÝÔ €  X�­ X  ô ô   ÔÔ €  X�­ X X X�­ ÔÓ     ÓÝ    ÝÓE  1 ° ° Ü  `	 ¸  h À  p È   x Ð  (#°   œXE Ó 
   §   Ý
 ƒ8  Ìß" ÝÔ €  X�­ X  ô ô   ÔÔ €  X�­ X X X�­ ÔÓ     ÓÝ    ÝÓB  . ° °  `	 ¸  h À  p È   x Ð  (#°   œXB Ó    (                  ÿÿ$ �   �   òòÚ    ÚÚ
   
 Úóó 
   '  Ý
 ƒ^  ‡! ÝÔ €  X‹ X  õ ô   ÔÔ €  X‹ X X X‹ ÔÓ     ÓÝ    ÝÓB  . ° °  `	 ¸  h À  p È   x Ð  (#°   œXB ÓÝ ‚  ÿÿÿÿÿÿÿƒ^  ÝÔ     ÔÔ      ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ     ÓÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÔ    ÔÔ    ÔòòÝ     Ýà     àò…òÚ    Ú1Ú
   
 Úó…óóóÝ ‚    ÿ!  ƒ^  ÝÔ    ÔÔ    ÔÝ     Ý€€The€D.C.€Circuit€upheld€the€ICC's€1976€rules,€but€expressed€skepticism€about€the€ICC'sÐ   	 °      Ðinterpretation€of€the€4R€Act.€€òòAtchison,€T.€&€S.€F.€Ry.€Co.€v.€I.C.C.óó,€580€F.2d€623,€634€(1978).€Ð   	  ð    ÐAfter€passage€of€the€Staggers€Act,€the€ICC€repudiated€its€prior€interpretation.€€òòSeeóó€365€I.C.C.€atÐ   	 �à   Ð128. 
     Ý
 ƒ^  ‡! ÝÔ €  X‹ X  õ ô   ÔÔ €  X‹ X X X‹ ÔÓ     ÓÝ    ÝÓB  . ° °  `	 ¸  h À  p È   x Ð  (#°   œXB ÓÝ  ‚  ÿÿÿ ÝÓ     ÓÔ    ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÔ    ÔÔ    ÔòòÝ     Ýà     àò…òÚ    Ú2Ú
   
 Úó…óóóÝ ‚    ÿæ   ƒ^  ÝÔ    ÔÔ    ÔÝ     Ý€€òòArizona€Public€Serv.€Co.€v.€Atchison,€Topeka€&€Santa€Fe€R.R.óó,€ICC€Docket€No.Ð   	 °      Ð38088,€slip€op.€at€12€(1987).     D   D   D  # D  ( D   D  
   #  Ý
 ƒ^  ‡! ÝÔ €  X‹ X  õ ô   ÔÔ €  X‹ X X X‹ ÔÓ     ÓÝ    ÝÓB  . ° °  `	 ¸  h À  p È   x Ð  (#°   œXB ÓÝ  ‚  ÿÿÿ ÝÓ     ÓÔ    ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÔ    ÔÔ    ÔòòÝ     Ýà     àò…òÚ    Ú3Ú
   
 Úó…óóóÝ ‚    ÿæ   ƒ^  ÝÔ    ÔÔ    ÔÝ     Ý€€òòMarket€Dominance€Guidelinesóó,€365€I.C.C.€at€131;€òòWestmoreland€Coal€Sales€Co.€v.Ð   	 °      ÐDenver€&€R.G.W.€Ry.óó,€5€I.C.C.2d€751,€757€(1989). 
   ­  Ý
 ƒ^  ‡! ÝÔ €  X‹ X  õ ô   ÔÔ €  X‹ X X X‹ ÔÓ     ÓÝ    ÝÓB  . ° °  `	 ¸  h À  p È   x Ð  (#°   œXB ÓÝ  ‚  ÿÿÿ ÝÓ     ÓÔ    ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÔ    ÔÔ    ÔòòÝ     Ýà     àò…òÚ    Ú4Ú
   
 Úó…óóóÝ ‚    ÿæ   ƒ^  ÝÔ    ÔÔ    ÔÝ     Ý€€òòWestmorelandóó,€5€I.C.C.2d€at€756„57. 
   û  Ý
 ƒ^  ‡! ÝÔ €  X‹ X  õ ô   ÔÔ €  X‹ X X X‹ ÔÓ     ÓÝ    ÝÓB  . ° °  `	 ¸  h À  p È   x Ð  (#°   œXB ÓÝ  ‚  ÿÿÿ ÝÓ     ÓÔ    ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÔ    ÔÔ    ÔòòÝ     Ýà     àò…òÚ    Ú5Ú
   
 Úó…óóóÝ ‚    ÿæ   ƒ^  ÝÔ    ÔÔ    ÔÝ     Ý€€òòDayton€Power€&€Light€Co.€v.€Louisville€&€N.R.R.óó,€1€I.C.C.2d€375,€379€(1985)Ð   	 °      Ð(emphasis€added). 
   ”  Ý
 ƒ^  ‡! ÝÔ €  X‹ X  õ ô   ÔÔ €  X‹ X X X‹ ÔÓ     ÓÝ    ÝÓB  . ° °  `	 ¸  h À  p È   x Ð  (#°   œXB ÓÝ  ‚  ÿÿÿ ÝÓ     ÓÔ    ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÔ    ÔÔ    ÔòòÝ     Ýà     àò…òÚ    Ú6Ú
   
 Úó…óóóÝ ‚    ÿæ   ƒ^  ÝÔ    ÔÔ    ÔÝ     Ý€€2€I.C.C.2d€at€6. 
   –  Ý
 ƒ^  ‡! ÝÔ €  X‹ X  õ ô   ÔÔ €  X‹ X X X‹ ÔÓ     ÓÝ    ÝÓB  . ° °  `	 ¸  h À  p È   x Ð  (#°   œXB ÓÝ  ‚  ÿÿÿ ÝÓ     ÓÔ    ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÔ    ÔÔ    ÔòòÝ     Ýà     àò…òÚ    Ú7Ú
   
 Úó…óóóÝ ‚    ÿæ   ƒ^  ÝÔ    ÔÔ    ÔÝ     Ý€€365€I.C.C.€at€127. 
   U  Ý
 ƒ^  ‡! ÝÔ €  X‹ X  õ ô   ÔÔ €  X‹ X X X‹ ÔÓ     ÓÝ    ÝÓB  . ° °  `	 ¸  h À  p È   x Ð  (#°   œXB ÓÝ  ‚  ÿÿÿ ÝÓ     ÓÔ    ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÔ    ÔÔ    ÔòòÝ     Ýà     àò…òÚ    Ú8Ú
   
 Úó…óóóÝ ‚    ÿæ   ƒ^  ÝÔ    ÔÔ    ÔÝ     Ý€In€addition€to€the€cases€described€below,€the€Board€recently€concluded€that€UP€hadÐ   	 °      Ð"made€a€prima€facie€case€of€geographic€competition"€in€òòSouthwest€Railroad€Car€Parts€Co.€v.Ð   	  ð    ÐMissouri€Pacific€Railroad€Co.óó,€ICC€Docket€No.€40073€at€9€(Served€Feb.€20,€1998),€noting€thatÐ   	 �à   Ðthe€complainant€had€conceded€that€it€had€"relocat[ed]€its€facilities€in€order€to€avoid€unreasonableÏtransportation€costs."€€òòIdóó. 
   ª   Ý
 ƒ8  Ìß" ÝÔ €  X�­ X  ô ô   ÔÔ €  X�­ X X X�­ ÔÓ     ÓÝ    ÝÓE  1 ° ° Ü  `	 ¸  h À  p È   x Ð  (#°   œXE Ó 
   §   Ý
 ƒ8  Ìß" ÝÔ €  X�­ X  ô ô   ÔÔ €  X�­ X X X�­ ÔÓ     ÓÝ    ÝÓB  . ° °  `	 ¸  h À  p È   x Ð  (#°   œXB Ó 
   ]  Ý
 ƒ^  ‡! ÝÔ €  X‹ X  õ ô   ÔÔ €  X‹ X X X‹ ÔÓ     ÓÝ    ÝÓB  . ° °  `	 ¸  h À  p È   x Ð  (#°   œXB ÓÓ     ÓÔ     Ôà     àà    `	 àòòò…òÚ    Ú9Ú
   
 Úó…óóó€€òòSee,€e.g.óó,€Surface€Transportation€Board,€Office€of€Economics,€EnvironmentalÐ   	 °      ÐAnalysis,€and€Administration,€Rail€Rates€Continue€Multi„Year€Decline€(Feb.�1998)€at€4„5€(coalÏtraffic€accounted€for€22.5€percent€of€total€rail€industry€revenue€in€1996,€at€average€rates€per€ton„¼mile€substantially€lower€than€any€other€commodity€group). 
     Ý
 ƒ^  ‡! ÝÔ €  X‹ X  õ ô   ÔÔ €  X‹ X X X‹ ÔÓ     ÓÝ    ÝÓB  . ° °  `	 ¸  h À  p È   x Ð  (#°   œXB ÓÓ     ÓÔ     Ôà     àà    `	 àòòò…òÚ    Ú10Ú
   
 Úó…óóó€€òòPromoting€Wholesale€Competition€Through€Open€Access€Non„DiscriminatoryÐ   	 °      ÐTransmission€Servicesóó,€Order€No.�888,€FERC€Stats.€&€Regs.€ðð31,036€(1996),€òòorder€on€rehearingóó,Ð   	  ð    ÐOrder€No.�888„A,€FERC€Stats.€&€Regs.€ðð31,048€(1997);€òòsee€alsoóó€òòOpen€Access€Same„TimeÐ   	 �à   ÐInformation€System€&€Standards€of€Conductóó,€Order€No.�889,€FERC€Stats.€&€Regs.€ðð31,037Ð   	 €Ð   Ð(1996),€òòorder€on€rehearingóó,€Order€No.�889„A,€FERC€Stats.€&€Regs.€ðð31,049€(1997). 
   �  Ý
 ƒ^  ‡! ÝÔ €  X‹ X  õ ô   ÔÔ €  X‹ X X X‹ ÔÓ     ÓÝ    ÝÓB  . ° °  `	 ¸  h À  p È   x Ð  (#°   œXB ÓÝ  ‚  ÿÿÿ ÝÓ     ÓÔ    ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÔ    ÔÔ    ÔòòÝ     Ýà     àò…òÚ    Ú11Ú
   
 Úó…óóóÝ ‚    ÿæ   ƒ^  ÝÔ    ÔÔ    ÔÝ     Ý€€€òòSeeóó€Transcript€of€Hearing,€Ex€Parte€No.€575,€òòReview€of€Rail€Access€and€CompetitionÐ   	 °      ÐIssuesóó€at€316€(April€2,€1998);€òòsee€alsoóó€òòid.óó€at€329€(noting€that€at€HL&P€"They€go€back€and€forthÐ   	  ð    Ðbetween€gas€and€coal"). 
   x  Ý
 ƒ^  ‡! ÝÔ €  X‹ X  õ ô   ÔÔ €  X‹ X X X‹ ÔÓ     ÓÝ    ÝÓB  . ° °  `	 ¸  h À  p È   x Ð  (#°   œXB ÓÝ  ‚  ÿÿÿ ÝÓ     ÓÔ    ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÔ    ÔÔ    ÔòòÝ     Ýà     àò…òÚ    Ú12Ú
   
 Úó…óóóÝ ‚    ÿæ   ƒ^  ÝÔ    ÔÔ    ÔÝ     Ý€€€STB€Docket€No.€41191,€òòWest€Texas€Utilities€Co.€v.€Burlington€Northern€RailroadÐ   	 °      ÐCo.óó,€(served€May€3,€1996),€òòaff'd€sub€nom.óó€òòWest€Texas€Utilities€Co.€v.€STBóó,€114€F.3d€206€(D.C.Ð   	  ð    ÐCir.€1997).B M _ 1 _    
   §   Ý
 ƒ8  Æ/" ÝÔ €  X‹ X  õ ô   ÔÔ €  X‹ X X X‹ ÔÓ     ÓÝ    ÝÓB  . ° °  `	 ¸  h À  p È   x Ð  (#°   œXB Ó 
   >  Ý
 ƒ^  ‡! ÝÔ €  X‹ X  õ ô   ÔÔ €  X‹ X X X‹ ÔÓ     ÓÝ    ÝÓB  . ° °  `	 ¸  h À  p È   x Ð  (#°   œXB ÓÓ     ÓÔ     Ôà     àÝ  ‚  ÿÿÿ ÝÔ    ÔÔ    ÔòòÝ     Ýò…òÚ    Ú13Ú
   
 Úó…óóóÝ ‚    ÿË   ƒ^  ÝÔ    ÔÔ    ÔÝ     Ý€€Comments€Of€Consumers€United€For€Rail€Equity,€€March€26,€1998,€at€4;€CommentsÐ   	 °      ÐOf€The€Fertilizer€Institute,€March€26,€1998,€at.€4„5;€€Comments€Of€Potomac€Electric€PowerÏCompany,€March€26,€1998,€at€12„13.€Ì 
   c  Ý
 ƒ^  ‡! ÝÔ €  X‹ X  õ ô   ÔÔ €  X‹ X X X‹ ÔÓ     ÓÝ    ÝÓB  . ° °  `	 ¸  h À  p È   x Ð  (#°   œXB ÓÓ     ÓÔ     Ôà     àÝ  ‚  ÿÿÿ ÝÔ    ÔÔ    ÔòòÝ     Ýò…òÚ    Ú14Ú
   
 Úó…óóóÝ ‚    ÿË   ƒ^  ÝÔ    ÔÔ    ÔÝ     Ý€€òòAssessing€the€Need€for€Competitive€Reforms€in€Rail„Served€Transport€Markets:€€TheÐ   	 °      ÐQuestion€of€Accessóóòò,óó€Mark€L.€Burton,€March,€1998,€Prepared€for€the€Attorneys€General€of€Ohio,Ð   	  ð    ÐIllinois,€Texas€and€Iowa,€p.€20.€Ì 
   ·  Ý
 ƒ^  ‡! ÝÔ €  X‹ X  õ ô   ÔÔ €  X‹ X X X‹ ÔÓ     ÓÝ    ÝÓB  . ° °  `	 ¸  h À  p È   x Ð  (#°   œXB ÓÓ     ÓÔ     Ôà     àÝ  ‚  ÿÿÿ ÝÔ    ÔÔ    ÔòòÝ     Ýò…òÚ    Ú15Ú
   
 Úó…óóóÝ ‚    ÿË   ƒ^  ÝÔ    ÔÔ    ÔÝ     Ý€€Written€Statement€Of€The€Dow€Chemical€Company€March€26,€1998€at€€3.€Ð   	 °      Ð 
   §  Ý
 ƒ^  ‡! ÝÔ €  X‹ X  õ ô   ÔÔ €  X‹ X X X‹ ÔÓ     ÓÝ    ÝÓB  . ° °  `	 ¸  h À  p È   x Ð  (#°   œXB ÓÓ     ÓÔ     Ôà     àÝ  ‚  ÿÿÿ ÝÔ    ÔÔ    ÔòòÝ     Ýò…òÚ    Ú16Ú
   
 Úó…óóóÝ ‚    ÿË   ƒ^  ÝÔ    ÔÔ    ÔÝ     Ý€€Comments€Of€FirstEnergy€Corp.,€March€26,€1998€at€€4.Ð   	 °      Ð 
   ¿  Ý
 ƒ^  ‡! ÝÔ €  X‹ X  õ ô   ÔÔ €  X‹ X X X‹ ÔÓ     ÓÝ    ÝÓB  . ° °  `	 ¸  h À  p È   x Ð  (#°   œXB ÓÓ     ÓÔ     Ôà     àÝ  ‚  ÿÿÿ ÝÔ    ÔÔ    ÔòòÝ     Ýò…òÚ    Ú17Ú
   
 Úó…óóóÝ ‚    ÿË   ƒ^  ÝÔ    ÔÔ    ÔÝ     Ý€€Statement€of€the€United€States€Department€of€Transportation€March€1998€at€4.Ð   	 °      Ð 
   „  Ý
 ƒ^  ‡! ÝÔ €  X‹ X  õ ô   ÔÔ €  X‹ X X X‹ ÔÓ     ÓÝ    ÝÓB  . ° °  `	 ¸  h À  p È   x Ð  (#°   œXB ÓÝ  ‚  ÿÿÿ ÝÓ     ÓÔ    ÔÔ     ÔÝ     Ýà     àÝ ‚  ÿÿÿ§   ƒ^  ÝÔ    ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÔ    ÔÔ     ÔòòÝ     Ýò…òÚ    Ú18Ú
   
 Úó…óóóÝ ‚    ÿ-  ƒ^  ÝÔ    ÔÔ     ÔÝ     Ý€€See,€e.g.,€€Comments€Submitted€On€Behalf€Of€The€National€Industrial€TransportationÐ   	 °      ÐLeague,€March€26,€1998€at€34,€and€Comments€Of€Wyandot€Dolomite,€Inc.,€March€26,€1998€at€2„¼3.3| x       «  ô\	  	   `   * T i m e s   N e w   R o m a n       T T                                                                               ôôC ô\	    PŽ 6QôP ô\	  	   `   * T i m e s   N e w   R o m a n       T T                                                                               XXP ô\	    PŽ 6QXP% ä2¼  A   `    A r i a l       T T   o m a n       T T                                                                               XXX ä2¼    P± ŠQXP< þ6X  9   ` (  " C o u r i e r   N e w       T T     T T                                                                               XXx þ6X   @É D�QX@ ô\	  	   `   * T i m e s   N e w   R o m a n       T T                                                                                 k ô\	    PŽ 6Q PðDD	      * T i m e s   N e w   R o m a n       T T                                                                               XX-ðDD0DXDhDX    (   J               ‡$ ¡   ¡   Ô €  X�­ X  ô ô   ÔÔ €  X�­ X X X�­ ÔÓ     Ó                 d  ¬‰¦$    ÿÿÿÿ/ ÿÿÿÿ. !             ÿU‹ÿ  ÀÀÀÝ
 ƒ^  ‡! ÝÔ €  X‹ X  õ ô   ÔÔ €  X‹ X X X‹ ÔÓ     ÓÝ    ÝÖ €2       ÿÿ ÖÑ    
 ÑÝ  ‚  ÿÿÿ ÝÓ     ÓÔ    ÔÔ     ÔÝ     Ýñ  ñß� €9 <   ; ; ; ; Q               A =  z  ,Èû x  x 
  0  €   €  @  È          @  E,°x x     x ð         ,°x x    � ßñ ñÓ          ÓÓ     ÓòòBEFORE€THEÐ   	 °      ÐÝ ‚  ÿÿÿ‡   ƒ^  ÝÔ    ÔÔ     ÔÝ     ÝÑ €>      ÑÝ  ‚  ÿÿÿ ÝÓ     ÓÔ    ÔÔ     ÔÝ     ÝÓ          ÓÓ     ÓòŒòSURFACE€TRANSPORTATION€BOARDóŒóóóÐ   	 �à   Ð______________________________ÌÌòòSTB€EX€PARTE€NO.€627óóÐ   	 `	°   ÐÌòòMARKET€DOMINANCE€DETERMINATIONS€„„€Ð   	 @�   ÐPRODUCT€AND€GEOGRAPHIC€COMPETITIONóóÐ   	 0€   Ð_______________________________ÌÌòòCOMMENTS€OFÐ   	  P
   ÐTHE€ASSOCIATION€OF€AMERICAN€RAILROADSóóÐ   	 ð@   Ð_______________________________ÌÌÌÝ ‚  ÿÿÿë  ƒ^  ÝÔ    ÔÔ     ÔÝ     ÝòòINTRODUCTION€AND€SUMMARYóóÐ   	 °    ÐÓ     ÓÌÌÝ  ‚  ÿÿÿ ÝÓ      ÓÔ    ÔÔ     ÔÝ     ÝÓ          Óà     àà    `	 àThe€Association€of€American€Railroads€submits€these€comments€in€response€toÏthe€Board's€April€29,€1998€Notice€of€Proposal€to€Eliminate€Product€and€Geographic€CompetitionÏFrom€Consideration€in€Market€Dominance€Determinations.€€AAR€represents€the€interests€of€theÏnation's€major€railroads.€€Its€members€operate€77€percent€of€the€railroad€route€miles€in€the€UnitedÏStates,€employ€91€percent€of€the€nation's€rail€employees€and€generate€93€percent€of€U.S.€railÏfreight€revenues.Ìñ  ñß� €9 ?   ; ; ; ; Q               A =  z  ,Èû x  x 
  0  €   €  @  È          @  E,À!x x     x ð         ,À!x x    � ßñ ñà     àà    `	 àAAR€understands€that€the€primary€impetus€for€the€Board's€proposal€in€thisÏproceeding€is€the€perceived€concern€among€shippers€that€it€is€unduly€burdensome€to€litigate€rateÏreasonableness€cases€before€the€Board€and,€in€particular,€that€market€dominance€determinationsÏare€viewed€as€"major,€undue€litigation€obstacles€that€discourage€captive€shippers€from€evenÏseeking€regulatory€relief."€€Notice€of€Proposal€at€4.€€We€believe€the€shippers'€concerns€areÏoverstated,€and€particularly€as€to€product€and€geographic€competition€we€do€not€believe€that€theÏneed€to€litigate€these€issues€has€deterred€the€filing€of€rate€cases.€€AAR€nevertheless€agrees€thatÐ     -P(+    ÐÑ  >     Ñâ
   >    âÑ    °° ÑÑ   X° Ñâ
     >  âÑ
   
 Ññ  ñÑ  >     ÑÑ    °° ÑÑ   X° ÑÑ
   
 Ññ ññ  ñÑ  >     ÑÑ    °° ÑÑ   X° ÑÑ
   
 Ññ ñprocedural€obstacles€and€the€cost€of€litigation€should€not€be€barriers€to€obtaining€regulatory€reliefÏfrom€the€agency€when€such€relief€is€warranted.€€Therefore,€the€Association€and€its€memberÏrailroads€stand€ready€to€assist€in€the€adoption€of€more€efficient€procedures€that€will€make€theÏstatutory€remedies€afforded€to€shippers€meaningful.Ìà     àà    `	 àAAR€does€not€believe,€however,€that€elimination€of€product€and€geographicÏcompetition€from€consideration€in€market€dominance€determinations€is€a€proper€means€ofÏmaking€rate€reasonableness€remedies€more€accessible€to€shippers.€€Elimination€of€what€has€beenÏproperly€viewed€as€an€important€substantive€component€of€the€agency's€market„based€approachÏto€rate€regulation€can€only€result€in€distortions€in€the€regulatory€process€and€arbitrary€results€inÏindividual€cases.€€Accessible€rate€remedies€should€be€achieved€through€further€reform€andÏmodification€of€the€procedures€governing€rate€reasonableness€cases€without€violating€theÏintegrity€of€the€statutory€scheme€that€requires€that€effective€competition,€wherever€it€exists,Ïshould€determine€rail€rates€in€the€first€instance.Ìà     àà    `	 àIt€is€beyond€serious€contention€that€product€and€geographic€competition€areÏeffective€constraints€on€rail€rates€in€numerous€markets.€€Under€the€Board's€proposal,€onlyÏcompetitive€alternatives€between€the€same€origin€and€destination€points€as€the€issue€trafficÏmovement€would€be€considered.€€This€restriction€is€obviously€irrational.€€Take€the€commonÏexample€of€a€utility€served€by€two€railroads,€where€each€railroad€serves€a€different€mine€capableÏof€providing€coal€to€the€utility.€€Under€the€Board's€proposal,€the€source€competition€provided€byÏthe€two€railroads€would€be€ignored,€and€òòbothóó€railroads€could€be€found€to€be€market€dominant.€Ð   	 P( #&   ÐSimilarly,€in€a€case€where€a€utility€previously€served€by€a€single€railroad€òòactuallyóó€constructed€aÐ   	 0*€%(   Ðbuild„out€to€another€railroad€or€barge€to€obtain€coal€from€other€mines,€the€Board's€proposal€couldÐ   	 ,`'*   Ðresult€in€a€finding€of€market€dominance€by€either€railroad.€€There€is€no€sound€rationale€forÏestablishing€rules€that€would€have€such€arbitrary€results.€Ìà     àà    `	 àSince€1981,€when€the€Interstate€Commerce€Commission€(ICC)€first€includedÏproduct€and€geographic€competition€in€its€market€dominance€guidelines,€it€has€been€a€basic€tenetÏof€railroad€rate€regulation€that€"to€exclude€from€consideration€òòa€priorióó€any€potential€source€ofÐ   	 0€   Ðcompetition€would€be€contrary€to€the€intent€of€Congress€as€expressed€in€the€Staggers€Act."€ÏòòMarket€Dominance€Determinations€&€Consideration€Of€Product€Competitionóó,€365€I.C.C.€118,Ð   	 ð@   Ð130€(1981).€òò€óóIn€market€dominance€cases€decided€in€the€intervening€period,€rail€rates€repeatedlyÐ   	 Ð    Ðhave€been€found€to€be€constrained€by€effective€product€and€geographic€competition.€€In€addition,Ïvarious€exemptions€from€rate€regulation€have€been€based,€at€least€in€part,€on€the€ICC's€and€theÏBoard's€finding€of€effective€product€and€geographic€competition.€Ìà     àà    `	 àThere€is€no€evidence€that€product€and€geographic€competition€have€disappeared€asÏfactors€in€railroad€markets.€€Indeed,€the€evidence€indicates€that€product€and€geographicÏcompetition€are€becoming€increasingly€important.€€The€electric€power€industry,€in€particular,€isÏchanging€rapidly€as€a€result€of€the€deregulation€of€electricity€generation€and€utility€mergers.€ÏThese€changes€are€increasing€the€effectiveness€of€product€and€geographic€competition€in€coalÏtransportation€markets.€€Global€competition€has€intensified.€€As€the€testimony€of€railroadÏmarketing€witnesses€attached€to€these€comments€demonstrates,€shippers€understand€the€strengthÏof€product€and€geographic€competition€and€regularly€use€these€competitive€forces€to€disciplineÏrail€rates.€€It€would€be€particularly€ironic€for€the€Board€to€do€away€with€product€and€geographicÏcompetition€at€the€very€time€that€deregulation€in€the€electric€utility€industry€is€making€this€anÏincreasingly€potent€›force.Ð   	 ,`'*   Ðà     àà    `	 àTo€eliminate€product€and€geographic€competition€from€consideration€in€marketÏdominance€determinations€would€be€to€ignore€commercial€reality.€€It€would€also€violate€the€logicÏof€the€economic€principles€underlying€the€market€dominance€standard.€€A€core€premise€of€theÏeconomics€of€competition€is€that€market€power€can€be€constrained€by€a€range€of€competitiveÏforces,€and€it€is€well€established€that€in€transportation€markets€multiple€forms€of€competition,Ïoften€acting€in€concert€with€one€another,€can€discipline€railroad€prices.€€This€is€hardly€aÏcontroversial€proposition.€€As€Professors€¢Kalt£€and€¢Willig£€explain€in€their€Verified€StatementÏsubmitted€with€these€comments,€the€arbitrary€exclusion€of€entire€categories€of€competitive€forcesÏin€market€dominance€determinations€would€be€contrary€to€the€fundamental€economics€ofÏcompetition.Ìà     àà    `	 àElimination€of€product€and€geographic€competition€from€consideration€in€marketÏdominance€determinations€also€would€be€inconsistent€with€the€regulatory€scheme€established€byÏCongress€in€the€Staggers€Act.€€Congress€made€clear€that€while€captive€shippers€would€beÏprotected€by€maximum€rate€regulation,€there€should€be€no€regulation€of€rates€in€circumstancesÏwhere€the€rates€are€constrained€by€effective€competition.€€The€Board€should€not€decide€„„€for€allÏcases€and€without€regard€to€the€facts€„„€to€ignore€this€legislative€mandate.Ìà     àà    `	 àThe€Board€should€continue€to€give€railroads€the€opportunity€to€meet€their€burdenÏof€showing€that€product€and€geographic€competition€effectively€constrain€their€rates.€€It€can€do€soÏand€substantially€reduce€the€burdens€of€market€dominance€determinations€by€simplifyingÏprocedures€in€market€dominance€cases.€€The€Board's€recent€ruling€in€Docket€No.€42022,€òò¢FMC£Ð   	 P( #&   ÐWyoming€Corp.€v.€Union€Pacific€Railroad€Co.óó€demonstrates€that€fair€and€effective€proceduralÐ   	 0*€%(   Ðrules€can€be€established€to€minimize€litigation€burdens.€€¢AAR£€believes€that€the€discoveryÐ   	 ,`'*   Ðstandards€set€out€in€that€case€are€appropriate€and€it€would€support€adoption€of€those€rules€as€partÏof€the€Board's€formal€procedures€governing€rate€reasonableness€cases.ñ  ñòòóóñ ñÌà     àà    `	 à¢AAR£€will€carefully€review€the€comments€of€other€parties€for€constructiveÏprocedural€suggestions€and€it€would€hope€in€its€reply€comments€to€be€able€to€endorse€otherÏsuggestions€for€reducing€the€burden€or€cost€of€litigating€issues€relating€to€product€and€geographicÏcompetition.ÌÓ     ÓÔ €   ×c ! X X‹ Ôñ  ñÔ €          Ý
 ƒ^   Ôñ ñòò*€€€€€€€€€*€€€€€€€€€*óóÐ   	 ð@   ÐÓ     ÓÔ €  X‹ X !  ×c Ôñ  ñÔ €          ecide€„„€f Ôñ ñà     àà    `	 à¢AAR£'s€Comments€are€supported€by€the€following€verified€statements:Ð   	 tÄ   ÐÝ ‚  ÿÿÿf  e€„„ ÝÔ    ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ    ÔÔ     ÔÝ     ÝÓC €	@                  ÿÿ        $   #=                 C Óñ  ñØ-                                    - Øñ ñÓC €	@                  ÿÿ        $        $@                 C Óñ  ñØ-                                    - Øñ ñÓ          ÓÓE  1 ° ° Ü  `	 ¸  h À  p È   x Ð  (#°   œXE Óà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àà      àProfessors€Joseph€P.€¢Kalt£€and€Robert€D.€¢Willig£€explain€that€the€elimination€ofÏproduct€and€geographic€competition€from€market€dominanceÏdeterminations€would€be€wholly€at€odds€with€basic€principles€ofÏeconomics€and€competition€policy.€€They€point€out€that€these€types€ofÏcompetitive€forces€are€prevalent€throughout€the€economy€and€they€areÏespecially€important€in€many€segments€of€the€railroad€industry.€€TheyÏacknowledge€the€Board's€concern€over€the€cost€and€efficiency€of€rail€rateÏproceedings,€but€they€explain€that€the€Board€should€not€establishÏsubstantive€standards€that€ignore€fundamental€economic€principles€to€dealÏwith€this€concern,€but€rather€establish€procedures€that€permit€expeditiousÏand€efficient€adjudication€of€market€dominance€cases.ñ  ñÓ     ec Óñ ñÓ
   ¾Û     ÓÐ    `	Ð `	Ð   ÐÓC €	A                  ÿÿ        $        $@                 C Óñ  ñØ-                                    - Øñ ñà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àà      àÔ2  ÿÿ                  Ôð"ðÔ3
   
 Ôà0    `	`	Ð `	Ð  àRobert€L.€¢Sansom£,€President€of€Energy€Ventures€Analysis,€Inc.,€describesÐ   	 rÂ   Ðthe€implications€of€the€Board's€proposal€as€it€relates€to€the€transportationÏof€coal.€€Mr.€¢Sansom£€describes€the€evidence€demonstrating€that€productÏand€geographic€competition€have€exerted€substantial€constraints€on€railÏrates€for€coal€movements.€€He€also€describes€why€it€would€be€particularlyÏinappropriate€for€the€Board€to€eliminate€product€and€geographicÏcompetition€from€market€dominance€determinations€at€this€time,€sinceÏderegulation€in€the€electric€utility€industry€is€òòincreasingóó€the€importance€ofÐ   	 &R!#   Ðthose€competitive€factors€for€rail€transportation€of€coal.Ð    `	Ð `	Ð   Ðñ  ñß� €9 B   ; ; ; ; Q               A =  z  ,Èû x  x 
  0  €   €  @  È          @  E,¬(x x     x ð         ,¬(x x    � ßñ ñÓC €	@                  ÿÿ        $        $A                 C ÓØ-                                   - Øà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àà      àñ  ñÔ   ??US. ,  ÔÔ   USecide€ Ôñ ñSenior€marketing€officers€of€four€Class€I€railroads€describe€the€significantÏinfluence€of€geographic€and€product€competition€on€the€pricing€andÏmarketing€of€rail€transportation€services.ñ  ñÓ     ec Óñ ñÓ
   �I ¾Û  ÓÐ    `	Ð `	Ð   ÐÝ ‚  ÿÿÿf&  e€„„ ÝÔ    ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÓH  . ° °  `	 ¸  h À  p È   x Ð  (#° °‚, `	‹XH ÓÔ    ÔÔ     ÔòòÝ     ÝÓC €	@                  ÿÿ        $        $@                 C Óñ  ñØ                       Øñ ñà0     àà     ° àÔ
      ÔÔ   ??US. ,  Ô¢I£.à     àñ  ñß� €9 C   ; ; ; ; Q               A =  z  ,Èû x  x 
  0  €   €  @  È          @  E,±,x x     x ð         ,±,x x    � ßñ ñÔ   US??. ,  ÔTHE€ELIMINATION€OF€PRODUCT€AND€GEOGRAPHIC€COMPETITIONÐ   	 µ,(*   ÐœFROM€MARKET€DOMINANCE€DETERMINATIONS€WOULD€BEÏINCONSISTENT€WITH€THE€EXISTING€STATUTORY€SCHEME.Ô     Þ2   Ôóóñ  ñÓ     ec Óñ ñÓ
   ¾Û �I  ÓÐ     ð  (#(#  ÐÝ ‚    ÿÐ1  tion ÝÔ    ÔÔ     ÔÓ$   ° °‚, `	‹X° °�X$ Óñ  ñóóñ ññ  ñóóñ ññ  ñóóñ ñÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ    ÔÔ     ÔÝ     ÝÓ          Óà    Ü àAs€the€Board€points€out€in€its€Notice,€the€ICC€previously€addressed€the€question€whether€toÏinclude€product€and€geographic€competition€in€market€dominance€determinations€in€a€series€ofÏdecisions€beginning€in€1976.€€Initially,€the€ICC€decided€that€product€and€geographic€competitionÏwould€not€be€considered€in€applying€the€quantitative€market€share€presumption€contained€in€theÏfirst€market€dominance€guidelines€„„€that€is,€market€share€would€be€calculated€without€referenceÏto€alternative€product€markets€or€origin/destination€pairs€other€than€those€involved€in€theÏmovement€at€issue.€€òòSeeóó€òòSpecial€Proc.€For€Findings€of€Market€Dominanceóó,€355€I.C.C.€12€(1976).Ý ‚  ÿÿÿD5  e€„„ ÝÔ    ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÔ    ÔÔ     ÔòòÝ     ÝÑ     ÑÑ     È  Ñ×  ƒE         ×Ý
 ƒD  ÿÿ Ýò…òÚ    Ú1Ú
   
 Úó…óÝ     Ý×
   
 ×óó€Ð   	 žî   ÐThis€original€approach€was€adopted€over€the€objection€of€several€parties,€including€theÏDepartment€of€Justice,€and€the€ICC€soon€had€second€thoughts.€€òòSeeóó€òòSpecial€Proc.€For€Findings€ofÐ   	 ^®   ÐMarket€Dominanceóó,€359€I.C.C.€735,€736€n.7€(1979).ñ  ñÓ     ec Óñ ñÓ
      ¾Û  ÓÐ   	 >Ž   Ðà    Ü àAfter€passage€of€the€Staggers€Act€in€1980,€the€ICC€formally€reversed€its€earlier€position,Ïfinding€that€"to€exclude€from€consideration€òòa€priorióó€any€potential€source€of€competition€would€beÐ   	 þN   Ðcontrary€to€the€intent€of€Congress€as€expressed€in€the€Staggers€Act."€€365€I.C.C.€at€130.Ìà    Ü àThe€ICC's€understanding€of€Congress'€intent€is€confirmed€by€the€legislative€history.€€When€itÏenacted€the€Staggers€Act,€Congress€made€it€clear€that€the€objective€of€the€new€regulatory€schemeÏwas€to€allow€market€forces,€not€regulation,€to€establish€railroad€rates€whenever€possible:€Ï"òò[W]heneveróó€there€is€effective€competition€which€will€restrain€rate€increases€by€the€railroads,Ð   	 ^%® #   Ðsuch€competition€should€continue€to€function€as€the€regulator€of€the€rate€rather€than€theÐ   	 >'Ž"%   ÐCommission."€€Report€of€Committee€on€Conference,€H.R.€Conf.€Rep.€No.€96„1430,€at€89€(1980)Ï(emphasis€added).€€"[C]ompetition€should€be€the€determining€factor€in€railroad€rates€òòwhereverÐ   	 �à   Ðpossibleóó."€€òòId.óó€at€91„92€(emphasis€added).€€Under€the€new€regulatory€scheme,€the€CommissionÐ   	 pÀ   Ðhad€"jurisdiction€to€determine€rate€reasonableness€òòonlyóó€when€there€is€no€effective€competition."€Ð   	 P
    ÐReport€of€the€House€Committee€on€Interstate€and€Foreign€Commerce,€H.R.€Rep.€No.€96„1035,€atÏ33€(1980)€(emphasis€added).Ìà    Ü àCongress€expressly€stated€this€objective€in€the€Rail€Transportation€Policy€section€of€theÏStaggers€Act:€€ÌÝ ‚  ÿÿÿÿÿÿÿe€„„ ÝÔ     ÔÔ     ÔÝ     ÝÓ          Óà0    Ü àà0    Ü(#Ü(# àIn€regulating€the€railroad€industry,€it€is€the€policy€of€the€United€States€Government€„„ñ  ñÓ     ec Óñ ñÓ
   ßm     ÓÐ    (#(#  ÐÓH  . ° ° é `	 ¸  h À  p È   x Ð  (#° °‚, `	‹XH Óà8    é àà0    `	éïéï àà    ¸ à(1)€€to€allow,€to€the€maximum€extent€possible,€competition€andÏthe€demand€for€services€to€establish€reasonable€rates€for€transportationÏby€rail;Ð    `	ï`	ï  ÐÓH  . ° °  `	 ¸  h À  p È   x Ð  (#° ° é `	‹XH Óà8     àà0    `	Ð Ð  àà    ¸ à(2)€€to€minimize€the€need€for€Federal€regulatory€control€over€theÏrail€transportation€system€.€.€.Ð    `	Ð `	Ð   Ðà8     àà0    `	Ð Ð  àà    ¸ à(6)€to€maintain€reasonable€rates€where€there€is€an€absence€ofÏeffective€competition€.€.€.€.ñ  ñÓ     ec Óñ ñÓ
      ßm  ÓÐ    `	Ð `	Ð   ÐÌÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          ÓStaggers€Rail€Act€of€1980,€49€U.S.C.€ðð�10101.€€In€describing€the€new€rail€transportation€policy,Ïthe€House€Committee€on€Interstate€and€Foreign€Commerce€noted:€€"This€new€section€directs€theÏCommission€to€encourage€primary€reliance€on€the€marketplace€rather€than€regulation,€to€limitÏregulation€of€railroads€to€those€areas€where€there€is€an€absence€of€effective€competition."€€H.R.ÏRep.€No.€96„1035,€at€54.Ìà     àCongress€left€to€the€ICC€the€task€of€developing€rules€and€procedures€to€implement€theÏnew€transportation€policy,€but€the€ICC's€(and€now€the€Board's)€discretion€was€limited€by€the€clearÏstatement€of€Congress'€objective:€€Rates€should€not€be€regulated€where€there€is€effectiveÏcompetition.€€The€Board's€current€proposal€to€eliminate€product€and€geographic€competition€fromÐ   	 U,¥')   Ðmarket€dominance€analyses€would€be€directly€contrary€to€this€objective€because€it€would€result€inÏthe€regulation€of€railroad€rates€that€are€effectively€constrained€by€competition.Ìà     àThis€departure€from€Congress'€deregulatory€objective€would€be€especially€inappropriateÏgiven€that€product€and€geographic€competition€are€widespread€in€transportation€markets.€€In€itsÏ1981€decision,€the€ICC€concluded€that:ÌÝ ‚  ÿÿÿUD  e€„„ ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÔ&  Î ÔÓ          Óà8     àà8    `	Ð Ð  àGeographic€and€product€competition€serve€as€effective€constraintsÏon€the€abuse€of€market€power€by€a€rail€carrier.€€Therefore,€they€areÏrelevant€factors€to€be€considered€in€determining€whether€a€carrier€isÏmarket€dominant€vis„a„vis€certain€traffic.€Not€to€consider€suchÏfactors€may,€in€many€instances,€result€in€inaccurate€determinationsÏof€market€dominance.ñ  ñÓ     bj Óñ ñÓ
   ¾Û     ÓÐ    `	x`	x  ÐÝ ‚  ÿÿÿ«I  tive ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          Ó365€I.C.C.€at€127.€€Subsequent€experience€has€borne€out€this€observation.€€As€discussed€in€moreÏdetail€later€in€these€comments,€the€ICC€and€the€Board€have€repeatedly€found€since€1981€thatÏproduct€and€geographic€competition€"serve€as€effective€constraints"€in€diverse€railroad€markets.€ÏIt€is€therefore€beyond€dispute€that€the€elimination€of€product€and€geographic€competition€couldÏ"result€in€inaccurate€determinations€of€market€dominance"€in€numerous€cases.€Ô'  ÎêI   Ôñ  ñÓ     bj Óñ ñÓ
      ¾Û  ÓÌà     àThe€ICC's€1981€decision€to€include€product€and€geographic€competition€in€marketÏdominance€analyses€was€appealed€to€the€Fifth€Circuit,€which€found€the€decision€to€be€consistentÏwith€the€deregulatory€intent€of€Congress€in€the€Staggers€Act.€€Rejecting€arguments€that€CongressÏintended€that€the€ICC€examine€only€direct€„„€intermodal€and€intramodal€„„€competition,€the€courtÏstated:ÌÝ ‚  ÿÿÿ	L  tive ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          Óà8     àà8    `	Ð Ð  à[I]f€the€ICC€was€required€to€ignore€the€effects€of€indirectÏcompetition,€certain€rates€would€become€subject€to€regulatoryÏintervention€even€though€the€rate€is€governed€by€market€forces.€ÏSuch€a€result€flies€in€the€face€of€Congress'€stated€policy€ofÏderegulation€of€rates€subject€to€effective€market€control.ñ  ñÓ     bj Óñ ñÓ
   ¾Û     ÓÐ    `	x`	x  ÐÝ ‚  ÿÿÿ$P  tive ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          ÓòòWestern€Coal€Traffic€League€v.€United€Statesóó,€719€F.2d€772,€779€(5òòthóó€Cir.€1983),€òòcert.óó€òòdeniedóó,Ð   	 ¼,(+   Ð466€U.S.€953€(1984).ñ  ñÓ     bj Óñ ñÓ
      ¾Û  ÓÌà     àThe€ICC€once€again€addressed€the€issue€in€its€1985€decision,€òòProduct€&€GeographicÐ   	 �à   ÐCompetitionóó,€2€I.C.C.2d€1€(1985).€€There,€the€agency€adopted€a€proposal€supported€by€the€AARÐ   	 pÀ   Ðalong€with€several€shippers€and€shipper€groups€imposing€the€burden€of€proving€product€andÏgeographic€competition€on€the€defendant€railroad€rather€than€on€the€complaining€shipper.€€AÏnumber€of€parties€to€that€proceeding€opposed€any€consideration€by€the€ICC€of€product€andÏgeographic€competition.€€Addressing€their€arguments,€the€ICC€responded:ÌÝ ‚  ÿÿÿDR  tive ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          Óà8     àà8    `	Ð Ð  àWe€think€that€elimination€of€the€basic€product€and€geographicÏcompetition€guidelines€is€unwarranted.€€As€stated€previously,€theseÏstandards€have€been€applied€and€challenged,€and€have€stood€theÏtest€of€the€courts.€ñ  ñÓ     bj Óñ ñÓ
   ¾Û     ÓÐ    `	x`	x  ÐÝ ‚  ÿÿÿÚU  tive ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          ÓòòId.óó€at€6.ñ  ñÓ     bj Óñ ñÓ
      ¾Û  ÓÐ   	 ^®   Ðà     àIn€short,€product€and€geographic€competition€have€been€included€in€market€dominanceÏdeterminations€since€1981€because€Congress,€in€passing€the€Staggers€Act,€intended€that€ratesÏconstrained€by€effective€competition€should€not€be€regulated.€€Nothing€has€occurred€since€1980Ïto€suggest€that€Congress€wishes€to€expand€the€scope€of€regulatory€intervention.€€While€the€BoardÏhas€the€authority€to€modify€its€regulations€if€necessary€to€accommodate€significant€changes€in€theÏmarket,€it€does€not€have€the€authority€to€disregard€Congress'€intent€or€to€establish€rules€that€areÏinconsistent€with€the€scheme€established€by€Congress.€€As€the€ICC€expressly€acknowledged,€theÏelimination€altogether€of€product€and€geographic€competition€from€the€scope€of€marketÏdominance€inquiries€would€be€contrary€to€Congress'€intent€and€therefore€it€is€not€an€action€thatÏthe€Board€is€authorized€to€take.ñ  ñÓ     bj Óñ ñÓ
   ð6     ÓÌÝ ‚  ÿÿÿœW  tive ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÓB  . ° °  `	 ¸  h À  p È   x Ð  (#° °�XB ÓÔ     ÔÔ     ÔòòÝ     ÝÓ          Óà0     àà     ° àÔ
      ÔII.à     àCONSIDERATION€OF€GEOGRAPHIC€AND€PRODUCT€COMPETITION€INÐ   	 e+µ&)   ÐDETERMINING€MARKET€DOMINANCE€IS€MANDATED€BY€SOUNDÏECONOMICS€AND€PUBLIC€POLICY.Ô     È\   Ôóóñ  ñÓ     bj Óñ ñÓ
   ¾Û ð6  ÓÐ    E-•(+ (#(#  ÐÝ ‚    ÿ\  d).Ì ÝÔ     ÔÔ     ÔÓ  
 ° °�X° °�X Óñ  ñóóñ ñÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          Óà     àCongress'€decision€to€allow€the€market€to€determine€railroad€rates€whenever€possible€wasÏbased€on€sound€public€policy.€€Where€competition€is€effective,€it€disciplines€the€prices€thatÏcustomers€pay€for€the€products€and€services€they€desire€and€it€ensures€that€prices€do€not€riseÏabove€levels€needed€to€induce€sellers€to€bring€their€supplies€to€market.€€Competition€alsoÏdisciplines€the€efficiency€of€a€firm's€operations,€since€inefficient€operators€face€elimination€fromÏthe€market€by€lower„cost,€more€efficient€firms€that€can€offer€more€favorable€terms.€€Reliance€onÏcompetition€to€discipline€the€conduct€of€market€participants€is€far€more€efficient€than€reliance€onÏregulation,€which€necessarily€distorts€efficient€marketplace€results.ñ  ñÓ     bj Óñ ñÓ
      ¾Û  ÓÌà     àBut€as€the€Board€and€its€predecessor€have€frequently€noted,€competition€and€marketÏforces€cannot€readily€be€forced€into€neat€pigeonholes.€€Competition€is€a€process€defined€byÏrivalry€among€various€options€that€can€potentially€meet€the€needs€of€a€purchaser.€€The€specificÏoptions€available€to€purchasers€„„€and€the€relative€strength€of€those€options€„„€turn€on€theÏcharacteristics€of€a€particular€market€and€the€needs€of€purchasers.€€As€Professors€Kalt€and€WilligÏexplain€in€their€Verified€Statement,€in€"evaluating€whether€competition€is€likely€to€be€effective€inÏregulating€the€price€and€quality€offerings€available€to€customers,€there€is€no€methodological€orÏtheoretical€reason€to€examine€only€some€of€the€available€alternatives€while€deliberately€ignoringÏothers."€€Kalt/Willig€V.S.€at€7„8.Ìà     àThe€sources€of€competition€in€rail€transportation€markets€are€diverse.€€Competition€isÏclearly€not€limited€to€alternative€ways€to€move€a€specific€product€between€a€specific€origin€andÏdestination.€€Originating€shippers€often€have€alternative€outlets€for€their€product;€receivingÏshippers€can€often€source€from€alternative€origins.€€If€a€utility€served€by€two€railroads€canÏpurchase€coal€from€a€mine€served€by€one€railroad€or€from€a€different€mine€served€by€the€secondÐ   	 ,`'*   Ðrailroad,€it€would€be€irrational€to€conclude€that€there€could€be€no€competition€simply€because€theÏtwo€railroads€do€not€serve€the€same€origin€òòandóó€destination.€€This€is€precisely€the€sort€of€anomalyÐ   	 �à   Ðthat€would€arise€if€the€Board€eliminates€consideration€of€geographic€competition.Ìà     àThe€rivalry€that€characterizes€a€competitive€market€can€arise€from€a€variety€ofÏcircumstances.€€Indeed,€in€1981€the€ICC€rejected€the€use€of€quantitative€presumptions€in€marketÏdominance€determinations€because€they€did€not€adequately€take€account€of€the€variety€ofÏcircumstances€that€create€competitive€pressure€in€rail€transportation€markets:ÌÝ ‚  ÿÿÿ@^  tive ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          Óà8     àà8    `	Ð Ð  à[T]he€use€of€rebuttable€presumptions€in€market€dominanceÏdeterminations€often€placed€too€much€emphasis€on€quantitativeÏevidence€which€did€not€fully€reflect€the€circumstances€of€any€givenÏmovement.€€This€quantitative€evidence€was€frequently€offered€atÏthe€expense€of€other€evidence€which,€though€less€subject€toÏquantification,€is€more€reflective€of€the€degree€of€market€powerÏpossessed€by€a€rail€carrier€over€certain€traffic.ñ  ñÓ     €o Óñ ñÓ
   ¾Û     ÓÐ    `	x`	x  ÐÝ ‚  ÿÿÿ’i  rati ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          Ó365€I.C.C.€at€120.€€The€market€dominance€guidelines€adopted€by€the€ICC€in€1981€and€appliedÏ(with€some€modifications)€since€then€are€based€on€the€explicit€recognition€that€competition€canÏonly€be€understood€by€evaluating€"the€total€competitive€situation."Ý ‚  ÿÿÿ(l  rati ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÔ     ÔÔ     ÔòòÝ     Ý×  ƒF         ×Ý
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 ×óó€€€While€the€marketÐ   	 î>   Ðdominance€guidelines€identify€four€specific€types€of€competitive€pressure€„„€intramodal,Ïintermodal,€geographic€or€product€competition€„„€other€"forms€of€competition€that€are€more€case„¼specific"€are€given€"due€consideration."Ý ‚  ÿÿÿÿÿÿÿrati ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÔ     ÔÔ     ÔòòÝ     Ý×  ƒH     p  ×Ý
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 Úó…óÝ     Ý×
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 ×óó€€Any€one€type€of€competition€"acting€alone,€or€inÐ   	 Ž"Þ    Ðconcert,€[can]€restrain€a€[carrier's]€market€power."Ý ‚  ÿÿÿÿÿÿÿrati ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÔ     ÔÔ     ÔòòÝ     Ý×  ƒI     P  ×Ý
 ƒD  ÿÿ Ýò…òÚ    Ú4Ú
   
 Úó…óÝ     Ý×
   
 ×óó€€The€purpose€of€the€market€dominance€inquiryÐ   	 n$¾"   Ðis€to€"consider€òòanyóó€kind€of€competition€from€òòanyóó€source€to€see€if€it€effectively€constrains€the€.€.€.Ð   	 N&ž!$   Ðrates€at€issue."Ý ‚  ÿÿÿÿÿÿÿrati ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÔ     ÔÔ     ÔòòÝ     Ý×  ƒJ         ×Ý
 ƒD  ÿÿ Ýò…òÚ    Ú5Ú
   
 Úó…óÝ     Ý×
   
 ×óóñ  ñÓ     €o Óñ ñÓ
      ¾Û  ÓÐ   	 °      Ðà     àAs€Professors€Kalt€and€Willig€explain,€this€approach€is€consistent€with€the€fundamentalÏeconomics€of€competition.€€Like€the€Board€and€the€ICC€before€it,€the€antitrust€agencies€regularlyÏlook€at€product€and€source€competition€in€merger€and€other€enforcement€proceedings€as€part€ofÏthe€overall€analysis€of€competition.€€Kalt/Willig€V.S.€at€8.€€And€in€1985,€the€ICC€rejectedÏproposals€from€some€shippers€to€eliminate€product€and€geographic€competition€from€the€marketÏdominance€guidelines,€noting€correctly€that€those€types€of€competition€"are€economically€validÏand€are€the€basic€antitrust€tenet€in€determining€market€power."Ý ‚  ÿÿÿÿÿÿÿrati ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÔ     ÔÔ     ÔòòÝ     Ý×  ƒK     p  ×Ý
 ƒD  ÿÿ Ýò…òÚ    Ú6Ú
   
 Úó…óÝ     Ý×
   
 ×óó€Ð   	 Ð    Ðà     àAs€a€matter€of€standard€economics,€the€issue€is€whether€competition€is€effective€and€notÏwhat€label€is€applied€to€the€competition.€€If€the€Board€arbitrarily€excludes€product€and€geographicÏcompetition€from€consideration,€it€would€necessarily€find€market€dominance€in€some€cases€inÏwhich€effective€competition€exists,€which€is€both€an€economically€irrational€result€and€one€thatÏ"is€antithetical€to€a€regulatory€system€in€which€policy€calls€for€competition€to€serve€as€theÏregulator€of€rates€wherever€and€whenever€possible."€€Kalt/Willig€V.S.€at€16.ñ  ñÓ     €o Óñ ñÓ
   ð6     ÓÌÝ ‚  ÿÿÿÿÿÿÿrati ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÓB  . ° °  `	 ¸  h À  p È   x Ð  (#° °�XB ÓÔ     ÔÔ     ÔòòÝ     ÝÓ          Óà0     àà     ° àÔ
      ÔIII.à     àPRODUCT€AND€GEOGRAPHIC€COMPETITION€HAVE€BEEN€ANDÐ   	 W§   ÐCONTINUE€TO€BE€FORMS€OF€EFFECTIVE€COMPETITION.Ô     Ëy   Ôóóñ  ñÓ     €o Óñ ñÓ
   ¾Û ð6  ÓÐ    G — (#(#  ÐÝ ‚    ÿy  tion ÝÔ     ÔÔ     ÔÓ  
 ° °�X° °�X Óñ  ñóóñ ñÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          Óà     àWhen€the€ICC€decided€to€include€product€and€geographic€competition€within€the€scope€ofÏthe€market€dominance€guidelines,€it€did€so€because€"[g]eographic€and€product€competition€serveÏas€effective€constraints€on€the€abuse€of€market€power€by€a€rail€carrier."Ý ‚  ÿÿÿ{  rati ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÔ     ÔÔ     ÔòòÝ     Ý×  ƒL     `  ×Ý
 ƒD  ÿÿ Ýò…òÚ    Ú7Ú
   
 Úó…óÝ     Ý×
   
 ×óó€€Subsequent€decisions€byÐ   	 Å%!#   Ðthe€ICC€and€the€Board€in€market€dominance€determinations€and€exemption€and€mergerÐ   	 ¥'õ"%   Ðproceedings€demonstrate€the€extent€and€potency€of€geographic€and€product€competition€in€manyÏâ
    
 âdifferent€rail€markets.€€ñ  ñÓ     €o Óñ ñÓ
      ¾Û  ÓÐ   	 �à   ÐÝ ‚  ÿÿÿÿÿÿÿrati ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÓB  . ° °  `	 ¸  h À  p È   x Ð  (#° °�XB ÓÔ     ÔÔ     ÔòòÝ     ÝÔ&     ÔÓ          Óà0     àà0    `	(#(# àà      àÔ
     ÔA.à    `	 àRate€CasesÔ    �   Ôóóñ  ñÓ     €o Óñ ñÓ
   ¾Û     ÓÐ    °    `	(#`	(#  ÐÝ ‚    ÿÏ~  tion ÝÔ     ÔÔ     ÔÓ  
 ° °�X° °�X Óñ  ñóóñ ññ  ñóóñ ñÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          Óà     àà    `	 àIn€the€following€rate€reasonableness€cases,€the€ICC€or€the€Courts€concluded€thatÏgeographic€and/or€product€competition€created€sufficient€options€for€the€shipper€to€preclude€aÏfinding€that€the€carrier€was€market€dominant.Ý ‚  ÿÿÿ’€  rati ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÔ     ÔÔ     ÔòòÝ     Ý×  ƒM         ×Ý
 ƒD  ÿÿ Ýò…òÚ    Ú8Ú
   
 Úó…óÝ     Ý×
   
 ×óóñ  ñÓ     €o Óñ ñÓ
      ¾Û  ÓÐ   	 .
~   ÐÝ ‚  ÿÿÿÿÿÿÿrati ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓC €	@                  ÿÿ        $        $@                 C Óñ  ñØ-                                    - Øñ ñÓ          ÓÓE  1 ° ° Ü  `	 ¸  h À  p È   x Ð  (#° °�XE Óà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àà      àòòConsolidated€Papers,€Inc.€v.€Chicago€&€North€Western€Transportation€Co.óó,€7Ð   	 ^   ÐI.C.C.2d€330€(1991).Ð    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àThe€Commission€found€geographic€competition€constrained€CNW€becauseÏits€Wisconsin€paper€manufacturer€customers€had€options€which€permittedÏthem€to€avoid€CNW's€services.€€These€customers€could€obtain€pulpwoodÏand€wood€chips€from€local€sources€rather€than€via€rail€from€Wyoming€andÏColorado.€€The€customers'€decreased€reliance€on€distant€sources€stemmedÏin€part€from€technological€changes€that€permitted€greater€reliance€on€localÏsupplies.€This€case€highlights€the€relationship€that€often€exists€betweenÏgeographic€and€product€competition.€€While€the€local€supply€of€rawÏmaterial€provided€geographic€competition€for€raw€material€originating€atÏdistant€points€and€moving€via€rail,€the€manufacturers'€changing€reliance€onÏalternative€wood€types€in€the€paper„making€process€provided€productÏcompetition.ñ  ñÓ     €o Óñ ñÓ
   ¾Û     ÓÐ    `	Ð `	Ð   Ðñ  ñß� €9 N   ; ; ; ; Q               A =  z  ,Èû x  x 
  0  €   €  @  È          @  E,ìx x     x ð         ,ìx x    � ßñ ñà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àà      àñ  ñÔ   ??US. ,  ÔÔ   US€opera Ôñ ñòòCoal€Trading€Corp.€v.€The€Baltimore€&€Ohio€R.R.óó,€6€I.C.C.2d€360€(1990).ñ  ñÓ     €o Óñ ñÓ
      ¾Û  ÓÐ    ì< `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àThe€Commission€held€that€the€railroads€did€not€have€market€dominanceÏover€coal€moved€for€Coal€Trading€Corporation€("CTC")€because€of€theÏgeographic€competition€inherent€in€dealing€with€brokers.€€As€a€coalÏbroker,€CTC€could€supply€its€export€customers€from€many€coal€mineÏorigins€throughout€the€United€States,€including€mines€exclusively€servedÏby€either€of€the€two€defendant€railroads€or€by€other€carriers.ñ  ñÓ     €o Óñ ñÓ
   ¾Û     ÓÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àà      àòòWestmoreland€Coal€Sales€Co.€v.€Denver€&€Rio€Grande€Western€R.R.óó,€5€I.C.C.2dÐ   	 :#Š!   Ðâ
    
 â751,€758€(1989).ñ  ñÓ     €o Óñ ñÓ
      ¾Û  ÓÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àThe€Commission€found€that€the€defendant€railroads€lacked€marketÏdominance€because,€as€a€broker,€the€shipper€had€geographic€alternatives€toÐ   
 ú&J"%   Ðtransporting€coal€destined€for€export€via€rail€from€Utah€and€Colorado€toÏports€in€California.€€As€the€Commission€noted,€Westmoreland€Coal€SalesÏ"was€not€contractually€committed€to€any€particular€coal€origins€orÏdestinations."€€Thus,€according€to€the€Commission,€Westmoreland€was€notÏcaptive€to€the€railroads.ñ  ñÓ     €o Óñ ñÓ
   ¾Û     ÓÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àà      àòòAmstar€Corp.€v.€Alabama€Great€Southern€Railroadóó,€1988€I.C.C.€LEXIS€(May€10,Ð   	 .
~   Ð1988).ñ  ñÓ     €o Óñ ñÓ
      ¾Û  ÓÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àThe€Commission€held€that€geographic€competition€in€the€form€of€multipleÏsugar€supply€alternatives€prevented€the€defendant€railroads€from€havingÏmarket€dominance€over€shipments€from€certain€Amstar€sugar€refineries€toÏthree€destinations€„„€Buffalo,€Cincinnati€and€Evansville.€€According€to€theÏCommission,€Amstar€had€effective€bargaining€power€with€the€railroads,Ïbecause€it€could€choose€from€three€of€its€other€sugar€refineries€to€supplyÏthese€destinations.€€When€the€different€points€of€origin€were€considered,Ïeach€destination€was€found€to€be€served€by€more€than€one€independent€setÏof€rail€carriers.ñ  ñÓ     €o Óñ ñÓ
   ¾Û     ÓÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àà      àòòGeneral€Chemical€Corp.€v.€United€Statesóó,€817€F.2d€844€(D.C.€Cir.€1987).ñ  ñÓ     €o Óñ ñÓ
      ¾Û  ÓÐ    <Œ `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àThe€D.C.€Circuit€upheld€the€Commission's€conclusion€regarding€productÏcompetition€„„€specifically,€that€effective€end„product€competition€canÏconstrain€railroad€rates€for€moving€raw€materials.€€General€Chemical€was€aÏsoda€ash€producer€located€in€Green€River,€Wyoming,€a€locationÏresponsible€for€80%€of€the€domestic€soda€ash€market.€€Railroads€movedÏ95%€of€the€soda€ash€from€this€region,€thus€the€producers€claimed€to€beÏcaptive€to€the€railroads.€€A€third€of€annual€soda€ash€production€was€used€toÏmanufacture€glass€containers,€an€end€product€that€competes€withÏcontainers€made€of€aluminum,€paper€and€steel.€€The€Court€accepted€theÏCommission's€finding€that€the€competition€between€the€various€types€ofÏcontainers€had€a€"significant"€disciplinary€effect€on€the€price€of€soda€ash€„„Ïwhich€could€affect€traffic€volumes€and,€therefore,€the€rates€the€railroadsÏwould€set€to€deliver€this€material.Ð    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àIn€addition,€the€Court€agreed€with€the€Commission€that€two€materials,Ïcullet€and€caustic€soda,€are€popular€soda€ash€substitutes€for€theÏmanufacturing€of€glass,€and€thus€provided€additional,€direct€productÏcompetition.ñ  ñÓ     €o Óñ ñÓ
   ¾Û     ÓÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àà      àòòSalt€River€Project€Agricultural€Improvement€&€Power€District€v.€United€Statesóó,Ð   	 Ê)%(   Ð762€F.2d€1053€(D.C.€Cir.€1985).€ñ  ñÓ     €o Óñ ñÓ
      ¾Û  ÓÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àEvidence€of€effective€product€competition€was€found€in€Salt€River'sÏdramatic€increase€in€the€use€of€local€gas€at€two€of€its€electric€generatingÐ   	 Š-Ú(,   Ðplants€in€Arizona€in€lieu€of€oil€transported€via€rail.€€In€a€two„year€period,Ïoil€use€declined€from€100%€to€18%€at€one€of€the€plants,€and€from€18%€toÏ1%€at€the€other.Ð    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àThe€Court€also€found€effective€geographic€competition€as€Salt€RiverÏsecured€fuel€oil€for€these€plants€from€eighteen€sources€other€than€thoseÏserved€by€Southern€Pacific.€€In€one€year,€Salt€River€received€over€twoÏtimes€more€oil€from€competing€alternatives€than€from€Southern€PacificÏorigins.€€The€next€year€it€received€no€oil€from€sources€served€by€SouthernÏPacific,€while€continuing€to€receive€oil€from€other€sources.ñ  ñÓ     €o Óñ ñÓ
   ¾Û     ÓÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àà      àòòEli€Lilly€&€Co.€v.€Burlington€Northern€R.R.óó,€I.C.C.€Docket€No.€38262€(servedÐ   	 Þ.
   ÐJuly€27,€1984)€at€9.ñ  ñÓ     €o Óñ ñÓ
      ¾Û  ÓÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àThe€Commission€held€that€BN€lacked€market€dominance€over€shipmentsÏof€nitric€acid€from€a€supplier€in€Cosgrove,€Missouri€to€an€Eli€Lilly€plant€inÏLafayette,€Indiana,€in€part,€because€of€effective€geographic€competition.ÏEli€Lilly€also€received€nitric€acid€from€four€additional€suppliers,€in€fourÏdifferent€locations,€none€of€which€was€served€by€BN.€€Since€Eli€LillyÏadmitted€that€it€used€these€supply€alternatives€to€restrain€nitric€acidÏproducers€from€raising€their€rates,€the€Commission€found€that€theÏcompany€could€just€as€easily€"restrain€the€railroads'€pricing€by€shifting€theÏamount€of€its€purchases€among€its€various€suppliers€on€different,Ïcompeting€rail€lines."ñ  ñÓ     €o Óñ ñÓ
   ¾Û     ÓÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àà      àòòAluminum€Co.€("ALCOA")€v.€Burlington€Northern,€Inc.óó,€I.C.C.€Docket€No.Ð   	 Ü,   Ð37715S€(served€Apr.€11,€1983).ñ  ñÓ     €o Óñ ñÓ
      ¾Û  ÓÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àThe€ALJ€found€that€geographic€competition€existed€in€the€transportationÏof€aluminum€sheeting€from€ALCOA's€Warrick,€Indiana€plant€to€threeÏdestinations€served€by€the€defendant€railroads.€€Customers€at€these€threeÏdestinations€received€less€than€half€of€their€aluminum€via€rail€fromÏALCOA's€Warrick€facility,€the€remainder€coming€from€nearly€30€separateÏsuppliers€of€aluminum€in€almost€50€unique€locations.€€Since€ALCOA'sÏcustomers€could€obtain€aluminum€from€a€multitude€of€competing€sources,Ïsufficient€geographic€competition€existed€to€restrain€rates.Ð    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àThe€ALJ€also€held€that€the€railroads€faced€product€competition.€€The€ALJÏdetermined€that€if€the€delivered€price€for€aluminum€sheeting€wasÏexcessive,€ALCOA's€container€customers€could€shift€to€plastic,€and€theÏrailroads€would€experience€a€loss€in€traffic.€€In€this€connection,€the€ALJÏnoted€that€one€ALCOA€customer€had€instituted€a€process€that€would€allowÏit€to€recycle€its€own€cans€„„€thereby€reducing€its€need€for€aluminumÏsheeting€and€rail€transport.ñ  ñÓ     €o Óñ ñÓ
   ¾Û     ÓÐ    ¼,(+ `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àà      àòòAluminum€Ass'n,€Inc.€v.€Akron,€Canton€&€Youngstown€R.R.óó,€367€I.C.C.€475Ð   	 °      Ð(1983).ñ  ñÓ     €o Óñ ñÓ
      ¾Û  ÓÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àThe€Commission€found€rail€rates€for€movements€of€aluminum€ingot€fromÏthe€West€to€destinations€in€the€East,€Midwest€and€South€were€constrainedÏby€product€competition€from€recycled€aluminum.€Nearly€30%€of€theÏaluminum€supply€came€from€recycling,€and€almost€80%€of€this€recycledÏaluminum€was€produced€in€close€proximity€to€the€destinations€to€whichÏthe€issue€traffic€moved.€€Therefore,€the€Commission€held€that€aluminumÏconsumers€had€a€realistic€alternative€to€transporting€aluminum€ingot€fromÏthe€West.€€The€Commission€also€held€that€aluminum€is€used€in€the€highlyÏcompetitive€market€for€food€and€beverage€containers,€where€steel,€glassÏand€plastic€are€ready€substitutes.€Ð    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àThe€Commission€also€found€convincing€evidence€that€the€railroads€facedÏeffective€geographic€competition.€€First,€it€found€that€producers€in€theÏWest€accounted€for€less€than€one€third€of€the€U.S.€capacity,€and€the€threeÏlargest€volume€aluminum€rail€movements€to€the€complaint€destinations€didÏnot€originate€on€the€on€the€defendant€carrier.€€Second,€it€found€thatÏproducers€could€avoid€the€railroads€„„€and€transportation€costs€entirely€„„Ïby€engaging€in€swaps€or€trades,€in€the€nature€of€barter€transactions.€ÏIndeed,€two€of€the€aluminum€customers€received€more€in€trade€than€theyÏdid€via€rail.€€Finally,€the€Commission€found€that€imports,€particularly€intoÏthe€destinations€at€issue,€competed€with€the€respondent€railroads'Ïshipments.ñ  ñÓ     €o Óñ ñÓ
   ¾Û     ÓÐ    `	Ð `	Ð   ÐÝ ‚  ÿÿÿƒ     ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÓH  . ° °  `	 ¸  h À  p È   x Ð  (#° °‚, `	‹XH ÓÔ     ÔÔ     ÔòòÝ     ÝÓC €	@                  ÿÿ        $        $@                 C Óñ  ñØ                       Øñ ñà0     àà0    `	(#(# àà      àÔ
     ÔB.à    `	 àExemption€ProceedingsÔ    ì³   ÔóóÐ    î> `	(#`	(#  ÐÝ ‚    ÿÊ²   ñÓ ÝÔ     ÔÔ     ÔÓ$   ° °‚, `	‹X° °�X$ Óñ  ñóóñ ñÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          Óà    Ü àà     àThe€Board's€exemption€authority€is€not€an€issue€in€this€proceeding.€€However,€the€ICC'sÏand€the€Board's€prior€exemption€cases€are€relevant€here€because€they€discuss€the€extent€andÏvitality€of€product€and€geographic€competition€in€a€variety€of€railroad€markets,€and€in€many€casesÏthey€describe€the€dynamic€by€which€product€and€geographic€competition€effectively€constrainÏrail€rates.€€The€particular€commodities€covered€by€prior€exemptions,€of€course,€could€not€be€theÏsubject€of€rate€reasonableness€proceedings,€but€they€illustrate€the€type€and€diversity€of€productsÏand€railroad€markets€that€are€affected€by€product€and€geographic€competition.€€In€light€of€itsÏexemption€precedents,€the€Board€could€not€logically€conclude€that€product€and€›geographicÐ   	 Ì+'*   Ðcompetition€are€insignificant.ñ  ñÓ       Óñ ñÓ
      ¾Û  ÓÌà    Ü àà     àSome€representative€exemptions€granted€since€1990€are€described€below.ÌÝ ‚  ÿÿÿ»´     ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓC €	@                  ÿÿ        $        $@                 C Óñ  ñØ-                                    - Øñ ñÓ          ÓÓK  1 ° ° Ü  `	 ¸  h À  p È   x Ð  (#° °‚, `	‹XK Óà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àà      àEx€Parte€No.€346€(Sub„No.€34),€òòRail€General€Exemption€Authority€„„€ExemptionÐ   	 pÀ   Ðof€Hydraulic€Cementóó,€1996€STB€LEXIS€410€(served€Dec.€17,€1996).€Ð    `	° `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àThe€Board€extended€an€exemption€for€the€rail€transportation€of€hydraulicÏcement€to€cover€a€particular€shipper's€traffic,€rejecting€the€shipper'sÏcontention€that€its€access€to€only€one€rail€carrier€(UP/¢CNW£)€made€itÏcaptive:€€"That€the€¢Dacotah£€plant€is€physically€served€by€only€one€carrierÏdoes€not€necessarily€mean€that€there€is€an€absence€of€effectiveÏcompetition."€€òòId.óó€at€*6.€€The€Board€explained:€"There€is€competition€fromÐ   	 ð@   Ðother€producers€that€inhibits€the€ability€of€the€railroad€serving€¢Dacotah£'sÏcement€plant€to€increase€rates.€€¢Dacotah£'s€relatively€unfavorableÏgeographic€location€(usually€the€most€distant€supplier€in€the€market€itÏsupplies)€puts€it€at€a€natural€disadvantage€vis„a„vis€its€competitors.€€TheÏcarrier€serving€¢Dacotah£€must€establish€rates€that€overcome€thisÏdisadvantage€in€order€to€handle€¢Dacotah£'s€hydraulic€cement€traffic.€€If€theÏrate€is€too€high,€the€producer€does€not€participate€in€the€market€and€theÏcarrier€does€not€participate€in€its€transportation€to€that€market."€€òòId.óó€at€*8.€€ñ  ñÓ       Óñ ñÓ
   ¾Û     ÓÐ    pÀ `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àà      àòòRail€General€Exemption€Authority€„„€Exemption€of€Carbon€Dioxideóó,€10€¢I.C.C.2d£Ð   	 .~   Ð359€(1994).ñ  ñÓ       Óñ ñÓ
      ¾Û  ÓÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àThe€ICC€exempted€rail€transportation€of€carbon€dioxide,€noting€theÏwidespread€existence€of€geographic€competition€due€to€the€fact€that€carbonÏdioxide€plants€and€processing€facilities€were€dispersed€across€the€UnitedÏStates.€€"If€a€railroad€were€to€raise€its€rates€to€one€carbon€dioxide€shipper,Ïeither€the€shipper€could€send€the€carbon€dioxide€to€another€market,€or€theÏreceiver€could€buy€its€supply€from€another€producer,€or€both€situationsÏcould€occur."€€€òòId.óó€at€363.ñ  ñòòóóÓ       Óñ ñÓ
   ¾Û     ÓÐ    ž!î `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àà      àòòRail€General€Exemption€Authority€„„€Exemption€of€Rock€Salt,€Saltóó,€10€¢I.C.C.2d£Ð   	 \#¬!   Ð241€(1994).ñ  ñÓ       Óñ ñÓ
      ¾Û  ÓÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àRail€transportation€of€rock€salt€and€common€salt€was€exempted€because€ofÏthe€broad€geographic€dispersion€of€salt€mines€and€processing€plants€andÏthe€presence€of€substantial€volumes€of€imported€salt.€€The€ICC€concludedÏthat€shippers€had€alternative€markets€for€their€product€and€receivers€hadÏalternative€sources€of€supply.ñ  ñòòóóÓ       Óñ ñÓ
   ¾Û     ÓÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àà      àòòPetition€to€Exempt€from€Regulation€the€Rail€Transportation€of€Scrap€Paperóó,€9Ð   	 ª+ú&*   Ð¢I.C.C.2d£€957€(1993).ñ  ñÓ       Óñ ñÓ
      ¾Û  ÓÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àÐ    Š-Ú(, `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àThe€ICC€granted€a€partial€exemption€from€regulation€for€the€railÏtransportation€of€scrap€paper€in€this€proceeding,€retaining€jurisdiction€forÏproducts€subject€to€the€statutory€rate€cap€for€non„ferrous€recyclables.€€òòId.óó€atÐ   	 �à   Ð958.€€There€was€substantial€geographic€and€product€competition€due€to€theÏfact€that€scrap€paper€is€generated€throughout€the€United€States€and€"thereÏis€no€difference€between€recycled€fibers€originating€in€the€variousÏregions."€òòId.óó€at€960.ñ  ñÓ       Óñ ñÓ
   ¾Û     ÓÐ    P
  `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àà      àòòRail€General€Exemption€Authority€ð!ð€Used€Motor€Vehiclesóó,€9€¢I.C.C.2d£€884€(1993).ñ  ñÓ       Óñ ñÓ
      ¾Û  ÓÐ    ^ `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àThe€ICC€found€that€there€was€"intense€rail„to„rail€and€geographicÏcompetition€because€shippers€have€numerous€options€in€selecting€originÏand€destination€points€for€used€motor€vehicle€traffic€and€thus€need€notÏlimit€rail€transportation€to€only€one€carrier."ñ  ñÓ       Óñ ñÓ
   ¾Û     ÓÐ    `	Ð `	Ð   ÐÔ& A    Ôà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àà      àòòRail€General€Exemption€Authority€ð!ð€Petition€of€¢AAR£€to€Exempt€RailÐ   	 |Ì   ÐTransportation€of€Selected€Commodity€Groupsóó,€9€¢I.C.C.2d£€969€(servedÐ   	 l¼   ÐOct.€15,€1993).ñ  ñÓ       Óñ ñÓ
      ¾Û  ÓÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àThe€ICC€concluded€that€effective€geographic€and€product€competitionÏexisted€for€lard€and€meat€products€because€(a)€brokers€play€a€key€role€inÏthe€market€by€representing€smaller€producers,€(b)€major€producers€andÏbrokers€have€multiple€locations€served€by€different€rail€carriers,€and€(c)Ïmajor€producers€have€the€ability€to€shift€production€from€one€facility€toÏanother.€€òòId.óó€at€976.€€Transportation€rates€for€wallboard€were€constrainedÐ   	 ì<   Ðby€product€competition€from€previously€exempted€substitute€commodities.€ÏòòId.óó€at€977.€€Geographic€or€product€competition€was€also€cited€as€a€basis€forÐ   	 Ì   Ðexempting€primary€forest€or€wood€raw€materials,€coke€produced€fromÏcoal,€and€cinders,€clay,€shale,€and€slate.€€òòId.óó€at€976„79.ñ  ñÓ       Óñ ñÓ
   ¾Û     ÓÐ    ¬ü `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àà      àòòRail€General€Exemption€Authority€ð!ð€Transportation€Equipmentóó,€9€¢I.C.C.2d£€263Ð   	 j º   Ð(1992)ñ  ñÓ       Óñ ñÓ
      ¾Û  ÓÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àThe€ICC€granted€an€exemption€for€rail€transportation€of€motor€vehiclesÏand€motor€vehicle€parts€and€accessories,€noting€the€existence€of€"motorÏcarrier€competition,€geographic€competition€generally,€and€various€shipperÏoptions€and€powers."€€òòId.óó€at€265.€€The€ICC's€notice€instituting€theÐ   	 
&Z!$   Ðproceeding€described€in€detail€the€vibrancy€of€geographic€and€productÏcompetition€in€this€market,€noting€that€(a)€€the€industry€is€widelyÏdispersed;€(b)€parts€can€be€obtained€from€numerous€sources;€(c)€finishedÏcars€can€be€sent€to€a€variety€of€destinations;€(d)€shippers€of€motor€vehiclesÏare€major€corporations€with€the€ability€to€negotiate€hard€for€concessionsÏfrom€the€railroads;€and€(e)€automobile€manufacturers,€related€automotiveÏfirms,€and€automobile€importers€are€able€to€reconfigure€and€relocate€theirÏoperations.Ô'  Ê)°Í   Ôñ  ñÓ       Óñ ñÓ
   ¾Û     ÓÐ    Š-Ú(, `	Ð `	Ð   Ðœà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àà      àòòRail€General€Exemption€Authority€ð!ð€Lumber€or€Wood€Productsóó,€7€I.C.C.2d€673Ð   	 °      Ð(1991).ñ  ñÓ       Óñ ñÓ
      ¾Û  ÓÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àÐ    `	Ð `	Ð   Ðà8    Ü àà8    Üü!Üü! àà0    `	Ð Ð  àThe€ICC€granted€an€exemption€for€the€rail€transportation€of€variousÏlumber,€plywood,€and€treated€wood€products€noting€the€existence€ofÏgeographic€and€product€competition.€€òòId.óó€at€678.€€In€addition,€the€ICCÐ   	 `	°   Ðrejected€the€request€of€some€parties€to€retain€competitive€access€regulationÏfor€long„haul€lumber€movements,€stating:€€"Geographic€competition€isÏparticularly€relevant€for€this€lumber€traffic€because€any€attempt€by€a€railÏcarrier€to€abuse€market€power€by€refusing€to€enter€competitive€joint€ratesÏor€reciprocal€switching€agreements€with€other€rail€carriers€would€leave€thatÏcarrier€vulnerable€to€competition€from€other€regions."€€òòId.óó€at€680„81.ñ  ñÓ       Óñ ñÓ
   ¾Û     ÓÐ     P
 `	Ð `	Ð   ÐÝ ‚  ÿÿÿ¹  ü!Ü ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÓH  . ° °  `	 ¸  h À  p È   x Ð  (#° °‚, `	‹XH ÓÔ     ÔÔ     ÔòòÝ     ÝÔ&  ž ÔÓC €	@                  ÿÿ        $        $@                 C Óñ  ñØ                       Øñ ñà0     àà0    `	(#(# àà      àÔ
     ÔC.à    `	 àMerger€ProceedingsÔ    Ý   ÔóóÐ    ¾ `	(#`	(#  ÐÝ ‚    ÿÕÛ  	Ð ` ÝÔ     ÔÔ     ÔÓ$   ° °‚, `	‹X° °�X$ Óñ  ñóóñ ñÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          Óà    Ü àñ  ñß� €9 O   ; ; ; ; Q               A =  z  ,Èû x  x 
  0  €   €  @  È          @  E,|x x     x ð         ,|x x    � ßñ ññ  ñÔ   ??US. ,  ÔÔ   USÜü! Ôñ ñà     àThe€Board€has€also€recognized€the€importance€of€product€and€geographic€competition€inÏrecent€merger€cases.€€As€a€general€matter,€the€Board€and€the€ICC€have€acknowledged€that€evenÏwhere€the€number€of€routing€options€decreases€from€two€originating€or€terminating€carriers€toÏone€as€the€result€of€the€merger,€"geographic€or€product€competition€may€be€sufficient€to€act€as€aÏconstraint€to€prevent€competitive€harm."€€òòUnion€Pacific€Corporation,€et€al.€ð!ð€Control€and€MergerÐ   	 üL   Ðð!ð€Southern€Pacific€Rail€Corporation,€et€al.óó,€Decision€No.€44,€F.D.€No.€32760€at€100€(servedÐ   	 Ü,   ÐAugust€12,€1996)€("òòUP/SP"óó);€òòBurlington€Northern€Inc.,€et€al.€ð!ð€Control€and€Merger€ð!ð€Santa€FeÐ   	 ¼   ÐPacific€Corporation,€et€al.óó,€Decision€No.€38,€F.D.€No.€32549€at€55(served€August€23,€1995)Ð   	 œì   Ð("òòBNSFóó").€€In€particular,Ô'  ž¾_Ü   Ôñ  ñÓ      Óñ ñÓ
      ¾Û  ÓÐ   	 |!Ì   ÐÝ ‚  ÿÿÿÏÝ  ü!Ü ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          Óà8    Ü àà8    Üü!Üü! àsource€competition€can€be€an€effective€competitive€restraint€on€rail€rates€whenÏsources€of€supply€are€numerous,€cost€conditions€of€alternative€sources€of€supplyÏare€homogenous,€transport€costs€from€alternative€sources€are€similar,€deliveredÏproducts€are€close€substitutes,€and€the€share€of€transport€costs€in€the€deliveredÏprice€of€the€product€is€high.ñ  ñÓ      Óñ ñÓ
   ¾Û     ÓÐ    Ð Ð   ÐÝ ‚  ÿÿÿã  ü!Ü ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          ÓòòUP/SPóó,€at€125.€€In€the€UP/SP€merger,€the€Board€specifically€addressed€the€effectiveness€of€theseÐ   	 Ú(*$'   Ðcompetitive€factors€in€the€context€of€several€transportation€markets.€€òòSeeóó,€òòe.g.óó,€òòUP/SPóó€at€126,Ð   	 º*
&)   Ð132.€€òòSeeóó€òòalsoóó€òòBNSFóó€at€68€(acknowledging€the€importance€of€these€competitive€factors€in€electricÐ   	 š,ê'+   Ðutility€markets).ñ  ñÓ      Óñ ñÓ
      ¾Û  ÓÌÝ ‚  ÿÿÿNå  ü!Ü ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÓH  . ° °  `	 ¸  h À  p È   x Ð  (#° °‚, `	‹XH ÓÔ     ÔÔ     ÔòòÝ     ÝÓ          Óà0     àà0    `	(#(# àà      àÔ
     ÔD.à    `	 àMarketing€TestimonyÔ    fè   Ôóóñ  ñÓ      Óñ ñÓ
   ¾Û     ÓÐ    �à `	(#`	(#  ÐÝ ‚    ÿžç  carr ÝÔ     ÔÔ     ÔÓ$   ° °‚, `	‹X° °�X$ Óñ  ñóóñ ññ  ñóóñ ñÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          Óà    Ü àà     àThe€verified€statements€of€railroad€marketing€officers€submitted€with€these€commentsÏestablish€that€product€and€geographic€competition€continue€to€be€widespread€and€effective.€€AsÏthe€individual€witness€statements€illustrate,€railroads€are€forced€to€set€their€rates€to€reflect€theÏproduct€and€geographic€competition€they€confront.€€Sometimes,€if€they€fail€to€heed€theÏcompetitive€forces€or€decline€to€meet€the€competition,€they€lose€the€business€altogether.€€A€fewÏof€the€examples€set€forth€in€the€verified€statements€of€the€geographic€and€product€competitionÏthat€railroads€face€in€today's€marketplace€are€described€below.ñ  ñÓ      Óñ ñÓ
      ¾Û  ÓÌÝ ‚  ÿÿÿjé  ü!Ü ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÓE  + ° ° `	 ¸  h À  p È   x Ð  (#° °‚, `	‹XE ÓÔ     ÔÔ     ÔòòÝ     ÝÓ          Óà0    `	 àà0    ¸`	(#`	(# àà     `	 àÔ
     Ô1.à    ¸ àGeographic€CompetitionÔ    mí   Ôóóñ  ñÓ      Óñ ñÓ
   ¾Û     ÓÐ    n¾ ¸(#¸(#  ÐÝ ‚    ÿ¨ì  carr ÝÔ     ÔÔ     ÔÓ'   ° °‚, `	‹X° ° `	‹X' Óñ  ñóóñ ññ  ñóóñ ñÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          ÓÓH  . ° °  `	 ¸  h À  p È   x Ð  (#° °‚, `	‹XH Óà     àà    `	 àMr.€Richard€Peterson,€Senior€Director€of€Interline€Marketing€of€Union€PacificÏRailroad€Company€("UP"),€notes€that€UP€is€the€only€railroad€serving€most€of€the€grain€elevatorsÏlocated€on€its€system.€€However,€if€UP€does€not€charge€competitive€rates€from€those€grainÏelevators€that€it€exclusively€serves,€farmers€and€merchants€will€truck€the€grain€to€elevatorsÏlocated€on€other€railroads.€€He€notes€as€well€that€because€individual€grain€products€(i.e.,€wheat,Ïbarely,€corn)€are€largely€fungible€commodities,€UP's€grain€shippers€will€lose€business€and,Ïconsequently,€so€will€UP,€unless€it€sets€rates€to€allow€grain€moving€on€UP€to€compete€effectivelyÏwith€grain€produced€elsewhere.ñ  ñÓ      Óñ ñÓ
      ¾Û  ÓÌà     àà    `	 àDouglas€J.€Babb€and€Gregory€T.€Swienton€are€Senior€Vice€Presidents€of€theÏBurlington€Northern€and€Santa€Fe€Railway€Company.€€They€describe€the€geographic€optionsÏenjoyed€by€American€Electric€Power's€("AEP")€Rockport€Plant,€situated€on€the€Ohio€River.€ÏWhile€AEP€receives€its€coal€primarily€via€barge,€three€major€railroads€have€the€ability€to€deliverÐ   	 Ì+'*   Ðcoal€to€the€river.€€As€a€result,€the€rates€quoted€by€BNSF€to€deliver€Powder€River€Basin€Coal€toÏAEP€are€influenced€by€UP's€ability€to€deliver€coal€from€Powder€River€Basin€mines,€as€well€asÏmines€in€Wyoming€and€Colorado,€and€by€CSXT's€ability€to€deliver€coal€from€Appalachian€minesÏto€the€Ohio€River.€€Messrs.€Babb€and€Swienton€also€point€to€the€leverage€exercised€by€utilitiesÏwhich€have€multiple€plants,€even€where€each€individual€is€exclusively€served€by€a€single€carrier.€ÏThe€leverage€results€from€the€ability€of€these€utilities€to€alter€the€production€levels€at€theirÏvarious€sites€to€take€advantage€of€the€most€favorable€rates€for€delivered€fuels.€€For€example,ÏUnion€Electric's€Labadie€plant€is€supplied€by€UP€from€the€Powder€River€Basin,€while€its€RushÏIsland€and€Sioux€plants€are€supplied€by€BNSF€from€the€Powder€River€Basin€and€Illinois.€€IfÏBNSF's€rates€to€the€Rush€Island€and€Sioux€plants€are€too€high,€Union€Electric€can€generate€moreÏpower€from€the€Labadie€plant€served€by€UP.Ìà     àà    `	 àJohn€Anderson,€Executive€Vice€President€of€Sales€and€Marketing€at€CSXÏTransportation,€describes€a€situation€involving€a€CSXT€processing€customer,€located€inÏAlabama,€for€which€CSXT€ships€product€to€manufacturing€plants€in€South€Carolina.€€AÏcompetitor€of€CSXT's€customer€sought€to€expand€its€business€by€planning€to€build€a€newÏprocessing€plant€near€the€South€Carolina€manufacturer,€thus€avoiding€a€rail€move.€€In€the€face€ofÏthis€competitive€pressure,€CSXT€and€its€customer€forged€a€partnership€resulting€in€the€reductionÏof€the€delivered€price€of€the€product€and€the€retention€of€the€business.Ìà     àà    `	 àDonald€Seale€and€J.W.€Fox€of€Norfolk€Southern€describe€an€instance€ofÏgeographic€competition€from€the€merchandise€side€of€NS's€business.€€They€report€that€Georgia€isÏa€destination€market€served€by€NS€for€the€movement€of€caprolactam,€a€chemical€used€in€textileÏmanufacturing.€€NS€felt€compelled€to€reduce€the€rates€it€charged€a€South€Carolina€shipper€of€thisÐ   	 ,`'*   Ðproduct€in€order€to€meet€competition€from€a€competitor€of€their€customer€based€in€Georgia€andÏserved€by€CSXT.ÌÝ ‚  ÿÿÿwî  ü!Ü ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÓ?  + ° ° `	 ¸  h À  p È   x Ð  (#° °�X? ÓÔ     ÔÔ     ÔòòÝ     ÝÓ          Óà0    `	 àà0    ¸`	(#`	(# àà     `	 àÔ
     Ô2.à    ¸ àProduct€CompetitionÔ    Èü   Ôóóñ  ñÓ     er Óñ ñÓ
   ¾Û     ÓÐ    pÀ ¸(#¸(#  ÐÝ ‚    ÿ	ü  carr ÝÔ     ÔÔ     ÔÓ!  
 ° °�X° ° `	‹X! Óñ  ñóóñ ñÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          ÓÓB  . ° °  `	 ¸  h À  p È   x Ð  (#° °�XB Óà     àà    `	 àMessrs.€Seale€and€Fox€of€NS€also€provide€a€variety€of€examples€of€productÏcompetition,€noting€that€NS's€rates€for€many€products€are€constrained€by€their€customers'€abilityÏto€substitute€alternatives.€€Beet€sugar€and€cane€sugar€are€interchangeable,€as€are€kaolin€clay€andÏcalcium€carbonate,€and€talc€and€industrial€sand.€€If€NS's€rates€are€out€of€line,€manufacturers€usingÏraw€materials€shipped€via€the€NS€will€switch€to€alternatives€moved€by€a€competitor€or€producedÏlocally.ñ  ñÓ     er Óñ ñÓ
      ¾Û  ÓÌà     àà    `	 àJohn€Anderson€of€CSXT€offered€another€example€of€product€competition,Ïdiscussing€the€transportation€of€grain€to€lots.€€He€reported€that€North€Carolina€feed€millsÏfrequently€replace€the€corn€delivered€by€CSXT€from€Ohio€with€locally€grown€wheat€in€their€mixÏof€grains.€€If€CSXT€wants€to€continue€to€deliver€Ohio€corn,€it€must€offer€rates€which€make€theÏcorn€moved€by€rail€more€attractive€than€the€wheat€available€locally.Ìà     àà    `	 àThe€BNSF€marketing€officers,€Messrs.€Babb€and€Swienton,€discuss€productÏcompetition€in€the€context€of€one€of€BNSF's€utility€customers.€€Houston€Lighting€&€PowerÏoperates€gas,€coal,€lignite€and€nuclear€plants€„„€all€supplying€electricity€to€the€same€region.€€If€theÏdelivered€price€of€the€Powder€River€Basin€Coal€moved€by€BNSF€is€too€high,€HL&P€has€theÏability€to€shift€incremental€coal€generation€to€its€gas„fired€plants,€which€have€significant€excessÏcapacity.€€This€flexibility€has€been€frequently€raised€during€rail€negotiations€with€BNSF.Ìà     àà    `	 àFinally,€in€another€utility€related€example,€NS€witnesses€Fox€and€Seale€describeÏthe€phenomenon€of€coal€tolling,€a€practice€whereby€a€high€cost€utility€will€divert€its€coal€supplyÐ   	 î+>'*   Ðto€a€nearby€generator€and€then€purchase€that€second€utility's€electricity€to€supply€its€customers.€ÏCarolina€Power€&€Light,€which€received€coal€via€Norfolk€Southern,€employed€this€option€byÏhaving€its€coal€sent€via€CSXT€to€Appalachian€Power€and€then€purchasing€the€electricity.€ÏCarolina€Power€&€Light€stressed€its€ability€to€enter€into€such€a€transaction€in€its€subsequent€rateÏrenegotiations€with€NS.Ìà     àà    `	 àThe€evidence€is€irrefutable€that€product€and€geographic€competition€are€a€fact€ofÏlife€in€the€contemporary€marketing€of€rail€transportation€services.€€The€Board's€proposal€simplyÏto€disregard€product€and€geographic€competition€entirely€in€rail€rate€cases€would€ignore€thisÏreality.€€ñ  ñÓ     er Óñ ñÓ
   ð6     ÓÌÝ ‚  ÿÿÿ¼ý  r,€" ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÓB  . ° °  `	 ¸  h À  p È   x Ð  (#° °�XB ÓÔ     ÔÔ     ÔòòÝ     ÝÓ          Óà0     àà     ° àÔ
      ÔIV.à     àMOST€UTILITY€COAL€SHIPMENTS€ARE€SUBJECT€TO€INTENSE€ANDÐ   	 ÷G   ÐINCREASINGLY€EFFECTIVE€GEOGRAPHIC€AND€PRODUCTÏCOMPETITION.Ô     	  Ôóóñ  ñÓ     er Óñ ñÓ
   ¾Û ð6  ÓÐ    ×' (#(#  ÐÝ ‚    ÿl tch€ ÝÔ     ÔÔ     ÔÓ  
 ° °�X° °�X Óñ  ñóóñ ñÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          Óà     àThe€implications€of€the€Board's€proposal€can€be€seen€most€starkly€in€the€context€of€railÏtransportation€of€coal.€€Indeed,€electric€utility€shippers€of€coal€obviously€understand€the€potentÏforce€of€geographic€competition€since€one€of€the€specific€objectives€of€certain€of€the€complainingÏshippers€in€the€consolidated€òòBottleneckóó€proceeding€was€to€obtain€the€benefits€of€geographicÐ   	 5…   Ðcompetition€„„€i.e.,€transportation€service€from€a€second€railroad€serving€different€mines€fromÏthose€served€by€the€bottleneck€carrier.€€It€would€be€ironic€for€the€Board€to€eliminate€fromÏconsideration€a€form€of€competition€that€coal€shippers€have€so€vigorously€pursued.€€It€would€beÏdoubly€ironic€for€the€Board€to€eliminate€product€and€geographic€competition€from€marketÏdominance€determinations€at€the€same€time€that€deregulation€in€utility€markets€is€making€thoseÏcompetitive€forces€all€the€more€powerful€as€constraints€on€rail€rates.ñ  ñÓ     er Óñ ñÓ
      ¾Û  ÓÌà     àCoal€is€the€most€significant€commodity€transported€by€U.S.€railroads,€both€in€terms€ofÐ   	 U,¥'*   Ðton„miles€and€total€revenues.×  ƒP         ×Ý
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 ×€€The€vast€majority€of€this€coal€traffic€moves€under€railÐ   	 °      Ðtransportation€contracts€mutually€agreed€to€by€shippers€and€railroads.€€A€small€percentage€of€coalÏtraffic€moves€pursuant€to€common€carrier€rates;€a€very€small€number€of€these€shipments€result€inÏrate€litigation.€€Nonetheless,€these€few€coal€rate€cases€constitute€a€majority€of€the€rate€complaintsÏthat€have€been€brought€before€the€Board€in€recent€years.€€Thus,€the€Board's€proposal€to€eliminateÏconsideration€of€geographic€and€product€competition€must€be€evaluated€in€light€of€its€likelyÏeffect€in€these€coal€rate€cases.€€Perversely,€this€approach€to€regulation€would€be€likely€to€òòincreaseóóÐ   	 ð@   Ðthe€burdens€of€coal€rate€litigation€„„€on€the€parties€and€the€Board€„„€by€permitting,€perhapsÏencouraging,€needless€and€unwarranted€expansion€of€the€Board's€jurisdiction€to€include€casesÏinvolving€rail€transportation€that€is€clearly€subject€to€effective€competition.€Ìà     àAs€described€in€the€accompanying€Verified€Statement€of€Robert€L.€Sansom,€rail€rates€forÏcoal€transportation€have€fallen€dramatically€(about€50�percent€in€real€terms)€over€the€past€decade.€ÏThis€decline€has€occurred€whether€or€not€a€coal€shipper€has€either€direct€intramodal€or€intermodalÏtransportation€alternatives€(òòi.e.óó,€alternative€rail€or€nonrail€carriers€providing€competitive€serviceÐ   	 `   Ðbetween€the€same€origins€and€destinations).€€Shippers€deemed€òònotóó€to€have€either€intramodal€orÐ   	 ð@   Ðintermodal€competition,€as€the€Board€and€the€ICC€have€defined€these€terms,€benefit€from€intenseÏand€effective€òògeographicóó€competition,€in€which€a€competing€carrier€offers€to€(and€often€does)Ð   	 °"     Ðtransport€the€shipper's€coal€to€a€different€destination,€or€from€a€different€origin.€€In€fact,€moreÏthan€half€of€the€rail„served€coal„fired€power€generating€capacity€in€the€U.S.€is€represented€byÏpower€plants€that€also€receive€competitive€rail€service€from€other€carriers€and€other€modes€ofÐ   	 P( #&   Ðtransportation.€€The€fact€that€many€coal€shippers€currently€enjoy€effective€geographicÏcompetition€explains,€at€least€in€part,€the€significant€drop€in€rail€rates€for€coal€transportation€overÏthe€past€decade.€€Indeed,€as€Dr.�Sansom€explains,€the€remarkable€decline€in€rail€rates€for€coalÏtransportation€in€recent€years€has€extended€to€electric€power€generating€plants€served€only€by€aÏsingle€rail€carrier.Ìà     àElectric€power€is€a€quintessentially€fungible€commodity,€whether€it€is€produced€fromÏcoal,€natural€gas,€nuclear€reactors,€or€hydroelectric€plants.€€The€market€for€electric€power€isÏrapidly€becoming€even€more€competitive,€in€response€to€recent,€fundamental€changes€in€theÏindustry.€€These€recent€changes€include€the€FERC's€Order€No.�888€proceeding,€in€which€thatÏagency€adopted€transmission€rules€designed€to€facilitate€expansion€of€the€competitive€bulk€powerÏmarket,×  ƒQ         ×Ý
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 ×€along€with€other€fundamental€regulatory€initiatives,€such€as€the€deregulation€of€electricÐ   	 pÀ   Ðpower€generation,€the€expansion€of€regional€energy€markets€administered€by€independent€systemÏoperators€("ISOs"),€and€soon,€the€introduction€of€retail€competition€in€some€states.€€òòSeeóó€SansomÐ   	 0€   ÐV.S.€at€26„28.€€Thus,€electricity€increasingly€is€generated,€dispatched,€conveyed€by€transmissionÏlines€and€distribution€facilities€and,€ultimately,€bought,€sold€and€traded€in€a€competitiveÏmarketplace€on€the€basis€of€the€relative€cost€of€production.€€Competition€in€the€market€forÏelectric€power€inevitably€constrains€electricity€prices,€as€well€as€the€costs€of€all€necessary€inputs,Ïincluding€railroad€transportation€of€coal.€€òòId.óó€€Ð   	 �$à"   Ðà     àOther€continuing€developments€in€the€electric€utility€industry€are€likely€to€cause€theseÐ   	 p&À!$   Ðcompetitive€constraints€to€become€even€more€intense€and€more€pervasive.€€First,€new€technology,Ïincluding€combined„cycle€gas€turbine€generators,€will€increase€competitive€pressures,€andÏinevitably€will€decrease€coal€volumes€consumed€by€old„fashioned€coal€burning€steam€generationÏplants.€€Sansom€V.S.€at€38„41.€€These€state„of„the„art€generation€systems€are€not€only€highlyÏefficient;€they€have€lower€capital€costs€than€conventional€steam€generation€plants,€and€areÏquicker€to€build,€easier€to€permit€and€easier€to€locate.€€òòId.óó€€These€factors€make€natural€gasÐ   	 `	
   Ðcombined„cycle€plants€the€predominant€choice€for€new€electric€generating€capacity,€includingÏtraditional€"baseload"€generation,€and€make€these€plants€increasingly€competitive€with€existingÏcoal„fired€generating€capacity.€€òòId.óó€Ý ‚  ÿÿÿ~
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 ×óóñ  ñòòóóñ ñÐ   	 °    Ðà     àSecond,€natural€gas„fired€plants€will€become€far€more€competitive€relative€to€steam„firedÏplants€as€a€series€of€newly€promulgated€and€proposed€additional€environmental€constraints€takeÏeffect€in€the€near€future.€€For€example,€significantly€more€restrictive€sulfur€dioxide€emissionÏlimitations€will€be€imposed€on€coal„fired€power€plants€when€Phase€2€of€the€Clean€Air€ActÏAmendments€of€1990€takes€effect€on€January€1,€2000.€€Under€these€restrictions,€essentially€allÏlarge€coal„fired€generating€plants€will€realize€a€significant€increase€in€their€generating€costs,Ïwhile€combined„cycle€gas€plants,€which€emit€virtually€no€sulfur€dioxide,€will€experience€noÏadditional€costs,€thus€enhancing€their€competitive€position€relative€to€coal„fired€plants.€€SansomÏV.S.€at€41„45.€Ìà     àMoreover,€newly€proposed€regulatory€initiatives€by€the€Environmental€Protection€AgencyÏ("EPA"),€including€new€controls€on€ozone€production,€and€national€ambient€air€quality€standardÐ   	 P( #&   Ðfor€fine€particulates,€also€would€impose€substantial€additional€penalties€on€coal„fired€generatingÏplants€while€leaving€natural€gas„fired€plants€relatively€unscathed,€further€enhancing€theirÏcompetitive€position.€€òòId.óó€€In€addition,€the€United€States'€commitment€to€reduce€emissions€ofÐ   	 pÀ   Ðglobal„warming€gases€seven€percent€below€1990€levels,€undertaken€in€the€Kyoto€accord€signed€inÏDecember,€1997,€essentially€would€require€electric€utilities€to€reduce€coal„fired€generation€byÏhalf€in€the€next€decade.€€òòId.óó€€If€ratified€and€enforced,€these€restrictions€would€drastically€reduceÐ   	 `	
   Ðcoal€volumes€transported€by€railroads€and€improve€the€competitive€position€of€natural€gas„firedÏgenerating€capacity€via„a„via€coal„fired€plants.€€òòId.óóÐ   	 Ð    Ðà     àThird,€increasing€concentration€in€the€electric€utility€industry€resulting€from€a€series€ofÏmergers€will€expand€the€geographic€scope€of€several€major€electric€utilities,€facilitating€theirÏability€to€shift€power€production€from€plants€served€by€one€carrier€to€those€served€by€itsÏcompetitors,€effectively€rewarding€carriers€that€charge€lower€coal€transportation€rates,€andÏpunishing€those€whose€rates€are€relatively€higher.€€òòId.óó€at€43„44.€Ð   	 0€   Ðà     àAll€of€these€factors€will€combine€to€increase€the€bargaining€power€of€domestic€electricÏutilities€vis„a„vis€railroads€in€the€near€future,€by€a€substantial€margin.€€Indeed,€Vice€ChairmanÏOwen€reached€precisely€this€conclusion€in€his€separate€opinion€in€the€recent€òòWest€Texasóó€coal€rateÐ   	 Ð     Ðcase.Ý ‚  ÿÿÿÿÿÿÿor€p ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÔ     ÔÔ     ÔòòÝ     Ý×  ƒS         ×Ý
 ƒD  ÿÿ Ýò…òÚ    Ú12Ú
   
 Úó…óÝ     Ý×
   
 ×óó€€While€concurring€in€the€Board's€decision€to€reject€a€claim€of€effective€electricity€productÐ   	 °"     Ðcompetition€based€on€the€specific€circumstances€of€the€case,€Vice€Chairman€Owen€pointed€toÏrecent€developments€in€the€electric€utility€industry€as€warranting€"careful€analysis"€of€futureÏclaims€of€such€competition€in€utility€coal€cases.€€òòWest€Texasóó€at€36.€€Further,€Vice€ChairmanÐ   	 P( #&   ÐOwen€predicted€that€future€utility€coal€complaints€would€properly€be€dismissed€on€grounds€ofÏeffective€electricity€product€competition:ñ  ñÓ     to Óñ ñÓ
   ð6     ÓÌÝ ‚  ÿÿÿÿÿÿÿor€p ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          Óà8     àà8    `	Ð Ð  àSometime€in€the€future,€it€should€be€expected€that€a€rate€complaintÏwill€be€brought€before€this€agency€by€an€electric€utility€that€has€asÏa€feasible€alternative€the€ability€to€obtain€an€adequate€supply€ofÏlower„cost€electric€power€from€sources€other€than€its€ownÏgenerating€plant.ñ  ñÓ     to Óñ ñÓ
   ¾Û ð6  ÓÐ    `	x`	x  ÐÝ ‚  ÿÿÿŒ0 or€p ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          ÓIt€would€be€particularly€inappropriate€for€the€Board€to€decide€to€ignore€product€and€geographicÏcompetition€at€the€very€time€that€those€forces€are€emerging€as€potent€forces€to€discipline€the€ratesÏof€the€most€important€commodity€handled€by€rail.€ñ  ñÓ     to Óñ ñÓ
      ¾Û  ÓÌà     àThe€effectiveness€of€the€competitive€constraints€discussed€above€may€vary€to€someÏdegree€in€individual€cases,€and€Ô €T    ÔAAR€does€not€contend€that€these€constraints€would€compel€aÏfinding€of€no€market€dominance€in€every€coal€rate€case€that€might€be€brought.€€By€the€sameÏreasoning,€however,€it€cannot€rationally€be€concluded€òòa€priorióó€that€evidence€of€geographic€andÐ   	 •å   Ðproduct€competition,€no€matter€how€compelling,€can€never€suffice€to€establish€"effectiveÏâ
    
 âcompetition"€within€the€meaning€of€the€statute.ñ  ñÓ     to Óñ ñÓ
   ð6     ÓÐ   	 U¥   ÐÝ ‚  ÿÿÿ‘2 or€p ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÓB  . ° °  `	 ¸  h À  p È   x Ð  (#° °�XB ÓÔ     ÔÔ     ÔòòÝ     ÝÔ&     ÔÓ          Óà0     àà     ° àÔ
      ÔÔ   ??US. ,  ÔV.à     àß� €9 U   ; ; ; ; Q               A =  z  ,Èû x  x 
  0  €   €  @  È          @  E,°x x     x ð         ,°x x    � ßÔ   US??. ,  ÔTHE€BOARD€CAN€SUBSTANTIALLY€REDUCE€ANY€BURDENS€ASSOCIATEDÐ   	 °      ÐWITH€DEVELOPING€AND€PRESENTING€EVIDENCE€ON€GEOGRAPHICÏCOMPETITION€WITHOUT€ELIMINATING€THESE€FACTORS€FROMÏCONSIDERATION€IN€MARKET€DOMINANCE€CASES.Ô     c7  Ôóóñ  ñÓ     to Óñ ñÓ
   ¾Û ð6  ÓÐ    €Ð (#(#  ÐÝ ‚    ÿ©6 .€€S ÝÔ     ÔÔ     ÔÓ  
 ° °�X° °�X Óñ  ñóóñ ñÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          Óà     àThe€written€comments€filed€with€the€Board€in€Ex€Parte€No.€575€do€not€reflect€aÏwidespread€concern€with€product€and€geographic€as€substantive€standards.€€Of€the€90€writtenÏstatements€filed€in€Ex€Parte€No.€575,€only€three€specifically€take€issue€with€the€Board'sÏconsideration€of€product€and€geographic€competition€in€market€dominance€determinations.Ý ‚  ÿÿÿÓ9 he„a ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÔ     ÔÔ     ÔòòÝ     Ý×  ƒV         ×Ý
 ƒD  ÿÿ Ýò…òÚ    Ú13Ú
   
 Úó…óÝ     Ý×
   
 ×óóÐ   	 Þ.
   Ðâ
    
 âSignificantly,€several€commenting€parties€acknowledged€the€potency€of€these€forces€in€theÏmarketplace.òòòò€óó€óóFor€example,€an€economist€submitting€testimony€on€behalf€of€the€AttorneysÐ   	 žî   ÐGeneral€of€Ohio,€Illinois,€Texas€and€Iowa,€discussed€the€interchangeability€of€coal€and€fuel€oilÏfor€some€utilities,€of€various€nitrogen€fertilizers€for€farmers,€and€of€different€grain€products€forÏfeed€producers,€concluding€ñ  ñÓ     of Óñ ñÓ
      ¾Û  ÓÌÝ ‚  ÿÿÿÿÿÿÿhe„a ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          Óà8     àà8    `	Ð Ð  à[i]n€those€instances€in€which€a€substitute€input€can€be€obtained€viaÏan€alternative€rail€carrier€or€through€the€use€of€an€alternativeÏtransport€mode,€the€availability€of€product€substitutes€canÏdiscipline€rail€pricing€practices.Ý ‚  ÿÿÿŒ> he„a ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÔ     ÔÔ     ÔòòÝ     Ý×  ƒW     P  ×Ý
 ƒD  ÿÿ Ýò…òÚ    Ú14Ú
   
 Úó…óÝ     Ý×
   
 ×óóñ  ñÓ     of Óñ ñÓ
   ¾Û     ÓÐ    î> `	x`	x  ÐÝ ‚  ÿÿÿÿÿÿÿhe„a ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          Óà     àA€spokesman€for€Dow€Chemical€described€the€advantages€shippers€can€have€if€theyÏoperate€several€plants€served€by€different€origin€carriers,€acknowledging€thatñ  ñÓ     of Óñ ñÓ
      ¾Û  ÓÌÝ ‚  ÿÿÿ-A he„a ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          Óà8     àà8    `	Ð Ð  àOne€of€the€options€that€chemical€companies€have€historicallyÏattempted€to€use€for€negotiating€leverage€at€captive€plants€has€beenÏto€shift€product€sourcing€or€production€to€facilities€not€captive€toÐ   
 L$œ"   Ðthat€railroad.€Ý ‚  ÿÿÿŽB he„a ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÔ     ÔÔ     ÔòòÝ     Ý×  ƒX         ×Ý
 ƒD  ÿÿ Ýò…òÚ    Ú15Ú
   
 Úó…óÝ     Ý×
   
 ×óóñ  ñÓ     of Óñ ñÓ
   ¾Û     ÓÐ    °    `	x`	x  ÐÝ ‚  ÿÿÿÿÿÿÿhe„a ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          ÓA€witness€for€FirstEnergy€described€the€potency€of€geographic€competition€at€the€source,€statingÏthatñ  ñÓ     of Óñ ñÓ
      ¾Û  ÓÌÝ ‚  ÿÿÿ6E he„a ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          Óà8     àà8    `	Ð Ð  àFirstEnergy's€fuel€needs€could€be€met€through€coal€from€a€varietyÏof€sources,€which€coal€could€be€transported€by€a€variety€of€originÏcarriers.€€This€source€diversity,€of€course,€presents€the€opportunityÏfor€competition€between€both€coal€suppliers€and€origin€rail€carriersÏto€earn€FirstEnergy's€business.Ý ‚  ÿÿÿRF he„a ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÔ     ÔÔ     ÔòòÝ     Ý×  ƒY     p  ×Ý
 ƒD  ÿÿ Ýò…òÚ    Ú16Ú
   
 Úó…óÝ     Ý×
   
 ×óó€ñ  ñÓ     of Óñ ñÓ
   ¾Û     ÓÐ    î>	
 `	x`	x  ÐÝ ‚  ÿÿÿÿÿÿÿhe„a ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÓ      ÓÔ     ÔÔ     ÔÝ     ÝÓ          ÓAnd€the€Department€of€Transportation€generally€criticized€attempts€at€"artificially€barring"Ïparticular€forms€of€competition,€commenting€that€".€.€.€approaching€deregulation€in€the€electricÏutility€industry€may€introduce€more€geographic€and€product€competition€into€coal€transportationÏthan€exists€today."Ý ‚  ÿÿÿ?I he„a ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÔ     ÔÔ     ÔòòÝ     Ý×  ƒZ     P  ×Ý
 ƒD  ÿÿ Ýò…òÚ    Ú17Ú
   
 Úó…óÝ     Ý×
   
 ×óóñ  ñÓ     of Óñ ñÓ
      ¾Û  ÓÐ   	 Lœ   Ðà     àThere€is€no€broad€consensus€that€product€and€geographic€competition€are€insignificantÏand€should€be€ignored.€€The€more€pervasive€concern,€as€the€Board€observed€in€its€Notice€ofÏProposal,€is€that€the€complexity€and€burdens€involved€in€rate€reasonableness€proceedingsÏconstitute€an€impediment€to€obtaining€relief€and€perhaps€a€deterrent€to€bringing€cases€in€the€firstÏplace.Ý ‚  ÿÿÿÿÿÿÿhe„a ÝÔ     ÔÔ     ÔÝ     ÝÝ  ‚  ÿÿÿ ÝÔ     ÔÔ     ÔòòÝ     Ý×  ƒ[     0  ×Ý
 ƒD  ÿÿ Ýò…òÚ    Ú18Ú
   
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 ×óó€€AAR€does€not€believe€the€burdens€associated€with€litigating€market€dominance€issues,Ð   	 ¬ü   Ðincluding€issues€relating€to€product€and€geographic€competition,€are€substantial€and€we€think€it€isÏunlikely€that€any€shipper€has€been€deterred€from€filing€a€rate€complaint€on€this€›ground.Ð   	 l"¼    Ðà     àEven€if€the€burdens€imposed€by€rate€cases€were€substantial,€those€burdens€do€not€justifyÏjettisoning€an€important€component€of€the€substantive€standards.€€Moreover,€consideration€ofÏproduct€and€geographic€competition€does€not€contribute€disproportionately€to€the€time€andÏexpense€of€rate€cases.€With€the€revisions€to€the€evidentiary€standards€adopted€in€Ex€Parte€No.Ï320€(Sub„No.€3),€2€¢I.C.C.2d£€1€(1985),€railroads€already€have€the€burden€of€proof€on€product€andÏgeographic€competition.€€Therefore,€shippers€need€not€come€forward€with€any€evidence€on€thisÏsubject€unless€and€until€railroads€have€submitted€evidence€on€these€factors.Ìà     àTo€the€extent€railroads€have€sought€inappropriate€and€unduly€broad€discovery€fromÏshipper€complainants,€such€excesses€can€and€should€be€addressed.€€Specifically,€the€Board€couldÏadopt€as€part€of€its€formal€rules€the€limitations€on€discovery€imposed€in€STB€Docket€No.€42022,Ïòò¢FMC£€Wyoming€Corp€v.€Union€Pacific€Railroad€Coóó.€€Those€rules€would€require€a€carrier€seekingÐ   	 pÀ   Ðdiscovery€in€a€rate€reasonableness€proceeding€to€identify€with€specificity€the€product€andÏgeographic€competition€it€asserts€is€effective,€to€explain€the€basis€of€that€assertion€to€avoidÏfishing€expeditions€and€to€tailor€its€requests€narrowly€to€elicit€only€the€information€needed€toÏprove€the€effectiveness€of€the€specific€competition€it€identifies.Ìà     àThere€may€well€be€other€procedural€changes€that€are€warranted.€€¢AAR£€would€welcomeÏconstructive€suggestions€for€reducing€the€burdens€associated€with€market€dominance€discovery€ÌÔ& A    Ôand€evidence€in€rate€cases€and€looks€forward€to€working€with€other€parties€to€achieve€thisÏobjective.Ìà     àà    `	 àà    ¸ àà     àà    h àà    À àà     àRespectfully€submitted,ÌÝ ‚  ÿÿÿÿÿÿÿhe„a ÝÔ     ÔÔ     ÔÝ     ÝÓ          Óà     àà    `	 àà    ¸ àà     àà    h àà    À àà     à_______________________________ÌOf€Counsel:à    `	 àà    ¸ àà     àà    h àà    À àà     àLOUIS€P.€¢WARCHOT£Ð   	  +p&)   Ðà     àà    `	 àà    ¸ àà     àà    h àà    À àà     àKENNETH€P.€¢KOLSON£ÌJEFFREY€R.€¢MORELAND£à     àà    h àà    À àà     àAssociation€of€American€RailroadsÐ   	  -P(+   ÐRICHARD€E.€¢WEICHER£à     àà    h àà    À àà     à50€F€Street,€¢N.W.£Ð   	 °      ÐThe€Burlington€Northern€and€Santa€Fe€à    À àà     àWashington,€D.C.€€20001Ð   	  ð    Ð€€€€€€€€Railway€CompanyÌà     àà    `	 àà    ¸ àà     àà    h àà    À àà     àSAMUEL€M.€¢SIPE£,€JR.ÌJEAN€PIERRE€¢OUELLET£à     àà    h àà    À àà     àF.€MICHAEL€KAILÐ   	 pÀ   ÐCanadian€National€Railway€Companyà    À àà     àANTHONY€¢LaROCCA£Ð   	 `	°   Ðà     àà    `	 àà    ¸ àà     àà    h àà    À àà     à¢Steptoe£€&€Johnson,€¢LLP£Ì¢MARCELLA£€W.€¢SZEL£à     àà    h àà    À àà     à1330€Connecticut€Avenue,€¢N.W.£Ð   	 @�   ÐTIMOTHY€¢MULCAHY£à     àà    h àà    À àà     àWashington,€D.C.€€20036„1795Ð   	 0€   ÐCanadian€Pacific€Railway€Companyà    h àà    À àà     à(202)€429„6486Ð   	  p	   Ðà     àà    `	 àà    ¸ àà     àà    h àà    À àà     àÌTIMOTHY€T.€¢O'TOOLE£à     àà    h àà    À àà     àG.€PAUL€¢MOATES£Ô'  @°€U  ÔÐ   	  P
   ÐCONSTANCE€L.€ABRAMSà     àà    h àà    À àà     àVINCENT€F.€¢PRADA£Ð   	 ð@   ÐConsolidated€Rail€Corporationà    h àà    À àà     à¢Sidley£€&€AustinÐ   	 à0   Ðà     àà    `	 àà    ¸ àà     àà    h àà    À àà     à1722€Eye€Street,€¢N.W.£ÌP.€MICHAEL€¢GIFTOS£à     àà    h àà    À àà     àWashington,€D.C.€€20006Ð   	 À   ÐDOUGLAS€R.€MAXWELLà     àà    h àà    À àà     à(202)€736„8175Ð   	 °    ÐÓ!   ° °  Ü#° °�X! Ó¢CSX£€Transportation,€Inc.ÌÓE  . ° °  `	 ¸  h À  p È   x Ð  (#° ° �ÄE Óà     àà    `	 àà    ¸ àà     àà    h àà    À àà     àCounsel€for€the€AssociationÌÓ!   ° °  Ü#° °�X! ÓRONALD€A.€LANEà     à€€€€of€American€RailroadsÐ   	 €Ð   ÐÓE  . ° °  `	 ¸  h À  p È   x Ð  (#° ° �ÄE ÓMYLES€L.€TOBINÌIllinois€Central€Railroad€CompanyÌÓ!   ° ° F Ü#° °�X! Óñ  ñòòóóñ ñÌÓB  . ° °  `	 ¸  h À  p È   x Ð  (#° °‚–B ÓRICHARD€P.€¢BRUENING£ÌWILLIAM€J.€¢WOCHNER£ÌKansas€City€Southern€Railway€CompanyÌÓ!   ° ° F Ü#° °�X! Óà    F àñ  ñòòóóñ ñÌÓB  . ° °  `	 ¸  h À  p È   x Ð  (#° °‚–B ÓJAMES€C.€BISHOP,€JR.ÌGEORGE€A.€¢ASPATORE£ÌNorfolk€Southern€Railway€CompanyÌÓ!   ° ° F Ü#° °�X! Óà    F àñ  ñòòóóñ ñÌÓB  . ° °  `	 ¸  h À  p È   x Ð  (#° °‚–B ÓJAMES€V.€DOLANÌ¢ARVID£€E.€ROACH€IIÌUnion€Pacific€Railroad€Companyà    h àà    À àà     àMay€29,€1998Ð   	  #ð!   Ðñ  ñÔ&     ÔÔ'     Ôñ ñœ