Letter to the Editor of the New York Times

Submitted July 29, 2009

The article by Stephen Labaton ("Antitrust Chief Hits Resistance in Crackdown," July 26, 2009) scratches the surface of the monopoly power of freight railroads.

While the Obama Administration’s broad antitrust policy may be a "reversal" from its predecessor, there is far less difference on railroad regulation.   Bush antitrust lawyers said in 2004 that the most heavily-used railroad monopoly schemes would likely be subject to antitrust law.  The problem is that the railroads are exempt from such regulation.

It's easy to see why both administrations think there's a problem:

The electricity consumers in one Louisiana city pay an extra $15 million annually because of railroad monopoly power.

Farmers often pay twice the rate to ship commodities as those with access to competitive rail.

And a Minnesota paper company found it cheaper to produce paper in Finland and import it to the U.S. instead of producing and shipping the paper domestically.

The railroad monopoly is costing jobs, consumers, and our economy.  Before government lawyers can even look at this stacked deck, Congress must revoke the railroad's antitrust exemption.  

Robert Szabo

Executive Director and Counsel

Consumers United for Rail Equity