[Federal Register Volume 64, Number 243 (Monday, December 20, 1999)]
[Notices]
[Pages 71188-71190]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-32902]
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DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
[STB Finance Docket No. 33388 (Sub-No. 90)] 1
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\1\A copy of this decision is being served on all persons
designated as POR, MOC, or GOV on the service list in STB Finance
Docket No. 33388.
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CSX Corporation and CSX Transportation, Inc., Norfolk Southern
Corporation and Norfolk Southern Railway Company--Control and Operating
Leases/Agreements--Conrail Inc. and Consolidated Rail Corporation
(Buffalo Rate Study)
AGENCY: Surface Transportation Board, DOT.
[[Page 71189]]
ACTION: Decision No. 1; Notice of Buffalo Rate Study Proceeding and
Request for Comments
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SUMMARY: In 1998, the Board approved, subject to certain conditions:
(1) The acquisition of control of Conrail Inc. and Consolidated Rail
Corporation (collectively, Conrail) by (a) CSX Corporation and CSX
Transportation, Inc. (collectively, CSX) and (b) Norfolk Southern
Corporation and Norfolk Southern Railway Company (collectively, NS);
and (2) the division of the assets of Conrail by and between CSX and
NS. One of the conditions imposed called for a 3-year study of rail
rates in the State of New York's Buffalo area (the Buffalo Rate Study
or the Study) following the division of Conrail's assets, which
occurred on June 1, 1999. Through this decision, we are initiating our
Buffalo Rate Study to examine linehaul and switching rates for rail
movements into and out of the Buffalo area. We are requiring certain
information to be submitted by CSX and NS, and are requesting public
comments to develop a more complete record. We are also setting the
timetable for the submission of additional information and comments as
the Study progresses.
DATES: For the initial 6-month review, the carriers' rail 100% waybill
files for the period beginning June 1, 1997, and ending November 30,
1999, should be made available to all interested parties and to Board
staff by December 30, 1999. CSX and NS comprehensive filings are due by
January 14, 2000; comments from other parties are due by February 14,
2000; and CSX and NS replies to comments are due by February 29, 2000.
For the first full-year review, the carriers' rail 100% waybill
files for the period ending May 31, 2000, should be made available to
all interested parties and to Board staff by June 30, 2000. CSX and NS
comprehensive filings are due by July 14, 2000; comments from all
interested parties are due by August 14, 2000; and CSX and NS replies
to comments are due by August 29, 2000.
ADDRESSES: An original and 25 copies of all documents must refer to STB
Finance Docket No. 33388 (Sub-No. 90) and must be sent to: Surface
Transportation Board, Office of the Secretary, Case Control Unit, Attn:
STB Finance Docket No. 33388 (Sub-No. 90), 1925 K Street, N.W.,
Washington, DC 20423-0001. In addition, one copy of all documents in
this proceeding must be sent to each representative: (1) Dennis G.
Lyons, Esq., Arnold & Porter, 555 12th Street, N.W., Washington, DC
20004-1202; and (2) Richard A. Allen, Esq., Zuckert, Scoutt &
Rasenberger, L.L.P., 888 Seventeenth Street, N.W., Washington, DC
20006-3939.
In addition to submitting an original and 25 copies of all paper
documents filed with the Board, parties also must submit, on 3.5-inch
IBM-compatible floppy diskettes (disks) or compact discs (CDs), copies
of all pleadings and attachments (e.g., textual materials, electronic
workpapers, data bases and spreadsheets used to develop quantitative
evidence) and clearly label pleadings and attachments and corresponding
computer diskettes with an identification acronym and pleading number.
Textual materials must be in, or convertible by and into, WordPerfect
7.0. Electronic spreadsheets must be in, or convertible by and into,
Lotus 1-2-3 97 Edition, Excel Version 7.0, or Quattro Pro Version 7.0.
Parties may individually seek a waiver from the disk-CD requirement.
The computer data contained on the computer diskettes and CDs submitted
will be subject to the protective order discussed below.
FOR FURTHER INFORMATION CONTACT: Michael A. Redisch, (202) 565-1544.
[TDD for the hearing impaired: (202) 565-1695.]
Background
In Decision No. 89, served on July 23, 1998, in STB Finance Docket
No. 33388 (Conrail), we approved, subject to certain conditions, the
acquisition of control of Conrail by CSX and NS and the division of the
assets of Conrail by and between CSX and NS. That division occurred on
June 1, 1999. Prior to this, rail service in the Buffalo area
2 was dominated by Conrail. The Greater Buffalo interests
were particularly critical of Conrail's pre-transaction market power in
the area.
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\2\ The Erie-Niagara Rail Steering Committee (ENRSC), an ad hoc
committee representing businesses located in the New York State
counties of Erie and Niagara, and in those parts of Chautauqua
County that lie north or east of CP 58 near Westfield, referred to
this area as the Niagara Frontier region. We will use this term, as
well as the Greater Buffalo area or the Buffalo area,
interchangeably. See Conrail, Decision No. 89, slip op. at 305-06,
n.505.
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We determined that, while the method we approved for the division
of Conrail's Buffalo-area assets--with the largest share going to CSX--
would not create direct two-railroad service for all shippers in the
Buffalo area, it would improve local competition
significantly.3
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\3\ We found that the transaction would result in a much
stronger ``second railroad'' presence in the Buffalo area than had
been the case previously, especially given the enhancements we
imposed. For example, in a settlement reached with the National
Industrial Transportation League (NITL), CSX and NS agreed to
mitigate the market power they would otherwise inherit from Conrail
at exclusively served points where Conrail performed switching
services, and we expanded those terms in approving the transaction
and imposed that agreement as expanded and other settlement
agreements pertaining to the Buffalo area, as discussed below,
including certain representations made by CSX beneficial to that
area.
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As a precautionary measure, we also imposed a condition that called
for a 3-year study of rail rates in the Buffalo area following the
division of Conrail's assets and the integration of those assets into
CSX and NS, which occurred on June 1, 1999. We will begin our Buffalo
Rate Study with an initial review of the first 6 months (June 1, 1999,
through November 30, 1999), which will be followed by a review of the
first year (June 1, 1999, through May 31, 2000).
Comments and Information Requested
In this initial stage of the Buffalo Rate Study, we will require
that CSX and NS file information sufficient for us to determine that
they are in compliance with all the conditions related to switching
that we have imposed in the Buffalo area. 4 We will also
require CSX and NS to submit information sufficient for us to determine
the trend in rates for rail movements into and out of the Buffalo area
for the period beginning June 1, 1997, which is before the parties
submitted the Conrail application subsequently approved by us, until
November 30, 1999. And we will require that CSX and NS make available
to interested parties and to Board staff the Conrail, CSX, and NS rail
100% waybill files for rail movements into and out of the Buffalo area
(subject to the protective order discussed below) for the period of
June 1, 1997, through November 30, 1999, so that we may obtain an
independent determination of
[[Page 71190]]
the trends in rail rates into and out of the Buffalo area during this
period.5 Comprehensive filings addressing the matters
discussed above are due from CSX and NS by January 14, 2000.
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\4\ Conrail's switching fees had been $450 within its Buffalo
switching district and $390 at other points in the Niagara frontier
area. The NITL agreement retains switching for 10 years by CSX and
NS for all facilities that received switching by Conrail to either
of those carriers, and at an inflation-adjusted fee no higher than
$250 for the first 5 years. We extended the switching component of
the NITL agreement to situations where shortlines paid switching
charges to Conrail and where Conrail received switching services
from NS or CSX (Conrail, Decision No. 89, slip op. at 57). We also
extended the NITL agreement to certain international rail movements
into and out of Niagara Falls (id., slip op. at 86-87).
While the NITL agreement covered only post-integration switching
by CSX for NS and NS for CSX, CSX explained that it had also
negotiated voluntary agreements with both Canadian National Railway
Company and its affiliates (collectively, CN) and Canadian Pacific
Railway Company and its affiliates (collectively, CP) that provide
lower switching fees for enlarged volumes than formerly available to
CN and CP from Conrail in the Greater Buffalo area. In addition, the
agreements provide increased access to CN and CP for cross-border
truck competitive traffic. We imposed these CN and CP settlements as
conditions to our approval of the transaction.
\5\ Our understanding is that information contained in the rail
100% waybill files for the period ending November 30, 1999, should
be available by December 30, 1999. Proper documentation for these
files, including a way to translate from Conrail's (old) freight
station codes to CSX's and NS' (new) freight station codes, should
also be made available at that time. Further, to facilitate the
continued use of waybill data in this proceeding, CSX and NS should
be prepared to provide updates to their original waybill submissions
on a quarterly basis.
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We are also requesting comments from shippers and their
representatives, from other railroads serving the Buffalo area, and
from other interested parties, seeking their views and evidence
concerning trends in Buffalo-area rail rates and information to help us
determine if local businesses and other railroads have available the
switching rates to which they are entitled. Comments from all
interested parties are due by February 14, 2000; and CSX and NS replies
to comments are due by February 29, 2000.
Later next year, consistent with the June 1, 1999 division date, we
will rebase this Buffalo Rate Study on a fiscal year ending May 31st of
each year. Updates of the carriers' rail 100% waybill files for rail
movements into and out of the Buffalo area for the period ending May
31, 2000, should be made available, subject to the protective order
discussed below, to all interested parties and to Board staff by June
30, 2000. CSX and NS comprehensive filings are due by July 14, 2000;
comments from other parties are due by August 14, 2000; and CSX and NS
replies to comments are due by August 29, 2000.
Protective Order. Parties may submit filings (including waybill
data and computer data), as appropriate, under seal marked Confidential
or Highly Confidential pursuant to the Protective Order entered in STB
Finance Docket No. 33388 in Decision No. 1 (served April 16, 1997), as
modified in various respects in Decision No. 4 (served May 2, 1997),
Decision No. 15 (served August 1, 1997), Decision No. 22 (served August
21, 1997), Decision No. 46 (served October 17, 1997), and Decision No.
87 (served June 11, 1998). Waybill files being made available to
interested parties shall be subject to this Protective Order.
Service List. A copy of this decision is being served on all
persons designated as POR, MOC, or GOV on the service list in STB
Finance Docket No. 33388. This decision will serve as a notice that
persons who were parties of record in STB Finance Docket No. 33388 will
not automatically be placed on the service list as parties of record
for this Buffalo Rate Study proceeding. Any persons interested in being
on the STB Finance Docket No. 33388 (Sub-No. 90) service list and
receiving copies of CSX and NS filings relating to the Buffalo Rate
Study must send us written notification with copies to the railroads'
representatives.
This action will not significantly affect either the quality of the
human environment or the conservation of energy resources.
Decided: December 10, 1999.
By the Board, Chairman Morgan, Vice Chairman Clyburn, and
Commissioner Burkes.
Vernon A. Williams,
Secretary.
[FR Doc. 99-32902 Filed 12-17-99; 8:45 am]
BILLING CODE 4915-00-P
