WASHINGTON – In remarks before the group Consumers United for Rail Equity (CURE), U.S. Senator Herb Kohl today vowed to keep up his fight to pass the Railroad Antitrust Enforcement Act, his bipartisan bill to repeal the obsolete antitrust exemptions protecting freight railroads from competition. These exemptions deny rail consumers antitrust protections available to consumers in virtually every other industry.Kohl introduced the legislation in response to concerns that freight railroads are abusing their dominant market power and raising rates for those who rely on them to ship dozens of vital commodities, including coal and agricultural products. Kohl’s bill was passed unanimously by the Senate Judiciary Committee on March 5, 2009, and Kohl reached an agreement with Sen. John Rockefeller (D-WV) last June to include the provision in Rockefeller’s rail regulatory reform bill which could come before the Senate this year.

“My goal is to ensure that railroads play by the same rules as all businesses in our economy and give all railroad shippers strong remedies under antitrust law,” Kohl said.  “We have made it plain that we will not consent to any rail bill moving forward on the Senate floor that does not contain such antitrust provisions.”

            Over the last 20 years, railroad industry consolidation has reached the point where only four class I railroads provide nearly 90 percent of the nation’s rail transportation as measured by revenue.  Many industries – known as “captive shippers” -- are served by only one railroad.  These captive shippers have faced constantly rising rail rates.  In many cases the ordinary protections of antitrust law are unavailable to these captive shippers – instead, the railroads are protected by a series of exemptions from the normal rules of antitrust law to which all other industries must abide.

As an example, Dairyland Power in La Crosse serves the electricity needs of more than 575,000 people. Several years ago, Dairyland was hit with a 93% rate increase - resulting in about $35 million of increased cost.

Current antitrust law protects a wide range of railroad industry conduct from scrutiny by antitrust enforcers.  Railroad mergers and acquisitions are exempt from antitrust law and are reviewed solely by the Surface Transportation Board.  Railroads that engage in collective ratemaking are also exempt from antitrust law.  Private parties have no right to obtain injunctions to halt anti-competitive practices.   Kohl’s bill will eliminate these and other antitrust exemptions by allowing the federal government, state attorneys general and private parties to file suit to enjoin anti-competitive mergers and acquisitions.  It will restore the review of these mergers to the agency where they belong, the Justice Department’s Antitrust Division.  And it will eliminate the antitrust exemption for railroad collective rate making.