The Changing Antitrust/Regulation Interface in the US: Railways and Beyond

Posted by D. Daniel Sokol

Tim Brenan (U Maryland - Baltimore, Econ) explains The Changing Antitrust/Regulation Interface in the US: Railways and Beyond.

ABSTRACT: The transition from regulation to competition creates both structural and governance issues in rail, as it has in telecommunications and electricity. The latter two sectors provide both models for handling structural issues through either strict separation or fostering competition among vertically integrated firms and lessons regarding when separation may be problematic regarding operations and investment. We then turn to the antitrust/regulation interface, describing present rail immunities and using proposed legislation to identify competitive problems involving bottleneck control and conditions on sales of routes to short lines. Even if immunity were lifted, antitrust may (and perhaps should) be unable to address alleged problems. Addressing substantive harms may also be precluded by a recent radical shift in US law, making antitrust defer to regulatory authority. Recent political changes may herald a reversal, with consequences going far beyond rail.