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With a new administration in D.C., it's time to think outside of the box because passenger rail's survival just may depend on it

Saturday, December 13, 2014

DOT vs AAR

I don't even pretend to understand the minutiae of PRIIA Section 207 but the case that was recently discussed may in its own way alter the future of passenger rail. The thing is that I'm not sure if I'm supposed to side with the USDOT the way NARP has given that its friend of the court brief was the only one that supports the DOT's effort to overturn the Court of Appeals ruling.

The AIPRO filed its own friend of the court brief, asking the high court to uphold the appeals court ruling. The case could be made that keeping Section 207 of the 2008 law could actually be a bigger detriment to the future of passenger rail than striking it down.

Some excerpts from the brief:

ARGUMENT
SECTION 207 OF THE PRIIA IMPERMISSIBLY CONFERS
ON AMTRAK REGULATORY AUTHORITY OVER ITS COMPETITORS
IN THE PASSENGER-RAIL INDUSTRY.
A. The Provision Of Passenger-Rail Service
Is A Competitive Industry In Which
Amtrak Is But One Competitor. 
The first important move toward this new competitive
regime was Congress’s enactment of the
Amtrak Reform and Accountability Act of 1997, Pub.
L. No. 105–134, 111 Stat. 2570, which terminated 
Amtrak’s monopoly over intercity service.
Section 217 authorizes States to select “an
entity other than Amtrak to provide services
required for the operation of an intercity passenger
train route * * *.” PRIIA § 217, 49
U.S.C. § 24702 (note).
 Section 301(a) authorizes the Secretary of
Transportation to “make grants * * * to assist
in financing the capital costs of facilities,
infrastructure, and equipment necessary to
provide or improve intercity passenger rail
transportation.” PRIIA § 301(a), 49 U.S.C.
§ 24402(a)(1). A State that applies for a grant
must either “select[] the proposed operator of
its service competitively” or “provide written
justification to the Secretary showing why
the proposed operator is the best, taking into
account price and other factors, and that use
of the proposed operator will not unnecessarily
increase the cost of the project.” PRIIA
§ 301(b), 49 U.S.C. § 24402(b)(3). 
Section 214 directs the Federal Railroad Administration
to establish an Alternate Passenger
Rail Service Pilot Program, under
which “a rail carrier or rail carriers that own
infrastructure over which Amtrak operates
a[n] [intercity] passenger rail service route”
may “petition the Administration to be considered
as a passenger rail service provider
over that route in lieu of Amtrak * * *.” PRIIA
§ 214(a), 49 U.S.C. § 24711(a)(1) (emphasis
added). 

Translation: The days of only one company operating trains are over because Congress said so--twice. The best way for passenger rail to progress is to let each route be open for bidding.

B. Section 207 Unconstitutionally Delegates
To Amtrak Regulatory Authority Over
Amtrak’s Direct Competitors In The Passenger-Rail
Industry. 
1. Amtrak’s Section 207 standards expressly
apply to all intercity passenger trains, not
just to Amtrak’s trains. 
Adding to the unfairness is the fact that, although
Section 207 directs Amtrak and the FRA to
consult with certain other stakeholders in developing
the performance standards, the statute does not afford
even this limited right to Amtrak’s competitors
in the provision of passenger-rail service before permitting
Amtrak to impose regulations on them. See
PRIIA § 207(a), 49 U.S.C. § 24101 (note) (listing
stakeholders with consultation rights). Thus, when
Amtrak and the FRA initially proposed the Section
207 metrics and standards in March 2009 (see J.A.
11), they solicited comments from the stakeholder
groups specifically identified in the statute (see J.A.
75) but did not afford Amtrak’s competitors in the
passenger-rail industry any opportunity to comment—even
though these competitor passenger railroads
would be directly subject to the new regulatory
standards. 

Translation: That the feds did not allow Amtrak's competitors to even comment on the metrics as laid out in PRIIA is disturbing. How was this any different than what the Senate attempted to do to private operators in 2012 (Hint: It's the same thing)?

2. Amtrak’s Section 207 standards may trigger
STB investigations and enforcement actions
against Amtrak’s competitors.
Section 213 of the PRIIA provides for investigation
and enforcement actions by the STB any time
that “any intercity passenger train”—not solely those
operated by Amtrak—fails to achieve 80 percent ontime
performance or fails to meet the Section 207
service-quality standards for two consecutive quarters.
PRIIA § 213(a), 49 U.S.C. § 24308(f)(1).

Translation: The idea that other operators could be penalized by the STB for delays even if they were caused by Amtrak is akin to some of the battles that took place in Florida earlier this decade when SunRail was held up due to liability provisions Amtrak initially found objectionable.

Final thoughts

  • The dueling briefs by NARP and the AIPRO could actually be a clash of the past vs the future since the former posits itself as an advocacy organization while the latter is a trade group for other passenger carriers in the same manner that Airlines for America is for the airline industry
  • The USDOT's attorney did its side no favors with the way he argued its case--even sympathetic justices were a bit perplexed
  • We will find out next June just what SCOTUS will do
  • Eventually, the new Congress will have to redraft the metrics in order to avoid a repeat in the future

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