All discussion and conclusions contained in the interim report, to the extent not modified herein, are hereby incorporated by reference into this report. FINDINGS We find that implementation of the standards and procedures contained herein would enable the Commission to make prompt determinations as to market dominance without undue delay, in accordance with the congressional intent expressed by section 202 of the Rail Revitalization and Regulatory Reform Act of 1976. We further find that the proposed rules set out in appendix A are sound, equitable, reasonable, and necessary, and should be adopted as specified in the attached order. And we further find that this is not a major Federal action significantly affecting the quality of the human environment within the meaning of the National Environmental Policy Act of 1969. An appropriate order will be entered. COMMISSIONER CORBER, concurring: Although my concurring expression in the interim report suggested a rationale for establishing the point of activation of the third presumption at 50 percent in excess of variable costs rather than 80 percent, I am not in disagreement with the 60-percent figure prescribed in the report and order on further consideration. The stated basis for the 60-percent trigger is more soundly grounded than the one for 80 percent. Moreover, we are at the very beginning of our experience with the market dominance concept and an approach reasonably weighted toward rate flexibility is consistent with the intent of the 4R Act. In this connection I note with approval that the presumption is not to be taken as rigidly fixed and that it will be reassessed on the basis of experience. There are recognized infirmities in existing cost figures which support the use of a percentage leaving ample room for error. As the accounting systems of the carriers, as well as those prescribed by the Commission, improve there will be better data with which to improve the accuracy of this presumption. Finally, I reemphasize what I stated in regard to the interim report, that the presumption does not determine the justness or reasonableness of any rate. It merely indicates the rates which must be scrutinized in accordance with the usual tests for justness and reasonableness. APPENDIX A PART 1109 REQUIREMENTS AND PROCEDURES RELATING TO THE RAILROAD REVITALIZATION AND REGULATORY REFORM ACT OF 1976 $1109.1 Requirements and Procedures Relating to a Determination of Market Dominance with Regard to Rates Challenged as Unreasonably High' (a) In order that the Commission may determine whether a rail carrier proposing a rate increase possesses market dominance over the service to be rendered under a proposed rate, there shall be included in the carrier's statement notifying the Commission that it wishes to have the proposed rate considered pursuant to section 15(8)(c) of the Interstate Commerce Act, evidence upon which the Commission may base a determination with regard to market dominance, to the extent available, and including but not limited to the following information: (1) descriptions of involved commodities and full seven-digit STCC number(s); (2) descriptions of involved points or areas and mileage(s), stated in terms of short line mileage by rail; (3) the variable cost of the service to which the rate applies; (4) whether and to what extent the rate in issue has been docketed, discussed, considered, or approved before a rate bureau acting under an agreement filed with and approved by the Commission pursuant to section 5a or Sb of the Interstate Commerce Act; application number(s), date proposal docketed with rate bureau, and final disposition of proposal and date thereof; and the share of the market, or an estimate thereof, presently held by such participating carriers; (5) tonnage of the involved traffic transported between the involved points or areas by the proponent carrier and its affiliates during the preceding year, and the rates charged therefor during the same time period; (6) names of any known originating for-hire carriers of any mode offering interchangeable service between the involved points or areas, the tonnage transported, and the rates charged therefor during the preceding year; (7) the extent to which the proponent rail carrier has taken general increases approved by the Commission in the preceding 2 years; (8) any other relevant information. (b) In all proceedings involving a request for suspension of a proposed rate on the ground that it is unreasonably high there shall be included in the verified complaint seeking suspension of the schedule containing the proposed rate, evidence upon which the Commission may base a determination with regard to market dominance, including the information outlined in subparagraphs (a)(1)-(7), to the extent available and not previously furnished by the rail carrier, and including but not limited to the following information: (1) characteristics of the involved traffic or movement affecting the ease or difficulty with which transportation services of other carriers or modes may be substituted for the service to be performed under the rate in issue; (2) tonnage of the involved traffic transported between the involved points or areas by any known for-hire carriers, other than those in subparagraph (a)(5), during the preceding year, and the rates charged therefor during the same time period; (3) any other relevant information. (c) Any reply to a verified complaint seeking suspension should contain any information required by $1109.1(a) and (b), to the extent not previously furnished by complainant. Whether or not a reply to a verified complaint seeking suspension is filed, the proponent rail carrier on or before the due date for filing a reply, must As used in this section, the term rates includes fares and charges. 2Section 15(8) (d) of the Interstate Commerce Act as amended requires that complainants seeking suspension of a proposed rate be verified. See 49 CFR 1100.42(f) provide the Commission with the information required by §1109.1(a) to the extent available and not previously submitted by another party. (d) A formal complaint containing an allegation that an existing rail rate is unreasonably high shall contain verified evidence upon which the Commission may base a determination with regard to market dominance, including, to the extent available, the information outlined in $1109.1(a) and (b). The answer to a formal complaint shall be verified and shall contain the information outlined in §1109.1(a) to the extent not previously furnished. Replies limited to the issues of market dominance raised by any verified answer, may be filed within 10 days of the due date for the filing of such answer. (e) Upon notification of a proceeding instituted upon the Commission's own initiative to investigate whether an existing or proposed rate is unreasonably high, the interested carrier or carriers shall file, within 20 days from the service date of the order instituting said investigation, a verified statement containing, to the extent available and if not previously furnished by the carrier(s), evidence upon which a market dominance determination may be based, including but not limited to the information outlined in §1109.1(a) and (b). Replies, if any, directed to the issue of market dominance, should be filed within 20 days of the due date for the filing of the carrier statement. (f) In a proceeding involving a determination as to market dominance wherein the evidence adduced establishes that the rate in issue has been discussed, considered, or approved under a rate bureau agreement filed with the Commission pursuant to section 5a or 5b of the Interstate Commerce Act, a rebuttable presumption will arise that a carrier participating in the rate or in such discussion or consideration does not provide effective competition to the proponent rail carrier for the involved traffic or movement. (g) In a proceeding involving a determination as to market dominance wherein the evidence adduced establishes one of the following situations, a rebuttable presumption that the carrier whose rate is in issue has market dominance over the involved traffic or movement will arise: (1) where the proponent carrier has handled 70 percent or more of the involved traffic or movement during the preceding year; the market share of the proponent will be deemed to include the share of any affiliates, and of any carrier participating in the rate or with whom the proponent carrier has discussed, considered, or approved the rate in issue; (2) where the rate in issue exceeds the variable cost of providing the service by 60 percent or more; and, (3) where affected shippers or consignees have made a substantial investment in railrelated equipment or facilities which prevents or makes impractical the use of another carrier or mode. 355 I.C.C. PART 1109 - REQUIREMENTS AND PROCEDURES RELATING LATORY REFORM ACT OF 1976 At a General Session of the INTERSTATE COMMERCE COMMISSION, held at its Office in Washington, D.C., on the 30th day of September 1976. EX PARTE No. 320 SPECIAL PROCEDURES FOR MAKING FINDINGS OF MARKET DOMINANCE AS REQUIRED BY THE RAILROAD REVITALIZATION AND REGULATORY REFORM ACT OF 1976 It appearing, That the Commission, by notice and order served March 10, 1976, instituted this rulemaking proceeding under authority of section 202 of the Railroad Revitalization and Regulatory Reform Act of 1976 (Public Law 94-210) to establish standards and procedures for determining whether and when a rail carrier possesses market dominance over a service rendered or to be rendered at a particular rate or rates; It further appearing, That by said notice of proposed rulemaking all interested parties were invited to make representations with regard to the proposed rules; and that notice to all interested parties was given through publication in the Federal Register of March 16, 1976; It further appearing, That various parties submitted their views and suggestions regarding the proposed regulations, that the Commission has considered all representations filed, and, on August 23, 1976, served its interim report setting forth its conclusions, findings, reasons therefor, and its decision that the regulations set forth therein should be adopted, pending further comment of the parties; It further appearing, That the Commission, upon consideration of all the comments filed, has, on the date hereof, made and filed its report setting forth its conclusions, findings, reasons therefor, and its decision that the regulations set forth in appendix A thereof should be adopted, which report is hereby referred to and made a part hereof; It further appearing, That, except to the extent modified herein, the conclusions, findings, and reasons therefor set forth in the interim report served August 23, 1976, are hereby adopted and made a part hereof; Wherefore, and for good cause: It is ordered, That the Commission hereby adopts the regulations as set forth in said appendix A. It is further ordered, That part 1109 of Title 49 of the Code of Federal Regulations be, and it is hereby, amended by adding the regulations as set forth in said appendix A. It is further ordered, That this order shall become effective forthwith. It is further ordered, That this proceeding shall remain open, so that refinements and modifications of adopted standards and procedures may be made in the light of actual experience. And it is further ordered, That notice of this order shall be given to the general public by depositing a copy in the Office of the Secretary of this Commission at Washington, D.C., and by filing a copy with the Director, Office of the Federal Register. 355 I.C.C. |