severe impact upon air quality and noise levels. The total possible reduction in railroad employment is insignificant when compared to national employment. Specific local employment reductions are not significant in relation to total employment in local geographic areas. The merger is not expected significantly to alter water quality, the terrestrial environment, or historic sites. The FEIS addresses adverse impacts which cannot be avoided. Such impacts include: (1) localized minor increases in noise intrusion; (2) emission of air pollutants along study routes and at study terminals which will receive an increase in traffic; (3) minor increases in potential rail derailments from increased traffic on some study routes resulting in spillage of hazardous materials; (4) reduction in some communities of employment by the merged system; and (5) a possible increase in safety hazards at rail grade crossings along lines which incur additional traffic. The only long-term impact caused by the merger results from the increase in fuel consumption leading to the reduction of the longterm supply of energy. However, this increase in fuel consumption is de minimus. The effect in the long term on the air quality will be negligible, while no long-term effects are anticipated for noise levels since the additional noise intrusions do not significantly change existing conditions. Hence, the merger will have minimal impacts on the environment. In certain instances the merger will have beneficial effects, while the adverse effects are widely dispersed and nearly negligible. MERGER CRITERIA Congress has directed us to approve and authorize a merger of rail carriers when we find the transaction is consistent with the public interest." In examining the public interest, we are required to consider a wide range of factors including, but not limited to, (1) the effect on the adequacy of transportation to the public, (2) the effect of including, or failing to include, other rail carriers in the area involved in the proposed transaction, (3) the total fixed charges that would result, and (4) the interest of affected carrier employees. We also must scrutinize any resulting guaranty, assumption of payment of dividends or of fixed charges, or increase in total fixed charges. 749 U.S.C. 11343(a)(1) and 11344(c). 49 U.S.C. 11344(b). 1949 U.S.C. 11344(d). 48 49 The public interest criterion draws its content in large part from the national transportation policy."" (a) To ensure the development, coordination, and preservation of a transportation system that meets the transportation needs of the United States, including the United States Postal Service and national defense, it is the policy of the United States Government to provide for the impartial regulation of the modes of transportation subject to this subtitle, and in regulating those modes (1) to recognize and preserve the inherent advantage of each mode of transportation; (2) to promote safe, adequate, economical and efficient transportation; (3) to encourage sound economic conditions in transportation, including sound economic conditions among carriers: (4) to encourage the establishment and maintenance of reasonable rates for transportation without unreasonable discrimination or unfair or destructive competitive practices: (5) to cooperate with each State and the officials of each State on transportation matters; and (6) to encourage fair wages and working conditions in the transportation industry. No plainer statement of overall congressional intent appears than: "Title IV of this bill is intended to encourage mergers, consolidations and joint use of facilities that tend to rationalize and improve the Nation's rail system. 53 Highly pertinent to our examination of the public interest under the statute are the policies embodied in the antitrust laws, particularly section 7 of the Clayton Act which proscribes certain anticompetitive acquisitions.2 The Commission is not obligated to measure proposals for consolidation by the standards of the antitrust laws and need not-and, indeed, should not-sit as an antitrust court in determining compliance with the Clayton Act. The Commission, after all, is empowered to disapprove mergers which would comply with antitrust notions, and perhaps more importantly, approve mergers even if they would be inconsistent with the antitrust laws. Nevertheless, the Commission, like other regulatory agencies, has long been required to consider anticompetitive "49 U.S.C. 10101(a). "Railroad Revitalization and Regulatory Reform Act. (4R Act) Legislative History. Public Law 94-210, p. 34. Section 7 of the Clayton Act, as amended, 15 U.S.C. 18, provides in pertinent part: “No corporation engaged in commerce shall acquire directly or indirectly, the whole or any part of the stock or other share capital *** of another corporation engaged also in commerce, where in any line of commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or tend to create a monopoly.” "McLean Trucking v. United States. 321 U.S. 67 (1944). "Northern Lines Merger Case, 396 U.S. 491, 509, 514 (1970). consequences as part of its broad public interest statutory mandate. See Denver & R.G.W.R. Co. v. United States, 387 U.S. 485 (1967). We need only consider anticompetitive consequences as one of several factors which must be examined, no one of which must necessarily control in the circumstances of every case. On the other hand, we believe that antitrust factors have a special place in our analysis. As the Supreme Court has observed, the antitrust laws give "understandable content to the broad statutory concept of the 'public interest.' " FMC v. Aktiebolaget Svenska America Linien, 390 U.S. 238, 244 (1968). In this connection, our recent policy statement particularized numerous public interest criteria to be considered, as follows: (1) Whether essential rail services will continue to be provided, either by the consolidating companies or by other railroads which may be affected by the consolidation (“essential services" include, but are not limited to, those required by the national defense and those shown necessary to achieve other established national goals, such as energy conservation and rural and community development); (2) Whether opportunities to achieve operating efficiencies will be increased; (3) Whether redundant facilities will be eliminated; (4) Whether the ability of the consolidated system to attract new business will be enhanced; (5) Whether the consolidated company will be financially viable; (6) Whether effective inter- and intramodal competition will be maintained wherever economic realities make it possible; and (7) Whether there will be any adverse impact on the environment of the region served.55 56 When we approve a merger, we may impose conditions. The merging carriers are required to provide a fair arrangement for the protection of affected employees so that the employees will not be in a worse position related to their employment." Concerning maintenance of routes and channels of trade, protection of operating relationships between competing railroads, and similar matters, we have broad discretionary powers to subject a proposed merger to such terms, conditions, and modifications as we find to be just and reasonable. Our statutory authority to impose such conditions is not limited to conditions proposed or favored by the carriers.58 In this regard the Commission has imposed, in almost every merger or consolidation Railroad Consolidation Procedures. 359 I.C.C. 195, 199 (1978). 5649 U.S.C. 11344(c). $49 U.S.C. 11347. Illinois Cent. Gulf R.-Acquisition-G., M. & O., et al., 338 I.C.C. 805, 844 (1971) and Seaboard Air Line R. Co.-Merger-Atlantic Coast Line, 320 1.C.C. 122, 128 (1963). transaction approved over a period of almost 30 years, some modification or variation of conditions that require applicants to keep open all routes and channels of trade via existing junctions and gateways; maintain neutrality in handling traffic so as to permit equal opportunity for service to and from all lines reaching the rails of the merged company without discrimination; continue existing traffic and operating relationships in effect between the merging companies and all connecting lines; handle all traffic without discrimination as between competing carriers in promptness or frequency of service; and forego any restraint or curtailment of the right of industries located on the lines of the merged carrier to route traffic over any or all existing routes and gateways (the standard traffic conditions).59 The genesis of these conditions was in the 1920's.60 It is sufficient to note at this point that of the protective conditions involved in these proceedings, only labor protection is provided on the basis of explicit provision in the statute. All other conditions must find some basis in our general mandate to impose conditions governing the transaction, or the transaction, or in the specific considerations enumerated. In sum, we have examined the total transportation factors and conclude that there are substantial transportation benefits flowing from the merger of BN and Frisco. In our analysis, we have considered the competitive aspects in light of the policies underlying the antitrust laws. We find that the merger satisfies the public interest test of the act. DISCUSSION We begin the decade of the 1980's faced with an economy suffering the ravages of inflation and an uncertain future as to the reliability of our energy resources. The Interstate Commerce Commission cannot cure these problems. However, our decisions regarding surface transportation can incrementally reduce these problems. A basic ingredient in the price of all goods is transportation, and a basic ingredient of our Nation's transportation system is energy. When carrier operations can be made more efficient and less costly without disrupting essential services, it is in the public interest to approve the result. In this manner our national economy "Detroit. T. & I. R. Co. Control, 275 1.C.C. 455, 492-493 (1950). 60Chicago Junction Case, 71 I.C.C. 631 639-641 (1922); St. Louis S. W. Ry. Co. Control. 180 I.C.C. 175, 206 (1932); and Southwestern Lines Unification. 124 I.C.C. 401, 439 (1927). can benefit from the efficiencies and cost reductions through either price reductions or a forebearance to raise prices. The merger of Frisco into BN presents us with just such an opportunity-two railroads voluntarily initiating a transaction that will reduce their costs and improve utilization of equipment and facilities without eliminating essential services. We find the merger consistent with the public interest, subject to the condition in appendix M. The issuance of stock and the assumption of Frisco's obligation or liabilities by BN, and control of FTC by BN, are also approved. We will address each of these factors separately. Merger We have weighed the benefits of this merger to applicants and shippers versus the injury to other railroads and found the public interest considerations favoring the applications. Adequacy of transportation.-Approval of this merger, as conditioned, will have a beneficial effect on the adequacy of transportation to the public. Not only will the services of the merged company be significantly improved, but other railroads will be able to continue providing essential services. The merged company will be able to provide new single-line service, reduced transit times, more efficient and frequent service, and improved car utilization. Single-line service will be available between the gulf coast and the Midwest and Northwest. This new service will be available between Seattle, Portland, and Vancouver, on the one hand, and Birmingham, Memphis, and Mobile on the other. Another direct route is between Minneapolis-St. Paul, Duluth-Superior, and Chicago, on the one hand, and, on the other, Tulsa, Oklahoma City, Dallas-Fort Worth, and Houston. Preblocked trains will be able to move over long distances without interchange and with minimal switching. The elimination or reduction of switching or interchange at Kansas City and St. Louis will also save time and resources in carrying freight. Shippers support this merger because reduced transit time, ease of tracing shipments, control of loss and damage, possible expansion into new markets, and improved car utilization and availability will result from the new single-line service that will be available after the merger. When shippers who spend billions of dollars annually |