§10709. Determination of market dominance in rail carrier rate proceedings
(a) In this section, "market dominance" means an absence of effective competition from other carriers or modes of transportation for the transportation to which a rate applies.
(b) When a rate for transportation by a rail carrier providing transportation subject to the jurisdiction of the Interstate Commerce Commission under subchapter I of chapter 105 of this title is challenged as being unreasonably high, the Commission shall determine, within 90 days after the start of a proceeding under section 10707 of this title to investigate the lawfulness of that rate, whether the carrier proposing the rate has market dominance over the transportation to which the rate applies. The Commission may make that determination on its own initiative or on complaint. A finding by the Commission that the carrier does not have market dominance is determinative in a proceeding under this subtitle related to that rate or transportation unless changed or set aside by the Commission or set aside by a court of competent jurisdiction.
(c) When the Commission finds in any proceeding that a rail carrier proposing or defending a rate for transportation has market dominance over the transportation to which the rate applies, it may then determine that rate to be unreasonable if it exceeds a reasonable maximum for that transportation. However, a finding of market dominance does not establish a presumption that the proposed rate exceeds a reasonable maximum. This subsection does not limit the power of the Commission to suspend a rate under section 10707(c) of this title. However, if the Commission has found that a carrier does not have market dominance over the transportation to which the rate applies, the Commission may suspend an increase in that rate as being in excess of a reasonable maximum for that transportation only if it specifically changes or sets aside its prior determination of market dominance.
(d)(1) In this subsection-
(A) "fixed and variable cost" means all cost incurred by rail carriers in the transportation of freight, but limiting the return on equity capital to a rate equal to the embedded cost of debt.
(B)(i) "cost recovery percentage" means the lowest revenue-variable cost percentage which, if all movements that produced revenues resulting in revenue-variable cost percentages in excess of the cost recovery percentage are deemed to have produced only revenues resulting in the cost recovery percentage, would produce revenues which would be equal, when combined with total revenues produced by all other traffic transported by rail carrier, to the total fixed and variable cost of the transportation of all traffic by rail carrier.
(ii) for purposes of determining the cost recovery percentage only, "revenue-variable cost percentage" means the quotient, expressed as a percentage figure, obtained by dividing the total revenues produced by the transportation of all traffic received by rail carriers for rail transportation by the total variable cost of such transportation.
(2) In making a determination under this section, the Commission shall find that the rail carrier establishing the challenged rate does not have market dominance over the transportation to which the rate applies if such rail carrier proves that the rate charged results in a revenue-variable cost percentage for such transportation that is less than-
(A) 160 percent during the period beginning on the effective date of the Staggers Rail Act of 1980 and ending September 30, 1981;
(B) 165 percent during the period beginning October 1, 1981, and ending September 30, 1982;
(C) 170 percent during the period beginning October 1, 1982, and ending September 30, 1983;
(D) 175 percent or the cost recovery percentage, whichever is less, during the period beginning October 1, 1983, and ending September 30, 1984; and
(E) the cost recovery percentage, during each 12-month period beginning on or after October 1, 1984.
For purposes of subparagraphs (D) and (E) of this paragraph, the cost recovery percentage shall in no event be less than a revenue-variable cost percentage of 170 percent or more than a revenue-variable cost percentage of 180 percent.
(3) For purposes of determining the revenue-variable cost percentage for a particular transportation, variable costs shall be determined pursuant to section 10705a(m)(1) of this title, with adjustments specified by the Commission. A rail carrier may meet its burden of proof under this subsection by establishing its variable costs in accordance with such section 10705a(m)(1), but a shipper may rebut that showing by evidence of such type, and in accordance with such burden of proof, as the Commission shall prescribe.
(4) A finding by the Commission that a rate charged by a rail carrier results in a revenue-variable cost percentage for the transportation to which the rate applies that is equal to or greater than the applicable percentage under paragraph (2) of this subsection does not establish a presumption that (A) such rail carrier has or does not have market dominance over such transportation, or (B) the proposed rate exceeds or does not exceed a reasonable maximum.
(5)(A) Within 180 days after the effective date of the Staggers Rail Act of 1980 and on an annual basis thereafter, the Commission shall determine the cost recovery percentage for the transportation of all traffic received by rail carriers. The Commission shall make such determination after considering each individual revenue-variable cost percentage resulting from the revenues and costs of a valid and reliable statistical sample of all movements of commodities transported by class I rail carriers during the most recent calendar year for which such information is available.
(B) If, on the basis of calculations under subparagraph (A) of this paragraph, the Commission determines that revenues earned by all class I rail carriers during the previous calendar year do not exceed the fixed and variable costs of such carriers, then the cost recovery percentage for purposes of this section shall be deemed to be equal to the cost recovery percentage last determined by the Commission.
(C) The Commission shall, in its annual report submitted to the Congress under section 10311 of this title, set forth the cost recovery percentage determined for that year under subparagraph (A) of this paragraph.
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| Revised Section | Source (U.S. Code) | Source (Statutes at Large) |
|---|---|---|
| 10709(a) | 49:1(5)(c)(i). | Feb. 4, 1887, ch. 104, |
| 10709(b) | 49:15(9) (1st and 2d sentences). | Feb. 4, 1887, ch. 104, |
| 10709(c) | 49:1(5)(b) (7th and 8th sentences), 15(9) (less 1st and 2d sentences). |
In subsection (b), the words "providing transportation subject to the jurisdiction of the Interstate Commerce Commission under subchapter I of chapter 105 of this title" are added for clarity. The words "Following promulgation of standards under section 1(5)(d) of this chapter" are omitted as executed. The word "start" is substituted for "commencement" for clarity. The word "transportation" is substituted for "service" for consistency. The word "change" is substituted for "modify" for consistency.
In subsection (c), the word "However" is substituted for "except that" for clarity. The words "as being in excess" are substituted for "on the ground that such rate as increased exceeds" for clarity. The last 8 words of 49:15(9) are omitted as surplus. The words "Notwithstanding any other provision of this chapter" are omitted as unnecessary. The words "does not establish" are substituted for "shall not create" for clarity. The words "The subsection does not limit" are substituted for "nothing in this paragraph shall limit" for clarity.
References in Text
The effective date of the Staggers Rail Act of 1980, referred to in subsec. (d)(2)(A), (5)(A), probably means Oct. 1, 1980, the general effective date of
Amendments
1980-Subsec. (d).
Effective Date of 1980 Amendment
Amendment by
Section Referred to in Other Sections
This section is referred to in sections 10701a, 10705a, 10707a, 10711, 11167 of this title.