STB REPORT #8 - APRIL 16 - 30, 1998 ****************************************************************************** A compilation of decisions and notices published by the Surface Transportation Board. Includes information on track abandonments, ownership changes and trackage rights agreements. Condensed for readability. The full text is available at www.stb.dot.gov/ ****************************************************************************** SURFACE TRANSPORTATION BOARD DECISION Finance Docket No. 32425 CHICAGO SOUTHSHORE & SOUTH BEND RAILROAD OPERATION EXEMPTION ILLINOIS INTERNATIONAL PORT DISTRICT A notice of exemption was served and published on February 13, 1995, for Chicago SouthShore & South Bend Railroad (CSS) to operate a "nonexclusive" switching service for the Illinois International Port District (Port), a noncarrier, on Port-owned track (Port track) generally north of 130th Street and east of Doty Avenue on the west bank of Lake Calumet in Chicago, IL. CSS simultaneously filed a petition to dismiss the notice of exemption. (A related notice of exemption was served and published on November 15, 1993, for CSS to acquire approximately 2 miles of overhead trackage rights for access to the Port track. The trackage rights were restricted to the movement of specific commodities for Reserve Iron and Metal Company and affiliated companies (Reserve), but the restriction was removed prior to the publication of CSS's notice of exemption on February 13, 1995.) Chicago Rail Link (CRL) filed a petition to revoke the notice of exemption, or, in the alternative, to revoke it in part to reflect the narrow scope of the switching service CSS was authorized to provide under the restricted trackage rights in Finance Docket No. 32392. Patrick W. Simmons, for and on behalf of United Transportation Union, Illinois Legislative Board, also petitioned to reject and/or revoke the notice of exemption, and, alternatively, to impose appropriate labor protective conditions for the benefit of CRL employees. CRL and Simmons also replied in opposition to CSS's petition to dismiss, but CRL subsequently withdrew its petition to revoke the notice of exemption when CSS withdrew its petition to dismiss. (CSS had argued that its operation of switching track is excepted from the prior approval requirements of 49 U.S.C. 10901. With the withdrawal of CSS's petition to dismiss, the decision in Illinois Central R. Co. Construction and Trackage, (1959), which found the Port track to be regulated and not exempt track, remains unchallenged, and, based on the evidence of record, we see no reason to question its soundness here.) In a separate decision, also served on February 13, 1995, the ICC denied Simmons petition to reject and/or revoke. Alleging new evidence, substantially changed circumstances, and material error, Simmons filed a petition to reopen the February 13 decision and renewed his request to reject and/or revoke the notice of exemption, or, in the alternative, to impose appropriate conditions to protect CRL employees. CSS filed a reply. Simmons petition to reopen will be denied. Originally called the Chicago Regional Port District, Port is a municipal corporation created by the State of Illinois in 1951 to develop a port terminal along Lake Michigan. Port acquired the Lake Calumet property from the city of Chicago in 1955 and constructed such port terminal facilities as warehouses, storage areas (grain elevators and storage facilities for dry and liquid cargo), 6 shipping docks, and approximately 8.7 miles of terminal track. These facilities are used by more than 100 companies, including four active rail shippers that have facilities adjacent to Port track (Reserve, Continental Grain Company, Countrymark Cooperative, Inc., and Ade Corporation), and an unspecified number of other active rail shippers that have facilities in the port terminal adjacent to CRL track. The Port track connects shippers, located within and outside its confines, to Port's facilities connecting rail lines, and water carriers that operate through the St. Lawrence Seaway and the inland waterway that extends to New Orleans, LA, and the Gulf of Mexico. Port has never provided rail service. Since 1982, CRL and its predecessor, LaSalle & Bureau County Railroad Company, have continuously operated a connection switching service within the confines of the port terminal. CRL's switching service is nonexclusive; Port retains the right to enter into operating agreements with other carriers and the discretion to designate a single carrier to perform maintenance and repair. Port apparently has retained CRL to perform maintenance and repair since 1982. CRL performs regularly scheduled, connection switching service within the port terminal for 16 rail carriers, which, for the most part, absorb its switching charges, and for industries located within the Port terminal and beyond. CSS states that Norfolk and Western Railway Company (N&W) and occasionally Illinois Central Railroad Company operated on Port track within recent years and that [it] is among several carriers who have obtained, by agreement with the Port and exemption by the [ICC], the right to operate on the track of this noncarrier, in order to serve the Port's tenant industries. The January 24, 1994 decision denying the petitions to reject and/or revoke the notice of exemption in Finance Docket No. 32392, noted that Mr. Anthony G. Ianello, Executive Director of Port, stated that CRL does not currently have a contract with the Port [and] never had an exclusive right to operate in the Port. To expand competition, Port entered into an Operating Agreement with CSS on September 30, 1994. The Agreement is for an initial 3-year term; it authorizes CSS to operate without limitation on all Port owned and controlled track within the confines of the terminal and reserves Port's right to contract with other carriers for the operation of Port track. As with all other carriers that operate Port track, CSS entered into a maintenance agreement acknowledging responsibility for its proportional share of track maintenance and repair costs and Port's right to designate annually which carrier is to perform the maintenance. CSS states that it does not provide, and has no intention of providing, any type of regularly scheduled or linehaul service, that it has not shared, and has no intention of sharing, employees with CRL, and that the Port terminal has not been, and will not be, operated as a joint facility. Prior to withdrawing its petition to revoke, CRL claimed that CSS already performed linehaul operations using Port track and that it could also perform carrier terminal switching service, because CSS's physical access to Reserve would permit it to transport shipments in single-line service from Reserve's port facilities to the Bethlehem Steel Company facility at Burns Harbor, IN, and to a mini steel mill at Indiana Harbor, IN, that was to become operational in 1995. In addition, CRL stated that N&W periodically transports trainloads of grain in linehaul service to grain shippers located adjacent to Port track in carrier terminal switching service. Simmons does not allege that the notice of exemption contained false or misleading information. Rather, he argues that the transaction is subject to the prior approval requirements of 49 U.S.C. 11343 and that appropriate labor protective conditions are mandatory to protect the CRL employees who may be adversely affected by increased competition within the Port terminal. Simmons first argues that the trackage rights amendment in Finance Docket No. 32652, which removed the restriction in Finance Docket No. 32392, constitutes a substantially changed circumstance because it was served after November 29, 1994, the date the record in the instant proceeding closed, and, as a result, was not considered in the ICC's February 13 decision. However, the evidence suggests otherwise. CRL had petitioned to reject or revoke the notice of exemption in Finance Docket No. 32392, arguing, among other things, that it was misleading because it: (1) failed to indicate that the trackage rights were restricted; (2) failed to contain a statement of purpose in the caption summary; and (3) suggested that CSS would be able to serve the Port terminal better at a time when CSS was neither serving nor authorized to serve the Port terminal. The ICC decision denying CRL's petition was served on January 24, 1995, just before the February 13 decision and notice were issued, and fully reflected that CSS's ultimate intent was to serve the port terminal without restriction. Simmons argues that the February 13 decision materially erred in allowing CSS to extend its operations over track operated by another carrier without obtaining approval, simply because the track is owned by a noncarrier, that it constitutes a gross expansion of the noncarrier class exemption, and that rail employees will be deprived of their statutory right to labor protection. To demonstrate material error, Simmons submitted a verified statement to show that, since 1982, CRL has been, and under an agreement continues to be, responsible for maintaining the Port track. The evidence had previously been submitted by CRL in reply to CSS's petition to dismiss, but Simmons argues that it is new evidence because CRL subsequently withdrew as an active participant in the proceeding. Additionally, Simmons asserts that the new evidence is based on his discussions with affected UTU personnel and his own investigation. Simmons argues that 49 U.S.C. 10901 distinguishes between operating and providing transportation over a line. Further he contends that the noncarrier class exemption applies only to noncarriers who seek both to acquire and operate rail lines that belong to existing carriers and that it can neither be bifurcated into separate acquisition and operation exemptions nor applied to allow a carrier to acquire and/or operate a rail line being operated by another carrier simply because the line is owned by a noncarrier. Thus, Simmons claims that CSS is not entitled to use the noncarrier class exemption because it does not seek to acquire and operate the line and, in the alternative, because it seeks to operate over, and not operate, the line. In his view, CRL is the only carrier that operates the line because it performs operations on the line . . . . [and] the maintenance, whereas CSS only performs operations over the line. Contrary to Simmons arguments, 49 U.S.C. 10901(a) does not require both the acquisition and operation of a line. While section 10901(a)(4) applies to transactions to provide transportation over, or by means of an extended or additional railroad line, section 10901(a)(3) applies broadly to rail carriers that seek to (3) acquire or operate an extended or additional railroad line. Moreover, it is apparent that the noncarrier class exemption was intended to apply, and numerous decisions reflect that it has been applied, to acquisition and/or operation transactions. We also disagree with Simmons argument that CSS is not entitled to use the noncarrier class exemption because it does not operate the Port track. The unrebutted evidence of record establishes that Port has entered into similar nonexclusive operating agreements and that CSS entered into such a nonexclusive agreement to operate, and is operating, the Port track in the same manner as CRL or any other carrier under contract with Port. Simmons reliance on CRL's past and continuing responsibility to maintain the Port track is misplaced. As already noted, the maintenance and operation responsibilities have been separated; maintenance is contracted out to a single carrier of Port's choice and may be reassigned annually whereas operating rights are contracted out to various carriers, and they must share the maintenance cost. Thus, there is no meaningful distinction between operating and operating over. Next, Simmons argues that CSS's operation of Port track comes literally under the terms of 49 U.S.C. 11343(a)(6) because it involves the joint use of a rail line operated by another carrier. He acknowledges that Port is not a carrier but emphasizes that the Port track already is being operated by a carrier and observes that Port nevertheless has a potential obligation to become a carrier upon default of either CRL or CSS. This argument lacks merit as well. Joint use arrangements for the most part have involved the sharing of terminal track and facilities. To the extent regulated track was involved, carriers could enter into these joint arrangements (and establish compensation) only if prior ICC approval was obtained. Otherwise, carriers could voluntarily enter into joint use arrangements without obtaining prior ICC approval, to the extent unregulated track and facilities were involved, but, as particularly relevant here, prior approval was necessary for a carrier to operate track and facilities owned by a noncarrier, regardless of whether the track and facilities were being operated by other carriers. A review of the case law establishes that 49 U.S.C. 11343 and its predecessors have been applied consistently and exclusively to transactions involving either a consolidation of carrier interests, or a joining of two or more carriers, with a consequent temporization of competition. In United Transportation Union v. Burlington Northern Company and Houston Belt & Terminal Railway, No. 40074 (ICC served Mar. 25, 1987), the ICC observed that 49 U.S.C. 10901 and its predecessors are directed at the transportation oriented activities of single rail carrier and noncarrier applicants, where there is little danger of adverse competitive consequences, whereas the focus of section 11343 is on the potential anticompetitive impact of multi-carrier transactions. The courts uniformly and repeatedly have affirmed ICC decisions finding that 49 U.S.C. 11343 is concerned only with transactions that involve two or more rail carrier participants. Joint use arrangements under section 11343(a)(6) are no exception. They must involve an agreement by at least two carriers to share track and/or facilities. Thus, CSS's operation of the Port track could not constitute a joint use of a line operated by another carrier because no other carrier was involved as a party to either the arrangement or the agreement. Even more on point, in ruling on a prior challenge to the adoption of the noncarrier class exemption, the court affirmed the ICC's express declaration that 49 U.S.C. 10901 extends to the acquisition by existing rail carriers of rail lines owned by noncarriers, regardless of whether the lines are being operated by other carriers. Finally, the ICC declined to impose labor protection for CRL's employees because CRL was not directly involved in the transaction and, in the alternative, because CSS and CRL were not sharing employees so as to come under the joint employee exception. Simmons does not challenge the ICC's refusal to apply the joint employee exception. Instead, he contends that CRL is directly involved in, and a necessary party to the transaction, even if it was not a party to the actual CSS-Port agreement, because the Port track could not be operated without the maintenance CRL performs as the operator. Additionally, he argues that a carrier's direct involvement in a transaction does not go to liability for employee protection under 49 U.S.C. 11343, but to discretionary protection under 49 U.S.C. 10901, an issue [we] need not reach if the arrangement is considered under 49 U.S.C. 11343(a)(6). In numerous decisions, the ICC and the courts consistently have ruled that the employees of a non-applicant carrier or a carrier not directly involved in a transaction are not entitled to labor protection. Simmons argues that CRL is directly involved and a necessary party, but the evidence demonstrates otherwise. CRL's status, as an operator of Port track, is no different from the status of CSS or any other carrier with similar authority, notwithstanding that CRL was also responsible for maintenance. CRL may be affected by the transaction, but it is neither involved nor a necessary party. Accordingly, based on the evidence of record, the ICC correctly concluded that the transaction was subject to 49 U.S.C. 10901 and the noncarrier class exemption and not to 49 U.S.C. 11343(a)(6) and the mandatory labor protection requirements of 11347. It is ordered: 1. Simmons petition to reopen and revoke is denied. Decided: April 9, 1998 Service Date: Late Release April 15, 1998 ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Docket No. AB-33 (Sub-No. 120X)] Union Pacific Railroad Company--Abandonment and Discontinuance of Service Exemption--in Warren County, IA On March 27, 1998, Union Pacific Railroad Company (UP) filed with the Surface Transportation Board a petition to: (1) abandon a line of railroad owned by UP known as the Carlisle Branch, extending from milepost 368.3 near Carlisle, IA, to milepost 379.13 near Indianola, IA, a distance of 10.83 miles; and (2) discontinue operations over a portion of the Carlisle Branch from milepost 379.13 to the end of the line at milepost 379.98 in Indianola, a distance of 0.85 mile, a total distance of 11.48 miles in Warren County, IA. The line traverses U.S. Postal Service Zip Code 50125. There is one non-agency rail station on the line at Indianola at milepost 379.7. By issuance of this notice, the Board is instituting an exemption proceeding. A final decision will be issued by July 15, 1998. Decided: April 8, 1998. Service Date: April 16, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Finance Docket No. 30186 (Sub-No. 3) TONGUE RIVER RAILROAD COMPANY--CONSTRUCTION AND OPERATION--WESTERN ALIGNMENT In this decision, we are denying appeals filed by Great Northern Properties Limited Partnership (Great Northern), the Northern Plains Resource Council (Northern Plains), and two union officials of a February 13, 1998 letter by the Chief of the Board's Section of Environmental Analysis (SEA), granting the Tongue River Railroad Company's (TRRC) request for a waiver of the 6-month prenotification period that generally is required for rail construction applications. Great Northern's and Northern Plains appeals are accompanied by petitions seeking leave to file out of time. Petitioners assert that the appeals were late-filed because Northern Plains was served with a copy of the waiver ruling at an old address and Great Northern was not served at all. Consequently, the petitioners did not learn of the waiver ruling until the 10-day appeal period had passed. The union officials, parties to the Sub-No. 2 proceeding but not this one, also seek leave to late-file their appeal. Good cause exists for granting petitioners leave to file their appeals and for considering their filings, and we will do so. TRRC currently has authority to construct and operate a line of railroad between Ashland and Decker, MT, subject to various conditions. (In Finance Docket No. 30186, TRRC had previously been authorized to construct a rail line between Miles City, MT, and Ashland. The November 1996 decision denied a request to revoke that authorization, eliminated a condition to that authorization, and imposed some new conditions on the proposed construction of the line, which would connect with the Ashland-Decker line. Petitions for review of the November 1996 decision are pending in the Ninth Circuit.) In that proceeding, the Board considered two alternative routes for the Ashland-Decker line. The first proposed route, TRRC's preferred route, closely follows the Tongue River. The Board found that this route presented adverse environmental impacts that could not be effectively mitigated. The second route, the so-called Four Mile Creek Alternative, avoids an environmentally sensitive section of the Tongue River, but follows a more circuitous route and allegedly offers less favorable operating characteristics than TRRC's preferred route. For reasons set forth in the November 1996 decision, we rejected TRRC's preferred route and approved the Four Mile Creek Alternative. On July 15, 1997, TRRC petitioned to reopen the November 1996 decision. In its petition, TRRC proposed the Western Alignment, a new alignment for an approximately 17-mile portion of the Four Mile Creek Alternative routing. The Western Alignment would allegedly require less construction and offer improved operating characteristics over the approved Four Mile Creek Alternative routing. We denied the petition by decision served December 1, 1997, but stated that TRRC could file a new application for authority to construct the Western Alignment. As a result of that decision, on December 19, 1997, TRRC filed a notice of intent, informing the Board that TRRC will file at the earliest practical time a new construction and operation application in the STB Finance Docket No. 30186 (Sub-No. 3) proceeding. By letter filed February 9, 1998, TRRC requested from SEA a waiver of the 6-month prefiling notice generally required for construction projects. The waiver was granted by the Chief of SEA in a letter dated February 13, 1998. Subsequently, on March 5, 1998, Great Northern filed its appeal of the waiver letter. On March 10, 1998, TRRC filed an opposition to the appeal. The union officials filed their appeal on March 20, 1998, to which TRRC filed opposition on March 30, 1998. Great Northern filed its appeal on March 23, 1998, to which TRRC replied on March 31, 1998. The environmental procedures pertaining to rail construction and operation applications are governed by the environmental rules and the rail construction rules. The regulations require that, if an environmental impact statement is required or contemplated for a proposed project, the prospective applicant generally must provide SEA with a prefiling notice at least 6 months prior to filing the application. The purpose of the lead time requirement is to allow the Board's environmental staff to familiarize itself with the parameters of the proposed project and to identify the potential environmental issues that may be associated with it. Waivers of the 6-month waiting period are permitted, where appropriate, to enable tailoring of the Board's internal procedures to the specific circumstances of individual cases. The SEA Chief granted a waiver here, explaining that SEA had adequate information about the proposed Western Alignment to waive the requirement for 6 months of lead time in this case. On appeal, Great Northern argues that the authority to grant or deny a waiver has not been delegated to the Chief of SEA and, therefore, her action in granting the waiver was invalid. However, 49 CFR 1105.2 specifically delegates the authority to the Chief of SEA to render initial decisions on requests for waiver. . . . Accordingly, the Chief of SEA acted within her authority to issue a letter waiver of the 6-month waiting period. Great Northern argues that TRRC's waiver request did not comply with the informational requirements at 49 CFR 1105.10(c)(2), which require such a request to describe as completely as possible the anticipated environmental effects and the timing of the proposed action, and to show that all or part of the 6-month prenotification period is not appropriate. But TRRC's waiver request was fully adequate. TRRC filed a lengthy 13-page waiver request accompanied by numerous exhibits, charts, and graphs showing the proposed Western Alignment and comparing that rail line to the alternatives already considered by SEA. The waiver letter and the attached exhibits describe the proposed rail line and its anticipated environmental effects, the timing of the proposed application, and included several reasons why 6 months lead time is not necessary in this case. This provided an adequate basis for SEA to conclude that 6 months lead time was not required here. In addition to the material in TRRC's waiver request, SEA also factored in its knowledge of the proposed Western Alignment from information TRRC had provided in its July 1997 petition to reopen Finance Docket No. 30186 (Sub No. 2). This information included maps, engineering studies, and preliminary estimates of potential environmental impacts. The waiver decision was also based on TRRC's notice of intent to file a new application for the Western Alignment, as well as SEA's preliminary verification and investigation of the Western Alignment, including informal consultation with several federal and state agencies and TRRC representatives. In sum, we find that, based on the information in TRRC's waiver request and numerous other sources, the Chief of SEA did not abuse her discretion in concluding that TRRC's request met the requirements of 49 CFR 1105.10(c)(2). Great Northern complains that TRRC's waiver request is silent as to the additional train traffic that the Western Alignment would generate, and as to increased air and noise pollution and other environmental degradation that would result. However, Great Northern has not shown that the waiver request should not have been granted. The proposed application concerns a new alignment for previously-approved (but unbuilt) rail line construction. Therefore, future train traffic for the alignment, and the amount of air and noise pollution likely, would be similar to the projections and conclusions in the environmental impact statement in Finance Docket No. 30186 (Sub-No. 2). Moreover, TRRC indicated in its waiver request that it believes the Western Alignment would reduce or avoid various environmental impacts associated with the Four Mile Creek Alternative and TRRC's original preferred route. The 6-month lead time rule is designed to allow SEA adequate time to prepare for the environmental review process. Any environmental analysis that takes place at that time is simply preliminary; the bulk of SEA's environmental review takes place only after an application is filed. Given the long history of proceedings involving this rail line, and the information provided in TRRC's waiver request, SEA had an adequate basis to determine that it did not need the entire 6- month period to prepare for the environmental review that will be required if TRRC's application for the Western Alignment is filed. Finally, Great Northern complains that the waiver request fails to explain how TRRC expects to complete the environmental review process, secure Board approval, and complete construction of the entire line between Miles City and Decker by December 1999, the time period imposed by the Board in its November 1996 decision. Although TRRC did not specify in its waiver request a completion date for the proposed new segment, the filing of an application to build the Western Alignment would not automatically relieve TRRC of its obligation to build the 89-mile line from Miles City to Decker within 3 years of the service date of the November 1996 decision. The union officials contend that they were prejudiced and deprived of due process when they were not invited to participate in an ex parte meeting held on December 17, 1997, between TRRC representatives and SEA. The officials ask us to vacate the Chief of SEA's February 13 ruling for that reason, and direct that a notice for a new meeting be served on all parties of record in the Sub-No. 2 proceeding. We find no merit to this argument. The environmental review process is informal in nature, and it is common for SEA to have informal, preliminary meetings with an applicant to discuss the environmental review process before the applicant seeks authority from the Board to construct and operate a rail line. Moreover, as the courts have held, it is not improper for SEA to issue a waiver that is not in writing and not published. SEA's waiver decisions, which are placed in the official docket comprising the administrative record may be appealed to the Board. Also, SEA's environmental documents (Environmental Assessments or Environmental Impact Statements, as appropriate) explain what waivers have been granted and the basis on which SEA did so. This gives the public adequate notice of the agency's waiver decisions, and an opportunity to comment on them. The officials also assert that the full 6-month prenotification period is necessary, at a minimum, here because any environmental analysis in this proceeding must encompass the entire 130-mile project, not just the newly-proposed 17-mile segment. We disagree. As noted, the purpose of the 6-month period is to afford SEA an opportunity to familiarize itself with a construction proposal. As the Chief of SEA said in her waiver ruling, a period of that length is simply not necessary here. SEA is already very familiar with the Tongue River project, for which a voluminous record has already been compiled. Moreover, the purpose of the prenotification period is not, as the union officials suggest, to enable the agency to perform an environmental review of the proposal. Rather, only preliminary environmental analysis is undertaken during this period. SEA will determine the scope of environmental review that will be necessary for this proceeding after the application for the Western Alignment has been filed. In sum, Great Northern, Northern Plains, and the union officials have not shown that SEA's waiver of the 6-month prenotification period in this proceeding was improper. Accordingly, we will deny their appeals of the waiver ruling. It is ordered: 1. Great Northern, Northern Plains, John D. Fitzgerald and Francis G. Marceau are granted leave to late-file their appeals. 2. The appeals of the waiver decision are denied. Decided: April 10, 1998 Service Date: Late Release April 16, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Finance Docket No. 33561 PROTECTIVE ORDER PORT OF PEND OREILLE D/B/A PEND OREILLE VALLEY RAILROAD ACQUISITION AND OPERATION EXEMPTION THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY On February 20, 1998, Port of Pend Oreille d/b/a Pend Oreille Valley Railroad (POVA), a Class III rail carrier, filed a verified notice to acquire the exclusive rail freight easement and all track structures on a 24.9-mile rail line that was owned by The Burlington Northern and Santa Fe Railway Company (BNSF). Notice of the exemption was served and published in the Federal Register on March 10, 1998. Port of Pend Oreille is a municipal corporation of the State of Washington and operates, as the Pend Oreille Valley Railroad, a 61-mile rail line between Newport and Metaline Falls, WA. The rail line involved in the acquisition transaction is located between milepost 1433.0, at Newport, WA, and milepost 1408.1, at Dover, ID. In conjunction with the acquisition of the rail freight easement and track structures, POVA acquired incidental overhead trackage rights over BNSF's 6.9-mile rail line between milepost 1408.1, at Dover, ID, and milepost 1401.2, at North Sandpoint, ID. BNSF retained ownership of the real estate underlying the rail line which was acquired, and POVA became the exclusive operator of the rail line. On April 9, 1998, John D. Fitzgerald, for and on behalf of United Transportation Union- General Committee of Adjustment GO 386, filed a petition to reject or revoke the exemption. Petitioner also indicated that discovery is sought. Petitioner expresses an intention to supplement the petition to reject or revoke upon completion of discovery. This decision addresses discovery only. Petitioner wishes to obtain access to an unredacted copy of the agreement or agreements between BNSF and POVA, dated February 3, 1998, as amended or supplemented (agreement). Petitioner states that counsel for POVA has furnished an unsigned and highly redacted copy of the agreement, on a confidential basis, but that counsel for POVA is unwilling to provide an unredacted copy in the absence of a Board-issued protective order. To facilitate discovery in this proceeding, petitioner's request will be deemed to be a request for a protective order, and a protective order will be issued. If the parties are unable to resolve discovery issues under the protective order, a motion to compel may be filed. It is ordered: 1. The request for protective order is granted. 2. The parties to this proceeding must comply with the protective order. Decided: April 15, 1998 Service Date: Late Release April 16, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD ENVIRONMENTAL ASSESSMENT NO. AB-33 (SUB-NO. 118X) Union Pacific Railroad Company - Abandonment Exemption In Colorado Springs, El Paso County, Colorado In this proceeding, the Union Pacific Railroad Company (UP)has filed a petition in connection with the abandonment of its railroad line known as the Templeton Gap Spur extending from the end of the line at milepost 602.70 (near North Academy Boulevard) to milepost 605.77 (near Templeton Gap Road), a distance of 3.07 miles in Colorado Springs, El Paso County, Colorado. In its application, UP states that the City of Colorado Springs agrees with the proposed abandonment and that the only shipper on the line, Pacific Coast Builders Supply, will not oppose the abandonment. We recommend the following environmental condition be placed on any decision granting abandonment authority: The National Geodetic Survey (NGS) has identified 2 geodetic station markers that may be affected by the proposed abandonment. Therefore, UP shall notify NGS at least 90 days prior to any salvage activities that may disturb or destroy these markers so that plans can be made for their relocation. Based on the information provided from all sources to date, and subject to the recommended conditions, we conclude that, as currently proposed, abandonment of the line will not significantly affect the quality of the human environment. Therefore, the environmental impact statement process is unnecessary. Service Date: April 17, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Ex Parte No. 575 REVIEW OF RAIL ACCESS AND COMPETITION ISSUES At the request of Senator John McCain, Chairman of the Senate Committee on Commerce, Science, and Transportation, and Senator Kay Bailey Hutchison, Chairman of the Subcommittee on Surface Transportation and Merchant Marine, the Board conducted two days of informational hearings, on April 2 and 3, 1998, to examine issues of rail access and competition in today's railroad industry. After reviewing both the written statements and oral testimony presented by over 60 witnesses, we have decided to pursue certain issues in the manner described in this decision. There is no dispute that the Staggers Rail Act of 1980 (Staggers Act), as implemented and administered first by the Interstate Commerce Commission (ICC) and now by the Board, has revitalized American railroads. Whether the railroads have improved their financial condition enough or too much, and at the expense of rail-dependent shippers, are issues of ongoing debate that were not resolved by the hearings. What the hearings did clearly show, however, is that there is widespread discontent today among those who use rail service. At the hearings, shippers complained of inadequate service and higher rates, regulatory remedies that they regard as more theoretical than real, and regulatory processes that they view as burdensome, costly, and unresponsive. While the Staggers Act was successful in spurring the railroads economic recovery, at the core of shippers complaints is their concern that the railroad industry is now dominated by a handful of large, Class I railroads, and as a result, shippers that are dependent on rail service increasingly lack competitive options. Shippers assert that, while the Staggers Act was meant to revive a failing industry and enable it to earn adequate revenues, Congress did not intend to thwart the equally important statutory goal that, to the maximum extent possible, competition should drive the railroads economic recovery. The shippers view is that, whether intentionally or not, implementation of the Staggers Act has met the former goal, but not the latter. The various recommendations for change made by the shippers at the Board hearings are intended to address this concern, and certain of the regulatory changes being proposed are embodied in S. 1429, legislation introduced by Senator Rockefeller and co-sponsored by Senators Burns and Dorgan. Carriers take the position that the problems shippers face today are not structural but operational, highlighted by ongoing service failures in the West, and the railroad industry has pledged to re-examine with shippers the adequacy of current remedies designed to address service failures. The railroads argue that some of the proposed shipper solutions to the concerns expressed about competition would simply transfer wealth from carriers to shippers, and that, while access may produce lower rates for the short term, the various open access remedies shippers seek would, if adopted, ultimately undo the gains achieved by the Staggers Act. The railroads argue that reducing their earnings would deprive carriers of funds needed to replace existing rail facilities and to invest in new infrastructure required to resolve service problems such as those recently experienced in the West and to meet added service demands in a growing economy. The railroads further maintain that existing remedies can address any pricing and competitive abuses, and that shippers have not explained how new remedies intended to inject more competition into the rail industry would ensure the industry of the revenues necessary to make the needed infrastructure and capacity investments. The railroads position is that, because they are part of a highly capital intensive industry whose marginal costs decline as use of its plant increases, railroads cannot be regulated under a perfect competition model. Instead, because much, but not all, of the railroads traffic base faces competition from other modes, railroads must be able to differentially price their services based upon demand that is, they must recover the substantial joint and common costs of their networks disproportionately from their captive traffic. Inherent in the rail industry cost structure are large amounts of joint and common costs that cannot be attributed to particular traffic. Because railroads, under the current system, serve a mix of competitive and captive traffic, a carrier cannot recover an equal portion of those unattributable costs from all traffic. Accordingly, it has been generally accepted that a railroad must price its traffic differentially so as to recover a greater percentage of its unattributable costs from traffic with a greater demand for (dependency on) rail transportation. Under demand-based differential pricing, shippers with greater transportation alternatives are offered lower markups to keep their traffic (and their contribution to the carrier's unattributable costs) on the rail network. As a result of this form of pricing, captive shippers may actually pay lower rates than would be necessary if competitive traffic were driven from the rail system by a purely cost-based pricing system. In this regard, we note that many of the shippers at the hearings did not dispute the continuing need for some sort of demand-based differential pricing, and that no party at the hearings showed how the more aggressive access remedies designed to produce lower rates and conform the industry more closely to a perfect competition model would permit railroads to recover sufficient revenues to cover system costs and support reinvestment in the rail facilities that shippers require. On the other hand, the railroads have not satisfactorily addressed the shippers basic complaints: that the rail industry has changed dramatically since 1980 as a result of significant railroad consolidations, system rationalizations, and greater carrier pricing and routing discretion. Although these changes have contributed to the efficiencies, cost savings, and improved earnings necessary to sustain the industry, cumulatively the result has been a significantly more consolidated industry in which competitive options for rail-dependent shippers have not been expanded. This increasing consolidation within the industry, combined with the difficulties that many shippers perceive in obtaining relief through the regulatory system, leave too many shippers feeling that they have no leverage and no avenue of relief. In short, the shippers charge that, eighteen years after passage of the Staggers Act, the regulatory system is not functioning as intended; what has resulted, they claim, is a highly concentrated rail industry that is generally pleased with the present regulatory scheme, and a group of rail-dependent shippers, which our regulation is meant to safeguard, that feels unprotected and broadly discontented. Whether seeking better service, better prices, or both, dozens of rail-dependent shippers and their trade associations appeared at the hearings to voice those sentiments. The railroad industry asserts that many shippers are largely satisfied with present-day rail service, and certain intermodal shippers which ship highly competitive traffic voiced their support for the regulatory status quo at the hearings. However, no rail-dependent shippers or shipper groups participated to express satisfaction with the present state of rail service. The Board cannot ignore the pleas of those many shippers that are concerned with the present state of affairs. It is thus clear that we have reached a regulatory crossroads. Neither continuation of the status quo nor the immediate adoption of the more drastic measures suggested by some shippers (measures which, if not carefully implemented, risk completely undoing the progress made towards a healthy national railroad system capable of meeting customers service needs) seems appropriate at this juncture. Therefore, we must take a careful, measured approach. We will start by accepting the offers made at the hearings by both rail industry and shipper representatives to reexamine certain aspects of our current regulatory scheme. We will also institute appropriate rulemaking proceedings to re-examine other issues that we believe we can address now. Finally, we intend to report appropriately to Congress on the outcome of the hearings and our proposed administrative initiatives, and discuss in that report other possible actions. We turn now to the specific issues that we believe immediately can and should be addressed administratively. Revenue Adequacy Congress has directed the Board to allow rail carriers to earn adequate revenues and to maintain standards and procedures for measuring such revenue levels. In implementing those directives, the ICC defined adequate revenues as those that provide a railroad a rate of return on net investment equal to the current cost of capital, and the Board has continued to employ that standard. At the hearings, several shipper interests asserted, as others have in the past, that the cost- of-capital standard, under which only a few Class I railroads have been found to have adequate revenues, fails to reflect the railroads true, robust financial posture. They argue that other financial measures such as credit-worthiness, return on equity, or market-to-book value show an industry that is doing quite well financially. The railroads, on the other hand, defend the continued use of the cost-of-capital standard, pointing to recent Wall Street reports that have questioned the industry's long-term viability in light of returns on investment less than that amount. At the hearings, representatives of both railroads and shippers advocated referring this issue to one or more disinterested expert economists with no preconceived position on the issue. Notwithstanding the administrative proceedings that have already been held, the years of continuing debate, and the litigation that has already addressed this issue, we agree that a fresh examination would be useful. Accordingly, we request representatives of the shipping community and rail industry to meet, under the supervision of an Administrative Law Judge (ALJ), and select a mutually acceptable panel of three such disinterested experts to examine the current and alternative measures of a railroad's financial health, and to make recommendations to us as to the appropriate standard to apply. We would then review the panel's recommendations and, if a new or revised standard is recommended, seek public comment on it. We request the parties to organize, meet, and select a three-person panel by May 15, 1998. The panel, under the ALJ's supervision, may determine its own procedures, and should submit its report to the Board by July 15, 1998. Competitive Access Under the current statute, three kinds of competitive access remedies are available to complaining shippers or carriers. The first, and least physically intrusive form of access, is an "alternative through route," whereby an incumbent railroad can be required to interline traffic with another railroad and provide a through route and through rate for that traffic. The second form of access is "reciprocal switching," whereby the incumbent railroad, for a fee, must transport the cars of a competing carrier, enabling the latter carrier, even though it cannot physically serve the shipper's facility, to offer a single-line rate to compete with the incumbent's single-line service. The third, most intrusive form of access is "terminal trackage rights," whereby the incumbent railroad, for a fee, must permit physical access over its lines to the trains and crews of a competing carrier. Although access to more routing options could provide additional competition in some circumstances, the statute does not provide these access remedies on demand; a showing of need is required. In implementing the directives of the Railroad Revitalization and Regulatory Reform Act of 1976 (4-R Act) and the Staggers Act, which ended the former shipper-directed open routing system under which railroads had been required to establish extensive and not always efficient interchanges and through routes, the current regulations require a demonstration that the incumbent rail carrier has engaged in anticompetitive conduct. More specifically, they require a showing that the carrier has either (1) used its market power to extract unreasonable terms or (2) because of its monopoly position shown a disregard for the shipper's needs by rendering inadequate service. At the hearings, as in the past, some shippers complained that the anticompetitive conduct standard of the competitive access regulations is too onerous, effectively precluding use of the competitive access remedy in an increasingly consolidated rail industry in which shippers are facing service failures such as those now being experienced in the West. The railroads concur that the competitive access rules should be revisited as they pertain to service failures. To ensure that our procedures are effective in addressing needed service improvements, we will expeditiously begin a rulemaking proceeding to consider revisions to the competitive access regulations to address quality of service issues. Given the changes that have taken place in the rail industry since 1980, we will also consider whether to revise the competitive access rules with respect to competitive issues that are not related to quality of service. First, however, we direct the railroads to arrange meetings with a broad range of shipper interests, again under the supervision of an ALJ that we will appoint, to explore the issue and see if the parties can mutually identify appropriate modifications to the non- service-related component of our standards that would facilitate greater access where needed. We suggest that the parties explore, for example, the proposal made by Illinois Central Railroad that each railroad designate certain open gateways on their systems that would be available for use by all shippers to create alternative through routes. We request the parties to report back to us on this issue by August 3, 1998. Market Dominance Product and Geographic Competition Another area of continuing concern for rail-dependent shippers involves the difficulties associated with seeking rate relief from the Board, especially those difficulties posed by the components of our market dominance standards relating to product and geographic competition. Under the statute, the Board has jurisdiction to consider a rate challenge only if the carrier has market dominance over the traffic involved, that is, if there is no effective competition for the traffic at issue. In evaluating whether a railroad can exercise market dominance, the Board considers whether the shipper could obtain the transportation service that it needs from other railroads (intramodal competition) or other modes of transportation (intermodal competition). In addition to these direct competitive alternatives, the Board considers, when raised by a railroad, whether there is product or geographic competition that would effectively constrain a carrier's pricing. Product competition results from the availability of suitable substitute products that can be acquired without relying on the services of the same carrier. Geographic competition exists where the shipper can conduct its business by obtaining the product it needs from a different source and/or by shipping its goods to a different destination using another carrier. Shippers complain that the examination of possible product and geographic competition unduly complicates the market dominance determination and places an enormous litigation obstacle to a shipper's ability to pursue a rate complaint. Plainly, the zealous use of the discovery process may be partly to blame for the heavy burdens associated with the inquiry into product and geographic competition in individual rate cases. We have, in a decision issued today, taken appropriate action to ensure that carriers which have the burden both of identifying the existence of and proving the effectiveness of any product and geographic competition not shift those burdens onto the shipper through unsupported and/or overreaching discovery demands. While our action to curb discovery abuses may alleviate some of the shippers concerns, we believe that it is also time to consider removing product and geographic competition altogether from the market dominance analysis. Initially, the ICC concluded that these issues complicate rate proceedings unduly. The ICC subsequently reversed course, concluding that consideration of these issues would be manageable. Based on more than a decade of experience, we should now reconsider whether the ICC's initial conclusion was the better one. Accordingly, we will institute a rulemaking proceeding expeditiously to consider eliminating product and geographic competition from our market dominance analysis. Smaller Railroads An area of great concern for short-line railroads (and for the shippers that they serve) are obstacles including paper barriers (contractual obligations incurred when short-line carriers acquired lines from larger, connecting carriers); inadequate car supply; and the lack of alternative routings that prevent them from obtaining or fully using connections with competing carriers. At the hearings, shippers suggested that, in a more competitive rail environment, there should be a greater role for short-line railroads and other smaller carriers, particularly in rural areas. We agree that smaller railroads represent a potentially significant resource in addressing the issues that concern the shippers, and that to date their potential remains largely untapped. At the hearing, we were advised that the smaller railroads and the large railroads have initiated discussions to address these concerns. Because we believe that private-sector solutions are generally preferable, we urge the parties to address and resolve these issues themselves, and to do so expeditiously. We direct the parties to report back to us on their progress in this regard by May 11, 1998. The Board is prepared to take administrative action as necessary and appropriate in this area to address the concerns that have been raised. Formalized Dialogue Another issue on which all sides agreed at the hearing was the need for greater communications, including more formalized discussions, between railroads and their customers. In addition to the forums that already exist to address issues of ongoing concern, such as the National Grain Car Council and the RSTAC, the railroads proposed to establish a regular, formalized process for discussions about service planning and needs, with the Board as an overseer of the process. In this regard, we remind railroads that their customers include both large and small shippers, and that they need to find a more systematic way of addressing customer concerns related to rate and service issues and to means for obtaining relief of small shippers as well as large ones. Additionally, we again remind the railroads that all of these initiatives will have effects on their employees, and we urge them to include rail labor in their discussions. We direct the railroads to report back to us on their progress in establishing formalized dialogue with shippers and with their employees, by May 11, 1998. Board/Shipper Discussions At the hearings, Board members expressed their willingness to meet with shippers to address general issues concerning railroad service. One shipper representative expressed concern about potential improprieties in the event that shippers were to meet informally with Board members. So long as shippers limit their discussions at such meetings to general service and other issues of broad concern, rather than specific pending cases, we welcome the opportunity to engage in dialogue with them. It is ordered: 1. The parties to this proceeding will take the actions described in this decision by the dates indicated above. Decided: April 16, 1998 Service Date: April 17, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD STB Finance Docket No. 33388 Decision No. 76 CSX CORPORATION AND CSX TRANSPORTATION, INC., NORFOLK SOUTHERN CORPORATION AND NORFOLK SOUTHERN RAILWAY COMPANY --CONTROL AND OPERATING LEASES/AGREEMENTS-- CONRAIL INC. AND CONSOLIDATED RAIL CORPORATION This decision addresses the motion by Richard and Judith Bell and George Rigamer, filed March 30, 1998, for leave to become a party of record for the purpose of commenting on and participating in this proceeding. CSX filed its reply (CSX-142) in opposition to the intervention request on April 2, 1998. Movants request to intervene and participate individually and as representatives of a class of approximately 8,000 plaintiffs in the court proceeding In Re: New Orleans Train Car Leakage Fire Litigation, No. 87-16374, Civil District Court for the Parish of Orleans, LA. Movants indicate that they have obtained a substantial jury verdict against CSX and that, if the verdict becomes final, CSX's proposed acquisition of Conrail may adversely affect CSX's ability to pay any final judgment. Movants allege that they have evidence of CSX's safety policies and procedures, particularly in the New Orleans area, that may have a bearing on the desirability of the proposed transaction. CSX opposes the motion. CSX indicates that, on October 31, 1997, movants jury verdict was vacated and set aside by the Supreme Court of Louisiana on the ground that the trial court erred in rendering a monetary judgment prior to adjudicating liability issues. According to CSX, movants have failed to show any reason why they could not have participated in this proceeding on a timely basis. The motion to intervene will be denied. Responsive applications, comments, protests, and requests for conditions were required to be filed with us by the October 21, 1997 due date for such filings, as established in Decision No. 6. Movants indicate that their original jury verdict was rendered on September 9, 1997, but they have made no showing why they could not have appeared and made their alleged safety claims by the October 21, 1997 deadline. Movants instant intervention request, filed more than 5 months after the established deadline, is much too late to be considered. Moreover, even at this late date, movants have not offered any evidence, other than bare allegations, of CSX's safety practices or policies. Thus, for these reasons we will deny the motion to intervene. It is ordered: 1. The motion to intervene, filed by Richard and Judith Bell and George Rigamer, is denied. Decided: April 15, 1998 Service Date: April 17, 1998 ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Docket No. AB-531X] Pioneer Valley Railroad Company, Inc. Abandonment Exemption In Hampden County, MA. On April 2, 1998, Pioneer Valley Railroad Company, Inc., filed with the Surface Transportation Board a petition to abandon a line of railroad known as the Westfield Branch extending from milepost 0.0 to the end of the line at milepost 1.9, a total distance of 1.9 miles, in Westfield, Hampden County, MA. The line traverses U.S. Postal Service ZIP Code 01085. There are no stations on the line. By issuance of this notice, the Board is instituting an exemption proceeding. A final decision will be issued by July 21, 1998. Decided: April 15, 1998. Service Date: April 22, 1998 ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33584] Union Pacific Railroad Company--Trackage Rights Exemption--The Burlington Northern and Santa Fe Railway Company The Burlington Northern and Santa Fe Railway Company (BNSF) has agreed to grant overhead trackage rights to Union Pacific Railroad Company (UP) from Beaumont, TX, at or near milpost 0.07 to Silsbee, TX, at or near milepost 152.16, continuing through Cleveland, TX, at or near milepost 94.9 and Conroe, TX, at or near milepost 72.1, to Navasota, TX, at or near milespost 28.14, a distance of 144.32 miles. Further, BNSF has agreed that UP may enter or exit the trackage rights line at Cleveland and at Conroe. The transaction is expected to be consummated on or shortly after April 13, 1998, the effective date of the exemption. Decided: April 13, 1998. Service Date: April 22, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION AND CERTIFICATE OF INTERIM TRAIL USE OR ABANDONMENT STB Docket No. AB-32 (Sub-No. 83) BOSTON AND MAINE CORPORATION--ABANDONMENT--IN HARTFORD AND NEW HAVEN COUNTIES, CT STB Docket No. AB-355 (Sub-No. 23) SPRINGFIELD TERMINAL RAILWAY COMPANY--DISCONTINUANCE OF SERVICE-- IN HARTFORD AND NEW HAVEN COUNTIES, CT On December 29, 1997, Boston and Maine Corporation (B&M) and Springfield Terminal Railway Company (ST) filed an application seeking authority to permit B&M to abandon and ST to discontinue service on a line of railroad known as the Canal Branch extending from milepost 14.50 in Cheshire, CT, to milepost 24.00 in Southington, CT, a distance of 9.50 miles, in Hartford and New Haven Counties, CT (the line). Notice of the application was published in the Federal Register on January 16, 1998. Protests were filed by Dalton Enterprises, Inc., and Mr. Francis L. Ariola. B&M replied separately to each protest. In addition, a comment was filed by J.J. Ryan Corporation-Rex Forge Division (Rex Forge), and a request for imposition of a public use condition and for issuance of a certificate of interim trail use (CITU) was filed by the Town of Cheshire (the Town). Upon review of the record, we conclude that the application should be granted, subject to historic preservation, public use, trail use, and standard employee protective conditions. On March 18, 1998, Dalton filed a motion requesting permission to late-file a supplement to its protest and tendered a supplemental pleading containing a verified affidavit from a potential shipper on the line, F & F Concrete Corporation. Dalton asserts that F & F would generate an additional 208 carloads a year to applicants, if service on the line was restored. Applicants replied to the motion, urging us to reject the tendered supplemental pleading as untimely, but also responding that the tendered evidence, even if considered, is entitled to little weight. Our rules provide that we will reject any pleading filed after its due date unless good cause is shown why the pleading is filed late. Protests were due on February 12, 1998. Dalton has not given a reason for the month-long delay in filing the information it now seeks to have considered. Having failed to demonstrate good cause for late-filing this information, we will deny Dalton's motion and reject the late-tendered supplemental pleading. The line has been embargoed since November 23, 1994, due to hazardous operating conditions. Applicants previous attempts to abandon the line were unsuccessful. Beginning on September 12, 1996, applicants filed an exemption petition to abandon and discontinue service over the line. Comments and protests were filed by the Cheshire Economic Development Commission, Southington Town Council, State Senator Brian McDermott, Mr. Francis L. Ariola, Rex Forge, Dalton, and Country Lumber, Inc. (Country Lumber). We denied the petition, because the record was inadequate to address the shippers concerns. At that time it appeared that Dalton's business would be seriously disrupted because of a lack of access for truck deliveries in the event B&M's property was acquired for trail use after abandonment. It also appeared that Rex Forge would be without alternative transportation service because its oversized shipments required rail movement due to highway and bridge limitations. Both Dalton and Country Lumber contended that their traffic had increased and applicants did not refute their statements that additional traffic was available. In addition, Rex Forge submitted that applicants moved a shipment after the line was embargoed, which brought into question whether at least a portion of the line could be restored to service without incurring significant costs. The record did not contain information on what rehabilitation was necessary or what it would cost to restore the line to service. Nor did the record contain an estimate of the line's revenue potential if Dalton's and Country Lumber's current traffic projections were taken into consideration. We advised applicants in the December 31 decision that they could either refile the petition for exemption if they could cure the noted problems or, in the alternative, file a formal application for abandonment and discontinuance in the first instance. Applicants chose to file an application for authority to abandon and discontinue service over the line. We rejected the application, which was filed on October 27, 1997, for failure to comply with our abandonment and discontinuance regulations and the environmental and historic reporting requirements. Moreover, the record did not contain an estimate of the line's revenue potential if protestants current traffic projections were taken into consideration as we had requested in the prior decision. In the refiled abandonment application now before us, the defects in the record noted in our previous decisions have been remedied. Applicants have submitted evidence on the traffic, revenues and costs attributable to the line, rehabilitation expenses, and estimates based on Dalton's traffic projections; and Dalton has submitted evidence in opposition to applicants case. A sufficient record now exists upon which to make an informed decision. As previously stated, the line is currently embargoed and, consequently, no service has been provided over it since November 23, 1994, with the exception of two movements of oversized metal presses to Rex Forge, located at Plantsville (milepost 20.00 on the line), that occurred in 1996 and 1997. In 1994, the last year when regular service was provided, Country Lumber and Dalton shipped or received 24 carloads and 58 carloads, respectively. In the November 14, 1997 decision rejecting their previous application, we told applicants to provide a revised estimate of operating results, assuming that there is no embargo, and to include revenue projections for potential traffic. In addition, we asked applicants to provide detailed estimates of both on- and off-branch costs, including normalized track maintenance costs that assume rehabilitation of the line. (Applicants previous estimate of forecast year operating results had assumed incorrectly that, because the line is embargoed, no traffic would be transported over the line and, consequently, no revenue would be earned or costs incurred.) Both applicants and Dalton provide estimates of the financial results of continued operations over the line for the forecast year (beginning December 1, 1997, and ending November 30, 1998). Dalton's figures show increased revenues to account for its projected additional carloads, but make no adjustments for increased costs associated with the movement of the extra carloads. To remedy this, applicants, in their reply, restate Dalton's estimates, taking into account higher cost levels associated with the movement of additional carloads. In the appendix to this decision, we have set forth applicants forecast year figures as contained in their application, Dalton's figures, applicants reply figures using Dalton's revenues, and our restatement of the amounts using both applicants and Dalton's revenue figures. Our restatement is based on the following analysis of the evidence. Applicants estimate of forecast year revenues is $55,188. This estimate is predicated upon the movement of 71 carloads per year, consisting of 30 carloads per year from Country Lumber, a traffic level slightly higher than that experienced in the last year of operations in 1994, generating estimated revenues of $19,910, and 41 carloads per year from Dalton (based on information from Dalton used in a court case between Dalton and applicants), generating revenues of $24,240. Applicants further adjusted the revenue estimate, increasing it by 25% to take into account Dalton's assumption that trucking rates are 25% higher than rail rates. Dalton argues that applicants estimate of 71 carloads is understated. According to Dalton, it will increase its shipping and receiving to approximately 110 carloads per year due to the fact that its largest customer, Home Depot, has increased the number of stores that will purchase from Dalton from 30 to 100. In addition, Dalton claims that, if rail service were available, it could ship 50 additional carloads per year of finished products to Maynard's Warehouse in Plano, IL. No documentation is provided by Dalton from either Home Depot or Maynard's Warehouse in support of its claim. Dalton also asserts that Country Lumber would use on average 50 carloads per year, not the 30 carloads used in applicants revenue figures (no supporting statement was submitted by Country Lumber). In total, Dalton's projection assumes the movement of 210 carloads (160 carloads attributable to Dalton and another 50 carloads for Country Lumber) which would generate revenues of $130,143. The revenue level of $55,188, contained in the application, amounts to a revenue per carload (for 71 carloads) of $777.30. Dalton's revenue level of $130,143, which was not challenged by applicants in their reply statement, amounts to a revenue per carload (for 210 carloads) of $619.73. Mr. Ariola also challenges applicants traffic projections, contending that applicants could potentially move 380 carloads annually (300 carloads estimated for Dalton and 80 carloads estimated for Country Lumber). These estimates are unsupported and, moreover, Mr. Ariola fails to indicate the amount of annual revenue that could be generated at the higher traffic level. Avoidable costs are costs that applicants will cease to incur if they abandon and discontinue service over the line. On-branch avoidable costs are shown for: (1) maintenance-of- way and structures; (2) maintenance of equipment (including depreciation); (3) transportation expense; and (4) freight car costs (other than return). Applicants have submitted data showing avoidable on-branch costs for the forecast year of $32,954. Using Dalton's revenues for the forecast year, applicants project avoidable on-branch costs of $80,910. Applicants state that off-branch avoidable costs are $40,468 for the forecast year, and $119,694 for the forecast year if Dalton's revenue projections are used. Dalton does not challenge applicants costs, adopting them in combination with its estimate of higher traffic volume, and therefore revenues, for its analysis. While applicants believe that Dalton's revenue projections are overstated, in their reply they nonetheless provide estimates of operating results at protestant's higher revenue level to show that, even at that level of revenue, operations would continue to be unprofitable, with avoidable costs exceeding revenue. Applicants, however, point out that Dalton's costs should be higher because of the higher volume of traffic Dalton assumes in its analysis. Applicants adjust upward each of Dalton's estimated avoidable costs. With the exception of maintenance-of-way and structures (discussed below), we use all of applicants avoidable costs as shown in their application. The maintenance-of-way and structures figure is based on applicants reply statement. Applicants estimate of avoidable costs is found to be in conformity with the Board's abandonment regulations and are, therefore, acceptable. The allocation of costs for 210 carloads by using a proration of the costs for 71 carloads is reasonable and appears to be the only practical method for computing costs at the higher revenue level, given that all these costs are variable. Total avoidable costs, as restated, at the 71-carload level are $81,972 and at the 210-carload level are $200,604. Applicants initial estimate of forecast year maintenance-of-way and structures is $12,825, based on inspection, brush clearing and snow removal during the first 7 years of operation after rehabilitation. This figure is understated and reflects applicants overstated rehabilitation cost. Applicants point out that Dalton does not address the maintenance cost related to its rehabilitation program, something that would be particularly important considering the reduced scope of its rehabilitation. Applicants correct this deficiency by including a maintenance cost that reflects Dalton's more modest rehabilitation program. According to applicants, the annual maintenance cost following Dalton's rehabilitation program would be $21,375. We accept this amount as the best evidence of record. The parties agree that the line currently does not meet FRA class 1 standards and requires rehabilitation. Dalton alleges that applicants deliberately let the condition of the line deteriorate and removed track materials for use elsewhere on their system. Given the minimal use of the line during the years prior to the embargo, we cannot find that applicants failed to maintain the line adequately. According to applicants, approximately 9,500 new or relay ties need to be installed, and brush cutting and rail joint rehabilitation are needed to bring the line up to FRA class 1 standards. This rehabilitation program would cost $785,650, and allow the line to be maintained with minimal attention for the next 7 years. Applicants provide a detailed explanation of their costs. Applicants submit that they have inspected the line, but, according to Dalton, applicants have not seen the line since the embargo, and, thus, have no basis for determining the quantities of materials required for rehabilitation. Dalton contends that applicants rehabilitation cost estimate is overstated. The most significant figure in the rehabilitation cost is the cost for ties. Dalton notes that applicants estimate does not consider the 1.1 miles of track that was completely rebuilt after the embargo as part of an interstate road project. According to Dalton, only 6,077 ties need to be replaced for the portion of the line that has not been rebuilt. In addition, Dalton argues that applicants use larger, more expensive new ties instead of smaller, less expensive, relay ties and that applicants estimates for surfacing, brush removal and joint rehabilitation are overstated. Dalton submits an alternative rehabilitation cost of $483,125, based on a signed quotation from an independent contractor. In response, applicants argue that their method of rehabilitation is more economical in the long run. Applicants note that Dalton has not included any disposal cost for the ties being replaced and provide a price quote for this service of $48,616. For comparative purposes, applicants restate Dalton's figures by adding tie removal costs for a total rehabilitation figure of $534,779. We agree with Dalton that applicants rehabilitation cost is overstated for a number of reasons: it includes more ties than necessary; it uses larger ties than required; and it uses new instead of relay ties. Minimum FRA class 1 standards require about 700 non-defective ties per mile. Compared to this standard, applicants tie replacement rate of 1,000 ties per mile is excessive, even if all current ties were defective. However, no evidence has been submitted showing that all ties are defective. The fact that one train moved over the line in 1996 indicates that the line may still be passable and that some of the ties may be non-defective. Accordingly, we conclude that applicants have overstated the rehabilitation cost of the line. Dalton submitted a signed quotation from an independent contractor in support of its rehabilitation cost figure, and its replacement rate of ties per mile is adequate to restore the line to operating condition and to meet minimum FRA class 1 standards, even if all current ties are defective. Accordingly, we find Dalton's supporting evidence persuasive. However, tie removal is a necessary part of rehabilitation and applicants addition of this cost is appropriate. Therefore, we will use Dalton's rehabilitation cost of $483,125 and applicants tie removal cost of $48,616, for a total rehabilitation cost of $531,741. Applicants estimated administrative costs for the forecast year are $1,301, less than 1% of the total annual revenues attributable to the branch using Dalton's revenues. We find this amount to be reasonable and we accept it. Opportunity costs (or total return on value) reflect the economic loss experienced by a carrier from forgoing a more profitable alternative use of its assets. The opportunity cost of road property is computed on an investment base that is the sum of: (1) allowable working capital; (2) the net liquidation value (NLV) of the line; and (3) current income tax benefits (if any) resulting from abandonment. The investment base, also called the valuation of the road properties, is then multiplied by the nominal rate of return, which is 17.7%. The resulting figure, the nominal return on value, is then adjusted by applying a holding gain (or loss), which is the increase or decrease in value that a carrier will expect to realize by holding assets for 1 additional year. (1) Working Capital. Our abandonment regulations call for working capital to be equal to 15 days of avoidable on-branch costs (less depreciation and return). Applicants compute working capital for the forecast year to be $825 at the 71-carload level. Using Dalton's 210-carload projection, the amount is $3,325. (2) Net Liquidation Value. NLV is the sum of the net salvage value (NSV) for track and bridges and the value of the merchantable land in the right-of-way. Applicants initial NLV estimate for the line is $2,139,050. Dalton's NLV for the line is $782,260. In their reply, applicants restated NLV for the line to be $995,040, using a revised NSV and Dalton's land value. a. Net Salvage Value. Applicants assume that all track materials are either relay quality or scrap. According to applicants, a $70 per net ton (NT) removal cost is included in the $270 per NT price for relay material, and the price for removal of scrap material is included in the price contractors pay for track materials in place, excluding ballast and ties. Prices are based on applicants direct market price experience within a 60-day period. Applicants do not include a cost for tie removal. Applicants submit a revised NSV for the line which includes a salvage cost for the 1.1 miles of recently rebuilt track. They value 0.9 miles of 115-lb. new rail that was installed at $465 per NT less $70 per NT for removal costs, based on several quotations submitted in support of their figures. Most specify 3/16" wear, indicating that the price is based on relay quality rail. Applicants revised NSV for the line after including this 115-lb. relay rail is $274,140. Dalton values track materials using a different set of categories: relay, reroll, and scrap. It presents a quotation from an independent contractor in support of its NSV of the line. Dalton's gross salvage value (GSV) for the track materials on the line is $211,360. Dalton argues that applicants did not include the cost to remove the track and estimate it to be $149,100, excluding any removal and disposal cost for ties and restoration of grade crossings. The NSV for the line, using Dalton's figures, is $62,260. Although Dalton argues that applicants track material values are overstated, it presents no assessment of the condition of the track material on which to base its reduction of applicants valuation. Its supporting information is contained in a quotation from a contractor, but Dalton does not submit any market data indicating that its unit costs are reasonable. Consequently, we cannot accept its values for track materials. Dalton uses a separate removal cost to develop its cost estimate. However, similar to applicants, it leaves all ties in place. We also note that there are several grade crossings on the line, but neither party addresses the restoration cost for these grade crossings. As a result, both parties NLV estimates may be overstated. Because of the above flaws in Dalton's NSV estimate, we accept applicants estimate as the best evidence of record. However, applicants inadvertently omitted relay joint bars which adds $11,600 to their NSV. We correct this error and restate NSV to be $285,740. b. Net Land Value. Applicants land value of $1,867,000 is based on an appraisal of the right-of-way. The right-of-way contains 72.79 acres over 9.50 route-miles, and is generally from 50 to 70 feet wide. Applicants appraisal uses comparable parcels to develop an across-the-fence (ATF) value. The appraisal was developed to assist in condemnation proceedings. Applicants evidence indicates that there were other railroad right-of-way sales in the area. Applicants believe that a public agency will acquire a portion of the line for a linear park, which will connect to an existing trail located on an adjacent portion of the line that was previously abandoned. A portion may also be acquired by Dalton for use as a private roadway. In analyzing applicants land appraisal, Dalton challenges the use of ATF value, because, it asserts, the property is no longer a rail line. Thus, Dalton argues that the highest and best use of the property is to combine it with abutting property. In place of ATF value, Dalton submits that each segment of the right-of-way should be analyzed independently to develop its market value for NLV purposes. Dalton points out that applicants have not adjusted comparable sales to take into account that the property has limited frontage and access, and substantial restrictions due to wetlands and easements. Dalton presents a detailed appraisal for one segment of the line. The segment contains 5.498 acres. It notes that there is an easement for a coaxial cable, in addition to a sewer easement which is located under or adjacent to this segment. Dalton states that the appraisal is based on comparable sales in the area and reflects the market value of the property. Adjustments were made for the time of sale, location of the property, and the size and condition of the parcel. The median value is $0.22 per square foot, which Dalton estimates to be $10,000 per acre. Dalton uses this unit cost to develop its land value of $720,900 for the line. Dalton believes that only one parcel of land (applicants Industrial Sale No. 12) is actually comparable to the subject property, and it has a value of $6,604 per acre. In response, applicants maintain that their ATF approach to valuation of the right-of-way is appropriate because the property is a rail line. Applicants point out that Dalton's appraisal is for a 3,371-foot segment of the right-of-way that was valued for Dalton as part of its plan to acquire that portion of the line post-abandonment. Applicants note that, ultimately, Dalton was ready to pay a negotiated price of $150,000 for that segment of the line. Applicants restate their NLV using Dalton's land value of $720,900 in order to show that the line will still not generate the required rate of return. We generally agree with Dalton's criticisms of applicants real estate appraisal. The adjustments it applies to comparable sales are what we typically expect to see in an acceptable appraisal. However, Dalton does not develop a segment-by-segment approach similar to applicants appraisal. Further, Dalton's land valuation is based on only one comparable sale. We do not consider it reasonable to base the value of the entire 9.50-mile right-of-way on one parcel when other data are available. Nevertheless, Dalton presents the only evidence which takes into account appropriate adjustments that must be made to ATF values to reflect the value of the right-of-way for NLV purposes. In order to develop a reasonable value for the land, we will use applicants segment-specific data and the comparable sales adjustment factors developed in Dalton's evidence. Using this method, our restated land value for the right-of-way is $1,244,500. Our restated NLV for the line is $1,530,240. (3) Income Tax Consequences. Neither party includes any income tax consequences in its estimate. Nominal Return on Value. Both applicants and protestant Dalton use an after-tax 11.9% cost of capital figure for the nominal return element. The pre-tax equivalent (using a 35% Federal and a 2% state tax rate) is 17.7%. It has been our long standing policy to use the pre-tax cost of capital rate in abandonment proceedings. Therefore, we will use the 17.7% rate to compute nominal return on value to be $270,999 at applicants projected revenue level and $271,441 at Dalton's estimated revenue level. Our analysis of the evidence indicates that for the forecast year, at the 71-carload revenue level, applicants would incur an avoidable loss from operations of $26,784, an avoidable loss including return on value of $297,783, and would require an estimated subsidy payment of $830,825. At Dalton's higher 210-carload level, applicants would incur an avoidable loss from operations of $70,458, an avoidable loss including return on value of $341,899, and would require an estimated subsidy payment of $874,941. Applicants identify one shipper, Rex Forge, as a significant user on the line. They identify two shippers, Dalton and Country Lumber, who used the line prior to the embargo. Of these, only Dalton filed a protest. Dalton is a manufacturer of asphalt and sport surface materials. Its plant abuts the line in Cheshire. Prior to the embargo, Dalton used the line to bring in raw materials for processing at its plant. Dalton states that it built and later expanded its plant at its present location because of the existence of the line. Dalton opposes the abandonment and discontinuance because of its reliance upon rail service. Dalton contends that the proposed abandonment could result in its inability to remain in business. It notes that Cheshire's zoning for industrial use is confined to a narrow strip of land adjacent to the rail line and that the land surrounding that strip, in the area of its plant, has been zoned strictly for residential use. Dalton states that, when the line was embargoed, it was forced to use trucks over residential streets resulting in numerous complaints from property owners. Dalton also states that the additional cost in shipping by truck versus rail is significant and has financially harmed its business. Rex Forge produces steel and stainless steel forgings and conducts galvanizing operations at its Plantsville facility. Rex Forge acknowledges that freight levels on the line are not sufficient to support viable rail operations. At the time the line was embargoed, Rex Forge sought an arrangement with applicants to permit the delivery of several large presses, weighing between 300,000 and 600,000 pounds. Because of highway clearances and weight restrictions, the presses could not be delivered by motor carriers. As noted, applicants delivered the presses to the Rex Forge plant during the embargo. Rex Forge indicates that it needs to obtain additional presses to ensure that its plant has adequate equipment to meet future business requirements. It submits that applicants have agreed to retain a temporary freight easement under which the 4-mile segment of track between milepost 24.00 at Southington and milepost 20.00 at Plantsville will be left intact for at least a 12-month period so that rail delivery of additional presses can be accomplished on reasonable terms and conditions. In addition, according to Rex Forge, applicants and Rex Forge will seek an extension of the freight easement, not to exceed 6 months, from the Town of Southington and/or the Connecticut Department of Transportation, if necessary, to permit delivery of additional presses during the 6-month period. Rex Forge's operations also require motor vehicle access to the storage and marshaling yard at the rear of its plant. Rex Forge states that applicants have agreed that they will not oppose the grant of a driveway easement and, in cooperation with Rex Forge, applicants will use their efforts to obtain such an easement if the rail line is sold for recreational purposes. Rex Forge indicates that it will coordinate the construction and use of the driveway into its plant with trail purchasers. In light of applicants willingness to enter into these arrangements, Rex Forge does not object to abandonment of this line. Our concern that abandonment of the line would leave Rex Forge without viable alternative transportation service for its oversized shipments was one of the reasons we denied the petition for exemption. Now that applicants and Rex Forge have worked out an agreement, our concern is satisfied. Mr. Ariola is concerned that the proposed abandonment not only will result in loss of rail service for area businesses, but also will result in a significant increase in truck traffic, subjecting residential neighborhoods to noise and air pollution. Mr. Ariola states that the towns of Cheshire, Milldale, Plantsville, and Southington are still rebounding from a severe recession and that this branch line is needed to continue long-term growth and for the economic infrastructure of these towns. Mr. Ariola claims that the presence of a railroad in any one of these towns could lure businesses. He asserts that there are several shippers that would generate substantial traffic for the line if applicants would provide reliable service. Applicants state that there is alternative motor transportation available to shippers. The line is located near various state roads and highways which provide an alternate transportation network for all of the affected communities. The statutory standard governing an abandonment or discontinuance of service is whether the present or future public convenience and necessity permit the proposed abandonment and discontinuance. In implementing this standard, we must balance the potential harm to affected shippers and communities against the present and future burden that continued operations could impose on the railroad and on interstate commerce. The Board must determine whether the burden on the railroad from continued operation is outweighed by the burden on the shippers and public parties from the loss of rail service. This involves a question of whether, and to what degree, shippers will be harmed if rail service is no longer available. The fact that shippers are likely to incur some inconvenience and added expense is insufficient by itself to outweigh the detriment to the public interest of continued operation of uneconomic and excess facilities. Protestants must show that the harm to shippers and communities outweighs the demonstrated harm to the railroad and interstate commerce by continued operation of the line. In determining whether to grant or deny an abandonment or discontinuance application, we consider a number of factors, including operating profit or loss, other costs the carrier may experience (including opportunity/economic cost), and the effect on shippers and communities. No one factor is conclusive. Applicants and protestant Dalton disagree on several issues, including traffic levels for the forecast year, track rehabilitation and maintenance costs, and land value. We have analyzed the parties arguments and evidence for each of the operating projections. Under each projection, we find that the line will result in an operating loss. Even if we accept Dalton's projected traffic level of 210 carloads, we find that applicants would suffer an operating loss of $70,458, and when opportunity costs are considered, an economic loss of $874,941. The loss applicants would suffer from continued operation of the line outweighs protestant Dalton's concerns about potential harm to its business. Protestant has not alleged, much less shown, that its facility cannot be served by motor carriers. Although the cost of motor carrier service to Dalton may be greater than the cost of rail service provided by applicants, applicants have demonstrated that rail service cannot be provided except at a substantial loss to applicants. There is no reason that this cost should be borne by applicants rather than Dalton, which is the user of the transportation service. Dalton's and Mr. Ariola's assertions that there is significant traffic available from other shippers are unsupported and are entitled to little weight because none of the potential shippers has opposed this application. It has been long held that such unsupported evidence of future traffic is not enough to justify a denial of an abandonment. Thus, absent more specific documentation of the likelihood of future traffic, applicants should not have to continue to incur losses on the line. Moreover, in projecting increased traffic levels, Dalton ignores the costs applicants would incur if they handled the additional traffic. When such avoidable costs are factored in, the line would incur an even greater loss at the higher traffic levels than it would at Dalton's original estimate of 210 carloads. Concerning the impact on the community from increased truck traffic, we note that no community interest has opposed this application or corroborated Dalton's allegations. The environmental impact of the proposed abandonment is discussed below. On balance, we conclude that any harm to shippers and the community from the abandonment and discontinuance of service is outweighed by the demonstrated harm to applicants and the burden on interstate commerce through continued operation of the line. We note that 49 U.S.C. 10904 provides a mechanism for those who want to continue rail service that the Board has authorized to be discontinued or abandoned. Under section 10904, any financially responsible person (and all government agencies are deemed to be financially responsible) may file an offer of financial assistance (OFA) to acquire a line or subsidize the losses of the existing operator. SEA served an environmental assessment (EA) on February 6, 1998, and requested comments. In the EA, SEA noted that the Connecticut Historical Commission advised SEA that the line encompasses an important section of the historical Farmington Canal, which is listed on the National Register of Historic Places. Therefore, SEA recommends imposition of a condition requiring B&M to retain its interest in and take no steps to alter the historic integrity of all sites and structures on the line until completion of the section 106 process of the National Historic Preservation Act. SEA also has determined that the right-of-way may be suitable for other public use following abandonment. Dalton submitted comments on the EA. It states that the EA is flawed for two reasons: (1) it failed to calculate increases from truck traffic if the rail line proposed for abandonment had not been embargoed; and (2) it failed to take into account the increase in Dalton's business since the line was embargoed in November 1994. According to Dalton, it would now use a minimum of 160 rail cars per year, which translates to approximately 480 trucks per year. In addition, according to Dalton, County Lumber estimates its potential traffic at 50 rail cars per year or 200 trucks. This would equal a total of 680 trucks per year. In accordance with the information submitted in their application, applicants have incorporated specific assumptions about the potential for traffic on the rail line. SEA's environmental analysis is consistent with those assumptions. The fact that SEA has not analyzed increases in truck traffic based on projections offered by Dalton does not render the EA defective. There is no indication in this record that the 480 trucks from Dalton would translate into an increase of more than 10% over the level of current average daily vehicular traffic on the roads near Dalton's facility. In the absence of more complete and reliable data regarding the magnitude of the increase in truck traffic relative to existing vehicular traffic, SEA has reasonably relied on applicants traffic assumptions in conducting its analysis, and the resulting EA is therefore adequate. We adopt SEA's analysis and recommended condition. Accordingly, based on SEA's recommendations, we conclude that the proposed abandonment and discontinuance, if implemented as conditioned, will not significantly affect either the quality of the human environment or the conservation of energy resources. The Town requests issuance of a CITU pursuant to the National Trails System Act, to enable it to acquire a portion of the right-of-way between milepost 14.50 and milepost 18.50 for recreational trail use. The Town has submitted a statement of willingness to assume financial responsibility for the right-of-way and acknowledged that use of the right-of-way is subject to possible future reconstruction and reactivation for rail service. By letter dated March 16, 1998, B&M states that it is willing to negotiate with the Town. We will issue a CITU covering that portion of the line between milepost 14.50 and milepost 18.50 as agreed to by B&M. The parties may negotiate an agreement during the 180-day period prescribed below. If an agreement is executed, no further Board action is necessary. If no agreement is reached within 180 days, B&M may fully abandon the line, subject to the conditions imposed below. Use of the right-of-way for trail purposes is subject to restoration for railroad purposes. SEA has indicated in its EA that the right-of-way may be suitable for other public use after abandonment. The Town also requests imposition of a public use condition on the portion of the right-of-way between milepost 14.50 and milepost 18.50. It requests that B&M be prohibited from disposing of the corridor other than the tracks, ties and signal equipment, except for public use on reasonable terms, and that B&M be barred from the removal or destruction of potential trail-related structures, such as bridges, trestles, culverts and tunnels, for a 180-day period from the effective date of the abandonment. The Town asserts that the 180 days is needed to work with the Connecticut Department of Environmental Protection and local agencies to complete a trail plan, to acquire funding, and to commence negotiations with B&M. The Town has met the public use criteria for imposing a public use condition by specifying: (1) the condition sought; (2) the public importance of the condition; (3) the period of time for which the condition would be effective; and (4) justification for the period of time requested. Accordingly, a 180-day public use condition will also be imposed on the portion of the right-of-way between milepost 14.50 and milepost 18.50. If a trail use agreement is reached on a portion of the right-of-way, B&M must keep the remaining right-of-way intact for the remainder of the 180-day period to permit public use negotiations. We find: 1. The present or future public convenience and necessity permit the abandonment and discontinuance of the above-described line, subject to employee protective conditions and the conditions that B&M: (1) shall leave intact the portion of the right-of-way between milepost 14.50 and milepost 18.50, including bridges, trestles, culverts and tunnels (but not track and track materials), for a period of 180 days from the effective date of this decision and certificate, to enable any state or local government agency or any other interested person to negotiate the acquisition of that portion of the line for public use; (2) comply with the interim trail use/rail banking procedures for the portion of the right-of-way between milepost 14.50 and milepost 18.50 as set forth below; and (3) retain its interest in and take no steps to alter any sites and structures on the right-of-way that are 50 years old or older until completion of the section 106 process of the National Historic Preservation Act. 2. Abandonment and discontinuance of service over the line will not have a serious, adverse impact on rural and community development. 3. The line may be suitable for other public purposes. 4. As conditioned, this action will not significantly affect either the quality of the human environment or the conservation of energy resources. It is ordered: 1. Dalton's motion to late-file a supplement to its protest is denied. 2. The application for abandonment and discontinuance of service over the above- described line is granted subject to the conditions specified above. 3. If an interim trail use/rail banking agreement is reached for the portion of the right-of- way between milepost 14.50 and milepost 18.50, it must require the trail user to assume, for the term of the agreement, full responsibility for management of, any legal liability arising out of the transfer or use of (unless the user is immune from liability, in which case it need only indemnify the railroad against any potential liability), and for the payment of any and all taxes that may be levied or assessed against, the right-of-way. 4. Interim trail use/rail banking is subject to the future restoration of rail service and to the user's continuing to meet the financial obligations for the right-of-way. 5. If interim trail use is implemented and subsequently the user intends to terminate trail use, it must send the Board a copy of this decision and certificate and request that it be vacated on a specified date. 6. If an agreement for interim trail use/rail banking is reached by the 180th day after service of this decision and certificate, interim trail use may be implemented. If no agreement is reached by that time, B&M may fully abandon the line, provided the conditions imposed above are met. 7. Applicants must promptly provide the Town and any other interested persons the information they require in order to formulate an OFA to acquire or subsidize the line. 8. Provided no OFA has been received, this decision and certificate will be effective May 22, 1998. 9. B&M shall file notice of consummation with the Board to signify that it has exercised the authority granted and fully abandoned the line. If consummation has not been effected by B&M's filing of a notice of consummation by April 22, 1999, and there are no legal or regulatory barriers to consummation, the authority to abandon will automatically expire. Decided: April 20, 1998 Service Date: Late Release April 22, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-33 (Sub-No. 105X) UNION PACIFIC RAILROAD COMPANY--ABANDONMENT EXEMPTION-- IN KANE COUNTY, IL By decision and notice of interim trail use or abandonment (NITU) served on April 29, 1997, a 180-day period was authorized for the City of Elgin, IL, to negotiate an interim trail use/rail banking agreement with the Union Pacific Railroad Company (UP) for a 2.8-mile segment of the East Elgin Industrial Lead between milepost 41.0 near Elgin Junction and milepost 43.8 near East Elgin, in Kane County, IL. At the City's request, the 180-day negotiating period was extended through April 24, 1998, by decision served November 4, 1997. On April 16, 1998, the City filed a request for another 180-day extension of the negotiating period. The City states that UP has just recently completed the review of the voluminous documents, including old deeds and other property records, necessary for title searches. It states that additional time is needed to complete an appraisal ordered by UP. The City also indicates that UP has tendered to the City a draft line sale and donation contract which will provide for the City's acquisition of the rail line property, and that the parties are hopeful to complete this complex real estate transaction in the near future. UP agrees with this request for an extension. It is ordered: 1. The City's request to extend the NITU negotiating period is granted. 2. The NITU negotiating period is extended until October 21, 1998. Decided: April 21, 1998 Service Date: April 23, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-497 (Sub-No. 1X) MINNESOTA NORTHERN RAILROAD, INC.--ABANDONMENT EXEMPTION--IN RED LAKE AND POLK COUNTIES, MN In a decision served November 28, 1997, Minnesota Northern Railroad, Inc. (MNN), was granted an exemption to abandon a line of railroad known as the Red Lake Falls-Strata Line, extending from milepost 59.00 near Strata, MN, to milepost 69.14 near Red Lake Falls, MN, a distance of 10.14 miles, in Red Lake and Polk Counties, MN. The exemption became effective on November 29, 1997. In the November 28 decision, a condition was imposed prohibiting MNN from salvaging or disposing of the portion of the right-of-way designated as Southeast Section 26 until completion of the section 7 process of the Endangered Species Act. In a letter filed April 6, 1998, MNN states that it has complied with the section 7 condition. It attaches a letter, dated February 11, 1998, from the U.S. Fish and Wildlife Service (F&WS), in which F&WS states that there are no federally-listed threatened or endangered species within the proposed abandonment project area and that this precludes further action as required under section 7 of the Endangered Species Act. Therefore, the Board's Section of Environmental Analysis recommends that the section 7 condition be removed. It is ordered: 1. This proceeding is reopened. 2. Upon reconsideration, the condition imposed in the November 28 decision to implement the section 7 process of the Endangered Species Act is removed. Decided: April 16, 1998 Service Date: April 23, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Finance Docket No. 33572 (Sub-No. 1) UNION PACIFIC RAILROAD COMPANY TRACKAGE RIGHTS EXEMPTION THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY By petition filed March 23, 1998, Union Pacific Railroad Company (UP or petitioner) requests that the Board permit the trackage rights arrangement exempted in STB Finance Docket No. 33572, as it relates to the operation between Council Bluffs and Hastings, to extend only until July 16, 1998, and as it relates to the operation between Hastings and Northport, to extend only until October 1, 1998. On March 23, 1998, UP filed a notice of exemption under the Board's class exemption procedures. The notice covered the agreement by The Burlington Northern and Santa Fe Railway Company (BNSF) to grant temporary overhead trackage rights over two segments of its line to UP: (1) between Council Bluffs, IA, at milepost 483.6 on BNSF's Bayard Subdivision (at a point which is equal to milepost 12.8 on BNSF's Omaha Subdivision) and Hastings, NE, at milepost 156.5 on BNSF's Hastings Subdivision, a distance of approximately 214.6 miles over a segment which extends from Council Bluffs through Omaha, NE, Ashland, NE, Lincoln, NE, Crete, NE, and Fairmont, NE, to Hastings, for the period March 30, 1998, through July 15, 1998; and (2) between Hastings, NE, at milepost 156.5 on BNSF's Hastings Subdivision and Northport, NE, at milepost 34.4 on BNSF's Angora Subdivision, a distance of approximately 387.7 miles over a segment which extends from Hastings though Holdredge, NE, Oxford, NE, Culbertson, NE, Wray, CO, East Brush, CO, Sterling, CO, and Sidney, NE, to Northport, for the period March 30, 1998, through September 30, 1998. The portion of the trackage rights operation between Council Bluffs, IA, and Hastings, NE, is scheduled to expire effective July 16, 1998. The portion of the trackage rights operation between Hastings and Northport, NE, is scheduled to expire effective October 1, 1998. The exemption became effective on March 30, 1998, 7 days after the verified notice was filed. According to petitioner, the trackage rights arrangement exempted in STB Finance Docket No. 33572 is necessary because UP will be performing programmed track, roadbed and structural maintenance work on its trackage between Council Bluffs and Northport. However, petitioner states that BNSF is only willing to grant temporary operating rights on its trackage during the periods of maintenance activity on UP's trackage. Petitioner further states that operating crew constraints on BNSF dictate that UP's operations over BNSF's trackage be handled as trackage rights rather than as a detour arrangement. Petitioner maintains that, without approval of temporary trackage rights, it is unlikely that any other arrangement can be reached to allow UP to operate over BNSF's line, and UP would face severe operational problems on the trackage for which programmed track, roadbed and structural maintenance is scheduled. Although the parties have expressly agreed on the term of the proposed trackage rights arrangement, trackage rights approved under the class exemption normally remain effective indefinitely regardless of any durational contract provisions. Occasionally, trackage rights exemptions have been granted for a limited term rather than in perpetuity. UP's trackage rights have already been authorized. Limiting the term of the trackage rights is consistent with the limited scope of the transaction previously exempted and will have no adverse impact on shippers on the line as the trackage rights are for overhead traffic only. Therefore, we will grant the petition and permit the trackage rights exempted in STB Finance Docket No. 33572, as they relate to the operation between Council Bluffs and Hastings, to expire on July 16, 1998, and as they relate to the operation between Hastings and Northport, to expire on October 1, 1998. It is ordered: 1. Under 49 U.S.C. 10502, we exempt the trackage rights described in STB Finance Docket No. 33572, as discussed above, permitting them to expire, as they relate to the operation between Council Bluffs and Hastings, on July 16, 1998, and as they relate to the operation between Hastings and Northport, on October 1, 1998. 2. Notice will be published in the Federal Register on April 23, 1998. 3. This decision is effective on May 23, 1998. Decided: April 10, 1998 Service Date: April 23, 1998 ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33575] State of North Carolina Intracorporate Family Exemption Merger of Beaufort and Morehead Railroad Company into North Carolina Railroad Company The State of North Carolina (the State), Beaufort and Morehead Railroad Company (B&M), and North Carolina Railroad Company (NCRR) have filed a verified notice of exemption to merge B&M, a Class III rail carrier wholly owned by the State (a noncarrier), into NCRR, a Class III rail carrier controlled by the State. An agency of the State, the North Carolina Department of Transportation, owns 100% of the outstanding common stock of B&M. The State owns approximately 75% of the outstanding common stock of NCRR. The proposed merger is an element of a financial restructuring, not subject to Board jurisdiction, related to the proposed buyout by the State of the private shareholders of NCRR. The merger will allow NCRR to issue new preferred stock in exchange for B&M preferred stock. The preferred stock issuance will evidently preserve NCRR's Federal tax status as a real estate investment trust after the State acquires all of its common stock. The parties expected to consummate the merger on or after March 31, 1998. Decided: April 15, 1998 Service Date: April 23, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD STB Finance Docket No. 33388 Decision No. 77 CSX CORPORATION AND CSX TRANSPORTATION, INC., NORFOLK SOUTHERN CORPORATION AND NORFOLK SOUTHERN RAILWAY COMPANY--CONTROL AND OPERATING LEASES/AGREEMENTS-- CONRAIL INC. AND CONSOLIDATED RAIL CORPORATION This decision addresses the petition by CONSOL Inc. (CONSOL), filed April 9, 1998, for leave to intervene, file comments, and participate in oral argument. Applicants separately replied to CONSOL's petition. CONSOL states that it is the largest producer of coal in the area served by the former Monongahela Railway Company, which was acquired by Conrail in 1991. In its petition, CONSOL indicates that it has not previously participated in this proceeding in light of applicants representations that, although NS will have operational control of Conrail's Monongahela coal lines, CSX will have equal, perpetual access to all current and future facilities in the area. CONSOL maintains that it only recently learned that applicants have been unable to negotiate an implementing operating plan for the area and that conditions to the CSX/NS/CR transaction may be necessary to protect its interests. CONSOL asserts that, as a potential protestant in the case, it was entitled to rely on applicants representations of two-carrier access to its coal producing area. In opposing the petition, NS insists that CONSOL's intervention request is too late, will broaden the issues and unjustly prejudice NS, and would disregard the well-established procedural schedule in the case. NS indicates that, although it agrees with many of petitioner's objectives and is committed to resolving access issues for all shippers in the area, CONSOL's proposed conditions would impose an artificial and unnecessary deadline for arriving at an implementing operating agreement. Although CSX does not object to CONSOL's intervention, CSX requests an opportunity to reply if CONSOL's tendered comments are accepted. CONSOL's petition to intervene will be denied. Under the procedural schedule established in Decision No. 6, entities seeking to participate in this proceeding were required to enter their appearances by August 7, 1997, and file responsive applications, comments, protests, and requests for conditions by October 21, 1997. CONSOL states that it has not participated previously in light of applicants representations that they would develop and agree to an operating plan for the Monongahela area. While CONSOL has not participated as a party, a number of parties to the proceeding have addressed the interests of CONSOL in their submissions. CONSOL could have decided to participate directly as a party in the proceeding under the schedule established, but did not. Under these circumstances, CONSOL has not shown extraordinary or compelling reasons for permitting it to participate now. In any event, the application will be assessed in the light of representations made in the application, including the stated intention to afford equal access to all facilities in the Monongahela area. It is ordered: 1. The CONS-1 petition to intervene is denied. The comments in CONS-2 are rejected. Decided: April 22, 1998 Service Date: April 24, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Finance Docket No. 33574 (Sub-No. 1) THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY TRACKAGE RIGHTS EXEMPTION UNION PACIFIC RAILROAD COMPANY By petition filed March 24, 1998, The Burlington Northern and Santa Fe Railway Company (BNSF) and Union Pacific Railroad Company (UP) (collectively petitioners) request that the Board permit the trackage rights arrangement exempted in STB Finance Docket No. 33574, as it relates to the operation of the Shawnee Junction segment, to extend only until July 15, 1998, as it relates to the operation of the Fish Lake segment, to extend only until September 1, 1998, and as it relates to the operation of the Lewisville/Longview segment, to extend only until July 31, 1998. On March 24, 1998, BNSF filed a notice of exemption under the Board's class exemption procedures. The notice covered the agreement by UP to grant BNSF limited overhead trackage rights between the following points: (1) Shawnee Junction, WY, in the vicinity of UP's milepost 271.4 (North Platte Subdivision) and Northport, NE, in the vicinity of UP's milepost 117.3 (North Platte Subdivision), a distance of approximately 154 miles (Shawnee Junction segment); (2) Fish Lake, WA, in the vicinity of UP's milepost 354.7 (Spokane Subdivision) and Attalia, WA, in the vicinity of UP's milepost 215.7 (Spokane Subdivision), a distance of approximately 139 miles (Fish Lake segment); and (3)(a) Lewisville, AR, in the vicinity of UP's milepost 390.3 (Pine Bluff Subdivision) and Big Sandy, TX, in the vicinity of UP's milepost 525.0, on the Pine Bluff Subdivision (milepost 112.95 Dallas Subdivision), and (b) Longview, TX, in the vicinity of UP's milepost 89.6, on the Dallas Subdivision (milepost 0.0 Palestine Subdivision) and Dallas, TX, in the vicinity of UP's milepost 214.6 (Dallas Subdivision), a distance of approximately 260 miles (Lewisville/Longview segment). The trackage rights are scheduled to expire effective July 15, 1998, for the Shawnee Junction segment, effective September 1, 1998, for the Fish Lake segment, and effective July 31, 1998, for the Lewisville/Longview segment. The trackage rights operations under the exemption became, or will become, effective on April 1, 1998, for the Shawnee Junction segment, on July 1, 1998, for the Fish Lake segment, and on June 15, 1998, for the Lewisville/Longville segment. The trackage rights arrangement exempted in STB Finance Docket No. 33574 is necessary because BNSF will be performing maintenance and repairs on its main line and will utilize the trackage rights over UP's lines as alternative routes for BNSF traffic. However, UP is only willing to grant temporary operating rights on its trackage during the periods of maintenance activity on BNSF's trackage. According to petitioners, operating crew constraints on UP dictate that BNSF's operations over UP's trackage be handled as trackage rights rather than as a detour or other similar arrangement. Petitioners maintain that, without approval of temporary trackage rights, it is unlikely that any other arrangement can be reached to allow BNSF to operate over UP's line, and BNSF would face the possibility of severe congestion and service disruption on its main line. Although the parties have expressly agreed on the term of the proposed trackage rights arrangement, trackage rights approved under the class exemption normally remain effective indefinitely regardless of any durational contract provisions. Occasionally, trackage rights exemptions have been granted for a limited term rather than in perpetuity. BNSF's trackage rights have already been authorized. Limiting the term of the trackage rights is consistent with the limited scope of the transaction previously exempted and will have no adverse impact on shippers on the line as the trackage rights are for overhead traffic only. Therefore, we will grant the petition and permit the trackage rights exempted in STB Finance Docket No. 33574, as they relate to the operation of the Shawnee Junction segment, to expire on July 15, 1998, as they relate to the operation of the Fish Lake segment, to expire on September 1, 1998, and as they relate to the operation of the Lewisville/Longview segment, to expire on July 31, 1998. It is ordered: 1. Under 49 U.S.C. 10502, we exempt the trackage rights described in STB Finance Docket No. 33574, as discussed above, permitting them to expire, as they relate to the operation of the Shawnee Junction segment, on July 15, 1998, as they relate to the operation of the Fish Lake segment, on September 1, 1998, and as they relate to the operation of the Lewisville/Longview segment, on July 31, 1998. 3. This decision is effective on May 24, 1998. Decided: April 10, 1998 Service Date: April 24, 1998 ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33581] Lake County Railroad--Modified Rail Certificate On March 24, 1998, Lake County, OR filed a notice for a modified certificate of public convenience and necessity to operate, as Lake County Railroad (LCR), a 54.45-mile line of railroad, known as the Lakeview Branch, extending from milepost 458.60 in Alturas, CA, to milepost 513.05 in Lakeview, OR. The involved rail line was abandoned by Southern Pacific Transportation Company (SPT) in Docket No. AB-12 (Sub-No. 84) (ICC served Oct. 20, 1985). LCR acquired the line from SPT, and subsequently contracted with Great Western Railway of Oregon (GWR) to operate the line as a short line operator. According to LCR, the lease agreement entered into between LCR and GWR on May 1, 1991, as amended on May 5, 1991, December 7, 1994, and on or about October 1, 1995, was terminated on November 1, 1997. LCR provides freight service between Lakeview and Alturas, and connects with Union Pacific Railroad Company at Alturas. Operations by LCR over the 54.45-mile line commenced on November 1, 1997. The rail segment qualifies for a modified certificate of public convenience and necessity. LCR indicates that no subsidy is involved and that there are no preconditions for shippers to meet in order to receive rail service. This notice must be served on the Association of American Railroads (Car Service Division) as agent for all railroads subscribing to the car-service and car-hire agreement. Decided: April 17, 1998. Service Date: April 24, 1998 ----------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-192 (Sub-No. 1) THE BIRMINGHAM SOUTHERN RAILROAD COMPANY ABANDONMENT AND DISCONTINUANCE OF TRACKAGE RIGHTS IN JEFFERSON COUNTY, AL On January 9, 1998, the Birmingham Southern Railroad Company (BS) amended an application it filed on December 22, 1997, seeking to abandon a portion of its railroad line known as the Birmingham Branch, between BS milepost 146+97.22 and the end of the line, a distance of 3.869 miles, in Jefferson County, AL; and to discontinue its trackage rights over Norfolk Southern Railway Company's (NSR) line between NSR's mileposts 143 and 144, a distance of .614 miles in Jefferson County, AL. The trackage rights include the right of BS to travel over approximately 500 feet of main line track over which NSR continues to maintain operations, and approximately 2,741 feet of yard track that was removed by NSR approximately 10 years ago. Notice of the filing of the application was served and published in the Federal Register on January 29, 1998. The United Transportation Union filed comments seeking labor protection. BS amended its original filing to clarify that the portion of the Birmingham Branch sought to be abandoned consists of only two segments: (1) the Birmingham Running Track, extending a distance of 2.78 miles between BS station 0+00 and BS station 146+97.22; and (2) the Birmingham Yard, extending a distance of 1.08 miles between BS station 0+00 and BS station 56+83.94. BS maintains that a third segment originally included in its December 22, 1997 filing (the Ingalls Iron Works Track, extending a distance of .29 miles between BS station 3+20.28 and BS station 18+41.48) is actually exempt industry/switching track that should not have been included in the abandonment application. Accordingly, BS does not seek abandonment authorization for the Ingalls Iron Works Track. Upon review of the record, we conclude that the application should be granted, subject to standard employee protective conditions. The only shipper served via the Birmingham Branch since 1982 is Mindis Metal Company, a processor of scrap metal at a facility in Birmingham. Traffic for Mindis in 1995, 1996, and the first six months of 1997, amounted to 1,069, 650, and 365 carloads, respectively. During the base year (July 1, 1996 - June 30, 1997), BS transported 641 carloads for Mindis, earning revenues of $156,696 and incurring an avoidable loss from operations of $28,813. No traffic was generated under the NSR trackage rights and there was no overhead or bridge traffic on the line during the base year. BS states that the Birmingham Branch has a total of thirteen crossings, eight of which are located on 12th Street, an extremely high volume traffic area in the City of Birmingham. Twelve of the crossings are over public roads and one is over a private road. According to BS, the aging signal systems located on 12th Street need to be completely replaced. BS submits that, to upgrade the Birmingham Branch to comply with Federal Railroad Administration class l safety standards, it would need to install 6,800 cross ties and 588 switch ties, and replace the 12th Street road crossing protection systems, resulting in an estimated material expense of $251,003 and an estimated labor and overhead expense of $398,330. Because of the rehabilitation costs needed to maintain the Birmingham Branch, the decreasing volume of traffic, and the lack of prospects for generating additional traffic, BS determined that it was no longer economically feasible to continue service to Mindis. As a result, BS, Mindis, and NSR, entered into an agreement dated February 14, 1997, to reroute the traffic. Under the agreement, NSR constructed a turnout to perform switching services for Mindis and BS constructed and installed approximately 528 feet of industry track from NSR's main line to connect Mindis facility to the new turnout. Subsequently, with the consent of Mindis, BS discontinued its service on June 23, 1997, and NSR commenced its new service via the turnout and connecting track on July 1, 1997. NSR continues to provide this service. Under the agreement, NSR will own and maintain the turnout; Mindis will own and maintain the connecting track. As a result of the new construction, BS submits that it no longer has the ability to perform switching service on behalf of Mindis. According to BS, Ingalls Iron Works (Ingalls), a shipper with a facility served under the NSR trackage rights, terminated its operations and, as a result, the track has been out of service for approximately 25 years. BS submits that, subsequent to the termination of Ingalls operations, NSR removed the majority of its yard track over which BS held trackage rights. Although CSX Transportation, Inc. (CSXT), used a short segment of BS industry track for a number of years to provide switching services to Ingalls and an industry that subsequently moved into the facility, CSXT assertedly has removed all of its connecting tracks to the facility and has no continuing need to use BS tracks for this purpose. Thus, as a result of the changes discussed above, BS submits that all service on the Birmingham Branch and related NSR trackage rights has been discontinued. No protests or comments on behalf of shipper or community interests have been filed regarding the proposed abandonment and discontinuance of trackage rights. In addition to the February 14, 1997 agreement, BS and Mindis entered into an agreement on July 28, 1997, as amended, wherein BS agreed to lease land and track, including the connecting track, to Mindis to both facilitate NSR's switching services, and to enable CSXT to install a connection to Mindis facility. Thus, in addition to the new service already implemented by NSR, Mindis will have a new alternative service available via CSXT. In this instance, there is no harm, real or potential, to shippers as the traffic of Mindis, the only shipper located on the Birmingham Branch, was rerouted with Mindis agreement effective July 1, 1997. Because no comments or protests have been filed, it appears that this new shipping arrangement has proven satisfactory to Mindis. In addition, the evidence indicates that Mindis will also have a new alternative rail service available from CSXT. Discontinuance of the NSR trackage rights also does not harm any shipper or community interest. Indeed, the record shows that the Ingalls facility is no longer in operation and NSR has removed the majority of the involved yard track. In contrast, the abandonment of the Birmingham Branch would allow BS to avoid the costs associated with maintaining this low-volume line that lacks prospects for generating additional traffic. Moreover, the community would benefit because abandonment of this short line segment would eliminate numerous road crossings on a heavily traveled street. O