STB REPORT #14 - JULY 16 - 31, 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 STB Finance Docket No. 33407 DAKOTA, MINNESOTA & EASTERN RAILROAD CORPORATION CONSTRUCTION INTO THE POWDER RIVER BASIN By application filed February 20, 1998, the Dakota, Minnesota & Eastern Railroad Corporation (DM&E) seeks authority to construct and operate 280.09 miles of new railroad line, which would extend the DM&E into the Powder River Basin (PRB) coal fields in northeastern Wyoming. In connection with this construction DM&E also plans to undertake substantial rehabilitation along its approximately 600-mile existing line. This construction and operation project involves numerous communities in three states (Wyoming, South Dakota, and Minnesota) and is the largest project of its kind filed with the Board. By decision served May 7, 1998, the Board issued a procedural schedule pertaining to the transportation aspects of this proceeding. A draft scope for the Environmental Impact Statement (EIS) that will be prepared in this case also has been issued for public review and comment. Public scoping meetings also have been held in communities that would be affected by the proposed rail line. In this decision we will set this proceeding for modified procedure (on a written record, as opposed to oral hearings) and address a pending motion to compel discovery. We will also discuss some of the unique issues and concerns that have been raised in this case to date to provide guidance for the material that will be filed in the second round of comments, in accordance with the procedural schedule set for this case. Even though we are still at the preliminary stages of our review of this project, we have received numerous pleadings from landowners, environmental groups, shipper organizations, shippers and receivers (including electric utilities), DM&E and other railroads, government entities, and rail labor unions, both in support of and in opposition to the project. We have reviewed all the pleadings, but will focus in this decision on DM&E's pleading and the pleading filed in opposition by the Mid States Coalition for Progress (the Coalition), which reflects the sort of objections being raised by the other parties in opposition. The Coalition contends that in this construction case the Board must consider: (1) whether DM&E is fit, financially and otherwise, to undertake the construction and provide rail service; (2) whether there is public demand or need for the service; and (3) whether additional competition would be harmful to existing carriers. The Coalition argues that DM&E is a marginal Class II carrier which has struggled for years to maintain its current operations, and that to undertake a project of this magnitude with no firm financing or customer commitments would jeopardize its common carrier obligation to serve its existing shippers. DM&E, the Coalition asserts, has no margin for error and, therefore, its application should be denied on fitness grounds. Also, the Coalition claims that, even if the project were somehow successfully completed, the net public transportation benefits resulting from this project would be negligible. The Coalition claims there has been no credible showing of public demand for this project, and that the public interest is not served by the expenditure of $1.4 billion on the construction of facilities that would be redundant to existing rail lines into the Powder River Basin, particularly where there has been no showing that existing service is inadequate. Finally, the Coalition, while acknowledging that only the transportation aspects of the project are at issue now, contends that the application also raises a number of serious environmental issues. Combined with DM&E's weak financial position and the highly speculative transportation benefits that may result, the Coalition claims that the deleterious environmental impacts of the project require rejection of this application. DM&E responds that the rail transportation policy favors the construction of new rail lines. It claims that there is a heavy burden on opponents to demonstrate clear inconsistency with the public convenience and necessity. DM&E points out that neither current shippers nor employees, the two groups with the most at stake in DM&E's ability to carry out this project, oppose the application. Similarly, DM&E claims that its shareholders do not oppose the project and that the financial markets, not regulation, should have the ultimate say on whether the project is financially feasible. DM&E acknowledges the environmental concerns that many commenters have raised, but contends that this phase of the proceeding is not the proper time for addressing these concerns. The construction of a rail line is governed by 49 U.S.C. 10901, which states that the Board shall authorize such construction unless it finds doing so inconsistent with the public convenience and necessity. The statute does not define public convenience and necessity, but a three-part test has evolved to evaluate whether a proposed construction is permissible: (1) is the applicant financially fit to undertake the construction and provide service; (2) is there a public demand or need for the proposed service; and (3) will the new competition be in the public interest and not harmful to existing carriers/services? DM&E, in its reply to the comments filed on the procedural schedule noted, If the schedule had not included a provision for a second round of comments [which it does], the Board would be justified in closing the record at this juncture, on the ground that opponents have not demonstrated any need for further submission. This comment indicates, however, that DM&E may have misconstrued the applicable statutory standard and the extent to which it has satisfied that standard in the pleadings it has submitted thus far, given the breadth of the proposal and its environmental impacts. Under the procedural schedule set for this case, the next step is for us to set the case for modified procedure. The purpose of a modified procedure order is to review the comments filed in reply to a petition or application and to determine if the evidence and arguments submitted are adequate to enable the agency to decide the case. If not, the order discusses the additional material that is needed. Additional evidence and argument would be warranted here, even if the procedural schedule did not already provide for a second round of comments. Pursuant to this schedule, the due date for evidence and argument in opposition to the transportation aspects of the application is August 31, 1998, the due date for reply evidence and argument is September 21, 1998, and we anticipate issuing a decision by November 3, 1998. DM&E, in its June 16, 1998 reply states that the statute articulates a policy that . . . establishes a strong presumption which necessarily imposes on opponents of new railroad construction a heavy burden of rebuttal by demonstrating clear inconsistency with the public convenience and necessity. DM&E overstates the effect of the statute. The statute provides that construction applications should be granted unless we find that "such activities are inconsistent with the public convenience and necessity." That means that where, as here, opponents have presented strong evidence challenging the elements that make up the "public convenience and necessity" determination (i.e., financial fitness, and public demand or need) for such a broad proposal, it is critical for the applicant to respond to these allegations. This is particularly true where as here, serious environmental concerns have been raised as well. To date in this case, DM&E has submitted general statements of support for its application. But neither these statements nor any other submission by the applicant explains with specificity why this rail line is needed. For example. what does DM&E project as the need for additional coal hauling capacity in the future and what are the bases for those projections, including specific support from individual shippers? In this regard, the record says nothing about the vigor of existing competition between the two carriers presently serving the Powder River Basin, the Burlington Northern Santa Fe Railroad (BNSF) and the Union Pacific Railroad (UP), nor does the record describe the extent of competitive benefit that service by the DM&E would provide to the public. Additional evidence on these issues now should be provided. We also have questions about the level of support from the people who would be directly affected by the proposed new construction and expanded operation of the DM&E system. DM&E's application contained a number of statements of support from elective representatives (though more from the national and state level than the local level), but the initial round of comments produced a large number of statements in opposition to the project from those who live in the numerous towns, cities, counties and states that would be directly affected and produced very few statements in support of it. The people who are and would become neighbors of the DM&E would incur a large measure of the impact of the construction and subsequent operation. The extent and nature of those impacts, and whether they can be adequately mitigated, will not be entirely clear until the environmental review process, now underway, has been completed. Nonetheless, in the final analysis, we will decide whether the benefits to the public from the construction outweigh any adverse impacts, taking the potential environmental effects into account in our decisionmaking. This stage of the proceeding affords the applicant the opportunity to develop the record on what it believes those benefits will be and, given the extensive environmental concerns raised to date, it is our view that applicant bears an evidentiary burden in this regard. Another issue requiring additional evidence and argument is the financial fitness of the applicant to carry out the proposed construction. As noted, various parties have challenged the applicant's financial fitness. Moreover, DM&E has asserted that the risk of this enterprise will be incurred by the financial community, not the railroad. To sustain this argument DM&E should offer more than mere assertions. That is especially true because DM&E says it expects to finance this enterprise in part with debt, and the consequences of failure in such circumstances usually do not fall exclusively upon the creditor. The Coalition argues that the DM&E is a marginal carrier which should not be considering such an ambitious enterprise. To date, DM&E has offered little in the way of evidence or argument to rebut this contention. This is a multi-state, 1000-mile project that will be a huge financial undertaking. Myriad environmental concerns, including impacts on communities, Native Americans, and ranchers have been raised about this proposal, and the need for it also has been seriously questioned. In these circumstances, it is important that we ". . . be convinced that the proposed venture will not drain the railroad's resources and disable it from performing those duties of public service . . . with consequent detriment to the public . . . . Even given the more favorable policy toward line constructions evidenced by the recent changes to 49 U.S.C. 10901, it is important that DM&E demonstrate its ability to carry the project through to completion in light of the state of the record to date in this proceeding. It is ordered: 1. The request for discovery will be addressed by the appointment of an administrative law judge. 2. This proceeding will be continued under the modified procedure, in accordance with the procedural schedule set forth in our May 7, 1998, decision. Decided: July 15, 1998 Service Date - July 16, 1998 ------------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Docket No. AB-57 (Sub-No. 45X)] Soo Line Railroad Company--Abandonment Exemption--in Dakota County, MN Soo Line Railroad Company has filed a notice of exemption to abandon an approximately .62+/-mile line of its railroad on the Farmington Minnesota Line between milepost 143.73+/- to milepost 144.35+/- in Farmington, Dakota County, MN. The line traverses United States Postal Service Zip Code 55024. Provided no formal expression of intent to file an offer of financial assistance (OFA) has been received, this exemption will be effective on August 16, 1998, unless stayed pending reconsideration. Soo shall file a 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 Soo's filing of a notice of consummation by July 17, 1999, and there are no legal or regulatory barriers to consummation, the authority to abandon will automatically expire. Decided: July 13, 1998. Service Date - July 17, 1998 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION Docket No. AB-167 (Sub-No. 1165X) CONSOLIDATED RAIL CORPORATION--ABANDONMENT EXEMPTION--IN ST. JOSEPH COUNTY, IN On October 17, 1996, a decision and notice of interim trail use or abandonment (NITU) was served, authorizing a 180-day period for the City of South Bend, IN, to negotiate an interim trail use/rail banking agreement with Consolidated Rail Corporation (Conrail) for a 2.0+-mile portion of its line of railroad known as the Plymouth Industrial Track between milepost 179.00+ and railroad milepost 181.00+, in St. Joseph, IN. At the request of the City, the negotiation period under the NITU was extended by decisions served April 25, 1997, February 19, 1998 and May 7, 1998. The latest extension expired on June 30, 1998. On July 1, 1998, the City filed a request for an extension of the negotiation period and the public use condition until September 30, 1998. The City states that the property appraisal of the right-of-way has been completed. The City also states that it an offer has been made, but that they were unable to reach an agreement during the previously granted negotiation period. By letter dated July 14, 1998, Conrail advised the Board that it supports an extension of the trail use negotiation period until September 30, 1998. The Board's public use jurisdiction expires 180 days from the effective date of the decision approving the abandonment. The public use condition imposed here was for the maximum 180-day period. It expired on April 15, 1997, and may not be renewed. Therefore, the requested extension of the public use condition must be denied. It is ordered: 1. The request to extend the public use condition is denied. 2. The negotiating period under the NITU is extended to September 30, 1998. Decided: July 14, 1998 Service Date - July 17, 1998 ------------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 33631] 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 milepost 345.6, at Tower 55-UPRRX near Fort Worth, to milepost 217.3, near Temple, a distance of 128.3 miles in the State of Texas. On July 6, 1998, UP filed a petition for exemption in STB Finance Docket No. 33631 (Sub-No. 1), wherein UP requests that the Board permit the overhead trackage rights arrangement described in the present proceeding to expire on July 31, 1998. That petition will be addressed by the Board in a separate decision. The transaction was scheduled to be consummated on July 13, 1998. The purpose of the trackage rights is to permit UP to use BNSF trackage while UP's trackage is out of service for maintenance.. Decided: July 13, 1998 Service Date - July 17, 1998 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION 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 By decision served on April 22, 1998, the Board found that the public convenience and necessity permit Boston and Maine Corporation (B&M) to abandon and Springfield Terminal Railway Company (ST) to discontinue service over a line of railroad, known as the Canal Branch, extending from milepost 14.50 in Cheshire to milepost 24.00 in Southington, a distance of 9.50 miles, in Hartford and New Haven Counties, CT. Before the decision authorizing abandonment and discontinuance became effective, Dalton Enterprises, Inc. timely filed an offer of financial assistance (OFA) to purchase the line. By decision served on May 5, 1998, Dalton was found to be financially responsible and the effective date of the decision authorizing abandonment and discontinuance was postponed to permit the financial assistance process to proceed. Subsequently, as no agreement was reached, Dalton filed a request that the Board establish the conditions and amount of compensation for the sale of the line, to which applicants replied. By decision served on July 1, 1998, the Board set the purchase price for the line at $1,382,416, and established terms for transfer of the line. By letter filed on July 10, 1998, Dalton indicates that it accepts the Board's terms and conditions to purchase the line. Accordingly, the sale will be approved and the application will be dismissed. It is ordered: 1. Under 49 U.S.C. 10904, Dalton is authorized to acquire the rail line described above. 2. Under 49 U.S.C. 10904 and 49 CFR 1152.27(f)(2), the application is dismissed effective on the date the sale is consummated. Decided: July 16, 1998 Service Date - July 20, 1998 ------------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Docket No. AB-33 (Sub-No. 122X)] Union Pacific Railroad Company--Abandonment Exemption--in Monroe and Juneau Counties, WI Union Pacific Railroad Company (UP) has filed a notice of exemption to abandon and discontinue service over a 8.4-mile line of railroad on the Camp Douglas Industrial Lead from milepost 174.3 near Wyeville to the end of the line at milepost 182.7 near Camp Douglas, in Monroe and Juneau Counties, WI. The line traverses United States Postal Service Zip Codes 54660 and 54618. Juneau County filed a request for issuance of a notice of interim trail use (NITU) for the entire line pursuant to section 8(d) of the National Trails System Act. The Board will address the County's trail use request and any others that may be filed in a subsequent decision. Provided no formal expression of intent to file an offer of financial assistance (OFA) has been received, this exemption will be effective on August 19, 1998, unless stayed pending reconsideration. UP shall file a 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 UP's filing of a notice of consummation by July 20, 1999, and there are no legal or regulatory barriers to consummation, the authority to abandon will automatically expire. Decided: July 9, 1998. Service Date - July 20, 1998 ------------------------------------------------------------------------- SERVICE DATE - JULY 20, 1998 DECISION Docket No. AB-103 (Sub-No. 11X) THE KANSAS CITY SOUTHERN RAILWAY COMPANY--ABANDONMENT EXEMPTION--IN HEMPSTEAD, LAFAYETTE AND COLUMBIA COUNTIES, AR On January 9, 1998, a decision and notice of interim trail use or abandonment (NITU) was served, authorizing a 180-day period for the Director of Parks, Recreation and Tourism for the City of Hope, AR (HPRT) to negotiate an interim trail use/rail banking agreement with the Kansas City Southern Railway Company (KCS) for its line of railroad between milepost 4.00 at or near Hope, and milepost 46.78 at the Arkansas-Louisiana State Line, a distance of 42.78 miles, in Hempstead, Lafayette and Columbia Counties, AR. The negotiation period under the NITU expired on July 8, 1998. By letter dated July 7, 1998, HPRT filed a request to extend the negotiation period for an additional 180 days. HPRT states that it is continuing to negotiate with KCS for an interim trail use/rail banking agreement. By letter filed July 8, 1998, KCS states it supports the extension request. It is ordered: 1. The negotiating period under the NITU is extended to January 4, 1999. Decided: July 16, 1998 Service Date - July 20, 1998 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD DECISION STB Docket No. AB-167 (Sub-No. 1168X) CONSOLIDATED RAIL CORPORATION--ABANDONMENT EXEMPTION-- IN BROOKS AND HANCOCK COUNTIES, WV By decision and notice of interim trail use or abandonment (NITU) served January 24, 1997, a 180-day period was authorized for West Virginia Rail Authority, City of Weirton and Harmon Creek Trail Association (collectively, commenters) to negotiate an interim trail use/rail banking agreement with Consolidated Rail Corporation (Conrail) for a 4.00-mile portion of the Weirton Secondary Track between milepost 35.70 and milepost 39.70 in Brooke and Hancock Counties, WV. The January 24 decision also imposed a condition requiring Conrail to confine its salvage activities to the existing right-of-way and not disturb any previously undisturbed prime farmland. The negotiation period under the NITU was extended to January 21, 998 by decision served July 24, 1997 at the request of commenters. By decision served January 30, 1998, the negotiation period under the NITU was further extended to July 20, 1998, at the request of the Harmon Creek Trail Association, Weirton Park and Recreation Board, and the West Virginia Rail Authority (collectively, petitioners). On July 6, 1998, petitioners filed a request for an additional 180-day extension of the trail use negotiation period. Petitioners state that the additional time is needed to complete negotiations because the pending acquisition of Conrail has added a new dimension to the proposed trail project. Petitioners also state that additional time is required to continue negotiations over the issue of railroad crossings over public roadways. The Pennsylvania Public Utility Commission has ordered a moratorium on the disposition of railroad bridges suitable for potential trail use. Petitioners need to resolve the bridge issue and to coordinate with the Washington County Commission and others to develop plans for an environmental report and bridge repair or removal estimates. By letter dated July 13, 1998, Conrail agreed to the extension. It is ordered: 1. The negotiating period under the NITU is extended to January 16, 1999. Decided: July 14, 1998 Service Date - July 20, 1998 ------------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Docket No. AB-547X] Roaring Fork Railroad Holding Authority--Abandonment Exemption--in Garfield, Eagle and Pitkin Counties, CO On June 30, 1998, Roaring Fork Railroad Holding Authority (RFRHA) filed with the Surface Transportation Board (Board) a petition to abandon its line of railroad known as the Aspen Branch, extending from milepost 360.22 near Glenwood Springs to the end of the line at milepost 393.66 near Woody Creek, a total distance of approximately 33.44 miles in Garfield, Eagle and Pitkin Counties, CO. The line traverses U.S. Postal Service Zip Codes 81601, 81602, 81621, 81623, 81628, 81654 and 81656. There are no stations on the line. RFRHA seeks exemptions from the offer of financial assistance (OFA) provisions and the public use provisions. These exemption requests will be addressed in the final decision. The line contains federally granted rights-of-way. Any documentation in RFRHA's possession will be made available promptly to those requesting it. By issuance of this notice, the Board is instituting an exemption proceeding. A final decision will be issued by October 16, 1998. Included in its petition is a request by RFRHA to railbank the line and a statement of its willingness to assume full responsibility for the management and use of the right-of-way and for the payment of taxes and other liabilities. This request by RFRHA to railbank its own line will be addressed in the final decision. Decided: July 14, 1998 Service Date - July 20, 1998 ------------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Docket No. AB-554X] Perry County Port Authority d/b/a Hoosier Southern Railroad--Discontinuance Exemption--in Spencer County, IN On July 1, 1998, Perry County Port Authority d/b/a Hoosier Southern Railroad (HSR) filed with the Surface Transportation Board (Board) a petition under 49 U.S.C. 10502 for exemption from the provisions of 49 U.S.C. 10903-10905 to discontinue service on a line of railroad known as the Rockport Line extending from milepost 0.0 at Rockport Junction to milepost 16.2 at Rockport, a distance of 16.2 miles in Spencer County, IN. As part of the exemption, HSR also seeks to discontinue incidental trackage rights over approximately 1.1 miles of Norfolk Southern Railway Company's (NSR) main line extending from milepost 32.1- EB at Rockport Junction to milepost 33.2-EB at Lincoln City, also in Spencer County, IN. The lines traverse U.S. Postal Service Zip Codes 47552, 47611 and 47635. The Rockport Line includes the stations of Rockport, Chrisney, Rock Hill and Rockport Junction. HSR desires to terminate service because NSR has terminated its lease with HSR effective May 31, 1998. NSR resumed providing all rail service on the Rockport Line as of June 1, 1998. HSR seeks exemption from the offer of financial assistance (OFA) subsidy provision. This exemption request will be addressed in the final decision. HSR also seeks exemption from the public use provisions. However, because this is a discontinuance proceeding and not an abandonment, trail use/rail banking and public use conditions are not applicable. By issuance of this notice, the Board is instituting an exemption proceeding. A final decision will be issued by October 19, 1998. Decided: July 14, 1998. Service Date - July 21, 1998 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD ENVIRONMENTAL ASSESSMENT NO. AB-31 (SUB-NO. 35X) Grand Trunk Western Railroad, Inc. -- Abandonment Exemption -- In Macomb County, MI In this proceeding, the Grand Trunk Western Railroad, Inc. (GTW) has filed a notice in connection with the abandonment of its railroad line located between milepost 0.42 and milepost 19.50, a distance of 19.08 miles in Macomb County, MI. The Michigan State Historic Preservation Office may need additional information to complete its evaluation of the potential impact of this project on historic resources. Accordingly, we recommend imposition of the following condition: Grand Trunk Western Railroad, Inc. shall retain its interest in and take no steps to alter the historic integrity of all 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. The National Geodetic Survey (NGS) identified numerous geodetic station markers along the rail line that may be affected by the proposed abandonment and requests 90 days notice to plan relocation of any markers which may be disturbed or destroyed. Therefore, we recommend that the following condition be imposed on any decision granting abandonment authority: Grand Trunk Western Railroad, Inc. shall consult with the National Geodetic Survey and provide NGS with 90 days notice prior to disturbing or destroying any geodetic markers. Service Date - July 22, 1998 ------------------------------------------------------------------------- SURFACE TRANSPORTATION BOARD STB Finance Docket No. 33388 Decision No. 89 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 covers both the STB Finance Docket No. 33388 lead proceeding and the following embraced proceedings: STB Finance Docket No. 33388 (Sub-No. 1), CSX Transportation, Inc. --Construction and Operation Exemption -- Connection Track at Crestline, OH; STB Finance Docket No. 33388 (Sub-No. 2), CSX Transportation, Inc. -- Construction and Operation Exemption -- Connection Track at Willow Creek, IN; STB Finance Docket No. 33388 (Sub-No. 3), CSX Transportation, Inc. -- Construction and Operation Exemption -- Connection Tracks at Greenwich, OH; STB Finance Docket No. 33388 (Sub-No. 4), CSX Transportation, Inc. -- Construction and Operation Exemption -- Connection Track at Sidney Junction, OH; STB Finance Docket No. 33388 (Sub-No. 5), Norfolk and Western Railway Company -- Construction and Operation Exemption -- Connecting Track With Union Pacific Railroad Company at Sidney, IL; STB Finance Docket No. 33388 (Sub-No. 6), Norfolk and Western Railway Company -- Construction and Operation Exemption -- Connecting Track With Consolidated Rail Corporation at Alexandria, IN; STB Finance Docket No. 33388 (Sub-No. 7), Norfolk and Western Railway Company -- Construction and Operation Exemption -- Connecting Track With Consolidated Rail Corporation at Bucyrus, OH; STB Finance Docket No. 33388 (Sub-No. 8), CSX Transportation, Inc. -- Construction and Operation Exemption -- Connection Track at Little Ferry, NJ; STB Finance Docket No. 33388 (Sub-No. 9), CSX Transportation, Inc. and The Baltimore and Ohio Chicago Terminal Railroad Company -- Construction and Operation Exemption -- Connection Track at 75th Street SW, Chicago, IL; STB Finance Docket No. 33388 (Sub-No. 10), CSX Transportation, Inc. -- Construction and Operation Exemption -- Connection Track at Exermont, IL; STB Finance Docket No. 33388 (Sub-No. 11), CSX Transportation, Inc. and The Baltimore and Ohio Chicago Terminal Railroad Company -- Construction and Operation Exemption -- Connection Track at Lincoln Avenue, Chicago, IL; STB Finance Docket No. 33388 (Sub-No. 12), Norfolk Southern Railway Company -- Construction and Operation Exemption -- Connecting Track With Consolidated Rail Corporation at Kankakee, IL; STB Finance Docket No. 33388 (Sub-No. 13), Norfolk and Western Railway Company -- Construction and Operation Exemption -- Connecting Track With Illinois Central Railroad Company at Tolono, IL; STB Finance Docket No. 33388 (Sub-No. 14), Norfolk and Western Railway Company -- Construction and Operation Exemption -- Connecting Track With Consolidated Rail Corporation at Butler, IN; STB Finance Docket No. 33388 (Sub-No. 15), Norfolk and Western Railway Company -- Construction and Operation Exemption -- Connecting Track With Consolidated Rail Corporation at Tolleston, IN; STB Finance Docket No. 33388 (Sub-No. 16), Norfolk and Western Railway Company -- Construction and Operation Exemption -- Connecting Track With Consolidated Rail Corporation at Hagerstown, MD; STB Finance Docket No. 33388 (Sub-No. 17), Norfolk and Western Railway Company -- Construction and Operation Exemption -- Connecting Track With Consolidated Rail Corporation at Ecorse Junction (Detroit), MI; STB Finance Docket No. 33388 (Sub-No. 18), Norfolk and Western Railway Company -- Construction and Operation Exemption -- Connecting Track With Consolidated Rail Corporation at Blasdell (Buffalo), NY; STB Finance Docket No. 33388 (Sub-No. 19), Norfolk and Western Railway Company -- Construction and Operation Exemption -- Connecting Track With Consolidated Rail Corporation at Gardenville Junction (Buffalo), NY; STB Finance Docket No. 33388 (Sub-No. 20), Norfolk and Western Railway Company -- Construction and Operation Exemption -- Connecting Track With Consolidated Rail Corporation at Columbus, OH; STB Finance Docket No. 33388 (Sub-No. 21), Norfolk and Western Railway Company -- Construction and Operation Exemption -- Connecting Track With Consolidated Rail Corporation at Oak Harbor, OH; STB Finance Docket No. 33388 (Sub-No. 22), Norfolk and Western Railway Company -- Construction and Operation Exemption -- Connecting Track With Consolidated Rail Corporation at Vermilion, OH; STB Finance Docket No. 33388 (Sub-No. 23), Norfolk and Western Railway Company -- Joint Relocation Project Exemption--Over CSX Transportation, Inc. (Currently Consolidated Rail Corporation) at Erie, PA; STB Finance Docket No. 33388 (Sub-No. 24), Consolidated Rail Corporation -- Acquisition Exemption -- Line Between Fort Wayne, IN, and Tolleston (Gary), IN; STB Finance Docket No. 33388 (Sub-No. 25), Norfolk and Western Railway Company -- Trackage Rights Exemption -- CSX Transportation, Inc.; STB Finance Docket No. 33388 (Sub-No. 26), CSX Corporation and CSX Transportation, Inc. -- Control -- The Lakefront Dock and Railroad Terminal Company; STB Finance Docket No. 33388 (Sub-No. 27), Norfolk and Western Railway Company -- Trackage Rights Exemption -- CSX Transportation, Inc.; STB Finance Docket No. 33388 (Sub-No. 28), CSX Transportation, Inc. -- Trackage Rights Exemption -- Norfolk and Western Railway Company; STB Finance Docket No. 33388 (Sub-No. 29), CSX Transportation, Inc. -- Trackage Rights Exemption -- Norfolk and Western Railway Company; STB Finance Docket No. 33388 (Sub-No. 30), Norfolk and Western Railway Company -- Trackage Rights Exemption -- CSX Transportation, Inc.; STB Finance Docket No. 33388 (Sub-No. 31), CSX Corporation and CSX Transportation, Inc. -- Control Exemption -- Albany Port Railroad Corporation; STB Finance Docket No. 33388 (Sub-No. 32), Norfolk and Western Railway Company -- Trackage Rights Exemption -- The Baltimore and Ohio Chicago Terminal Railroad Company; STB Finance Docket No. 33388 (Sub-No. 33), Norfolk and Western Railway Company -- Trackage Rights Exemption -- The Baltimore and Ohio Chicago Terminal Railroad Company; STB Finance Docket No. 33388 (Sub-No. 34), CSX Transportation, Inc. -- Trackage Rights Exemption -- Norfolk and Western Railway Company; STB Docket No. AB-167 (Sub-No. 1181X), Consolidated Rail Corporation -- Abandonment Exemption -- In Edgar and Vermilion Counties, IL; STB Docket No. AB-55 (Sub-No. 551X), CSX Transportation, Inc. -- Abandonment Exemption -- In Edgar and Vermilion Counties, IL; STB Docket No. AB-290 (Sub-No. 194X), Norfolk and Western Railway Company -- Abandonment Exemption -- Between South Bend and Dillon Junction in St. Joseph and La Porte Counties, IN; STB Docket No. AB-290 (Sub-No. 196X), Norfolk and Western Railway Company -- Abandonment Exemption -- Between Toledo and Maumee in Lucas County, OH; STB Docket No. AB-290 (Sub-No. 197X), Norfolk and Western Railway Company -- Discontinuance Exemption -- Toledo Pivot Bridge in Lucas County, OH; STB Finance Docket No. 33388 (Sub-No. 35), Responsive Application -- New York State Electric and Gas Corporation; STB Finance Docket No. 33388 (Sub-No. 36), Responsive Application -- I & M Rail Link, LLC; STB Finance Docket No. 33388 (Sub-No. 39), Responsive Application -- Livonia, Avon & Lakeville Railroad Corporation; STB Finance Docket No. 33388 (Sub-No. 59), Responsive Application -- Wisconsin Central Ltd.; STB Finance Docket No. 33388 (Sub-No. 61), Responsive Application -- Bessemer and Lake Erie Railroad Company; STB Finance Docket No. 33388 (Sub-No. 62), Responsive Application -- Illinois Central Railroad Company; STB Finance Docket No. 33388 (Sub-No. 63), Responsive Application -- R.J. Corman Railroad Company/Western Ohio Line; STB Finance Docket No. 33388 (Sub-No. 69), Responsive Application -- State of New York, by and through its Department of Transportation, and the New York City Economic Development Corporation; STB Finance Docket No. 33388 (Sub-No. 72), Responsive Application -- The Belvidere & Delaware River Railway and the Black River & Western Railroad; STB Finance Docket No. 33388 (Sub-No. 75), Responsive Application -- New England Central Railroad, Inc.; STB Finance Docket No. 33388 (Sub-No. 76), Responsive Application -- Indiana Southern Railroad, Inc.; STB Finance Docket No. 33388 (Sub-No. 77), Responsive Application -- Indiana & Ohio Railway Company; STB Finance Docket No. 33388 (Sub-No. 78), Responsive Application -- Ann Arbor Acquisition Corporation, d/b/a Ann Arbor Railroad; STB Finance Docket No. 33388 (Sub-No. 80), Responsive Application -- Wheeling & Lake Erie Railway Company; STB Finance Docket No. 33388 (Sub-No. 81), Responsive Application -- Canadian National Railway Company and Grand Trunk Western Railroad Incorporated; and STB Finance Docket No. 33388 (Sub-No. 83), Grand Trunk Western Railroad Incorporated -- Construction and Operation Exemption -- Connecting Tracks at Trenton, MI. The Board approves, with certain conditions: (1) the acquisition of control of Conrail Inc. and Consolidated Rail Corporation (collectively, Conrail) by (a) CSX Corporation and CSX Transportation, Inc. (collectively, CSX), and (b) Norfolk Southern Corporation and Norfolk Southern Railway Company (collectively, NS); and (2) the division of the assets of Conrail by and between CSX and NS. CSXC and CSXT and their wholly owned subsidiaries, and also the wholly owned CRC subsidiary to be known as New York Central Lines LLC (NYC), are referred to collectively as CSX. NSC and NSR and their wholly owned subsidiaries, and also the wholly owned CRC subsidiary to be known as Pennsylvania Lines LLC (PRR), are referred to collectively as NS. CRR and CRC, and also their wholly owned subsidiaries other than NYC and PRR, are referred to collectively as Conrail or CR. CSX, NS, and Conrail are referred to collectively as applicants (or, sometimes, the primary applicants). By application filed June 23, 1997, CSX Corporation (CSXC), CSX Transportation, Inc. (CSXT), Norfolk Southern Corporation (NSC), Norfolk Southern Railway Company (NSR), Conrail Inc. (CRR), and Consolidated Rail Corporation (CRC) seek approval for: (1) the acquisition by CSX and NS of control of Conrail; and (2) the division of the assets of Conrail by and between CSX and NS. By various ancillary filings also filed June 23, 1997, applicants seek approval for or exemption of various ancillary control-related matters. The application has been endorsed by more than 2,700 parties, including more than 2,200 shippers, more than 350 public officials, and more than 80 railroads. Submissions opposing the CSX/NS/CR transaction and/or urging the imposition of conditions have been filed by Ann Arbor Acquisition Corporation d/b/a Ann Arbor Railroad (AA), Housatonic Railroad Company, Inc. (HRRC), Illinois Central Railroad Company (IC), I & M Rail Link, LLC (I&M), Indiana Southern Railroad, Inc. (ISRR), Livonia, Avon & Lakeville Railroad Corporation (LAL), New England Central Railroad, Inc. (NECR), New York Cross Harbor Railroad (NYCH), New York & Atlantic Railway (NYAR), the Philadelphia Belt Line Railroad Company (PBL), Ohi-Rail Corporation (Ohi-Rail), R.J. Corman Railroad Company/Western Ohio Line (RJCW), The Elk River Railroad, Incorporated (TERRI), Reading Blue Mountain & Northern Railroad Company (RBMN), Wheeling & Lake Erie Railway Company (W&LE), and Wisconsin Central Ltd. (WCL). Submissions have also been filed: by Providence and Worcester Railroad Company (P&W); jointly by the American Short Line Railroad Association (ASLRA) and Regional Railroads of America (RRA); jointly by Boston and Maine Corporation (B&MC), Springfield Terminal Railway Company (ST), and Maine Central Railroad Company (MC); jointly by Canadian National Railway Company (CNR), Grand Trunk Corporation (GTC), and Grand Trunk Western Railroad Incorporated (GTW); by Durham Transport, Inc. (Durham); jointly by Gateway Western Railway Company (GWWR) and Gateway Eastern Railway Company (GWER); and jointly by North Shore Railroad Company (NSHR), Juniata Valley Railroad Company (JVRR), Nittany & Bald Eagle Railroad Company (NBER), Lycoming Valley Railroad Company (LVRR), Shamokin Valley Railroad Company (SVRR), Union County Industrial Railroad Company (UCIR), the National Railroad Passenger Corporation (NRPC or Amtrak), the American Public Transit Association (APTA), the Commuter Rail Division of the Regional Transportation Authority of Northeast Illinois (referred to as Metra or, on occasion, Chicago Metra), Metro-North Commuter Railroad Company (MNCR), the METRO Regional Transit Authority (referred to as METRO or, on occasion, Northeast Ohio METRO), the Northern Virginia Transportation Commission (NVTC), the Potomac and Rappahannock Transportation Commission (P&RTC), The National Industrial Transportation League (NITL), the U.S. Clay Producers Traffic Association, Inc. (CPTA), The Fertilizer Institute (TFI), the Chemical Manufacturers Association (CMA), The Society of the Plastics Industry, Inc. (SPI), the Institute of Scrap Recycling Industries, Inc. (ISRI), the American Farm Bureau Federation (AFBF), the American Feed Industry Association (AFIA), the National Cattlemen's Beef Association (NCBA), the National Corn Growers Association (NCGA), the National Pork Producers Council (NPPC), the National Grain and Feed Association (NGFA), the National Mining Association (NMA), A. T. Massey Coal Company, Inc. (Massey), American Electric Power Service Corporation (AEP), Centerior Energy Corporation (Centerior), Consumers Energy Company (Consumers), Eastman Kodak Company (Kodak), Eighty-Four Mining Company (EFMC), GPU Generation, Inc. (GPU), Indianapolis Power & Light Company (IP&L), Niagara Mohawk Power Corporation (NIMO), Northern Indiana Public Service Company (NIPS), Orange and Rockland Utilities, Inc. (O&R), Rochester Gas and Electric Corporation (RG&E), ASHTA Chemicals Inc. (ASHTA), E.I. DuPont de Nemours and Company, Inc. (DuPont), Fina Oil and Chemical Company (Fina), Millennium Petrochemicals Inc. (Millennium), PPG Industries, Inc. (PPG), Occidental Chemical Corporation (OxyChem), Shell Oil Company, Shell Chemical Company, Union Camp Corporation (Union Camp), the Westlake Group of Companies (Westlake), APL Limited (APL), the American Trucking Associations (ATA), AK Steel Corporation (AK Steel), Wyandot Dolomite, Inc. (Wyandot), National Lime and Stone Company (NL&S), Redland Ohio, Inc. (Redland), Fort Orange Paper Company (FOPC), The International Paper Company (IP), Joseph Smith & Sons, Inc. (JS&S), Inland Steel Company (ISC), Prairie Material Sales, Inc. (Prairie Group), General Mills, Inc. (General Mills), the New York/New Jersey Foreign Freight Forwarders and Brokers Association (NYNJFFF&BA), Resources Warehousing & Consolidation Services, Inc. (RWCS), the Transportation Intermediaries Association (TIA), JStar Consolidated, Inc. (JStar), J.B. Hunt Transport, Inc. (Hunt), DeKalb Agra, Inc. (DeKalb Agra), Cargill, Incorporated (Cargill), and A.E. Staley Manufacturing Company (Staley). Submissions respecting the CSX/NS/CR transaction have been filed by: the State of New York, acting by and through its Department of Transportation (NYDOT); the New York City Economic Development Corporation (NYCEDC), acting on behalf of the City of New York; United States Representative Jerrold Nadler and 23 other Members of the United States House of Representatives (referred to collectively as the Nadler Delegation); the Erie-Niagara Rail Steering Committee (ENRSC); the Genesee Transportation Council (GTC); the Tri-State Transportation Campaign (TSTC); the Business Council of New York State, Inc. (BCNYS); the Empire State Passengers Association (ESPA); the Southern Tier West Regional Planning and Development Board (STWRB); the Northwest Pennsylvania Rail Authority (NWPRA); the Eight State Rail Preservation Group (ESRPG); the Pennsylvania House and Senate Transportation Committees (referred to collectively as the Pennsylvania Transportation Committees); United States Senator Arlen Specter of Pennsylvania; the Delaware Valley Regional Planning Commission (DVRPC); the Southwestern Pennsylvania Regional Planning Commission (SPRPC); the Philadelphia Regional Port Authority (PRPA), the South Jersey Port Corporation (SJPC), The Delaware River Port Authority (DRPA), and The Port of Philadelphia and Camden, Inc. (PPC); the Commonwealth of Pennsylvania, Governor Thomas J. Ridge, and the Pennsylvania Department of Transportation (referred to collectively as PADOT); the City of Philadelphia and the Philadelphia Industrial Development Corporation (referred to collectively as PIDC); United States Representative Robert Menendez of New Jersey; the Village of Ridgefield Park, New Jersey; the South Jersey Transportation Planning Organization (SJTPO); the Coalition of Northeastern Governors (CNEG); the Connecticut Department of Transportation (CTDOT); the Rhode Island Department of Transportation (RIDOT); United States Senator Jack Reed of Rhode Island; the Commonwealth of Massachusetts; the State of Vermont; the Maine Department of Transportation (MEDOT); the Conservation Law Foundation (CLF), Baltimore Area Transit Association (BATA), the Citizens Advisory Committee for the Baltimore region (CAC), the State of Delaware Department of Transportation (DEDOT), the West Virginia Association for Economic Development (WVED), the West Virginia State Rail Authority (WVSRA), the Ohio Attorney General (OAG), the Ohio Rail Development Commission (ORDC), and the Public Utilities Commission of Ohio (PUCO); the City of Cleveland, OH; the Cities of Bay Village, Rocky River, and Lakewood, OH (referred to collectively as the BRL Cities); United States Representative Dennis J. Kucinich of Ohio; the Summit County Port Authority (SCPA); the Stark Development Board, Inc. (SDB); the City of Cincinnati, OH; the Toledo-Lucas County Port Authority (TLCPA); the Toledo Metropolitan Area Council of Governments (TMACOG); the Four City Consortium (FCC, an association of the Cities of East Chicago, Hammond, Gary, and Whiting, IN); the City of Indianapolis, IN; the Indiana Port Commission (IPC); the Parks and Recreation Department of St. Joseph County, IN; the Illinois International Port District (the Port of Chicago); the Illinois Department of Transportation (ILDOT); the Village of Riverdale, IL; the City of Georgetown, IL; the Environmental Law & Policy Center of the Midwest (EL&PC), various labor parties, including the Allied Rail Unions (ARU), the International Association of Machinists and Aerospace Workers (IAM), the Transportation Communications International Union (TCU), Transportation Trades Department (TTD), the United Railway Supervisors Association (URSA), and the United Transportation Union (UTU). Submissions have also been filed by the United States Department of Agriculture (USDA), the United States Department of Justice (DOJ), and the United States Department of Transportation (DOT). Numerous additional parties, including elected officials, government agencies, shippers, shortline railroads, and labor organizations, have participated in this proceeding. Their submissions have generally been limited to expressions of either support for or opposition to either the CSX/NS/CR transaction or the conditions requested by one or more of the parties urging the imposition of conditions upon any approval of the transaction. In this decision, we are taking the following action: (1) except as otherwise indicated, we are approving the primary application in its entirety; (2) with certain limited restrictions, we are approving applicants' request to override antiassignment and other similar clauses in shipper contracts, but only for a period of 180 days from Day One. Day One (also known as the Closing Date) is the date on which CSX and NS will effect the division of the operation and use of Conrail's assets; (3) with one exception, we are approving applicants' request to override antiassignment and other similar clauses in Conrail's Trackage Agreements. The one exception concerns Conrail's Cahokia/Willows trackage rights on Gateway. As respects these trackage rights, we are rejecting applicants' request to override antiassignment clauses in Conrail's Trackage Agreements; (4) we are exempting the transactions at issue in the Sub-Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 27, 28, 29, 30, 32, 33, and 34 dockets. We are dismissing the petition filed in the Sub-No. 31 docket.; (5) we are granting the application in the Sub-No. 26 docket; (6) we are requiring applicants to give 14 days' prior notice to the Board and the public of the date that will be designated as Day One; (7) we are imposing as conditions, but with certain modifications, the terms of the NITL agreement; (8) we are imposing as conditions the terms of the settlement agreements that applicants entered into with certain parties; (9) we are requiring CSX to participate in New York City's Cross Harbor Freight Movement Major Investment Study in order to assess the feasibility of upgrading cross-harbor float and tunnel operations to facilitate cross-harbor rail movements; (10) we are requiring CSX to negotiate an agreement with CP to grant CP either haulage rights unrestricted as to commodity and geographic scope, or trackage rights unrestricted as to commodity and geographic scope, over the Conrail line that runs between Selkirk (near Albany) and Fresh Pond (in Queens), under terms agreeable to the parties, taking into account the investment that needs to continue to be made to the line; (11) we are requiring CSX to make, by October 21, 1998, an offer to the City of New York to establish a committee intended to develop ways to promote the development of rail traffic to and from the City, with particular emphasis on Conrail's Hudson Line, as well as ways to address the City's goals of industrial development and the reduction of truck traffic that is divertible to rail movement, and CSX's goals to provide safe, efficient, and profitable rail freight service; (12) we are requiring CSX to discuss with P&W the possibility of expanded P&W service over trackage or haulage rights on the line between Fresh Pond, NY, and New Haven, CT, focusing on operational and ownership impediments related to service over that line; (13) we are requiring applicants to monitor origins, destinations, and routings for the truck traffic at their intermodal terminals in Northern New Jersey and in Massachusetts in a manner that would permit the determination of whether the transaction has led to substantially increased truck traffic over the George Washington Bridge; (14) we are requiring the application of the $250 maximum reciprocal switching charge provided for in the NITL agreement to certain points in the Niagara Falls area for traffic using International Bridge and Suspension Bridge, for which Conrail recently replaced its switching charges with so-called "line haul" charges; (15) we are requiring that CSX's trackage rights over a line of the former Buffalo Creek Railroad be transferred to NS; (16) we are initiating a 3-year rate study to assess whether Buffalo-area shippers have been subjected to higher rates because of the CSX/NS/CR transaction; (17) we are requiring CSX to meet with regional and local authorities in the Buffalo area to establish a committee for the development of rail traffic to and from that area; (18) we are requiring CSX to adhere to its agreements with CN and CP that provide for lower switching fees in the Buffalo area; (19) we are requiring CSX to adhere to its representation regarding investment in new connections and upgraded facilities in the Buffalo area; (20) we are granting the responsive application filed by LAL to the extent necessary to permit LAL to cross Conrail's Genesee Junction Yard to forge a connection with NS via a short movement on the Rochester & Southern Railroad (R&S); (21) we are imposing a condition that will ensure that the effects of the "blocking" provisions to which certain shortlines, such as the RBMN, are subject are not given greater force as a result of the CSX/NS/CR transaction; (22) we are requiring CSX to grant NECR trackage rights between Palmer, MA, and West Springfield, MA, to facilitate joint-line movements with NECR's affiliate, Connecticut Southern Railroad, Inc. (CSO); (23) we are directing CSX to meet with IC to attempt to resolve their dispute regarding a dispatching plan for the short segment of CSX's Memphis line over which IC has trackage rights; (24) we are requiring applicants (a) to grant Wheeling & Lake Erie Railway Company (W&LE) overhead haulage or trackage rights access to Toledo, OH, with connections to AA and other railroads at Toledo, (b) to extend W&LE's lease at, and trackage rights access to, NS' Huron Dock on Lake Erie, and (c) to grant W&LE overhead haulage or trackage rights to Lima, OH, with a connection to the Indiana & Ohio Railway Company (IORY) at Lima; (25) we are also requiring applicants to negotiate with W&LE concerning mutually beneficial arrangements, including allowing W&LE to provide service to aggregates shippers or to serve shippers along CSX's line between Benwood and Brooklyn Junction, WV; (26) we are imposing a condition intended to ensure that AA's quality interline service under its new Chrysler contract is continued and that this contract is not undermined; (27) we are affirming that our approval of the CSX/NS/CR transaction will not preempt the Belt Line Principle advocated by PBL; (28) we are requiring that IP&L be given the choice of having its Stout plant served by NS directly or via switching by Indiana Rail Road Company (INRD), and we are further requiring the creation of an NS/ISRR interchange at MP 6.0 on ISRR's Petersburg Subdivision along with conditional rights for either NS or ISRR to serve any build-out to the Indianapolis Belt Line; (29) we are requiring that Conrail's trackage rights on the NS line between Keensburg, IL, and Carol, IN, be transferred to CSX rather than NS. These trackage rights will enable CSX to haul certain coal shipments to the Gibson plant of PSI Energy, Inc.; (30) we are imposing a condition intended to assure the preservation of the build-out option that JS&S now has at its Capital Heights, MD, scrap metal processing facility; (31) we are requiring applicants to consult with ASHTA concerning the routing of its hazardous materials shipments; (32) we are directing applicants to discuss with the Port of Wilmington any problems concerning switching services and charges, and to report back to the Board by September 21, 1998; (33) we are exempting the several abandonments and the one discontinuance proposed by applicants in the abandonment dockets; (34) we are imposing the standard labor protective conditions as further discussed; (35) we are directing CSX and NS to meet with labor representatives and to form task forces for the purpose of promoting labor- management dialogue concerning implementation and safety issues; (36) we are imposing an operational monitoring condition, and, in connection therewith, we are requiring CSX, NS, and Conrail to file periodic status reports and progress reports; (37) we are imposing certain environmental mitigating conditions; (38) we are establishing oversight for 5 years so that we may assess the progress of implementation of the CSX/NS/CR transaction and the workings of the various conditions we have imposed, and we are retaining jurisdiction to impose additional conditions if, and to the extent, we determine that additional conditions are necessary to address harms caused by the CSX/NS/CR transaction; and (39) we are denying all other conditions heretofore sought by the various parties to this proceeding. CSX operates approximately 18,504 route miles and 31,961 track miles of railroad in 20 states east of the Mississippi River and in Ontario, Canada. Of that total, approximately 1,607 miles are operated under trackage rights while the remaining mileage is either owned by CSX or operated by CSX under contract or lease. CSX has principal routes to, and serves, virtually every major metropolitan area east of the Mississippi River, from Chicago, IL, St. Louis, MO, Memphis, TN, and New Orleans, LA, on the West to Miami, FL, Jacksonville, FL, Charleston, SC, Norfolk, VA, Washington, DC, and Philadelphia, PA, on the East. Other major metropolitan areas served by CSX include Atlanta, GA, Nashville, TN, Cincinnati, OH, Detroit, MI, Pittsburgh, PA, Baltimore, MD, Charlotte, NC, Birmingham, AL, and Louisville, KY. CSX interchanges traffic with other railroads at virtually all of the aforementioned locations and at numerous other points on its railroad system. NS operates approximately 14,282 route miles and 25,236 track miles of railroad in 20 states, primarily in the South and the Midwest, and in Ontario, Canada. Of that total, approximately 1,520 miles are operated under trackage rights while the remaining mileage is either owned by NS or operated by NS under contract or lease. NS has routes to, and serves, virtually every major market in an area that stretches from Kansas City, MO, in the Midwest to Norfolk, VA, in the East, to Chicago, IL, and Buffalo, NY, in the North, and to New Orleans, LA, and Jacksonville, FL, in the South. These markets include Memphis, Chattanooga and Knoxville, TN; St. Louis, MO; Fort Wayne, IN; Detroit, MI; Toledo, Cincinnati, Columbus, and Cleveland, OH; Louisville and Lexington, KY; Bluefield, WV; Alexandria, Roanoke, Lynchburg, and Richmond, VA; Winston-Salem, Raleigh, Durham, Charlotte, and Morehead City, NC; Greenville, Spartanburg, Columbia, and Charleston, SC; Atlanta, Macon, Valdosta, and Savannah, GA; Bessemer, Birmingham, Montgomery, and Mobile, AL; Des Moines, IA; and Peoria, Springfield, and Decatur, IL. NS interchanges traffic with other railroads at virtually all of these locations and at numerous other locations on its railroad system. Conrail operates approximately 10,500 miles of railroad in the Northeast and Midwest, and its primary network forms an "X" connecting Chicago (via the Chicago Line) and East St. Louis (via the St. Louis and Indianapolis Lines) in the West, with Boston, MA, New York, NY, and Northern New Jersey (via the Chicago Line and other main lines), and with Pittsburgh, Harrisburg, PA, Philadelphia, Baltimore, and Washington, DC (via the Pittsburgh Line and other main lines) in the East. The "hub" of the "X" is located in, and about, Cleveland, OH. Conrail's principal interchange points are in: Chicago, East St. Louis, and Streator, IL; Salem, IL, via Union Pacific Railroad Company (UPRR) trackage rights between Salem and St. Elmo, IL, on the St. Louis Line; Cincinnati; Hagerstown, MD; and Washington, DC. Other important interchange points include Effingham, IL; Fort Wayne, IN; Toledo and Columbus, OH; Buffalo and Niagara Falls, NY; Montreal, Quebec; Rotterdam Junction, NY; and Worcester (including Barbers), MA. Conrail's Chicago Line extends between Chicago and the Albany, NY, area and connects there (through the Selkirk Branch) with the River Line (serving North Jersey via the west shore of the Hudson River), the Hudson Line (through which Conrail reaches New York City and Long Island), and the Boston Line (which extends to Boston and via which Conrail serves New England). Other important routes contiguous to the Chicago Line include the Detroit Line (between Detroit and a connection with the Chicago Line at Toledo), the Michigan Line (the portion between Detroit and Kalamazoo, MI), the Kalamazoo Secondary and Branch (between Kalamazoo, MI, and Elkhart, IN, on the Chicago Line), the Montreal Secondary (between Syracuse, NY, and Adirondack Junction, Quebec), and the Southern Tier (between Buffalo, NY, and Croxton, NJ). Conrail's St. Louis Line extends between East St. Louis, IL, and Indianapolis, IN, connecting there with the Indianapolis Line which, in turn, extends between Indianapolis and the Cleveland area (connecting there with the Chicago Line). Conrail's Cincinnati Line (between Cincinnati and Columbus, OH) and its Columbus Line (between Columbus and Galion, OH, on the Indianapolis Line) and the Scottslawn Secondary Track (between Columbus and Ridgeway, OH, on the Indianapolis Line) all accommodate traffic flows between other parts of the Conrail system and Cincinnati, Columbus and/or Conrail points served via the West Virginia Secondary Track between Columbus and the Kanawha Valley of West Virginia. The transaction for which approval is sought in the primary application involves the joint acquisition of control by CSX and NS of CRR and its subsidiaries (the Control Transaction) and the division between CSX and NS of the operation and use of Conrail's assets (the Division). The Control Transaction and the Division are governed principally by an agreement (the Transaction Agreement) dated as of June 10, 1997, between CSXC, CSXT, NSC, NSR, CRR, CRC, and CRR Holdings LLC (CRR Holdings, a recently created limited liability company jointly owned by CSXC and NSC). The Control Transaction and the Division are also governed by a letter agreement dated as of April 8, 1997, between CSXC and NSC, but only to the extent such CSX/NS Letter Agreement has not been superseded either by the Transaction Agreement or by the agreement (the CRR Holdings Agreement) that governs CRR Holdings. CSX and NS have already acquired 100% of the common stock of CRR in a series of transactions that included a CSX tender offer that was consummated on November 20, 1996, an NS tender offer that was consummated on February 4, 1997, a joint CSX/NS tender offer that was consummated on May 23, 1997, and a merger that was consummated on June 2, 1997. Following this series of transactions: CRC remains a direct wholly owned subsidiary of CRR; CRR has become a direct wholly owned subsidiary of Green Acquisition Corp. (Tender Sub); Tender Sub is now a direct wholly owned subsidiary of CRR Holdings; and CRR Holdings is jointly owned by CSXC and NSC (CSXC holds a 50% voting interest and a 42% equity interest in CRR Holdings; NSC holds a 50% voting interest and a 58% equity interest in CRR Holdings). The merger that was consummated on June 2, 1997 (the Merger) involved the merger of Green Merger Corp. (Merger Sub, a direct wholly owned subsidiary of Tender Sub) into CRR, with CRR being the surviving corporation; and, in connection with the Merger: (i) each remaining outstanding share of CRR common stock not held by CSX, NS, or their affiliates was converted into the right to receive $115 in cash, without interest; and (ii) the shares of Merger Sub, all of which were then owned by Tender Sub, were converted into 100 newly issued shares of CRR, all of which were placed into a voting trust (the CSX/NS Voting Trust) to prevent CSXC and NSC, and their respective affiliates, from exercising premature control of CRR and its carrier subsidiaries pending review by the Board of the primary application. At the present time, in accordance with the agreement that governs the CSX/NS Voting Trust, the affairs of CRR and CRC remain under the control of their independent boards of directors. The Transaction Agreement provides that, following the effective date of the Board's approval of the primary application (the Control Date), CRR and CRC will each be managed by a board of directors consisting of six directors divided into two classes, each class having three directors. On each board, CSXC will have the right to designate three directors and NSC will likewise have the right to designate three directors; and actions that require the approval of either board will require approval both by a majority of the directors on that board designated by CSX and by a majority of the directors on that board designated by NS. The Transaction Agreement provides that, if the primary application is approved, the division of the operation and use of Conrail's assets will be effected on the Closing Date, which is defined as the third business day following the date on which certain conditions precedent (including the effectiveness of a final Board order and, where necessary, sufficient labor implementing agreements) shall have been satisfied or waived, or such other date as may be agreed upon. It is anticipated that, during the period beginning on the Control Date and ending on the Closing Date, CSX and NS will exercise joint control of Conrail as a separately functioning rail system. To effect the Division, CRC will form two wholly owned subsidiaries (referred to collectively as the Subsidiaries): New York Central Lines LLC (NYC) and Pennsylvania Lines LLC (PRR). CSXC will have exclusive authority to appoint the officers and directors of NYC; NSC will likewise have exclusive authority to appoint the officers and directors of PRR; and CRC, as the sole member of the Subsidiaries, will (with certain exceptions) follow CSXC's and NSC's directions with respect to the management and operation of NYC and PRR, respectively. On the date of the Division, CRC will assign to NYC and PRR certain of CRC's assets. NYC will be assigned those CRC assets designated to be operated as part of the CSX rail system (the NYC-Allocated Assets), and PRR will be assigned those CRC assets designated to be operated as part of the NS rail system (the PRR-Allocated Assets). These assets will include, among other things, certain lines and facilities currently operated by Conrail, whether owned by Conrail or operated by Conrail under trackage rights. Certain additional assets (referred to as the Retained Assets) will continue to be held by CRR and CRC (or their subsidiaries other than NYC and PRR) and will be operated by them for the benefit of CSX and NS. In addition, on the date of the Division: the former Conrail line now owned by NS that runs from Fort Wayne, IN, to Chicago, IL (the Fort Wayne Line), will be transferred to Conrail in a like-kind exchange for Conrail's Chicago South/Illinois Lines (the Streator Line); and Conrail will assign the Fort Wayne line to NYC, to be operated together with the other Conrail lines to be assigned to NYC and used by CSX as part of the CSX rail system. The NYC-Allocated Assets will include the following primary routes currently operated by Conrail (routes over which Conrail operates pursuant to trackage rights are designated "TR"): (1) NY/NJ Area to Cleveland (New York Central Railroad route), including (a) line segments from North NJ Terminal to Albany (Selkirk), (b) Albany to Poughkeepsie, NY, (c) Poughkeepsie to New York City (TR), (d) New York City to White Plains (TR), (e) Albany to Cleveland via Syracuse, Buffalo and Ashtabula, OH, (f) Boston to Albany, (g) Syracuse to Adirondack Jct., PQ, (h) Adirondack Jct. to Montreal (TR), (i) Woodard, NY, to Oswego, NY, (j) Syracuse to Hawk, NY, (k) Hawk to Port of Oswego (TR), (l) Buffalo Terminal to Niagara Falls/Lockport, (m) Lockport to West Somerset (TR), (n) Syracuse to NYS&W/FL connections, NY, (o) Albany/Boston Line to Massachusetts branch lines, (p) Albany/Boston Line to Massachusetts branch lines (TR), (q) New York City to Connecticut branch lines (TR), (r) Connecticut branch lines (TR), (s) Connecticut Branch lines, (t) Churchville, NY, to Wayneport, NY, (u) Mortimer, NY, to Avon, NY, and (v) Rochester Branch, NY; (2) Crestline, OH, to Chicago (Pennsylvania Railroad route), including (a) Crestline to Dunkirk, OH, (b) Dunkirk to Fort Wayne, IN, (c) Fort Wayne to Warsaw, IN, (d) Warsaw to Chicago Terminal (Clarke Jct.), IN, and (e) Adams, IN, to Decatur, IN; (3) Berea to E. St. Louis, including (a) Cleveland Terminal to Crestline, (b) Crestline to E. St. Louis via Galion, OH, Ridgeway, OH, Indianapolis, IN, Terre Haute, IN, Effingham, IL, and St. Elmo, IL, (c) Anderson, IN, to Emporia, IN, (d) Columbus to Galion, (e) Terre Haute to Danville, IL, (f) Danville to Olin, IN, (g) Indianapolis to Rock Island, IN, (h) Indianapolis to Crawfordsville, IN, (i) Indianapolis to Shelbyville, IN, (j) HN Cabin, IL, to Valley Jct., IL, (k) St. Elmo to Salem, IL (TR), (l) Muncie (Walnut Street), IN, to New Castle RT, IN (TR), and (m) New Castle RT, IN; (4) Columbus to Toledo, including (a) Columbus to Toledo via Ridgeway, (b) Toledo Terminal to Woodville, and (c) Toledo Terminal to Stonyridge, OH; (5) Bowie to Woodzell, MD, including (a) Bowie to Morgantown, and (b) Brandywine to Chalk Point; (6) NY/NJ to Philadelphia (West Trenton Line), including Philadelphia to North NJ Terminal; (7) Washington, DC, to Landover, MD; (8) Quakertown Branch, line segment from Philadelphia Terminal to Quakertown, PA (TR); and (9) Chicago Area, line segment from Porter, IN, to the westernmost point of Conrail ownership in Indiana. Along with these lines, CSXT will operate certain yards and shops, as well as the Conrail Philadelphia Headquarters and Philadelphia area information technology facilities. The PRR-Allocated Assets will include the following primary routes currently operated by Conrail (routes over which Conrail operates pursuant to trackage rights are designated "TR"): (1) NJ Terminal to Crestline (Pennsylvania Railroad route), including (a) North NJ Terminal to Allentown, PA, via Somerville, NJ, (b) Little Falls, NJ, to Dover, NJ (TR), (c) Orange, NJ, to Denville, NJ (TR), (d) Dover to Rockport (TR), (e) Rockport to E. Stroudsburg via Phillipsburg, NJ, (f) Allentown Terminal, (g) Orange to NJ Terminal (TR), (h) NJ Terminal to Little Falls (TR), (i) Bound Brook to Ludlow, NJ (TR), (j) Allentown, PA, to Harrisburg via Reading, (k) Harrisburg Terminal, (l) Harrisburg to Pittsburgh, (m) Conemaugh Line via Saltsburg, PA, (n) Pittsburgh to W. Brownsville, PA, (o) Central City, PA, to South Fork, PA, (p) Pittsburgh Terminal, (q) Monongahela, PA, to Marianna, PA, (r) Pittsburgh to Alliance, OH, via Salem, (s) Beaver Falls, PA, to Wampum, PA, (t) Alliance to Cleveland Terminal, (u) Mantua, OH, to Cleveland Terminal, (v) Alliance to Crestline, (w) Alliance to Omal, OH, (x) Rochester, PA, to Yellow Creek, OH, (y) E. Steubenville, WV, to Weirton, WV, (z) Steubenville Branches Bridge, OH, (aa) Pittsburgh Branches, (bb) Ashtabula to Youngstown, OH, (cc) Ashtabula Harbor to Ashtabula, (dd) Niles, OH, to Latimer, OH, (ee) Alliance, OH, to Youngstown, (ff) Youngstown to Rochester, (gg) Allentown to Hazleton, PA, (hh) CP Harris, PA, to Cloe, PA (TR), (ii) Cloe to Shelocta, PA, (jj) Tyrone, PA, to Lock Haven, PA (TR), (kk) Creekside, PA, to Homer City, PA, (ll) Monongahela Railroad, (mm) portion of Kinsman Connection in Cleveland, (nn) portion of 44 Ind. Track including Dock 20 Lead, and (oo) Gem Ind. Track-Lordstown, OH; (2) Cleveland to Chicago (New York Central Railroad route), including (a) Cleveland Terminal to Toledo Terminal, (b) Elyria, OH, to Lorain, OH, (c) Toledo Terminal to Sylvania, OH, (d) Toledo Terminal to Goshen, IN, (e) Elkhart, IN, to Goshen, and (f) Elkhart to Porter, IN; (3) Philadelphia to Washington (Amtrak's Northeast Corridor, referred to as NEC), including (a) Philadelphia Terminal to Perryville, MD (TR), (b) Wilmington Terminal, DE, (c) Perryville to Baltimore (TR), (d) Baltimore Terminal, (e) Baltimore Bay View to Landover, MD (TR), (f) Baltimore to Cockeysville, MD, (g) Pocomoke, MD, to New Castle Jct., DE, (h) Harrington, DE, to Frankford/Indian River, DE, (i) Newark, DE, to Porter, DE, (j) Claremont R.T., (k) Loneys Lane Lead, and (l) Grays Yard (TR); (4) Michigan Operations (excluding the Detroit Shared Assets Area), including (a) Toledo Terminal to Detroit Terminal, (b) Detroit Terminal to Jackson, MI, (c) Jackson to Kalamazoo, MI, (d) Kalamazoo to Elkhart, IN, (e) Jackson to Lansing, MI, (f) Kalamazoo to Grand Rapids, (g) Kalamazoo to Porter, IN (TR), (h) Kalamazoo Ind. Track, and (i) Comstock Ind. Track; (5) Eastern Pennsylvania lines, including (a) Philadelphia Terminal to Reading, (b) Reading Terminal, (c) Thorndale, PA, to Woodbourne, PA, (d) Leola/Chesterbrook, PA, lines, (e) Philadelphia Terminal to Lancaster, PA (TR), (f) Lancaster to Royalton, PA (TR), (g) Lancaster to Lititz/Columbia, PA, (h) portion of Stoney Creek Branch, (i) West Falls Yard, and (j) Venice Ind. Track; (6) Indiana lines, including (a) Anderson to Goshen via Warsaw, (b) Marion to Red Key, IN, and (c) Lafayette Ind. Track; (7) Buffalo to NY/NJ Terminal, including (a) NJ/NY Jct. to Suffern, NY (TR), (b) Suffern to Port Jervis, NY, (c) Port Jervis to Binghamton, (d) Binghamton to Waverly, (e) NJ/NY Jct. to Spring Valley, NY (TR), (f) Paterson Jct., NJ, to Ridgewood, NJ (TR), (g) Waverly to Buffalo, (h) Waverly to Mehoopany, PA, (i) Sayre, PA, to Ludlowville, NY, (j) Lyons, NY, to Himrods Jct., NY, (k) Corning, NY, to Himrods Jct., NY, (l) North Jersey Terminal to Paterson Jct., NJ (TR), (m) Paterson Jct. to North Newark, NJ, and (n) NJ/NY Jct. to North Jersey Terminal (TR); (8) Buffalo to Harrisburg and South, including (a) Perryville, MD, to Harrisburg, PA, (b) Carlisle, PA, to Harrisburg, (c) Wago, PA, to York (area), PA, (d) Harrisburg to Shocks, PA, (e) Williamsport, MD, to Buffalo via Harrisburg, PA, (f) Watsontown, PA, to Strawberry Ridge, PA, (g) Ebenezer Jct., NY, to Lackawanna, NY, (h) Hornell, NY, to Corry, PA, (i) Corry to Erie, PA (TR), and (j) Youngstown to Oil City, PA; (9) Cincinnati to Columbus to Charleston, WV, including (a) Columbus to Cincinnati, (b) Cincinnati Terminal, (c) Columbus Terminal to Truro, OH, (d) Truro to Charleston, WV, (e) Charleston to Cornelia, WV, and (f) Charleston to Morris Fork, WV; (10) Chicago South/Illinois operations, including (a) Osborne, IN, to Chicago Heights, IL, via Hartsdale, (b) Hartsdale to Schneider, IN, (c) Schneider to Hennepin, IL, (d) Keensburg, IL, to Carol, IL, and (e) Schneider to Wheatfield, IN; and (11) Chicago Market, including (a) Western Ave. Operations/Loop to Cicero/Elsdon, IL, (b) Chicago to Porter, IN, (c) Clarke Jct., IN, to CP 501, IN, (d) CP 509 to Calumet Park, IL, (e) Western Ave. Ind. Track, (f) Old Western Ave. Ind. Track, (g) North Joint Tracks, (h) Elevator Lead & Tri-River Dock, (i) CR&I Branch, (j) 49th Street Ind. Track, (k) 75th Street to 51st Street (TR), (l) Port of Indiana, IN, and (m) CP 502, IN, to Osborne, IN. Along with these lines, the abandoned Conrail line from Danville to Schneider, IL, will also be a PRR-Allocated Asset. Certain equipment will be included in the NYC-Allocated Assets and the PRR-Allocated Assets and will be made available to CSXT and NSR pursuant to a CSXT Equipment Agreement and an NSR Equipment Agreement, respectively. Much of the locomotive equipment and rolling stock equipment, however, will not be included in the NYC- and PRR-Allocated Assets but will be included, instead, in the Retained Assets and will be leased by CRC or its affiliates to NYC or PRR pursuant to equipment agreements to be negotiated by the parties. CRC currently holds certain trackage rights over CSXT and NSR. In general), CRC will assign the trackage rights that it holds over CSXT to PRR (to be operated by NSR), and it will assign the trackage rights that it holds over NSR to NYC (to be operated by CSXT). The shares currently owned by Conrail in TTX Company (TTX, formerly known as Trailer Train) will be allocated to NYC and PRR. Applicants' current ownership interests in TTX are: CSX, 9.345%; NS, 7.788%; Conrail, 21.807%. Following approval of the primary application, the ownership of TTX by applicants and their subsidiaries will be as follows: CSX, 9.345%; NYC, 10.125%; NS, 7.788%; PRR, 11.682%. Conrail's 50% interest in Triple Crown Services Company will be allocated to PRR. Applicants indicate that they have taken steps to ensure that all of the existing contractual commitments of Conrail to its shippers will be fulfilled. The Transaction Agreement provides that all transportation contracts of CRC in effect as of the Closing Date (referred to as Existing Transportation Contracts) will remain in effect through their respective stated terms and will be allocated as NYC-Allocated Assets and PRR-Allocated Assets, and that the obligations under them shall be carried out after the Closing Date by CSXT, utilizing NYC-Allocated Assets, and by NSR, using PRR-Allocated Assets, or pursuant to the Shared Assets Areas Agreements, as the case may be. The Transaction Agreement further provides, with respect to the Existing Transportation Contracts, that CSX and NS: will allocate the responsibilities to serve customers under these contracts; and will cooperate as necessary to assure shippers under these contracts all benefits, such as volume pricing, volume refunds, and the like, to which they are contractually entitled. The Retained Assets include assets contained within three Shared Assets Areas (SAAs) that are more fully described below: the North Jersey SAA; the South Jersey/Philadelphia SAA; and the Detroit SAA. The Retained Assets also include Conrail's System Support Operations (SSO) facilities, including equipment and other assets associated with such facilities, currently used by Conrail to provide support functions benefitting its system as a whole, including Conrail's: (1) customer service center in Pittsburgh, PA; (2) crew management facility in Dearborn, MI; (3) system maintenance-of-way equipment center in Canton, OH; (4) signal repair center in Columbus, OH; (5) system freight claims facility in Buffalo, NY; (6) system non-revenue billing facility at Bethlehem, PA; (7) system rail welding plant at Lucknow (Harrisburg), PA; (8) system road foreman/engineer training center at Philadelphia and Conway, PA; (9) police operations center at Mt. Laurel, NJ; (10) the Philadelphia Division headquarters building and offices located at Mount Laurel, NJ; and (11) other SSO facilities identified by CSX and NS prior to the Closing Date. Each SSO Facility will be operated by Conrail for the benefit of CSXT/NYC and NSR/PRR, and the costs of operating each SSO Facility will be retained by Conrail as "Corporate Level Liabilities" and will be shared between CSX and NS. In general: NYC will assume all liabilities arising on or after the Closing Date that relate predominantly to the NYC-Allocated Assets; PRR will assume all such liabilities that relate predominantly to the PRR-Allocated Assets; CRC will be responsible for all such liabilities that do not relate predominantly to the NYC- or PRR-Allocated Assets; and CRC will also be responsible for certain liabilities arising prior to the Closing Date. Separation Costs incurred following the Control Date in connection with Conrail agreement employees now working jobs at or in respect of NYC-Allocated Assets will be the sole responsibility of CSX, while Separation Costs incurred in connection with Conrail agreement employees now working jobs at or in respect of PRR-Allocated Assets will be the sole responsibility of NS. Separation Costs incurred in connection with Conrail agreement employees working jobs at or in respect of Retained Assets will be shared by CSX and NS. Separation Costs incurred following the Control Date for Conrail agreement employees at Conrail's Altoona and Hollidaysburg shops will be the responsibility of NS, and Separation Costs incurred following the Control Date in connection with agreement employees at Conrail's Philadelphia headquarters and technology center and Conrail's Pittsburgh customer service center will be the responsibility of CSX. Separation Costs for eligible Conrail non-agreement employees will be shared by CSX and NS. After the Closing Date, compensation and other expenses (excluding Separation Costs) for agreement employees (other than certain Conrail employees performing general and administrative functions) working jobs at or in respect of NYC-Allocated Assets will be the sole responsibility of CSX, while such expenses for such agreement employees working jobs at or in respect of PRR-Allocated Assets will be the sole responsibility of NS. Applicants indicate: that CSXT and NYC will enter into the CSXT Operating Agreement, which will provide for CSXT's use and operation of the NYC-Allocated Assets; that NSR and PRR will enter into the NSR Operating Agreement, which will provide for NSR's use and operation of the PRR-Allocated Assets; and that CRC, NYC, PRR, CSXT and/or NSR will enter into certain Shared Assets Areas Operating Agreements, which will provide for the operation of certain Shared Assets Areas for the benefit of both CSXT and NSR. The CSXT Operating Agreement and the NSR Operating Agreement (collectively, the Allocated Assets Operating Agreements) will provide that CSXT and NSR will each have the right, for an initial term of 25 years, to use and operate, as part of their respective systems, the NYC-Allocated Assets and the PRR-Allocated Assets, respectively. These agreements will require CSXT and NSR each to bear the responsibility for and the cost of operating and maintaining their respective Allocated Assets. CSXT and NSR will each receive for its own benefit and in its own name all revenues and profits arising from or associated with the operation of its Allocated Assets. CSXT will pay NYC an operating fee based on the fair market rental value of the NYC- Allocated Assets. NSR will similarly pay PRR an operating fee based on the fair market rental value of the PRR-Allocated Assets. CSXT and NSR will have the right to receive the benefits of NYC and PRR, respectively, under any contract or agreement included in the NYC-Allocated Assets or the PRR-Allocated Assets, respectively, and, with the consent of NYC and PRR, respectively, to modify or amend any such contract or agreement on behalf of NYC and PRR. CSXT and NSR will each have the right to renew its Allocated Assets Operating Agreement for two additional terms of 10 years each. The Allocated Assets Operating Agreements contemplate that, upon termination of the agreements, CSXT and NSR will be deemed to have returned their Allocated Assets to NYC or PRR, subject to any regulatory requirements. Both CSXT and NSR will be permitted to serve shipper facilities located within the three SAAs (the North Jersey SAA, the South Jersey/Philadelphia SAA, and the Detroit SAA), which will be owned, operated, and maintained by Conrail for the exclusive benefit of CSX and NS. CSXT and NSR will enter into an SAA Operating Agreement with CRC in connection with each of the SAAs, and CRC will grant to CSXT and NSR the right to operate their respective trains, with their own crews and equipment and at their own expense, over any tracks included in the SAAs. CSXT and NSR will each have exclusive and independent authority to establish all rates, charges, service terms, routes, and divisions, and to collect all freight revenues, relating to freight traffic transported for its account within the SAAs. Other carriers that previously had access to points within the SAAs will continue to have the same access as before. (1) The North Jersey SAA encompasses all Conrail Northern New Jersey trackage east of and including the NEC, and also (a) certain line segments north of the NEC as it turns east to enter the tunnel under the Hudson River, (b) the Conrail Lehigh line west to Port Reading Junction, (c) the rights of Conrail on the New Jersey Transit Raritan line, (d) the Conrail Port Reading Secondary line west to Bound Brook, (e) the Conrail Perth Amboy Secondary line west to South Plainfield, and (f) the NEC local service south to the Trenton area. (2) The South Jersey/Philadelphia SAA encompasses all Conrail "Philadelphia" stations and stations within the Philadelphia City limits, industries located on the Conrail Chester Industrial and Chester Secondary tracks, all Conrail trackage in Southern New Jersey, Conrail's rights on the NEC north from Zoo Tower in Philadelphia to Trenton, NJ, and the Ameriport intermodal terminal and any replacement of such terminal built substantially through public funding. (3) The Detroit SAA encompasses all Conrail trackage and access rights east of the CP-Townline (Michigan Line MP 7.4) and south to and including Trenton (Detroit Line MP 20). A number of other areas, though not referred to as SAAs, are nevertheless subject to special arrangements that provide for a sharing of routes or facilities to a certain extent. (1) Monongahela Area: Although the Conrail lines formerly a part of the Monongahela Railway will be operated by NS, CSX will have equal access for 25 years, subject to renewal, to all current and future facilities located on or accessed from the former Monongahela Railway, including the Waynesburg Southern. (2) Chicago Area: Both CSX and NS will have access to Conrail's rights concerning access to and use of the Willow Springs Yard of The Burlington Northern and Santa Fe Railway Company (BNSF); applicants will enter into an agreement concerning their respective rights as successors to Conrail and as parties controlling the controlling shareholder in the Indiana Harbor Belt Railway (IHB), a 51%-owned Conrail subsidiary (the stock of IHB will be a Conrail-retained asset); certain trackage rights of Conrail over IHB will be assigned or made available to NYC to be operated by CSX or to PRR to be operated by NS; CSX and NS will enter into an agreement to permit each of them to maintain current access and trackage rights enjoyed by them over terminal railroads in the Chicago area; and CSX will be granted an option, exercisable if CSX and BNSF come under common control, to purchase the Streator Line from Osborne, IN, to Streator, IL. (3) Ashtabula Harbor Area: NS will have the right to operate and control Conrail's Ashtabula Harbor facilities, with CSX receiving use and access, up to a proportion of the total ground storage, throughput, and tonnage capacity of 42%. (4) Buffalo Area: CSX will operate Seneca Yard, and NS will receive access to yard tracks in that yard. (5) Cleveland Area: Conrail's switching yard at Collinwood will be operated by CSX and its Rockport Yard will be operated by NS. (6) Columbus, OH: NS will operate Conrail's Buckeye Hump Yard, and CSX will operate the former Local Yard and intermodal terminal at Buckeye. (7) Erie, PA: Norfolk and Western Railway Company (NW, a wholly owned NS subsidiary) will have a permanent easement and the right to build a track on the easement along the Conrail right of way through Erie, PA, to be operated by CSX. NW will have trackage rights in Erie to connect its existing Buffalo-Cleveland line if such connection can be achieved without using the Conrail Buffalo-Cleveland line to be operated by CSX. (8) Fort Wayne, IN: CSX will operate the line between Fort Wayne and Chicago, currently owned by NS. (9) Indianapolis, IN: NS will have overhead trackage rights from Lafayette and Muncie to Hawthorne Yard to serve, via CSX switch, shippers that presently receive service from two railroads. (10) Toledo, OH: Conrail's Stanley Yard will be operated by CSX, and its Airline Junction Yard will be operated by NS. (11) Washington, DC: Conrail's Landover Line from Washington, DC, to Landover, MD, will be allocated to CSX, and NS will be given overhead trackage rights. (12) Allocation of Rights with Respect to Freight Operations Over Amtrak's NEC: Conrail's NEC overhead trackage rights north of New York (Penn Station) will be assigned to CSX. Both CSX and NS will have overhead rights to operate trains between Washington, DC, and New York (Penn Station), subject to certain limitations. From Zoo Tower, Philadelphia, to Penn Station, NY, Conrail's NEC rights to serve local customers will be part of the Retained Assets and Conrail will assign those rights to CSX and NS, with CSX and NS having equal access to all local customers and facilities. Between Washington, DC, and Zoo Tower, Philadelphia, Conrail's NEC rights to serve local customers will be assigned to NS. The right to serve local customers on the NEC north of New York (Penn Station) will be assigned to CSX. Applicants intend that the Allocated Assets conveyed to CSX (NYC) and NS (PRR) will be operated by CSXT and NSR, respectively, and that both the Allocated Assets conveyed to CSX and NS as well as the Retained Assets made available by Conrail to CSX or NS or both will be enjoyed and used by CSX and NS as if the carrier in question were itself Conrail. Applicants similarly intend that the SAAs will be used, enjoyed, and operated as fully by CSX and NS as if each of them were Conrail. From the Closing Date forward, CSX and NS will be responsible for all of the operating expenses and new liabilities attributable to the assets which they are operating. It is expected, however, that most of the pre-Closing Date liabilities of CRC, CRR, and their subsidiaries will remain in place. It is contemplated that CRC will pay its pre-Closing Date liabilities, including its debt obligations, out of payments received, either directly or through NYC and PRR, from CSXT and NSR in connection with the Allocated Assets and the SAAs. Applicants expect that such payments will be sufficient to permit CRC and its subsidiaries (1) to cover their operating, maintenance, and other expenses, (2) to pay all of their obligations as they mature, (3) to provide dividends to CRR sufficient to permit it to discharge its debts and obligations as they mature, and (4) to receive a fair return for the operation, use, and enjoyment by CSX and NS of the Allocated Assets and SAAs. Applicants add, however, that, if for any reason these sources of funds to CRC and CRR prove insufficient to permit them to pay and discharge their obligations, CSX and NS have agreed that CRR Holdings shall provide the necessary funds, which it will obtain from CSXC and NSC. Applicants anticipate that, following the Division of Conrail, approximately 350 employees will be employed by Conrail in the Philadelphia area (where the headquarters of CRR and CRC are now located). These employees will include Conrail employees managing and operating trains for CSX and NS, the employees in the local SAA, and the management personnel for the continuing Conrail functions. In addition, CSX and NS each anticipates establishing a regional headquarters-type function in Philadelphia at which an undetermined number of additional personnel will be employed. It is intended that, following the Division: CRC will not hold itself out to the public as performing transportation services directly and for its own account; CRC will not enter into any contract (other than with CSXT or NSR) for the performance of transportation services; and all transportation services performed by CRC will be performed as agent or subcontractor of CSXT or NSR. Applicants claim that the division of Conrail proposed in the primary application has enabled applicants to avoid, "wherever possible," situations where shippers will see their rail options decline from two carriers to one; and that in "virtually all of the few" 2-to-1 situations that the division proposed in the primary application would otherwise have entailed, CSX and NS have agreed to provide one another with trackage and/or haulage rights that will permit the continuation of two rail carrier service. Applicants claim that the CSX/NS/CR transaction will create vigorous rail competition in large portions of the Mid-Atlantic and Northeastern regions now served only by Conrail; will create numerous new single-line routes between the Northeast and the Southeast and between the Northeast and the Midwest, which will result in improved transit times, greater reliability of on-time delivery, increased safety, and other service and efficiency gains; will allow CSX and NS to divert substantial freight traffic from the congested highways of the Eastern United States; and will generate, each year, nearly $1 billion in quantified public benefits and also significant additional benefits (most notably those benefits resulting from the introduction of rail competition into areas now rail-served only by Conrail). Applicants have provided three Labor Impact Exhibits, each using a different base line in calculating the impacts that the transactions proposed in the primary application and the related filings will have on rail carrier employees. Applicants' 1996/97 Labor Impact Exhibit projects, with respect to both the CSX and NS expanded systems, that the proposed transactions will result in the abolition of 3,090 jobs and the creation of 1,109 jobs (for a net loss of 1,981 jobs), and will also result in the transfer of an additional 2,323 jobs. Applicants' 1996 Labor Impact Exhibit projects, with respect to both the CSX and NS expanded systems, that the proposed transactions will result in the abolition of 3,822 jobs and the creation of 1,152 jobs (for a net loss of 2,670 jobs), and will also result in the transfer of an additional 2,323 jobs Applicants' 1995 Labor Impact Exhibit projects, with respect to both the CSX and NS expanded systems, that the proposed transactions will result in the abolition of 6,654 jobs and the creation of 1,699 jobs (for a net loss of 4,955 jobs), and will also result in the transfer of an additional 2,288 jobs. Applicants emphasize that the projections contained in their Labor Impact Exhibits are short term projections; applicants maintain that, in the long run, the transactions proposed in the primary application and the related filings will provide opportunities for rail transportation growth and, therefore, new jobs. Applicants anticipate that, if we approve the transactions proposed in the primary application and the related filings, we will impose on such transactions the standard labor protective conditions customarily imposed on similar such transactions. RELIEF REQUESTED IN THE LEAD DOCKET. In the STB Finance Docket No. 33388 lead docket, applicants seek: approval of the transaction proposed in the primary application (in paragraph 1 below); approval of certain "elements" of that transaction, referred to as Transaction Elements (in paragraphs 2, 3, 4, 5, 6, 7, 8, 9, 10, and 11 below); and a "fairness determination" respecting the terms under which CSX and NS have acquired all of the common stock of CRR (in paragraph 12 below). (1) Applicants seek approval and authorization, pursuant to 49 U.S.C. 11323 and 11324, of the acquisition by CSXC and NSC (each a noncarrier corporation controlling one or more rail carriers) of joint control of, and the power to exercise joint control over, CRR (also a noncarrier corporation controlling one or more rail carriers). (2) Applicants seek approval and authorization, pursuant to 49 U.S.C. 11323 and 11324, of the acquisition by NYC and PRR of, and of the operation by CSXT and NSR over, the Conrail lines and other assets, including without limitation trackage and other rights, that will be allocated to CSX (NYC) and NS (PRR), respectively. Applicants also ask that we expressly provide that, pursuant to the sought approval and authorization under 49 U.S.C. 11323 and 11324, and notwithstanding any purported limitations on assignability, NYC and PRR each will have the same right, title, and interest in the Conrail lines and other assets forming its part of the Allocated Assets as Conrail itself now has, including the power to pass the use and enjoyment of those lines and other assets to CSXT and NSR (3) Applicants request a declaratory order that 49 U.S.C. 10901 does not apply to the transfer of the Allocated Assets to NYC and PRR. (4) Applicants seek approval and authorization, pursuant to 49 U.S.C. 11323 and 11324: (i) for CSXT and NSR to enter into the Allocated Assets Operating Agreements and to operate the assets held by NYC and PRR, respectively; (ii) for CSXT, NSR, and CRC to enter into the three SAA Operating Agreements and to operate the assets in the SAAs; and (iii) for CSX and NS to use, operate, perform, and enjoy the Allocated Assets and the assets in the SAAs consisting of assets other than routes (including, without limitation, the Existing Transportation Contracts). Applicants also request a declaratory order, or a declaration to the same effect as a declaratory order: (a) that CSX and NS will have the authority to conduct operations over the routes of Conrail covered by the Trackage Agreements as fully and to the same extent as Conrail itself could; and (b) that CSX and NS may use, operate, perform, and enjoy the Allocated Assets and the assets in the SAAs consisting of assets other than routes (including, without limitation, the Existing Transportation Contracts) as fully and to the same extent as Conrail itself could. (5) For the period following the transfer of CRC assets to NYC and PRR, applicants seek approval and authorization: (a) for CSXC, NSC, and CRR to continue to control NYC and PRR; and (b) for the common control, by CSXC, CSXT, NSC, NSR, CRR, and CRC of (i) NYC and PRR, and (ii) the carriers currently controlled by CSXC, CSXT, NSC, NSR, CRR, and CRC. Such authorization and approval will be necessary because, as applicants note: CRC, NYC, and PRR will not be part of a "single system" of rail carriers, and therefore authorization to control CRC will not in and of itself imply authorization to control NYC and PRR; and, although CSX will exercise day-to-day control of NYC and NS will exercise day-to-day control of PRR, the fact that certain major actions concerning NYC and PRR will remain under the control of CRC will result in an ongoing common control relationship involving CSXC, NSC, and CRR, and the subsidiaries of each. (6) Applicants seek approval and authorization for the acquisition by CSXT of certain trackage rights over PRR; and for the acquisition by NSR of certain trackage rights over NYC. (7) Applicants seek approval and authorization, of the trackage rights provided to CSXT to access all current and future facilities located on or accessed from the former Monongahela Railway, including the Waynesburg Southern. (8) The trackage rights covered by paragraph 6 include, among many other such trackage rights, certain trackage rights to be acquired by NS over the NYC Bound Brook, NJ- Woodbourne, PA line. These particular trackage rights, however, are intended to be temporary in duration, and will expire, by their terms, at the end of 3 years. Applicants therefore seek authorization for NS to discontinue the Bound Brook-Woodbourne trackage rights in accordance with the terms thereof. (9) Applicants seek approval and authorization of certain incidental trackage rights granted in connection with operations within the SAAs. These trackage rights include: (i) trackage rights granted by CSXT to NSR and CRC; and (ii) trackage rights granted by NSR to CSXT and CRC. (10) To the extent that any matter concerning either (i) the joint ownership by CSX and NS of CRR, CRC, NYC, and/or PRR, or (ii) the Transaction Agreement and the Ancillary Agreements referred to therein, including the provision for handling Existing Transportation Contracts, might be deemed to be a pooling or division by CSX and NS of traffic or services or of any part of their earnings, applicants request approval for such pooling or division. (11) Applicants seek approval and authorization for the transfer of Conrail's Streator Line from Conrail to NSR/NW. (12) Applicants seek a determination that the terms under which CSX and NS, both individually and jointly, have acquired all of the common stock of CRR are fair and reasonable to the stockholders of CSXC, the stockholders of NSC, and the stockholders of CRR. RELATED FILINGS. In STB Finance Docket No. 33388 (Sub-No. 1), CSXT has filed a notice to operate, at Crestline, OH, a connection track in the northwest quadrant of the intersection of CRC's North-South line between Greenwich, OH, and Indianapolis, IN, and CRC's East-West line between Pittsburgh, PA, and Fort Wayne, IN. The connection will extend approximately 1,507 feet between approximately MP 75.4 on the North-South line and approximately MP 188.8 on the East-West line. In STB Finance Docket No. 33388 (Sub-No. 2), CSXT has filed a petition to operate, in Willow Creek, IN, a connection track in the southeast quadrant of the intersection between CSXT's line between Garrett, IN, and Chicago, IL, and CRC's line between Porter, IN, and Gibson Yard, IN (outside Chicago). The connection will extend approximately 2,800 feet between approximately MP BI-236.5 on the CSXT line and approximately MP 246.8 on the CRC line. In STB Finance Docket No. 33388 (Sub-No. 3), CSXT has filed a petition to operate, in Greenwich, OH, connection tracks in the northwest and southeast quadrants of the intersection between the CSXT line between Chicago and Pittsburgh and the CRC line between Cleveland and Cincinnati. The connection in the northwest quadrant, a portion of which will be constructed utilizing existing trackage and/or right-of-way of the Wheeling & Lake Erie Railway Company, will extend approximately 4,600 feet between approximately MP BG-193.1 on the CSXT line and approximately MP 54.1 on the CRC line. The connection in the southeast quadrant will extend approximately 1,044 feet between approximately MP BG-192.5 on the CSXT line and approximately MP 54.6 on the CRC line. In STB Finance Docket No. 33388 (Sub-No. 4), CSXT has filed a petition to operate, at Sidney Junction, OH, a connection track in the southeast quadrant of the intersection between the CSXT line between Cincinnati, OH, and Toledo, OH, and the CRC line between Cleveland, OH, and Indianapolis, IN. The connection will extend approximately 3,263 feet between approximately MP BE-96.5 on the CSXT line and approximately MP 163.5 on the CRC line. In STB Finance Docket No. 33388 (Sub-No. 5), NW has filed a petition to operate, at Sidney, IL, a connection track between the UPRR north-south line between Chicago, IL, and St. Louis, MO, and the NW east-west line between Decatur, IL, and Tilton, IL. The connection, which will be in the southwest quadrant of the intersection of the two lines, will be approximately 3,256 feet in length. In STB Finance Docket No. 33388 (Sub-No. 6), NW has filed a petition to operate, at Alexandria, IN, a connection track between the CRC line between Anderson, IN, and Goshen, IN, and the NW line between Muncie, IN, and Frankfort, IN. The connection, which will be in the northeast quadrant of the intersection of the two lines, will be approximately 970 feet in length. In STB Finance Docket No. 33388 (Sub-No. 7), NW has filed a petition to operate, at Bucyrus, OH, a connection track between NW's Bellevue, OH-Columbus, OH line and CRC's Fort Wayne, IN-Crestline, OH line. The connection, which will be in the southeast quadrant of the intersection of the two lines, will be approximately 2,467 feet in length. In STB Finance Docket No. 33388 (Sub-No. 8), CSXT has filed a notice to construct and operate, at Little Ferry, NJ, two connection tracks between the CRC Selkirk-North Bergen line and the New York, Susquehanna and Western Railway (NYS&W) Paterson-Croxton line. The first connection will extend approximately 480 feet between approximately MP 5.75 on the CRC line and approximately MP 5.65 on the NYS&W line. The second connection will extend approximately 600 feet between approximately MP 4.04 on the CRC line and approximately MP 4.15 on the NYS&W line. In STB Finance Docket No. 33388 (Sub-No. 9), CSXT and The Baltimore and Ohio Chicago Terminal Railroad Company (B&OCT, a wholly owned CSXT subsidiary) have filed a notice to construct and operate a connection track in the vicinity of 75th Street SW, Chicago, IL, in the southwest quadrant of the intersection of the lines of B&OCT and The Belt Railway Company of Chicago (BRC). The connection will extend approximately 1,640 feet between approximately MP DC-22.43 on B&OCT's North-South line between Cleveland and Brighton Park, and approximately MP 12.95 on BRC's East-West line between Bedford Park Yard and South Chicago Yard. In STB Finance Docket No. 33388 (Sub-No. 10), CSXT has filed a petition to construct and operate a connection track in Exermont, IL, in the northwest quadrant of the intersection between CSXT's Cincinnati-East St. Louis line and CRC's Cleveland-East St. Louis line. The connection will extend approximately 3,590 feet between approximately MP BC-327.9 on the CSXT line and approximately MP 231.4 on the CRC line. In STB Finance Docket No. 33388 (Sub-No. 11), CSXT and B&OCT have filed a notice to construct and operate a connection track in the vicinity of Lincoln Avenue in Chicago, IL, in the northeast quadrant of the intersection of the lines of B&OCT and IHB. The connection will extend approximately 840 feet between approximately MP DC-9.5 on B&OCT's line between Cleveland and Barr Yard, and approximately MP 10.43 on IHB's line between Gibson Yard and Blue Island Jct. In STB Finance Docket No. 33388 (Sub-No. 12), NSR has filed a petition to construct and operate, at Kankakee, IL, a connection track between the Illinois Central Railroad Company (IC) Chicago, IL-Gibson City, IL north-south line, over which NSR has trackage rights, and the CRC Streator, IL-Schneider, IN east-west line. The connection, which will be in the southeast quadrant of the intersection of the two lines, will be approximately 1,082 feet in length. In STB Finance Docket No. 33388 (Sub-No. 13), NW has filed a notice of exemption to construct and operate a connection track at Tolono, IL, in the southeast quadrant of the intersection of the IC line between Chicago, IL, and Centralia, IL, and the NW line between Decatur, IL, and Tilton, IL. The connection will be about 1,600 feet in length. In STB Finance Docket No. 33388 (Sub-No. 14), NW has filed a petition to construct and operate, at Butler, IN, a connection track between NW's Detroit, MI-Fort Wayne, IN line and CRC's Elkhart, IN-Toledo, OH line. The connection, which will be in the northwest quadrant of the intersection of the two lines, will be approximately 1,750 feet in length. In STB Finance Docket No. 33388 (Sub-No. 15), NW has filed a notice to construct and operate a connection track at Tolleston, IN. This track, which will connect an NW line and a CRC line, will be about 930 feet in length. In STB Finance Docket No. 33388 (Sub-No. 16), NW has filed a notice to construct and operate a double track connection at Hagerstown, MD. This track, which will connect an NW line and a CRC line, will be about 800 feet in length. In STB Finance Docket No. 33388 (Sub-No. 17), NW has filed a notice to construct and operate a connection track at Ecorse Junction (Detroit), MI. This track, which will connect an NW line and a CRC line, will be about 400 feet in length. In STB Finance Docket No. 33388 (Sub-No. 18), NW has filed a petition to construct and operate, at Blasdell (Buffalo), NY, a connecting track approximately 2,500 feet in length between NW's Erie, PA-Buffalo, NY Line and CRC's Buffalo, NY-Harrisburg, PA Line. In STB Finance Docket No. 33388 (Sub-No. 19), NW has filed a notice to construct and operate, at Gardenville Junction (Buffalo), NY, a connecting track approximately 1,700 feet in length between CRC's Buffalo, NY-Harrisburg, PA Line and CRC's Ebenezer Secondary Track. In STB Finance Docket No. 33388 (Sub-No. 20), NW has filed a notice to construct and operate, at Columbus, OH, an NW-CRC connecting track approximately 1,423 feet in length. In STB Finance Docket No. 33388 (Sub-No. 21), NW has filed a petition to construct and operate, at Oak Harbor, OH, a connecting track approximately 4,965 feet in length between, and in the northwest quadrant of the intersection of, NW's Toledo, OH-Bellevue, OH line and CRC's Toledo, OH-Cleveland, OH line. In STB Finance Docket No. 33388 (Sub-No. 22), NW has filed a petition to construct and operate, at Vermilion, OH, a connecting track approximately 5,398 feet in length between NW's Cleveland, OH-Bellevue, OH line and CRC's Toledo, OH-Cleveland, OH line. In STB Finance Docket No. 33388 (Sub-No. 23), NW has filed a notice regarding a joint project involving relocation of NW's rail line running down 19th Street in Erie, PA (a distance of approximately 6.1 miles, between approximately MP B-85.10 near Downing Avenue and approximately MP B-91.25 west of Pittsburgh Avenue) to a parallel railroad right-of-way currently owned and operated by CRC that will be allocated to CSXT in connection with the primary application. In STB Finance Docket No. 33388 (Sub-No. 24), CRC and NW have filed a petition regarding the acquisition by CRC (or by NYC) of the Fort Wayne Line, between MP 441.8 at Fort Wayne, IN, and MP 319.2 at Tolleston (Gary), IN. In STB Finance Docket No. 33388 (Sub-No. 25), NW and CSXT have filed a notice regarding the acquisition by NW of trackage rights over approximately 32.7 miles of a CSXT line between Lima, OH (Erie Junction), at or near CSXT MP BE-129.2, and Sidney, OH, at or near CSXT MP BE-96.5. The trackage rights to be acquired by NW include overhead trackage rights between Lima and Sidney and local trackage rights that will allow NW to serve 2-to-1 shippers at Sidney. In STB Finance Docket No. 33388 (Sub-No. 26), CSXC, CSXT, and The Lakefront Dock and Railroad Terminal Company (LD&RT) have filed an application seeking approval and authorization for the acquisition and exercise by CSXC and CSXT of control of LD&RT, and the common control of LD&RT and CSXT and the other rail carriers controlled by CSXT and/or CSXC. LD&RT, a Class III railroad in which CSXT and CRC each currently owns a 50% voting stock interest, operates approximately 17 miles of yard tracks at Oregon, OH. In STB Finance Docket No. 33388 (Sub-No. 27), NW and CSXT have filed a notice regarding the acquisition by NW of overhead trackage rights over approximately 5 to 6 miles of a CSXT line between Columbus, OH (Parsons Yard), at or near CSXT MP CJ 71.5, and Scioto, OH, at or near CSXT MP CK 2.5. In STB Finance Docket No. 33388 (Sub-No. 28), CSXT and NW have filed a notice regarding the acquisition by CSXT of overhead trackage rights over approximately 2.02 miles of an NW line between Columbus, OH (Watkins Yard), at or near NW MP N-696.7, and Bannon, OH, at or near NW MP N-698.72. In STB Finance Docket No. 33388 (Sub-No. 29), CSXT and NW have filed a notice regarding the acquisition by CSXT of overhead trackage rights over approximately 1.4 miles of an NW line between Erie Junction (Delray), MI, at or near MP D4.4, and Ecorse Junction, MI, at or near MP D5.8. In STB Finance Docket No. 33388 (Sub-No. 30), NW and CSXT have filed a notice regarding the acquisition by NW of overhead trackage rights over approximately 1.7 miles of a CSXT line between the connection of two CSXT lines near Washington Street at or near MP 123.7, and the connection of two CSXT lines at Pine at or near MP 122.0, in Indianapolis, IN. In STB Finance Docket No. 33388 (Sub-No. 31), CSXC and CSXT have filed a petition regarding the acquisition by CSXC and CSXT of control of Albany Port Railroad Corporation (APR). APR, which operates approximately 16.5 miles of track at the Port of Albany, NY, is owned in equal 50% shares by CRC and D&H (Delaware and Hudson Railway Company, Inc., an affiliate of Canadian Pacific Railway Company); and, if the primary application is approved, CRC's 50% interest in APR will be allocated to CSXT in the Division. In STB Finance Docket No. 33388 (Sub-No. 32), NW and B&OCT have filed a notice regarding the acquisition by NW of overhead trackage rights over approximately 10.8 miles of the IHB McCook Branch between the IHB/B&OCT connection at McCook, IL, at or near MP 28.5, and the IHB/CP connection at Franklin Park, IL, at MP 39.3. In STB Finance Docket No. 33388 (Sub-No. 33), NW and B&OCT have filed a notice regarding the acquisition by NW of trackage rights over B&OCT's Barr Subdivision between the connection of the NSR Chicago Line and the B&OCT line at Pine Junction, IN (CP 497) and: (i) the connection with B&OCT's McCook Subdivision at Blue Island Junction, IL, at or near MP DC 14.9, a distance of approximately 14.9 miles; and beyond to (ii) the B&OCT/IHB connection at McCook, IL, at or near MP 28.5, a distance of approximately 13.6 miles. In STB Finance Docket No. 33388 (Sub-No. 34), CSXT and NW have filed a notice regarding the acquisition by CSXT of overhead trackage rights over approximately 45.5 miles of an NW line between Bucyrus, OH, at or near NW MP S-63.0, and Sandusky, OH, at or near NW MP S-108.5. The trackage rights to be acquired by CSXT, although described as "overhead" trackage rights, will allow CSXT to access 2-to-1 shippers at Sandusky. In STB Docket Nos. AB-167 (Sub-No. 1181X) and AB-55 (Sub-No. 551X), CRC and CSXT, respectively, have filed a notice to abandon an approximately 29-mile portion of the Danville Secondary Track between MP 93.00" at Paris, IL, and MP 122.00" at Danville, IL, in Edgar and Vermilion Counties, IL. The line, which is presently owned and operated by CRC, is proposed to be operated by CSXT pursuant to the authority sought in the primary application. With respect to the Paris-Danville abandonment, the City of Georgetown, IL, has requested a 180-day public use condition and has also filed a Trails Act statement. CSX has indicated that it is willing to negotiate with the City of Georgetown, pursuant to the National Trails System Act, respecting interim trail use of the right-of-way involved in Docket Nos. AB-167 (Sub-No. 1181X) and AB-55 (Sub-No. 551X). In STB Docket No. AB-290 (Sub-No. 194X), NW has filed a notice to abandon a line between MP SK-2.5 near South Bend, IN, and MP SK-24.0 near Dillon Junction, IN, a distance of approximately 21.5 miles in St. Joseph and La Porte Counties, IN. NW initially sought, in Docket No. AB-290 (Sub-No. 194X), to abandon the South Bend-Dillon Junction line. Applicants thereafter indicated, in their briefs, that NW was seeking, in Docket No. AB-290 (Sub-No. 194X), authorization for discontinuance. Applicants, however, have since confirmed that, in fact, NW continues to seek to abandon the South Bend-Dillon Junction line. With respect to the South Bend-Dillon Junction abandonment, the St. Joseph County Parks and Recreation Department has requested a 180-day public use condition and has also filed a Trails Act statement. In STB Docket No. AB-290 (Sub-No. 196X), NW has filed a petition to abandon a line between MP TM-5.0 in Toledo, OH, and MP TM-12.5 near Maumee, OH, a distance of approximately 7.5 miles in Lucas County, OH. NW (i.e., NS) indicated, in its December 15, 1997, rebuttal filing, that it did not object to the STB Docket No. AB-290 (Sub-No. 196X) 180- day public use condition sought by the Toledo Metropolitan Area Council of Governments (TMACOG), as long as that condition did not interfere with arm's-length NW-TMACOG negotiations. NW subsequently agreed that, upon obtaining authorization to abandon the Toledo-Maumee line: it will donate and quitclaim to TMACOG or TMACOG's designee NW's interest in the right-of-way; and it will retain its interest in the ties, rail, and metal material, and will remove these items from the line at an appropriate time following abandonment. In STB Docket No. AB-290 (Sub-No. 197X), NW has filed a notice of exemption under 49 CFR 1152.50 seeking authorization to discontinue operations over the Toledo Pivot Bridge extending between MP CS-2.8 and MP CS-3.0 near Toledo, OH, a distance of approximately 0.2 miles in Lucas County, OH. NW initially sought authorization to abandon the Toledo Pivot Bridge. Subsequently, in accordance with a settlement NW (i.e., NS) reached with TLCPA and TMACOG, NW advised that it now seeks authorization for discontinuance only. The applicable statutory provisions are codified at 49 U.S.C. 11321-26. Despite the several factors contained in those provisions, "The Act's single and essential standard of approval is that the [Board] find the [transaction] to be 'consistent with the public interest.'" To determine the public interest, we balance the benefits of the merger against any harm to competition or to essential service(s) that cannot be mitigated by conditions. In making our public interest determination in proceedings such as this one involving the merger of at least two Class I railroads, section 11324(b) requires us to consider five factors: (1) the effect of the proposed transaction on the adequacy of transportation to the public; (2) the effect on the public interest of including, or failing to include, other rail carriers in the area involved in the proposed transaction; (3) the total fixed charges that result from the proposed transaction; (4) the interest of carrier employees affected by the proposed transaction; and (5) whether the proposed transaction would have an adverse effect on competition among rail carriers in the affected region or in the national rail system. Section 11324(b)(1), requiring that we examine the effect of the transaction on the adequacy of transportation to the public, necessarily involves an examination of the public benefits of the transaction. These include efficiency gains such as cost reductions, cost savings, and service improvements permitting a railroad to provide the same rail services with fewer resources or improved rail services with the same resources. An integrated railroad can often realize certain of these benefits by achieving the economies of scale, scope, and density stemming from expanded operations. Cost savings may include elimination of interchanges, internal reroutes, more efficient movements between the merging parties, reduced overhead, and elimination of redundant facilities. These benefits, in varying degrees depending on competitive conditions, have generally been passed on to most shippers as reduced rates and/or improved services. Competitive harm results from a merger to the extent that the merging parties gain sufficient market power to profit from raising rates or reducing service (or both). In evaluating claims of competitive harm, our general practice is to distinguish harm caused by the transaction from disadvantages that other railroads, shippers, or communities may have already been experiencing. Wherever feasible, we impose conditions to ameliorate significant harm that is caused by the merger. Our general policy statement on rail consolidations, recognizes that potential harm from a merger may occur from a reduction in competition, or from harm to a competing carrier's ability to provide essential services. Thus, we must evaluate whether opposing railroads will be financially and competitively able to withstand the projected loss of traffic to the consolidated system. In assessing the probable impacts and determining whether to impose conditions, our concern is the preservation of competition and essential services, not the survival of particular carriers. An essential service is defined as one for which there is a sufficient public need, but for which adequate alternative transportation is not available. Finally, because our statutory mandate requires a balancing of efficiency gains against competitive harm, the antitrust laws provide guidance, but are not determinative in our merger proceedings. After pursuing competing bids individually to acquire all of Conrail, CSX and NS reached an agreement to acquire Conrail jointly. The transaction they are proposing will result in a procompetitive restructuring of rail service throughout much of the Eastern United States. Before the transaction, CSX operated about 18,500 miles of track, NS about 14,300, and Conrail about 10,700. As proposed in this transaction, NS will control about 58% of Conrail's lines, while CSX will control about 42%, at a total price of $9.895 billion, plus assumed liabilities and transaction fees. After the transaction is fully consummated, both CSX and NS will provide vigorous, balanced, and sustainable competition, each over approximately 20,000 miles of rail line in the East. Before this transaction, Conrail faced no Class I rail competitor through much of its service area. This meant that Conrail was a bottleneck carrier for most through shipments moving to or from this area. Now, CSX and NS will directly compete with each other in important markets where Conrail did not compete with other major railroads before. These markets are the Northern New Jersey portion of the New York metropolitan area, Southern New Jersey/Philadelphia, Detroit, the area served by the Monongahela Railroad, and the Ashtabula Harbor. The total amount of rail traffic that will gain head-to-head two railroad competition has been estimated by applicants at $700 million per year. With very minor exceptions, the combination of NS and Conrail and of CSX and Conrail lines will be end-to-end and not parallel. It has been our experience that end-to-end restructurings of this kind rarely result in a diminution of competition. We have adopted a presumption, known as the one-lump theory, that vertical combinations will not result in competitive harm. In only a handful of instances, the restructuring would, unless conditioned, result in a reduction from two to one of carriers serving a particular location. Applicants have agreed, and we will ensure, that wherever that would happen, applicants will provide one another sufficient trackage rights at reasonable rates, together with any other conditions that might be called for, to remedy the situation. Because the transaction as conditioned will result in no instances of significant competitive harm, and will significantly increase competition for many shippers, the clear impact of this transaction is to create a substantial increase in rail-to-rail competition, and not a reduction. In addition, the transaction will permit both CSX and NS to compete more effectively with motor carrier service, which is the dominant mode of freight transportation for most commodities throughout the East. The division of Conrail's lines, roughly half to each carrier, permits both CSX and NS to offer new and efficient single-line service in competition with motor carriers and with each other to thousands of shippers that received only joint-line service before. The transaction should lead to improved service and reduced transit times for thousands of shippers throughout the Eastern United States. This will permit these two carriers to divert a significant amount of traffic from the nation's highways. Applicants project that expanded rail operations will result in removal of 1,027,000 truck trips a year from our nation's highways, with 438,000 of that total attributed to CSX and 589,000 to NS. This diversion of traffic away from the highways will result in substantial net environmental benefits in terms of reduced air pollution and highway traffic congestion, and will reduce annual diesel fuel consumption by over 80 million gallons. These opportunities will also spur both CSX and NS to make substantial new investments in improving rail infrastructure. CSX plans to invest $488 million, while NS plans to invest $729 million in new rail property and equipment due to this transaction. Indeed, several line construction projects that we previously authorized are already well under way. These important public interest benefits of increased competition, new single-line routes, reduced highway traffic, and increased capital investment in needed facilities, are largely uncontested. In addition, anticipated synergies will enable NS and CSX to reduce their cost of providing transportation by about $1 billion per year beginning in the third year following completion of the transaction. The clear trend since 1980 has been that railroad efficiencies achieved through mergers or other means have been largely passed along to shippers in the form of lower rates and improved service. Indeed, our monitoring of rail rates indicates that this downward trend has continued unabated since 1993, a time during which rail service in the West was totally restructured with two major rail mergers. We are mindful of the fact that the recent UP/SP merger was followed by serious service problems resulting from a variety of factors, a significant one being a rail infrastructure that is inadequate to meet the rapidly increasing demand for rail service in the West. The railroads in the West, however, have been upgrading their infrastructure, as they indicated they would in the context of their merger proceedings, and we expect service to continue to improve as the infrastructure is upgraded. Given the substantial savings predicted, which we have examined and have found generally to be reasonable projections, neither NS nor CSX should have any difficulty financing the fixed charges resulting from the acquisition. In fact, the transaction should ultimately result in improved financial ratios for the major eastern railroads. Although the impacts of this transaction are chiefly positive, protests or responsive applications have been filed by about 160 parties. Given the magnitude of this undertaking, and the ongoing service problems in the West, it is not surprising that numerous parties would be anxious about the substantial changes in rail operations that are projected. Nevertheless, we believe that many of these concerns are either overstated or unwarranted. Where protestants have raised valid competitive or other concerns, however, we have addressed them with conditions wherever appropriate. In imposing various conditions, it has been our aim not to undermine the strength and integrity of the proposal before us, which clearly benefits the public interest. In this regard, we have not altered the already procompetitive SAAs carefully negotiated by applicants. But, we have used our broad conditioning authority to preserve or enhance service and competitive opportunities for areas in the Northeast that lost significant competitive alternatives in the railroad bankruptcies that led to the formation of Conrail in the 1970s. We have either preserved competition or provided for new competition to and from New York City, Buffalo, and Rochester, NY. We have also provided conditions aimed at protecting the viability of small carriers such as the Ann Arbor Railroad, the Wheeling & Lake Erie Railroad, and the New England Central Railroad. These and other small carriers provide valuable services to shippers on a regional basis. We have preserved service or competitive opportunities for shippers such as Indianapolis Power & Light Company, Wyandot Dolomite, AK Steel Corporation, and Joseph Smith & Sons, Inc. Finally, we are aware that throughout the course of this proceeding, applicants and various parties have worked diligently to negotiate settlement agreements. Those efforts have resulted in a number of important agreements that should improve competition and service quality for shippers of freight and rail passengers. Chief among these agreements are the NITL agreement (permitting important remedies relating to oversight, loss of single-line service, and reciprocal switching), and the agreements with two major unions, United Transportation Union and Brotherhood of Locomotive Engineers (together representing almost half of all railroad employees). Applicants have reached settlement agreements with the National Grain and Feed Association, and with a number of electric utility companies such as Potomac Electric Power Company, New York State Electric and Gas, Atlantic City Electric Company, Detroit Edison Company, and Delmarva Power & Light Company. Applicants have also reached an important agreement with Amtrak permitting them to provide freight service over the Northeast Corridor. At the same time, Amtrak has gained an agreement to permit it to conduct certain express operations over the lines of NS. Applicants also reached important agreements with the Port Authority of New York and New Jersey, the New Jersey Department of Transportation, the City of Cleveland, the City of Indianapolis, and with over 25 railroads, including the Canadian National Railway, the Canadian Pacific Railway, and many smaller railroads. These agreements, taken as a whole, will do much to promote safe and adequate service, and improved competition, well into the twenty-first century. The NITL Settlement Agreement. CSX and NS have entered into a number of agreements with public agencies, shippers, and other railroads to improve efficiency and service, and to address safety and passenger concerns. Chief among these is the settlement with the National Industrial Transportation League (NITL), the nation's largest shipper trade association. The settlement covers a broad range of issues raised by NITL and other parties, although NITL has retained the right to pursue certain rate conditions. Generally, the provisions of the NITL agreement are in the public interest, and we will impose them as conditions to our approval of this transaction. In certain areas touched on by that agreement, however, we believe that some additional general remedies are required. We have modified that agreement in four basic ways. First, at the urging of many parties including the United States Department of Transportation, the Chemical Manufacturers Association, and others, we have extended the oversight period from 3 to 5 years. Second, we have extended the single-line to joint-line and reciprocal switching protections, which were crafted with NITL's shipper members in mind, to reach shortlines that connect with Conrail and the shippers that they serve. Third, we have revised the reciprocal switching provision so that it protects not just switching that has been provided by Conrail to CSX and NS, but also switching that has been provided by CSX and NS to Conrail, where feasible. Fourth, we are revising applicants' plan for allocation of Conrail shipper contracts between NS and CSX, by permitting only a temporary override of antiassignment provisions and other similar provisions that would unduly impede the carrying out of the transaction. The NITL agreement, as expanded by the Board, provides the following: Consultation With Shipper Representatives. The settlement led to the creation of a "Conrail Transaction Council" consisting of representatives of the railroads, NITL, and other organizations representing affected rail users. CSX and NS are to discuss the implementation process with the Council, which may suggest mechanisms to address any perceived obstacles to the effective and efficient implementation of the transaction. Although the Council is not intended to supplant our oversight of implementation, it nonetheless furthers the public interest. If shippers and carriers have a forum for timely and efficient communication of information, problems are more likely to be resolved without requiring our intervention. Additional Plans For The Shared Assets Areas. Under the agreement, applicants have already provided to the Council on February 1, 1998, a summary description of how operations will be conducted in each of the three Shared Assets Areas (SAAs), North Jersey, South Jersey/Philadelphia and Detroit. These summaries describing the interrelationship of the two railroads, dispatching controls and the effects on individual shippers in these areas related to car ordering, car supply, and car location have facilitated shipper planning, and have allowed more meaningful public comment on safety and operational issues. Preparation For Separate Operations. The NITL agreement provides that, prior to the start of separate operations over the Conrail lines, CSX and NS will advise us that: (1) management information systems are in place for operations on the former Conrail system, within the SAAs, and at interchanges between the CSX/Conrail and NS/Conrail systems, including car tracing capabilities; and (2) they have obtained the necessary labor implementing agreements. If either CSX or NS requests that we take steps to initiate labor implementing agreements prior to the control date, NITL will support that request. CSX and NS will, consistent with safe and efficient implementation of the transaction, initiate their separate operations of the Conrail routes as soon as possible after control has been authorized. This condition will assure that the transaction is implemented in an orderly manner, and only when applicants have in place the two most important prerequisites for successful implementation: labor agreements and computerized information systems. Board Oversight - Development of Measurable Standards. The agreement proposes that we require oversight of the transaction for a 3-year period. We believe, however, that a 5-year oversight period would be more appropriate. As part of that oversight, the parties suggest that we require quarterly reports from CSX and NS and an opportunity for comment by all interested shippers. CSX, NS and the Council have agreed jointly to develop and recommend to us objective, measurable standards to be used in the quarterly reports, with the baseline to be the current Conrail operations. Given the operational complexity and the broad scope of this transaction, we believe that continuing oversight is necessary. To ensure that the Council continues to serve its intended purpose as an adjunct to our oversight of service implementation, we will require applicants to continue their participation in the Council process until the Council certifies to us that the service-related aspects of the transaction have been successfully implemented. The Council shall report to us, as necessary, any impediments to service implementation requiring exercise of our continuing oversight jurisdiction, with recommendations as to how that jurisdiction should be exercised. Conrail Rail Transportation Contracts. Applicants propose to allocate Conrail rail transportation contracts. Under the NITL agreement, shippers that could have had their contracts allocated to either of the two carriers, and who become dissatisfied with the service they are receiving from the carrier to which their contract's performance is allocated, may, at any time after 6-months' experience, submit to arbitration on an expedited basis the issue as to whether there is just cause for the transfer of responsibility for service to the other carrier. With regard to the Conrail contracts distributed between CSX and NS, this provides a useful remedy for contract shippers that are unhappy with the performance of the carrier serving them. As explained in more detail in the Shipper Contracts section below, we have modified applicants' proposal to permit an override of antiassignment and other similar clauses in existing contracts, so that only a temporary override will be permitted. At the end of 180 days after Day One, the day on which Conrail assets are divided, shippers will be permitted freely to exercise whatever termination rights those contracts may contain, provided they have given 30 days' notice to the carrier of their intentions. Shippers in those circumstances will not need to make a showing that their service is inadequate in order to terminate the contract. Interline Service. Because of the allocation of Conrail's routes, a number of shippers that currently have single-line service from Conrail on certain moves will no longer have single-line service available. Those shippers who have shipped at least 50 cars on an annual basis on the routes in question, if they request, may require CSX and NS to maintain the existing Conrail rates, subject to RCAF-U increases. Applicants will also work with the shippers to provide fair and reasonable joint-line service, for a period of 3 years. An arbitration procedure is established for disputes concerning the routing or interchange points for these shippers. After examining the record in this case as it relates to shortline railroads, we have determined that these remedies should be extended to single-line to joint-line situations also involving a third carrier that is a Class III railroad. Shippers on Class III railroads in those circumstances would face the same degree of harm as do shippers that are losing single-line Conrail service through the transaction, and this slight expansion of the NITL agreement provides an appropriate remedy. In other words, where a Class III railroad could provide through service connecting solely with Conrail, but will now have to provide a three-carrier connecting service with both CSX and NS, the Class III carrier, at its option, will be able to invoke the single-line to joint-line protections set forth in the NITL agreement. Gateways. CSX and NS have agreed to keep open all major interchanges with other carriers as long as they are economically efficient. This comports fully with our statutory mandate to preserve efficient routings. Reciprocal Switching. The NITL agreement enhances competition to the extent that it preserves for 10 years those arrangements under which Conrail made reciprocal switching available to NS and CSX. It also generally reduces Conrail's switching rates, which range up to $450 per car and tend to be around $390, to $250 per car, with an inflation adjustment, for the next 5 years. This aspect of the agreement is beneficial because, at least in some cases, the transaction may change the rail transportation map in ways that reduce the incentive of CSX and NS to grant reciprocal switching to each other at certain locations where Conrail granted such switching rights to one of them before the transaction. Reciprocal switching is generally a voluntary arrangement that carriers undertake when it is in their own best interest. Conrail, because of its very strong competitive position, has generally been unwilling to grant switching rights to other carriers without charging relatively high rates for that service. CMA, SPI and certain other parties have argued that we should do more to preserve or to enhance existing reciprocal switching arrangements in this proceeding. Several parties have pointed out that the preservation of switching arrangements guaranteed by the NITL agreement works only in one direction. Switching granted by Conrail to NS and CSX would be preserved, while switching granted by NS and CSX would not be. It may be that there are considerably fewer situations where NS and CSX agreed to perform switching for Conrail, but there are situations where such arrangements did provide valuable competition. For example, ARCO Chemical Company operates a facility in South Charleston, WV, that is now served directly by CSX, and which is open to reciprocal switching to Conrail. NS will be obtaining the Conrail line. Under the NITL agreement, this switching would not be preserved. We believe that it is appropriate for us to expand the NITL agreement to require, where feasible, preservation of switching agreements in both directions - NS and CSX over Conrail and Conrail over NS and CSX C under the same terms provided for in the NITL agreement. There are a limited number of circumstances in which shortline railroads now pay switching charges to Conrail. We believe that a similar logic compels preservation of these switching arrangements and rate accommodations to the same extent provided for in the NITL agreement when the switching only involves Conrail and CSX or NS. We caution that we do not intend by this provision to undo or override blocking provisions in contracts by which shortline railroads obtained their rail properties from Class I railroads. Finally, several parties have asked that we reduce the level of switching charges to $130 per car, roughly the level that UPRR agreed to charge BNSF in a settlement agreement that we imposed as a condition in the UP/SP merger. Other than this one comparison, these parties have presented no evidence to indicate that a $130 fee would be appropriate for these eastern carriers or that a $250 fee would not be appropriate. We have no reason to believe that the $250 fee that these two carriers have voluntarily negotiated with NITL for services they provide for each other is unreasonable or should be reduced. One thing is quite certain: the $250 fee is in almost every case lower than the switching fees that Conrail charged before this transaction. Thus, the new fee facilitates rail-to-rail competition. Facilities Within The Shared Assets Areas. During the term of the operating agreements for the Shared Assets Areas, all existing and new shipper-owned facilities within the areas may be served by both CSX and NS. This clarification promotes competition by giving shippers and both carriers the opportunity to invest in joint facilities or for the carriers to develop for their own use facilities that they will separately own or control in the area, such as transloading facilities or ramps for automotive traffic. In sum, the NITL agreement, as expanded by us, provides significant benefits both to the parties and to the public. As outlined above, the agreement preserves interchanges and reciprocal switching arrangements, reduces many switching charges, and provides efficient joint-line service and fair pricing to Conrail shippers affected by the allocation of Conrail lines between CSX and NS. The benefits of the NITL agreement apply to all shippers meeting its terms; they are not restricted to NITL members only. The terms of the agreement extend beyond traditional conditions that have been imposed by us or the Interstate Commerce Commission (ICC) in previous consolidation proceedings. The agreement carries out our direction that, whenever possible, disputes should be resolved by negotiated settlement between affected parties, rather than addressed by a resolution imposed by government decree. Additional Broad Issues Raised By Various Shipper Trade Associations. Chemical Manufacturers Association (CMA), the Society of the Plastics Industry (SPI), and other shipper organizations raise numerous issues and request extensive conditions. Many of these issues and conditions have been advanced by others and are discussed elsewhere. In light of the NITL agreement and the relief that we have accorded in other parts of this decision, none of these additional conditions is necessary or appropriate to avert merger related harm. Several protestants, including two large trade associations, NITL and CMA, have argued that the transaction is contrary to the public interest because CSX and NS have paid a large acquisition premium for the Conrail properties. They have argued that both of these carriers will be forced to raise their rates to captive shippers in order to make up their revenue shortfall and finance this investment. Moreover, these parties argue that the addition of these Conrail properties to the CSX and NS investment bases will erode shippers' regulatory rate protections. They claim that inclusion of the new value of parts of Conrail in the investment bases of NS and CSX will both move the carriers further from meeting our revenue adequacy standards and increase the level of the jurisdictional threshold (below which rates are conclusively presumed to be reasonable). Protestants claim that CSX and NS will now be able to charge higher maximum rates on captive traffic than Conrail was able to charge. As a threshold matter, the basic premise of these parties -- that CSX and NS will be unable to finance this investment without gouging shippers by taking advantage of merger related changes in the investment base used for rate regulatory purposes -- is simply not true. Applicants have provided ample evidence to demonstrate that they will have much more than a sufficient flow of funds to meet their financial obligations without having to raise rates to shippers at all. Moreover, both CSX and NS should ultimately be financially stronger because of the synergies that the merger permits. And those two new systems together should be financially stronger, more efficient and more competitive than were the three carriers that previously provided service in the East. Indeed, because the transaction significantly reduces rail market power in the East, and because relatively few shippers were captive to rail even before this transaction, CSX and NS could not successfully pursue a strategy of making up a revenue shortfall simply by increasing their rates to captive shippers. Protestants' suggestion that applicants would pay a multi-billion dollar premium based upon the expectation of extracting increased monopoly rents (because of adjustments in the regulatory rate base) from the very small number of shippers that are truly captive is not credible. Implicit in protestants' arguments is the suggestion that the purchase price was excessive. Protestants have submitted no evidence to support the notion that the purchase price that was negotiated at arm's length for Conrail is not an accurate reflection of the worth of that property. Certainly it is a more accurate reflection of value than Conrail's historic book value. Book values reflect accounting estimates of depreciation, maintenance, and obsolescence. These estimates may vary significantly from the current economic value of the assets; applicants have presented substantial testimony to show that the book value of Conrail's assets, even without the merger, was understated. More importantly, predecessor book value totally disregards merger synergies, which appear to be substantial here. In sum, the purchase price agreed to by these commercially sophisticated railroads represents by far the best evidence of the current market value of these properties. A large number of protestants are shippers or local communities that have argued that the transaction will harm them by creating new competitive rail service that will help their competitors or the competitors of shippers located in their communities. Accordingly, these shippers and communities have sought, bit by bit, what altogether would amount to thousands of miles of trackage rights or shared rail lines for the purpose of extending the benefits of joint service areas to them. These parties in effect have said, it would not harm the applicants very much to give this relief, which they have provided to others, to me as well. The ICC and the Board have consistently declined to attempt to equalize the rail transportation options of shippers who receive merger benefits with all those who do not. Applicants have proposed a restructuring that makes sense for them as an economic and an operational matter, while at the same time creating new rail competition for several major cities and many hundreds of shippers. In creating this structure, applicants are not creating new market power and are willing to give up some of the existing monopoly power of the Conrail franchise. If we were to require trackage rights by a second carrier for every shipper or community that competes with shippers who benefitted by the transaction, it is possible, even likely, that this entire transaction would collapse. And, if we were to grant these extensive conditions, there would inevitably be shippers and communities who compete with the shippers and communities to whom we give new competitive service who could claim that they too are competitively disadvantaged. As a practical matter, the line must be drawn somewhere. Under the statute, the railroads are given the initiative in making merger proposals, which we are to approve if they are in the public interest, as is this one. A number of parties have urged us to take this opportunity to restore something approaching the level of competition that existed in the Northeast prior to the formation of Conrail. These parties correctly point out that during this earlier period many shippers in the Northeast had available several rail carriers to provide service. The crucial point that these parties overlook is that none of these carriers providing alternative service proved to be economically sustainable. In large part, this was due to ever-increasing competition from motor carriers. Although there were many competing visions of how rail service might best be restructured in the Northeast, Congress, in adopting the Final System Plan, concluded that only one major railroad would be feasible in certain areas. For the most part, Conrail's structure before the merger, not the structure of its predecessors, generally provides the appropriate baseline for determining whether relief is warranted. This transaction actually restores two-carrier competition in some of the areas where Congress provided for only one railroad when it adopted the Final System Plan. While we are not averse to facilitating new competition, where possible, neither this transaction nor the Board should be charged with restoring the rail map as it existed prior to the bankruptcy of numerous railroads in the Northeast and the formation of Conrail. Although about six times as many shipments will go from joint-line service to single-line as the reverse, applicants concede that there are some shippers whose single-line service will be replaced by somewhat less efficient joint-line service as a result of the merger. As applicants note: "The creation of a limited number of joint-line movements is an unavoidable by-product of this transaction." We agree with applicants' assessment that shippers would be modestly harmed because they will receive somewhat less efficient joint-line service after the transaction, but that more shippers will benefit through newly available single-line service. The net result is improved service in the public interest. In most cases, it is difficult to devise a remedy for the relatively few shippers that have lost single-line service without fundamentally restructuring the transaction that applicants have proposed. We believe that the appropriate remedy for this limited harm is the creative solution that has been agreed to already by applicants and NITL in the NITL agreement, That provision, which we have extended to shippers served by a Class III railroad, assures the continuation of service at existing rates for 3 years for Conrail shippers that previously had single-line service but will have joint-line service after the transaction. It would unduly interfere with applicants' proposed operations and be a substantial overreach, however, for us to give either NS or CSX trackage rights to permit these shippers direct access to two carriers so that one of them could serve those particular shippers in single-line service. Nevertheless, as part of our overall monitoring of the transaction, we will focus on ensuring that shippers affected by a loss of single-line service continue to receive adequate service. The American Short Line Railroad Association (ASLRA) and Regional Railroads of America (RRA) claim that, because the transaction will result in significant changes in the relationship between shortlines and Class I carriers in the East, we should impose special conditions to protect the interests of the smaller carriers. In our merger decisions, including this one, we have given special consideration to shortline interests, generally providing protections similar to those afforded shippers. For example, if a merger would cause a shortline to lose one of its two Class I connections, it has been our practice to impose conditions, where feasible, to preserve a second connection. Similarly, if a shortline carrier has a build-out option to reach a second Class I carrier, we have attempted to preserve that option as well. We have also prevented contractual blocking provisions -- that make it more costly for shortlines to route over Class I carriers other than those from which they have been spun off -- from having greater force as the result of a merger. We are keenly aware that the shortlines are an important part of the national rail transportation system. They provide a valuable service in gathering and distributing traffic that generally flows over the lines of the Class I carriers, and they are usually able to provide this type of service at a lower cost than the larger carriers can achieve. Because they provide valuable and efficient services, shortline carriers have generally been able to reach privately negotiated agreements with the larger carriers. There is no indication that this mutually beneficial process will suddenly terminate or be jeopardized because of this transaction. Nevertheless, where conditions are warranted to protect the interests of particular shortlines, or shortlines in general, from the adverse impacts of this transaction, we will impose them as appropriate. ASLRA and RRA ask that we require NS and CSX to adopt all of the existing agreements between Conrail and the various shortlines and apply them until there is mutual agreement that any change is required. Applicants have agreed to adopt Conrail's existing agreements for their duration, which we believe should satisfy the shortlines' concerns in this regard. But, to the extent the shortlines would go beyond that, and have us require that existing gateways and rate relationships are maintained in perpetuity unless there is mutual agreement to change them, such relief would give the shortlines a veto power over any change in the existing agreements and relationships, making it unnecessarily cumbersome for these parties to revise them. Freezing agreements, rates, and routes would prevent efficiency enhancing changes that benefit shippers. The ICC once pursued a policy of freezing routings, gateways, and rate relationships, but this policy was not in the public interest, and we will not reinstitute it here. ASLRA, RRA, and a number of shortline carriers, including the Reading Blue Mountain and Northern Railroad (RBMN), and at least one shipper, Union Camp Corporation, have raised issues about blocking provisions. These provisions are features of many contracts of sale or lease of rail lines of Class I carriers to shortline carriers that are imposed by sellers to ensure that the traffic originated by shortline carriers on these segments that used to be owned by Class I carriers continues to flow over the lines of the seller to the maximum extent possible. It is clear that Class I carriers have been willing to sell lines at lower prices with these conditions attached. We do not believe, however, that it would be appropriate for us to require a wholesale elimination of these freely negotiated contractual terms as part of this proceeding. Nevertheless, we certainly will not permit a transaction such as this to unduly increase the effects of these blocking provisions. For example, RBMN is concerned that the blocking provision in its contract will make it prohibitively expensive for it to connect with another carrier to reach all points that could be served by NS, which is taking over the Conrail lines that now connect with RBMN. We will grant the relief RBMN seeks by restricting the blocking provision to destinations on NS that were formerly Conrail destinations. That is, we will preclude existing blocking provisions from being interpreted in such a way that the transaction would expand their reach. ASLRA and RRA ask that we perform 5 years of continuing oversight concerning shortline issues they have raised here. We will adopt that proposal, and invite these shortline associations and their members to participate in the oversight that we will be conducting. INDIVIDUAL CONDITIONS SOUGHT The various conditions requested by parties involve the exercise of our conditioning power, which gives us broad authority to impose conditions governing railroad consolidations. Because conditions generally tend to reduce the benefits of a consolidation, they will be imposed only where certain criteria are met. Conditions will generally not be imposed unless the merger produces effects harmful to the public interest that a condition will ameliorate or eliminate. The principal harms for which conditions are appropriate are a significant loss of competition or the loss by another rail carrier of the ability to provide essential services. Essential services are those for which there is no adequate transportation alternative. A condition must be operationally feasible, and produce net public benefits. We are disinclined to impose conditions that would broadly restructure the competitive balance among railroads with unpredictable effects. A condition must address an effect of the transaction, and will generally not be imposed to ameliorate longstanding problems which were not created by the merger. Finally, a condition should also be tailored to remedy adverse effects of a transaction, and should not be designed simply to put its proponent in a better position than it occupied before the consolidation. Because there are so many parties requesting conditions, we will not discuss each one here. Many of the conditions requested have been denied because they are addressed to a preexisting problem. Other conditions are addressed to allegations concerning such issues as vertical effects of the transaction, the acquisition premium, increased rail options of shippers' competitors, and the shift of some traffic from single-line to joint-line service. These broad issues have been discussed above. All requests for conditions not specifically discussed and approved in this decision should be considered denied. We note also, however, that we have taken into account many of the concerns expressed by parties that are not specifically being discussed in this decision in imposing other broad conditions, including our expanded oversight condition. Moreover, we emphasize that many of the settlement arrangements applicants have entered into with some of the parties serve to address concerns expressed by other parties as well. NORTHEAST East Of The Hudson. NYDOT and the New York City Economic Development Corporation (NYCEDC), and Congressman Nadler and 23 of his Congressional colleague (Nadler Delegation), protest that, while shippers in the North Jersey SAA west of the Hudson will gain direct rail competition between CSX and NS after the transaction, shippers east of the Hudson will continue to have access to only one Class I carrier, with CSX replacing Conrail. Protestants would enlarge the North Jersey SAA to include New York City and Long Island, or would introduce another carrier to operate over trackage rights between Selkirk, NY (near Albany), and Fresh Pond, NY (in Queens), on the Conrail line being allocated to CSX. The Nadler Delegation asks for a condition requiring a joint facility east of the Hudson River that would be connected to New Jersey and Long Island via existing passenger railroad tunnels through midtown Manhattan and over the New York Cross Harbor Railroad's (NYCH) cross-harbor float operation. Under their plan, Conrail Shared Asset Operator (CSAO) would be required to acquire and operate the cross-harbor float, and a core system of rail lines and terminals east of the Hudson, connecting at Fresh Pond. NYCH strongly opposes this forced acquisition, although, as discussed below, it would like us to impose a condition protecting a flow of traffic using its facilities to cross the Hudson River. The Nadler Delegation also points out that this general area experiences severe motor vehicle traffic congestion and related air pollution. They allege that the transaction will aggravate these problems, but that better cross-harbor transportation will improve them. Included in the joint facility they propose would be the Bay Ridge Line, operated by the New York and Atlantic Railway (NYAR) under concession from the LIRR. NYAR strongly opposes the Nadler Delegation's proposal to conscript its facilities for this use by CSAO, and it also contends that the Bay Ridge Line lacks the physical capacity to carry additional freight traffic. The New York parties argue that it is unfair that the transaction benefits shippers west of the Hudson with new two-carrier service, but does not confer similar advantages on shippers east of the Hudson. Even though, as explained below, we are inclined to make an exception to our general policy of not attempting to significantly enhance parties' pre-merger competitive alternatives, here, not all of the relief that protestants seek is feasible or necessary. There are some serious operational problems with introduction of any additional rail service in the New York metropolitan area east of the Hudson. One of these problems is the low density of rail freight traffic. As applicants have pointed out, only about 5% of the rail freight revenues in the Greater New York City area are derived from shipments originating at or destined to points east of the Hudson. Over 97% of New York metropolitan area freight traffic east of the Hudson moves in or out of the city by truck. Thus, Conrail only provides Albany-to-New York City freight service through a single round-trip train 5 days a week. A second daily train operates in local service from NYC's Oak Point Yard as far north as Hastings- on-Hudson, and another local operates 2-3 days per week between Poughkeepsie and Peekskill. Any additional operations would require adequate density to provide effective and efficient service, and there is no indication that such traffic will be forthcoming. An even more difficult problem is the extremely limited amount of excess rail infrastructure, and the severe physical limitations that the densely built city imposes on any efforts to increase that capacity. Many of the lines over which these parties would impose trackage rights are heavily traveled passenger lines. Some of the segments operated by Metro North carry as many as 332 passenger trains a day. In addition, applicants assert that existing freight yards lack the capacity to accommodate additional carriers, and it is difficult to find commercial space to accommodate yards for a second Class I carrier coming into New York City. Moreover, it appears that existing passenger railroad tunnels through midtown Manhattan may have difficulty accommodating currently available equipment. Applicants claim that neither RoadRailers nor standard boxcars could move through those tunnels, although protestants dispute this claim with regard to RoadRailers. Applicants also note that, because standard intermodal equipment requires clearances ranging up to 20'6 for high cube double stack containers, intermodal trains could not clear the tunnel either. Even if special equipment were obtained, operations through the tunnels might be difficult given the level of passenger traffic present over this route. Scheduling additional freight traffic could increase substantially the risk of delay and the possibility of disrupting passenger service. Operating these trains at night might not be a solution if it interferes with Amtrak's maintenance operations on the rights of way through Penn Station. Given the limited capacities of its route to and through Penn Station, Amtrak must reconcile maximum safe passenger use with a maintenance program ensuring adequate repair. Given these problems, it is not surprising that Conrail has never negotiated any operating protocols with Amtrak permitting use of these tunnels. Whether CSX or NS will be able to negotiate such agreements in the future is uncertain. We believe it would be unwise for us to mandate such use given the operational and safety problems it could entail. We will, however, impose a condition requiring CSX to cooperate with the New York interests in studying the feasibility of upgrading cross harbor float and tunnel facilities that may alleviate traffic congestion and consequent air pollution in New York City. We will not require CSX to purchase, rehabilitate or operate these facilities. We assume that, if these facilities would improve the efficiency of its operations, CSX will use them, if they are available, for through movements over its own lines or joint movements with NS. We will specifically oversee the impact of this condition under our 5-year monitoring program. In addition to being very difficult to execute, and likely being outside of our authority to grant vis-a-vis use of the rail property of nonapplicant railroads NYCH and NYAR, additional ameliorative conditions to create additional or enhanced direct rail connections with the North Jersey SAA are unnecessary because the transaction should fundamentally improve, rather than harm, competition in the New York metropolitan area. There is now only one Class I rail carrier east of the Hudson, Conrail. Following the transaction, CSX will take its place. The introduction of two strong competitive rail carriers, NS and CSX, in the North Jersey SAA, will make rail competition in the city stronger. The nearby presence of NS will force CSX to pay close attention to the shippers in the city, to ensure that they do not resort to drayage across the river where they will have an NS option. Many of these shippers now dray their shipments to Northern New Jersey for subsequent rail transport. Although Conrail has been indifferent to the use of drayage across the Hudson because it has no rail competition on either side, CSX points out that CSX, in its own interests, will seek to minimize any such drayage. This should moderate somewhat the increase in cross-river drayage that we expect will be generated by the new, competitive intermodal staging areas in the North Jersey SAA, at the same time that it increases competition in the region. The Nadler Delegation is concerned about the impacts on air quality of additional drayage across the George Washington Bridge. They have suggested that over 1,000 truck movements a day will shift from the relatively uncongested Tappanzee Bridge to the George Washington Bridge to take advantage of the new intermodal staging areas in the North Jersey SAA. We believe, however, that the number should be no higher than 253. These additional trucks would amount to a negligible 1% increase in the daily truck traffic on the George Washington Bridge. Nevertheless, because of the potential adverse environmental effects that would result from an unexpectedly large merger-related increase in truck traffic through the city and over the George Washington Bridge, we will impose a condition requiring applicants immediately to begin monitoring origins, destinations, and routings for motor carrier traffic at their intermodal terminals in Northern New Jersey and in Massachusetts. The purpose of the study is to permit us to determine the accuracy of our assessment that the transaction will not result in substantially increased truck traffic over the George Washington Bridge. Applicants should report their results on a quarterly basis, and this matter will be specifically included in the 5-year oversight condition that we are imposing. The settlement agreements reached with Canadian National Railway Company (CN) and Canadian Pacific Railway (CP) will increase rail transport options for shippers. These agreements -- giving CN and CP the opportunity to offer transportation services to shippers in New York City and Long Island for general merchandise traffic via haulage rights -- have been specifically designed to attract truck-competitive freight business off the roads and on to rail. These agreements will now permit many area shippers to solicit independent competitive bids from at least two railroads. This is new competition. As we have noted, the significant traffic problems east of the Hudson predate this transaction. Overall, the transaction, with the CN and CP/D&H agreements that are designed to capture traffic previously handled by motor carriers, should ameliorate somewhat this longstanding problem. Nonetheless, NYDOT and NYCEDC have cogently explained why the separate and confidential settlement agreements reached by CSX with CP/D&H and CN are, as presently configured, not sufficient to satisfy the needs of east-of-the-Hudson shippers. One deficiency in the CSX-CP haulage agreement may be the revenue factor CSX is to receive for this service, which the New York parties assert is considerably above their calculations of Conrail's URCS variable cost or fully allocated cost for existing movements along the Hudson Line. More importantly, numerous other restrictions significantly limit the movements to which this privately negotiated haulage agreement would apply. We have carefully balanced the needs of the competing parties here, and strongly believe that we must forcefully use this opportunity to restore a modicum of the competition that was lost in the financial crisis that led to the formation of Conrail. It appears that there will soon be sufficient capacity on the Hudson Line for safe service from a second freight operator. Metro- North President Nelson has testified that his company's portion of the Hudson Line could easily and safely accommodate a second freight operator moving an additional 6-8 scheduled trains each day, and that completion of the state-funded Oak Point Link by early 1999 will eliminate the most serious conflict between freight and passenger operations on the remainder of the Hudson Line. Therefore, we will impose a condition requiring CSX to negotiate an agreement with CP to permit either haulage rights, not restricted as to commodity or geographic scope, or similarly unrestricted trackage rights, over the east-of-the-Hudson line from Fresh Pond to Selkirk (near Albany), under terms agreeable to the parties, taking into account the investment that continues to be required for the line. If these parties have not reached agreement within 60 days of the effective date of this decision, we will initiate a proceeding to determine just how the needs of the New York parties are to be addressed. Moreover, CSX should offer to the City of New York to establish a committee for the development of rail traffic to and from the City, with particular emphasis on the Hudson Line. Similarly, as a step toward allowing more rail competition into and out of the city, CSX should discuss with Providence & Worcester Railroad Company (P&W) the possibility of expanded P&W service over trackage or haulage rights from Fresh Pond to New Haven, CT, focusing on operational and ownership impediments related to additional freight service over the line. We will continue to follow the progress of these negotiations as part of the oversight process. Portions of this segment of the NEC require a third rail to obtain electric power for passenger trains. Third rail operations require special equipment. No study or analysis has been presented of the commercial practicability of such a routing. We note that Conrail has never operated freight trains from Newark to New Haven. P&W now operates over the New Haven-to-Fresh Pond line via overhead trackage rights that are restricted to the movement of construction aggregates. It notes that the line is heavily used by Amtrak, Metro North, Conrail, and itself, and that expanded service by freight carriers other than itself, as suggested by the Nadler delegation, would raise significant concerns about the availability of adequate operating windows. P&W has also explained that the relevant properties are owned by the Connecticut Department of Transportation ("CDOT"), the New York Metropolitan Transportation Authority, Amtrak and Conrail. NYCH has also submitted comments, asking for the imposition of certain conditions relating to traffic between Long Island and points in Southern New England and adjacent New York, on the one hand, and points in the Mid-Atlantic States and the South and Southwest, on the other. NYCH claims this traffic should travel via what NYCH describes as its Greenville Gateway. It appears that NYCH's requested conditions relate to allegations it is now pursuing in a pending lawsuit against Conrail wherein NYCH alleges that Conrail has failed to honor shipper directions to route traffic moving between Long Island-Southern New England and the Southeastern and Southwestern regions of the country over its supposedly efficient float operation connecting Brooklyn and North Jersey waterfronts that were discussed in the preceding section. The issues in this court case are irrelevant to future operations of Conrail lines by CSX and NS. Insofar as the transaction is concerned, NYCH will now have access to both NS and CSX via the Greenville Yard, and NYCH is not adversely affected by the transaction. Even if NYCH had difficulties in the past in its dealing with Conrail, there has been no showing that CSX or NS would not use NYCH's Greenville Gateway if it represented the most efficient and most economical routing, which has not been shown. Therefore, we are denying NYCH's request for conditions. Buffalo/Niagara Falls. The primary focus of the parties representing the Buffalo/Niagara Falls area (Erie Niagara Chautauqua Rail Steering Committee (ENRSC), NYDOT, General Mills, and others) is to obtain SAA status for Buffalo, which they contend is necessary for area shippers to remain competitive with shippers in the Detroit SAA and elsewhere that have gained service of an additional carrier through this transaction. They also argue that we should take this opportunity to restore the level of rail competition that preceded the formation of Conrail. Congressman Jack Quinn and Congressman John J. LaFalce pointed out at oral argument that, before the adoption of the Final System Plan, the United States Railway Association (USRA) proposed two-railroad service for Buffalo, and they urged the Board to take this opportunity to create that competition now. They also noted that Conrail's reciprocal switching rates in Buffalo are some of the highest in the nation. The transaction plan does call for two carriers to serve the Buffalo area. CSX will acquire the former New York Central line, while NS will acquire the former Erie Lackawanna line reaching Buffalo from the east, as well as the former Penn Central line reaching Buffalo from the south, and overhead service over what remains of the Erie Lackawanna line reaching Buffalo from the north that connects with Canadian carriers at Niagara Falls. Although it is true that this arrangement will not create direct two-railroad service for all shippers in the Buffalo area, it will greatly improve local competition. This is so because local shippers served directly by either CSX or NS will now be able to take advantage of the nearby presence of the other carrier through drayage, and in some cases through build-outs. More importantly, new shippers contemplating locating in the Buffalo area or expanding operations there may have the option of locating on lines of either of these two major carriers, and can lock in the benefits of this competition through a long-term contract. In addition, the NITL agreement, with its provisions for reduced reciprocal switching charges, will help many shippers who have complained about the very high reciprocal switching charges formerly assessed by Conrail. Many Buffalo shippers -- applicants estimate 50%, while some area protestants estimate 20-30% -- will have access to both NS and CSX through reciprocal switching. It is clear that the conditions we are imposing will preserve existing switching agreements for 10 years while limiting switching rates to $250 per car for 5 years. This is a sharp drop from the prevailing level of $390-450 for switching fees about which protestants have complained. Moreover, we will require CSX to carry through on its agreements with CN and CP, providing for lower switching fees in the Buffalo area. Against these competitive and other benefits, protestants raise limited specific allegations of loss of rail competition by these parties relating to (1) Conrail's switching cancellations at Buffalo in November 1996, (2) Conrail's cancellation of switching at Niagara Falls in April 1996, and (3) reduction of competition at the Buffalo waterfront. As detailed below, we find that the latter two of these allegations have merit, and we will impose conditions addressing these situations. 1. Protestants allege that Conrail's cancellation of switching for 89 shippers in Buffalo in November 1996, a month after Conrail's and CSX's initial agreement to merge, was in anticipation of this transaction, which eventually superseded the Conrail/CSX agreement. ENRSC and others would have the definition of 2-to-1 points receiving access to a second carrier through trackage rights conditions extended to cover those points that lost reciprocal switching through these cancellations. These allegations, if true, would be cause for concern. The record, however, does not support the inference that the Buffalo switching cancellations were taken in anticipation of this transaction, but indicates that they were part of a routine tariff updating process for shippers that were no longer present or no longer desiring rail service. The dispositive fact here is that the cancellation process itself allows for immediate reinstatement of reciprocal switching for any shipper coming forward to request it. Opponents could have settled this issue clearly and conclusively had they simply produced specific shippers to testify to having been wrongly identified as missing or inactive; no shipper has done so. We are left to conclude that there are no such shippers. 2. A more serious charge of switching cancellations leading to competitive harm from this transaction involves the April 1996 cancellation by Conrail of switching for CSX movements into the Niagara Falls area for traffic using one of the two nearby rail bridges connecting the United States with Canada. In 1995, CSX changed the way it served this traffic, from using trackage rights in Canada over CN and a Conrail switch at Suspension Bridge to and from shippers in Niagara Falls, to a haulage agreement in which CN carried this CSX traffic across International Bridge at Fort Erie, through Buffalo and into Conrail's Frontier Yard. Under this arrangement, Conrail took the CSX traffic to and from the yard, and Conrail received its compensation in the form of a division of a line haul rate, rather than a switching charge. Applicants concede that more recent arrangements CSX has made with the Canadian roads may cause this traffic to move via Suspension Bridge or Frontier Yard, but state that, in either case, Conrail will pick up the traffic and take it to Niagara Falls as part of the line-haul movement We find these arrangements whereby Conrail receives compensation for the short pick-up and delivery component of International or Suspension Bridge movements into and out of the Niagara Falls area via a division of a line haul rate to be no different in substance from its prior compensation arrangement, when its compensation was termed a switching charge. If Suspension Bridge were to have become the point of entry again, as applicants suggest, the Conrail movements under the joint rate with CSX would have been identical to the earlier Conrail movements under the switch. In their settlement with NITL, CSX and NS have agreed to mitigate the market power they will inherit from Conrail at exclusively served points where Conrail performs switching services. We find that the terms of that agreement, as they apply to reciprocal switching, should be applied to those points in the Niagara Falls area where Conrail recently replaced its switching charges with equivalent line haul charges, and to those movements to which the switches and line-haul rates applied (i.e., movements using International Bridge or Suspension Bridge). This directive will bring the compensation under the procompetitive and beneficial terms of the NITL agreement. 3. Finally, ENRSC charges that, by taking over Conrail's 5.66-mile Buffalo waterfront line (the Buffalo Creek line), CSX would reduce existing competition between Conrail and its own trackage rights access over that line. As applicants point out, CSX transferred one set of trackage rights to operate over that line to Buffalo and Pittsburgh Railroad (BPRR) when it sold all its rail property in Buffalo to that carrier in 1988. Nevertheless, CSX has retained, but has not used, a separate set of rights over that Conrail line. As discussed below in relation to PSI Energy, in spite of arrangements that may have been made with Conrail or BPRR, trackage rights may not be canceled unless we grant authority for their discontinuance. To ensure that shippers on the Buffalo Creek line would not inadvertently lose one of their two Class I rail connections as a result of the transaction, we will require that the CSX trackage rights over Conrail on the Buffalo Creek line be transferred to NS. Following a request made by Chairman Morgan at the close of oral argument, CSX proffered a number of additional conditions and representations that it agreed could be imposed to accommodate concerns raised by parties in the Buffalo area. Even though we do not think that these proferred conditions and representations in and of themselves would be adequate to address the concerns of the Buffalo parties, they are clearly beneficial and complement the procompetitive conditions we are imposing for Buffalo. 1. As discussed previously, we will require CSX to adhere to the agreements it has separately reached with CN and CP/D&H providing both lower switching fees in the Greater Buffalo area and increased access to these carriers for cross-border, truck-competitive traffic. 2. We will also require CSX to meet with regional and local authorities in the Buffalo area to establish a committee to promote the growth of rail traffic to and from the Greater Buffalo area. The committee will meet periodically to address the region's industrial and economic development goals and opportunities for diversion of truck traffic to rail, as consistent with safe, efficient, and profitable rail service. 3. We will hold CSX to all of its representations related to the Buffalo area, most notably those regarding its plans for investment in new connections and upgraded facilities in the Buffalo area, including: (1)upgrading Conrail's existing computer technology and fueling facilities at Buffalo; (2) maintaining or increasing current employment levels in the Buffalo area; (3) providing overhead trackage rights to NS through Buffalo to Suspension Bridge; (4) working with NS and other carriers operating in the Buffalo area to schedule switching and through movements within the area's rail network so as to reduce congestion at points such as CP Draw; and (5) investing substantial funds in network improvements to reduce shipping time and enhance service reliability for rail shippers in the Greater Buffalo area. Finally, while we believe the competitive and other benefits resulting from our approval of this transaction will reduce rates and enhance service for rail shippers in the Buffalo area, we have decided to take the additional step of initiating a 3-year rate study to assess whether our assessment proves to be correct, or whether Buffalo-area shippers will be subjected to higher rates because of this transaction. Rochester. The Genesee Transportation Council (GTC), and Rochester Gas & Electric Company (RG&E) have raised concerns about the impact of the transaction in the Rochester area. We concur with applicants that the majority of the issues raised by these parties relate to existing conditions, not to any harm caused by the merger. If anything, the transaction will enhance rail competition and service in and around Rochester. Enhanced service will derive from, for example, the proposed expansion of Frontier Yard, which will improve classification of local and regional traffic and reduce transit times. New competition will derive from the fact that the Rochester and Southern Railroad, Inc. (R&S) now connects with NS on the Southern Tier route in competition with CSX, which inherits the bulk of Conrail's lines and operations in the Rochester area. RG&E's main objection is that its primary coal burning generating station will retain service from a single railroad while certain other utility companies are obtaining two-carrier service both at their generating plants and at Monongahela coal mines. As discussed in detail above, this does not provide a basis for relief. RG&E also calls for a steep reduction of Conrail's $390 switching charge as part of the transaction, arguing that the charge dampens competition. But the transaction will improve, not worsen, RG&E's situation by limiting switching fees to $250 per car. RG&E also calls for us to increase our scrutiny of the reasonableness of switching charges in general, but this issue has no nexus to this transaction. GTC acknowledges applicants' proposal for NS to form an alliance with R&S to compete for Rochester traffic, but calls for us to ensure that this alliance is forged. We fully expect that NS will have every incentive on its own to form the alliance with R&S. And, as noted below, the relief we are granting to Livonia, Avon, and Lakeville Railroad Corporation should significantly increase NS' interest in forging an alliance with R&S, and should further benefit the Rochester area. GTC also wants applicants to set up intermodal terminals at specified locations and to improve routings between Rochester and the Southeast. Again, these are matters for negotiation between Rochester interests and applicants. This proceeding is not the proper forum for pursuing these goals. Delaware Department of Transportation (DEDOT). DEDOT is primarily interested in expansion of the South Jersey SAA to include the Port of Wilmington. The port is currently served by a single Class I railroad, Conrail, and after the transaction it will be served solely by NS. Thus, it appears that the transaction will have no adverse impact on the port. DEDOT has also asked that we impose a condition requiring NS to permit passenger service upon request by a rail passenger carrier anywhere on its entire system. As discussed in greater detail in our section concerning passenger railroads, we believe that these issues are best left to negotiation between the freight railroad and the passenger railroad. Moreover, DEDOT has not shown any particular connection between this transaction and the condition that it seeks. Finally, DEDOT has asked that we grant local operating rights for shortline railroads over the Delmarva Secondary line. No justification has been presented for this relief. We note that NS has agreed already to grant limited overhead rights over this line to the Maryland and Delaware Railroad. DEDOT stated at oral argument that it was concerned with high switching charges at the Port of Wilmington. The original NITL agreement does not technically apply to reduce switching charges between Conrail and carriers other than NS and CSX, but, as discussed above, we have extended this component of the agreement to incorporate Class III railroads. Because we do not have sufficient information on the situation at the Port of Wilmington to determine whether we should impose a remedy and, if so, what that remedy would be, we are directing applicants to discuss with the Port any problems concerning switching service and charges, and report back to us within 60 days of the service date of this decision. We will then determine whether any further action is appropriate concerning this limited issue. MIDWEST Chicago Switching District. Several conditions are sought by various railroads and others to require a restructuring of operations, beyond that proposed by applicants, in and through the Chicago switching area. Wisconsin Central Ltd. (WCL) seeks, in (Sub-No. 59), a forced sale by CSX to it of a 7.6-mile portion of The Baltimore & Ohio Chicago Terminal Railroad Company's (B&OCT) Altenheim Subdivision, a condition precluding CSX from allowing its affiliate B&OCT to charge a separate switching fee for its services, and neutral dispatching over Indiana Harbor Belt Railroad Company (IHB). I&M Rail Link, LLC (I&M) seeks in (Sub-No. 36) to acquire Conrail's 51% interest in IHB, while Northern Indiana Public Service Company (NIPS) urges us to prohibit CSX and NS from jointly acquiring that interest. NIPS and A.E. Staley Manufacturing Company (Staley) also seek nondiscriminatory dispatch of rail traffic over IHB, and the Indiana Port Commission (IPC) supports divestiture of Conrail's interest in that switching line to a neutral carrier or group of carriers. Prairie Group, while supporting the primary transaction, has expressed concern about its effect on IHB, and in particular upon IHB's local on-line shippers. Applicants oppose all of these requests as competitively unjustified. As a preliminary matter, WCL's request to preclude separate charges by B&OCT has no nexus to this transaction. This relief appears to have been sought merely to permit WCL to achieve its longstanding goal of avoiding B&OCT's switching charges for traffic routed WCL-B&OCT-CSX, a matter wholly unrelated to the transaction before us. Similarly, WCL's bid to acquire a 7.6-mile portion of B&OCT's Altenheim Subdivision, purportedly to resolve possible service quality issues, has not been justified either. For a number of years, WCL has been interested in acquiring this property, but it has evidently been unwilling to pay the asking price. It has not provided any competitive or other justification for that extraordinary relief here. The basic question we must consider when evaluating these proposed conditions is whether the transaction would cause any significant competitive harm or unduly disrupt essential service in this area; we conclude that it would not. Responsive applicants and others maintain that the transaction would limit independent routing options in and around Chicago, increase the leverage of CSX and NS to control this traffic, and diminish the ability of other carriers to compete for traffic in the area. A review of the situation, however, reveals that the transaction will not result in any significant change in the concentration of ownership of the relevant switching carriers, and thus will not impair rail competition in the region. There are now three switching carriers in the Chicago Terminal area: B&OCT, which is entirely owned by CSX; IHB, which is owned 51% by Conrail and 49% by Soo Line Railroad Company (Soo); and The Belt Railway of Chicago (BRC), which is 50% owned by western railroads and 50% owned by eastern railroads, with CSX currently holding 25%, NS 8.33%, and Conrail 16.67%. After the transaction, B&OCT will continue to be a wholly owned CSX subsidiary; NS and CSX will each hold 25% of BRC; and NS and CSX will hold 29.58 and 21.42% interests in IHB, respectively, with Soo continuing to hold a 49% share. Responsive applicants rely on the notion that NS and CSX will jointly control BRC; that is not the case. NS and CSX will not jointly control, and have not been authorized to jointly control, this carrier. Nor do these two eastern carriers have identical interests. NS and CSX will each have an incentive to ensure that BRC is operated to facilitate interchange of its own traffic. The same was true before the transaction, except that there were three carriers in the mix. By the same token, the western carriers still retain a 50% interest here, and they will ensure that BRC is managed in a way that keeps their routing options open. With regard to IHB, NS and CSX would acquire Conrail's interest, while Soo would continue to hold a 49% share. Applicants have represented that IHB will continue to be managed as a neutral switching carrier, just as it was managed by Conrail before this transaction. We will hold applicants to that representation. Responsive applicants have failed to justify the extreme divestiture remedies that they have sought. They have failed to show that the interchange options of any carriers are likely to be disadvantaged by the changed ownership of IHB, which, with Conrail's shares controlled by NS and CSX, is less concentrated than previously. Given applicants' assurances about the management of IHB, we conclude that no further relief for this situation is warranted. Indeed, this type of intrusive solution for problems we believe are unlikely to occur raises additional competitive and service concerns that have not been adequately addressed by responsive applicants. As part of our 5-year oversight, we will monitor for problems in the Chicago Switching District, and IHB's management as a neutral switching carrier. If problems do arise after approval and consummation of the transaction, our monitoring and oversight conditions should provide a fully effective mechanism for identifying and resolving them. In sum, we have no basis for imposing the other conditions relating to the Chicago area sought by I&M, IPC, NIPS, Prairie Group and others. The conditions sought, most of which would mandate service levels or require specific ownership, care, or use of switching carrier assets in the region, are extraordinary and unjustified measures that would hamper applicants' efforts to manage their operations efficiently following consummation of this transaction. Illinois International Port District (The Port of Chicago). The Port of Chicago at Calumet Harbor, Lake Calumet, IL, is the largest port on the Great Lakes. The Port is divided into separate eastern and western sides, and trackage to both sides is owned by NS or related companies. On the western side, various other trunk and switching carriers have trackage rights over NS to serve the Port and its tenants. On the east, NS service is exclusive. The Port of Chicago contends that applicants' proposed Operating Plan demonstrates that service will be further reduced, and thus that the transaction will aggravate the already poor competitive and service situation along the eastern side of Calumet Harbor. It argues that, to remedy delays and poor service to customers on the eastern side, to increase intermodal competition, and to increase competition with other ports, we should require that NS provide CSX and local switching carriers (Chicago, South Shore and South Bend Railroad Company, and Chicago Rail Link) rights to serve customers over NS trackage on the east side of Lake Calumet. We view the problems presented here as pre-existing. As we have explained, we will not impose conditions to remedy pre-existing conditions that are unlikely to be exacerbated by the transaction. At this point, the Port of Chicago's fears that its rail service will be further reduced is speculative. Nevertheless, we will carefully monitor the situation under the 5-year general oversight condition being imposed in this proceeding. Indianapolis. CSX and Conrail are the only Class I railroads now serving Indianapolis, and this city contains by far the largest number of shippers that would be 2-to-1 shippers but for the trackage rights agreed upon between CSX and NS. Under the proposed transaction, CSX is taking over Conrail's lines, while NS will be given trackage and other rights permitting it to serve all of the 2-to-1 shippers. Although The City of Indianapolis originally had concerns about this arrangement, it has reached a settlement agreement with applicants that satisfies those concerns. Under that settlement agreement, CSX has agreed to allow greater access to NS and to shortlines in the area. NS will have switching rights to any new as well as existing industries on the former Indianapolis Union Belt Railroad. The various Indianapolis shortlines will be allowed to connect with each other for local traffic moving between points on those carriers under switching rates the carriers have negotiated under a 10-year agreement. CSX has also committed to permit NS to build its own track in Hawthorne Yard. CSX has agreed to timely and nondiscriminatory handling of NS' cars to and from that yard. Nevertheless, Indiana Southern Railroad, Inc. (ISRR), supported by the United States Department of Agriculture (USDA), argues that the transaction, even with the additional remedies proposed by applicants, will result in added market power in and around Indianapolis. ISRR contends that the transaction places CSX in a more dominant position than Conrail is in now and places NS in a weaker position than was CSX. ISRR argues that it should be given rights to reach three locations surrounding Indianapolis: Shelbyville, Muncie, and Crawfordsville. ISRR claims that, following the transaction, NS, unlike CSX, will not have its own tracks, facilities or perhaps even employees on site. It claims that NS will be restricted in its use of Hawthorne Yard, where it will receive or deliver Indianapolis traffic for the numerous 2-to-1 shippers in the area. CSX will control dispatching, will provide access to 2-to-1 shippers via switching, and will collect switching charges and trackage rights fees. Some parties, including USDA, argue that, under those circumstances, NS will not be an effective competitive replacement for CSX in this market. We disagree with this analysis, and believe that NS will be able to replace the competition formerly provided by CSX, which now serves shippers in this area primarily under similar switching and trackage rights arrangements. Applicants will reduce the prevailing Conrail switching charge of $390 to no more than $250 per car for at least 5 years and guarantee maintenance of reciprocal switching rights for 10 years, which should make NS more competitive than was CSX. We have thoroughly examined the 29 cents per car-mile trackage rights fee that CSX and NS will charge where they will operate over each other's lines as a result of this transaction. As discussed in detail below, that fee is reasonable and will permit the trackage rights tenant to replace competition that would otherwise be lost through this transaction. The proposed NS and CSX routings from Indianapolis to the Chicago and St. Louis gateways should be just as competitive as the current ones formed by Conrail and CSX. CSX will take over Conrail's direct route to St. Louis, but there will now be a new single-line NS routing option, less direct than CSX's new route but corresponding to the way NS and CSX could connect pre- transaction in joint-line service in competition with Conrail. We anticipate NS developing and taking advantage of this new Indianapolis-to-St. Louis route. As for Indianapolis-Chicago, CSX's route is more direct; NS picks up Conrail's existing, less direct route. Crawfordsville, in particular, has a number of 2-to-1 shippers, but these will have very comparable service to what they had before. Currently, CSX and Conrail maintain service over a route through Crawfordsville from Indianapolis to Chicago that is shared through alternating trackage rights over each other's lines. The same will be the case between CSX and NS. Similarly, we see no substantial change affecting shippers at Muncie. As to Conrail's role as a neutral gateway for shippers it exclusively serves in the Indianapolis area, the evidence does not overcome our well-established and judicially approved presumption that the merger of a bottleneck carrier with one of its connections will not unduly increase rail market power. ISRR has simply presented no convincing evidence or argument that CSX will have any more incentive than did Conrail to foreclose the use of ISRR's lines to provide efficient interline service. Moreover, the new connection with NS at milepost 6 resulting from the condition we are imposing in response to IP&L's concerns should preserve ISRR's ability to compete for participation in coal movements to IP&L's Stout and Perry K plants. Further, we share applicants' concerns that interference with efficient operations would occur if ISRR were granted the substantial expansion of its operations that it seeks. ISRR service to Shelbyville would add an interchange and delay traffic by at least 1 day. The small town of Crawfordsville will already be served by CSX and NS, it is on an Amtrak route, and it is not signaled. Adding ISRR would increase the number of trains at crossings. The line to Muncie will become CSX's mainline between Cleveland and St. Louis; any shortline operations over the line would increase interference for both through freight and local operations Finally, the $1.5 million ISRR expects to lose of its $9 million in annual total revenue is overstated, since that estimate includes traffic already diverted, in 1996, to INRD at Stout. It strains credulity that ISRR would give up its ability to compete for this coal traffic or that it would sever its only link to Indianapolis. In sum, ISRR has not demonstrated serious financial harm to it, much less that this harm would hinder its ability to provide essential services. PASSENGER RAILROADS National Railroad Passenger Corporation (Amtrak). Amtrak's main concern has been applicants' request that we override the agreement between Amtrak and Conrail so as to permit multiple carriers to operate over important parts of Amtrak's Northeast Corridor (NEC). The NEC, a high-speed, high-density line connecting Boston, MA, New York City and Washington, D.C., is crucial both to Amtrak's operations and to rail freight operations in the East. Conrail conveyed the line to Amtrak in 1976, retaining a freight service easement that is governed by the NEC Agreement. Applicants and Amtrak have recently entered a comprehensive agreement with regard to this and other issues. We applaud the parties for reaching an agreement on this difficult issue without our intervention. Amtrak has also requested a condition to guard against any transaction-related deterioration of Amtrak's on-time passenger operations. Applicants now support such a condition as part of their settlement agreement. DOT supports a more general 5-year oversight condition during which we would monitor developments regarding the interface between freight and passenger service. We will incorporate Amtrak's and DOT's requests as part of the 5-year oversight that we are imposing. Regional Passenger Railroads. A number of passenger railroads and agencies with an interest in passenger issues have asked for conditions concerning the relationship between applicants and passenger railroads in the Eastern United States. We agree with DOT that rail passenger transportation is an important national resource that contributes substantially to reducing air pollution and roadway congestion. We also concur that the transaction has at least the potential to affect significantly intercity and commuter rail passenger service, particularly in the Northeastern United States. To ensure the continuation of reliable rail passenger service, DOT recommends that we impose a 5-year oversight condition on the transaction, with periodic reports to provide sufficient information to monitor developments. As noted above, we think DOT's suggestion that we retain jurisdiction to ensure that reliable passenger operations are continued is a good one, and we will impose a rail passenger monitoring condition, as part of the overall 5-year monitoring condition that we are adopting for this transaction. On review of specific requests for relief, however, it is apparent that most of the particular conditions sought by the passenger railroads are not directly related to effects of the transaction. Rather, these parties seek material changes to, or extensions of, existing contracts, or to compel new contractual commitments or property sales by NS or CSX. We are reluctant to use our conditioning power to compel resolution of differences between freight railroads and passenger agencies with respect to operating, dispatching, and compensation matters. And before imposing any such conditions, we would have to study thoroughly the effect of the requested conditions on applicants' freight operations, an issue that the passenger railroads and agencies appearing here have generally not adequately addressed. CSX and NS have agreed to step into Conrail's shoes and to honor Conrail's existing contracts with passenger railroads and agencies. Similarly, the transaction will have no effect on the contracts CSX and NS entered into with the passenger entities before the transaction. A number of passenger agencies have requested that we void, extend, or amend in various ways their existing contracts with CSX, NS and/or Conrail. These contracts set forth the rights and remedies available to the parties with respect to the matters about which they now complain. As explained below, no adequate basis has been presented for us to amend these voluntary private contracts here. On the whole, the requested conditions do not arise out of operational or economic impacts attributable to the transaction. Rather, they appear to be an effort to use our approval process to obtain concessions, revisions or extensions that the passenger entities have apparently been unable to work out through the normal process of commercial negotiation. Applicants maintain that they have worked in good faith with passenger railroads and agencies in the past and that they will continue to do so after the transaction is consummated. As the record here makes abundantly clear, such contracts frequently require the freight and passenger railroads to work out intricate details concerning rail operations, capital expenditures, and compensation. The freight railroads need to assure themselves that they can share their tracks with passenger traffic without disrupting their freight operations. This may require extensive planning and additional capital expenditures, or may not be possible at all in some circumstances where existing capacity cannot be sufficiently expanded. By the same token, passenger operators need to ensure that they can provide timely and expeditious service. We think that, ordinarily, this delicate balance can best be achieved by negotiation between the parties. And applicants have represented that they will continue to work with regional passenger railroads on issues of mutual importance. Neither a basis nor a need has yet been presented for departing from this overall approach, although we will continue to monitor the situation. OTHER FREIGHT RAILROADS Ann Arbor Railroad Company (AA). AA, a Class III railroad operating a 46-mile line from Toledo, OH, north to Ann Arbor, MI, claims that the transaction will divert more than $3 million per year, or 42% of its annual revenues, thereby undermining its ability to provide essential services to eight shippers on its system who do not have direct access to another rail carrier. AA also claims that the transaction, unless conditioned, will reduce competition in the Toledo-Chicago corridor. It asserts there are only three efficient routes, one over NS and two over Conrail, and that, after the transaction, NS will control all three of these routes. AA seeks a condition giving it approximately 220 miles of trackage rights over NS from Toledo to Chicago. It also seeks a condition permitting it to interchange traffic with CP at Ann Arbor to provide an additional source of revenue to offset its claimed losses. Finally, on brief, AA asks for DT&I type rate conditions to preserve efficient routes of Class III carriers. AA's argument that the transaction will harm competition on the Toledo-Chicago corridor is without merit. Traffic can now move over three feasible routes, two Conrail routes and an NS route. After the transaction, NS will take over the most direct Conrail route, and CSX will also maintain a route that is only slightly longer. AA objects that the CSX routing would be more circuitous and would entail operational difficulties, making it inappropriate for the time-sensitive automotive traffic that AA interchanges at Toledo. Assuming AA's evidence to be correct, only one of the existing routes, the most direct Conrail route between Toledo and Chicago via Elkhart, IN, would be adequate for the time-sensitive automotive traffic with which AA is most concerned. As noted, that route will be operated by NS. CSX will provide service over an alternative routing that appears to be at least as competitive as the routing that NS previously relied upon. (Prior to the transaction, NS' best route between Toledo and Chicago was circuitous. Traffic moved southeast from Toledo for 47 miles to Bellevue, OH, before heading west to Fort Wayne and Chicago.) Indeed, CSX has committed itself to investing $200 million to upgrade this line to compete with NS. We conclude that the transaction will not impair competition for traffic moving between Toledo and Chicago, but will preserve or improve options for these movements. In any event, the extensive trackage rights remedy sought by AA would undermine, not improve, efficient service. Conrail now combines the automotive traffic it receives from AA with a large amount of other traffic. This permits it to operate high-volume, run-through trains connecting with the major western railroads at Chicago, a service that NS will continue after the transaction. AA would be unable to match this volume, and it would have to use one of the switching carriers in the Chicago area to complete its movements. AA's request for authority to interchange with CP at Ann Arbor will also be denied. CP performs no operations at or through Ann Arbor. CP has entered a voluntary haulage rights agreement with NS, which operates over a Conrail line passing through Ann Arbor. (NS will acquire the line through the transaction.) Under the haulage rights agreement, NS moves CP trains from Detroit to Chicago. This agreement is for overhead traffic only. AA has not demonstrated that permitting its traffic to be picked up by NS for CP at Ann Arbor is either necessary or practical. In addition, CP's traffic moving over these haulage rights is time-sensitive traffic that would be disrupted by the intermediate interchange required to pick up AA's traffic at Ann Arbor. Finally, AA is concerned that CSX and NS may undercut AA's ability to participate in through movements AA's automotive customers. Ordinarily, we would expect that, ifAA provides an efficient route and desirable service, which appears to be the case, connecting Class I carriers will have a strong economic incentive to use that carrier. AA has just obtained a significant contract for some new automotive business with Chrysler Corporation, which will be opening a new plant next to AA's Ottawa yard in Toledo. AA concedes that this contract will increase its revenues, and offset somewhat the traffic diversion that it anticipates from the transaction. Nevertheless, because of the apparent importance of this contract service to both Chrysler and AA, and due to the fact that AA's viability could be threatened by a loss of this customer, we will impose a condition to ensure that quality interline service is continued, and that this contract is not undermined. Both this condition and the condition we are imposing allowing AA to connect with the W&LE at Toledo, as discussed below, should help to improve AA's financial prospects. We will also monitor this and other situations involving the relationship between shortlines and Class I railroads as part of our oversight process. It would not be in the public interest, however, for us to impose the rate equalization conditions that AA has sought. Durham Transport, Inc. (Durham). Durham, a Class III railroad, operates over 12 miles of rail line within the Raritan Center Industrial Park (Raritan Center) in Edison, NJ, close by the North Jersey SAA. Durham suggests that the Conrail Shared Asset Operator (CSAO) plans to operate out of Metuchen Yard over a track segment, the GSA Lead, that extends into Raritan Center. Durham asserts that joint use of the GSA Lead within Raritan Center is not addressed in any agreement between Durham and Conrail, and requests that we condition approval of the transaction upon the negotiation by applicants and Durham of a satisfactory agreement for the joint use of the GSA Lead. Applicants have not responded in this record to Durham's request. Durham has conceded that it has an existing interchange agreement with Conrail, and that applicants have informed it that this agreement would be honored by them. Thus, it appears that there is presently a satisfactory interchange agreement between Conrail and Durham, and that the terms of this agreement will continue beyond the transaction. But, it is not clear to us whether applicants intend to operate over that segment of the GSA Lead within Raritan Center or, if they do, whether a new joint use agreement with Durham would be required. However, Durham has not presented any reason for us to think that this transaction will undermine this carrier's ability to negotiate a satisfactory agreement for interchange of its traffic. Remedies are available under the Act to ensure interchange in the unlikely event that our intervention becomes necessary. Gateway Western Railway and Gateway Eastern Railway. We concur with Gateway that applicants have not demonstrated that an override of the assignment restrictions in Gateway's Cahokia/Willows trackage rights agreements is necessary to enable applicants, in particular CSX, to carry out the transaction. Gateway insists that, because it can perform any terminal or interchange switching in the area, CSX does not need to assume Conrail's Cahokia/Willows trackage rights. Gateway also maintains that, in the absence of an application or petition for exemption with respect to terminal trackage rights, the unilateral assignment of Conrail's trackage rights to CSX will not yield increased efficiency, enhanced safety, or any other transportation benefit. Applicants, on the other hand, have not adduced specific evidence or argument to rebut Gateway's showing that an override is unnecessary. We may require terminal facilities owned by one railroad to be used by another if the use is practicable and in the public interest without substantially impairing the ability of the rail carrier owning the facilities . . . to handle its own business. In approving the merger in UP/SP, we found that, in a similar assumption of terminal trackage rights, our exercise of override authority was unnecessary. The applicants in UP/SP sought a similar override, but they had also filed, in an embraced proceeding, a separate application for terminal trackage rights. Here, although an application or petition is not an absolute prerequisite, additional evidence of a need to override the antiassignment provisions in Gateway's Cahokia/Willows trackage rights agreements would be necessary before that relief could be granted. Applicants may file a separate application or petition if they believe that relief under that section is warranted. Housatonic Railroad Company (HRRC). HRRC is a small Class III railroad operating in Massachusetts, Connecticut, and New York. It currently connects only with Conrail, and after the transaction it will connect only with CSX. HRRC's request for a condition granting trackage rights to permit HRRC to improve its situation by being able also to reach NS, CP and B&M has not been justified. HRRC has also asked that its existing divisions and rate agreements with Conrail be preserved. CSX has agreed to continue these agreements for their duration. To the extent that HRRC's pleading can be read as a request to perpetuate such agreements beyond that time, no justification has been presented. Applicants represented at oral argument that they would deal fairly with this small carrier, and we will require that applicants do so. Finally, HRRC seeks a remedy for the loss by some of its shippers of HRRC/Conrail routings that will now become HRRC/CSX/NS routings. We have already granted a remedy directly responsive to this and other analogous situations by extending the NITL agreement single-line to joint-line protections to cover them, at the option of the Class III carrier. We assume that HRRC will invoke this option. Illinois Central Railroad Company (IC). IC asks that we impose two conditions, divestiture of a short but strategic CSX line (Sub-No. 62) and a competitive routing condition. IC requests that we order CSX to sell it about 2 miles of CSX mainline, the Leewood-Aulon Line, near Memphis, TN, an important link for IC's north-south traffic. As an alternative to divestiture, IC suggests that we impose a condition requiring joint dispatching of that line. With regard to the first condition, IC states that, because CSX owns and dispatches this line, it has a direct effect on IC's operations in Memphis and systemwide, which it claims will be harmed by the transaction. The transaction will allow CSX to compete directly with IC for the large volumes of traffic currently moving in IC-Conrail joint-line service, and thus may place more CSX traffic on the line over which IC has trackage rights. Applicants admit that IC's trains have experienced delays through Memphis, but assert that CSX is working to avoid the delays. Because these delays are an existing problem, and not an effect of the transaction, applicants state that they are not a proper basis for relief. CSX and its predecessors have owned and controlled dispatching over the line for IC and its predecessors for more than 90 years. Moreover, applicants state that divestiture could cause severe problems for CSX because the Leewood-Aulon line is part of a CSX mainline that carries substantial traffic in interchange with BNSF and UPRR. Divestiture could interfere with CSX's use of the Memphis gateway. Applicants also indicate that IC's proper remedy is that contained in the trackage rights agreement, which requires CSX to be reasonable, fair, and nondiscriminatory to all parties using the line, and provides for mandatory arbitration of disputes. We are denying IC's request that CSX divest ownership and control of the Leewood-Aulon line to IC. No justification has been presented for this extreme remedy that could result in serious harm to CSX's ability to provide service. Nevertheless, we believe that the public interest requires us to do what we can to prevent carrier disputes such as this one from impairing the service that the carriers provide to their shippers. Accordingly, we will impose a condition requiring CSX to meet with IC to attempt to resolve this dispute concerning Memphis dispatching, and to report back to us on the results of this discussion within 30 days of the effective date of this decision. IC's second request is for a condition to preserve its existing routings with Conrail. Because it has been unable to reach an agreement with CSX, IC argues that CSX will favor what IC contends are less efficient IC/CSX joint-line routings via New Orleans and Memphis over what IC contends are more efficient IC/CSX joint-line routings via Chicago, East St. Louis, and Effingham, IL. Under IC's proposed condition, CSX would be required to enter into joint rates with IC for the movement of traffic to or from former Conrail points via its Illinois gateways that would provide CSX with the same revenue per mile as CSX would receive over its long-haul route between the same origin and destination. IC contends that this requirement would prevent CSX from denying a shipper access to existing service options via those gateways by commercially closing the route. We are denying IC's request for the imposition of a routing condition. As applicants correctly note: IC's proposal goes well beyond even the repudiated conditions . . . in asking the Board to impose a formula to cap CSX's divisions. IC sought similar relief, including the same formula for setting divisions, which the ICC denied. We continue to believe that conditions of this type are inefficient, anticompetitive, and contrary to the public interest. Livonia, Avon, and Lakeville Railroad Corporation (LAL). LAL is a Class III Rochester-based railroad that now connects only with Conrail; after the transaction it will connect only with CSX. LAL's primary concern is the removal of the firewall that prevents it from crossing the Genesee Junction Yard to connect directly with Rochester and Southern Railroad, Inc. (R&S). This connection, which is supported by the Genesee Transportation Council (GTC), would permit it to reach NS, which is acquiring Conrail's Southern Tier Line, and CP. Dating back to the Final System Plan, LAL's predecessors have been unable to connect with R&S' predecessors. Thus, LAL's responsive application to overcome this barrier (Sub-No. 39) might appear to be unrelated to any harm caused by this transaction. But, LAL also argues that a significant number of its shippers who now use LAL/Conrail service will be forced to shift to inefficient, three-carrier LAL/CSX/NS service. This allegation is backed by strong supporting statements of a number of shippers on its lines, who document how this change in service will harm their businesses. LAL has explained that certain grain shipments it originates to what are now Conrail points on the Delmarva Peninsula and in Pennsylvania will be particularly affected, depriving Western New York farmers of an important outlet for their products. Applicants assert that the new, three-carrier move that LAL and its shippers have requested, LAL/R&S/NS, is no less cumbersome than the three-carrier move it is intended to replace. We disagree. Shortline carriers like LAL and R&S have shown themselves capable of providing seamless service in conjunction with their Class I connections. And, LAL has explained that it expects no problems coordinating activities with R&S within Genesee Junction Yard. LAL has noted that its management can reach R&S headquarters for any needed face-to-face meeting with a 25-minute drive from Lakeville or a 5-minute drive from Genesee Junction Yard. Thus, within 60 days of service of this decision, we will require CSX to negotiate an agreement with LAL that permits that carrier to operate over the approximately 1 route mile of track within Genesee Junction Yard necessary to reach a connection with R&S. If the parties are unable to reach an agreement within that time frame, they may submit their separate proposals to us. Finally, we note that, as explained above, we have been generally unwilling to grant the relief requested by numerous other shippers whose single-line service will become joint-line service, since that relief would have unduly burdened the transaction by granting CSX and NS trackage rights over each other's lines. That is not the case here. The relief we are granting to LAL and its shippers, which only requires LAL operations over a little-used, 1-mile segment of Conrail track, should not noticeably interfere with applicants' planned operations. New England Central Railroad, Inc. (NECR). NECR is a Class III railroad operating a primarily north-south rail line from East Alburg, VT, south to New London, CT. NECR complains that the transaction will not give New England shippers two-carrier service, and will eliminate Conrail's role as a neutral carrier. In addition, NECR insists that the transaction will result in NECR's losing traffic to the extent that it might threaten NECR's survival. To offset these losses, NECR seeks approximately 256 miles of trackage rights from Palmer, MA, to the North Jersey SAA. The State of Vermont is concerned about the possible adverse impact of this transaction on NECR, whose lines are used by Amtrak for the Vermonter service. Vermont has provided financial support for this particular Amtrak service. Vermont states that the financial failure of NECR would terminate that carrier's ability to make available quality trackage between Palmer, MA, and St. Albans, VT, to Amtrak. Amtrak would then seek to pass along additional costs to the state. Applicants argue, however, that NECR will be in the same position after the transaction as it is now, with its current connection with Conrail at Palmer, MA, being replaced by a connection there with CSX. Applicants also insist there will not be any loss of essential rail services supplied by NECR, and that the trackage rights NECR seeks over CSX would create severe operational problems. NECR's claims that harm will result from Conrail's disappearance as an allegedly neutral connection to CSX and NS, and that CSX will be a more dominant carrier than Conrail has been, are baseless. CSX and NS have no incentive to foreclose efficient through routes following the division of Conrail. To the contrary, applicants have expressed their intention to maintain efficient routings, and any failure to do so could result in challenges under the Board's competitive access rules. Further, CSX has agreed to assume Conrail's agreements with NECR. Even though we agree with applicants that NECR's diversion estimate of $8.0 million is overstated, we think that NECR will suffer some financial harm from this transaction. Applicants' diversion estimate of $1.6 million per year of its gross revenue of about $16-17 million per year seems more reliable. In coming up with its $8 million figure, NECR assumed that all of its movements of paper and wood products received from Canadian origins would be diverted. The record shows that these products are moved south over NECR and are transloaded to motor carriers for delivery over a broad area that already includes numerous points served by CSX and NS. NECR has failed to demonstrate that these movements from nearby Canadian origins will be replaced by single-line movements from CSX or NS southeastern origins. These two carriers have the capacity to provide single-line service of forest products from many origins to these destinations now, but they have not captured this business, perhaps because the particular forest products moving from Canada have no exact substitute in the Southeast. There is no reason to believe that this traffic will now all be diverted simply because CSX and NS have extended their routes into the Northeast. NECR points out two shippers of northbound lumber that it characterizes as being susceptible to immediate diversion. NECR notes that these two companies receive southern yellow pine lumber originating on applicants' lines in the Southeast. NECR argues that, if the transaction is approved, CSX will be able to provide single-line service as opposed to joint-line service with NECR, and that CSX will attract this business through new truck transloading facilities that it will establish. NECR fails to explain why CSX would be any more likely to pursue such a strategy than Conrail is now. If NECR forms an efficient part of a through route, its services will continue to be used. Despite the fact that its diversion evidence is flawed, NECR has shown that it will be financially harmed by this transaction. Moreover, it is clear that NECR provides important services both for its shippers and for Amtrak. Accordingly, to ensure NECR's continued ability to provide these services, we will require applicants to grant NECR trackage rights as sought between Palmer, MA, and Springfield, MA. These trackage rights will facilitate through movements with NECR's affiliate, Connecticut Southern Railroad. We will require applicants to attempt to negotiate the details of these trackage rights arrangements with NECR. If the negotiations prove unsuccessful, the parties may submit separate proposals to us within 30 days of the effective date of this decision. North Shore Railroad Company (NSHR) and affiliates. NSHR and its affiliates -- Juniata Valley Railroad Company (JVRR), Nittany & Bald Eagle Railroad Company (NBER), Lycoming Valley Railroad Company (LVRR), Shamokin Valley Railroad Company (SVRR), and Union County Industrial Railroad Company (UCIR) -- ask that we note for the record the settlement agreement they have entered into with NS. As we have noted elsewhere in this decision, we are requiring applicants to adhere to any representations made to parties in this case. Philadelphia Belt Line Railroad Company (PBL). PBL is a small Class III railroad in Philadelphia. Although its lines are now composed of three discrete segments totaling about 16 miles, PBL claims that its original 1889 charter was intended to allow it to function as a continuous belt railway serving Philadelphia. PBL's goal of achieving that status is a longstanding one that has no nexus to this transaction. To the extent that PBL's beltline principle may have any valid contractual basis, we will grant the relief that PBL seeks by ruling that any such contracts are not intended to be preempted by our approval of this transaction. Providence and Worcester Railroad Company (P&W). P&W is a regional freight railroad operating in Massachusetts, Rhode Island, Connecticut, and New York. It supports the primary application. Nonetheless, it has advised us that, under an Order of the Special Court (Order) dated April 13, 1982, P&W has the right to acquire the terminal properties known as New Haven Station if Conrail elects to withdraw from or abandon or discontinue freight service obligations at that location. P&W has sought an interpretation of the Order and a declaration of its rights from the statutory successor to the Special Court, the United States District Court for the District of Columbia. On January 22, 1998, that court ruled that this matter was not yet ripe for adjudication, since the Conrail control proceeding was still pending before us. It appears to us that our approval and the eventual consummation of this transaction will not trigger P&W's rights under the 1982 Order because Conrail will continue to own New Haven Station and will therefore not withdraw from, abandon, or discontinue freight service there. This view is apparently shared by the FRA Chief Counsel. But these views may not represent what would be the ultimate determination of the District Court, which would have primary jurisdiction in interpreting the Order. Nor need we, because of our ultimate disposition of the issue, adjudicate applicants' claim that, because P&W has, for a valuable consideration, agreed to support the transaction contemplated by the Application, it is accordingly estopped from denying CSX the quiet enjoyment of New Haven Station. Rather, we will specifically find that applicants' continued ownership and use of New Haven station is an integral and necessary part of the underlying transaction before us, and that any rights that P&W might otherwise have been found to have under the Order, must therefore be preempted. As applicants have explained, a core purpose of that immunity provision is that a successor carrier must be allowed to operate property acquired through a Board-approved transaction. R.J. Corman Western (RJCW). RJCW filed a responsive application (Sub-No. 63) requesting trackage rights on, or ownership of, 2 miles of Conrail line in Lima, OH. RJCW is a Class III railroad, operating between Glenmore, OH, and the Indiana/Ohio border via Lima. RJCW's only rail connection is at Lima, with Conrail. Traffic moving to or from the Glenmore-Lima line is now switched by Conrail to CSX and NS over the 2.3 miles of line that RJCW seeks to operate over. RJCW has attempted unsuccessfully to obtain this line from Conrail in the past. CSX will now obtain this segment through the transaction. RJCW claims that CSX will prefer to switch RJCW's traffic to its own lines, and will increase the very low existing switching charge of $60 per car for RJCW's traffic to reach NS. It also argues that CSX will raise its line-haul rates and/or diminish the level and frequency of interchange if it controls the switch movement. RJCW has offered no basis upon which to conclude that CSX will not maintain reasonable reciprocal switching rates or that CSX will have an economic incentive to restrict the movement of RJCW's traffic. The presumption under our precedent and economic theory is to the contrary. Moreover, the NITL agreement preserves existing switching charges for 5 years, with an annual inflation adjustment, making further relief concerning this issue unnecessary. RJCW essentially seeks to improve its position by obtaining a strategic piece of rail line that would give it direct access to two Class I carriers. RJCW's post-transaction competitive position will be unchanged. CSX will simply step into Conrail's shoes at Lima; RJCW will still have one connection, CSX instead of Conrail, and will be able to move traffic to interchange with NS through a switch movement, just as it does today. In sum, RJCW has provided no grounds for this additional relief, and the oversight condition we are imposing will permit us to continue to monitor the situation. The Elk River Railroad, Incorporated (TERRI). TERRI is a small Class III railroad originating coal in South Central West Virginia. Although its sole Class I connection is now with CSX, before the transaction it had been pursuing a build-out option that would, if successful, have permitted it to interchange with Conrail. The relevant Conrail line is being acquired by NS, which, TERRI claims, will not have the same interest in handling this coal traffic because it handles other competing coal traffic. TERRI's situation will remain largely the same as it was before the transaction. It will continue to have access to one Class I carrier, with a possible build-out option that may entail considerable expense. NS has stated that it is willing to work with TERRI to establish an appropriate interchange if TERRI completes its proposed build-out. It is also willing to discuss the issue of rehabilitating or selling to TERRI the line between Falling Rock and Charleston. Given these representations, which we expect to be adhered to, and the fact that TERRI's situation is not substantially changed, we see no need to require any of the good faith bargaining conditions that TERRI seeks. Wheeling & Lake Erie Railway Company (W&LE). W&LE has filed a responsive application and has requested numerous conditions that it claims are necessary to alleviate merger related harm. Senator Mike DeWine, Congressman Ralph S. Regula, Stark Development Board (SDB), the Ohio Attorney General, Ohio Rail Development Commission (ORDC), ISRI, and others have supported W&LE in this regard. Although W&LE has made some general assertions about the competitive impact of the merger, it does not propose its conditions as a competitive solution to offset the diminution of competition experienced by any shipper or group of shippers. Rather, the conditions W&LE seeks are offered to offset the adverse financial impact of the transaction on W&LE. W&LE claims that the transaction will divert between $12.7 and $15 million of traffic per year from its lines. W&LE maintains that, because it is a highly leveraged carrier, its balance sheet will not permit it to weather such an impact and still provide essential services. W&LE claims that its proposed conditions will generate about $11 million per year in additional traffic to offset its losses. Revenue losses could make it difficult for W&LE to continue to provide service to the numerous shippers, including the NEOMODAL Terminal, that have testified that they value the W&LE service, and that it serves as a spur to competition. Although W&LE's projections of a $12.7 to $15 million yearly gross traffic revenue loss are overstated, it does appear that W&LE would lose substantial revenue due to this transaction. Applicants' estimate of $1.4 million may be somewhat understated. They correctly note that much of W&LE's traffic both originates and terminates on its system, and none of that traffic is at risk. Many of the losses included in W&LE's $15 million figure represent reductions from a baseline that includes a substantial projected traffic increase; we think those projections are overly optimistic and unwarranted. About $3.6 million of the traffic losses included in the lower $12.7 million figure relate to the phantom train issue. This refers to traffic generated by a run-through train that was operated for about 6 weeks in 1997, but no longer operates. It is inappropriate to attribute to the merger traffic losses that have already occurred. Moreover, it is inaccurate to assume, as W&LE uniformly does here, that NS single-line service will always replace a joint NS/W&LE service. If the W&LE routing and service is more efficient, as W&LE contends, then it is likely that NS would continue to use that service. Even with these adjustments, however, it is apparent that a substantial amount of traffic, probably between $1.4 and $3.0 million, could be diverted from W&LE because of this transaction. Much of the traffic loss claimed by W&LE is due to new, more efficient routings afforded applicants by the transaction rather than to any enhancement of applicants' market power. Nevertheless, we think that the combination of W&LE's precarious financial situation and these rather heavy losses calls out for a remedy to preserve essential services and an important competitive presence here. W&LE not only provides valuable competitive service to shippers, but it also provides a transportation network that could be important to shippers if the major carriers have difficulty providing service. That being said, we recognize that the extensive conditions W&LE is seeking are a substantial overreach both in terms of geographic scope and financial impact. Certainly, W&LE has not justified $11 million of new traffic as relief, nor has it justified such intrusive conditions as permitting it to extend its operations over applicants' lines all the way to Chicago. We will require applicants to provide certain remedies to W&LE to prevent further erosion of W&LE's financial viability due to this transaction. We will require applicants to provide: (a)overhead haulage or trackage rights access to Toledo, OH, with connections to the Ann Arbor Railroad and other railroads there; (b)an extension of W&LE's lease for the Huron Docks and trackage rights access to the Huron Docks over NS' Huron Branch; (c)overhead haulage or trackage rights to Lima, OH, including a connection to the Indiana and Ohio Railroad. Further, we will require that applicants negotiate with W&LE concerning mutually beneficial arrangements, including allowing W&LE to provide service to aggregate shippers or to serve shippers along CSX's main line from Benwood to Brooklyn Junction, WV. If these parties are unable to agree on a solution with regards to items (a), (b), and (c) within 90 days of the service date of this decision, we will institute expedited proceedings to resolve these matters. Finally, we expect the parties to inform us of any mutually beneficial arrangements that they have reached. DETAILS OF PUBLIC BENEFITS. The most important public benefit resulting from the transaction will be a substantial increase in competition by allowing both CSX and NS to serve where only Conrail served before. This will bring new competition to shippers in such markets as Southern New Jersey/ Philadelphia, Northern New Jersey, Detroit, Ashtabula, and the Monongahela coalfields. Applicants estimate that $700 million worth of traffic per year will receive new two-carrier competition. In addition, the expansion of the NS and CSX systems will enable them to provide more competitive single-line service over more direct routes, to render improved service, and to use equipment more efficiently. These features of the transaction will improve operating efficiency, reduce transit times and terminal delays, and provide logistics savings associated with single-line service that will make these companies more competitive with trucking and should, within 4 years of the transaction, shift over $400 million worth of traffic each year from highways to rail lines. Using 1995 data, applicants have demonstrated that they should be able to achieve quantifiable public benefits, including operating cost savings, logistics savings, avoided highway maintenance costs, and other public benefits, of approximately $1 billion annually within that same period. Other benefits include favorable safety and environmental consequences, and theimprovement in the rail system in the Eastern United States that will result from the substantial additional investment that NS and CSX will make to take advantage of opportunities available on their newly restructured systems. These transportation benefits will also assist in creating new economic development opportunities and in helping industries served by the new systems to be more competitive in the global marketplace. As noted, applicants project that the acquisition of Conrail will yield almost $1 billion in quantifiable public benefits during a normal year. These include $562.6 million in operating efficiencies and cost savings, $340.1 million in shipper logistics savings and competitive pricing benefits, and $95.5 million in highway maintenance benefits resulting from fewer trucks being operated over public highways. These benefits do not include an additional $445.4 million in private benefits in terms of anticipated revenue gains ($299.5 million for NS and $145.9 million for CSX) from increased traffic volume, but not from any projected rate increases. Revenue gains, while a benefit to the carriers, are not deemed to be a quantifiable public interest benefit. They do undercut, however, arguments raised by various parties that applicants will have to raise their rates to pay the acquisition price for the Conrail properties, as discussed earlier in this decision. These anticipated revenue gains have not been challenged. Various parties, including several shortline railroads, shippers, and municipalities, have questioned the public benefits to be realized as a result of the acquisition. While none of these parties has presented alternative calculations or any detailed analysis, several note that the recent UP/SP merger has resulted in severe difficulties with the movement of traffic in the West, and this has resulted in significant hardship for many shippers, with few or no benefits yet being realized as a result of that merger. Applicants here have properly recognized that benefits are not all realized at once and have, in our opinion, developed realistic projections showing that for the first 2 years following the acquisition, there will be significantly fewer benefits (or even temporary losses) resulting from that acquisition. The long-range (i.e., normal year) figures, however, show that, after the initial shake-out costs occur, the acquisition should produce substantial yearly public benefits. Moreover, serious infrastructure deficiencies were a significant factor related to the problems in the West. UPRR took over an SP system with well known and serious problems of deferred maintenance and delayed capital improvements. Both UPRR and SP had experienced tremendous traffic growth over the last 10 years that was straining existing capacity. In contrast, as applicants note, they will be taking over a Conrail system that is in much better condition than was SP. The Conrail system also has a greater percentage of double track than does any railroad in the country. None of the carriers in the East has experienced the remarkable traffic growth that took place in the West. As discussed elsewhere in this decision, applicants have, with the assistance of FRA, prepared and submitted detailed operating plans that demonstrate that they should be able to operate without the safety and other problems recently experienced by UPRR. Applicants have already completed or are in the process of completing, numerous construction projects necessary to allow traffic to flow freely over their newly structured systems. This construction, together with applicants' firm commitment not to attempt to implement this transaction before they have in place appropriate labor agreements and information technology necessary to provide efficient and reliable service, should ensure that the UP/SP situation is not repeated. Additionally, operational monitoring to be conducted by the Conrail Transaction Council and by the Board will help ensure a smooth transition. The transaction will create competitive railroad options at many locations currently served only by Conrail. New rail-to-rail competition will benefit shippers in the South Jersey/Philadelphia, North Jersey, and Detroit SAAs, at the Ashtabula docks in Ohio, and in the Monongahela coal fields in Southwestern Pennsylvania and Northern West Virginia. Applicants have estimated that more than $700 million in annual freight movements that are now rail-served solely by Conrail at origin or destination will now have two independent and competitive alternatives. The transaction will also increase competition between railroads and other modes due to the expansion of single-line service throughout the new NS and CSX systems. CSX's traffic studies project annual truck-to-rail diversions that will eliminate 438,000 truck trips per year, and NS has predicted that its expanded operations will remove an additional 589,000 truck trips. Together, applicants estimate that they will divert sufficient truck traffic to remove a million line-haul truck trips per year from our nation's highways. The operating efficiency gains and diversion of traffic from highways to rail lines will yield substantial environmental benefits, as recognized in the Final EIS. Trucks on average require at least three times the amount of fuel as trains to move the same amount of freight the same distance. Therefore, the diversion of traffic from the highways will reduce diesel fuel consumption by 80 million gallons per year. This will materially improve air quality. The transaction should also yield safety benefits. Among all Class I railroads, NS and CSX had the lowest accident rates for the period 1994-1996. Although FRA noted some problems with the corporate safety culture of CSX in a report issued in October of 1997, our record shows that the problems mentioned in that report have now been resolved. In response to the concerns of FRA and others, we issued a decision in November of 1997 requiring each applicant to provide us with a detailed Safety Implementation Plan. Achieving the lower accident rates of NS and CSX on the new lines would significantly reduce future rail accidents. Moreover, the diversion of traffic from motor carriers to railroads will reduce highway accidents and related personal injuries and loss of lives. Because trucks have more hazardous materials incidents per ton-mile of freight moved than do railroads, the diversion of hazardous materials from truck to rail will make the handling of these materials safer. Applicants' commitment to safety is reflected in their good safety records and in the SIPs they developed in close consultation with FRA. The competitive benefits, operating efficiency gains, and environmental and safety benefits will be achieved with no significant adverse competitive effects. The existing NS and CSX systems connect largely end-to-end with the portions of Conrail that each acquiring applicant will operate. In those few areas where shippers' rail options would have declined from two to one, applicants' transaction agreement largely preserves two-carrier service, through trackage rights or other arrangements, and we have imposed additional conditions that appropriately address all remaining competitive issues. The benefits will also be achieved with minimal line abandonments, totaling only about 58 miles. These are lines with little or no local traffic and where overhead traffic can be routed more efficiently over other lines. These substantial public benefits from the transaction are largely undisputed. While a number of parties have claimed that the transaction will have various adverse effects on them, none has seriously challenged applicants' projections of public benefits or has raised significant questions about the overall competitive, environmental, and safety benefits to be derived from the transaction. DETAILS OF FINANCIAL MATTERS The evidence demonstrates that, after acquiring the Conrail properties, NS and CSX will remain financially sound, that NS' and CSX's assumption of the payment of Conrail's fixed charges will be consistent with the public interest, that the terms of the acquisition agreements and transactions are just and reasonable, and that the assumption by CSX and NS of the liabilities of Conrail will neither impair the acquiring carriers' ability to maintain viable plant investments and to provide service, nor force them to raise rates to captive shippers to finance the acquisition. We believe that, despite expenditures of approximately $4.2 billion and $5.8 billion, by CSX and NS, respectively, for Conrail's stock, the financial condition of each of the acquiring companies should be favorable because considerable gains in earnings should result from increased revenues and cost savings attributable to implementation of the post-acquisition operating plans submitted by CSX and NS. CSX expects the acquisition to produce annual benefits in a normal year, giving effect to full implementation of its operating plan, of $435.8 million, consisting of $289.9 million in operating efficiencies and cost savings and $145.9 million in operating revenue gains. Net revenue gains to CSX are expected to total $58.1 million in the first year of the acquisition, growing to $108.4 million in the second year, and reaching $145.9 million in the third year. After adjusting for various expenses incurred during the first 3 years that are associated with the acquisition, we have computed annual operating benefits (from revenue gains and operating efficiencies) for each of these years. Almost all (over 98%) of the anticipated normalized annual operating benefits of $435.8 million are expected to be realized by the end of the third year following the acquisition. The consolidated pro forma income before fixed charges exceed fixed charges (interest payments for long-term debt) by margins that gradually rise from a low of 2.9 times during the first year after the acquisition to 3.4 times during the third year. The fixed charge coverage for the base year was 5.2 times, and for the normal year is projected to be 3.7 times. Thus, it would appear that CSX, on a post-acquisition basis, will generate sufficient income to cover payment of fixed charges, including interest associated with all debt issued to purchase Conrail stock plus debt assumed in the transfer of Conrail's assets. The pro forma cash throw-off-to-debt ratios, which measure the ability to generate sufficient cash flows from operations to repay long-term debt maturing during the year, are favorable. During the base year, cash flow from operations exceeded maturing long-term debt by 3.4 times. The pro forma ratios show a steady improvement from 3.3 times during the first year to 3.6 times by the third year (and 3.7 for the normal year). The operating ratio (the ratio of operating expenses to operating revenues) for the consolidated company is projected to improve (favorably decline) each year, moving from 85.5% during the base year to 83.7% for the third year and 83.5% for the normal year. This signifies a steady, gradual improvement in operating efficiency as a result of the acquisition. CSX's net income is projected to increase from $753 million during the first year to $961 million for the normal year. Because a large portion of this net income is being placed in retained earnings, shareholders' equity is projected to increase by a higher percentage than is net income. This results in a decline in return on equity, despite the increase in net income, from 15.4% for the first year to 13.7% for the normal year. The increase in net income, coupled with the increase in equity and repayment of long-term debt, results in the ratio of long-term debt to debt plus shareholders' equity being projected to improve from almost 60% in the first year to less than 46% by the normal year. The pro forma data indicate that CSX, after acquisition of 42% of Conrail, will possess considerable financial strength. Furthermore, these results may be understated because they do not take into account other economic forces unrelated to the merger such as growth in the overall economy, which would have a positive impact. We conclude that the surviving company will be financially sound. NS expects the acquisition to produce annual benefits in a normal year, giving effect to full implementation of its operating plan, of $572.19 million, consisting of $272.67 million in operating efficiencies and cost savings and $299.52 million in operating revenue gains. These amounts are higher than those projected for CSX, due largely to the fact that NS will operate approximately 58% of Conrail, while CSX will operate 42%. Net revenue gains to NS are expected to total $43.44 million in the first year of the acquisition, rising sharply to $226.41 million in the second year, and reaching $299.6 million in the third year. After adjusting for various expenses incurred during the first 3 years that are associated with the acquisition, we have computed annual operating benefits (from revenue gains and operating efficiencies) for each of these The consolidated pro forma income before fixed charges exceed fixed charges (interest payments for long-term debt) by margins that slowly rise from a low of 2.9 times during the first year after the acquisition to 3.8 times during the third year and 4.1 times for a normal year. The fixed charge coverage for the base year was 8.0 times (due to the fact that NS had very little debt prior to the acquisition). The pro forma fixed charge coverages are more than adequate. Again, as with CSX, it would appear that NS will generate sufficient income to cover payment of fixed charges, including interest associated with all debt issued to purchase Conrail stock and debt assumed in the transfer of Conrail's assets. The pro forma cash throw-off-to-debt ratios, which measure the ability to generate sufficient cash flows from operations to repay long-term debt maturing during the year, are extremely favorable. During the base year, cash flow from operations exceeded maturing long-term debt by 8.9 times. The pro forma ratios show a steady improvement from 8.3 times during the first year to 9.6 times by the third year (and 9.7 for the normal year). The operating ratio for the consolidated company is projected to improve (favorably decline) each year, moving from 77.5% during the base year to 73.6% for the third year, as well as for the normal year. This signifies a steady, gradual improvement in operating efficiency as a result of the acquisition. NS' net income is projected to increase from $746 million during the first year to $1,038 million for the normal year. As is true for CSX, because a large portion of this net income is expected to be retained and not paid out as dividends, shareholders' equity is projected to increase by a higher percentage than is net income. This results in slightly lower return on equity, despite the increase in net income, from 14.0% for the first year to 13.8% for the normal year. Again, as is true for CSX, NS' increase in net income, coupled with the increase in equity and repayment of long-term debt, results in the ratio of long-term debt to debt plus shareholders' equity being projected to improve from slightly over 61% in the first year to 48% by the normal year. The pro forma data indicate that NS, after acquisition of 58% of Conrail, will possess considerable financial strength. Furthermore, these results may be understated because they do not take into account economic factors extraneous to the merger such as growth in the economy as a whole and other positive financial impacts. We conclude that the surviving company will be financially sound. We are required to consider the total fixed charges resulting from the acquisition, as well as any assumption of payment of fixed charges and any increase in fixed charges. There will be significant acquisition-related increases in fixed charges for both NS and CSX due to the issuance of additional debt and the assumption of Conrail liabilities. As previously discussed, however, the evidence demonstrates that these increases will not undermine the financial soundness of either carrier. The financial soundness of the surviving entities supports a finding that the new fixed charges that will result, as well as CSX's and NS' assumption of Conrail's fixed charges, will be consistent with the public interest. Applicants' financial advisors, Wasserstein Perella & Co., Inc. (for the CSX shareholders), Merrill Lynch and J.P. Morgan (for the NS shareholders), and Lazard Freres & Co. LLC and Morgan Stanley & Co. (for the Conrail shareholders) used various valuation techniques to demonstrate the fairness of the terms of the stock purchase to the respective shareholders. All these investment firms rendered opinions that the consideration paid by NS and CSX was fair to their shareholders and to those of Conrail from a financial point of view. We find the arguments and conclusions of these investment firms, who have substantial expertise in the valuation of businesses and securities in connection with mergers and acquisitions, to be persuasive. The cash consideration payable for Conrail stock has been approved by the respective boards of directors and substantial majorities of stockholders of all companies. All factors considered, the unrebutted evidence submitted by applicants supports a finding that the terms of the acquisition agreement are just and reasonable to all shareholders of CSX, NS, and Conrail. Applicants have entered into trackage rights agreements providing CSX and NS the opportunity to operate over each other's track for through movements and to access certain shippers' facilities. These agreements provide that the tenant carrier (NS or CSX) will pay the landlord carrier (CSX or NS) trackage rights compensation of 29 cents per car-mile anywhere on their respective systems where trackage rights are proposed. Applicants do not explain how they developed their agreed upon level of 29 cents per car-mile; they note only that the fee is based on existing trackage rights fees negotiated between NS and CSX. The broadly applicable trackage rights fee of 29 cents is consistent with the relevant costs of CSX, the lowest costs of the three railroads at 29 cents per car-mile. This means that CSX would pay no more to NS for operating over its lines than it currently costs to operate over its own lines, while NS would actually pay less for operating over CSX lines than it costs to operate over its own. Therefore, neither carrier would have a disincentive to operate over the trackage rights granted by the other carrier, since in no case would the trackage rights compensation be higher than the cost of using the carrier's own track. Thus, we find that the trackage rights compensation applicants have agreed to pay will permit each carrier to provide effective competition through trackage rights, replacing competition that would otherwise be lost. EMBRACED CASES AND RELATED MATTERS. We are exempting or, where appropriate, granting approval for transactions proposed in 37 proceedings embraced in the application. These related filings include 10 notices of exemption and 12 petitions for exemption relating to construction projects; a notice of exemption for a joint relocation project; a petition for exemption for the transfer of a line; an application for control of terminal railroads; 8 notices of exemption for trackage rights; and authorization to abandon, or to discontinue operations over, four line segments. We are dismissing an exemption petition for control of a terminal railroad on the ground that the proposed transaction will not constitute control within the meaning of 49 U.S.C. 11324(d). By decision served November 25, 1997, we exempted, subject to certain specified environmental mitigation measures, the construction aspect of the connection tracks proposed in the related filings in STB Finance Docket No. 33388 (Sub-Nos. 1 through 7). Operations over the connection tracks involved in the related filings in Sub-Nos. 1 through 7 are addressed in the present decision. We are exempting applicants' remaining construction projects proposed in Sub-Nos. 8 through 22 because they are integral to the competitive service that CSX and NS will provide under the primary transaction, and because they otherwise satisfy our exemption criteria. As noted, with respect to construction projects, applicants filed 10 notices of exemption under the class exemption. This class exemption applies to proceedings under 49 U.S.C. 10901 involving the construction and operation of connecting lines of railroad within existing rail rights-of-way, or on land owned by connecting railroads. No individual findings under 49 U.S.C. 10502 are necessary as to the notices because the exemption criteria have been met and thus the proposals fall within the class exemption provided at 49 CFR 1150.36. Applicants indicate that the construction and operations covered by their notices will not be implemented until after the effective date of this decision. These exemptions are effective on August 22, 1998, unless stayed. Because the remaining construction projects do not qualify under the class exemption, applicants filed 12 petitions for exemption. Under 49 U.S.C. 10901(a), a rail line may not be constructed or operated without our prior approval. Under 49 U.S.C. 10502, however, we must exempt a transaction from regulation when we find that: (1) application of the statutory provision is not necessary to carry out the rail transportation policy of 49 U.S.C. 10101; and (2) either (a) the transaction is of limited scope, or (b) the application of the statutory provision is not needed to protect shippers from the abuse of market power. These exemptions are effective on August 22, 1998, unless stayed. Applicants filed eight notices of exemption regarding the acquisition of trackage rights. Our pertinent class exemption exempts the acquisition of trackage rights by a rail carrier over lines owned or operated by any other rail carrier that are: (i) based on written agreements; and (ii) not filed or sought in responsive applications in rail consolidation proceedings. The effective date of these notices is August 22, 1998. In STB Finance Docket No. 33388 (Sub-No. 23), NW filed a notice of exemption regarding a joint project involving relocation of NW's rail line running down 19th Street in Erie, PA (a distance of approximately 6.1 miles), to a parallel railroad right-of-way owned and operated by CRC that will be allocated to CSXT under applicants' transaction agreement. NW's joint proposal involves the relocation of a line of railroad which does not disrupt service to shippers. Because the project is contingent upon approval of the primary application, it will not be implemented until after the effective date of our decision here. We are exempting, in the STB Finance Docket No. 33388 Sub-No. 24 docket, the acquisition by CRC of NW's Fort Wayne Line. CRC and NW state in their petition that this line transfer will not be effected until immediately prior to Day One of the CSX/NS/CR transaction, when the Fort Wayne Line will be allocated to CSX. We are granting the application in STB Finance Docket No. 33388 (Sub-No. 26) where CSXC, CSXT, and The Lakefront Dock and Railroad Terminal Company (LD&RT) seek approval for the acquisition and exercise by CSXC and CSXT of control of LD&RT, and the common control of LD&RT and CSXT and the other rail carriers controlled by CSXT and/or CSXC. LD&RT, a Class III railroad in which CSXT and CRC each currently owns a 50% voting stock interest, operates approximately 17 miles of yard tracks at Oregon, OH. LD&RT provides facilities for the transfer of iron ore pellets from lake vessels to rail cars. LD&RT does not have any employees; its operations are performed entirely by CSXT employees and, to a limited extent, CRC employees. Control and operation of LD&RT by CSXT will not have regional or national transportation significance because CSXT is already responsible for all of LD&RT's business and there will be no significant changes in carrier operations. We are dismissing the exemption proceeding in STB Finance Docket No. 33388 (Sub-No. 31) because the acquisition by CSXC and CSXT of a 50% interest in Albany Port Railroad Corporation (APR) will not enable CSXC and CSXT to control APR within the meaning of 49 U.S.C. 11323-25. APR, which operates approximately 16.5 miles of track at the Port of Albany, NY, is owned in equal 50% shares by CRC and Delaware and Hudson Railway Company, Inc. (D&H), an affiliate of Canadian Pacific Railway Company. If the primary application is approved, CRC's 50% interest in APR will be allocated to CSXT. Currently, CRC and D&H each has two representatives on a four-member board of directors. Neither owner alone can control that board or APR's operations. APR operates in the interest of both of its owners. Petitioners state that the proposed control of CRC and allocation of CRC's interest to CSXT will not affect APR's operations. D&H will continue to participate in APR's management, and D&H's ability to obtain service from APR on a neutral and impartial basis will not be impaired. Applicants have filed a petition for exemption under 49 U.S.C. 10502 and three notices of exemption under 49 CFR 1152.50 to abandon, or in one proceeding, to discontinue operations over, four line segments that total 58.2 miles of track in Illinois, Indiana, and Ohio. Public notice was properly given and, in Decision No. 12, served July 23, 1997, we accepted the abandonment and discontinuance requests for consideration. Because the abandonment proposals were conditioned on consummation of the primary transaction, we stated in Decision No. 12 that the abandonment requests would be processed in accordance with the overall procedural schedule, rather than the deadlines established in section 10904 and in our regulations governing abandonments. The record is now complete and we will consider the merits of each proposal under the applicable standards. As noted, applicants have filed three abandonment or discontinuance notices of exemption. The notices seek to invoke the 2-year out-of-service class exemption, pursuant to which an abandonment or discontinuance of service or trackage rights is exempt if the carrier certifies that no local traffic has moved over the line for at least 2 years, that any overhead traffic on the line can be rerouted over other lines, and that no formal complaint filed by a user of rail service on the line (or a state or local government entity acting on behalf of such user) regarding cessation of service over the line either is pending with the Board or any U.S. District Court or has been decided in favor of the complainant within the 2-year period. These exemptions will be effective on Day One (unless stayed pending reconsideration). As noted, NW filed a petition for exemption in STB Docket No. AB-290 (Sub-No. 196X) to abandon a 7.5-mile line between Toledo and Maumee, OH. Under 49 U.S.C. 10903-05, a rail line may not be abandoned without prior approval. No shipper opposes the abandonment petition. This exemption will be effective on Day One (unless stayed pending reconsideration). The City of Georgetown, IL (City), requests issuance of a notice of interim trail use (NITU) under the National Trails System Act (Trails Act), with respect to the Paris-Danville abandonment in STB Docket Nos. AB-167 (Sub-No. 1181X) and AB-55 (Sub-No. 551X). The City has submitted a statement of willingness to assume financial responsibility for the rights-of-way and acknowledged that use of the rights-of-way are subject to future reactivation for rail service. CSX and Conrail have indicated their willingness to negotiate trail use agreements. A NITU will be issued in the STB Docket Nos. AB-167 (Sub-No. 1181X) and AB-55 (Sub-No. 551X) proceeding as part of this decision. The parties may negotiate an agreement during the prescribed 180-day period, as discussed further below. If the parties reach a mutually acceptable final agreement, no further Board action is necessary. If no agreement is reached within 180 days, applicants may fully abandon the line. Use of the right-of-way for trail purposes is subject to restoration for railroad purposes. The City also seeks a public use condition with respect to the Paris-Danville abandonment. The St. Joseph County Parks and Recreation Department (Department) seeks a similar condition with respect to NW's notice of exemption in STB Docket No. AB-290 (Sub-No. 194X). They have met the criteria for imposing a public use condition. Accordingly, 180-day public use conditions will be imposed in STB Docket Nos. AB-167 (Sub-No. 1181X) and AB-55 (Sub-No. 551X), and in STB Docket No. AB-290 (Sub-No. 194X). Although the Department also sought a trail use condition, NW has not agreed to negotiate with the Department with regard to trail use. Accordingly, a NITU cannot be imposed in the STB Docket No. AB-290 (Sub-No. 194X) proceeding. In issuing the NITU and imposing the public use conditions, we will follow our usual practice and have the 180-day Trails Act period run from the service date of the decision, while the public use condition will run from the effective date of the decision. The Toledo Metropolitan Area Council of Governments (TMACOG) sought a 180-day public use condition in the STB Docket No. AB-290 (Sub-No. 194X) proceeding. TMACOG subsequently indicated that it reached an agreement with NW where, upon obtaining authority to abandon the Toledo-Maumee line, NW will donate and quitclaim to TMACOG or TMACOG's designee NW's interest in the right-of-way, while retaining salvage rights to track material. Because an agreement has been reached for disposition of the right-of-way, a public use condition will not be imposed in this docket. ENVIRONMENTAL MATTERS The National Environmental Policy Act (NEPA) requires that we take environmental considerations into account in our decisionmaking. We must consider significant potential beneficial and adverse environmental impacts in deciding whether to approve the transaction as proposed, deny the proposal, or grant it with conditions, including environmental conditions. Accordingly, SEA has conducted a detailed review evaluating the potential environmental impacts of this transaction. SEA has prepared an Environmental Impact Statement (EIS) addressing a broad range of environmental issues and has obtained extensive public input. Based on its review, SEA recommended that we impose 65 environmental conditions to reduce or eliminate potential environmental impacts of the transaction. We have thoroughly reviewed the EIS and, as discussed below, we concur in SEA's analysis and recommendations and will impose SEA's recommended conditions with only minor modifications. We will continue appropriate monitoring of these environmental conditions until the end of our overall oversight of the transaction. In the Final EIS, SEA analyzed the effects of NS' proposed Cloggsville alternative routing of up to 11 trains per day away from East Cleveland and the West Shore suburbs of Cleveland, which NS offered as a method to mitigate environmental concerns a month before the Final EIS was issued. SEA also recommended mitigation in the Final EIS to address significant environmental impacts of this proposed routing change. Nevertheless, SEA provided an additional comment period ending June 28, 1998, for those affected by that proposed rerouting. SEA invited interested persons to bring their concerns to our attention by then, or alternatively through an administrative appeal of this decision. In the EIS, SEA considered a broad range of environmental issues potentially affecting a large number of communities on a general (or system-wide), regional, and local level. SEA focused on the potential environmental impacts resulting from changes in activity levels on existing lines and rail facilities. SEA also examined the potential environmental impacts from related construction and abandonment activities. Our general practice has been to mitigate only impacts resulting directly from a proposed transaction, and not to require mitigation for existing conditions and existing railroad operations. We concur in SEA's analysis that, on a system-wide basis, the transaction will bring important environmental benefits resulting from overall improvements and operating efficiencies, without significant adverse environmental impacts. As SEA explained, on a regional basis and a local or site-specific basis, the transaction will result in both benefits and potential significant adverse environmental impacts resulting from shifts in rail activity as the rail carriers take advantage of the reconfigured rail system. For many regions and communities, this shift will reduce rail traffic along certain rail lines and activities at certain rail yards and intermodal facilities and result in environmental benefits. But for others, the shift will increase rail activity, which could cause potential significant adverse effects. These potential impacts include safety impacts related to hazardous materials transport and freight and passenger operations along certain rail corridors. Additionally, as SEA concluded, the transaction will result in community and local impacts related to noise, highway/rail at-grade crossing safety and delay, and emergency response vehicle delay, among others. Finally, as SEA determined, there are potential environmental impacts that, unless mitigated as applicants have agreed to do, would be disproportionately high and adverse for minority and low-income populations in certain cities. During the environmental review process, applicants consulted with certain affected communities and negotiated a number of mutually acceptable agreements with local governments and organizations, addressing specific local environmental concerns. SEA has reviewed these agreements and recommends that we impose them as conditions, and we will do so. Also, applicants proposed voluntary mitigation options addressing environmental concerns of affected communities, which SEA considered in developing final mitigation recommendations in the Final EIS. We encourage the railroads and communities to negotiate private solutions to environmental issues. Generally, these agreements are more effective, and in some cases, more far-reaching, than environmental mitigation options we could impose unilaterally. Therefore, even if agreements are reached after SEA has made, and we have adopted, final environmental mitigation recommendations, agreements will be deemed to be an acceptable alternative to the specific local mitigation for a particular community that we have imposed. Thus, we have modified SEA's recommended environmental conditions to eliminate the site-specific and other local mitigation for communities where applicants have reached agreements following issuance of the Final EIS. Moreover, to give effect to privately negotiated solutions whenever possible, we clarify that negotiated agreements will remain available as an alternative to the local and site-specific mitigation imposed here (for example, specific grade crossing upgrade mitigation, real time monitoring for emergency response delay, or noise mitigation). For the communities that could not reach agreement, SEA has recommended reasonable, feasible environmental mitigation conditions addressing potential significant adverse impacts of the acquisition-related increase in rail traffic at multiple levels (general, regional, and local). Most of these address railroad operating safety concerns, such as hazardous materials transport, and the interaction between rail passenger and freight operations. Additionally, for the first time, we are imposing conditions relating to safety integration issues resulting from combining these railroads. Our conditions also address community impacts, such as noise and highway/rail at-grade crossing safety, for those communities that would be most affected by the transaction. We have also addressed potential disproportionate impacts on minority and low-income populations. With the recommended mitigation, we believe the transaction will not have, and cannot be viewed as having, a disproportionately high and adverse impact on minority and low-income areas. Many of our conditions extend to a number of states, while others are specific to individual communities and local needs. They would affect numerous communities in 19 states and the District of Columbia. With the exception of the Cloggsville alternative routing of train traffic in the Greater Cleveland area that NS itself developed and submitted to us, none of our conditions requires any change in applicants' operating plans. As previously noted, more than half of our environmental conditions address safety concerns. For example, for certain rail line segments that would face a significant increase in movement of hazardous materials, applicants will be required to implement various measures such as installing train defect detectors, developing and distributing local hazardous material emergency response plans, conducting required train inspections, and conducting simulated emergency response drills with local emergency response organizations. To address the increased safety risks at hundreds of highway/rail at-grade crossings resulting from transaction-related train increases, applicants will be required to install notification signs warning motorists about an imminent increase in the number of trains over that crossing, and to install upgraded warning devices, such as flashing lights or gates at particular crossings. To mitigate the potential safety risk from increased freight operations on appropriate rail line segments, applicants will be required to inspect the tracks on a usage basis rather than annually. To provide for safer passenger rail operations on certain rail line segments, CSX must consult with three passenger service agencies (Amtrak, VRE, and Maryland's commuter rail service (MARC)) to develop operational strategies and apply technology improvements to ensure that the safety of passenger train operations is maintained. Our conditions also address other local concerns, including noise, emergency vehicle response delay, cultural resources, and natural resources conditions for those communities that would be most affected by the transaction and could not negotiate an agreement. To address these concerns, SEA recommended, and we have imposed, measures such as building sound insulation or noise barriers, real-time train location monitors, and requiring best management practices. For a limited number of locations with identified significant adverse environmental impacts, mitigation conditions are not reasonable or feasible. Therefore, even with all the recommended mitigation, there may be significant adverse environmental impacts in certain communities. But these effects are by no means so severe that they warrant denying the application, which has many beneficial transportation and environmental impacts, and furthers the public interest. In sum, the Draft EIS and Final EIS plainly show that we have taken the requisite hard look at environmental issues in this case. With the exception of minor modifications, we concur in SEA's detailed analysis and recommendations and believe that our final environmental mitigation conditions are reasonable and feasible measures to reduce or eliminate potential adverse environmental impacts of the transaction. They provide appropriate safeguards to ensure that applicants maintain safe operations and protect the environment and the quality of life in affected communities to the extent practicable following consolidation of the three rail systems into two systems. OVERSIGHT CONDITION. We are establishing oversight for 5 years so that we may assess the progress of implementation of the CSX/NS/Conrail transaction and the workings of the various conditions we have imposed, and we are retaining jurisdiction to impose additional conditions if, and to the extent, we determine that additional conditions are necessary to address unforseen harms caused by the transaction Although the NITL settlement agreement proposes that we require oversight of the transaction for a 3-year period, we believe that a 5-year oversight period would be more appropriate, given the operational complexity and broad scope of this transaction. Our oversight process will be broadly based. As part of that process, we will monitor situations involving the relationship of shortline railroads to their Class I connections and to other Class I railroads. This will include oversight of the conditions we have imposed to ensure that quality interline service and connections are in place to maintain the viability of certain shortline railroads (such as AA and W&LE); to ensure that the transaction does not result in shortline railroads (such as RBMN) suffering from the expansion of any existing blocking provisions; and to ensure that the single-line to joint-line and reciprocal switching protections of the NITL agreement are appropriately extended to shortline railroads. Our oversight will also include assessing the effect of the acquisition premium on the jurisdictional threshold applicable to rate reasonableness cases and to the Board's revenue adequacy determinations; transaction-related impacts on Amtrak passenger operations and regional rail passenger operations; and transaction-related impacts within the Chicago Switching District, including the effect of IHB's management change on its role as a neutral switching carrier. If problems do arise after approval and consummation of the transaction, involving these and other matters, our oversight condition should provide a fully effective mechanism for quickly identifying and resolving them. Our oversight will also encompass ensuring applicants' adherence to the various representations that they have made on the record during the course of this proceeding. This includes ensuring that applicants adhere to their representation that, although NS will have operational control of Conrail's MGA lines, CSX will have equal access to all current and future facilities located on or accessed from such lines. In addition to our operational monitoring, we will be closely monitoring the competitive activities in this important joint access area. Our oversight will also enable us to ensure that CSX adheres to its representation regarding investment in new connections and upgraded facilities in the Buffalo area, to monitor the studies of the feasibility of upgrading cross harbor float and tunnel operations for the purpose of alleviating motor vehicle traffic congestion and air pollution in New York City, and to monitor the routings for truck traffic at applicants' intermodal terminals in Northern New Jersey and in the Commonwealth of Massachusetts, which could affect trucks traffic moving over the George Washington Bridge. Finally, we note that our 5-year oversight is separate from our operational monitoring, which is discussed in detail in its own section of this decision. In that section we have explained that, as a result of our ongoing experience or changed circumstances, particular aspects of the operational monitoring may be changed or eliminated. Operational monitoring could be phased out upon successful implementation of the transaction, which should take place in advance of completion of the 5-year oversight period. OPERATIONAL MONITORING Because we believe that the scope and complexity of the operational aspects of this transaction are unprecedented, we will require transitional operational monitoring from the start. Certain aspects of the operational monitoring will begin with the effective date of the decision, August 23, 1998, and certain aspects will begin with Day One. The purpose of the monitoring is to provide us with information that will allow a timely evaluation of, and response to, any issues that arise during implementation of various operational aspects of the transaction. While this monitoring will require periodic status and progress reports from applicants, we do not believe that it will be unduly burdensome. As noted, this monitoring will include activities ongoing prior to Day One. For these areas -- Labor Implementing Agreements, Construction And Other Capital Projects, Information Technology, and Customer Service -- monitoring will begin on August 23, 1998. For other operational categories -- Division of Power and Rolling Stock, Car Management, Crew Management and Dispatching, SAAs, the Monongahela Coal Area, Cleveland Operations, Chicago Gateway Operations, and Yard and Terminal Operations -- applicants must begin reporting on Day One. Finally, we will require reporting on certain of applicants' own initiatives, such as the Conrail Transaction Council (Transaction Council) and Labor Task Forces. This reporting will provide us timely information for implementing measures that may directly affect operations. This informational monitoring is separate from our 5-year oversight of the transaction. It may turn out that, as a result of our experience, or of changed circumstances, particular aspects of this monitoring will be changed or eliminated. Further, operational monitoring could be phased out upon successful implementation of the transaction, which should take place in advance of completion of the 5-year oversight period. Our specific reporting requirements are set forth below: 1. Labor Implementing Agreements. Beginning August 23, applicants must provide monthly reports about the status of each of their labor implementing agreements, and affected area (geographical or technical), until all of the agreements are complete. 2. Construction And Other Capital Projects. Beginning August 23, CSX and NS must report monthly on their respective projects, including any planned for the SAAs, whether or not specifically approved by us. Applicants also must report on their progress in implementing other planned infrastructure investments, such as in Cleveland, the Chicago Terminal area, and the Monongahela Coal area. 3. Information Technology. To ensure timely integration of applicants' information systems, and the training of personnel using the new computer systems, applicants must report monthly beginning August 23, as to the progress of systems integration and personnel training. These reports must identify the principal systems, affected operating areas, implementation schedules, and training schedules and completion, and must note any delays, either in planned implementation or training. 4. Customer Service. To achieve and maintain customer confidence in the transaction, and to ensure the integration of Conrail lines into the Centralized Customer Service Centers of CSX and NS, applicants must report monthly beginning August 23, on that transition, along with staffing and training of personnel. Reporting must also include information as to efforts to familiarize customers with any new processes that they may encounter in using the systems. 5. Power And Rolling Stock. As soon as possible after the effective date of the decision, but no later than Day One, applicants must report on the apportionment of the Conrail locomotive and freight car fleets. This report must categorize the freight and locomotive equipment by type, and must indicate the number of each type assumed by each applicant. 6. Car Management, Crew Management And Dispatching. Critical to an efficient and safe operational transition are the areas of car management, crew management and train dispatching. These areas include consolidation of the car management functions into the respective operating systems, crew training to familiarize employees with new operating territories and with different locomotives and other equipment, and employee time keeping. Also critical is complete familiarization with any new train and traffic control systems. Applicants will be required to certify, to the extent transition has occurred as of Day One, that all affected employees have been fully trained and qualified to operate over the territories they will be assigned (either Conrail, CSX, or NS); that assigned employees are qualified to access and operate the information management systems related to crew management, time keeping, and train dispatching; and that train, traffic control and car management systems are in place, fully operational, and fully staffed. 7. Shared Assets Areas. The proposed operating arrangements for the SAAs, North Jersey, South Jersey/Philadelphia, and Detroit, present many unique situations requiring close scrutiny. Applicants will be required, beginning Day One, to detail the operations for all three SAAs as follows: Provide, each Monday, daily status reports for each of the three SAAs for the previous 5-day period (Monday - Friday). For each respective SAA, and each yard in each SAA where appropriate, reports are to include (1) fluid yard capacity; (2) cars on hand loaded and empty; (3) cars handled per day; (4) average daily dwell time for cars handled; and (5)daily train origination information, as measured against current schedules for trains originating in the respective SAA. Significant areas of delay must be discussed in the transmittal of the weekly report, and the reason for the delay or late origination must be noted, e.g., (C) held for crews; (P) held for power. 8. Monongahela Coal Area. While this area does not contain the operating complexity of an SAA, it is nonetheless an important area subject to special arrangements in that NS will operate and maintain the area subject to a joint use agreement with CSX. Therefore, we will ask the Transaction Council to report to us any operating or service problems brought to the Council's attention. In addition, CSX has indicated that it plans to increase the capacity of Newell Yard, within the Monongahela Coal Area, to accommodate new coal traffic that it will move after the transaction. Therefore, we will require CSX to include Newell Yard with its reporting of Construction And Other Capital Projects. 9. Cleveland Operations. The Cleveland area presents a mix of yards and belt and main line trackage in industrialized and heavily populated areas with numerous at-grade crossings. CSX and NS have modified their original operating plans to address concerns regarding operating density in the greater Cleveland area, and we will monitor the Cleveland area to ensure the success of these commitments. Construction projects that will be monitored include the Cloggsville Connection, the Rockport Yard realignment, and the construction of connections and crossovers in the Coen Road area in Vermilion, OH, which are critical to the NS Cleveland operation. Progress reports for these projects must be included in the monthly Construction And Other Capital Projects reporting. 10. Chicago Gateway Operations. Beginning Day One, applicants will be required to report weekly on the number and on time delivery of run through trains delivered to western carriers via the Chicago gateway, including Streator, IL, by major commodity group. These reports shall indicate whether the connections were on time within two hours, based on the current schedules. Significant areas of delay must be discussed in the transmittal of the weekly report. 11. Yards And Terminals. Beginning Day One, applicants will report on the activity of their respective major yard facilities. This shall include a daily status report for each yard, for 1 day, Wednesday, to be submitted with other required reporting each Monday. These reports must include those informational items requested for the SAAs, with one exception: the terminal on-time performance for origination times must be reflected instead by the information contained in the reporting element covering on time performance. Because Manifest trains typically require more yard or terminal handling than other types of through-movement trains, there is a greater likelihood for Manifest trains to be adversely affected by yard congestion and delays. Therefore, applicants, in their major corridor on time performance report, must pay close attention to the movement of these trains through the reporting yards and terminals and the reasons for any delays. In addition, applicants will require the Indiana Harbor Belt Railroad Company (IHB) to file similar information on the operations of its yards in the Chicago area. 12. On Time Performance. Beginning Day One, applicants will select and report on the performance of their trains in twelve major corridors (6 CSX and 6 NS). The trains reported on must be identified by the following commodity groups: (I) Intermodal, (M) Manifest, (U) Unit, and (A) Automobile (parts and finished) if identified separately from Manifest. Significant areas of delay must be discussed in the transmittal of the weekly report, and the reason for the delays must be noted, e.g., (C) held for crews; (P) held for power, (D) delayed at connection. 13. The Conrail Transaction Council. Beginning August 23, the Transaction Council will be asked to report monthly on its meetings, and on specific elements of the transaction that were the subject of discussion or that are of concern. This is particularly the case for the areas of information technology, shared assets, and customer service. 14. Labor Task Forces. We will require monthly reporting, beginning August 23, on the establishment of labor task forces by applicants, along with an explanation of their objectives and initiatives. FINDING In STB Finance Docket No. 33388, we find: (a) that the acquisition and exercise of control of CRR and CRC by CSX and NS, and the resulting joint and common control of CRR, CRC, NYC, and PRR, through the proposed transaction, as conditioned herein, is within the scope of 49U.S.C. 11323 and is consistent with the public interest; (b)that the proposed transaction will not adversely affect the adequacy of transportation to the public; (c) that no other railroad in the area involved in the proposed transaction has requested inclusion in the transaction, and that failure to include other railroads will not adversely affect the public interest; (d) that the proposed transaction will not result in any guarantee or assumption of payment of dividends or any increase in fixed charges except such as are consistent with the public interest; (e) that the interests of employees affected by the proposed transaction do not make such transaction inconsistent with the public interest, and any adverse effect will be adequately addressed by the conditions imposed herein; (f) that the proposed transaction, as conditioned herein, will not significantly reduce competition in any region or in the national rail system; and (g) that the terms of the proposed transaction, including the terms of the acquisition of CRR stock, are just, fair, and reasonable to the stockholders of CRR, CSXC, and NSC. We further find that the conditions imposed in STB Finance Docket No. 33388, including but not limited to the various competitive conditions and the oversight and operational monitoring conditions, are consistent with the public interest. We further find that any rail employees of applicants or their rail carrier affiliates affected by the transaction authorized in STB Finance Docket No.33388, and any rail employees of the carriers involved in the trackage rights arrangements imposed as conditions in STB Finance Docket No. 33388, should be protected by the conditions set forth in the labor protective conditions set forth in New York Dock, Mendocino Coast, Norfolk and Western, and Oregon Short Line, as appropriate, unless different conditions are provided for in a labor agreement entered into prior to consummation of the transaction authorized in STB Finance Docket No. 33388, in which case protection shall be at the negotiated level, subject to our review to assure fair and equitable treatment of affected employees. The foregoing findings specifically extend to the following elements of the transaction authorized in STB Finance Docket No.33388: (a) the joint acquisition of control of CRR and CRC by CSX and NS; (b)the assignment of certain assets of CRC (including, without limitation, trackage and other rights) to NYC to be operated as part of CSXT's rail system and the assignment of certain assets of CRC (including, without limitation, trackage and other rights) to PRR to be operated as part of NSR's rail system (collectively, the NYC/PRR assignments), with NYC and PRR having, except to the extent limited in this decision, such right, title, interest in and other use of such assets as CRC itself had; (c) the entry by CSXT into the CSXT Operating Agreement and the operation by CSXT of the assets held by NYC; the entry by NSR into the NSR Operating Agreement and the operation by NSR of the assets held by PRR; and the entry by CSXT, NSR, and CRC into the Shared Assets Areas Operating Agreements and the operation by CSXT, NSR, and CRC thereunder of assets held by CRC, with CSXT and NSR respectively acquiring the right to operate and use the Allocated Assets and the Shared Assets, subject to the terms of the Allocated Assets Operating Agreements, the Shared Assets Areas Operating Agreements, and other Ancillary Agreements, as fully as CRC itself had possessed the right to use them, except to the extent limited in this decision; (d) the continued control by CSX, NS, and CRR of NYC and PRR, subsequent to the transfer of CRC assets to NYC and PRR, and the common control by CSXC, CSXT, NSC, NSR, CRR, and CRC of NYC and PRR, and the carriers each of them controls; (e) the acquisition by CSXT and NSR of the trackage rights listed in items 1.B and 1.A, respectively, of Schedule 4 of the Transaction Agreement; the acquisition by CSXT and NSR of the rights with respect to the NEC listed in Item 1.C of that schedule; and the acquisition by CSXT of the rights provided for by the Monongahela Usage Agreement; (f) the acquisition by CRC from CSXT and NSR, and by CSXT and NSR from each other, of certain incidental trackage rights over certain line segments, as identified in Section 3(c) of each of the three Shared Assets Areas Operating Agreements; and (g) the transfer of CRC's Streator Line to NS. We further find that, upon consummation of the authorized control and the NYC/PRR assignments, it is consistent with the public interest and necessary for applicants to carry out the transaction authorized in STB Finance Docket No. 33388 that, except to the extent limited in this decision, NYC and PRR shall have all of such right, title, interest in and other use of such assets as CRC itself had, notwithstanding any provision in any law, agreement, order, document, or otherwise, purporting to limit or prohibit CRC's unilateral transfer or assignment of such assets to another person or persons, or purporting to affect those rights, titles, interests, and uses in the case of a change in control. We further find that, upon consummation of the authorized control and the CSXT Operating Agreement, the NSR Operating Agreement, and the Shared Assets Areas Operating Agreements, it is consistent with the public interest and necessary for applicants to carry out the transaction authorized in STB Finance Docket No. 33388 that, except to the extent limited in this decision, CSXT and NSR shall have the right to operate and use the Allocated Assets allocated to each of them and the Shared Assets, including those presently operated by CRC under trackage rights or leases subject to the terms of the Allocated Assets Operating Agreements, the Shared Assets Areas Operating Agreements, and other Ancillary Agreements as fully as CRC itself had possessed the right to use them, notwithstanding any provision in any law, agreement, order, document, or otherwise, purporting to limit or prohibit CRC's unilateral assignment of its operating rights to another person or persons, or purporting to affect those rights in the case of a change in control. We further find, with respect to the Allocated Assets and the assets in Shared Assets Areas consisting of assets other than routes (including, without limitation, the CRC Existing Transportation Contracts), that it is consistent with the public interest and necessary for applicants to carry out the transaction authorized in STB Finance Docket No. 33388 that, except to the extent limited in this decision, CSXT and NSR shall have the right to use, operate, perform, and enjoy such assets to the same extent as CRC itself could, notwithstanding any provision in any law, agreement, order, document, or otherwise, purporting to limit or prohibit CRC's assignment of its rights to use, operate, perform, and enjoy such assets to another person or persons, or purporting to affect those rights in the case of a change in control. We further find that the NYC/PRR assignments are not within the scope of 49 U.S.C. 10901. We further find that, after the Closing Date, CRC will remain a rail carrier as defined at 49 U.S.C. 10102(5). We further find that, subject to the modifications made in this decision, the terms of the NITL agreement are consistent with the public interest. We further find that, to the extent that the ownership interests and control by CSX and NS over CRR, CRC, NYC, or PRR, or any other matter provided for in the Transaction Agreement or the Ancillary Agreements referred to therein may be deemed to be a pooling or division by CSX and NS of traffic or services or any part of earnings by CSX, NS, or Conrail within the scope of 49U.S.C. 11322, such pooling or division will be in the interest of better service to the public or of economy of operation, or both, and will not unreasonably restrain competition. We further find that the discontinuance of the temporary trackage rights to be granted to NSR on the CRC line between Bound Brook, NJ, and Woodbourne, PA (to be assigned to NYC and operated by CSXT), at the time and on the terms provided for in the Transaction Agreement and the Ancillary Agreements referred to therein, is required or permitted by the present or future public convenience and necessity and will not have a serious, adverse impact on rural and community development. In STB Finance Docket No. 33388 (Sub-No.1), we find that the proposed operation of a connection track is exempt from prior review and approval pursuant to 49 CFR 1150.36. In STB Finance Docket No. 33388 (Sub-Nos. 2, 3, 4, 5, 6, and 7), we find that the proposed operation of connection tracks are exempt from prior review and approval pursuant to 49 U.S.C. 10502 because such review is not necessary to carry out the transportation policy of 49 U.S.C. 10101 and regulation is not needed to protect shippers from the abuse of market power. In STB Finance Docket No. 33388 (Sub-Nos. 8, 9, 11, 13, 15, 16, 17, 19, and 20), we find that the proposed construction and operation of connection tracks are exempt from prior review and approval pursuant to 49 CFR 1150.36. In STB Finance Docket No. 33388 (Sub-Nos. 10, 12, 14, 18, 21, and 22), we find that the proposed construction and operation of connection tracks are exempt from prior review and approval pursuant to 49 U.S.C. 10502 because such review is not necessary to carry out the transportation policy of 49 U.S.C. 10101 and regulation is not needed to protect shippers from the abuse of market power. In STB Finance Docket No. 33388 (Sub-No. 23), we find that the relocation of NW's rail line at Erie, PA, is exempt from prior review and approval pursuant to 49 CFR 1180.2(d)(5). We further find that any rail employees of applicants or their rail carrier affiliates affected by the transaction authorized in STB Finance Docket No. 33388 (Sub-No. 23) should be protected by the conditions set forth in Oregon Short Line, unless different conditions are provided for in a labor agreement entered into prior to consummation of that transaction, in which case protection shall be at the negotiated level, subject to our review to assure fair and equitable treatment of affected employees. In STB Finance Docket No. 33388 (Sub-No. 24), we find that the transfer of NW's rail line between Fort Wayne, IN, and Tolleston (Gary), IN, to CRC is exempt from prior review and approval pursuant to 49 U.S.C. 10502 because such review is not necessary to carry out the transportation policy of 49 U.S.C. 10101 and regulation is not needed to protect shippers from the abuse of market power. We further find that any rail employees of applicants or their rail carrier affiliates affected by the transaction authorized in STB Finance Docket No. 33388 (Sub-No. 24) should be protected by the conditions set forth in New York Dock, unless different conditions are provided for in a labor agreement entered into prior to consummation of that transaction, in which case protection shall be at the negotiated level, subject to our review to assure fair and equitable treatment of affected employees. In STB Finance Docket No. 33388 (Sub-Nos. 25, 27, 28, 29, 30, 32, 33, and 34), we find that the acquisitions of trackage rights by applicants are exempt from prior review and approval pursuant to 49 CFR 1180.2(d)(7). We further find that any rail employees of applicants or their rail carrier affiliates affected by the transactions authorized in STB Finance Docket No. 33388 (Sub-Nos. 25, 27, 28, 29, 30, 32, 33, and 34) should be protected by the conditions set forth in Norfolk and Western, unless, with respect to any such transaction, different conditions are provided for in a labor agreement entered into prior to consummation of such transaction, in which case protection shall be at the negotiated level, subject to our review to assure fair and equitable treatment of affected employees. In STB Finance Docket No. 33388 (Sub-No. 26), we find that the acquisition and exercise of control of LD&RT by CSXC and CSXT, and the common control of LD&RT, CSXT, and other rail carriers controlled by CSXT and/or CSXC, is within the scope of 49 U.S.C. 11323 and will not substantially lessen competition, create a monopoly, or restrain trade in freight surface transportation in any region of the United States. We further find that any rail employees of applicants or their rail carrier affiliates affected by the transaction authorized in STB Finance Docket No. 33388 (Sub-No. 26) should be protected by the conditions set forth in New York Dock;, unless different conditions are provided for in a labor agreement entered into prior to consummation of that transaction, in which case protection shall be at the negotiated level, subject to our review to assure fair and equitable treatment of affected employees. In STB Finance Docket No. 33388 (Sub-No. 31), we find that the acquisition, by CSX, of a 50% interest in APR will not result in an acquisition of control within the scope of 49 U.S.C. 11323. In STB Finance Docket No. 33388 (Sub-No. 36), we find that the responsive application filed by I & M Rail Link, LLC, is not consistent with the public interest. In STB Finance Docket No. 33388 (Sub-No. 39), we find that the responsive application filed by Livonia, Avon & Lakeville Railroad Corporation is consistent with the public interest to enable LAL to cross Conrail's Genesee Junction Yard to connect directly with the Rochester & Southern Railroad, permitting LAL to reach NS. In all other respects, we find that the responsive application filed by LAL is not consistent with the public interest. In STB Finance Docket No. 33388 (Sub-No. 59), we find that the responsive application filed by Wisconsin Central Ltd. is not consistent with the public interest. In STB Finance Docket No. 33388 (Sub-No. 62), we find that the responsive application filed by Illinois Central Railroad Company is not consistent with the public interest. In STB Finance Docket No. 33388 (Sub-No. 63), we find that the responsive application filed by R.J. Corman Railroad Company/Western Ohio Line is not consistent with the public interest. In STB Finance Docket No. 33388 (Sub-No. 69), we find that the responsive application filed jointly by the State of New York, acting by and through its Department of Transportation, and the New York City Economic Development Corporation, acting on behalf of the City of New York, is consistent with the public interest to the extent it seeks to require CSX to cooperate in developing intramodal rail service in the area east of the Hudson River, as discussed in this decision. In all other respects, we find that the responsive application filed by NYDOT and NYCEDC is not consistent with the public interest. In STB Finance Docket No. 33388 (Sub-No. 75), we find that the responsive application filed by New England Central Railroad, Inc., is consistent with the public interest to the extent it seeks to require applicants to grant it trackage rights between Palmer and Springfield, MA. In all other respects, we find that the responsive application filed by NECR is not consistent with the public interest. In STB Finance Docket No. 33388 (Sub-No. 76), we find that the responsive application filed by Indiana Southern Railroad, Inc., is not consistent with the public interest. In STB Finance Docket No. 33388 (Sub-No. 78), we find that the responsive application filed by Ann Arbor Acquisition Corporation d/b/a Ann Arbor Railroad is not consistent with the public interest. In STB Finance Docket No. 33388 (Sub-No. 80), we find that the responsive application filed by Wheeling & Lake Erie Railway Company is consistent with the public interest to the extent it seeks: overhead haulage or trackage rights access to Toledo, OH, with connections to the Ann Arbor Railroad and other railroads at Toledo; an extension of W&LE's lease at, and trackage rights access to, NS' Huron Dock on Lake Erie; and overhead haulage or trackage rights to Lima, OH, with a connection to the Indiana & Ohio Railway Company at Lima. We further find that the responsive application filed by W&LE is consistent with the public interest to the extent it seeks to require applicants to negotiate with W&LE concerning mutually beneficial arrangements, including allowing W&LE to provide service to aggregates shippers or to serve shippers along CSX's line between Benwood and Brooklyn Junction, WV. In all other respects, we find that the responsive application filed by W&LE is not consistent with the public interest. In STB Docket Nos. AB-167 (Sub-No. 1181X) and AB-55 (Sub-No. 551X), we find that the abandonment by CRC and CSXT, respectively, of an approximately 29-mile portion of the Danville Secondary Track between MP 93.00 at Paris, IL, and MP 122.00 at Danville, IL, is exempt from prior review and approval pursuant to 49 CFR 1152.50. In STB Docket No. AB-290 (Sub-No. 194X), we find that the abandonment by NW of an approximately 21.5-mile line between MP SK-2.5 near South Bend, IN, and MP SK-24.0 near Dillon Junction, IN, is exempt from prior review and approval pursuant to 49 CFR 1152.50. In STB Docket No. AB-290 (Sub-No. 196X), we find that the abandonment by NW of an approximately 7.5-mile line between MP TM-5.0 in Toledo, OH, and MP TM-12.5 near Maumee, OH, is exempt from prior review and approval pursuant to 49 U.S.C. 10502 because such review is not necessary to carry out the transportation policy of 49 U.S.C. 10101 and regulation is not needed to protect shippers from the abuse of market power. In STB Docket No. AB-290 (Sub-No. 197X), we find that the discontinuance by NW of operations over the Toledo Pivot Bridge extending between MP CS-2.8 and MP CS-3.0 near Toledo, OH, a distance of approximately 0.2 miles, is exempt from prior review and approval pursuant to 49 CFR 1152.50. In STB Docket Nos. AB-167 (Sub-No. 1181X), AB-55 (Sub-No. 551X), and AB-290 (Sub-Nos. 194X, 196X, and 197X), we further find that any employees affected by the abandonments and/or discontinuance authorized therein should be protected by the conditions set forth in Oregon Short Line, unless different conditions are provided for in a labor agreement entered into prior to consummation of the relevant abandonment or discontinuance, in which case protection shall be at the negotiated level, subject to our review to assure fair and equitable treatment of affected employees. We further find, on the basis of the final Environmental Impact Statement issued in this proceeding, that this action, as conditioned by environmental mitigation conditions, will not result in any significant adverse environmental impacts on a systemwide basis and that its approval will result in environmental benefits, including reduced air pollutant emissions and the conservation of energy resources, on a systemwide basis. We further find that changes in traffic levels resulting from this action will cause beneficial environmental effects on a regional and local basis, and will cause adverse environmental effects in regional and local areas, depending on whether traffic levels are decreasing or increasing. We find that, with the environmental mitigation conditions, the adverse regional and local environmental effects do not outweigh the beneficial transportation and systemwide, regional, and local environmental effects of the transactions authorized in the STB Finance Docket No. 33388 proceeding and the embraced proceedings. We further find that, to the extent that there are significant adverse local environmental impacts resulting from the transactions authorized in the STB Finance Docket No. 33388 proceeding and the embraced proceedings, mitigation of these impacts is warranted only where the costs and burdens of that mitigation would not impair the implementation of these transactions or significantly reduce the operational efficiencies and other public interest benefits justifying our approval of these transactions. We further find that the proposed construction projects and abandonments, as conditioned by the environmental mitigation conditions, will not significantly affect the quality of the human environment or the conservation of energy resources. We further find that all other conditions requested by any party to the STB Finance Docket No. 33388 proceeding or any of the embraced proceedings but not specifically approved in this decision are not in the public interest and should not be imposed. It is ordered: 1. In STB Finance Docket No. 33388, the application filed by CSXC, CSXT, NSC, NSR, CRR, and CRC is approved, subject to the imposition of the conditions discussed in this decision. The Board expressly reserves jurisdiction over the STB Finance Docket No. 33388 proceeding and all embraced proceedings in order to implement the 5-year oversight condition imposed in this decision and, if necessary, to impose additional conditions and/or to take other action if, and to the extent, we determine it is necessary to impose additional conditions and/or to take other action to address harms caused by the CSX/NS/CR transaction. 2. If CSXC, CSXT, NSC, and NSR assume control over CRR and CRC, they shall confirm in writing to the Board, within 15 days after such assumption of control, the date of such assumption. Applicants shall submit to the Board three copies of the journal entries, if any, recording such assumption of control. 3. Applicants shall give 14 days' prior notice to the Board and to the public of the date that will be designated as Day One. 4. If applicants effect the Division, they shall confirm in writing to the Board, within 15 days after Day One, the date on which the Division was effected (i.e., the date that was Day One). Applicants shall submit to the Board three copies of the journal entries, if any, recording the Division. 5. All notices to the Board as a result of any authorization shall refer to this decision by service date and docket number. 6. No change or modification shall be made in the terms and conditions approved in the authorized application without the prior approval of the Board. 7. Except as otherwise provided in this decision, the approval granted herein expressly includes, without limitation, the following elements of the transaction as provided for in the application and in the Transaction Agreement and the Ancillary Agreements referred to therein: (a) the joint acquisition of control of CRR and CRC by CSX and NS; (b) the NYC/PRR assignments; (c) the entry by CSXT into the CSXT Operating Agreement and the operation by CSXT of the assets held by NYC; (d) the entry by NSR into the NSR Operating Agreement and the operation by NSR of the assets held by PRR; (e) the entry by CSXT, NSR, and CRC into the Shared Assets Areas Operating Agreements and the operation by CSXT, NSR, and CRC thereunder of assets held by CRC; (f) the continued control by CSX, NS, and CRR of NYC and PRR, subsequent to the transfer of CRC assets to NYC and PRR, and the common control by CSXC, CSXT, NSC, NSR, CRR, and CRC of NYC and PRR, and the carriers each of them controls; (g) the acquisition by CSXT and NSR of the trackage rights listed in Items 1.B and 1.A, respectively, of Schedule 4 of the Transaction Agreement; (h) the acquisition by CSXT and NSR of the rights with respect to the NEC listed in Item 1.C of that Schedule; (i) the acquisition by CSXT of the rights provided for by the Monongahela Usage Agreement; (j) the acquisition by CRC from CSXT and NSR, and by CSXT and NSR from each other, of certain incidental trackage rights over certain line segments, as identified in Section 3(c) of each of the three Shared Assets Areas Operating Agreements; and (k) the transfer of CRC's Streator Line to NS. 8. Except as otherwise provided in this decision, NYC and PRR shall have, upon consummation of the authorized control and the NYC/PRR assignments, all of such right, title, interest in and other use of such assets as CRC itself had, notwithstanding any provision in any law, agreement, order, document, or otherwise, purporting to limit or prohibit CRC's unilateral transfer or assignment of such assets to another person or persons, or purporting to affect those rights, titles, interests, and uses in the case of a change of control. 9. Except as otherwise provided in this decision, CSXT and NSR may conduct, pursuant to 49 U.S.C. 11321, operations over the routes of Conrail as provided for in the application, including those presently operated by CRC under trackage rights or leases (including but not limited to those listed in Appendix L to the application), as fully and to the same extent as CRC itself could, notwithstanding any provision in any law, agreement, order, document, or otherwise, purporting to limit or prohibit CRC's unilateral assignment of its operating rights to another person or persons, or purporting to affect those rights in the case of a change in control. 10. Except as otherwise provided in this decision, CSXT and NSR may use, operate, perform, and enjoy the Allocated Assets and the assets in Shared Assets Areas consisting of assets other than routes (including, without limitation, the Existing Transportation Contracts), as provided for in the application and pursuant to 49 U.S.C. 11321, to the same extent as CRC itself could, notwithstanding any provision in any law, agreement, order, document, or otherwise, purporting to limit or prohibit CRC's assignment of its rights to use, operate, perform, and enjoy such assets to another person or persons, or purporting to affect those rights in the case of a change in control. As respects any CRC Existing Transportation Contract (i.e., any CRC transportation contract in effect as of Day One) that contains an antiassignment or other similar clause: at the end of the 180-day period beginning on Day One, a shipper with such a contract may elect either (a) to continue the contract until the expiration thereof under the same terms with the same carrier that has provided service during the 180-day period, or (b) to exercise whatever termination rights exist under the contract, provided the shipper gives 30 days' written notice to the serving carrier. 11. To the extent that the ownership interests and control by CSX and NS over CRR, CRC, NYC, or PRR, or any other matter provided for in the Transaction Agreement or in the Ancillary Agreements referred to therein, may be deemed to be a pooling or division by CSX and NS of traffic or services or any part of earnings by CSX, NS, or Conrail within the scope of 49 U.S.C. 11322, such pooling or division is approved pursuant to 49 U.S.C. 11321 and 11322. 12. Discontinuance of the temporary trackage rights to be granted to NSR on the CRC line between Bound Brook, NJ, and Woodbourne, PA (to be assigned to NYC and operated by CSXT), at the time and on the terms provided for in the Transaction Agreement, is approved. 13. The terms of the acquisition of CRR stock by CSXC, NSC, Tender Sub, and Merger Sub are fair and reasonable to the stockholders of CRR, CSXC, and NSC. 14. The NYC/PRR assignments are not within the scope of 49 U.S.C. 10901 . 15. CRC will continue to be, after the Closing Date, a rail carrier as defined at 49 U.S.C. 10102(5). 16. Applicants must comply with all of the conditions imposed in this decision, whether or not such conditions are specifically referenced in these ordering paragraphs. 17. Applicants must comply with the environmental mitigation conditions set forth in Appendix Q. 18. Applicants must comply with the operational monitoring condition imposed in this decision, and, in connection therewith, must file periodic status reports and progress reports, as indicated in this decision. 19. Applicants must adhere to all of the representations they made during the course of this proceeding, whether or not such representations are specifically referenced in this decision. 20. Applicants must adhere to all of the terms of the NITL agreement, subject to the modifications made in this decision. 21. Applicants must adhere to the terms of the settlement agreements that were entered into with Amtrak, ESPA, STWRB, the City of Indianapolis, and UTU. 22. Applicants must monitor origins, destinations, and routings for the truck traffic at their intermodal terminals in Northern New Jersey and in the Commonwealth of Massachusetts in a manner that will allow us to determine whether the CSX/NS/CR transaction has led to substantially increased truck traffic over the George Washington Bridge. Applicants should report their results on a quarterly basis. 23. Applicants: must allow IP&L to choose between having its Stout plant served by NS directly or via switching by INRD; must allow for the creation of an NS/ISRR interchange at MP 6.0 on ISRR's Petersburg Subdivision for traffic moving to/from either the Stout plant or the Perry K plant; and must provide conditional rights for either NS or ISRR to serve any build-out to the Indianapolis Belt Line. 24. Applicants must consult with ASHTA concerning the routing of its hazardous materials shipments. 25. Applicants and the Port of Wilmington must enter into discussions respecting any problems concerning switching services and charges, and must advise us, no later than September 21, 1998, of the status of these discussions. 26. Applicants must adhere to their representation that, although NS will have operational control of Conrail's MGA lines, CSX will have equal access to all current and future facilities located on or accessed from such lines. 27. Applicants should meet with labor representatives and attempt to form task forces for the purpose of promoting labor-management dialogue concerning implementation and safety issues. 28. CSX must attempt to negotiate, with CP, an agreement pursuant to which CSX will grant CP either haulage rights unrestricted as to commodity and geographic scope, or trackage rights unrestricted as to commodity and geographic scope, over the east-of-the-Hudson Conrail line that runs between Selkirk (near Albany) and Fresh Pond (in Queens), under terms agreeable to CSX and CP, taking into account the investment that needs to continue to be made to the line. If CSX and CP have not reached an agreement by October 21, 1998, we will initiate a proceeding addressing this matter. CSX and CP should advise us, no later than October 21, 1998, whether they have or have not reached an agreement. 29. CSX must make, by October 21, 1998, an offer to the City of New York to establish a committee intended to develop ways to promote the development of rail traffic to and from the City, with particular emphasis on Conrail's Hudson Line, as well as ways to address the City's goals of industrial development and the reduction of truck traffic that is divertible to rail movement, and CSX's goals to provide safe, efficient, and profitable rail freight service. 30. CSX must cooperate with the New York interests in studying the feasibility of upgrading cross-harbor float and tunnel facilities to facilitate cross-harbor rail movements, and, in particular, must participate in New York City's Cross Harbor Freight Movement Major Investment Study. 31. CSX must discuss with P&W the possibility of expanded P&W service over trackage or haulage rights on the line between Fresh Pond, NY, and New Haven, CT, focusing on operational and ownership impediments related to service over that line. 32. CSX must adhere to its agreements with CN and CP that provide for lower switching fees in the Buffalo area and increased access to these carriers for cross-border, truck-competitive traffic. 33. CSX must meet with regional and local authorities in the Buffalo area to establish a committee to promote the growth of rail traffic to and from the Greater Buffalo area. 34. CSX must transfer to NS the trackage rights now held by CSX over the Conrail line that was formerly a Buffalo Creek Railroad line. 35. CSX must adhere to its representation regarding investment in new connections and upgraded facilities in the Buffalo area. 36. CSX must attempt to negotiate, with IC, a resolution of the CSX/IC dispute regarding dispatching of the Leewood-Aulon line in Memphis. CSX and IC must advise us, no later than September 21, 1998, of the status of their negotiations. 37. The $250 maximum reciprocal switching charge provided for in the NITL agreement must be applied to certain points in the Niagara Falls area for traffic using International Bridge and Suspension Bridge, for which Conrail recently replaced its switching charges with so-called line haul charges. 38. A 3-year rate study will be initiated to assess whether Buffalo-area shippers will be subjected to higher rates because of the CSX/NS/CR transaction. 39. As respects any shortline, such as RBMN, that operates over lines formerly operated over by CSX, NS, or Conrail (or any of their predecessors), and that, in connection with such operations, is subject to a blocking provision: CSX and NS, as appropriate, must enter into an arrangement that has the effect of providing that the reach of such blocking provision is not expanded as a result of the CSX/NS/CR transaction. 40. As respects AA's new contract with Chrysler, CSX and NS must take no action that would undermine, or interfere with AA's ability to provide quality interline service under, this contract. 41. The Belt Line Principle advocated by PBL will continue to have, after implementation of the CSX/NS/CR transaction, the effect, if any, that it presently has. Nothing in this decision should be taken to preempt that principle in any way. 42. Conrail's trackage rights on the NS line between Keensburg, IL, and Carol, IN, must be transferred to CSX. 43. As respects Wyandot and NL&S, CSX and NS: must adhere to their offer to provide single-line service for all existing movements of aggregates, provided they are tendered in unit-trains or blocks of 40 or more cars; and in other circumstances including new movements, for shipments moving at least 75 miles, must arrange run-through operations (for shipments of 60 cars or more) and pre-blocking arrangements (for shipments of 10 to 60 cars). 44. NS will have access to any new line constructed by JS&S or NS, or by any entity other than CSX, between the JS&S facility at Capital Heights, MD, and any line over which NS has trackage rights. 45. In STB Finance Docket No. 33388 (Sub-No. 1), the notice, to the extent not previously made effective, is accepted. 46. In STB Finance Docket No. 33388 (Sub-Nos. 2, 3, 4, 5, 6, and 7), the petitions, to the extent not previously granted, are granted. 47. In STB Finance Docket No. 33388 (Sub-Nos. 8, 9, 11, 13, 15, 16, 17, 19 and 20), the notices are accepted. 48. In STB Finance Docket No. 33388 (Sub-Nos. 10, 12, 14, 18, 21 and 22), the petitions are granted. 49. In STB Finance Docket No. 33388 (Sub-No. 23), the notice is accepted. 50. In STB Finance Docket No. 33388 (Sub-No. 24), the petition is granted. 51. In STB Finance Docket No. 33388 (Sub-Nos. 25, 27, 28, 29, 30, 32, 33, and 34), the notices are accepted. 52. In STB Finance Docket No. 33388 (Sub-No. 26), the application is approved. 53. In STB Finance Docket No. 33388 (Sub-No. 31), the petition is dismissed. 54. In STB Finance Docket No. 33388 (Sub-No. 35), the responsive application filed by New York State Electric and Gas Corporation is dismissed. 55. In STB Finance Docket No. 33388 (Sub-No. 36), the responsive application filed by I&M is denied. 56. In STB Finance Docket No. 33388 (Sub-No. 39), the responsive application filed by LAL: is granted to the extent necessary to permit LAL to operate across Conrail's Genesee Junction Yard to reach a connection with R&S; and, otherwise, is denied. CSX and LAL: must attempt to negotiate the details of such operations; and, if negotiations are not fully successful, may submit separate proposals no later than September 21, 1998. 57. STB Finance Docket No. 33388 (Sub-No. 54) is discontinued. 58. In STB Finance Docket No. 33388 (Sub-No. 59), the responsive application filed by WCL is denied. 59. In STB Finance Docket No. 33388 (Sub-No. 61), the responsive application filed by B&LE is dismissed. 60. In STB Finance Docket No. 33388 (Sub-No. 62), the responsive application filed by IC is denied. 61. In STB Finance Docket No. 33388 (Sub-No. 63), the responsive application filed by RJCW is denied. 62. In STB Finance Docket No. 33388 (Sub-No. 69), the responsive application filed by NYDOT and NYCEDC is granted in part and denied in part, as indicated in this decision. 63. In STB Finance Docket No. 33388 (Sub-No. 72), the responsive application filed by Belvidere & Delaware River Railway and the Black River & Western Railroad is dismissed. 64. In STB Finance Docket No. 33388 (Sub-No. 75), the responsive application filed by NECR: is granted insofar as it seeks to require CSX to grant NECR trackage rights between Palmer, MA, and West Springfield, MA; and, otherwise, is denied. CSX and NECR: must attempt to negotiate the details of such trackage rights; and, if negotiations are not fully successful, may submit separate proposals no later than September 21, 1998. 65. In STB Finance Docket No. 33388 (Sub-No. 76), the responsive application filed by ISRR is denied. 66. In STB Finance Docket No. 33388 (Sub-No. 77), the responsive application filed by IORY is dismissed. 67. In STB Finance Docket No. 33388 (Sub-No. 78), the responsive application filed by AA is denied. 68. In STB Finance Docket No. 33388 (Sub-No. 80), the responsive application filed by W&LE is granted in part and denied in part. As indicated in this decision, applicants must (a) grant W&LE overhead haulage or trackage rights access to Toledo, with connections to AA and other railroads at Toledo, (b) extend W&LE's lease at, and trackage rights access to, NS' Huron Dock on Lake Erie, and (c) grant W&LE overhead haulage or trackage rights to Lima, OH, with a connection to IORY at Lima. Applicants and W&LE must attempt to negotiate a solution with regard to these matters; and, if negotiations are not fully successful, may submit separate proposals no later than October 21, 1998. Further, applicants and W&LE must attempt to negotiate an agreement concerning mutually beneficial arrangements, including allowing W&LE to provide service to aggregates shippers or to serve shippers along CSX's line between Benwood and Brooklyn Junction, WV, and inform us of any such arrangements reached. 69. In STB Finance Docket No. 33388 (Sub-No. 81), the responsive application filed by CNR and GTW is dismissed. 70. In STB Finance Docket No. 33388 (Sub-No. 83), the notice filed by GTW is dismissed. 71. In STB Docket Nos. AB-167 (Sub-No. 1181X), AB-55 (Sub-No. 551X), and AB-290 (Sub-Nos. 194X and 197X), the notices are accepted. 72. In STB Docket No. AB-290 (Sub-No. 196X), the petition is granted. 73. In STB Docket Nos. AB-167 (Sub-No. 1181X) and AB-55 (Sub-No. 551X), the notice of exemption is modified to implement interim trail use/rail banking for 180 days commencing from July 23, 1998. If an interim trail use/rail banking agreement is reached, it must require the trail user to assume, for the term of the agreement, full responsibility for management of, for 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. Interim trail use/rail banking is subject to the future restoration of rail service and to the user's continuing to meet the financial obligation for the right-of-way. If interim trail use is implemented, and subsequently the user intends to terminate trail use, the user must (i) send the Board a copy of the cover page of this decision and the page(s) containing this ordering paragraph, and (ii) request that this ordering paragraph be vacated on a specified date. If any agreement for interim trail use/rail banking is reached within 180 days of July 23, 1998, interim trail use may be implemented. If no agreement is reached by that time, CRC or CSXT (as appropriate) may fully abandon the line, on or after Day One. 74. In STB Docket Nos. AB-167 (Sub-No. 1181X), AB-55 (Sub-No. 551X), and AB-290 (Sub-No. 194X), the requests for public use conditions are granted, and each exempted abandonment is subject to the condition that the appropriate railroad (CRC, CSXT, or NW, as appropriate) leave intact all of the rights-of-way underlying the tracks, including bridges, trestles, culverts, and tunnels (but not tracks, ties, and signal equipment), for a period of 180 days from August 22, 1998, to enable any State or local government agency, or other interested person, to negotiate the acquisition of the lines for public use. 75. Provided no OFA has been received, the exemptions in STB Docket Nos. AB-167 (Sub-No. 1181X), AB-55 (Sub-No. 551X), and AB-290 (Sub-Nos. 194X, 196X, and 197X) will be effective on Day One (unless stayed pending reconsideration). 76. With respect to each abandonment exempted in STB Docket Nos. AB-167 (Sub-No. 1181X), AB-55 (Sub-No. 551X), and AB-290 (Sub-Nos. 194X and 196X), the appropriate railroad (CRC, CSXT, or NW, as appropriate) shall file, pursuant to the provisions of 49 CFR 1152.29(e)(2), a 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 the filing of a notice of consummation by July 24, 1999, and there are no legal or regulatory barriers to consummation, the authority to abandon will automatically expire. 77. The labor protective conditions set forth in New York Dock Ry. -- Control -- Brooklyn Eastern Dist., 360 I.C.C. 60, 84-90 (1979), New York Dock Ry. v. United States, 609 F.2d 83 (2d Cir. 1979), will apply to: (1) the authority granted in STB Finance Docket No. 33388 for (a) the acquisition and exercise by CSX and NS of control, joint control, and common control of CRR, CRC, NYC, and PRR, (b) the NYC/PRR assignments, (c) the entry into and performance of operating agreements for Allocated Assets and Shared Assets, and (d) the transfer of the Streator Line to NS; (2) the line transfer exempted in STB Finance Docket No. 33388 (Sub-No. 24); and (3) the control transaction approved in STB Finance Docket No. 33388 (Sub-No. 26). 78. The labor protective conditions set forth in Mendocino Coast Ry., Inc. -- Lease and Operate, 354 I.C.C. 732 (1978), as modified in Mendocino Coast Ry., Inc. -- Lease and Operate, 360 I.C.C. 653 (1980), will apply to the authority granted in STB Finance Docket No. 33388 for the operation by CSX and NS of track leases with other rail carriers to which Conrail is a party. 79. The labor protective conditions set forth in Norfolk and Western Ry. Co. -- Trackage Rights -- BN, 354 I.C.C. 605, 610-15 (1978), as modified in Mendocino Coast Ry., Inc. -- Lease and Operate, 360 I.C.C. 653, 664 (1980), will apply to: (1) the trackage rights authorizations provided for in STB Finance Docket No. 33388; (2) the trackage rights exempted in STB Finance Docket No. 33388 (Sub-Nos. 25, 27, 28, 29, 30, 32, 33, and 34); and (3) the trackage rights arrangements imposed as conditions in STB Finance Docket No. 33388. 80. The labor protective conditions set forth in Oregon Short Line R. Co. -- Abandonment -- Goshen, 360 I.C.C. 91, 98-103 (1979), will apply to: (1) the one discontinuance approved in STB Finance Docket No. 33388; (2) the relocation exempted in STB Finance Docket No. 33388 (Sub-No. 23); and (3) the abandonments and one discontinuance exempted in STB Docket Nos. AB-167 (Sub-No. 1181X), AB-55 (Sub-No. 551X), and AB-290 (Sub-Nos. 194X, 196X, and 197X). 81. All conditions that were requested by any party in the STB Finance Docket No. 33388 proceeding and/or in the various embraced proceedings but that have not been specifically approved in this decision are denied. 82. As respects certain procedural matters not previously addressed: (a) the ARU-6 petition filed July 18, 1997, by ARU is denied; (b) the CDB-1 comments filed October 22, 1997, by Charles D. Bolam are accepted for filing and made part of the record; (c) the comments filed November 26, 1997, by Durham, respecting the North Jersey SAA operating plan, are accepted for filing and made part of the record; (d) the NITL-10 motion filed January 13, 1998, by NITL is granted, and the NITL-11 pleading (also filed January 13, 1998) is accepted for filing and made part of the record; (e) the RWCS-5 motion filed February 26, 1998, by RWCS is granted, and the RWCS-4 brief (also filed February 26, 1998) is accepted for filing and made part of the record; (f) the STW-5 motion filed February 26, 1998, by STWRB is granted, and the STW-4 brief (also filed February 26, 1998) is accepted for filing and made part of the record; (g) the NYAR No. 4 motion filed March 19, 1998, by NYAR is granted, and the NYAR No. 4 reply is accepted for filing and made part of the record; (h) the CE-12 motion filed May 26, 1998, by Consumers is denied, and the verified statement attached thereto is rejected; (i) the GWWR-5 motion filed May 28, 1998, by Gateway is denied; (j) the letter filed May 29, 1998, by NYCH is denied in part (insofar as it amounts to a request for leave to file a reply to the brief filed February 23, 1998, by the Nadler Delegation) and is rejected in part (insofar as it amounts to a reply to the brief filed February 23, 1998, by the Nadler Delegation); and (k) the Wyandot-6 pleading filed June 16, 1998, by Wyandot is denied, insofar as that pleading constitutes a motion to strike. 83. This decision shall be effective on August 22, 1998. Decided: July 20, 1998 Service Date - July 23, 1998 APPENDIX: FREIGHT RAILROADS ANN ARBOR RAILROAD. AA, a Class III railroad, operates over approximately 46 miles of main line track and 31.44 miles of yard and side tracks between Ann Arbor, MI, and Toledo, OH. AA, which has four direct Class I connections (Conrail at Toledo and Ann Arbor; NS at Toledo and Milan; CSX at Toledo; and CN at Toledo), claims that it offers its shippers nondiscriminant access to its Class I connections, and AA adds that the existence of these competitive connections has kept AA viable. AA also connects, at Ann Arbor, with the Tuscola & Saginaw Bay Railway Company, Inc. (TSBY), via which AA has two indirect Class I connections: CSX at Howell, MI; and CN at Durand, MI. AA contends: that its traffic base consists of nearly 50% bulk traffic and a little over 50% automotive traffic; that there is no intermodal competition for the bulk traffic; that the automotive traffic, however, will move by rail only so long as there is reliable and efficient service; and that such service can only be maintained by intra-rail competition. Competitive access to Chicago, AA maintains, is critical. AA claims that only two of its four Class I connections (Conrail and NS) from/to Chicago are efficient and that its other Class I connections (CSX and CN) cannot provide competitive routings from/to Chicago. (1) AA claims that the AA/TSBY/CSX routing (via Howell) and the AA/TSBY/CN routing (via Durand) are too circuitous and would also involve an additional carrier. (2) AA claims that the AA-Toledo-CSX routings, via either Deschler, OH, or Fostoria, OH, are too circuitous. (3) AA claims that the AA-Toledo-CN routing, via Port Huron, MI, is even more circuitous than the other alternative routings. The CSX/NS/CR application envisions that Conrail's Chicago-Kalamazoo-Ann Arbor and Chicago-Elkhart-Toledo lines will be assigned to NS. AA contends, in essence, that, as respects traffic moving from/to Chicago, it is a 2-to-1 shortline because the Conrail vs. NS competition that exists pre-transaction will cease post-transaction, and the AA/NS routing will become AA's only efficient routing for traffic moving from/to Chicago. AA concedes that the primary application also envisions new competitive routings for CSX, but these new routings, AA insists, will be of no use as respects Ann Arbor-Toledo traffic moving from/to Chicago. AA cites three such routings. (1) AA claims that the AA-Toledo-CSX routing via Galatea, OH, will be too circuitous. (2) AA notes that the AA-Toledo-CSX routing via Lima, OH, will be even more circuitous than the routing via Galatea. (3) AA notes that certain CSX haulage rights on Conrail's Chicago-Elkhart-Toledo line apparently are not applicable to traffic moving from/to AA's Arbor-Toledo line; and, even if applicable, will be in effect for no more than 3 years and will not allow CSX to operate its own trains. AA also notes that CP is reported to have received, in a settlement with NS, certain rights to operate over (at least a portion of) Conrail's Chicago-Kalamazoo-Ann Arbor line. AA insists, however, that it has been informed that the rights provided for in the NS/CP settlement will not permit an AA/CP interchange at Ann Arbor. AA fears that, without appropriate conditions, it stands to lose approximately 42% ($3,000,000) of its annual revenues. The loss of these revenues, AA warns, would have a devastating effect on AA, would require AA to reduce the level of its current service and to stop service to some customers altogether, and would impair AA's ability to perform essential services on its line. The effect, AA adds, would also be devastating to at least some AA-served shippers. AA therefore asks that we require: that AA be granted limited trackage rights between Chicago and Toledo over the Conrail Chicago-Elkhart-Toledo line to be assigned to NS; and that AA be permitted to interchange traffic with CP at Ann Arbor. AA also asks that we retain jurisdiction to set compensation and other terms in the event the parties are unable to resolve these matters through negotiations. (1) AA contends that its Chicago-Toledo trackage rights condition, by giving AA an alternative routing for traffic moving from/to Chicago, would allow AA: to preserve intramodal competition; to retain some traffic that would otherwise be diverted; and to attract new traffic to offset the remaining losses. (2) AA contends that its Ann Arbor interchange condition would allow AA to divert, to rail, certain automotive traffic that now moves by truck from Toledo to the Detroit-Windsor area. (3) AA contends that the conditions it seeks, by allowing AA to retain existing traffic and to attract new traffic, would enable AA to recoup its projected revenue losses, and would thereby allow AA to continue to provide essential services on its Ann Arbor-Toledo line. ASLRA & RRA. The American Short Line Railroad Association (ASLRA) and Regional Railroads of America (RRA), which claim that the CSX/NS/CR transaction will have substantial impacts on the more than 270 shortlines and regionals that presently have direct connections to CSX, NS, and/or Conrail, ask that we impose certain conditions. (1) ASLRA and RRA ask that we require CSX and NS to adopt existing inter-carrier agreements between Conrail, on the one side, and connecting shortlines and regionals, on the other side, and to apply those agreements, without modification except by mutual consent of the parties. (2) ASLRA and RRA ask that we require that existing gateways and rate relationships between CSX, NS, and Conrail, on the one side, and connecting shortlines and regionals, on the other side, be maintained until changed by mutual consent. (3) ASLRA and RRA ask that we consider expanded shortline and regional connections and access as a possible solution to competitive or operational problems that we identify during our review of the CSX/NS/CR transaction. (4) ASLRA and RRA ask that we clarify, as a matter of policy, that the rail system should be truly inter-active, by which is meant: (i) that, at junctions and terminal areas served by both CSX and NS, small railroads should have rights to interchange with both as well as with each other; and (ii) that artificial barriers that arbitrarily restrict full interchange rights should be discouraged. (5) ASLRA and RRA ask that, to ensure that CSX and NS do not use their market power to disadvantage small railroads, or shippers or receivers located on small railroads, we retain jurisdiction over inter-carrier relationships between CSX and NS, on the one side, and connecting shortlines and regionals, on the other side. (6) ASLRA and RRA ask that, to provide a forum for investigation and resolution of post-transaction competitive or service-related complaints by small railroads, or by shippers or receivers located on small railroads, we: (i) provide for continuing oversight for a period of 5 years after the effective date of the CSX/NS/CR transaction; and (ii) require periodic reporting of operational and service data by CSX and NS. (7) ASLRA and RRA ask that, at the conclusion of the 5-year oversight period, we include specific data and actions in our post-transaction study of the impact of the CSX/NS/CR transaction on small railroads in the affected service area. BOSTON AND MAINE. B&M opposes the suggestion, which it attributes to the State of Rhode Island, that, to allow for the creation of an NS/P&W interchange (at Gardner, MA), NS should be granted trackage rights over B&M's lines (apparently between Mechanicville, NY, and Gardner, MA). RIDOT has not asked that NS be granted trackage rights over B&M's lines. However, in connection with its request that we require direct access by a second Class I railroad into New England, RIDOT has indicated that it will continue to monitor any efforts by NS to gain access to New England via trackage rights on, or interchange agreements with, B&M. CANADIAN NATIONAL. CN, which operates a 1,000-mile rail network in the United States (in Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin) and a transcontinental rail network in Canada, contends that, if we impose any conditions relating to the Buffalo/Niagara Falls area, we should ensure that any such condition affords equitable treatment to all rail carriers serving that area. DURHAM TRANSPORT. Durham, a Class III railroad that operates within the Raritan Center Industrial Park (Raritan Center) in Edison, NJ, claims: that the lead tracks within Raritan Center are operated by Durham, which conducts such operations pursuant to an easement granted by the owners of Raritan Center, and which interchanges traffic with Conrail at Lower Yard; but that the maps submitted with the primary application indicate that all lead tracks within Raritan Center are part of the North Jersey SAA. Durham concedes that the maps submitted with applicants' North Jersey SAA operating plan do not indicate that the lead tracks within Raritan Center are part of the North Jersey SAA. Durham notes, however: that the relevant map, and the related narrative material, contain no references of any kind to Raritan Center; and that the yard switching assignments anticipated by applicants, make no reference to a Conrail/Durham interchange. Durham notes that applicants' Metuchen map shows a track 215 extending south to Raritan Junction. Track 215, according to Durham, proceeds south across U.S. 1 and the New Jersey Turnpike and terminates at Woodbridge Avenue, at which point the track number changes to 223 and becomes the GSA Lead; and the GSA Lead, Durham adds, extends into Raritan Center. Durham claims that the material, although incomplete and therefore ambiguous, suggests that the post-transaction Conrail will continue operations out of Metuchen Yard over the 215-223-GSA Lead track in order to reach shippers located on the Raritan Industrial Track both east and west of Raritan Center. Durham further contends that, because two carriers (Conrail and Durham) will be operating on the GSA Lead post-transaction, their operations will necessarily have to be coordinated, especially in view of the fact that much of the freight transported by Conrail through Raritan Center and over the GSA Lead will consist of chemicals and other hazardous materials. Durham therefore asks that we require the post-transaction Conrail to enter into an appropriate agreement governing the coordination of rail operations over the GSA Lead and the designation of crew assignments. Such an agreement, Durham notes, will ensure the preservation of interchange operations at Lower Yard. Durham, in its brief filed February 23, 1998, claims: that applicants, in a letter received by Durham on December 5, 1997, acknowledged the inaccuracy of the Conrail System Map and stated that they would honor Durham's Interchange Agreement with Conrail; that, however, applicants, in their letter, failed to address Durham's request for a trackage agreement for the joint use of the GSA Lead (track 223); that, by letter dated December 11, 1997, Durham requested that applicants negotiate such an agreement; that, however, applicants have not responded to this letter; and that applicants, in their rebuttal submission of December 15, 1997, did not address Durham's condition request. Durham accordingly renews its request that we condition approval of the CSX/NS/CR transaction upon the negotiation by applicants and Durham of a satisfactory joint use agreement for the use of the GSA Lead Track. Durham insists that joint use of the GSA Lead within the Raritan Industrial Park is not presently addressed in any of the interchange or other agreements between Durham and Conrail and, accordingly, requires an agreement between Durham and the SAA operator. GATEWAY WESTERN AND GATEWAY EASTERN. GWWR, a Class II railroad, operates between Kansas City, KS, and East St. Louis and Springfield, IL. GWER, a Class III railroad: operates between East St. Louis and East Alton, IL; between WR Tower and Willows Tower, IL, over track of the Terminal Railroad Association of St. Louis (TRRA); and between Lenox Tower and Rose Lake, IL, over track of The Alton & Southern Railway Company (A&S). GWWR and GWER are referred to collectively as Gateway. GWWR and Conrail operate over TRRA from Trendley Avenue to M&O Junction pursuant to separate grants of trackage rights that predate the 1988 Conrail/CMW agreement. Gateway's interests in this proceeding are focused upon two sets of trackage rights pursuant to which Conrail operates over portions of Gateway's lines. (1) The Cahokia trackage rights, which Conrail received in a 1988 agreement with the bankruptcy trustee of the Chicago, Missouri & Western Railroad Company (CMW, a previous owner of the GWWR line), permit Conrail to operate its trains between East St. Louis and Sauget, IL, via trackage rights over: GWWR from Missouri Avenue to Trendley Avenue; TRRA from Trendley Avenue to M&O Junction; and GWWR from M&O Junction to the Cahokia Marine Terminal. Conrail is allowed to use the Cahokia trackage rights for the sole purpose of accessing the Cahokia Marine Terminal. (2) The Willows trackage rights, which Conrail received in a 1994 agreement with GWER, permit Conrail to operate its trains over GWER's line in East St. Louis between the east interlocking limits of Willows (MP 236.8) and the TRRA connection at Q (MP 238.7). Conrail is allowed to use the Willows trackage rights for bridge traffic only. The CSX/NS/CR application envisions that Conrail's lines and rights in the East St. Louis area will be assigned to CSX, and Gateway is concerned that the introduction of CSX trains, and unit coal trains in particular, on the Willows/Cahokia segments will substantially impair Gateway's ability to handle its own traffic on those segments. Congestion, Gateway indicates, is not a major problem today because Conrail, with its limited market coverage, moves only a limited number of trains across the two segments. Gateway warns, however, that, given CSX's much greater market coverage, an assignment to CSX may result in a drastic expansion of the use of the two segments. Gateway adds that its dispatching control of the Willows/Cahokia segments will not enable it to resolve the operational problems posed by the introduction of large numbers of CSX trains. In the STB Finance Docket No. 33388 lead docket, applicants have requested that we issue a declaratory order that CSX and NS will have, post-transaction, the same authority to conduct operations over the routes of Conrail covered by certain Trackage Agreements that Conrail has pre-transaction, notwithstanding any clause in any such agreement purporting to limit or prohibit unilateral assignment by Conrail of its rights thereunder. The declaratory order applicants seek would confirm that, despite the provisions in the Cahokia/Willows trackage rights agreements (TRAs) that purport to bar unilateral assignment of Conrail's rights, CSX will be Conrail's successor-in-interest with respect to the Cahokia/Willows trackage rights, and will have the same Cahokia/Willows trackage rights that Conrail had. Gateway, which does not consent to the assignment of Conrail's Cahokia/Willows trackage rights to CSX, asks that we hold: (1) that, on account of Gateway's refusal to waive the provisions barring unilateral assignment of Conrail's Cahokia/Willows trackage rights, CSX will not be Conrail's successor-in-interest with respect to these rights; and (2) that CSX will be allowed to operate on the Cahokia/Willows segments if, but only if, it receives trackage rights on such segments (a) in negotiations with Gateway, and/or (b) in a 49 U.S.C. 11102 terminal trackage rights proceeding. Gateway argues: that sec. 11102 provides the only means by which one railroad can be compelled to open its terminal tracks to access by another; and that CSX has made, in the present proceeding, no showing that its use of the Cahokia and Willows segments is justified under the terms of sec. 11102. Gateway also argues that, even if sec. 11321(a) provides a means by which Gateway can be compelled to open its Cahokia/Willows tracks to CSX, CSX has not demonstrated that an override of the provisions in the Cahokia/Willows TRAs that bar unilateral assignment is necessary to allow CSX to carry out the CSX/NS/CR transaction. Gateway also contends that, if we hold that sec. 11321(a) authorizes an override of the provisions in the Cahokia/Willows TRAs that bar unilateral assignment, we should go further and hold that this override applies to all provisions in these TRAs. The holding urged by Gateway would substitute CSX for Conrail as the trackage rights tenant on the Cahokia/Willows segments, but would also require the terms and conditions applicable to the Cahokia/Willows trackage rights to be negotiated by Gateway and CSX or, if negotiations fail, to be set by the Board. Gateway argues, in essence: that the limited override sought by CSX would result in unbalanced agreements that neither Gateway nor its predecessor would ever have negotiated and that no regulatory agency would ever have imposed; and that a complete override would allow Gateway to protect its interests by negotiating, or by asking this agency to impose, balanced agreements that reflect the expanded use of the trackage rights that may occur with the substitution of CSX for Conrail. HOUSATONIC RAILROAD COMPANY. HRRC, a Class III railroad that operates over approximately 161.3 miles of track in Massachusetts, Connecticut, and New York, has two lines that connect at Danbury, CT: a north-south line, that extends between Pittsfield, MA, and Danbury, CT; and an east-west line, that extends between Beacon, NY, and Derby, CT. HRRC, which interchanges all of its traffic (approximately 5,000 inbound cars and 750 outbound cars a year) with Conrail at Pittsfield, contends that the CSX/NS/CR transaction, which will substitute CSX for Conrail as HRRC's Pittsfield connection, will adversely impact HRRC and/or its shippers in five ways: (1) 1-to-1 shippers on HRRC's lines will be competitively disadvantaged vis--vis their 1-to-2 competitors; (2) for those shippers on HRRC's lines that ship to points open today to both CSX and NS, the neutral gateway service provided pre-transaction by Conrail will not be provided post-transaction by CSX; (3) HRRC shippers of freight moving from/to Conrail points that will be served post-transaction by NS (and not by CSX) will be competitively disadvantaged by the substitution of a possibly more costly three-carrier routing (HRRC/CSX/NS) for what is now a two-carrier routing (HRRC/Conrail); (4) the new intramodal competition west of the Hudson will allow for the development of new intermodal competition east of the Hudson, which will divert traffic from all New England shortlines but particularly (because of location) from HRRC; and (5) whereas Conrail has honored its partnership commitments to HRRC, CSX will not continue the pre-transaction HRRC/Conrail partnership. Conrail, HRRC notes, can compete against HRRC in several ways (e.g., by establishing lower commodity rates to, or reload facilities at, nearby Conrail stations), but, mindful of its fiduciary obligations as HRRC's "partner," has not done so. CSX, HRRC warns, will do so. To protect HRRC and its on-line shippers from the anticompetitive impacts that will result from the CSX/NS/CR transaction, to increase intramodal competition in the territory served by HRRC, and to preserve the essential services provided by HRRC, HRRC asks that we impose three conditions: an access condition; a single-line to joint-line (SL-to-JL) condition; and a rate condition. In its comments filed October 21, 1997, HRRC asks that we require that NECR be granted trackage rights between Palmer, MA, and Albany, NY (including Selkirk, NY, and Mechanicville, NY). HRRC notes that these trackage rights, combined with an HRRC/NECR commercial arrangement that HRRC expects to negotiate, would enable HRRC to interchange traffic with NS, CP, and B&M in the Albany area. HRRC also states, in its comments, that, if we do not require that NECR be granted the Palmer-Albany trackage rights sought by NECR, we should, at the very least, require that CSX enter into a haulage arrangement with HRRC, under the terms of which CSX would haul HRRC's traffic over Conrail's Albany-Boston line (1) between Pittsfield and Albany, for the purpose of interchange in the Albany area with, among other carriers, NS, CP, and B&M, and (2) between Pittsfield and Palmer, for the purpose of interchange with connecting carriers at Palmer and intermediate points. In its brief filed February 23, 1998, HRRC makes no mention of its trackage rights condition but asks that we require that CSX enter into a haulage arrangement with HRRC, under the terms of which CSX would haul HRRC's traffic over Conrail's Albany-Boston line (1) between Pittsfield and Albany, for the purpose of interchange in the Albany area with, among other carriers, NS, CP, and B&M, and (2) between Pittsfield and Palmer, for the purpose of interchange with connecting carriers at Palmer and intermediate points. HRRC also asks that we retain jurisdiction to establish an appropriate haulage fee. HRRC, noting that the NITL agreement provides limited 3-year rate protection for certain SL-to-JL movements, asks that we make this protection applicable to movements originating on HRRC. HRRC is asking, in essence, that we clarify that the single line Conrail movements covered by section III(E) of the NITL agreement include the HRRC/Conrail movements of interest to HRRC. HRRC asks that we require CSX to fulfill its commitments: (i) that all rate arrangements binding on Conrail will be honored by CSX for their duration; and (ii) that, with respect to public group-to-group or mileage scale rate documents, rates to HRRC stations will be the same as rates to CSX local stations within that same group. I&M RAIL LINK. I & M Rail Link, LLC (I&M), a Class II railroad, operates over approximately 1,386 miles of rail line connecting Minneapolis/St. Paul, MN, Kansas City, KS, and Chicago, IL. I&M's interests in this proceeding are focused upon intermediate switching services in the Chicago switching district. I&M contends that there are today, in that district, only two intermediate switching carriers (i.e., only two carriers whose primary focus is on the movement of traffic from one railroad to another): Indiana Harbor Belt Railway (IHB) and The Belt Railway Company of Chicago (BRC). IHB is presently owned 51% by Conrail; the primary application envisions that this 51% interest will be retained by Conrail; and thus, post-transaction, IHB will be subject to joint control by CSX and NS. IHB is also owned 49% by Soo Line Railroad Company (Soo). BRC is presently owned 25% by CSX, 8.33% by NS, and 16.67% by Conrail; the primary application envisions that NS will acquire Conrail's stock; and thus, post-transaction, CSX and NS will each have a 25% ownership interest. BRC is also owned 16.68% by BNSF, 8.33% by GTW, 8.33% by IC, 8.33% by UPRR, and 8.33% by Soo. I&M is concerned that, post-transaction, the only two intermediate switching carriers in the Chicago switching district will be controlled or dominated by CSX and NS, and that IHB will cease to be an intermediate switching carrier and will become instead an operating adjunct of CSX and NS (particularly of CSX, which will have dispatching authority over IHB). I&M notes that there is, in the Chicago switching district, a third carrier that historically has been designated a switching carrier: The Baltimore and Ohio Chicago Terminal Railroad Company (B&OCT, a wholly owned CSX subsidiary). I&M contends, however: that B&OCT operates principally as an extension of, and a terminal company for, CSX, and not as a true intermediate switching carrier; and that B&OCT performs few, if any, intermediate switching services that do not include direct interchange to CSX or service to on-line industries. I&M therefore asks that we require Conrail to sell its 51% IHB ownership interest to a coalition of interested carriers that, at the present time, consists of I&M alone. I&M contemplates that IHB would continue to operate under its own management, and would control its own dispatching, serve on-line shippers from its own yards, and market its own services as an independent carrier. I&M contends that divestiture of Conrail's 51% ownership interest in IHB is necessary: to prevent an anticompetitive concentration of ownership and control of intermediate switching services and related terminal services in the Chicago switching district; to establish IHB as a neutral, independent switching carrier; to assure that IHB is not operated as an extension of CSX; to preserve essential switching capacity in the Chicago switching district; and to preserve an efficient connection at Chicago for I&M. ILLINOIS CENTRAL RAILROAD COMPANY. IC, a Class I railroad that operates approximately 2,624 route miles of rail line in Illinois, Kentucky, Tennessee, Mississippi, Louisiana, and Alabama, asks that we impose two conditions: a competitive routing condition and a line acquisition condition. IC's primary mainline extends between Chicago, IL, and New Orleans, LA. Secondary IC mainlines extend to Peoria and East St. Louis, IL, Mobile, AL, and Baton Rouge, LA. IC contends that there are today three joint-line routings for rail traffic moving between the South Central United States and Conrail territory in the Northeast: IC/Conrail; CSX/Conrail; and NS/Conrail. (Traffic routed IC/Conrail moves via one or another of IC's three "Illinois gateways" at Chicago, East St. Louis, and Effingham. The principal IC/Conrail gateway is at Effingham, which is where IC's north-south Chicago-New Orleans mainline crosses Conrail's east-west East St. Louis-Cleveland mainline.) IC further contends that, post-transaction, there will be, for this traffic, two joint-line routings (IC/CSX and IC/NS) and two single-line routings (CSX and NS). IC claims that its incentives will remain much the same post-transaction as they are pre-transaction because IC's participation in this traffic will continue to be on a joint-line basis only. IC further claims, however, that the incentives of CSX and NS will not be the same post-transaction because each will have, post-transaction, both a single-line routing and a joint-line routing; and IC believes that railroads, if at all possible, almost invariably favor their single-line routings and almost invariably seek to maximize their portions of joint-line routings, no matter how efficient alternative joint-line routings might be. IC's interests in this proceeding relate to the preservation of its post-transaction joint-line routings (i.e., IC/CSX and IC/NS) for traffic moving between the south central United States and Conrail territory in the Northeast. IC's interests as respects the IC/NS routing have been accommodated by an agreement with NS, which has committed to retaining shipper options via IC/NS gateways in Illinois. IC claims, however, that it has been unable to reach a similar agreement with CSX, and it is concerned that, post-transaction, CSX will favor less efficient IC/CSX joint-line routings via New Orleans and Memphis and will decline to participate in more efficient IC/CSX joint-line routings via Chicago, East St. Louis, and Effingham. The pre- transaction IC/Conrail joint-line routing via Effingham, IC warns, will cease to exist once CSX acquires Conrail's East St. Louis-Cleveland mainline. IC therefore asks that we require, except insofar as IC and CSX agree otherwise: that, for traffic moving to/from stations on lines of CSX and its shortline connections, CSX must, upon request of a shipper or IC, join with IC in market competitive joint rates via Chicago, East St. Louis, and Effingham where the applicable joint line routes are reasonably efficient (distance considered) and/or where a competitive service package can be offered to the customer; that, in constructing joint rates via IC, CSX's portion of such joint rates shall be at rate levels comparable on a per mile basis with CSX's revenue requirement via the portion of its preferred long-haul route between the same origins and destinations; that CSX's revenues shall be calculated by determining its revenue per car mile (revenue per car divided by CSX's route miles) over its preferred long-haul route (e.g., via New Orleans) and multiplying such revenue per car mile by CSX's route miles for the routing via IC (e.g., via Effingham); and that any absorbed switching charges or other unusual terminaling costs shall be added to this calculation. This competitive routing condition, IC contends, is necessary to assure that traffic moving between the south central United States and Conrail territory in the Northeast: has access to an IC/CSX joint-line routing option as an alternative to a CSX single-line routing option; and has access to an IC/CSX joint-line routing option via an Illinois gateway as an alternative to an IC/CSX joint-line routing option via Memphis and/or New Orleans. An approximately 2-mile segment of IC's Chicago-New Orleans mainline (this segment is known as the Leewood-Aulon line) lies in or near Memphis, TN, and extends between CSX MP F-371.4 (IC MP 387.9) at Leewood and CSX MP F-373.4 (IC MP 390.0) at Aulon. Pursuant to an agreement dated January 22, 1907, and various amendments thereto, IC currently operates via trackage rights over the CSX-owned Leewood-Aulon line, both ends of which connect with IC-owned portions of IC's Chicago-New Orleans mainline. The double-track Leewood-Aulon line is an essential link for nearly all north-south traffic moving on IC's rail system; all traffic moving on IC's core north-south trunk must traverse this 2-mile line in order to pass through Memphis. (IC notes: that its Riverfront line, a single-track line through downtown Memphis with 12 grade crossings in just over a mile, is utilized only by Amtrak; and that a 1995 agreement with the City of Memphis, which owns the right-of-way underlying the Riverfront line, prohibits freight operations on that line except in emergencies.) The Leewood-Aulon line is operated over by IC, CSX, and UPRR (UPRR operates over the line for the limited purpose of handling interchange traffic to and from CSX's Leewood Yard, which is located adjacent to the Leewood end of the line). Of the three, however, IC is by far the predominant user. The Leewood-Aulon line is, by IC's account, a secondary line for CSX; it is located at the end of CSX's Memphis-Nashville route and is used by CSX primarily for switching and the transfer of interchange traffic. IC's grievance respecting the Leewood-Aulon line reflects the fact that the line is owned, and therefore dispatched, by CSX. IC's grievance respecting the line, the number one bottleneck on IC as a scheduled service railroad, also reflects the additional fact that dispatching on the line, which until December 1996 was handled by a CSX operator based at Leewood, is now handled by CSX's centralized dispatching center in Jacksonville, FL, using a Traffic Control System (TCS). IC claims: that, prior to the December 1996 transfer, train movements on the Leewood-Aulon line were, for the most part, effectively coordinated; that, however, since the transfer, CSX has caused significant interference with and delays to IC's through train movements on the line; that CSX trains have been held at length on the line; that yard movements at CSX's Leewood Yard have often been allowed to foul the line; and that repeated complaints to CSX dispatchers in Jacksonville have not been addressed. The result, IC contends, has been severe disruptions to IC's operations in Memphis. The CSX/NS/CR transaction, IC claims, will allow CSX, for the first time, to compete directly with IC for certain traffic, and, in particular, for traffic currently moving in IC/Conrail joint-line service via Effingham. IC concedes that the CSX chokehold on IC's operations in the Memphis area predates the CSX/NS/CR transaction, but IC insists that, if the transaction is implemented, the anticompetitive effects of this chokehold will grow more harmful. With the CSX/NS/CR transaction, IC claims, CSX will have, for the first time, a competitive incentive to utilize its chokehold to render IC's service non-competitive and to force traffic now routed IC/Conrail via Effingham to move over a CSX routing via Memphis or New Orleans. IC therefore asks that we require that, under terms to be negotiated by IC and CSX or, if negotiations fail, to be set by the Board, CSX convey the Leewood-Aulon line to IC, subject to: the retention by CSX of trackage rights over the line sufficient to allow CSX to continue all operations which it conducts on the line today; the retention by CSX and IC of their existing rights to serve local shippers and industries on the line; and the retention by UPRR of the right to continue its current usage of the line. This condition, IC claims, would remove the chokehold that CSX now has on IC's operations in the Memphis area; it would thereby assure that IC can continue to offer effective competition for traffic to/from the Northeast; and it would preserve the basic operating patterns that now exist on the Leewood-Aulon line. IC has indicated that it would be willing to entertain alternative remedies to the Leewood-Aulon problem, such as the establishment of local operator positions at Leewood, staffed by joint employees of IC and CSX, to govern operations on the line. INDIANA SOUTHERN RAILROAD. ISRR is a Class III railroad with four Class I connections that operates in Indiana over approximately 176 miles of track between Indianapolis and Evansville. The four connections are: Conrail at Indianapolis; CP at Bee Hunter; NS at Oakland; and CSX at Evansville. Two additional connections are: the Indiana Rail Road Company (INRD) at Switz City; and the Algers, Winslow & Western Railway (AWW) at Oakland. ISRR's interests in this proceeding are focused on rail traffic moving from/to: Indianapolis, Crawfordsville, Muncie, and Shelbyville, IN; and points on Conrail's Indianapolis-Crawfordsville, -Muncie, and -Shelbyville lines. (1) Indianapolis, a 2-to-1 point, is served today by Conrail (via its E. St. Louis-Cleveland mainline) and CSX (via its Cincinnati-Indianapolis line, and also via trackage rights over Conrail's Indianapolis-Crawfordsville line). The CSX/NS/CR application envisions the assignment to CSX of Conrail's E. St. Louis-Cleveland mainline and its Indianapolis-Crawfordsville line. The CSX/NS/CR application, however, also envisions: that NS will serve 2-to-1 shippers at Indianapolis via trackage rights over CSX from both Muncie and Lafayette, IN; that NS will occupy Conrail's tracks at Hawthorne Yard in Indianapolis, will bring trains directly into and out of that yard, and will switch its trains at that yard; and that CSX will switch the 2-to-1 industries at Indianapolis for NS. (2) Crawfordsville, a 2-to-1 point, is served today by Conrail and CSX. The CSX/NS/CR application envisions the assignment to CSX of Conrail's Indianapolis-Crawfordsville line, but also envisions: that NS will serve all 2-to-1 shippers at Crawfordsville under haulage and trackage rights; and that CSX will perform the actual switching at Crawfordsville. (3) Muncie, a 2-to-2 point, is served today by Conrail and NS. The CSX/NS/CR application envisions that Conrail's Muncie tracks will be assigned to CSX. (4) Shelbyville, a 1-to-1 point, is served today by Conrail. The CSX/NS/CR application envisions that Conrail's Shelbyville tracks will be assigned to CSX. ISRR contends that, because NS will not have sufficient traffic to support routine service at Indianapolis and Crawfordsville, CSX vs. NS competition post-transaction will not be as strong as CSX vs. Conrail competition pre-transaction. ISRR also contends that, whereas Conrail today offers a neutral and indifferent gateway service for shippers located on its Indianapolis-Crawfordsville, -Muncie, and -Shelbyville lines (as respects traffic moving from/to nearby CSX and NS junctions), the post-transaction CSX will have a strong economic incentive to favor its own routes. The one shipper of most concern to ISRR is Indianapolis Power & Light (IP&L), which has two Indianapolis generating stations. (1) ISRR indicates that IP&L's Perry K plant, which is located on a Conrail line in Indianapolis, can receive coal originated by either Conrail, ISRR, or INRD. ISRR claims that, because Conrail does not serve IP&L's origin mines, Conrail functions today as a switch carrier, and is neutral as between traffic originated by ISRR and INRD. CSX, ISRR fears, would not be neutral (because INRD is an 89%-owned CSX subsidiary). (2) ISRR indicates that IP&L's Stout plant, which is located on an INRD line in Indianapolis, today has several routing options: INRD direct; CSX-INRD; ISRR-Switz City-INRD; ISRR-Indianapolis-Conrail-INRD; CP-INRD; and Conrail-INRD. ISRR contends that, whereas it has been able to compete for the Stout traffic via the Conrail switch at Indianapolis (because Conrail, which does not serve the origin mines, has been a neutral switching carrier), it will not be able to compete for this traffic post-transaction (because CSX will have an economic incentive to favor INRD). ISRR also claims that the CSX/NS/CR transaction will effectively eliminate three additional competitive options that are presently available to IP&L: the option of building out from the Stout plant to a nearby Conrail line; the option of moving coal to the Stout plant via a truck transload facility to be established on a nearby Conrail line; and the option of moving coal by truck to the Perry K plant either from the Stout plant or from a nearby INRD yard. ISRR claims that, because these options depend on Conrail vs. INRD competition, they cannot possibly survive the CSX/NS/CR transaction; CSX, ISRR insists, cannot be expected to compete effectively with its 89%-owned subsidiary (INRD). ISRR further claims that, despite the NS Indianapolis rights provided for in the CSX/NS/CR application, NS will not be able to compete effectively with CSX for traffic moving to IP&L's Perry K and Stout plants: because NS, which does not serve IP&L's origin mines, will not be able to originate the traffic; because NS' post-transaction route from the Southwestern Indiana mine region to Indianapolis will be highly circuitous; because the eastern mines served by NS are too far away to be competitive with nearby Indiana coal sources; and because NS will not be permitted to connect with ISRR (and therefore will not be able to perform the switch services currently performed by Conrail). ISRR contends that, with the traffic diversions (especially the IP&L traffic diversions) to CSX/INRD that will result from the new rail alignment envisioned in the CSX/NS/CR application, ISRR stands to lose $1.5 million in annual revenues (out of a total of approximately $9 million in annual revenues). The loss of these revenues, ISRR warns, would be devastating both to ISRR and also to those ISRR-served shippers whose transportation needs cannot economically be met by other modes of transportation. ISRR claims that it would have to abandon the northern segment of its line, cutting its connection to Indianapolis. ISRR therefore asks that we require that ISRR be granted: (1) overhead trackage rights in Indianapolis, over a Conrail line to be assigned to CSX, between MP 6.0 on ISRR's Petersburg Subdivision and IP&L's Perry K facility; (2) overhead trackage rights in Indianapolis, over a Conrail line to be assigned to CSX and over a 7-mile segment of an INRD line, between MP 6.0 on ISRR's Petersburg Subdivision and IP&L's Stout facility; (3) local trackage rights in Indianapolis over all Conrail lines in Indianapolis (including the Indianapolis Belt Line) that are needed to access any 2-to-1 shippers located in Indianapolis; (4) local trackage rights between Indianapolis and Crawfordsville over the Conrail line to be assigned to CSX; (5) local trackage rights between Indianapolis and Muncie over the Conrail line to be assigned to CSX ( ISRR seeks the right to serve shippers on the Indianapolis-Muncie line and to connect with NS at Muncie. ISRR does not seek the right to serve shippers in Muncie.); and (6) local trackage rights between Indianapolis and Shelbyville over the Conrail line to be assigned to CSX. ISRR also asks that we retain jurisdiction to establish compensation and other terms in the event the parties are unable to resolve these matters through negotiations. ISRR claims that the trackage rights it seeks: (a) would enable it to retain its current traffic base and to compete for some new traffic, and would thereby make it possible for ISRR to continue to provide essential rail service to its customers; (b) would allow it to provide an economical switching service to nearby Class I connections, and would thereby preserve intramodal competition in Indianapolis and the surrounding area; and (c) would provide more efficient routings and new marketing opportunities not only for ISRR itself but also for other shortlines in the Indianapolis area. LIVONIA, AVON & LAKEVILLE. LAL, a Class III railroad that operates over two lines in Western New York, indicates that its interests in this proceeding relate to its Genesee Junction-Avon-Lakeville line, an approximately 29.4-mile north-south line that runs between (i) Conrail's Genesee Junction Yard in Chili, NY, immediately south of Rochester, NY, and (ii) Lakeville, NY. LAL, which was organized in 1963 to save tracks that the Erie-Lackawanna Railroad Company (EL) sought to abandon, originally operated between Avon (the location of the LAL/EL interchange) and Lakeville/Livonia (LAL's southern termini). The Avon interchange, at EL MP 366.2, was LAL's only interchange; LAL was, from the start, captive to EL. In the mid-1970s, at the time of the creation of Conrail, LAL attempted to acquire the EL line that ran west from Avon to Caledonia; this acquisition, had it been accompanied by acquisition of or trackage rights over the 0.2-mile segment between MPs 366.2 and 366.4, would have given LAL a connection, at Caledonia, with the Baltimore and Ohio Railroad Company (B&O). LAL, however, was not given an opportunity to purchase, or to acquire trackage rights over, the 0.2-mile segment; because there was no reason to acquire the Caledonia-Avon line without access rights to the 0.2-mile segment, LAL never acquired that line (which was, in due course, abandoned); and the LAL/EL Avon interchange at MP 366.2 became, in 1976, the LAL/Conrail interchange. The LAL/Conrail interchange remained at Avon until 1996, at which time LAL acquired Conrail's Genesee Junction-Avon line (i.e., the northern segment of what is now LAL's Genesee Junction-Avon-Lakeville line). LAL's ownership of the Genesee Junction-Avon-Lakeville line extends to the east end of Conrail's Genesee Junction Yard, ownership of which was retained by Conrail. LAL claims that Conrail retained ownership of Genesee Junction Yard in order to block LAL from connecting, at the west end of the yard, with the Rochester & Southern Railroad (R&S), a Class III railroad whose line runs south approximately 44 miles to Silver Springs, NY, at which point R&S connects both with CP and with Conrail (on Conrail's Buffalo-Corning line). LAL indicates that, although it has the right to operate in Genesee Junction Yard for purposes of the LAL/Conrail interchange, and although R&S also has the right to operate in the yard (for purposes of an R&S/Conrail interchange) and through the yard (for certain other purposes), neither LAL nor R&S has the right to operate in the yard for purposes of an LAL/R&S interchange (which, accordingly, does not exist). At present, therefore, LAL, which was for 20 years captive to Conrail at Avon, remains captive to Conrail at Genesee Junction Yard. LAL indicates that it acquired the Genesee Junction-Avon line: because the line functioned as the sole outlet for LAL's traffic; because the track required immediate repairs, which Conrail was unwilling to make; and because Conrail had indicated that, if the line could not be sold to LAL, it would be sold to another shortline. The CSX/NS/CR application envisions that Conrail's Buffalo-Rochester-Syracuse line, and Genesee Junction Yard along with it, will be assigned to CSX. LAL fears that this assignment will adversely affect competitive rail service for shippers and receivers on its line because CSX, which will be much larger and more remote than Conrail, will be even more inclined than Conrail to neglect the needs of captive businesses. Operational issues are also of concern to LAL, which notes that grain shipments from LAL origins to Conrail destinations on the Delmarva Peninsula and in Pennsylvania will require duplicative costs and multiple interchanges attendant upon CSX/NS interline service. A CSX/NS interline routing, LAL insists, will not be equivalent to a Conrail single-line routing. LAL also contends that its customers will be adversely impacted by the fact that certain traffic that now moves, or that now could move, in NS/Conrail/LAL joint-line service will henceforth have to move in NS/CSX/LAL joint-line service. LAL insists that, as a practical matter (i.e., given CSX vs. NS rivalry), any such joint-line routings involving LAL simply will not survive the CSX/NS/CR transaction. LAL therefore asks that we require that LAL be allowed to acquire ownership of, or trackage rights over, the approximately 1 route mile of trackage constituting Genesee Junction Yard, with the right to directly interchange with all carriers with access to that yard (the only such carriers mentioned in the record are CSX and R&S), subject to terms and conditions to be negotiated by LAL and CSX or, if negotiations fail, to be set by the Board. LAL contemplates that its ownership would be accompanied by a reciprocal grant of trackage rights to CSX. This condition, LAL contends, would allow LAL's shippers to access both CSX and R&S, and is necessary: to mitigate the CSX/NS/CR transaction's adverse impact on food processing and agricultural businesses in New York; to keep shippers on the Genesee Junction-Avon-Lakeville line competitive with other shippers in the region; and to preserve LAL as a provider of essential services to shippers on the Genesee Junction-Avon-Lakeville line. LAL adds that, if CSX is to own the yard, CSX should be required to fulfill its promise to upgrade the yard to FRA Class 1 condition. An additional condition requested by LAL, apparently as an alternative to its acquisition/trackage rights condition, is the elimination of the restriction in the LAL/Conrail interchange agreement that bars LAL from utilizing Genesee Junction Yard to interchange traffic with carriers other than Conrail or its successor. NEW ENGLAND CENTRAL RAILROAD. NECR, a Class III railroad that operates over approximately 343 miles of track between East Alburg, VT, and New London, CT, claims that, in at least two respects, the CSX/NS/CR transaction, by substituting CSX for Conrail, will competitively disadvantage New England shippers and shortlines. (1) NECR claims that 1-to-1 shippers in New England will be competitively disadvantaged vis-à-vis their 1-to-2 competitors (competitors that are served pre-transaction by Conrail but that will be served post-transaction by CSX and NS). (2) NECR claims that, for those 1-to-1 shippers in New England that ship to points open today to both CSX and NS, the neutral gateway service now provided by Conrail will not be provided post-transaction by CSX, which will have a strong incentive to favor its own routes by raising rates or reducing service for traffic moving to NS destinations. NECR is also concerned that, with the traffic diversions that will result from the new post-transaction rail alignments, NECR stands to lose up to $8 million (i.e., almost half) of its annual revenues. The loss of these revenues, NECR warns, would have a devastating and possibly fatal effect on NECR, which would be compelled to make significant reductions in service throughout its system and to discontinue service altogether on marginal sections. The effect, NECR adds, would be devastating to those NECR-served shippers that have no practical alternative to NECR's rail service (e.g., NECR customers receiving forest products from Canadian origins); these shippers would lose essential rail service. NECR adds: that other shippers would incur increased costs in diverting their freight to truck; and that Amtrak service over NECR's system would be jeopardized. NECR therefore asks that we require that NECR be granted limited trackage rights over the Conrail lines to be assigned to CSX, (1) between Palmer, MA (the NECR/Conrail connection point), and West Springfield, MA, a distance of approximately 18 miles, (2) between West Springfield, MA, and Albany, NY (including Selkirk, NY, and Mechanicville, NY), a distance of approximately 98 miles, and (3) on the west side of the Hudson River, between Albany, NY, and the North Jersey SAA, a distance of approximately 140 miles. The term "limited trackage rights" is used by NECR to mean: (i) the right to operate trains over the described lines; and (ii) the right to interchange with all carriers, including shortlines, at all junctions on the described lines. These trackage rights would allow NECR to make at least the following new connections: with its Connecticut Southern Railroad, Inc. (CSO) affiliate, at West Springfield, MA; with HRRC at Pittsfield, MA; with B&M, D&H, and NS (via an NS/D&H haulage arrangement) in the Selkirk- Albany-Mechanicville area; and with NS and CSX in the North Jersey SAA. NECR also asks that we retain jurisdiction to establish terms in the event the parties are unable to resolve these matters through negotiations. NECR claims that the trackage rights it seeks: (a) would allow it both to retain some present traffic that CSX and NS would otherwise divert and also to attract some new traffic, and would thereby allow NECR to continue to provide essential rail service to its on-line customers; (b) would, by enabling NECR to offer New England shippers and shortlines alternative access to Class I carriers in the Selkirk-Albany-Mechanicville area and in the North Jersey SAA, resolve the anticompetitive disadvantages that New England shippers and shortlines are certain to suffer if the primary application is approved without conditions; and (c) would provide more efficient routings and new marketing opportunities not only for NECR itself but also for other New England shortlines. NECR acknowledges that, even without its requested trackage rights, it will have post-transaction access to NS via an NECR/B&M/NS routing (the NECR/B&M junction will be at Brattleboro; the B&M/NS junction will be at Mechanicville). NECR contends, however, that the post-transaction NS routing via Brattleboro will be significantly more circuitous than the post-transaction CSX routing (i.e., the pre-transaction Conrail routing). NECR indicates: that the West Springfield connection with CSO would enable NECR and CSO to reduce costs by coordinating their operations; that the West Springfield connection with CSO and the Pittsfield connection with HRRC would provide CSO and HRRC with more efficient routings and new marketing opportunities for traffic moving from/to points on their lines via the major Class I gateways in the Selkirk-Albany-Mechanicville area and the North Jersey SAA; and that similar efficiencies and marketing opportunities would be gained by NECR's other shortline connections. NEW YORK & ATLANTIC RAILWAY. NYAR, which began operations in May 1997, holds an exclusive franchise to provide freight service over LIRR's rail lines, which extend between Pennsylvania Station (in Manhattan) and Montauk (at the eastern tip of Long Island). NYAR notes that, aside from Conrail, P&W, and NYCH, NYAR is (as LIRR formerly was) the sole provider of rail freight service on Long Island (i.e., the Boroughs of Brooklyn and Queens and the Counties of Nassau and Suffolk). NYAR claims that, in this area, its geographical coverage is far more extensive than that of Conrail, P&W, and NYCH combined. NYAR's geographical coverage extends almost the entire east-west length of Long Island. The geographical coverage of Conrail and P&W, in contrast, is limited: their only access to Long Island is on the line that runs between Oak Point Yard (in the South Bronx) and Fresh Pond Yard (in Queens). Fresh Pond Yard is the location of the Conrail/NYAR and P&W/NYAR interchanges. NYCH's geographical coverage is also limited; its operations are conducted in and near the Bay Ridge area of Brooklyn. Bush Junction (in Brooklyn) is the location of the NYCH/NYAR interchange. NYAR's interests in this proceeding are focused upon the east-of-the-Hudson joint facility advocated by the Nadler Delegation, by which is meant (i) a cross-harbor float operation, and (ii) a core system of rail lines and terminals east of the Hudson River, including LIRR's 11-mile Bay Ridge Line (now operated over by NYAR) that extends between Bush Junction in Brooklyn and Fresh Pond Yard in Queens. NYAR asks that we reject the Nadler Delegation's proposal insofar as that proposal addresses the Bay Ridge Line. The Bay Ridge Line, NYAR contends, is critically important to NYAR. The Bay Ridge Line: provides NYAR its only access to the NYCH/NYAR interchange at Bush Junction; provides NYAR its only access on a freight-only line to the Conrail/NYAR and P&W/NYAR interchanges at Fresh Pond Yard; is the only line in the NYAR system over which NYAR can handle overhead traffic; and is one of only two lines in NYAR's entire system that are not subject to joint use by LIRR for passenger operations (and the resulting flexibility to cater to shippers' service needs, NYAR insists, will allow it to attract new shippers to locate on the line and to induce current shippers to increase the amount of traffic shipped over the line). NYAR claims that operations by applicants over the Bay Ridge Line would threaten NYAR's very existence. Applicants, NYAR claims, would have a tremendous advantage in competing for traffic that either originates or terminates on the line and that moves to/from (respectively) points served by CSX or NS. NYAR also fears that overhead traffic now handled by NYAR likely would be lost to applicants. And, NYAR adds, the physical characteristics of the single-tracked Bay Ridge Line do not make it a good candidate for multiple carrier use. NYAR contends: that, because the CSX/NS/CR transaction will not cause any fundamental changes in rail service on Long Island in general or on the Bay Ridge Line in particular, inclusion of the Bay Ridge Line in a joint facility would not address any transaction-related competitive harm; that 49 U.S.C. 11324(c) does not authorize us to compel the divestiture by a nonapplicant of its operating rights, or any portion thereof, in the manner proposed by the Nadler Delegation; that 49 U.S.C. 11102 does not authorize us to compel NYAR to grant applicants access to the Bay Ridge Line, (i) because the Bay Ridge Line is not a terminal facility, and (ii) because, in any event, multi-carrier use of this line would substantially impair NYAR's ability to use this line to handle its own traffic; and that 49 U.S.C. 10907(c)(1) does not authorize us to compel the sale of the Bay Ridge Line to applicants, (i) because sec. 10907(c)(1) does not address competitive access concerns, and (ii) because the Bay Ridge Line does not have any of the attributes necessary to make it a candidate for a forced sale under sec. 10907. On March 19, 1998, NYAR filed its NYAR No. 4 pleading containing: (a) a motion for leave to file a reply to the Nadler Delegation's brief; and (b) a reply to the Nadler Delegation's brief. NYAR insists: that the State of New York has never had an ownership interest in NYAR; that NYAR has never endorsed the proposal that the Bay Ridge Line be included in a joint facility; and that a temporary moratorium (agreed to by NYAR) on the rail transportation of municipal solid waste traffic reflects only a willingness to accommodate the interests of certain communities in the Borough of Queens, not a lack of capacity on the part of NYAR or any other railroad. NEW YORK CROSS HARBOR RAILROAD. NYCH, a Class III railroad that operates the lines formerly operated by the New York Dock Railway (NYDR) in Brooklyn, NY: serves shippers along a network of lines in the Bay Ridge area of Brooklyn; operates a car ferry service across New York Harbor, between its lines in Brooklyn (on the east side of the harbor) and Conrail's Greenville Yard in Jersey City, NJ (on the west side of the harbor); and serves customers at Greenville Yard. NYCH claims: (1) that, for traffic moving from/to shippers on its lines in Brooklyn, NYCH provides the principal connection to Conrail at Greenville Yard; (2) that, for traffic moving from/to points on the Long Island Rail Road (LIRR), NYCH provides a connection between LIRR and Conrail; and (3) that, for traffic moving between (i) points in Southern New England and in Southern New York east of the Hudson River, on the one hand, and (ii) points south and west of New York City, on the other hand, NYCH provides a portion of the bridge between Conrail's lines north of New York City (these lines extend south only as far as Fresh Pond Yard in Queens) and Conrail's lines west of New York Harbor (these lines extend east only as far as Greenville Yard in Jersey City). The freight operations formerly conducted by LIRR are now conducted by New York & Atlantic Railway (NYAR). NYCH acknowledges that, upon implementation of the CSX/NS/CR transaction, it will have, for the first time, two Class I connections because Greenville Yard is in the North Jersey SAA. NYCH's post-transaction prospects, however, are not, in NYCH's view, entirely satisfactory because, although NYCH will have two Class I connections at Greenville Yard (CSX and NS), it will still have, via NYAR, only one Class I connection at Fresh Pond Yard (CSX). NYCH claims that its status, as respects its bridge function, will be 1-to-1: the pre-transaction Conrail/NYCH/NYAR/Conrail routing will become a post-transaction CSX/NYCH/NYAR/CSX routing; there will be no comparable post-transaction routing involving NS, because Fresh Pond Yard and Conrail's lines north thereof are to be assigned to CSX. (1) NYCH fears that CSX, like Conrail, will favor its own Selkirk Yard (Albany, NY) routing, and will continue to route traffic around, rather than via, NYCH, which (NYCH claims) will threaten NYCH's ability to serve its on-line customers. NYCH therefore asks that we require CSX to utilize the CSX/NYCH/NYAR/CSX routing for traffic moving between points on Long Island and in Southern New England and in adjacent parts of New York State, on the one hand, and, on the other hand, points in the Mid-Atlantic States and the South and Southwest, where the CSX/NYCH/NYAR/CSX routing (what NYCH calls its Greenville Gateway) represents the shortest, the most efficient, and the most economical routing. (2) NYCH contends that the marked decline in recent decades in the volume of traffic routed via the Greenville Gateway reflects wrongdoing on the part of Conrail, and, on the strength of this contention, NYCH recently filed suit against Conrail on antitrust and other grounds. NYCH claims that, if it prevails in that suit, its damage award may well be substantial. NYCH acknowledges that CSX and NS have represented that, if necessary, they will provide any funds that are required to enable Conrail to discharge its post-transaction obligations. NYCH submits, however, that, during discovery, applicants' witnesses were unable to confirm this representation. NYCH therefore asks that we require CSX and NS to jointly and severally guaranty Conrail's pre-closing liabilities arising out of litigation (or settlement of litigation) relating to actions by Conrail that occurred prior to closing to the extent that the post-transaction Conrail lacks sufficient assets to meet such liabilities. NORTH SHORE RAILROAD COMPANY AND AFFILIATES. NSHR, JVRR, NBER, LVRR, SVRR, and UCIR ask that we note for the record the settlement agreement they have entered into with NS. OHI-RAIL CORPORATION. Ohi-Rail, a Class III railroad that operates over a 45-mile line between Baird, OH (its junction with Conrail) and Hopedale, OH (its junction with W&LE), indicates that its interests in this proceeding are focused on coal traffic originated at mines in Southeast Ohio and shipped to Centerior's Eastlake Plant in Eastlake, OH. This traffic, Ohi-Rail indicates, presently moves in a Conrail single-line routing. Post-transaction, however, this traffic (and, more broadly, any traffic originated on NS' Conrail lines or on connecting shortlines accessed by NS via its Conrail lines) will have to be routed NS/CSX because, although NS is to acquire most of the relevant Conrail lines in Eeastern Ohio, CSX is to acquire the relevant Conrail tracks in the Cleveland area. Ohi-Rail, which fears that CSX may favor its own single-line coal movements, warns that the loss of single-line service to the Eastlake Plant and other similarly situated utilities will have a detrimental impact on the development of Ohio coal reserves. Ohi-Rail therefore asks that we require that NS be granted direct access to Centerior's Eastlake Plant. PHILADELPHIA BELT LINE RAILROAD COMPANY. PBL, a Class III railroad, owns approximately 16.3 miles of track, right-of-way, and trackage rights along the waterfront in Philadelphia, PA, extending (i) from Bridge Street on the north, (ii) south to Allegheny Avenue (on the northern side of the site of Conrail's former Port Richmond Yard), (iii) further south to approximately Lehigh Avenue (which appears to be on the south side of the Port Richmond Yard), and (iv) further south, along or adjacent to Delaware Avenue, to Greenwich Yard. These tracks, right-of-way, and trackage rights, however, do not presently allow for uninterrupted operation from Bridge Street to Greenwich Yard; obstructions that PBL claims have been erected by the City of Philadelphia block such uninterrupted operation (these obstructions are apparently at the site of the Port Richmond Yard). As a practical matter, PBL's lines exist today as three discrete segments: the Belt Line North (from Bridge Street to Allegheny Avenue, a distance of approximately 3 miles -- The Port Richmond Yard today offers the only rail connection to the Belt Line Nort.); the obstructed segment (from Allegheny Avenue to approximately Lehigh Avenue); and the Belt Line South (from approximately Lehigh Avenue to Greenwich Yard). PBL claims that, at the time PBL was chartered in 1889 and at all relevant times thereafter, it was intended that PBL would function as a terminal and switching company whose facilities and services would forever be available on an equal access basis to all railroads then and in the future serving Philadelphia. PBL contends that the City of Philadelphia, by ordinances enacted in 1890 and 1914, memorialized this concept of equal access, which PBL refers to as the Belt Line Principle. The Belt Line Principle, PBL adds, remains as important today as it was more than a century ago; neutral, nondiscriminatory access by all railroads to PBL's lines is, PBL insists, essential to ensure that shippers located on these lines receive service at equitable rates from all carriers that reach the Philadelphia market. PBL's interests in this proceeding are focused on the Belt Line North, which has been leased by Conrail since 1987. Shippers on the Belt Line North, PBL claims, should presently have three line-haul options: Conrail, CSX, and CP. PBL claims, however, that, in reality, these shippers presently have, for the most part, only one line-haul option, because Conrail has imposed excessively high reciprocal switching charges in order to discourage these shippers from routing via CSX or CP. PBL concedes, in essence, that, because the Belt Line North is located in the South Jersey/Philadelphia SAA, Belt Line North shippers will have, post-transaction, two line-haul options: CSX and NS. PBL notes, however, that, in general, these shippers will continue to be unable to route via CP, or indeed via any other railroad that now has or that hereafter acquires access to Philadelphia. PBL therefore asks that we require that all carriers (including CSX, NS, and CP) that now have, or that in the future will have, access to any points in Philadelphia be provided equal, nondiscriminatory access to the Belt Line North through equitable reciprocal switch rates. PBL claims that the access provided by this condition: would allow for realization of the Belt Line Principle; would prevent CSX and NS from attaining market dominance over Belt Line North shippers; and would protect the essential services needed by shippers on the Belt Line North. PBL, in its brief, apparently suggests (this is not entirely clear) that, if we do not impose the condition it has sought, we should, at the very least, state that applicants will not have immunity provision, a right to disregard Conrail's pre-transaction Belt Line Principle obligations. Such a statement, PBL apparently contends, would effectively preserve the status quo respecting the Belt Line Principle. PROVIDENCE AND WORCESTER RAILROAD COMPANY. P&W, a regional railroad that operates in Massachusetts, Rhode Island, New York, and Connecticut, holds overhead trackage rights between Fresh Pond Yard (in Queens) and New Haven, CT; these overhead rights extend over lines owned by Conrail, the New York Metropolitan Transportation Authority (NYMTA), Amtrak, and the Connecticut Department of Transportation (CTDOT); and, with but one exception, these overhead rights are limited to the movement of construction aggregates. P&W's overhead trackage rights on Conrail extend over: Conrail's Market Running track between Pelham Bay and Oak Point Yard; and the New York Connecting Railroad line between Oak Point Yard (in the South Bronx) and Fresh Pond Yard (in Queens). P&W notes one exception to the "construction aggregates" limitation: P&W's overhead rights over the CTDOT-owned portions of the Fresh Pond Yard-New Haven line allow P&W to reach, for all purposes, its Waterbury Branch at Devon, CT, and its Danbury Branch at South Norwalk, CT. P&W's interests in this proceeding are focused upon two matters: the joint facility advocated by the Nadler Delegation; and certain terminal properties in New Haven. (1) P&W suggests that the Nadler Delegation's proposal may reflect a misunderstanding of P&W's rights on the Fresh Pond Yard-New Haven line. P&W insists that, except as respects the Danbury and Waterbury Branches, P&W's rights on the Fresh Pond Yard-New Haven line are limited solely to the overhead movement of construction aggregates. (2) P&W is concerned that the Nadler Delegation's proposal envisions the introduction of an additional railroad on the portion of the Fresh Pond Yard-New Haven line that lies within the limits of the proposed joint facility. The Fresh Pond Yard-New Haven line, P&W claims, is heavily used both by Conrail and P&W, and also (for passenger operations) by Amtrak and Metro-North Commuter Railroad Company (MNCR). The introduction of a third freight operator on this line, P&W warns, would raise significant concerns regarding the availability of adequate operating windows. (3) P&W submits that, if we decide to require that an additional carrier be granted operating rights on the Fresh Pond Yard-New Haven line or any portion thereof, we should allow P&W to be that additional carrier. P&W claims that, pursuant to an order entered April 13, 1982, by the Special Court created by the Regional Rail Reorganization Act of 1973, Conrail must, upon implementation of the CSX/NS/CR transaction, sell to P&W certain terminal properties in the vicinity of New Haven, CT. The 1982 order provides, in relevant part, that, if Conrail elects to withdraw from or abandon or discontinue freight service obligations on the terminal properties known as New Haven Station, and if, on application of P&W, the Federal Railroad Administrator shall find that P&W is continuing to operate as a self-sustaining railroad capable of undertaking additional common carrier responsibilities without federal financial assistance, then Conrail shall sell the New Haven Station properties to P&W. The 1982 order further provides: that such sale shall be at a reasonable price and on reasonable terms and conditions agreed upon by Conrail and P&W or, in the absence of agreement, set in arbitration; and that, upon the sale, P&W shall succeed to Conrail's service obligations, but subject to certain conditions. The record indicates: that, at or after the time the primary application was filed with the Board, Conrail was advised by P&W that it intended to exercise its rights to acquire New Haven Station; that Conrail, however, refused either to negotiate or to arbitrate; that, on November 12, 1997, P&W sought, in the United States District Court for the District of Columbia, a declaration that its right to purchase New Haven Station had matured; that, on December 19, 1997, Conrail asserted that P&W's complaint must be dismissed because its claims do not present a ripened case or controversy appropriate for judicial intervention at this time; and that, by order entered January 22, 1998, the District Court, citing the ripeness doctrine, dismissed P&W's complaint, but expressly granted P&W leave to refile after we render a final decision on the primary application P&W claims: that, upon the assignment of Conrail's New England lines to CSX, Conrail will have withdraw[n] from or abandon[ed] or discontinue[d] freight service at New Haven Station; that P&W will continue to operate as a self-sustaining railroad capable of undertaking additional common carrier responsibilities without federal financial assistance; and that, in compliance with the 1982 order, Conrail, once it withdraws from New Haven Station, must sell the New Haven Station properties to P&W. P&W further contends, in essence: that claims arising under the 1982 order cannot be resolved by the Board but must be resolved by the United States District Court for the District of Columbia, which now exercises the jurisdiction formerly exercised by the now defunct Special Court; and that P&W's rights under the 1982 order cannot be preempted by 49 U.S.C. 11321(a). Applicants are of the view that P&W's rights under the 1982 order can be adjudicated by the Board and must be preempted under 49 U.S.C. 11321(a). Applicants also contend that, in any event, the CSX/NS/CR transaction will not trigger P&W's rights under the 1982 order because Conrail will continue to own New Haven Station (and therefore will not withdraw from or abandon or discontinue freight service at that station). Applicants further contend that, even if P&W's rights under the 1982 order are triggered by the CSX/NS/CR transaction and are not preempted under 49 U.S.C. 11321(a), P&W is estopped from asserting such rights because the P&W/CSX settlement requires P&W to voice unconditional support for the primary application. READING BLUE MOUNTAIN & NORTHERN. RBMN, a Class III railroad, operates over approximately 280 miles of rail line in eastern Pennsylvania, in a north-south corridor that extends between Mehoopany and Reading. Within this corridor, RBMN's lines comprise two physically separated divisions (the Lehigh Division, which extends between Mehoopany and Lehighton, and the Reading Division, which extends between Hazleton and Reading) which are linked by two separate sets of trackage rights: (i) trackage rights over Conrail, between Hazleton and M&H Junction ( RBMN, however, apparently does not utilize its Hazleton-M&H Junction trackage rights to link its two divisions.); and (ii) trackage rights over C&S and Conrail, between Haucks Junction and Packerton Junction. The C&S (C&S Railroad Corporation) trackage rights apparently cover most of the distance between Haucks Junction and Packerton Junction. The Conrail trackage rights apparently fill a short gap in the vicinity of Packerton Junction between the C&S tracks and the Lehigh Division. Traffic moving on the Lehigh Division is apparently routed RBMN/Conrail via either Mehoopany or Lehighton (Such traffic includes overhead traffic moving between Conrail at Lehighton and two shortlines, Luzerne & Susquehanna Railroad (L&S) and Delaware-Lackawanna Railroad (DL), with which RBMN connects in the Scranton area.); traffic moving on the Reading Division is routed RBMN/Conrail via Reading. RBMN has physical connections with two Class I railroads (CP, via a connection in the Scranton area with D&H; and Conrail), but, on account of a restriction it accepted upon its acquisition of the Lehigh Division from Conrail in 1996, RBMN, for the most part, has but a single realistic Class I connection (Conrail). The restriction, which we shall refer to as the blocking provision, provides for the payment to [Conrail], its successors or assigns, of certain specified [penalty] amounts for any rail traffic handled by [RBMN, or its successors or assigns], which originates, terminates or otherwise moves over the [Lehigh Division], and which could commercially be interchanged with [Conrail], its successors or assigns, but is interchanged with another rail carrier. RBMN claims that, in practice, the blocking provision works as intended, effectively blocking RBMN from participating in non-Conrail routings of traffic that can commercially be routed via Conrail. RBMN contends that the CSX/NS/CR application, which envisions that all of the Conrail lines with which RBMN connects will be assigned to NS, will disadvantage RBMN and/or its customers in several ways. RBMN claims: (1) that the RBMN/NS relationship may result in an increase in the costs borne by RBMN and/or its customers; (2) that, as a matter of state law, the substitution of NS for Conrail may result in an expansion of the effect of the blocking provision; (3) that the division of Conrail contemplated by the primary application may jeopardize certain existing traffic flows (by changing Conrail single-line movements to CSX/NS joint-line movements); and (4) that the creation of new rail competition in other areas combined with the perpetuation of the Conrail monopoly in the RBMN region will adversely affect that entire region. Furthermore, RBMN, which now receives approximately $85,000 per month in fees from D&H trackage rights operations over the Lehigh Division, fears that perhaps half of the D&H trackage rights traffic will be diverted to another route post-transaction. The traffic is now routed Scranton-Allentown-Reading-Philadelphia (via the Lehigh Division) but, on account of certain trackage rights acquired by CP in a settlement agreement with NS, much of this traffic is likely to be routed Scranton-Harrisburg-Reading-Philadelphia post-transaction. RBMN therefore asks that we require: (1) that the blocking provision be eliminated or modified; and (2) that D&H be permitted to access, via RBMN's Reading Division, D&H's existing trackage rights on the Conrail line that runs through Reading. Elimination of the blocking provision, RBMN contends: would extend rail competition to the RBMN region; would prevent any exacerbation of the anticompetitive effects of the blocking provision; would enable RBMN to retain traffic that might otherwise be lost; would allow certain shippers to enjoy single-line service; and would enable RBMN to eliminate, in certain instances, excessively circuitous routings. Allowing D&H to access its trackage rights on the Conrail line that runs through Reading, RBMN contends: would provide RBMN the opportunity to retain, and indeed to expand, the trackage rights revenue now derived from D&H trackage rights operations; and would enable D&H to avoid congested conditions common on alternative routings. Implementation of this second condition would be contingent upon an RBMN/D&H agreement granting D&H trackage rights over RBMN's Reading Division. The "existing" D&H trackage rights referenced by this second condition are the trackage rights pursuant to which D&H traffic can now be routed Scranton-Allentown-Reading-Philadelphia R.J. CORMAN RAILROAD COMPANY/WESTERN OHIO LINE. RJCW, a Class III railroad that operates over three lines in Western Ohio, indicates that its interests in this proceeding are focused on its Glenmore-Lima line. RJCW notes that, at present, the Glenmore-Lima line's only direct Class I connection is Conrail at Lima. RJCW adds, however, that it also has, via a Conrail intermediate switch at Lima, access to both CSX and NS. RJCW states that traffic routed RJCW/CSX or RJCW/NS is switched through a British Petroleum yard located in Lima, over a 2.3-mile segment of Conrail's line by RJCW itself on behalf of Conrail. RJCW contends that Conrail's willingness to charge $60 per carload for this intermediate switch reflects the fact that Conrail is not competitive with respect to origins and destinations on traffic routed either RJCW/CSX or RJCW/NS. The CSX/NS/CR application envisions that Conrail's 2.3-mile Lima switch line will be assigned to CSX. RJCW fears that, once that happens, RJCW, although it will then have direct access to CSX, will no longer have, as a practical matter, any access to NS. RJCW therefore asks that we require that RJCW be allowed to acquire ownership of, or trackage rights over, Conrail's 2.3-mile switch line (between approximately MPs 54.4 and 52.1), subject to terms and conditions to be negotiated by RJCW and CSX or, if negotiations fail, to be set by the Board. This condition, RJCW contends, would allow RJCW to preserve a viable RJCW/NS routing in competition with the RJCW/CSX routing, and is necessary to keep Glenmore-Lima shippers competitive with other grain and fertilizer shippers in the region and to preserve RJCW as a provider of essential services on the Glenmore-Lima line. THE ELK RIVER RAILROAD, INCORPORATED. TERRI, a Class III railroad, operates over 79 miles of track in Clay, Braxton, and Gilmer Counties, WV, and provides (by its account) essential rail service to an economically depressed region of south-central West Virginia. TERRI, which presently has a single Class I connection (CSX at Gilmer, WV), has planned, for several years, to build out to a second Class I connection, and, in fulfillment of this plan, it has sought and received regulatory authorization to construct a 30-mile connecting track from its western terminus (at Hartland, WV) to a Conrail line at Falling Rock, WV (about 17.1 miles northeast of Charleston, WV), and it is presently in the process of acquiring the necessary right-of-way. TERRI claims that the success of its build-out will depend upon: (1) the rehabilitation of Conrail's Charleston-Falling Rock-Sanderson line; and (2) the establishment of reasonable arrangements pursuant to which TERRI-originated coal may access rail-to-barge transloading docks at ChCSX at Gilmer, WV), has planned, for several years, to build out to a second Class I connection, and, in fulfillment of this plan, it has sought and received regulatory authorization to construct a 30-mile connecting track from its westarleston. Because the CSX/NS/CR application envisions that NS will be assigned Conrail's West Virginia Secondary (between Columbus, OH, and Charleston, WV) and also Conrail's Charleston-Falling Rock-Sanderson line, the effect of the CSX/NS/CR transaction upon TERRI's build-out would seem to be merely the substitution of NS for Conrail as TERRI's potential second Class I connection. TERRI claims, however, that NS' interests vis--vis TERRI's build-out line are not precisely the same as Conrail's. Conrail, TERRI insists, was eager to gain additional coal traffic, and was therefore willing to work with TERRI. NS, TERRI adds, has substantial reserves of marketable coal on its own lines, and, for this reason, may be less interested in opening up new markets for TERRI-originated coal than Conrail was. TERRI therefore asks that we require a commitment by NS to negotiate in good faith cussions with Conrail. WHEELING & LAKE ERIE RAILWAY COMPANY. W&LE, a regional railroad which was created in 1990 as an NS spin-off and which has since expanded with line acquisitions and trackage rights grants from NS, CSX, and Conrail, operates over 864 miles of track in Ohio, Pennsylvania, West Virginia, and Maryland. W&LE's main stem extends 149 miles from Bellevue, OH, to Mingo Junction, OH; W&LE serves numerous Ohio points, including Bellevue, Carey, Chatfield, Wellington, Spencer, Akron, Canton, Orrville, Brewster, and Mingo Junction; and W&LE extends beyond Mingo Junction (i) south to Benwood, WV, and (ii) east to Rook and Connellsville, PA (and, via trackage rights, it extends beyond Connellsville to Hagerstown, MD). W&LE's interests in this proceeding are focused mainly on its relationship with NS, which has been W&LE's most significant joint-line partner. W&LE fears that NS, once it acquires the Conrail lines it will receive in the CSX/NS/CR transaction, (a) will have little need for a W&LE/NS routing, and (b) will be W&LE's most pervasive head-to-head competitor. The consequences, W&LE concludes, are likely to be so severe (a loss of more than 16,000 cars and $12.7 million in gross revenue) that, if the CSX/NS/CR transaction is implemented as proposed, W&LE will be rendered insolvent by no later than the year 2001. W&LE therefore asks that we require that W&LE be granted: (1) access between Bellevue and Chicago by means of a haulage agreement, with underlying trackage rights; (2) access between Bellevue (Yeomans) and Toledo, a distance of 54 miles (on an NS line), by means of a haulage agreement, with underlying trackage rights; W&LE seeks: rights to interchange with AA, CN, and Indiana & Ohio Railway Company (IORY); and access to British Petroleum for movement of coke to Cressup, WV; (3) access via a lease of, with a right to purchase, NS' Huron Branch (Shinrock to Huron) and NS' Huron Dock on Lake Erie (W&LE currently has a short term lease on the dock); (4) access between Benwood, WV, and Brooklyn Junction, WV, a distance of 33.4 miles (on a CSX line), by means of a haulage agreement, with underlying trackage rights. W&LE also seeks: access to the yard facilities at Brooklyn Junction; access to PPG and Bayer, both at Natrium, WV (and now served by CSX); and access to British Petroleum, at Cressup, WV; (5) trackage rights (a) on Conrail's Fort Wayne Line (to be assigned to NS), to reach the National Stone quarry near Bucyrus and also to reach stone receivers in Wooster (MP 135) and on a side track extending approximately from MP 87.3 to MP 85.1, near Alliance -- W&LE would operate on the Conrail line: (i) between Bucyrus (CP Colsan, at MP 200.5) and Orrville (CP Orr, MP 124), a distance of 76.5 miles; and (ii) between Canton (Fairhope, at MP 97.8) and Alliance, a distance of approximately 10 miles. W&LE would reach the National Stone quarry via the 6.2-mile Spore Industrial Track, which connects with the Fort Wayne Line at CP Colsan (MP 200.5), (b) on NS' Chatfield-Colsan line, a distance of 10.8 miles, between Chatfield and Colsan, to provide alternative access to the Spore Industrial Track, (c) on NS' Maple Grove-Bellevue line, a distance of 21.3 miles, between Maple Grove (MP 269.4) and Bellevue (MP 248.1), to reach a stone quarry located on the Northern Ohio & Western Railway (NO&W) in the vicinity of Redlands, and (d) on CSX's New Castle Subdivision in Akron (a distance of 0.5 miles), and then on Conrail's lines in the area east of Akron (these lines are to be assigned to NS), to reach stone terminal destinations in the Macedonia, Twinsburg, and Ravenna areas -- to bridge the gap between the CSX line and the Conrail lines, W&LE would apparently have to operate on an 8-mile line owned by Summit County); (6) access to Wheeling Pittsburgh Steel at Allenport, PA, by means of a haulage agreement with underlying trackage rights over CSX from MP 41 near Monessen, PA, to MP 53.9 near Brownsville, PA, a distance of 12.9 miles, and over Conrail from MP 53.9 near Brownsville, PA, to Wheeling Pittsburgh Steel at Allenport, PA, a distance of 9.5 miles; (7) access over CSX's New Castle Subdivision, by means of a haulage agreement, with underlying trackage rights, (a) from Akron, OH, to the Ohio Edison Power plant at Niles, OH, a distance of 42 miles, and (b) to Erie, PA, for interchange with other railroads. W&LE seeks, in particular, an interchange at Erie with Buffalo & Pittsburgh Railroad, Inc. (BPRR). Access to Erie would apparently be over a CSX line (from Akron to Youngstown) and over Conrail lines to be assigned to CSX (from Youngstown to Erie via Ashtabula); (8) access via a lease of, with a right to purchase, Conrail's Randall Secondary between Cleveland (MP 2.5) and Mantua (MP 27.5); (9) access, apparently via trackage rights, to Reserve Iron & Metal, L.P., in Cleveland; (10) access, apparently via trackage rights, to Weirton Steel Corporation at Weirton, WV; (11) with respect to four joint facilities the maintenance of which has been W&LE's responsibility under the 1990 spin-off arrangements that created W&LE, an order (a) relieving W&LE of the burden of maintaining these facilities, and (b) allocating the costs of maintenance on a proportional use basis; and (12) a guarantee of fairness and nondiscriminatory treatment on any haulage and trackage rights granted. The four joint facilities are railroad grade crossings in Wellington, Canton, Steubenville, and Cleveland, OH. W&LE insists that it is no longer feasible for W&LE to maintain these facilities, in view of (i) CSX's and NS' anticipated post-transaction traffic increases, and (ii) W& LE's anticipated post-transaction traffic losses. W&LE has also requested several additional conditions. W&LE asks: (i) that we require NS to assume W&LE's $915,000 per year lease payments on W&LE's P&WV (Pittsburgh & West Virginia Railroad) properties; (ii) that we encourage the full development of the Neomodal Terminal; (iii) that we impose an oversight condition and retain jurisdiction during the oversight period; and (iv) that we provide, in connection with the oversight condition, a mechanism for an inclusion proceeding in the event W&LE fails during the pendency of the oversight proceeding. W&LE claims that the opportunities its conditions would provide might allow it to gain revenues of about $11 million, and might thereby allow for the preservation of W&LE service in the Chicago-Pittsburgh Corridor. Several purposes, W&LE contends, would be served by the continued existence of W&LE: W&LE would continue to exist as a competitive force in the Chicago-Pittsburgh Corridor; W&LE would continue to provide the essential rail services it now provides; W&LE's route structure would be available (via NS/W&LE and CSX/W&LE joint-line routings) to allow bunched traffic flows to bypass congested facilities in Cleveland and Pittsburgh; and W&LE would be able to offer routing efficiencies for traffic flows that would otherwise move over more circuitous CSX and NS single-line routings. WISCONSIN CENTRAL LTD. WCL, a Class II railroad that operates over approximately 2,017 miles of rail line in Wisconsin, Michigan's Upper Peninsula, Minnesota, and Illinois, asks that we impose three conditions to protect its interests in efficient and competitive switching services in Chicago. WCL fears that virtually all post-transaction WCL traffic interchanged at Chicago with either CSX or NS will be subject to CSX control as it moves through the Chicago switching district. WCL contends that, today, it has two routings by which it may reach NS: it may route via the Altenheim Subdivision of B&OCT (which CSX presently controls); or it may route via IHB (which CSX presently does not control). WCL further contends that, post-transaction, both of WCL's routings to reach NS will be subject to some measure of CSX control. WCL therefore asks that we require that WCL be allowed to acquire that portion of B&OCT's Altenheim Subdivision that begins at the WCL/B&OCT connection at B&OCT MP 37.4 at Madison Street, Forest Park, IL, and that extends to a connection with UPRR and the Panhandle Line of Conrail in the vicinity of Rockwell Street, Chicago, IL, a distance of approximately 10 miles. WCL claims that its ownership of this portion of the Altenheim Subdivision would allow WCL trains to move along a new route paralleling the congested B&OCT route between Western Avenue and Brighton Park. This new route, WCL contends: would allow WCL to establish, independent of CSX control, connections with NS, BNSF, and GTW; would thereby mitigate the CSX/NS/CR transaction's adverse impact on switching services competition in the Chicago switching district; and would mitigate congestion on the B&OCT route and thereby enhance the overall capacity and efficiency of the Chicago switching district. The new route would also require operation by WCL over Conrail's Panhandle Line (in Chicago) from Ogden Junction (Rockwell Street) on the north to a point near the Ash Street interlock (near Brighton Park) on the south, a distance of approximately 3 miles. WCL notes, however, that it has already reached agreement with NS regarding the acquisition, by WCL, of a leasehold interest in this line. WCL contends that, for many years, CSX has operated B&OCT not as a true intermediate switching carrier but rather as a vehicle for obtaining desired operating efficiencies. WCL claims: that, for many years, B&OCT has been operated as an extension of CSX; that CSX, maintaining the fiction that CSX itself does not operate in the Chicago switching district, has required that any railroad seeking to interchange with CSX in the Chicago switching district must interchange via B&OCT; that, however, any railroad seeking to interchange with CSX via B&OCT has been faced with a B&OCT intermediate switching charge; that, since 1988, this charge has been, in whole or in large part, either waived by B&OCT or absorbed by CSX with respect to those railroads that accommodate CSX's pre-blocking requirements; that, in essence, the fiction that CSX itself does not operate in Chicago has given CSX a bargaining lever to use in demanding blocking and classification services from other carriers; and that these arrangements have had an especially serious impact on smaller railroads that have volumes of traffic that do not suit CSX's pre-blocking needs. WCL fears that, post-transaction, CSX will operate IHB the way it has operated B&OCT. Under the arrangements provided for in connection with the CSX/NS/CR application, WCL notes, CSX will be responsible: for dispatching IHB between Gibson, IN, and Franklin Park, IL; for managing IHB; and for controlling Blue Island Yard (IHB's principal yard). WCL is concerned: that IHB, subject to the control of CSX, will cease to be a genuinely neutral switching carrier; and that CSX will use its management of IHB and its ownership of B&OCT to route via B&OCT WCL/Conrail traffic now routed via IHB. WCL therefore asks that we require that CSX, apart from B&OCT and without the use of B&OCT as an intermediate switch carrier, conduct direct interchange in the Chicago switching district. This condition, WCL contends: would implement the public policy codified at 49 U.S.C. 10742; would increase efficiency by removing B&OCT from interlining accounting systems where not necessary; and would recognize the reality that CSX today is, and even more so post-transaction will be, an active interlining carrier present in its own name and right in Chicago. WCL is concerned that, post-transaction, CSX will control the two Chicago switching carriers that provide WCL virtually its only access to the Chicago switching district either via trackage rights or as intermediate carriers (B&OCT and IHB) and will be one of the two largest shareholders of the third Chicago switching carrier (BRC), and will therefore have, in WCL's judgment, far too much control over switching and dispatching in the Chicago switching district. Because efficient routings through the Chicago switching district are crucial to WCL, WCL asks that we require that dispatching over IHB in the Chicago switching district be provided by a neutral railroad (i.e., a railroad other than any of the IHB owner railroads). This neutrality condition, WCL contends, is necessary to preserve competition and to assure adequate terminal facilities and efficiencies. APPENDIX: PASSENGER RAILROADS AMERICAN PUBLIC TRANSIT ASSOCIATION. APTA, a trade association representing the North American transit industry, has concerns that the CSX/NS/CR transaction may adversely impact commuter rail operations throughout the eastern half of the United States, such as: (1) the rail realignments that will follow the CSX/NS/CR transaction may effectively limit the access that commuter railroads would otherwise have had to the lines operated over by CSX, NS, and Conrail; (2) the increased freight traffic that CSX and NS are likely to handle post-transaction may result in greater interference with commuter rail operations and commuter rail schedules; and (3) the workforce reductions that will be a consequence of the CSX/NS/CR transaction will result in additional cross-subsidization of the freight railroads by the commuter railroads. For example, with regard to the Railroad Retirement System, APTA notes: that both commuter railroads and freight railroads pay a payroll tax based upon the number of active employees working for each system; that this tax supports the pensions provided to railroad employees across the country; that, over the years, freight railroad employment has decreased while commuter railroad employment has increased; and that this has created a situation in which the commuter railroads have been compelled to provide large and growing subsidies to the freight railroads in the form of pension payments to freight railroad retirees. To ensure that commuter rail operations can continue to provide the American public with high quality and efficient transportation service, APTA asks that we impose several conditions upon any approval of the primary application. (1) With regard to the access problem, APTA suggests that we should: promote cooperation between applicants and commuter railroads; ensure that commuter rail operations will be reasonably accommodated by applicants; ensure that fair and reasonable operating rights agreements can be established in the future, with fair and reasonable compensation to CSX and NS; and establish a process that will provide a means to resolve future disputes between freight railroads and commuter railroads, and thereby safeguard the public's interest in passenger rail service. (2) With regard to the interference problem, APTA suggests that we should: ensure that commuter rail operations are not undermined by freight rail operations, neither in the first 3 post-transaction years nor in the years that come thereafter; provide a means to resolve disputes that arise beyond the first 3 post-transaction years; and move towards incentive-based operating agreements. (3) With regard to the Railroad Retirement problem, APTA suggests that we should: review the 1990 report of the Commission on Railroad Retirement Reform; consider, in conjunction with the Railroad Retirement Board, the impact the CSX/NS/CR transaction and further declines in freight railroad employment will have on commuter rail systems; and impose conditions that will ensure that CSX and NS fund any negative financial impacts of the CSX/NS/CR transaction upon the commuter railroads' railroad retirement contributions. AMTRAK. Amtrak, which has reached agreements with CSX, NS, and Conrail, has advised that it now supports in all respects the CSX/NS/CR transaction, subject to imposition of a limited oversight condition that reads as follows: The STB should require oversight, for a 3-year period, of the implementation and effect of the transactions subject to STB review and approval in Finance Docket No. 33388 to the extent they may affect the on-time performance of Amtrak intercity passenger train services. As part of this continuing oversight, the STB should require quarterly reports from NS and CSX and provide Amtrak an opportunity to comment. NS, CSX and Amtrak shall jointly recommend to the STB objective, measurable standards to be used in such reports: on-time performance standards should reflect measurements employed in calculating incentive payments under the applicable Amtrak operating agreements. The foregoing condition is not intended to limit the STB's authority to continue oversight beyond the 3-year period. CHICAGO METRA. In its comments filed October 21, 1997, the Commuter Rail Division of the Regional Transportation Authority of Northeast Illinois (Metra or, on occasion, Chicago Metra) requested the imposition of several conditions primarily respecting four interlockings in the Chicago terminal area that are crucial to the commuter trains operated by Metra in its Southwest Service Corridor and that, in Metra's opinion, might be affected by the CSX/NS/CR transaction: the Chicago Ridge interlocking controlled by IHB/B&OCT; the Forest Hill interlocking controlled by CSX; the Belt Junction interlocking controlled by BRC; and the CP-518 interlocking controlled pre-transaction by Conrail and post-transaction by NS. In its pleading filed February 23, 1998, Metra has advised that it has reached, with CSX, a Letter Agreement that addresses Metra's concerns at the Forest Hill interlocking and that establishes a Joint Review Committee to address issues respecting the Chicago Ridge interlocking and the Belt Junction interlocking. Metra, though it has withdrawn its request for conditions insofar as such conditions were directed to CSX, has called to our attention the last paragraph of the Letter Agreement, which provides that the Letter Agreement will be submitted into the record of this proceeding and that CSX and Metra will seek from the Board confirmation of these understandings, that although the attached agreement does not seek or provide for the imposition of any conditions by the Board, the submission of this agreement will be considered by the Board as a representation that they will comply with its terms. Metra accordingly requests, on behalf of itself and CSX, that we confirm in our decision approving the CSX/NS/CR transaction that the contents of the Letter Agreement will be considered by the Board as representations to the Board that the parties will comply with the terms of the Letter Agreement. Metra has also indicated that it has withdrawn for the time being its request for a condition respecting CP-518. Metra premises this withdrawal upon: NS' claim that freight activity through the CP-518 interlocking will decrease post-transaction; NS' pledge to be bound by existing applicable agreements between Conrail and Metra; and NS' promise to participate in the Joint Review Committee established under the Letter Agreement with CSX. METRO-NORTH COMMUTER RAILROAD. MNCR operates, each week, 99 passenger trains on its 97.5-mile Port Jervis line, which extends between Port Jervis, NY, and Hoboken, NJ, and which consists of two segments: a 66.2-mile segment between Port Jervis and Suffern, which is owned by Conrail; and a 31.3-mile segment between Suffern and Hoboken, which is owned by NJT. MNCR's commuter service on both segments of the Port Jervis line is performed, under contract, by NJTRO. MNCR claims that, at the present time, MNCR's and NJTRO's commuter trains and Conrail's freight trains co-exist on the Port Jervis line with relatively few problems. MNCR anticipates, however, that there will be, within the next few decades, substantial increases in commuter service on the Port Jervis line. MNCR further anticipates that, as a consequence of the CSX/NS/CR transaction, there will also be, within the years to come, substantial increases in freight service on the Port Jervis line (which will be assigned to NS). MNCR, which contends that the anticipated increased number of trains, both passenger and freight, will require very careful scheduling and dispatching so as to prevent the impairment of either service, fears that the freight scheduling contemplated by NS will not properly accommodate MNCR's passenger trains. MNCR also fears that the dispatching function would suffer if NS were to assume dispatching control on the Port Jervis-Suffern segment, and were to remove that function to a far-distant location staffed by personnel unfamiliar with commuter trains. And, MNCR adds, if NS were to assume dispatching control on that segment, there would necessarily have to be a hand off of every MNCR train at Suffern (because dispatching control of the Suffern-Hoboken segment will remain with NJTRO). It would be far better, MNCR contends, to retain the hand off at its present location (CP Sparrow, at Port Jervis), which is just beyond the end of the commuter passenger service territory. MNCR therefore asks that we require that the Port Jervis-Suffern segment be conveyed to MNCR, subject to a reservation of trackage rights in favor of NS (PRR). MNCR also asks: that the purchase price be set at $9.8 million, the price upon which MNCR and Conrail had reached a tentative understanding before their negotiations were disrupted by the pending CSX/NS/CR transaction; and that any other terms respecting the purchase, if not agreed to by MNCR and NS, be subject to arbitration or a similar process. MNCR adds: that it stands ready to accept the segment as is based on the price it agreed upon with Conrail; that it would retain the status quo as respects dispatching; and that it is prepared to contribute its appropriate share of funding to put the segment into proper condition for operation of a modern, reliable rail passenger service in conjunction with reasonable levels of freight service. MNCR contends that, if we do not impose its purchase condition, we should at least require that NS agree to a long-term extension of the existing MNCR/Conrail trackage rights agreement, which extension (MNCR claims): would resolve, to some extent, MNCR's concerns respecting the conditions NS might otherwise impose upon MNCR's operations on the Port Jervis-Suffern segment; and would allow MNCR to justify at least some investment of public funds in the rehabilitation of that segment. NORTHEAST OHIO METRO. The METRO Regional Transit Authority (referred to as METRO or, on occasion, Northeast Ohio METRO) operates a mass transit system transporting citizens of Summit County within the Cleveland-Akron-Lorain Consolidated Metropolitan Statistical Area. METRO contends: that it has invested substantial resources in the development of a commuter rail transportation system intended to link the cities of Canton, Akron, and Cleveland (the CAC corridor); that Conrail's Hudson-Cleveland line is a key component of, not simply one option for, the CAC corridor; that the CSX/NS/CR application contemplates the assignment of the Hudson-Cleveland line to NS; that METRO is concerned that the rail realignments likely to follow the CSX/NS/CR transaction will have serious impacts on future commuter rail operations; and that METRO fears that, without guaranteed conditional commuter rail operating rights, these realignments will jeopardize the efficient implementation of commuter rail in Northeast Ohio. METRO therefore asks that we require that METRO be granted conditional commuter rail operating rights on Conrail's Hudson-Cleveland line. METRO adds, in its brief, that, if we do not impose its operating rights condition, we should at least require that NS and METRO negotiate a mutually binding agreement to mitigate the impacts of the CSX/NS/CR transaction on planned commuter rail service. VIRGINIA RAILWAY EXPRESS. VRE, a commuter railroad owned by the Northern Virginia Transportation Commission (NVTC) and the Potomac and Rappahannock Transportation Commission (P&RTC), operates 24 passenger trains per weekday over two routes: the Manassas route, which runs 35 miles between Manassas, VA, and Washington, DC; and the Fredericksburg route, which runs 55 miles between Fredericksburg, VA, and Washington, DC. The two routes, which share a common segment, run over tracks now owned by CSX, NS, Conrail, and Amtrak. VRE's operations are conducted by Amtrak. NVTC and P&RTC claim that their present relationships with the three freight railroads over whose tracks VRE operates are not entirely satisfactory. The Operating Access Agreements pursuant to which VRE's operations are conducted, NVTC and P&RTC claim: require NVTC and P&RTC to indemnify the freight railroads for any damages that would not have occurred but for the existence of VRE's service, including damages attributable to the gross negligence of the freight railroads themselves; provide the freight railroads with unilateral powers to cancel or delay VRE trains, to impose schedule changes and restrictions, and to compel VRE to make capital improvements; and allow the freight railroads the right to force VRE to discontinue operations on short notice for any reason. NVTC and P&RTC claim that CSX and NS, citing the demands imposed by their existing freight train schedules, have thwarted efforts to expand VRE's operations. NVTC and P&RTC further claim that, apparently for the same reason, they have been unable to reach agreement with CSX and NS with respect to capital improvements that NVTC and P&RTC would like to make. NVTC and P&RTC add: that CSX's dispatchers have made little effort to accommodate VRE's schedules; that CSX's managers, when arranging maintenance work on the CSX lines, have similarly made little effort to accommodate VRE's schedules; and that the resulting deterioration in the on-time performance of VRE's trains has led to a decrease in the number of VRE riders. NVTC and P&RTC are concerned that the likely substantial post-transaction increases in freight traffic on these lines will result in a further deterioration of VRE's commuter service; any capacity enhancements resulting from VRE's own investments in the rights-of-way may well be eroded even before VRE can operate any new service; and the infrastructure improvements that applicants intend to undertake will wreak havoc with VRE's commuter schedules. NVTC and P&RTC claim that applicants have not even attempted to address freight-passenger conflicts through structural undertakings designed to ensure accommodation of passenger operations, but have proposed to avoid any negative impact on passenger operations solely by better scheduling of freight train operations. NVTC and P&RTC contend that, in these circumstances, applicants' claims that VRE's operations will not be adversely affected by the CSX/NS/CR transaction cannot be taken seriously. NVTC and P&RTC therefore ask that we require the modification of the terms and conditions provided for in the Operating Access Agreements pursuant to which VRE's operations are presently conducted. If the terms and conditions provided for in the CSX Access Agreement were modified in the manner requested by NVTC and P&RTC: (1) the CSX Access Agreement would henceforth apply to the Conrail line between RO Interlocking in Arlington and Virginia Avenue Interlocking in Washington; (2) CSX would continue to have the authority to grant to third parties new rights to use the CSX line, but any grant of such rights to third parties made after January 10, 1995, would be subject to the current rights (at the time of such grant) of NVTC/P&RTC with respect to that line; (3) CSX would continue to have the authority to approve or reject any VRE commuter rail service modifications proposed by NVTC/P&RTC, but CSX would have to explain any denial of any such proposed modifications; (4) CSX's right to charge NVTC/P&RTC for capital improvements made by CSX would be limited to capital improvements required by law; (5) CSX would be required to submit to arbitration disputes between CSX and NVTC/P&RTC regarding the responsibilities of each for capital improvements in connection with expansion of VRE service; (6) CSX would no longer have the right to charge NVTC/P&RTC for revenue losses attributable, in CSX's view, to the presence of VRE commuter rail service; (7) a portion of the compensation paid to CSX would be dependent upon on-time performance standards; and (8) the termination date of the CSX Access Agreement, which is presently set as June 30, 1999, would be extended to June 30, 2008. If the terms and conditions provided for in the NS Access Agreement were modified in the manner requested by NVTC and P&RTC: (1) NS would continue to have the authority to grant to third parties new rights to use the NS line, but any grant of such rights to third parties made after September 1, 1996, would be subject to the current rights (at the time of such grant) of NVTC/P&RTC with respect to that line; (2) NS would be required to explain any denial of changes proposed by NVTC/P&RTC in the schedule for VRE service; (3) NVTC and P&RTC would continue to be obligated to pay for capital improvements occasioned or required by VRE's commuter operations, but NS would be required to submit to arbitration disputes respecting whether and to what extent NVTC and P&RTC should be required to pay for such capital improvements; (4) the termination date of the NS Access Agreement, which is presently set as July 15, 1998, would be extended to July 31, 2006; (5) NVTC and P&RTC would be required to work in good faith to develop a plan to purchase, lease, or acquire an interest in the NS line (they are presently required to work in good faith to develop a plan to purchase the line), and NS and NVTC/P&RTC would be allowed to submit to arbitration unresolved disputes respecting this matter; and (6) a portion of the compensation paid to NS would be dependent upon on-time performance standards. APPENDIX: REGIONAL/LOCAL INTERESTS IN THE NORTHEAST BUSINESS COUNCIL OF NEW YORK STATE. BCNYS conditionally supports the CSX/NS/CR transaction but asks: (1) that we act to ensure the viability of shortline and regional carriers; (2) that we ensure, to the extent possible, that the inordinately high switching charges found in the Port of New York and upstate population centers will be reduced to reasonable levels; (3) that we ensure that shortline, regional, and other Class I railroads will be allowed to interchange with applicants' lines and other proximate railroads in areas where they are now prohibited from doing so; and (4) that we allow a third carrier trackage rights from upstate New York to the New York Metropolitan Area and the Port of New York, especially on the east side of the Hudson. COALITION OF NORTHEASTERN GOVERNORS. CNEG, an association of the governors of the nine Northeastern states (New York, New Jersey, Pennsylvania, and the six New England states), argues that approval of the CSX/NS/CR transaction should be conditioned to ensure effective rail competition throughout the Northeast. CNEG claims: that, insofar as CSX and NS propose to restore effective rail competition in the Northeast, their initiative should be encouraged; that, however, CSX and NS also propose to preserve the Conrail monopoly in large parts of the Northeast, including portions of New York, New Jersey, and Pennsylvania, and, in particular, the areas east of the Hudson River; and that the combination of the restoration of competition in certain areas and the preservation of the Conrail monopoly in other areas will have adverse impacts in all of the areas in which the Conrail monopoly is preserved. CNEG insists that our decision in this proceeding must reflect the unique history of Conrail, which (CNEG notes) was created in the public interest as a response to the rail crisis in the Northeast in the 1970s. CNEG argues that we must assure that the areas in which CSX and NS intend to preserve the Conrail monopoly will be afforded effective, two-carrier rail competition. CNEG notes that the competitive access it seeks can be accomplished in several ways. The preferred way, CNEG indicates, would entail the type of direct access by both CSX and NS that is being proposed for the SAAs. CNEG adds, however, that there are also other (though less effective) means to promote competition, such as trackage rights or haulage rights. CNEG indicates, in this regard, that it would be best if any east-of-the-Hudson trackage rights (in particular, trackage rights between Albany and New York City, and also between Albany and Worcester) were granted to NS. CNEG further contends that we should retain jurisdiction to determine whether there will be, post-transaction, effective rail competition in all parts of the Northeast and, in particular, in the areas east of the Hudson. The condition contemplated by CNEG would provide for periodic review of the competitive access issues, and would also provide the Board with sufficient authority to impose additional or other relief to the extent warranted. Such additional relief, CNEG indicates, might entail the creation of additional SAAs or the imposition of trackage rights in favor of NS over the CSX lines east of the Hudson River. COMMONWEALTH OF MASSACHUSETTS. The Commonwealth of Massachusetts indicates that, because CSX has agreed to certain conditions which, if implemented, will bring about economic balance and enhance passenger/freight operational coordination, the Commonwealth supports the CSX/NS/CR transaction subject to the fulfillment of certain stipulations agreed to by CSX. The Commonwealth, though it has not asked us to impose as conditions the stipulations agreed to by CSX, has asked that we retain jurisdiction: to provide for periodic oversight of the issues it has raised; and to confirm the fulfillment of the stipulations agreed to by CSX within a reasonable time frame (i.e., not less than 3 years nor more than 5 years after the effective date of approval). CONNECTICUT DEPARTMENT OF TRANSPORTATION. CTDOT argues that the CSX/NS/CR transaction, by preserving the Conrail monopoly east of the Hudson while creating competition west of the Hudson, will place New England at a competitive disadvantage. And, CTDOT adds, what makes matters even worse is that the Conrail monopoly in New England will be assigned to CSX, which will be less inclined to extend intermodal service into New England than NS would be. CTDOT contends that direct intermodal rail freight service on the Northeast Corridor through Penn Station (in Manhattan) to New Haven: would be the most effective means of mitigating intolerable levels of truck traffic in the I-95 corridor; and could be accomplished using single containers on flatcars and RoadRailer-type equipment. CTDOT claims, however, that, although NS might well be interested in using RoadRailers on the Northeast Corridor via New York City, CSX has indicated little interest in providing such a service. CTDOT therefore contends that, for competitive reasons and environmental reasons alike, we should approve the transaction only with conditions: to ensure competitive access to Connecticut for two or more Class I railroads, by extending the North Jersey SAA easterly through New York City and Westchester County, NY, along the Northeast Corridor to New Haven; to ensure competitive connections to national markets for shortline and regional railroads in New England; to provide incentives for the truck-to-rail diversion of traffic in the I-95 corridor; and to ensure the application of uniform, competitive rates for shippers in Connecticut and other areas east of the Hudson. CTDOT also contends that we should retain jurisdiction to implement changes as warranted in the future to ensure that the goal of competitive rail freight access to all regions is realized. CONSERVATION LAW FOUNDATION. CLF, an environmental group based in New England that supports rail as a sensible alternative to the urban sprawl and air pollution that will result from endless highway expansion, asks that we require CSX: to work with the Massachusetts Bay Transportation Authority and Amtrak in providing improved, faster passenger rail service and increased access between Albany and Boston; and to make every effort to improve freight rail service east of the Hudson River, especially from New York City and the ports of New Jersey to New England. DELAWARE RIVER PORT INTERESTS. The Philadelphia Regional Port Authority, the South Jersey Port Corporation, The Delaware River Port Authority, and The Port of Philadelphia and Camden, Inc. (referred to collectively as the Delaware River Port Interests) support the CSX/NS/CR transaction but contend: that CSX and NS must honor the agreements they have made with various parties; that the Board should establish guidelines and oversight requirements to ensure that implementation of the transaction does not result in a repetition of the problems that occurred as the UP/SP merger was implemented; and that implementation should not take place until all necessary labor-enabling agreements are effective, and until state, county, and local governments have been given an opportunity to provide input to CSX and NS on their detailed operating plans. Nor, the Delaware River Port Interests add, should implementation take place prior to the time that (a) all Conrail computer data is accessible and usable in providing customer service, (b) a determination has been made as to which Conrail personnel must be retained to provide at least the level of service that Conrail provided, and such personnel are employed by CSX and NS, and (c) the train schedules as provided to the Board are actually ready to be implemented. DELAWARE VALLEY REGIONAL PLANNING COMMISSION. DVRPC, the metropolitan planning organization for the nine-county Delaware Valley region, contends that, with the dissolution of Conrail, that region stands to lose a crucial employer, transportation provider, and civic leader. (a) DVRPC, which argues that the Delaware Valley region's losses will exceed 1,800 direct jobs, 1,800 indirect jobs, and $100 million of annual income, believes that a commitment for economic development should be proposed by applicants to help offset these losses. (b) DVRPC, which notes that the Delaware Valley region, an ozone nonattainment area, is affected by ozone precursors emitted by mobile sources, contends that attention should be accorded to the air quality impacts of proposed new rail facilities. (c) DVRPC, noting that the Delaware Valley region's rail passenger operators and Conrail share the use of each other's tracks, contends: that existing trackage rights and dispatching agreements should remain in force for at least 10 years; that the passenger carriers should have reasonable access to regional freight lines, including lines not currently served; and that the freight operators should have adequate access to shippers located on passenger lines. (d) DVRPC insists that applicants must provide guarantees for the continuation of current levels of doublestack and conventional intermodal services both at Ameriport and at the new, proposed Greenwich intermodal terminal. (e) DVRPC contends that, to safeguard the interests of the Delaware Valley region, there should be: an official mechanism to allow public input into the management of the South Jersey/Philadelphia SAA; and provisions to ensure long-term maintenance of SAA facilities in good condition. (f) DVRPC, noting that the CSX/NS/CR transaction contemplates continued train operations on the left bank of the Schuylkill River through Center City Philadelphia between Park Junction and Grays Ferry, contends that, to limit the adverse impacts of such operations, the diversion of all train traffic to the Highline Branch on the right bank of the Schuylkill River should be pursued. EIGHT STATE RAIL PRESERVATION GROUP. ESRPG's interests in this proceeding are focused on the Youngstown-Meadville-Corry-Hornell rail line, which ESRPG refers to, in its entirety, as the Southern Tier Extension. ESRPG claims: that the Southern Tier Extension once extended west from Hornell all the way to Chicago; that major portions of the Extension west of Youngstown have been abandoned and removed; but that, between Youngstown and Hornell, the Extension remains basically intact. ESRPG further claims: that CSX and NS hope to capture large volumes of traffic that now move by truck; that, however, these large volumes promise to tax the Conrail routes that CSX and NS will acquire far beyond their capacities; and that the Youngstown-Hornell line is ideally situated to furnish the additional capacity that will surely be needed in the years to come. ESRPG therefore asks that we require NS to maintain the Youngstown-Meadville and Corry-Hornell segments of the Southern Tier Extension in a condition adequate to accommodate through traffic on a continuous basis (by which ESRPG means that all trackage would have to be maintained at least to FRA Class 2 safety standards, permitting train speeds of at least 25 mph). ESRPG notes that the relief it seeks would require NS to restore those segments to that condition if they are currently below that condition, and would require NS to repair the washouts on the Corry-Hornell segment and otherwise restore that segment to operable status. EMPIRE STATE PASSENGERS ASSOCIATION. ESPA's interests in this proceeding are focused on the rail passenger service that will be provided post-transaction over the Empire Corridor lines linking Niagara Falls, Buffalo, Albany, and New York City. ESPA, which is an association dedicated to improving and expanding Amtrak, mass transit, and bus service in New York State, indicates that, during the course of this proceeding, CSX (to which the Empire Corridor lines will be assigned) has taken several steps that have given ESPA considerable comfort that CSX has been listening to ESPA's concerns and wants to cooperate with both Amtrak and New York State on passenger service. ESPA notes that it is gratified with this turn of events, and wants to commend CSX by giving it a qualified endorsement for its application. ESPA asks, however: (1) that we condition approval of the CSX/NS/CR transaction on certain commitments made by CSX in a December 19, 1997, letter sent by Paul H. Reistrup, CSX's Vice President Passenger Integration, to William E. Sanford, Chair of the Empire Corridor Rail Task Force for the Onandaga County Legislature; and (2) that we retain oversight jurisdiction to ensure that CSX's performance matches its promises. ERIE-NIAGARA RAIL STEERING COMMITTEE. ENRSC, an ad hoc committee representing business interests in New York State's Niagara Frontier region, contends that the CSX/NS/CR transaction will inflict direct competitive harm upon shippers located in that region. ENRSC claims: that, since 1976, shippers in the Niagara Frontier region have had to endure the burdens of the Conrail monopoly; that Conrail now controls the major revenue stations in the Niagara Frontier region, and originates and terminates the substantial majority of all Niagara Frontier rail traffic; that, although NS, CP/D&H, CN, and several shortlines have some physical access to the Niagara Frontier region, these carriers have no direct access to most of Conrail's principal revenue stations; and that Conrail has steadily reduced the number of Niagara Frontier shippers that can obtain access via reciprocal switching to the services of other rail carriers. ENRSC fears that the CSX/NS/CR transaction will adversely impact Niagara Frontier shippers in a variety of ways. (1) ENRSC claims that the Niagara Frontier market will remain largely captive to CSX (which will replace Conrail as the region's dominant rail carrier) and, to a lesser extent, NS. (2) ENRSC claims that many Conrail single-line moves will henceforth be CSX/NS joint-line moves because, although the vast majority of Conrail stations in the Niagara Frontier region will be assigned to CSX, the Conrail destinations for traffic originating in the Niagara Frontier region and the Conrail origins for traffic destined to the Niagara Frontier region will be split between CSX and NS. (3) ENRSC claims that another element of competitive harm occurring as a result of the CSX/NS/CR transaction is the elimination of reciprocal switching that occurred when Conrail made wholesale cancellations of reciprocal switching services in the Niagara Frontier area. ENRSC argues, in essence: that 1995 should be the operative date for determining a Niagara Frontier shipper's 2-to-1 status for purposes of the present proceeding; and that the shippers that were deprived of reciprocal switching by Conrail's 1996 cancellations have been adversely impacted by the CSX/NS/CR transaction. (4) ENRSC claims that certain shippers located on the Buffalo waterfront on a line of the former Buffalo Creek Railroad will suffer 2-to-1 impacts on account of the CSX/NS/CR transaction. ENRSC argues: that these shippers now have access both to Conrail (which owns the line) and to CSX (which has trackage rights over the line); and that, although the line will be assigned to CSX, the CSX trackage rights will not be assigned to NS. Applicants claim: that CSX once had two sets of trackage rights over this line; that, in connection with the 1988 sale of certain Buffalo-area rail assets to the BPRR, one set of such trackage rights was assigned to BPRR; that CSX has not had access to, nor has it served, shippers on the Buffalo waterfront since the 1988 sale; and that shippers on the Buffalo waterfront will have, post-transaction, access to two railroads (CSX, which will acquire the line from Conrail; and BPRR); (5) ENRSC claims that the acquisition premium paid for Conrail will result in higher transportation rates for captive shippers in the Niagara Frontier region. (6) ENRSC claims that, whereas most rail-dependent businesses in the Niagara Frontier region will generally continue to have access to only a single railroad, rail-dependent businesses in the three SAAs that will be created by applicants will henceforth have access to two railroads. ENRSC contends that neither the NITL agreement nor the settlement agreements entered into by CSX with CP and CN will mitigate the anticompetitive impacts that the CSX/NS/CR transaction will have in the Niagara Frontier region. The reciprocal switching provisions of the NITL agreement, ENRSC argues, will only benefit the relatively few shippers in the Niagara Frontier region that still have reciprocal switching service available from Conrail; but, because the NITL agreement does not provide for the establishment of reciprocal switching services at locations where such service is not now provided by Conrail, the NITL agreement, ENRSC insists, does nothing to correct the loss of competitive rail service that has already occurred in the Niagara Frontier region. And, ENRSC adds, the settlement agreements entered into by CSX, on the one side, and, on the other side, CP and CN, provide only modest opportunities for CP and CN to obtain relatively insignificant reductions by CSX in its required revenue share for new traffic that might move via the Niagara Frontier region. ENRSC argues that we should not focus primarily on the potential benefits of operating and economic efficiencies that may or may not be generated by the CSX/NS/CR transaction; we should focus instead, ENRSC insists, on the potential benefits of the increased rail competition that the transaction may or may not allow. And, ENRSC adds, our analysis of the increased rail competition that may or may not result from the CSX/NS/CR transaction should consider: (i) whether the transaction fulfills the goals of the Final System Plan; and (ii) whether the transaction complies with the balanced competition principle that holds that the largest markets must be served by at least two large railroads. ENRSC also contends that, because the combination of the preservation of the Conrail monopoly in the Niagara Frontier region and the establishment of new rail competition in the three SAAs will inflict competitive harm upon businesses located in the Niagara Frontier region, that region is entitled to relief even under the traditional analysis of railroad consolidations. ENRSC has proposed three alternative conditions. Condition #1 is the preferred alternative; Condition #2 is a less preferable alternative to Condition #1; and Condition #3 is a less preferable alternative to Conditions #1 and #2. Condition #1 contemplates: (i) the creation of a Niagara Frontier SAA that would enable all current and future customers that are or will be served by the Conrail lines within the limits of the Niagara Frontier region to receive direct and equal access to rail service from both CSX and NS; and (ii) the establishment of reciprocal switching arrangements for all current and future customers that are or will be served by the Conrail lines within the limits of the Niagara Frontier region that would allow other rail carriers serving the region (such as CN, CP, and existing shortlines) to provide competitive service at a reasonable level of charges (i.e., $156 per car, subject to adjustment). Condition #2 contemplates the reciprocal grant of terminal trackage rights by CSX and NS (to NS and CSX, respectively) for operations over the Conrail lines within the limits of the Niagara Frontier region, with trackage rights compensation set at $0.29 per car mile. Condition #3 contemplates the establishment by CSX and NS of reciprocal switching to all current and future customers that are or will be served by the Conrail lines located within the Niagara Frontier region, and further contemplates the establishment of a reasonable reciprocal switching charge (i.e., $156 per car). The reciprocal switching contemplated by Condition #3 would be open to all rail carriers that currently have access to the region and that wish to provide service to customers located at points that would otherwise be served only by CSX or only by NS. GENESEE TRANSPORTATION COUNCIL. GTC, the metropolitan planning organization for the nine-county GTC region in Upstate New York (the nine counties are Orleans, Monroe, Wayne, Genesee, Wyoming, Livingston, Ontario, Seneca, and Yates), supports the CSX/NS/CR transaction in principle but has asked that we impose certain conditions that, GTC claims, would correct various problems that have developed during the years Conrail has been the dominant railroad in the GTC region. The CSX/NS/CR transaction contemplates: the assignment to CSX of Conrail's to NS of Conrail's Southern Tier (Buffalo-Hornell-Binghamton) line, which runs through the southern portion of the GTC region. (a) GTC asks that CSX be required to establish an intermodal terminal in Rochester, to allow Rochester shippers to participate, on a competitive basis, in the service CSX proposes to open up between points in the Midwest and the Southwest and on the West Coast, on the one hand, and, on the other, Boston/New York. (b) GTC asks that NS be required either (i) to establish an intermodal terminal east of Rochester at Exit 42 on I-90, or (ii) to cooperate with the Rochester & Southern Railroad (R&S) in the establishment of an intermodal terminal in Rochester (such cooperation, GTC adds, would have to include the creation of joint through routes and service between Rochester and the Southeast). GTC claims that an NS (or R&S) intermodal terminal would give the GTC region truck-competitive intermodal service between points in the GTC region and points in the Southeast east of I-75, and would thereby allow the region to compete with shippers in the eastern part of New York who will enjoy, post-transaction, new north-south intermodal lanes. GTC has also suggested, as respects NS north-south intermodal operations, that it might be best to reinstitute service on certain line segments that have either been abandoned or rail-banked, or sold to shortlines. (c) GTC asks that CSX be required to remove Conrail-imposed interchange restrictions on two local shortlines, the Livonia, Avon & Lakeville (LAL) and the Falls Road Railroad (FRRR). (d) GTC asks that CSX be required to reduce Conrail's Rochester reciprocal switching charge from its current level of $390 per car to a level not in excess of 120% of variable cost. GTC claims that such a reduction would remove a barrier to competition by R&S as respects the many industrial sidings in Rochester to which only Conrail has direct access. (e) GTC asks that we establish oversight of the proposed CSX/NS joint usage agreement respecting the Monongahela coal fields, to ensure fair and impartial enforcement of the terms of that agreement. (f) GTC asks that CSX be required to upgrade the Amtrak Empire Corridor between Buffalo and Schenectady from Class 4 to Class 5. GTC concedes, in essence, that its conditions are largely directed to problems that predate the CSX/NS/CR transaction. GTC contends, however, that, given the unique character of a transaction that will establish the rail system east of the Mississippi River for generations to come, we would be better advised to broaden our view of what constitutes adequacy of transportation to the public and the public interest, as those terms are used in 49 U.S.C. 11324. A condition that enhances the adequacy of transportation, GTC argues, is in the public interest, even if the problem that condition will correct predates the transaction. MAINE DEPARTMENT OF TRANSPORTATION. MEDOT's concerns respecting the CSX/NS/CR transaction involve: competitive access for Maine shippers; better access to markets; enhanced capacity and intermodal operations; and passenger rail service. Choice, competition, and capacity are essential, MEDOT contends, if Maine is to have affordable and effective rail service that advances its competitiveness. MEDOT therefore asks that we impose certain conditions intended to assure that the effects of the CSX/NS/CR transaction will be beneficial, rather than harmful, to the State of Maine. (1) MEDOT seeks assurances that future competitive access to Maine and, more broadly, to New England by both CSX and NS will be provided. One way to improve the situation, MEDOT contends, would be to grant NS trackage rights between Albany, NY, and Worcester, MA; common access through a neutral carrier, MEDOT adds, would also be adequate. MEDOT suggests that, if we approve the transaction: we should require a periodic review of competitive access issues in New England; and we should retain jurisdiction to impose additional relief. (2) MEDOT, which contends that real cooperative efforts would be beneficial for both freight operations and passenger operations, asks that we impose conditions: allowing a means for attaining on-time performance for passenger trains; creating a process to address the initiation of new or special services; establishing standard and reasonable formulas for variable and fully allocated costs; creating liability standards; and establishing a means of allowing higher passenger train speeds. NADLER DELEGATION (NY & CT). The interests of the Nadler Delegation are focused on an area (referred to as the Region) that consists of: the City of New York, NY; Long Island, NY; Westchester County, NY; and the State of Connecticut. The Nadler Delegation notes: that the Region is currently rail-served from Selkirk, NY, via Conrail's Hudson Division; that Conrail also operates freight service between Fresh Pond Yard and New Haven, CT; that NYCH operates a float service across New York Harbor; that NYAR operates freight service on the New York State-owned LIRR; and that P&W, which connects with Conrail at New Haven, has trackage rights (limited to carriage of construction aggregates in unit trains) between Fresh Pond Yard and New Haven. The Nadler Delegation claims: that the Region generates 142 million tons of freight per year, 98 million tons of which is rail-appropriate; that, because the Region has a 19th Century rail infrastructure, just 2.8% of the 98 million tons of the Region's rail-appropriate freight currently moves by rail; and that the other 97.2% moves by truck. The Nadler Delegation contends that much of the economic dislocation now evident within the Region can be traced to a termination of rail services that occurred in 1968 after the Penn Central Transportation Company (the Penn Central) was required to take over the New York, New Haven and Hartford Railroad Company (the New Haven). The Nadler Delegation claims: that the Penn Central closed the cross-harbor rail car float service that until then had been operated by the New Haven between its line at Bay Ridge (in Brooklyn) and the former Pennsylvania Railroad facilities at Greenville (in Bayonne, NJ); that the consequences of this loss of rail service were immediate (between 1968 and 1976, the City of New York lost 342,000 manufacturing jobs); and that no factor other than the degradation, and then the termination, of the quality rail freight services that New York City had previously enjoyed can explain the enormity of the City's employment losses among industrial, warehouse, wholesale, harbor, and other blue collar occupations. The Nadler Delegation further contends that, since the withdrawal of rail service, the Region has had to rely almost entirely on truck transport. The Nadler Delegation claims: that truck transport is more expensive than rail service, particularly for commodities that are better suited to rail; that truck transport, because of its greater cost, has not been able to support a diverse economy; and that, therefore, the fact that rail transport has not been available has contributed to the creation of an abnormally white collar economy in the Region. The Nadler Delegation contends: that the entire Region is within an air quality nonattainment area and is the subject of a State Implementation Plan required by the Clean Air Act; that the Bronx, via which 60% of all truck traffic entering or leaving the Region must pass, has the highest rates of respiratory disease and related mortality attributable to air quality in the entire United States; that, in the South Bronx, respiratory disease death rates are far above the national average; and that, because there are no coal-burning electrical generating plants in the vicinity of the neighborhoods in the South Bronx with the worst respiratory disease problems, all such respiratory problems must be attributed to vehicle emissions. The Nadler Delegation contends: that the efficient operation of a cross-harbor float service could divert 14.4 million tons of freight from the highways to rail by the year 2020; and that roughly 4.2 million tons per year would use a float service immediately if it were realistically available. The Nadler Delegation further contends that it would be feasible to institute RoadRailer intermodal service and/or single container-on-flatcar (COFC) intermodal service on the tracks that run through the Hudson and East River tunnels (these tunnels are linked by tracks that run through Pennsylvania Station in Manhattan). The Nadler Delegation contends that the CSX/NS/CR transaction fails the 49 U.S.C. 11324(c) public interest test. The Nadler Delegation claims: that, because applicants do not intend to provide essential rail service within the Region, the transaction violates their 49 U.S.C. 11101 common carrier obligations; that the transaction will cause further economic dislocation in the Region; that the transaction, by creating new rail competition in Northern New Jersey while simultaneously preserving the old rail monopoly in the Region, will place the Region at a tremendous economic disadvantage; that, because CSX and NS intend to compete in the Region by drayage from their New Jersey terminals, the transaction will cause further deterioration in air quality levels in the Region; that, given the location of key highways within the Region, the transaction will result in substantial environmental degradation within areas of the Region with large minority populations, which areas are already suffering tremendous rates of disease related to excessive levels of air pollution; and that the transaction will result in no material improvement in transportation in the Region that would justify the permanent reduction in transportation options, economic opportunities, and environmental quality that the transaction will cause. The Nadler Delegation contends: that the current rail situation has not worked well for the Region and, for this reason, should not be allowed to continue; that, if the public interest is to be served, the rail system within the Region must be rationalized; that rationalization requires the establishment of a competitive east-of-the-Hudson route, which itself requires that major carriers be granted east-of-the-Hudson access to friendly connections; that the inclusion in the Conrail Shared Assets Operator (CSAO) of the cross-harbor floats and the lines connecting the floats to the feeder lines to the east, up to and including the P&W line, is essential to the future success of the cross-harbor floats; and that, without a rationalization of the Region's rail system, applicants will not be able to provide efficient and needed rail services to the public. The Nadler Delegation therefore contends that we should make approval of the CSX/NS/CR transaction subject to several conditions, and that we should retain jurisdiction to fix compensation in the event the interested parties are unable to reach agreement. Condition #1 would require the extension of the CSAO from Bayonne, NJ, across New York Harbor to Bay Ridge, by the acquisition of car float and rail facilities owned in part by the City of New York (i.e., the car float and rail facilities operated by NYCH). Condition #1, which is premised upon 49 U.S.C. 10907(c)(1) and 11324(c), contemplates, among other things, access by the CSAO to the 65th Street Yard (in Brooklyn). The Nadler Delegation claims that, given NYCH's chronic lack of adequate capitalization, the increased cross-harbor rail traffic the Delegation envisions will never be achieved as long as NYCH's rail assets are allowed to continue under present ownership. Condition #2 would require the extension of the CSAO from Bay Ridge to Fresh Pond Jct. by the granting of overhead trackage rights on tracks owned by the State of New York, LIRR (i.e., the tracks operated over by NYAR). Condition #2, which is premised upon 49 U.S.C. 11102 and 11324(c), contemplates, among other things, access by the CSAO to Fresh Pond Yard. The Nadler Delegation: concedes that Condition #2 would eliminate NYAR's participation in bridge traffic between Fresh Pond and Bay Ridge; but contends that there is presently very little such traffic, and that NYAR, much like NYCH, lacks the resources even to maintain, let alone to improve, the vital rail link that could be provided over NYAR's lines. Condition #3 would require the transfer to the CSAO of the Conrail line from Fresh Pond Jct. (in Queens) to Pelham Bay (in the Bronx). Condition #2, which is premised upon 49 U.S.C. 10907(c)(1), contemplates, among other things, the transfer to the CSAO of: the line between Fresh Pond Jct. and Oak Point Yard (known as the New York Connecting Railroad line); and Oak Point Yard. Condition #4 would require the extension of the CSAO from Oak Point Yard to Harlem River Yard (both in the Bronx). Condition #4, which is premised upon 49 U.S.C. 10907(c)(1) and 11324(c), contemplates, among other things: the transfer to the CSAO of Harlem River Yard; and access by the CSAO to the New York Terminal Produce Market (Hunt's Point Market). Condition #5 would require the extension of the CSAO to a point in Connecticut where it could connect directly with the full freight services of the P&W via trackage rights on Amtrak's Northeast Corridor, owned by New York State's Metro-North and by the Connecticut Department of Transportation. Condition #5 is premised upon 49 U.S.C. 10907(c)(1) and 11324(c). Condition #6a would reserve to Amtrak, as the owner or designated operator of the Northeast Corridor, the right to negotiate with any responsible operator, including but not limited to applicants, to provide intermodal or other direct freight service on the Northeast Corridor, which service must include but need not be limited to service through Amtrak's tunnels under the Hudson and East Rivers. The Nadler Delegation claims that Condition #6a, which is premised upon 49 U.S.C. 11324(c): would be a specific exception to the exclusivity of any rights to operate on the Northeast Corridor granted to applicants; and seeks only to prevent applicants from being granted the right to preclude the service contemplated by Condition #6a. Condition #6b, which is premised upon 49 U.S.C. 10907(c)(1) and 11324(c), would require that the State of New York be granted the right to designate a second operator of services on the Hudson Division between Selkirk and Oak Point Yard. The Nadler Delegation contends: that the creation of a rationalized rail system within the Region would generate enormous public benefits; that use of the floats would lower the cost of transporting a rail carload from a typical mid-Atlantic origin to a destination on geographic Long Island by $5.08 per ton; that the transfer of this traffic from truck to rail would generate enormous environmental savings (because taxpayers and the general public would not incur the costs that would otherwise be incurred on account of adverse environmental effects, e.g., the cost of time lost to disease and the cost of treating that disease); and that the conditions the Nadler Delegation seeks would give applicants an incentive to carry by rail much of the 98 million tons per year of the Region's rail-appropriate freight that currently moves by truck. NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION. NYCEDC, in its separately filed comments, contends that we should condition approval of the CSX/NS/CR transaction upon the grant of the relief sought in the jointly-filed responsive application. The CSX/NS/CR transaction, NYCEDC argues, represents an agreement by two similarly situated competitors (CSX and NS) to carve up a market (the New York Metropolitan Area) and to decide amongst themselves where competition will take place (in North Jersey) and where competition will not take place (in New York City and Long Island). NYCEDC contends that, under the antitrust laws, this would be considered a horizontal market allocation and a violation of Section 1 of the Sherman Act. NYCEDC contends that we should consider the antitrust essential facilities doctrine, which NYCEDC claims is applicable in the case of an entity that controls a facility or other resource that is alleged to be essential to a competitor's operation. This doctrine, NYCEDC argues, holds that it is an anticompetitive violation of Section 2 of the Sherman Act if: the entity that controls the facility or resource is a monopolist; the facility or resource cannot practically or reasonably be duplicated by competitors; the monopolist could feasibly deal with competitors; and the monopolist refuses to do so. NYCEDC contends that CSX's forthcoming monopoly east of the Hudson satisfies the criteria establishing anticompetitive behavior pursuant to the essential facilities doctrine. NYCEDC contends that the adverse impact of the CSX/NS/CR transaction will not be limited to shippers and receivers; New York City itself, NYCEDC claims, will suffer greatly in the absence of competition along the Conrail line east of the Hudson River. New York City's ability to maintain and attract manufacturing and distribution facilities within the City limits will be weakened; the many transportation-dependent businesses in New York and Long Island that are harmed by the lack of competitive options available to them in their present locations will naturally look to relocate to places where they will enjoy greater competition and more choice of service; the lack of adequate rail alternatives will mean greater resort to trucks; and the increased congestion associated with the use of these trucks will interfere with the economic development of the businesses and industries located in the City. And, NYCEDC adds, the increased use of trucks will add to air pollution in a metropolitan area that needs to find ways to improve, not worsen, the quality of its air. NEW YORK DEPARTMENT OF TRANSPORTATION. NYDOT contends that our application of the public interest standard should not be limited to consideration of the impact of the CSX/NS/CR transaction on existing rail competition. NYDOT argues: that the creation of Conrail was the result of a complex process, which was intended to preserve rail competition throughout New York and the Northeast; that, for various reasons, this process failed to achieve its competitive goals; that the emergence of the present Conrail monopoly in important parts of New York was a result disfavored by all key participants in the Conrail creation process, including the United States Railway Association (USRA); that USRA's primary goal of region-wide rail competition, although not achieved in 1976, has reappeared in 1998 as a key theme of the CSX/NS/CR application; and that we must therefore consider whether the CSX/NS/CR transaction will allow for the creation of the regional competition that should have been created, or preserved, in 1976. And, NYDOT adds, we should also consider the fact that, since 1974, the State of New York has invested or guaranteed over $1 billion dollars in rail service and infrastructure, much of which was for the support of Conrail and its facilities. NYDOT argues: that the New York Metropolitan Area and Hudson River Valley are among the country's largest markets for the consumption of products and transportation services; that, from a rail perspective, the region is one in which the State of New York has an enormous financial stake, in light of past and ongoing public investments in commuter and inter-city passenger facilities, yards and terminals, and freight service enhancements; that, however, the transaction as contemplated by applicants will preserve, within this region, the existing Conrail monopoly, while creating, within Northern New Jersey, intramodal competition; and that, in consequence, east side produce distributors, municipal waste and wood products shippers, and general merchandise shippers will lose market share and revenue. NYDOT notes that, as part of a plan to enhance freight service to the New York City area, NYDOT has constructed, on a trestle in the Harlem River, a $200 million rail bypass track known as the Oak Point Link (so called because it will end at Oak Point Yard) that will enable freight trains to avoid congestion at Mott Haven Junction and nearby locations. NYDOT adds, a transaction that leaves that portion of New York east of the Hudson River without effective rail competition is at odds with Congress' clearly intended goals for the rail lines that ultimately became Conrail. The mandate of USRA, NYDOT insists, was to preserve as nearly as possible the competitive rail service that existed in New York State before the bankruptcies of the early 1970s. NYDOT contends: that, in the Buffalo area, the CSX/NS/CR transaction amounts to a division and allocation of lines and shipping locations, with no real changes in the competitive outlook for shippers heretofore dependent on Conrail; that in the Detroit area, however, shippers in the Detroit SAA will gain new access to competitive rail service; that the terminal and related facilities in the Buffalo area compete with similar facilities in the Detroit area for important U.S.-Canada cross-border through traffic; and that, therefore, the CSX/NS/CR transaction, by creating an SAA in the Detroit area while preserving the Conrail (henceforth, CSX) monopoly in the Buffalo area, will put shippers and other commercial interests in the Buffalo area at a relative competitive disadvantage. NYDOT contends: that the State of New York has made massive investments in railroad passenger operations and facilities; and that Conrail is the cornerstone of the New York passenger network, because Conrail's facilities constitute the backbone of both the commuter system and the inter-city systems. NYDOT argues that, given New York State's enormous stake in the protection of current passenger service levels and in the preservation of its ability to meet the public's growing need for expanded and enhanced passenger service, continuing Board oversight would be appropriate. NYDOT claims: that 13 contracts entered into by New York State and Conrail remain in effect today, and will require further performance by Conrail in coming years, that these contracts represent public investments for a variety of rail maintenance and operation services; that applicants have made no specific commitment to carry out Conrail's obligations under these contracts; and that, therefore, unconditioned approval of the CSX/NS/CR application could cost New York State millions of dollars in lost benefits due from Conrail under these contracts. NYDOT contends: that the conditions sought by MNCR would serve the public's interest in safe, adequate, and expanded passenger rail service; and that the conditions sought by STWRB are reasonable and necessary. NYDOT contends that appropriate conditions must be crafted to assure that the recovery of any difference between the acquisition price and the value of the acquired assets does not become a pretext for higher rail rates on freight traffic that has no competitive alternatives. NYDOT contends that, in view of the adverse impacts an unconditioned CSX/NS/CR transaction could be expected to generate, that transaction is not in the public interest and should not be approved. NYDOT further contends that, in the event we approve that transaction, we must impose certain conditions intended to mitigate these adverse impacts. (1) NYDOT contends that, to mitigate the adverse impacts that will occur if CSX is established as the sole operator of Conrail's New York lines and trackage rights south of Albany and east of the Hudson River, we should grant the relief sought by NYDOT and NYCEDC in their jointly-filed responsive application. NYDOT adds that we should retain jurisdiction to rule upon and resolve potential disputes respecting implementation. (2) NYDOT contends that, to preserve the competitive balance between Buffalo and Detroit as through points for U.S.-Canada trade, we should grant the conditions sought by the ENRSC and establish an SAA and reasonable, associated switching terms in and around Buffalo. (3) NYDOT contends that, to ensure that the CSX/NS/CR transaction does not adversely affect commuter and inter-city passenger service, and to monitor applicants' compliance with other conditions, we should prescribe a 10-year oversight and reporting condition, and retain jurisdiction to impose such further or additional conditions as may be necessary. NYDOT specifically contends: that we should order CSX and NS to maintain their operations and facilities so that they can sustain both the present level of passenger operations in New York and future operations dictated by New York's investments and its expanding and dynamic needs; that we should require an express commitment by applicants to continue the New York program to achieve high speed passenger service between New York City and Albany (125 mph) and between Albany and Buffalo (100 mph); that we should require an express commitment by applicants to enhance and expand their passenger facilities in conjunction with Amtrak as circumstances require, consistent with New York's investment in Conrail facilities; and that, in view of New York's investment in facilities benefitting Conrail and Conrail's reciprocal commitments, New York must be entitled to petition for and receive Board orders that will compel applicants to meet New York's reasonable needs for passenger service. (4) NYDOT contends that, to protect the public investments made by the State of New York and to ensure that unfulfilled contractual undertakings made by Conrail are fully honored by its successors: we should impose a condition that will serve to memorialize, and make enforceable, applicants' stipulation respecting the 13 referenced contracts with New York and its agencies, and we should confirm that, because full compliance with these contracts will in no way interfere with the carrying out of the CSX/NS/CR transaction, a 49 U.S.C. 11321(a) override or avoidance of these contracts is not necessary. (5) NYDOT contends that we should grant the conditions sought by MNCR and STWRB. (6) NYDOT contends that we should impose appropriate conditions to ensure that captive New York shippers do not suffer unreasonable rate increases as a consequence of the high price applicants paid for Conrail. The conditions NYDOT has in mind would require CSX and NS to record their acquisition costs at historic book values for ratemaking purposes. (1) NYDOT contends that we should grant the relief sought by LAL, and that we should take action to protect connecting railroads like LAL from the harms threatened by the anticompetitive aspects of the proposed transaction. (2) NYDOT contends that we should grant the relief sought by NECR, but adds that, because the trackage rights sought by NYDOT/NYCEDC and NECR overlap, we must take care to ensure that all arrangements governing access to the common segment provide for such access on an equal and nondiscriminatory basis. (The common segment extends between Selkirk (west of the Hudson) and approximately CP-187 (east of the Hudson)). (3) NYDOT contends that, unless NWPRA can demonstrate that the operations it has proposed are feasible and compatible with the through service that NYDOT expects NS will conduct across the Southern Tier Extension (between Corry, PA, and Hornell, NY), the relief sought by NWPRA should be denied. NYDOT & NYCEDC (JOINT RESPONSIVE APPLICATION). NYDOT and NYCEDC claim: that, at present, all rail freight originating or terminating in the New York City/Long Island/Northern New Jersey area, and in the Hudson River Valley (between the New York Metropolitan Area and Albany), must be handled by Conrail; that, however, although the new North Jersey SAA will give shippers in Northern New Jersey direct access to CSX and NS, and although a new NS/CP haulage arrangement for through service via Albany may create additional new options for west-of-the-Hudson shippers, east-of-the-Hudson shippers will continue to be dependent on a single carrier (CSX); and that it necessarily follows that east-of-the-Hudson shippers will be disadvantaged relative to their west-of-the-Hudson counterparts. NYDOT and NYCEDC further claim that exclusive service by CSX on the east side of the Hudson may disrupt the prevailing trade flows of New York City and Long Island. NYDOT and NYCEDC contend: that much of the New York area's traffic is originated in Canada, New England, the Upper Midwest, and the West; that CSX, in an attempt to develop North-South traffic flows bridging its territory with Conrail territory, will favor traffic moving from/to the South as opposed to traffic moving from/to Canada, New England, the Upper Midwest, and the West; that it is likely that shippers of freight originating in Canada, New England, the Upper Midwest and the West will attempt to use truck transport to remain competitive; and that, therefore, the traffic may continue to flow, but the congestion on New York City's highways and bridges will be greatly increased. NYDOT and NYCEDC therefore ask that we require the grant of unrestricted (full service) trackage rights in favor of a rail carrier other than Conrail or CSX, to be designated jointly by NYDOT and NYCEDC, over Conrail's lines: (i) between the points of connection with CP/D&H at CP-160 near Schenectady, NY, and at Selkirk Yard near Selkirk, NY, on the one hand, and, on the other, CP-75 near Poughkeepsie, NY, with sufficient rights on tracks within Selkirk Yard to permit the efficient interchange of freight with CP/D&H; and (ii) between Mott Haven Junction (in the Bronx) and the point of connection with the lines of the LIRR near Fresh Pond (in Queens), via Harlem River Yard and Oak Point Yard. NYDOT and NYCEDC indicate that, because the lines between CP-75 and Mott Haven Junction are controlled by Metro-North Commuter Railroad Company (MNCR), any new railroad operating between CP-160 and/or Selkirk Yard, on the one hand, and, on the other, Fresh Pond, will have to obtain, from MNCR, operating rights over the lines between CP-75 and Mott Haven Junction. This, however, should not be an insurmountable obstacle, because MNCR has indicated that it is prepared to negotiate the granting of such rights. NYDOT and NYCEDC note, however, that, although MNCR contends that it is not prohibited or otherwise restricted, by the terms of any agreements now in effect, from granting the necessary rights, there is a question respecting MNCR's ability to grant such rights. NYDOT and NYCEDC therefore ask that, to the extent necessary to permit uninterrupted rail freight transportation between CP-160 and/or Selkirk Yard, on the one hand, and, on the other, Fresh Pond, we issue a declaration that, pursuant to 49 U.S.C. 11321(a), MNCR may grant, to a rail carrier other than Conrail or CSX, unrestricted trackage rights over the lines between CP-75 and Mott Haven Junction, notwithstanding any provisions of any agreements that purport to limit or prohibit such a grant. The New York Metropolitan Transportation Authority, of which MNCR is a subsidiary, is the lessee (under a long-term lease) of the lines between CP-75 and Mott Haven Junction, over which Conrail has trackage rights. NYDOT and NYCEDC have not indicated which provisions of which agreements might purport to limit or prohibit such a grant, although NYCEDC has suggested that Conrail and/or CSX may claim exclusive rights to conduct rail freight operations over the MNCR lines between CP-75 and Mott Haven Junction. It should be noted, however, that Conrail and CSX have not challenged the claim that MNCR is not prohibited or otherwise restricted, by the terms of any agreements now in effect, from granting the necessary rights. NYDOT and NYCEDC contend that the relief they seek would allow for the preservation of the competitive balance that now exists in the New York Metropolitan Area and the Hudson River Valley, by extending to shippers in New York City and Long Island, and on the eastern side of the Hudson River Valley, the same benefits of intramodal competition that applicants propose to confer on shippers in the North Jersey SAA. NORTHWEST PENNSYLVANIA RAIL AUTHORITY. NWPRA indicates: that it owns the Meadville-Corry line between MP 102.3 (in Meadville) and MP 60.8 (in Corry); that it is the lessee of an additional 0.3-mile segment of that line, between MPs 60.8 and 60.5 in Corry; that its operator, the Oil Creek and Titusville Lines - Meadville Division (OC&T), is authorized to provide common carrier rail service between MPs 102.3 and 60.5; and that it expects Conrail to convey to NWPRA the additional 0.3-mile segment, upon the expiration of Conrail's Southern Tier Agreement with NYDOT. The Erie-Corry segment of this "Conrail" line is owned by ALY. Conrail, however, has trackage rights over this segment, and these trackage rights will be assigned to NS. NWPRA claims: that the CSX/NS/CR transaction contemplates that NS will acquire, and provide common carrier rail service over, the Conrail line running via Corry between Erie, PA, and Hornell, NY; that NS, to provide such service, will have to operate over the 0.3-mile segment; that, however, OC&T is the only railroad common carrier authorized to provide rail service on the 0.3-mile segment; and that it therefore follows that NS, if it intends to provide through rail service between Erie and Hornell, will have to acquire trackage rights from NWPRA. It so happens, NWPRA adds, that it has interests of its own in connection with the Meadville-Corry line, because (NWPRA claims) efficiencies and opportunities for traffic growth on the Meadville-Corry line can only be advanced if OC&T is allowed to connect with its affiliate, the NY&LE, at Waterboro, NY (MP 23.2). NWPRA therefore contends that, because NS needs trackage rights over the 0.3-mile segment and because NWPRA (OC&T) needs trackage rights over the Corry-Waterboro segment, we should impose a condition requiring a reciprocal grant of overhead trackage rights between NS and NWPRA/OC&T. The reciprocal grant contemplated by NWPRA would consist of: (i) a grant to NS of trackage rights between MPs 64.1 and 60.5 (NWPRA claims that this grant would allow NS to establish a new high- speed connection at MP 64.1 between the ALY line and the Meadville-Corry line); and (ii) a grant to OC&T of trackage rights between MP 60.5 in Corry and the connection with the NY&LE at MP 23.2 in Waterboro. NYDOT contends: that NWPRA should not be allowed to compromise viable through service over the Southern Tier Mainline (which runs from Northern New Jersey through Binghamton and Hornell to Buffalo, NY) and/or the Southern Tier Extension; that NWPRA's requested condition, which seeks to put OC&T on a segment of track comprising an essential piece of an NS through route, threatens to interfere with New York's plans for improved rail service on the Southern Tier lines; and that NWPRA has provided no assurance that the service it contemplates can co-exist with NS' through operations on the Southern Tier Extension. NYDOT therefore insists that, unless NWPRA can demonstrate that its proposed operations are feasible and compatible with NS through service across the Southern Tier Extension, the relief sought by NWPRA should be denied. NYDOT also appears to be suggesting: that a conveyance of the 0.3- mile segment to NWPRA might violate certain NYDOT/Conrail contractual commitments; and that NS will have, as a consequence of the CSX/NS/CR transaction, sufficient authority to operate over the 0.3-mile segment, NWPRA's objections to such operations notwithstanding. Applicants contend that, although NS will indeed conduct through service between Erie and Hornell, it will conduct such service via Buffalo, and not via the Southern Tier Extension. It therefore follows, applicants note, that NS neither needs nor wants trackage rights over the 0.3-mile segment between MPs 60.8 and 60.5. NWPRA claims that NS' admission that it will not conduct through service on the Southern Tier Extension means that NS will continue the process of line degradation and segmentation that Conrail has pursued. NWPRA argues: that NS has failed to demonstrate that the Corry-Waterboro overhead trackage rights sought by NWPRA are inconsistent with the public interest; that, in fact, such trackage rights would allow for the preservation of alternative rail routings and competitive options; and that there is no reason to believe that joint use of the Corry-Waterboro segment would cause congestion or operational problems. PENNSYLVANIA DEPARTMENT OF TRANSPORTATION. The Commonwealth of Pennsylvania, Governor Thomas J. Ridge, and the Pennsylvania Department of Transportation (referred to collectively as PADOT) support the CSX/NS/CR transaction. PADOT has asked, however, that we include in the record in this proceeding two letter agreements dated October 21, 1997 (one with CSX; the other with NS). Each letter contains various proposals respecting the CSX/NS/CR transaction, and is addressed both to the Honorable Thomas Ridge, Governor of Pennsylvania, and to the Honorable Edward Rendell, Mayor of Philadelphia. PADOT indicates that the two agreements (the agreement with CSX, as memorialized in the CSX letter; and the agreement with NS, as memorialized in the NS letter) do not require the imposition of any conditions by the Board. PADOT adds, however, that the two agreements may be considered by the Board as constituting representations that applicants will comply with their respective terms. PENNSYLVANIA TRANSPORTATION COMMITTEES. The Pennsylvania House and Senate Transportation Committees (the Pennsylvania Transportation Committees) have several concerns respecting the CSX/NS/CR transaction. The Pennsylvania Transportation Committees urge resolution of certain regional and shortline competitive access issues, including: (a) access by B&LE to the Monongahela coal fields through trackage rights and appropriate haulage arrangements with CSX and/or NS; (b) the elimination of the interchange restrictions that presently preclude RBMN from interchanging freely with CP; and (c) the grant to W&LE of reasonable access trackage rights to competing carriers and gateway interchanges to insure W&LE's ability to provide essential services to Western Pennsylvania shippers. These competitive access conditions, the Pennsylvania Transportation Committees claim, are particularly important because the CSX/NS/CR transaction will restructure long-established traffic patterns and route relationships in fundamentally anticompetitive ways, and because (the Pennsylvania Transportation Committees claim) the only effective way to counter this reduction in competition is to grant regional and shortline railroads competitive access to carriers other than NS so that shipper options can be created to insure continued rail-to-rail competition between CSX and NS. The Pennsylvania Transportation Committees claim that applicants have failed to demonstrate the credibility of the revenue gains they anticipate from their projected intermodal traffic diversions. The Pennsylvania Transportation Committees contend: that applicants' diversion estimates fail to take into account the impact of economic downturns or changes in equipment availability in years two through five of the CSX/NS/CR transaction; that this failure is highly significant, because the acquisition premium paid to acquire Conrail cannot be justified without the diverted intermodal revenues applicants have projected; and that the Board, in its determination of the public interest, cannot simply accept applicants' assumption that economic conditions as they exist today will continue to exist unchanged into the future. Applicants have noted that the Governor and the Commonwealth of Pennsylvania support approval of the Transaction without conditions. This statement, the Pennsylvania Transportation Committees claim, is true