ABSTRACT
The Staggers Rail Act of 1980 is widely perceived to have deregulated the U.S. freight rail industry. Yet substantial rail traffic remains potentially subject to regulatory rate intervention. The prevailing regulatory framework embodies elements of traditional public utility regulation, including fully distributed costing. Furthermore, explicit earnings regulation may be under consideration. This research reviews the evolution of regulatory policy in the rail industry and documents some of the many potential drawbacks to explicit earnings regulation.
