an agreement is therefore a three-step process.
First, the Commission must determine whether the
agreement enhances one or more National Transporta-
tion Policy goals. Second, the Commission must
determine whether the agreement will harm inter-
ests intended to be protected by the antitrust
laws. Third, the Commission must determine
whether the benefits the agreement confers on the
public interest from the standpoint of the Nation-
al Transportation Policy outweigh the harm the
agreement will do to the public interest intended
to be protected by the antitrust laws,

"At each step in this three-step analysis, whether in a proceeding concerning a previously approved agreement or a proceeding involving a new agreement, the burden of proof rests with the applicants. Thus, the applicants have the burden to establish 1) that the agreement enhances one or more National Transportation Policy goals, 2) that the agreement will not have anticompetitive effects, and 3) that (if anti-competitive effects might be found) the benefits the agreement confers on the public interest from the standpoint of the National Transportation Policy outweigh the harm the agreement does to the public interest from the standpoint of national antitrust policy.

38200 step

further-tabe Cast Ak to achieve that cal.

"The burden of proof rests at all times with

applicants for two reasons. First, the test
articulated in the legislative record of section
5a speaks in terms of finding whether the National
Transportation Policy benefits of an agreement
outweigh the national antitrust policy disadvan-
tages of the agreement. The operative presumption
suggested by the language is that such agreements
are harmful unless proven otherwise.

"Second, section 5a is an antitrust exemption
Thus, it must

statute restrictive of competition.

be construed as narrowly as possible in favor of
competition. Accord, Federal Maritime Comm'n v.
Seatrain Lines, Inc., 411 U.S. 726, 733 (1973);
United States v. McKesson & Robbins, Inc., 351
U.S. 305, 316 (1956); United States v. Masonite
Corp., 316 U.S. 265, 280 (1942); Mt. Hood Stages,
Inc. v. Greyhound Corp., 555 F. 2d 686, 691 (9th
Cir. 1977)."

A copy of that notice, which discusses the reasons why the Commission imposed that standard, is attached as Appendix II.

While the Commission generally supports the enactment of section 3(a), with some modifications as noted below, one point deserves special mention. Section 3(a) states that the proce

dures of this bill apply to agency actions where the effect would be "substantially to lessen competition" or which would create

46-505 0 - 79 - 14

or maintain a situation involving a significant burden on competition. The importance of limiting these procedures to the consideration of broad policy issues or other major decisions cannot be overemphasized.

The Commission makes tens of thousands of decisions each year. Some of them, such as reviewing or making grants of antitrust immunity or mergers are, by their nature, significant and relatively few in number. But decisions as to rates and motor carrier entry total in the thousands.


The Commission had 14,402 cases pending before it as of February 28, 1979. During the month of February, it closed 1,074 cases on the formal docket and opened 1,686 cases. The number of cases filed is increasing rapidly, chiefly due to increased filings of applications for motor carrier operating authority. example, in February 1977, 609 applications for entry into the trucking industry were filed; in February 1978, the number was 991; and in February 1979, the number had risen to 1,602. In addition, the Commission has an even more extensive docket of informal cases. For example, in February 1979, we had 2,992 filings.

If the Commission were forced to undertake this analysis in every entry case and in every rate adjustment, it would slow our administrative process substantially. In the entry area, the Commission would seem to be required to perform the analysis in decisions granting entry as well as those denying it. The trucking industry at present seems to be characterized by excessive

service competition, and free entry has been advanced as a means to reduce service competition and stimulate price competition. Protestants could raise this issue in entry applications and presumably we would have to consider it. A proper balance of price and service competition could well support a grant of authority; but if the analysis must be made in each protested case, the result would be to greatly slow down the rate at which the Commission is now granting applications.

The potential for administrative burden is even greater in the rate area, where the volume of filings is much heavier.

The policies, standards, and criteria which guide how entry and rate decisions are made should be subjected to the section 3 (a) standard, but some means must be developed to accomplish that goal rather than by the application of the proposed procedures in each individual case. We think that one way of doing that would be to limit the application of the standard to major agency actions as defined by the agency. An agency's decision as to whether a particular action is major would be subject to judicial review. As discussed below, such an approach has worked well in other areas of the law. In addition, the Department of Justice might be given standing to ask the Commission to review Commission policies which are promulgated not in any major individual action, but rather are developed through a number of particular actions, which taken individually may possess only minor significance. The Commission would, of course, have the primary responsibility to identify and review its new policies in the light of section 3 (a).

I would now like to turn to the specific provisions of the bill. I should note that the Commission takes exception to some of the provisions. Where that is the case, we are suggesting changes. Also, while we generally support section 3(a), we are suggesting certain modifications.

Section makes certain findings and sets out the purpose of S. 382. We agree that competition plays an important role in protecting consumers and promoting efficiency and that, where applicable, agencies should consider the impact of their actions on competition. However, it is also true that unfettered competition may result in harm to consumers.

Hence, Congress has hedged

the "free market economy" of section 2(a) (1) with regulatory and antitrust controls. For example, Congress enacted the Interstate Commerce Act in 1887 to curtail certain "free market" practices of railroads--rate cutting, rebates, and financial combinations. Three years later the first federal antitrust law was adopted-the Sherman Act. The Clayton Act followed in 1914. As the Nation's industrial economy developed, federal economic regulation was extended to shipping, investment companies, the securities and commodities markets, labor-management relations, communications, etc. We think that those regulatory and antitrust controls are an important part of our Nation's economy. Consequently, we suggest that section 2(a) (1) be amended to read as follows:

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