Proponents of less federal regulation for America's transportation industry scored two major victories yesterday.
The Senate Commerce Committee approved landmark legislation - in the works for three years - to open up the domestic airline business for increased competition by reducing the role of the Civil Aeronautic Board in deciding fares and service to various markets.
"Substantial deregulation" of the interstate trucking industry was supported for the first time by the Carter administration. In Senate testimony, the assistant attorney general for antitrust, John H. Shenefield, said current Interstate Commerce Commission rules "stack the deck" against potential new truck firms.
President Carter hailed the Senate committee's 11-2 vote in favor of reporting out the Air Transportation Regulatory Reform Act of 1977 as "a breakthrough in our effort to remove outdated regulatory burdens, and to make sure that federal regulatory programs are responsive to the public interest."
Both Carter and the previous Republicant administration were strong advocates of the measure, which is opposed by unions and some of the nation's airlines. A House subcommittee has been studying a similar bill but no formal action there is expected before the new year.
Although some members of the Senate want a floor vote - which is expected to be favorable - on the airline bill before adjournment this year, Commerce Committee chairman Warren Magnuson (D-Wash.) expressed doubts that a vote could be scheduled before January.
The Senate bill voted out yesterday is substantially the same as a compromise offered earlier by Aviation Subcommittee chairman Howard W. Cannon (D-Nev.) and Sen. Edward M. Kennedy (D-Mass.), although some major changes were made in a tortuous series of Commerce Committee hearings that began in mid-year.
Only two Democrats - Daniel K. Inouye of Hawaii and John Melcher of Montana - voted against the measure. Among key sections of the bill are the following:
New competition would be permitted, with each airline allowed to open a new route in each of the first two years after enactment, and up to two routes a year thereafter, without prior CAB authority.
Fare increase of up to 5 per cent a year and fare reductions of up to 35 per cent a year could be implemented by airlines without CAB approval.
Airlines would be able to discontinue services which are unprofitable, and small commuter airlines would be encouraged to pick up services to smaller cities.
Employees who may lose jobs because their airline goes bankrupt or has to cut back on services, in the wake of new competitive pressures, would be provided federal money for a limited period of time.
Federal assistance would be expanded to small communities to subsidize improved air services.
The CAB would retain power to determine the "fitness" of an airline company to enter the business and to approve route changes or new routes outside the so-called "automatic entry" provisions of the bill. In addition, the CAB would be required to act in such cases within 10 months.
Cannon said the bill is designed to get away from "excessive government regulation and leave it to business management to make business judgments and not have the government making those judgments for them."
A new log jam that threatened to block the bill in committee was broken by Cannon yesterday when he voted in favor of an amendment he opposes just to get the bill reported.
The amendment, by Melcher, puts the "burden of proof" on airlines that seek new routes rather than on opponents, as originally written. This provision also does not apply to "automatic entry" routes.
Kenneday called the Commerce Committee's action "the first important legislative step" toward restructuring regulated industries. He emphasized that the bill also would tighten antitrust laws for the industry.
The committee action on air deregulation came as Kennedy opened hearings on trucking before his Judiciary Subcommittee on Antitrust and Monopoly. Similar hearings several years ago on airlines launched the drive that has resulted in the Cannon-Kennedy bill.
Administration officials emphasized last night that in supporting reduced trucking legislation before the Kennedy panel yesterday, Shenefield was speaking for the President. Shenefield's testimony was cleared in advance by the Office of Management and Budget, one spokesman said.
Shenefield said current ICC regulation of trucking thwarts competition, increases inefficiency, adds to inflation and waste of energy resources, and hinders opportunities for small business and minority entrepreneurs.