The Interstate Commerce Commission yesterday began a process that will make it substantially easier for bus companies to drop or add service to cities around the country and to raise or lower fares.
Bus deregulation will become official in 60 days, and the intercity bus industry will join airlines, railroads and truckers in having greater freedom to choose how it will serve the public.
For many small towns long since abandoned by the passenger railroads, the bus is the last remaining means of public transportation. One of the great fears expressed as the Bus Regulatory Reform Act of 1982 worked its way through Congress was that those small towns would be left with nothing.
Reese H. Taylor Jr., chairman of the Interstate Commerce Commission, said yesterday he does not believe that will happen. "There are some areas the Big Two Greyhound and Continental Trailways will not want to serve," Taylor said, "but we think" smaller companies will "fill in behind and take care of that . . . I think the act is going to aid, abet and encourage service to small cities."
He said critics voiced the same concerns when the trucking industry was deregulated and said a new ICC study proves these fears groundless. Similiar complaints have been heard since airline service was deregulated.
There are 1,470 intercity bus companies in the United States. They carried 375 million passengers in 1981 and served 15,000 communities, including places where riders can flag down a bus, according to the American Bus Association.
Taylor's comments came at a press conference as he announced that the ICC had already started eight of the 17 regulatory actions that must be completed for bus deregulation to take effect. "We intend to have final rules in place" within 60 days as the act provides, Taylor said.
President Reagan signed the act Monday, and predicted "better service to large and small communities across the nation." He said lower fares will result from increased competition and lessened regulation.
The legislation was endorsed by both Greyhound and Continental Trailways. The act does not eliminate federal regulation of buses, but substantially eases the tests bus operators must meet before they can enter or leave a community. It also gives the ICC the right to preempt state regulatory authorities in some matters, including intrastate fares.
The Big Two have argued for years that state regulators have compelled lower fares on intrastate bus trips, thus forcing the companies to charge higher fares to long-haul, interstate customers. In effect, the local rider was subsidizing the long-distance rider.
The legislation also provides that:
* Bus companies wanting to provide charter, contract or special services -- generally the more lucrative in the bus business -- need only prove they meet minimum financial and safety standards. At the moment they must also prove there is a need for their service.
* Companies seeking regularly scheduled routes must be granted authority to operate unless someone can show the proposed service is not consistent with the public interest. Thus the burden of proof is on the protester, not on the applicant as it is today.
* Bus companies will have increasing freedom to adjust fares without ICC approval. In the first year they can set them 10 percent above and 20 percent below the current rate; in the second year 15 percent above and 25 percent below. (Those limits are called a ZORF, for Zone of Rate Freedom.) After the third year, the ICC would intervene in fare changes only if they were found to be predatory or discriminatory.
* Companies wishing to abandon or cut schedules to less than one trip per weekday to a community must first inform the state regulator, then may apply to the ICC for authority to discontinue if the state regulator denies permission or takes no action with 120 days. The ICC may grant or deny the request after considering several factors and can order service continued for up to 165 days.
Taylor said experience indicates that if states are given adequate advance warning, new carriers will appear to fill the need. "It may not always be with a 47-passenger bus," he said.