In many regulatory bodies there often is the company on one side and some members of the public on the other side. On many regulatory bodies for a long time the bias was towards the company because the regulators are working with them on a daily or weekly or monthly basis. The devil you know versus the devil you do not know type of situation. The members of the public bring forth many viewpoints and some are always worth considering.

In corporate battles, the regulatory body is mediating between 2 companies they generally work with and it is interesting to see and watch.

In an article by Ross Marowits of the Canadian Press, the 2 railways that are based in Canada, Canadian National CN and Canadian Pacific (CP) are fighting each other to buy Kansas City Southern.

A number of years ago, CN bought Illinois Central running from Chicago to New Orleans; CP owns railway tracks that go to Kansas City. The railway Kansas City Southern goes from Kansas City to Mexico City including the manufacturing base of Mexico to bring goods to the US consumer.

If CN wins the battle and KCS has accepted their higher offer, then they would have to sell some tracks otherwise they would have a monopoly. If CP wins, they would have access to Mexico City or the stakes are high.

The fight is over a voting trust agreement which CP says is not good, however CN disagrees. To bolster their arguments both companies have gone to their customers and partners to write letters pro and con to the regulatory body of the US Surface Transportation Board who has yet made a decision.

The customers is this case are over 1,000 suppliers from every side of the rail industry, many of the largest ports in North America, trade associations, local chambers of commerce, state legislators, 2 governors, and 11 members of Congress. Each company has spent time and money doing the full political press on the regulatory body. The issue of public interest is very much of the table. The companies have also ensured past members of the US Surface Transportation Board have wrote opinions which the current Board has seen.

Linking to dividend paying companies, one of the advantages of the companies is there reach into regulatory bodies to ensure consistency and stability. Often most of the lobby is done behind the scenes, but when 2 generally friendly competitors fight, sometimes what is behind the curtain is revealed for all to see.

There are more questions than answers, till the next time – to raising questions.