Aii Expert Panel Discussion: FRA Waiver Reform and Driving Regulatory Innovation for Safer Railroading

Don’t miss the latest Aii expert panel discussion entitled “FRA Waiver Reform and Driving Regulatory Innovation for Safer Railroading.” Read the transcript below or watch and listen.

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Brigham A. McCown:
Hello and thank you all for joining us. I’m Brigham McCown, founder and chairman of the Alliance for Innovation and Infrastructure, Aii, and I’m honored to moderate this timely panel on driving regulatory innovation for safer railroading. This conversation comes at a particularly important moment. Just yesterday, I had the opportunity to be one of four testifying before the House Transportation and Infrastructure Committee during its hearing on America Builds: The Role of Innovation and Technology in a Safe and Efficient Rail System. In that testimony, I shared many of the findings and recommendation of Aii’s most recent report, which we’ll be discussing a bit and building off of today. The core message was clear. The Federal Railroad Administration’s waiver process, while intended as a tool of innovation, has become a bit of a bottleneck. What we see in federal government is inconsistent, opaque or politicized. Waiver processes like FRA can undermine safety advancements. By delaying or denying access to proven technologies like automatic track inspection or ATI, the result can be a regulatory culture that actually discourages innovation, hinders research and development, and puts an industry to disadvantaged compared to others. Our goal today is to spotlight constructive, actionable reforms to make sure that safety decisions are grounded on data and science, not politics, and that innovation is incentivized, not penalized. I’m grateful to be joined by an esteemed panel of leaders from across government industry and the technology policy. We’ll dive into real world examples, proposed policy changes, and how we can strike the right balance between regulation and innovation. I’ll start by allowing each of you to give a short introduction of yourself, your career highlights, and then I’ll share some opening questions and allow the discussion to evolve organically from there. Let’s begin. But Roger, before you introduce yourself, I would like to say thank you for joining us. Chairman of the US Service Transportation Board, you led GWU’s regulatory studies after a long career that I will let you explain. Thanks for joining us.

Roger Paul Nober:
Well, Brigham, thank you for having me and it’s good to meet Daniel and Stephen. As Brigham said, in a in a former life. I used to be the Chief Counsel of the House Transportation and Infrastructure Committee back in the 1990s, which seemed fresh but is now ancient history. And then in the early 2000s, we worked together at DOT. And then I left there to become the chairman of the Surface Transportation Board, which I was until the beginning of 2006, where I left and thought I would be a lawyer lobbyist in DC like everybody else, and then was asked to be the executive vice president at BNSF Railway Company, the country’s largest freight railroad. And I did that was the Executive Vice President and Chief Legal Officer for 16 years. And Brigham, I am glad you raised the automated track inspection because I was intimately involved in that. That was BNSF’s application to the FRA. So, we will definitely have some thoughts on that, but I retired from BNSF at the end of 2022. And I am now a professor at George Washington University. And I will just say being an academic in this environment is its own adventure, but I’m pleased to be here and thank you for having me.

Brigham A. McCown:
Absolutely. Thanks for joining us. Next, we have Stephen Gordon of the American Association of Railroads, and you have ve served since 2022, I think, as an Associate General Counsel there, and you are a seasoned regulatory lawyer. And the best part I like is you used to be at PHMSA, but please tell us more.

Stephen Gordon:
Yeah. So, I have been in the railroad industry, you know, off and on since very early on in my legal career. Started at FRA in the in the federal service in 2008 and served as a senior attorney there before moving over to PHMSA to start up their regulatory affairs branch within their office of Chief Counsel, served there for several years, and then switched over to the non-legal side and headed up the Office of Planning and Analytics which was responsible for doing economic analysis and environmental analysis of rulemakings and programs within PHMSA. As you said, in October 2022, I moved to the Association of American Railroads. Strangely enough, people think I’m crazy, but I really wanted to get back on the legal side of things and this opportunity presented itself, and I couldn’t be happier with the move. Being back in this industry is a really exciting place to be, because of all the changes that are happening. We’re seeing increased use or tempted use of technologies and ways that are innovative and really helping to drive safety and efficiency. So that’s kind of my background and where I am today.

Brigham A. McCown:
Well, Stephen, thanks for joining us. And although our time did not precisely overlap, we may have met when I was visiting some of the other folks there because I know your name, and it comes well regarded by other colleagues at DOT during that period. So, thanks for joining us today.

Stephen Gordon:
Thank you.

Brigham A. McCown:
And we have Daniel Castro, who currently serves as the Vice President of the Information Technology and Innovation Foundation, ITIF, where you direct the Center for Data Innovation and you lead research on advocacy on digital economy issues from private and security to AI regulation and data governance. Daniel, that’s a mouthful for me, so please tell us more.

Daniel Castro:
Absolutely. And thanks so much for having me here. You know, I started my career in government doing IT auditing at GAO across a number of different federal agencies. And my background’s really in cybersecurity, which is all about understanding risk. And you know, when we’re talking about, you know, rail safety here, this is really a question about “how do you manage risk with innovation”. And what I see again and again when I look kind of across the federal government is we need to embrace technology, we need to embrace AI, we need to embrace automation. And a lot of my research is really focused on what are the barriers to pursuing innovation across various contexts and rail is one where I think we have seen a lot of artificial barriers thrown up and I think that is why there are opportunities to take those barriers down.

Brigham A. McCown:
Wonderful. And I should also note that you have an MS in Information Security Technology and Management from Carnegie Mellon. Not bad.

Daniel Castro:
Thanks.

Brigham A. McCown:
So, as we start to dive into things, I think a couple of things from a 30,000-foot view. You mentioned into risk management. And I find that really interesting because both my career as a naval aviator, as a federal regulator and in running the Trans Alaska Pipeline system, you go, yeah, we’re all into risk management. That’s what we do. We’re into continuous improvement. It’s all about trying to mitigate risk and trying to keep occurrences from happening, right? We all know the consequence likelihood curve that we use as regulators. But you know, for people that maybe are not regulators at a 30,000-foot view, can we talk about that really everyone’s into risk management, right? Whether in your private life or in business, we’re all trying to identify things that could go wrong and figure out how to mitigate them. Do you think that’s fair?

Roger Paul Nober:
Brigham, who should start?

Brigham A. McCown:
Anybody, jump in! Sorry, I didn’t point out any names. What do you think? Are we all into risk management? Is it something all Americans should identify with?

Roger Paul Nober:
I will start and say that I think that you know having seen things from both the regulator and regulated side that we are into risk management and looking at things, but when you add a political regulatory component and you get people involved. You can’t just a simple risk assessment, if you will, where you assess probabilities and follow the course that is the most cost effective to reduce risk. The political system does not allow that. And I think that has been a significant impediment to the adoption of new technology. And you know, we can talk as the conversation goes on about other examples of it, but it is something that has been, I think, a real problem, which providing data isn’t enough. You have to sometimes prove the negative. You have to prove that if you do this, nothing bad could ever happen. And that is not how risk assessment works. Risk assessment says on a population wide basis if you followed one versus another, which would have less risk, not is there zero chance of anything ever happening.

Daniel Castro:
Add on to that. I mean, you know, from the cybersecurity side, I mean this is fundamentally you get to this question about how you manage risk while still enabling, you know, use as a right that kind of opportunity. If you think about securing anything, even just physical, if you want to secure your house, you could lock all the doors, bar up all the windows and make it so nobody could get in. But then nobody could get in, nobody could get out. That doesn’t actually solve the real problem, which is how do you have a secure home or secure building, where you can allow the right people in and the right people out. And that’s the challenge I think in all of these spaces for regulators is not just how do you kind of maximize whatever kind of security you want or minimize the risk, it is how do you do that in a way that doesn’t impose unnecessary cost on affected businesses, on affected users, on the American public and that is where you get into trade-offs, and exactly what Roger was saying, it’s not about getting this kind of in the security world, we talk about perfect security. Sometimes that’s just not feasible and that’s not really the goal. The goal is how do you strike this balance, and that’s something that I think, you know, regulators need to embrace because too often the risk they’re trying to minimize is the risk themselves, right? It’s how do I make sure I don’t do something that’s going to have blowback on me as opposed to how do I make sure I’m creating the, you know the best regulatory structure for this particular industry.

Roger Paul Nober:
If could just add one thing to what Daniel said, back at BNSF, we used to do cybersecurity penetration tests all the time, right? And what was the weak link every time, even if you had people come up with incredibly difficult passwords that they can’t remember or anything else, it is people, right? The people would be able to be tricked, and no matter how hard you, no matter how much prophylactic steps you put in terms of trying to protect the cybersecurity, you can’t, and people become the weak link, and so there’s a balance between human factors and security. Is the system usable versus is the system completely safe?

Stephen Gordon:
Yeah. One thing I might add to that is particularly in the regulatory space, a lot of times you’re dealing with inertia and there’s just a hesitancy to think about things in new ways. It’s difficult to change a rule, it’s a regulation. As we, as I’m sure we’re going to talk about today, the waiver process provides a kind of outlet valve for that. But again, that process is very, you know, it takes a long time. It’s expensive. Oftentimes the regulators are not receptive to thinking about things in different ways. So, you know, I would also point to inertia as something that you know in the risk calculus kind of prevents you from really looking at things from just purely a cost benefit perspective.

Brigham A. McCown:
So Stephen, let me build on that for a second because one of the points that I wanted to make, I’m wondering how it resonates with you all, is that by the time you enshrine something in regulation, when you’re being prescriptive, and I get it, there’s sometimes you might want to be prescriptive, but I was making the point that we need to continue to move toward performance based regulations because as soon as you issue that regulation, which may take two, four, five years or more to put in, the technology is already outdated. People are already doing something else, and I call this regulatory lag that’s inherent in the system. So, NHTSA, for example, put out a rear seat belt reminder. I read it. It was 280 pages to tell you how to do a rear seat belt reminder versus a one-page document that says here’s our expectation. You figure out how to implement it. Do we need to move away from prescription, and we will get into waivers in a second, but do we need to move more toward an outcome based regulatory environment? I’ll go to Stephen first and then down to Roger and then to Daniel.

Stephen Gordon:
Yeah. And I really do think that’s critical. You know, we talk regularly. In fact, Ian Jeffries, the president for AAR, testified recently at the Senate Commerce Committee on rail modernization as well. And you know, one of the things that he spoke about is how many of the regulations that we operate under are, you know, from the 1970s, 50 years old, many of them are even much older than that. Some of them go back to the 1930s. And the regulations at the time, you know, implemented best practices, but they weren’t really forward thinking. They really couldn’t be. They didn’t know what was coming. So, they set standards based on the practices of those times, and instead of creating flexible standards that would allow for change, they’re very prescriptive and if you have a more open outlook that allows for industry to adapt while still meeting performance standards. It really does open up the system such that, you know, in my case, railroads can figure out more efficient ways to meet that standard, but still meeting that baseline level of safety, in many cases achieving it through technology-based measures. But you can’t do that if you are, for instance like with track required to do a specific inspection each, you know, every over a period of time, let’s just say, you know, twice a week. And maybe you can meet that in a different way, but if you are required to do the periodic inspections, whether you have a different way of doing it or not, then you’re stuck. So ultimately, I do think that if you have performance-based regulations, it allows for that flexibility to really create new ways of doing things.

Brigham A. McCown:
OK, Roger?

Roger Paul Nober:
So, I learned about performance-based regulations probably 30 years ago when I was a staffer on Capitol Hill. The initial and the first of the four Republican revolutions that I have seen in my professional career was an idea to move trucking regulation toward performance-based regulations and what we learned is, first of all, there’s a tremendous amount of sort of regulatory pushback to that and you know, and for many reasons, which we can talk about. And then secondly, it’s a very difficult paradigm. It’s easy to talk about, it’s much more difficult to put into action. And then the third challenge with it is that it really requires a very professional and capable regulatory staff to be able to understand the risk assessment the way that the folks who are in the individual companies do. And you know that is not always the case. And risk-based and performance-based regulations really require a unique set of circumstances to work. And so, we have saw them many many times, but regulators tend to sort of revert back to, and Brigham, you would probably recognize this from your PHMSA days toward measurable command and control regulation because that is measurable. It’s something that they can go back and say you’ve done this, you’ve done this, you’ve done this. It’s easy to monitor compliance with, and it takes a lot of the subjectivity out of compliance and that’s easier for regulators to do. The problem is it very greatly stifles innovation. Now a little bit earlier I mentioned when it came to adopting new technology and you had a sort of command and control-based activity based regulatory scheme, you sometimes have to prove the negative. You have to say that if you do this and you eliminate the activity-based system, the activity-based requirement, well, nothing bad ever happened. And of course you can’t prove that, right? That’s not anything that you can prove. That’s not the way risk assessments work. You can say on a population, on a system-wide basis, we’ll have fewer incidents if we do it this way than that way, but you can’t. And that’s something that as we talk about the waiver process at BNSF, we were kind of put in the position of prove that nothing that ever would have been found with the manual inspection would be missed by the automated inspection, which is not the right way to look at it.

Brigham A. McCown:
OK. You know, building off of that and I meant to mention this yesterday and didn’t get a really chance to. We were talking about waivers, right? And different parts of DOT use different terminology for this special permit or for other ways, but the term itself conjures up a connotation that you’re getting by with something, you’re going around the regulations, they’re being waived. Well, gosh, why are we waiving safety regulations, right? And you know, should it be renamed to something else? And how should we think about waivers with regard to FRA?

Roger Paul Nober:
Well, I certainly agree that the that the concept of a waiver brings a pejorative meaning to it, right? That you’re waiving a safety regulation as opposed to innovating and providing something that’s safer. So, when BNSF was pursuing the automated track inspection waiver, I used to, and people were hesitant about it. I used to say, you know it’s kind of on one hand sort of ridiculous, right? That if somebody said to you, OK, your life depends on it on crossing this bit of track and you have two choices and two choices only. You can have our geometry car with 60 or 70 different measurements going over it and measuring everything from cross level to the integrity of the steel to how the ballast is. Or you could have a guy driving in a pickup truck at 15 miles an hour on the side and there was a gun to your head and your life depended on which would you choose. You choose the automated track inspection every time. Yet the regulators couldn’t bring themselves to do what was so intuitively obvious, because it sounds like you’re getting less safe. So, I say that only partially facetiously because it was a great frustration when we were trying to achieve that with those waivers that like nobody in their right mind would choose the person in the pickup truck driving at 15 miles an hour on the side over our geometry car or BSS.

Brigham A. McCown:
Let me make a quick footnote and then I’d like to go to Stephen and then to Daniel on this. That came up during yesterday’s testimony. And you know, everyone said at the outset, “yeah, you know, it’s, it’s not fully automated or fully manual. We need to work, you know, hand in hand together, we can do this.” And then one of the people testifying the entire time basically said, you know, it doesn’t catch everything it’s supposed to. It’s only seven of 20 something measurements. Would you rather trust a device that doesn’t catch a lot of things? Or our average inspector has 27 years of experience? He also then later said, “yeah, we should use them both, but we shouldn’t ever move away from the guy in the pickup truck driving down.” What do you think of that?

Stephen Gordon:
Yeah, well, you know, I think that’s a recipe for stagnation. As Roger said, you have these tools specifically with ATI that will go down the track at the track speed and pick up on various measurements that eyes cannot pick up on. That gives you an overall understanding of the health of the track. Does that mean necessarily that you don’t need visual inspections at certain times? No, it doesn’t necessarily. It doesn’t mean that. But it also doesn’t mean that you need the same amount. If you have a good understanding of what the track health is, by the measurements of the track geometry car, then you’re in a far greater position. And in fact, the numbers bear that out. I think that there is, if I recall correctly, I think, one of the railroads who was involved in the waiver program and may have even been BNSF found that there are ATI cars picked up 200 defects for everyone that the visual inspection picked up. Yeah, to say that you know if you’re going to have one or the other, it should be visual because they’re looking for more things. I think it fundamentally misunderstands what you’re really looking for, which isn’t specific things, but overall health and I think that’s really kind of what I think Roger may be talking about with respect to FRA is they don’t necessarily think about it in that way. They think about it as have you met certain prescriptive, you know, things that are in the regulations? Rather than thinking about like, how can we make this safer overall and what does that look like?

Roger Paul Nober:
Because then they can say that they’ve done their job. If they have made, if they have had the entities that they regulate comply with the specific regulations and the regulators have succeeded in doing their job, which is not really what they’re there to do, they’re there to make the system safer.

Brigham A. McCown:
So, Daniel, what’s wrong with the status quo?

Daniel Castro:
Yeah, I was going to say to your question about waivers, I mean, you know, to me this is an indication that you know, the regulatory system is not fit for purpose that the use of waivers is saying, well the rules are outdated and we’re having to go around them because they’re not designed for the current technology. This is where you do want streamlined approval processes. You do want to accelerate the use of new technology, and it’s important that we recognize this isn’t a question about regulation versus deregulation, you know, it’s about, you know, do we have static rules, or do we have dynamic rules? Are we changing with the times? And you know the question about approvals, I mean this is where you ask anyone, no matter where they are, you know, politically on the spectrum, should we have evidence-based policy? And the answer is yes. Should we have data-driven regulatory decisions? Yes. And so, when we’re talking about these waivers, this is really a question about, you know, does data support making a certain decision? And again and again, the answer is yes. And I think that’s why there’s so much frustration, you know, when these waivers aren’t granted because you’re basically seeing out in the open, you know, these petitions saying, you know, here’s a safer option, let us do this. And you know, when the answer comes back, no, you know, I think there’s reasonably a lot of frustration. And this is something that happens in so many areas of the economy. I mean, you think about something like, you know, when Uber came onto the scene. And you had all these outdated regulations for taxis. And the issue there was, we had a lot of rules for good reasons. You wanted to protect the passenger. You wanted to ensure safety. There wasn’t a certain trust that existed. But you know, the way Uber created this new business model and others created a whole new environment that solved many of these problems by using data, by using real time information, by creating the network, by creating, you know, reliability scores. And that’s where regulations have to be flexible and focused on, you know, performance-based outcomes. Because when you do that, you create opportunities for, you know, new types of innovation like this.

Brigham A. McCown:
Yeah, you know, Daniel, you raise a really important point. This came up yesterday and I can’t remember who I was or what side of the aisle, but they said, “you know, we have all this innovation occurring in these other industries. We have all of these,” you know, they mentioned rideshare, they mentioned home delivery like an Amazon product. And they said, “well, why not in rail?” And I think it was meant as a critique that railroads were not innovative. And the question did not come to me because I want to scream out because you know these other sectors that you’re talking about and discouraging new technology. Nobody wants to invest in a place where the rules do not encourage that. So why are technologies like ATI? And to be honest, ATI is not new. It’s proven, but not new. But why are technologies like ATI and other newer, more advanced technologies still caught in regulatory limbo. Stephen, let me start with you and then we’ll go around the horn.

Stephen Gordon:
Yeah, I mean, I think it really comes down to what we’ve been talking about. There’s just, uh, there’s a way of doing things that I think that regulators are comfortable with and they like it easy for them and if you have strict measures that a railroad has to do certain things at specified times, it’s very easy for you to track that and say whether the railroads complied or not, but if you’re looking at alternative ways of doing things like, for instance signal systems, there’s signal systems or railroads have invested significantly in microprocessor based systems that will continuously monitor the signals apparatus to ensure that it’s operating correctly. It has failed safes in it to prevent precisely the type of defects that the that FRA says that you have to inspect for, but yet we’re caught in a system that you still have to do those inspections even though you have technology that performs it for you. And you can’t get things done quickly because with the waiver process you run into time lags and with regulations it’s the same except for it’s even longer. So, you know a lot of what we do is to just constantly kind of beat the door on these things and try to help inform the regulators to make them more comfortable with the technology that is being used. But there is a real problem, I think, with regulators not fully understanding the technology that’s out there and the potential benefits of it.

Brigham A. McCown:
OK, Roger, your thoughts?

Roger Paul Nober:
Well, a few things. The first is that, you know, I’ve learned over time that logic and regulation don’t always overlap and part of it is the regulatory mindset that we’ve been talking about and part of it is just human factors and the reality of humans. So, one of the things that has always been interesting to me is that if you a lot of times in the rail industry try to use analogies to aviation because it’s something people understand and every commercial airliner that has existed for the past 30 years has the full ability to take off, fly and land completely autonomously and do so on a population on a system wide basis with fewer errors than human pilots. And then if you ask the question how many planes anybody has ever gotten onto without two pilots, the answer would be zero. And why? Because nobody would get on it. And it’s not a rational risk-based system. And not only that, but you can’t even go down to one pilot on a cargo plane where there aren’t any people, right? Just the crews. And so, some of it is regulatory, some of it is human factors. And then when you apply it to railroads, you get into this, you know, just concept of how do you prove the negative? How do you prove nothing bad will ever happen? And to a certain extent, waivers were an effort to try to provide a pathway to show that we’ll test out this technology and see if it works. But it has created a great deal of labor consternation that if you allow new technologies to be tested and show that they work, that would be a real risk to jobs. So, I think what we’ve seen the waiver process become politicized really over labor conditions having nothing to do with safety and that’s not good for the adoption of new technology because you know ultimately what private entity is going to invest capital in new technology that it doesn’t have a line of sight to getting a return on that capital. And that’s a basic premise that I’ve tried to be explaining to folks on the progressive side or the left side almost uniformly since I left the company. And some get it, some don’t, some just don’t care.

Brigham A. McCown:
OK.

Daniel Castro:
And if I can just add on, I mean, you know, I think it’s really important to, you know, remind policymakers that regulatory inertia is also a safety risk. And you know, it’s not just about, you know, the innovation cost and you know some of these opportunity costs and more investment in this area, all that’s incredibly important. But there’s the inaction does have consequences. It does have a safety cost. It is part of the safety risk calculation, or it should be part of the safety risk calculation, but it’s not. And so that’s where it’s really hard. You can’t kind of prove always that, well, what didn’t happen or the accidents that could have prevented with this new technology. But you can see them. I mean, you can see that from the evidence you have better data, there are repairs that could be made sooner. Lots of basically overall lowering risk and that’s something that regulators should really be doing more to address. And that’s kind of across the board where we need to find ways to align these incentives so that a regulator that’s not embracing change is basically a failed regulator in that sense. It’s all about continuous change. It’s not about locking in static rules. That’s not how you improve safety.

Brigham A. McCown:
Yeah, I think that’s a great comment and everything that you guys have just said, the whole point of this is to increase safety over time. We’re raising the bar through this iterative process of continuous improvement, right? And we want at the same time to ring out efficiency in the system and something that doesn’t get talked about much is we’re the great power competition with China. Part of the American advantage is the efficiency. We’re the ones who created just in time inventory. You know this is our strength and when the regulations misalign with technology, misalign with the ultimate mission of the industry, it becomes a burden instead of a plus. And speaking of waivers, let’s get into what should the FRA be doing? Because you know what we have seen from time to time is, and I don’t know how I’ll say it, political interference in the system. For various reasons, and not so much with the current administration, but they’ve inherited some things from before. What should the FRA be doing differently today than just a few short months or a few years ago? And I’ll start with Stephen.

Stephen Gordon:
OK. So, I would say a couple things. I think they need to figure out ways to shorten the process. One alternative would be to potentially, you know, set hard deadlines for decision making and allow a waiver application to go forward if FRA hasn’t made a decision on some sort of limited basis. Most waivers are, not necessarily system wide, they’re usually tried out in in specific locations, but I think you know having some sort of exit strategy that allows an entity to move forward in the absence of the regulator actually acting on something in a timely manner is one thing. Another thing would be to extend the length of waivers. Right now, the maximum waiver that is granted is five years. I think FRA should look at maybe allowing waivers for even longer, particularly ones that have been approved over and over again. There are waivers that have been around for 15 years. They’ve been approved three times. Is it really necessary to limit that waiver to five years? I’m not saying a permanent waiver. I think there you need to do a rule making but allow for entities to make use of the waiver for longer periods. And then the third thing. There’s been legislation that’s been passed about approving or I should say actually converting proven waivers into regulations. I think there needs to be a more concerted effort on that front to if you have a waiver that’s been approved twice, three times, you know from the data that it’s effective at doing what it’s supposed to do, then find a way to get that into the regulations and do that in an expedient way. So those would be three things that I would say.

Brigham A. McCown:
OK. Roger?

Roger Paul Nober:
You know, it’s interesting, Brigham, that part of the reason I joined the Regulatory Study Center to focus on regulatory process was my experience with the automated track inspection waiver process at the FRA. And you know, I’d say at the at the outset the fact that the waivers have become an element of policy is a regulatory failure. It means that the underlying regulations are not adapting to meet the current needs of the industry, and it’s very hard to get folks to recognize that. But in a perfect world, waivers should really be for testing out new technology, not for implementing policy in a way that goes around regular order, if you will, regular regulatory order. It’s kind of a mouthful. And so, I understand why people might say, “well, waivers shouldn’t be the element of policy,” and I actually might agree with that from an abstract regulatory standpoint, the second thing is that many of the suggestions that you guys make in your report about reviewing regulations on a regular basis, making them a permanent if they happen multiple times, I think are, you know, are helpful suggestions. I do think time limits on review is a challenge for any kind of adjudicatory action because you know, put yourself in the position as I have been of the folks asking for the waiver. So, you go in and they say, well, give us some evidence that, you know, give us the information we need to be able to grant the waiver in the first place to show the safety of this. And you do. And they say, well, we’re looking at it, but we need more. We don’t think that’s enough. We need more information. And you say, well, no, there isn’t, right. I mean and you hit up against the deadline. Well, the agency, it’s just, you know, let’s just say that there’s something that says we’re going to automatically improve it. If the agency is in the record said we don’t think there’s enough information to grant this and it automatically goes forward, then those are going to people are going to challenge the waiver. They’re probably going to succeed because the administrative record says that the agency still has a question. So, whether it’s been for environmental reviews or any kind of action, automatic time limits, I think are better in theory than in practice. They don’t work in practice because if you’re an applicant and the agency comes to you and says, will you extend the time? You’re going to say yes. I mean no applicants not going to say yes. So, I’d say that the final thing would be to do. You could make waivers be without end was subject to periodic review. So, the burden, if you will, or the, you know, the assumption is that they continue unless somebody can prove that they shouldn’t be, which is different than saying the burden of proof is on to show that they should be. And you know, I think for many of the technologies that are deployed, particularly things like automated track inspection or extended inspection. It’s going to be very hard to prove that those kinds of situations shouldn’t be kept going. And the final thing I’ll say is in too many situations, whenever we have an exigent circumstance, an outage, you know, bridges collapse, the very first thing we do is waive federal requirements, right? Waive the federal regulations and ask yourself why is it? But if we actually have to accomplish anything, the very first thing we do is waive the federal requirements. What does that say about the regulatory structure that we’re dealing with? I mean, that was the big thing in the Baltimore Bridge. I’ve been many parts of many Midwestern floods where to keep traffic moving, you waive requirements.

Brigham A. McCown:
That’s a really, really good point. And all those points are well taken. You know, before we move much forward, we’ve got about ten minutes left, and I would like to save two minutes a piece for some closing remarks. There’s a lot that we could still cover and still get through. We have surface reauthorization coming up, we had some proposed rail safety bills last Congress that didn’t actually get anywhere. There’s a lot of opportunity. As Bob Dylan once famously said, the times they are a changing and they continue to change and perhaps that’s the only constant in life, but in our remaining time, as you frame up maybe some things that we didn’t get to that you would like to talk about in your closing arguments, you know, I think as we walk through this, everyone’s goal for the most part is on safety. It’s just that people are coming at it from different approaches. And you know, hopefully I like the idea that once waivers are continuously approved, they just become permanent, perhaps if multiple railroads are asking for the same waiver, FRA should look at it as a nationwide waiver on their own and proactively give it. Perhaps they need to review some of their regulatory frameworks, but just in concluding. I’ll go Roger and then Daniel and then Stephen, you’ll have the last word. What are your thoughts if FRA or Congress were here with us today and they’ll be listening sooner or later to this panel discussion.

Roger Paul Nober:
Well, I would start with, you know, when one proposes regulatory changes, you have to accept what comes with it, whether you, you know, no matter where you are on the spectrum. So, when we talk about waivers, I testified before the TNI committee last year about California locomotive waivers, right? And the idea that you would allow one state to use a waiver process to essentially implement national greenhouse gas policy seems crazy, and you wouldn’t want to do it. Although you could, the proponents of that would use many of the same arguments that we’re using today. So, the first thing is we have to be careful what we suggest in terms of policy because over the time and regulatory span, you have to accept that it’s going to be used by an administration like this one and perhaps an AOC administration. So, we want something that’s fact based durable, and transparent and produces good regulatory outcomes. And for that the FRA should be focused on safety, right? And the development of new technology and safer technology to bring innovation to an incredibly important but relatively small industry and another just to just remember that you really have to count on companies to innovate because there might be 100 million cars in the world. So, the market for auto innovations is going to be one thing. There might be a million long haul trucks in the country and there are 1000 locomotives a year that are dealt with, you know maybe 10,000 locomotives total in the in the world. And it’s just a smaller market and because of that you have to give the companies that are providing the service an incentive to innovate and that’s a little bit different than some of these other areas. So, the waiver process needs to both be durable, transparent, and something that we don’t mind applying in other circumstances, even if we’re not going to like it on the one hand and on the other hand, is something that incents safety, the development of new safe technologies.

Brigham A. McCown:
OK. Thank you for that. Daniel?

Daniel Castro:
Yeah, a couple of points. I mean, one, we see this again and again, but labor shouldn’t be part of these discussions. You know, impact on jobs. When you’re talking about safety regulation, we’re talking about innovation, modernization, the safety regulations are not a job creation program. That’s not what they’re there for, that shouldn’t be the focus, and you know that should be kept out entirely from the debate. We need evidence-based safety regulations and that’s where the focus should be. And you know that should be just crystal clear to regulators that they need to make their decisions based on that. Second point is that you know whenever we’re talking about new technology, it’s fine, right? Fear, uncertainty and doubt. Opponents of any kind of technological change and innovation can use that uncertainty about what comes next to stall progress. And the way to respond to that is with more data. And that’s what regulators should do. There is always uncertainty and unknown about the future. And what you do is you have good oversight to manage change and to make sure that change is moving in the direction you want. And so, I think whenever that type of objection is raised, we need to help policy makers understand that comes with innovation, that comes with progress, and this is how you manage it. And so, they’re equipped with that, and they don’t see that as a period of progress. And the last part is really just across the board. We need more recognition that automation is good, the use of AI and data. These are good things for our society, and this is something that America needs to be leading in across virtually all sectors, if we want to compete globally, if we want to compete with China. These are core areas for, you know, increasing productivity for our national economic competitiveness, for our national security. And so, you know, we should be embracing opportunities to use automation. We should be embracing opportunities to get companies to invest more in these areas. That will lead America better off. That’s how we improve our infrastructure. And again, I think it’s part of this is kind of a culture shift that we’re ultimately trying to get to. where policymakers understand that, you know, they should be the ones demanding this change. And you know, the hearings that you’re at, I wish they’re asking more questions about where’s the innovation. That’s really what they should be asking about.

Brigham A. McCown:
OK. Kevin?

Stephen Gordon:
Yeah. So, I think probably number one, I think there just needs to be a focus on data-driven decision making. I think that certainly we’ve seen in the past where you know politics or parochial interests that they weren’t related to safety have impacted the decision making process, but I think really what we need is to step back and look at what the data tells us and make decisions based on for, in FRA’s case, their mission is the safety of the rail industry. What does the data say about improving rail safety and if an entity is asking for a relief from regulations that would appear to do that, then that’s something that should be really looked at and investigated and go where the data tells you. So that’s one thing. The second thing I might say is that one thing, you know, obviously given that DOT is a is a large organization that regulates multiple modes of transportation, there needs to be aware awareness of consequences if different modes are being regulated in different ways. So, I think there needs to be an understanding that there needs to be some sort of modal equity. Certainly, railroads and trucks are not the same. So, there may be different decisions that need to be made, but we shouldn’t be picking winners and losers just based on the fact that one entity is being allowed to embrace technology more than another. So, I would say be aware awareness of modal equity concerns is also a big issue.

Brigham A. McCown:
OK. Well guys, really appreciate you joining me today. Our time is about up, so we’re going to have to leave it there. But this is obviously a very interesting discussion and one that you’re right has cross modal implications and while DOT is one department, it’s many sub agencies and but very important to the country. So, hopefully there’s some good takeaways in here. I think there are that others can listen to and ultimately, I’ll end it with saying like I said earlier, the only cost in life is change. Technology is evolving more quickly with every iteration. And so, I’ll say you have got to get on board, or you’ll be left at the station, so we’ll have to leave it there. Thank you all for participating and joining us here at Aii today. Thank you.

Stephen Gordon, Daniel Castro, and Roger Paul Nober:
Thank you.

This transcript was generated by Microsoft Teams and lightly edited for clarity. Please excuse any incidental spelling or grammatical errors and refer to the full video.