Regulators need to promote tech innovation, not stifle it
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A data-driven “Moneyball” approach isn’t just a smart way to build a baseball team, it’s also the tack our most effective oversight agencies are taking to make rules that allow businesses to grow alongside the technologies that drive them.

The Federal Railroad Administration, on the other hand, is going in the opposite direction.


The rail industry’s governing body recently proposed a rule that would require freight trains to operate with at least two crew members at all times.  And while the FRA is relying on anecdotes to argue that it would improve safety, there is no data to support its assertion.  In fact, the FRA acknowledges that the statistical evidence supporting its argument is lacking.

The FRA’s proposal runs counter to the principles of sound rulemaking that are more important than ever before given the rapid tech innovations that are revolutionizing how businesses operate.  This was my approach to regulation while I headed up the Office of Information and Regulatory Affairs in the early 2000s, and it is how regulators should and mostly do operate today.

Today’s businesses need to be able to be able to accommodate changes in market trends and emerging technologies, making it vital for rules to be based on metrics.  In other words, businesses should be required to meet safety and operational standards – not required to engage in specific operational practices that could become obsolete and saddle them with burdensome costs.  Currently, the freight railroad industry is operating at its safest level ever with train accident rates down 43 percent since 2000 and 79 percent since 1980.

Smart regulations in the 21st century should encourage innovation in the industry.  But under the structure of the FRA rule, railroads would be required to ask for permission to implement new technologies that could affect how their trains are staffed.  Pre-market approval requirements like this have been shown to deter innovation because they rob businesses of the incentive to invest in modernizing themselves.

With regard to the transportation sector, businesses should be embracing emerging technologies that allow for autonomous control of a vehicle or locomotive that will one day make our transportation network safer.  But while the Department of Transportation – which oversees the FRA – pushes for driverless cars and trucks, it is seemingly moving to prohibit the same for trains.

The Obama administration has shown leadership in creating an overall regulatory environment that allows businesses to keep up with technologies that make them more efficient, profitable and safe.  But with this rule, the FRA is going rogue and operating outside of the administration’s typical approach.

Implementing this rule would undermine the progress that has been made in recent years to get rid of unnecessary regulations and create an environment that recognizes the rapidly changing technologies that characterize our world today.

It would also set a dangerous precedent by ignoring tried and true practices for creating rules based on strong data and instead basing them almost on anecdotal evidence.

The FRA needs to withdraw this rule to show that it is in tune with the advances in technology that could make our country’s safe and efficient rail network even better.  Failure to do so could hold the industry back for years to come.

Mr. Graham served as the Administrator of the Office of Information and Regulatory Affairs under President George W. Bush. He is currently the Dean of Indiana University’s School of Public and Environmental Affairs.