Railroad Competition and Service Improvement Act of 2007

Railroad Competition and Service Improvement Act of 2007 - Sets forth Surface Transportation Board directives calling for effective competition among rail carriers and reliable rail transportation service for rail customers.

Requires a rail carrier, upon shipper request, to establish rates for transportation and provide requested service between any two points on the carrier's system.

Prohibits the Board from issuing a certificate authorizing construction and operation of railroad lines, short line purchases by Class II and Class III rail carriers, or consolidation, merger, and acquisition of control of rail carriers, or exempt from such certificate requirements any person, transaction, or service with respect to such activity, if the activity involves a transfer of interest in a line of railroad, from a Class I rail carrier to a Class II or III rail carrier, and the activity would: (1) restrict the ability of the Class II or Class III rail carrier to interchange traffic with other rail carriers; (2) restrict competition of rail carriers in the region affected by the activity in a manner that would violate U.S. antitrust laws; or (3) require higher per car interchange rates for Class II or Class III rail carriers to interchange traffic with other rail carriers. Prescribes procedures for Board review of any activity alleged to have resulted in a restriction of competition.

Makes mandatory (currently, discretionary) entry by rail carriers into reciprocal switching agreements where the Board finds it is practicable and in the public interest, or where such agreements are necessary to provide competitive rail service.

Requires the Board to designate any state or substantial part of a state as an area of inadequate rail competition after making certain findings.

Requires the Board to post rail service complaints on its website.

Sets forth time limits for the Board to act on complaints filed alleging unlawfulness of a new or revised rail rate, rule, or practice.

Establishes the Office of Rail Customer Advocacy.

Grants rail customers access to a Board process for determining rail rate reasonableness in railroad market dominance cases.

Requires the Board to submit certain rail rate, service, and other disputes to arbitration.

Authorizes the Board to investigate rail carrier violations on its own initiative (under current law, the Board is authorized to investigate only on complaint). Requires the Board (currently, discretionary) to initiate an investigation upon receiving a complaint alleging rail carrier violations.