The competition was regulated within the railway industry by the state throughout the world from the beginning of the railway era in the 19th century. We examine four models of the competition on railways in the world, and then compare influence on a state budget analyzing the case of Austrian railways. Finally we compare a historical experience with current European railway reforms and deduce possible forms of the railway industrys regulation and their compatibility with objectives of a transport policy. We conclude the only possibility is an unbundled market based on competitive tendering of passenger services instead of free open access.