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Why would you break up the Class Is? Sure, maybe there's theoretical efficiency in having more smaller roads, but you know what they say: if it ain't broke, don't fix it. The freight rail industry has only recently emerged from decades of stagnation and underinvestment. Let's not kick out their legs just after they found good footing.
The important thing is just to not allow any further consolidation of the big Class Is. The regional balance is good enough as is. It could be better sure, but it also could be a lot worse.
Passenger rain's the real nightmare, and there are two different approaches we can take: the evolutionary or the revolutionary.
The evolutionary approach consists of buying the right to run passengers on an existing railroad and upgrading it to passenger standards. For practical reasons of cost and political expedience, the evolutionary approach tends to be favored, though I think It's not always a good idea. Most of our existing rail lines are not favorable to high-speed-rail. The ones that are are usually near-capacity. For the cost it takes to add new capacity and upgrade the corridor to passenger standards, you don't get that much. Maybe a 110 mph speed limit if you're lucky, but usually you're stuck piddling along at speeds closer to 60 mph with no way to improve other than buying new land to smooth out the curves, at which point the cost advantages of re-use start to disappear. For every existing corridor that's well-maintained, straight, smooth, and suitable for high-speed running (such as the FEC Railway or most of the NEC) there's twenty janky piece of crap lines that are falling apart, rough as hell, zig-zag all over the place, and have grade crossings every twenty feet (see: most non-mainline freight tracks).
Building new lines would make sense for places outside of the Northeast, but it's not practical right now. Unfortunately, without a good ROW you can't pull a Brightline, and without gobs of cash you can't pull a Texas Central.
