[Federal Register Volume 62, Number 243 (Thursday, December 18, 1997)]
[Rules and Regulations]
[Pages 66272-66274]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-32897]
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DEPARTMENT OF TRANSPORTATION
Office of the Secretary
14 CFR Part 255
[Docket No. OST-97-3057]
RIN 2105-AC67
Computer Reservations System Regulations
AGENCY: Office of the Secretary, DOT.
ACTION: Final rule.
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SUMMARY: The Department is adopting a rule which amends its rules
governing airline computer reservations systems (CRSs) (14 CFR part
255) by changing their expiration date from December 31, 1997, to March
31, 1999. This amendment will keep the rules from terminating on
December 31, 1997, and will thereby cause those rules to remain in
effect while the Department carries out its reexamination of the need
for CRS regulations. The Department believes that the current rules
should be maintained during that reexamination because they appear to
be necessary for promoting airline competition and helping to ensure
that consumers and travel agents can obtain complete and accurate
information on airline services.
DATES: This rule is effective on December 31, 1997.
FOR FURTHER INFORMATION CONTACT: Thomas Ray, Office of the General
Counsel, 400 Seventh St. SW., Washington, DC 20590, (202) 366-4731.
SUPPLEMENTARY INFORMATION: When the Department adopted its rules
governing CRS operations, 14 CFR part 255, in 1992, it included a
sunset date for the rules to ensure that the need for the rules and
their effectiveness would be reexamined within several years. The
sunset date is December 31, 1997. 14 CFR 255.12. We have begun the
process of reexamining the rules but cannot complete that task by the
rules' current
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sunset date. We therefore proposed to change the sunset date to March
31, 1999. 62 FR 59313, November 3, 1997. We gave interested persons an
opportunity to comment on our proposal, but no one except America West
Airlines submitted comments. America West supports the proposal. We
have determined to adopt our proposed rule.
Background
As we explained in the notice of proposed rulemaking, in our last
major CRS rulemaking, and in recent CRS proceedings, CRS regulations
are necessary to protect airline competition and ensure that consumers
can obtain accurate and complete information on airline services. See,
e.g., 57 FR 43780, 43783-43787, September 22, 1992. CRSs have become
essential for the marketing of airline services, and market forces do
not discipline the price and quality of service offered airlines by the
systems. Furthermore, the systems operating in the United States are
each entirely or predominantly owned by one or more airlines or airline
affiliates. Without regulations, a system's owners could use it to
unreasonably prejudice the competitive position of other airlines or to
provide misleading or inaccurate information to travel agents and their
customers. 62 FR 59315, November 3, 1997.
When we last reexamined the CRS rules, we readopted them with
changes designed to promote airline and CRS competition. 57 FR 43780,
September 22, 1992. Our rules included a sunset date, December 31,
1997, to ensure that we would reexamine them after several years. 14
CFR 255.12; 57 FR at 43829-43830, September 22, 1992.
We have begun the process of reexamining our rules by publishing an
advance notice of proposed rulemaking asking interested persons to
comment on whether we should readopt the rules and, if so, whether
changes are needed. 62 FR 47606, September 10, 1997. At the request of
some parties, we gave the parties more time for submitting their
comments and reply comments on the advance notice. 62 FR at 58700,
October 30, 1997. We later invited interested persons to comment on a
rulemaking petition filed by America West Airlines in their comments on
our advance notice. 62 FR 60195, November 7, 1997.
Our Proposed Extension of the Current Rules
We obviously cannot complete the rulemaking proceeding for the
reexamination of our rules by December 31, 1997, the current sunset
date set forth in our rules. We therefore proposed to change the rules'
sunset date to March 31, 1999. The proposed amendment would keep the
current rules in force while we conducted our overall reexamination of
the rules.
We reasoned that a temporary extension of the current rules would
preserve the status quo while we determine whether our existing rules
should be readopted. As we noted, the systems, airlines, and travel
agencies have been operating with the expectation that each system will
comply with the rules. They would be unduly burdened if the rules
expired and were later reinstated by us, since they could have changed
their method of operations in the meantime. 62 FR at 59315, November 3,
1997.
We also tentatively determined that a short-term continuation of
the current rules was necessary to protect airline competition and
consumers against unreasonable practices. The findings made in our last
major CRS rulemaking on the need for CRS rules still appeared to be
valid. Those findings indicated that the rules should be maintained to
protect airline competition and consumers against the injuries that
could otherwise occur.
We further found that an extension of the rules was unlikely to
impose significant costs on the systems and their owners, since they
had already adjusted their operations to comply with the rules and
since the rules did not impose costly burdens of a continuing nature on
the systems. 62 FR 59316, November 3, 1997.
Finally, we suggested that our obligation under section 1102(b) of
the Federal Aviation Act, recodified as 49 U.S.C. 40105(b), to act
consistently with the United States' obligations under treaties and
bilateral air services agreements provided an additional ground for
maintaining our current rules during our reexamination of their need
and effectiveness. 62 FR 59316, November 3, 1997.
Due to the need to make the proposed amendment effective by the end
of 1997, we shortened the comment period to fifteen days. As we noted,
however, the advance notice of proposed rulemaking for the
reexamination of the CRS rules had stated that we intended to propose
an extension of the current rules. 62 FR at 59314, November 3, 1997.
Comments
America West was the only party that filed comments on our proposal
to change the rules' sunset date. America West agrees with our
tentative findings in the notice of proposed rulemaking that the
systems have market power that requires continuing regulation and the
findings made in our parity clause rulemaking and in our last major CRS
rulemaking. America West further cites the complaints made by it in its
recent petition for a rulemaking on CRS booking fee practices and
travel agency transactions, Docket OST-97-3014, and asks that we act
promptly on that petition.
Decision
We will amend the rules' sunset date as proposed by our notice of
proposed rulemaking. America West supports our proposal, and no one
objected to it. The analysis underlying that proposal is consistent
with the findings made by us in other recent rulemakings on CRS issues,
as stated in our notice and America West's comments. We will, of
course, review our past findings on the need for continued CRS
regulation as part of our overall reexamination of the CRS rules.
We recognize America West's interest in prompt action on its
rulemaking petition, but we plan to address its petition when we review
the comments and reply comments being filed in the proceeding for
reexamining all of the CRS rules. We have already asked parties to
include their responses to America West's petition in their comments on
our advance notice of proposed rulemaking. 62 FR 60195, November 7,
1997.
Effective Date
We have determined for good cause to make this amendment effective
on December 31, 1997, rather than thirty days after publication as
required by the Administrative Procedure Act, 5 U.S.C. 553(d), except
for good cause shown. In order to maintain the current rules in effect
on a continuing basis, we must make this amendment effective by
December 31, 1997. Since the amendment preserves the status quo, it
will not require the systems, airlines, and travel agencies to change
their operating methods. As a result, making the amendment effective
less than thirty days after publication will not burden anyone.
Regulatory Process Matters
Regulatory Assessment
This rule is a nonsignificant regulatory action under section 3(f)
of Executive Order 12866 and has not been reviewed by the Office of
Management and Budget under that order. Executive Order 12866 requires
each executive agency to prepare an assessment of costs and benefits
for each significant rule under section 6(a)(3) of that order. The rule
is also not significant under the
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regulatory policies and procedures of the Department of Transportation,
44 FR 11034, February 26, 1979.
In our notice of proposed rulemaking we tentatively determined that
maintaining the current rules should impose no significant costs on the
CRSs. The systems have done the work necessary to comply with the
rules' requirements on displays and functionality. Continuing to
operate in compliance with the rules would not impose a substantial
burden on the systems. Maintaining the rules would benefit airlines
using CRSs, since otherwise they could be subjected to unreasonable
terms for participation, and would benefit consumers, who otherwise
might obtain incomplete or inaccurate information on airline services.
We also noted that our notice of proposed rulemaking in our last
major rulemaking included a tentative regulatory impact statement whose
analysis we made final in adopting the rules. In proposing to change
the rules' sunset date, we stated our belief that the analysis remained
applicable to that proposal and that no new regulatory impact statement
therefore seemed necessary. We further stated our willingness to
consider any comments on that analysis before making our proposal
final.
As indicated, no one filed any comments. We will therefore base
this rule on the analysis used in our last major CRS rulemaking, as
discussed in our notice of proposed rulemaking. We will, of course,
undertake a new regulatory assessment as part of our review of the
existing rules, if we determine that rules remain necessary.
This rule does not impose unfunded mandates or requirements that
will have any impact on the quality of the human environment.
Regulatory Flexibility Analysis
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601 et seq., was
enacted by Congress to ensure that small entities are not unnecessarily
and disproportionately burdened by government regulations. The act
requires agencies to review proposed regulations that may have a
significant economic impact on a substantial number of small entities.
For purposes of this rule, small entities include smaller U.S. and
foreign airlines and smaller travel agencies.
Our notice of proposed rulemaking set forth the reasons for our
proposed extension of the rules' expiration date and the objectives and
legal basis for that proposed rule. We also pointed out that keeping
the current rules in force would not change the existing regulation of
small businesses. In addition, we presented a regulatory flexibility
analysis on the impact of the rules in our last major CRS rulemaking.
That analysis appeared to be valid for our proposed amendment of the
rules' sunset date. We therefore adopted that analysis as our tentative
regulatory flexibility statement and stated that we would consider any
comments submitted on that analysis in this proceeding.
We noted that the continuation of our existing CRS rules will
primarily affect two types of small entities, smaller airlines and
travel agencies. To the extent that the rules enable airlines to
operate more efficiently and reduce their costs, changing the sunset
date of the CRS rules would also affect all small entities that
purchase airline tickets, since airline fares may be somewhat lower
than they would otherwise be.
We reasoned that the rules would benefit smaller airlines without a
CRS ownership affiliation, by protecting them from certain potential
system practices that could injure their ability to operate profitably
and compete successfully. If there were no rules, the systems' airline
owners could use them to prejudice the competitive position of smaller
airlines. The rules protect smaller airlines, for example, by
prohibiting display bias and discriminatory fees for services provided
airlines. The rules also impose no significant costs on smaller
airlines.
The CRS rules affect the operations of smaller travel agencies,
primarily by prohibiting certain CRS practices that could unreasonably
restrict the travel agencies' ability to use more than one system or to
switch systems. Among other things, the rules give travel agencies the
right to use third-party hardware and software and prohibit display
bias.
No one filed comments on our Regulatory Flexibility Act analysis.
We will adopt the analysis set forth in the notice of proposed
rulemaking.
The Regulatory Flexibility Act also requires each agency to
periodically review rules which have a significant economic impact upon
a substantial number of small entities. 5 U.S.C. 610. Our rulemaking
reexamining the need for the CRS rules and their effectiveness will
constitute the required review of those rules. Our reexamination of the
rules will include a Regulatory Flexibility Act analysis if we propose
new CRS rules.
Our rule contains no direct reporting, record-keeping, or other
compliance requirements that would affect small entities. There are no
other federal rules that duplicate, overlap, or conflict with our
proposed rules.
The Department certifies under section 605(b) of the Regulatory
Flexibility Act (5 U.S.C. et seq.) that this regulation will not have a
significant economic impact on a substantial number of small entities.
Paperwork Reduction Act
This proposal contains no collection-of-information requirements
subject to the Paperwork Reduction Act, Pub. L. 96-511, 44 U.S.C.
Chapter 35.
Federalism Implications
This rule will have no substantial direct effects on the States, on
the relationship between the national government and the States, or on
the distribution of power and responsibilities among the various levels
of government. Therefore, in accordance with Executive Order 12812, we
have determined that the rule does not have sufficient federalism
implications to warrant preparation of a Federalism Assessment.
List of Subjects in 14 CFR Part 255
Air carriers, Antitrust, Consumer protection, Reporting and
recordkeeping requirements, Travel agents.
Accordingly, the Department of Transportation proposes to amend 14
CFR part 255, Carrier-owned Computer Reservations Systems, as follows:
PART 255--[AMENDED]
1. The authority citation for part 255 is revised to read as
follows:
Authority: 49 U.S.C. 40101, 40102, 40105, 40113, 41712.
2. Section 255.12 is revised to read as follows:
Sec. 255.12 Termination.
Unless extended, these rules on carrier-owned computer reservation
systems shall terminate on March 31, 1999.
Issued in Washington, D.C. on December 11, 1997.
Charles A. Hunnicutt,
Assistant Secretary for Aviation and International Affairs.
[FR Doc. 97-32897 Filed 12-17-97; 8:45 am]
BILLING CODE 4910-62-P
