I

103D CONGRESS

1ST SESSION H. R. 471

To amend the Federal Aviation Act of 1958 to enhance competition among

air carriers by prohibiting an air carrier who operates a computer reservation system from discriminating against other air carriers participating in the system and among travel agents which subscribe to the

system, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 6, 1993

Mr. OBERSTAR introduced the following bill; which was referred to the

Committee on Public Works and Transportation

A BILL

To amend the Federal Aviation Act of 1958 to enhance

competition among air carriers by prohibiting an air

carrier who operates a computer reservation system from

discriminating against other air carriers participating in

the system and among travel agents which subscribe

to the system, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Airline Competition

5 Enhancement Act of 1993’’.
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1 SEC. 2. COMPUTER RESERVATION SYSTEMS.

2 (a) IN GENERAL.—Title IV of the Federal Aviation

3 Act of 1958 (49 U.S.C. App. 1371–1389) is amended by

4 adding at the end the following new section:

5 ‘‘SEC. 420. COMPUTER RESERVATIONS SYSTEMS.

6 ‘‘(a) PROHIBITIONS AGAINST VENDOR DISCRIMINA7 TION.—

8 ‘‘(1) IN GENERAL.—No vendor, in the operation

9 of its computer reservation system, may unjustly dis10 criminate among participants in such system. For

11 purposes of this subsection, unjust discrimination

12 shall include, but not be limited to, practices prohib13 ited by this subsection. A prohibition of a practice

14 for which an effective date is specified in paragraph

15 (2) shall take effect on such date.

16 ‘‘(2) SPECIFIED PROHIBITED CRS OPERATIONAL

17 PRACTICES.—No vendor, in the operation of its com18 puter reservation system, may—

19 ‘‘(A)(i) make available to subscribers an

20 integrated display in which information is or21 dered or emphasized based upon factors relat22 ing to air carrier identity; or

23 ‘‘(ii) supply information from its computer

24 reservations system to any person creating or

25 attempting to create such an integrated display

26 if the vendor knows or has reason to know that
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1 such person intends to create or attempt to cre2 ate such an integrated display; except that the

3 prohibition contained in this clause shall not

4 apply to the extent that the vendor is supplying

5 the information to a subscriber creating, in ac6 cordance with the conditions of the exception

7 contained in subsection (c)(1), an integrated

8 display using information from the system;

9 ‘‘(B) make available, after September 30,

10 1994, to a subscriber any subscriber trans11 action capability which is more functional, time12 ly, complete, accurate, reliable, secure, or effi13 cient, is easier for the subscriber to use or ac14 cess, or provides to the subscriber a different

15 level of confirmation of transactions, with re16 spect to one participant than with respect to

17 any other participant; except to the extent that

18 the vendor is offering the other participant the

19 opportunity to participate in such capability at

20 the same price and terms as other participants

21 and the participant has not accepted such offer;

22 ‘‘(C) make available, after September 30,

23 1994, to a participant any participant trans24 action capability which is more functional, time25 ly, complete, accurate, reliable, secure, or effi-
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1 cient with respect to one participant than with

2 respect to any other participant; except to the

3 extent that the vendor is offering the other par4 ticipant the opportunity to participate in such

5 capability at the same price and terms as other

6 participants and the participant has not accept7 ed such offer;

8 ‘‘(D) charge any separate participant fee

9 for, or require compliance with any terms or

10 conditions relating to, the provision of any com11 puter reservation system feature, function, or

12 service which the vendor offers as a separate

13 option to the participant for the purpose of

14 complying with the requirements of this sub15 section, unless such fee, terms, or conditions

16 are reasonable; or

17 ‘‘(E) directly or indirectly prohibit a sub18 scriber from obtaining or using any other com19 puter reservation system.

20 ‘‘(3) PROHIBITION AGAINST INDUCING DIS21 CRIMINATION.—No vendor or air carrier shall re22 quire, or provide any incentives to induce, any sub23 scriber to use information from a computer reserva24 tion system to create an integrated display in which
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1 information is ordered or emphasized based upon

2 factors relating to air carrier identity.

3 ‘‘(4) USE OF THIRD-PARTY HARDWARE, SOFT4 WARE, AND DATA BASES.—

5 ‘‘(A) IN GENERAL.—Except on grounds of

6 demonstrated technological incompatibility, no

7 vendor may prohibit or unreasonably restrict,

8 directly or indirectly—

9 ‘‘(i) the interconnection to its com10 puter reservation system equipment of

11 computer hardware or software supplied by

12 a person other than such vendor; or

13 ‘‘(ii) the use by a subscriber, to access

14 directly any other computer reservation

15 system or data base, of hardware and com16 munications lines supplied by any other

17 vendor.

18 ‘‘(B) SPECIFIED PROHIBITIONS.—The

19 practices prohibited by subparagraph (A) in20 clude, but are not limited to, the following:

21 ‘‘(i) The imposition of fees in excess

22 of reasonable levels to certify or inter23 connect third-party equipment or to use

24 equipment supplied by any other vendor to
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1 access any other computer reservation sys2 tem or data base.

3 ‘‘(ii) Undue delays or redundant or

4 unnecessary testing before certifying or

5 interconnecting such equipment or access.

6 ‘‘(iii) The imposition of requirements

7 that subscribers use the vendor’s computer

8 reservation system for any minimum num9 ber or percentage of the subscriber’s book10 ings.

11 ‘‘(iv) Refusals to provide any services,

12 compensation, or other benefits normally

13 provided subscribers on account of the sub14 scriber’s using third-party equipment or

15 the subscriber’s using the same equipment

16 for access to both the vendor’s computer

17 reservations system and other computer

18 reservation systems and data bases.

19 ‘‘(v) The termination of a subscriber

20 contract because of the subscriber’s use of

21 third-party equipment or the use of the

22 same equipment for access to the vendor’s

23 computer reservations system and any

24 other computer reservation systems or data

25 bases.
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1 ‘‘(5) EXTENSION OF CONTRACT AS CONDITION

2 TO PROVIDING ADDITIONAL SYSTEM COMPONENTS.—

3 No vendor may require, as a condition for providing

4 to a subscriber additional computer reservation sys5 tem components (including software and enhance6 ments), that the term of the subscriber contract for

7 previously provided system components be extended.

8 ‘‘(6) USE OF SYSTEM IN SALE OF AIR TRANS9 PORTATION SERVICES.—No vendor may require use

10 of its computer reservation system by the subscriber

11 in any sale by the subscriber of air transportation

12 services of the vendor.

13 ‘‘(7) USE OF SYSTEM AS CONDITION TO COM14 PENSATION FOR SALE OF SERVICES.—No vendor

15 may require that a subscriber use or subscribe to its

16 computer reservation system as a condition to the

17 receipt of any compensation for the sale of air trans18 portation services by the subscriber.

19 ‘‘(8) CONDITIONAL PRICES.—No vendor may

20 charge prices to subscribers conditioned in whole or

21 in part on the identity of air carriers whose air

22 transportation services are sold by the subscriber.

23 ‘‘(b) SUBSCRIBER CONTRACT RESTRAINTS.—

24 ‘‘(1) TERM OF CONTRACT.—
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1 ‘‘(A) GENERAL RULE.—Except as provided

2 in subparagraph (B), no subscriber contract

3 provision shall be enforceable in law or equity

4 after the 180th day following the date of the

5 enactment of this section to the extent that

6 such provision provides for the term of the con7 tract to be more than 3 years.

8 ‘‘(B) GRANDFATHER OF CERTAIN EXIST9 ING CONTRACTS.—This paragraph shall not

10 apply to a contract—

11 ‘‘(i) which is in effect on the date of

12 the enactment of this section,

13 ‘‘(ii) which is for a term of not more

14 than 5 years, and

15 ‘‘(iii) with respect to which all parties

16 to the contract have agreed, in writing,

17 after such date of enactment and before

18 the 180th day following such date of enact19 ment, that the contract will be enforceable,

20 subject to other paragraphs of this sub21 section, until the last day of its term.

22 ‘‘(2) OTHER PROVISIONS.—No subscriber con23 tract provision shall be enforceable in law or equity

24 to the extent that such provision—
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1 ‘‘(A) forms a basis for a claim of actual or

2 liquidated damages by the vendor in the event

3 of cancellation of the contract, except as

4 follows:

5 ‘‘(i) damages related to the vendor’s

6 actual cost of removing its equipment from

7 the subscriber’s premises;

8 ‘‘(ii) the unamortized share of the

9 vendor’s actual cost of installing such

10 equipment in the subscriber’s premises ex11 clusive of any element of capital invest12 ment in such equipment; and

13 ‘‘(iii) other amounts owed to the ven14 dor by the subscriber during the unexpired

15 term of the contract, but in no event in16 cluding amounts which are in the nature of

17 a penalty for cancellation or which other18 wise become due upon cancellation;

19 ‘‘(B) extends, or provides for the extension

20 of, the contract beyond its stated date of termi21 nation, whether because of the addition or dele22 tion of equipment or because of some other

23 event;

24 ‘‘(C) provides an expiration date later than

25 the earliest expiration date of any other con-
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1 tract for computer reservations services or

2 equipment between the same subscriber and

3 vendor;

4 ‘‘(D) directly or indirectly requires that the

5 subscriber use the vendor’s computer reserva6 tions system for a minimum volume of trans7 actions, whether measured as an absolute num8 ber, a percentage of total transactions of any

9 kind, or otherwise (including making failure to

10 comply with such a requirement a breach or

11 violation of the contract or a ground for termi12 nation of the contract); and

13 ‘‘(E) directly or indirectly requires the sub14 scriber to use a minimum number or ratio of

15 system components based upon or related to the

16 number of system components leased from an17 other vendor (including making failure to com18 ply with such a requirement a breach or viola19 tion of the contract or a ground for termination

20 of the contract).

21 ‘‘(c) PROHIBITION OF SUBSCRIBER MODIFICATION

22 OF INFORMATION.—No subscriber may use computer soft23 ware or hardware to modify information in a computer

24 reservation system or derived from a computer reservation

25 system in such a way as to produce—
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1 ‘‘(1) integrated displays of such information in

2 which information is ordered or emphasized based

3 on factors relating to air carrier identity, except that

4 the subscriber may use the software or hardware to

5 create such displays of air transportation services—

6 ‘‘(A) if, before such use, the displays have

7 been requested by a customer of the subscriber

8 in writing;

9 ‘‘(B) if the request is kept on file by the

10 subscriber until there has been a period of at

11 least 2 years in which the customer has not

12 purchased any services from the subscriber; and

13 ‘‘(C) if the software or hardware is used

14 only with respect to such customer; or

15 ‘‘(2) displays of such information which provide

16 subscriber transaction capability which violates sub17 section (a)(2)(B) or participant transaction capabil18 ity which violates subsection (a)(2)(C).

19 ‘‘(d) REPORTING.—

20 ‘‘(1) QUARTERLY REPORTS.—Not later than

21 the last day of the 1st calendar quarter following the

22 date of the enactment of this section and of each

23 calendar quarter following such 1st calendar quarter

24 and ending on or before December 31, 1994, each

25 vendor shall submit to the Secretary a report de-
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1 scribing the manner in which the vendor proposes to

2 achieve and is achieving compliance with subsections

3 (a)(2)(A), (a)(2)(B), (a)(2)(C), and (a)(2)(D).

4 ‘‘(2) REPORT OF SECRETARY.—On or before

5 September 30, 1993, the Secretary shall transmit to

6 the Committee on Public Works and Transportation

7 of the House of Representatives and the Committee

8 on Commerce, Science, and Transportation of the

9 Senate a report, based on the reports filed by ven10 dors pursuant to paragraph (1) of this subsection—

11 ‘‘(A) which describes the progress which

12 each vendor has made in achieving compliance

13 with subsections (a)(2)(A), (a)(2)(B), (a)(2)(C),

14 and (a)(2)(D);

15 ‘‘(B) which compares and contrasts the

16 participant transaction capabilities and sub17 scriber transaction capabilities, including the

18 protocols of each vendor with each participant;

19 and

20 ‘‘(C) which includes a tentative finding by

21 the Secretary as to whether each vendor is

22 making satisfactory progress toward, and is

23 likely to achieve, compliance with each of such

24 subsections in accordance with any time limit

25 contained in such subsection.
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1 The Secretary shall provide each vendor a copy of

2 the report transmitted under this paragraph within

3 30 days after the date of such transmittal.

4 ‘‘(3) SUPPLEMENTAL VENDOR REPORT.—If the

5 report transmitted under paragraph (2) includes a

6 finding of the Secretary that a vendor is not making

7 satisfactory progress toward, or is not likely to

8 achieve, compliance with subsection (a)(2)(A),

9 (a)(2)(B), (a)(2)(C), or (a)(2)(D) in accordance with

10 any time limit contained in such subsection, the Sec11 retary shall require the vendor to submit to the Sec12 retary a supplemental report describing the manner

13 in which the vendor proposes to achieve compliance

14 with such subsection.

15 ‘‘(4) MAINTENANCE OF RECORDS.—Not later

16 than 90 days after the date of the enactment of this

17 section, the Secretary shall issue regulations requir18 ing each vendor to maintain such information con19 cerning its computer reservation system as the Sec20 retary determines is necessary to enable the Sec21 retary to determine whether or not the vendor is

22 making progress toward achieving compliance, or is

23 in compliance, with this section. Such regulations

24 shall establish the form and substance of the infor25 mation to be maintained.
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1 ‘‘(e) MONITORING OF PARTICIPANT FEES.—Not

2 later than June 30, 1993, and each March 31 thereafter,

3 the Secretary shall transmit, to the Committee on Public

4 Works and Transportation of the House of Representa5 tives and the Committee on Commerce, Science, and

6 Transportation of the Senate, a report on the participant

7 fees charged by vendors during the preceding calendar

8 year, including whether such fees represent an increase

9 or decrease over the fees charged previously and whether,

10 in the opinion of the Secretary, such fees are reasonable.

11 ‘‘(f) SPECIAL RULES FOR CERTAIN VIOLATIONS.—

12 ‘‘(1) APPLICABILITY.—The procedures and time

13 limits set forth in this subsection shall apply to any

14 complaint filed with the Secretary alleging a viola15 tion of this section (including any regulation issued

16 to carry out this section or otherwise relating to

17 computer reservation systems).

18 ‘‘(2) DEADLINE FOR DECISION WITH RESPECT

19 TO A COMPLAINT.—Not later than the 90th day fol20 lowing the date of the filing of a complaint to which

21 this subsection applies, the Secretary shall issue—

22 ‘‘(A) on the basis of the information filed

23 with respect to the complaint and any other in24 formation available to the Secretary, an order

25 which determines that there is not a material
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1 issue of fact with respect to the complaint

2 and—

3 ‘‘(i) which finds that the violation has

4 not occurred and dismisses the complaint;

5 or

6 ‘‘(ii) which finds, after compliance

7 with the procedures of section 1002(c) of

8 this Act, that the violation has occurred

9 and sets out the remedies and penalties

10 that the Secretary determines are appro11 priate for the violation and the information

12 forming the basis for such finding;

13 ‘‘(B) a consent order which sets out the

14 remedies and penalties which the Secretary de15 termines are appropriate and to which the al16 leged violator has agreed; or

17 ‘‘(C) for a determination of whether or not

18 the violation has occurred and appropriate rem19 edies and penalties for the violation if the viola20 tion has occurred, an order instituting a pro21 ceeding which includes an oral hearing on the

22 record before an administrative law judge in ac23 cordance with section 554 of title 5, United

24 States Code.
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1 ‘‘(3) PARTIES TO AN ALJ PROCEEDING.—If the

2 Secretary issues an order instituting a proceeding

3 before an administrative law judge under this sub4 section, both the Department of Transportation and

5 the person filing the complaint shall be parties to

6 the proceeding if they so elect, and the administra7 tive law judge may designate additional parties to

8 the proceeding.

9 ‘‘(4) POWER OF ALJ TO COMPEL PRODUCTION

10 OF DOCUMENTS.—An administrative law judge to

11 whom a complaint under this subsection is assigned

12 may compel the production of documents and other

13 information necessary to determine whether the vio14 lation has or has not occurred.

15 ‘‘(5) DEADLINE FOR ALJ DECISION.—Not later

16 than the 270th day following the date on which the

17 Secretary issues an order instituting a proceeding

18 before an administrative law judge under this sub19 section, the judge shall issue an order—

20 ‘‘(A) which finds that no violation has oc21 curred and dismisses the complaint; or

22 ‘‘(B) which finds that a violation has oc23 curred and sets out the remedies and penalties

24 that the administrative law judge determines

25 are appropriate for such violation.
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1 ‘‘(6) DEADLINE FOR FINAL ORDER.—Not later

2 than the 90th day following the date of issuance an

3 order by an administrative law judge under this sub4 section, the Secretary shall issue a final order with

5 respect to the complaint. If the Secretary does not

6 issue the final order by the last day of such 90-day

7 period, the order of the administrative law judge

8 shall be deemed to be a final order of the Secretary.

9 ‘‘(g) TREATMENT OF CERTAIN REDUCED CRS SERV10 ICES.—If any computer reservation system service being

11 provided to a participant in such system for a participant

12 fee is reduced without a corresponding reduction in the

13 participant fee, the participant fee shall be treated, for

14 purposes of this section, as being increased by the vendor.

15 ‘‘(h) REGULATIONS.—

16 ‘‘(1) GENERAL AUTHORITY.—The Secretary

17 may issue regulations to carry out the objectives of

18 this section and such other regulations relating to

19 computer reservation systems as the Secretary deter20 mines appropriate. Such regulations shall not be in21 consistent with the provisions of this section.

22 ‘‘(2) ENFORCEABILITY.—The enforceability of

23 this section shall not be affected by any delay or fail24 ure of the Secretary to issue regulations to carry out

25 the objectives of this section.
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1 ‘‘(i) DEFINITIONS.—For purposes of this section, the

2 following definitions apply:

3 ‘‘(1) COMPUTER RESERVATIONS SYSTEM.—The

4 term ‘computer reservations system’ means—

5 ‘‘(A) a computer system which is offered to

6 subscribers for use in the United States and

7 contains information on the schedules, fares,

8 rules, or seat availability of 2 or more sepa9 rately identified air carriers and provides sub10 scribers with the ability to make reservations

11 and to issue tickets; and

12 ‘‘(B) a computer system which was subject

13 to the provisions of part 255 of title 14 of the

14 Code of Federal Regulations (relating to com15 puter reservation systems) on June 1, 1991.

16 ‘‘(2) COMPUTER SYSTEM.—The term ‘computer

17 system’ means a unit of one or more computers, and

18 associated software, peripherals, terminals, and

19 means of information transfer, capable of perform20 ing information processing and transfer functions.

21 ‘‘(3) INTERNAL RESERVATION SYSTEM.—The

22 term ‘internal reservation system’ means a computer

23 system which contains information on airline sched24 ules, fares, rules, or seat availability and is used by

25 an air carrier to respond to inquiries made directly
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1 to the carrier by members of the public concerning

2 such information and to make reservations arising

3 from such inquiries.

4 ‘‘(4) INTEGRATED DISPLAY.—The term ‘inte5 grated display’ means a computerized display of in6 formation which relates to air carrier schedules,

7 fares, rules, or availability and is designed to include

8 information pertaining to more than 1 separately

9 identified air carrier. Such term excludes the display

10 of data from the internal reservations system of an

11 individual air carrier when provided in response to

12 a request by a ticket agent relating to a specific

13 transaction.

14 ‘‘(5) PARTICIPANT.—The term ‘participant’, as

15 used with respect to a computer reservations system,

16 means an air carrier which has its flight schedules,

17 fares, or seat availability displayed through such

18 system.

19 ‘‘(6) PARTICIPANT FEE.—The term ‘participant

20 fee’ means any fee, charge, penalty, or thing of value

21 contractually required to be furnished to a vendor by

22 a participant for display of the flight schedules,

23 fares, or seat availability of the participant through

24 the computer reservation system of the vendor or for
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1 other computer reservation system services provided

2 to the participant.

3 ‘‘(7) PARTICIPANT TRANSACTION CAPABIL4 ITY.—The term ‘participant transaction capability’

5 means a service, product, function, or facility with

6 respect to any computer reservation system which is

7 provided by a vendor to any participant and which

8 is capable of benefiting the air transportation busi9 ness of such participant, including the quality, reli10 ability, and security of communications provided by

11 the vendor linking such vendor’s computer reserva12 tion system to the computer system or data bases of

13 any participant, the loading into the system of infor14 mation on schedules, fares, rules, or seat availability,

15 the booking or assignment of seats, the issuance of

16 tickets or boarding passes, the retrieval of data from

17 the system, or a means of determining the timeliness

18 with which a participant will receive payment for air

19 transportation sold through the system.

20 ‘‘(8) PROTOCOL.—The term ‘protocol’ means a

21 set of rules or formats which govern the information

22 transfer between and among computer reservation

23 systems, participants, and subscribers.

24 ‘‘(9) SUBSCRIBER.—The term ‘subscriber’

25 means a ticket agent which uses a computer reserva-
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1 tion system in the sale and issuance of tickets for

2 air transportation.

3 ‘‘(10) SUBSCRIBER CONTRACT.—The term ‘sub4 scriber contract’ means an agreement, and any

5 amendment thereto, between a ticket agent and a

6 vendor for the furnishing of computer reservations

7 services to such subscriber.

8 ‘‘(11) SUBSCRIBER TRANSACTION CAPABIL9 ITY.—The term ‘subscriber transaction capability’

10 means any capability offered through a computer

11 reservation system to a subscriber with respect to air

12 transportation, including the capability of a ticket

13 agent through a computer reservations system to

14 view information on airline schedules, fares, rules,

15 and seat availability or to book space, assign seats,

16 or issue tickets or boarding passes for air transpor17 tation to be provided by air carriers.

18 ‘‘(12) VENDOR.—The term ‘vendor’ means any

19 person who owns, controls, or operates a computer

20 reservations system.’’.

21 (b) CONFORMING AMENDMENT TO TABLE OF CON22 TENTS.—The table of contents contained in the first sec23 tion of the Federal Aviation Act of 1958 is amended by

24 adding at the end of the matter relating to title IV of such

25 Act the following:

‘‘Sec. 420. Computer reservations systems.
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‘‘(a) Prohibitions against vendor discrimination.

‘‘(b) Subscriber contract restraints.

‘‘(c) Prohibition of subscriber modification of information.

‘‘(d) Reporting.

‘‘(e) Monitoring of participant fees.

‘‘(f) Special rules for certain nonfee violations.

‘‘(g) Treatment of certain reduced CRS services.

‘‘(h) Definitions.’’.

1 SEC. 3. RULEMAKING ON RANDOM TESTING FOR PROHIB2 ITED DRUGS.

3 Not later than 1 year after the date of the enactment

4 of this Act, the Secretary of Transportation shall complete

5 a rulemaking proceeding and issue a final decision on

6 whether there should be a reduction in the annualized rate

7 of random testing for prohibited drugs now required by

8 the Secretary for personnel engaged in aviation activities.

9 SEC. 4. CLARIFICATION OF PFC APPLICABILITY.

10 Section 1113(e)(1) of the Federal Aviation Act of

11 1958 (49 U.S.C. App. 1513(e)(1)) is amended by adding

12 at the end thereof the following new sentence: ‘‘After the

13 date of the enactment of this sentence, no public agency

14 authority shall collect a fee authorized to be imposed

15 under this subsection from a passenger enplaning at an

16 airport if the passenger did not pay for the air transpor17 tation which resulted in such enplanement, including any

18 case in which the passenger obtained the ticket for the

19 air transportation with a frequent flier award coupon

20 without monetary payment.’’.
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