47606 Federal Register / Vol. 62, No. 175 / Wednesday, September 10, 1997 / Proposed Rules

State Public Utility Commissions)

having jurisdiction over rate regulation.

The requirements of this section, in

particular paragraph (c), are in addition

to, and not substitution for, other

requirements, and are not intended to be

used, by themselves, by other agencies

to establish rates.

(b) Each power reactor applicant for

or holder of an operating license for a

production or utilization facility of the

type and power level specified in

paragraph (c) of this section shall

submit a decommissioning report, as

required by 10 CFR 50.33(k) of this part

containing a certification that financial

assurance for decommissioning will be

provided in an amount which may be

more but not less than the amount

stated in the table in paragraph (c)(1) of

this section, adjusted annually using a

rate at least equal to that stated in

paragraph (c)(2) of this section, by one

or more of the methods described in

paragraph (e) of this section as

acceptable to the Commission. The

amount stated in the applicant’s or

licensee’s certification may be based on

a cost estimate for decommissioning the

facility. As part of the certification, a

copy of the financial instrument

obtained to satisfy the requirements of

paragraph (e) of this section is to be

submitted to NRC.

* * * * *

(d) Each non-power reactor applicant

for or holder of an operating license for

a production or utilization facility shall

submit a decommissioning report as

required by 10 CFR 50.33(k) of this part

containing a cost estimate for

decommissioning the facility, an

indication of which method or methods

described in paragraph (e) of this

section as acceptable to the Commission

will be used to provide funds for

decommissioning, and a description of

the means of adjusting the cost estimate

and associated funding level

periodically over the life of the facility.

(e)(1) * * *

(i) Prepayment. Prepayment is the

deposit prior to the start of operation

into an account segregated from licensee

assets and outside the licensee’s

administrative control of cash or liquid

assets such that the amount of funds

would be sufficient to pay

decommissioning costs. Prepayment

may be in the form of a trust, escrow

account, government fund, certificate of

deposit, or deposit of government

securities. A licensee may take credit on

earnings on the prepaid

decommissioning trust funds using a 2

percent annual real rate of return from

the time of the funds’ collection through

the decommissioning period, if the

licensee’s rate-setting authority does not

authorize the use of another rate.

(ii) External sinking fund. An external

sinking fund is a fund established and

maintained by setting funds aside

periodically in an account segregated

from licensee assets and outside the

licensee’s administrative control in

which the total amount of funds would

be sufficient to pay decommissioning

costs at the time termination of

operation is expected. An external

sinking fund may be in the form of a

trust, escrow account, government fund,

certificate of deposit, or deposit of

government securities. A licensee may

take credit for earnings on the external

sinking funds using a 2 percent annual

real rate of return from the time of the

funds’ collection through the

decommissioning period, if the

licensee’s rate-setting authority does not

authorize the use of another rate.

* * * * *

(3) For an electric utility, its rates

must be sufficient to recover the cost of

the electricity it generates, transmits, or

distributes. These rates must be

established by a regulatory authority

such that they are sufficient for the

licensee to operate, maintain, and

decommission its plant safely. The

Commission reserves the right to take

the following steps in order to assure a

licensee’s adequate accumulation of

decommissioning funds: review, as

needed, the rate of accumulation of

decommissioning funds; and either

independently or in cooperation with

either the FERC and the State PUC’s,

take additional actions as appropriate

on a case-by-case basis, including

modification of a licensee’s schedule for

accumulation of decommissioning

funds. Acceptable methods of providing

financial assurance for

decommissioning for an electric utility

are—

* * * * *

(f)(1) Each power reactor licensee

shall report to the NRC within 9 months

after [the effective date of the final rule],

and at least once every 2 years thereafter

on the status of its decommissioning

funding for each reactor facility or part

of a reactor facility that it owns. The

information in this report must include,

at a minimum: the amount of

decommissioning funds estimated to be

required pursuant to 10 CFR 50.75(b)

and (c); the amount accumulated to the

date of the report; a schedule of the

annual amounts remaining to be

collected; the assumptions used

regarding rates of escalation in

decommissioning costs, rates of

earnings in decommissioning trust

funds, and rates of other factors (e.g.,

discount rates) used in funding

projections; and any modifications

occurring to a licensee’s current trust

agreement since the last submitted

report. Any licensee for a plant that is

within 5 years of the projected end of

its operation shall submit such a report

annually.

* * * * *

Dated at Rockville, Maryland, this 4th day

of September, 1997.

For the Nuclear Regulatory Commission.

John C. Hoyle,

Secretary of the Commission.

[FR Doc. 97–23962 Filed 9–9–97; 8:45 am]

BILLING CODE 7590–01–P

DEPARTMENT OF TRANSPORTATION

Office of the Secretary

14 CFR Part 255

[Docket No. OST–97–2881; Notice No.

97–9]

RIN 2105–AC65

Computer Reservations System (CRS)

Regulations

AGENCY: Office of the Secretary,

Transportation

ACTION: Advance notice of proposed

rulemaking

SUMMARY: The Department is initiating

this rulemaking to determine whether it

should continue or modify its existing

rules governing airline computer

reservations systems (CRSs). Unless

extended by the Department, the

existing rules (14 CFR part 255) will

expire on December 31, 1997. It is the

Department’s preliminary position that

the rules should be continued, probably

with revisions.

DATES: Comments must be submitted on

or before November 10, 1997. Reply

comments must be submitted on or

before December 9, 1997.

ADDRESSES: Comments must be filed in

Room PL–401, Docket 49812, U.S.

Department of Transportation, 400 7th

St. S.W., Washington , D.C. 20590. Late

filed comments will be considered to

the extent possible. To facilitate

consideration of comments, each

commenter should file six copies of its

comments.

FOR FURTHER INFORMATION CONTACT:

Thomas Ray, Office of the General

Counsel, 400 Seventh St. SW.,

Washington, DC 20590, (202) 366–4731.

SUPPLEMENTARY INFORMATION: The

Department adopted its rules governing

CRS operations—14 C.F.R. part 255—

because CRSs had become essential for
Federal Register / Vol. 62, No. 175 / Wednesday, September 10, 1997 / Proposed Rules 47607

the marketing of airline services for

almost all airlines operating in this

country. We found that the rules were

necessary to ensure that the owners of

the systems—all of which were airlines

or airline affiliates—did not use them to

unreasonably prejudice the competitive

position of other airlines or to provide

misleading or inaccurate information to

travel agents and their customers. Our

rules include a sunset date, December

31, 1997, so they will expire unless we

readopt them after examining whether

they are still necessary. We are

beginning this proceeding to determine

whether we should readopt the rules

and, if so, with what modifications.

The CRS Business

A CRS consists of a periodicallyupdated central database that contains

information on the travel services sold

through the system. Subscribers (mainly

travel agents) access the CRS through

computer terminals, which are usually

leased from the system. Consumers may

also access a CRS through an on-line

computer service or the Internet.

The most important service sold

through a system is airline

transportation, but a system user can

also obtain information and conduct

transactions for rental cars, hotels, and

other travel services.

A CRS enables users to find out what

airline seats and fares are available, to

book a seat, and to issue a ticket on each

airline that ‘‘participates’’ in the system,

that is, that makes its services saleable

through the CRS. Airlines participating

in a system pay a fee whenever someone

uses the system to make a booking on

that airline (most of the systems also

charge fees for related transactions, such

as booking changes and cancellations).

Other travel suppliers pay similar types

of fees. The systems also charge many

travel agency subscribers for using a

CRS, although subscriber fees, unlike

airline fees, are disciplined by

competition and typically have been

relatively small (and even offset by large

bonuses for using a system). In the past

each airline owning a system also

benefited when travel agencies used its

system, because those agencies made

more bookings on that airline than they

would have made if they had used a

system that was not affiliated with that

airline (this is the ‘‘halo effect’’). The

size of the halo effect has apparently

shrunk in recent years, in large part

because the functionality offered by the

systems for the owner airlines and other

participating airlines has become more

equal.

Four CRSs—each affiliated with one

or more U.S. airlines—operate in the

United States. The largest system, Sabre,

is primarily owned by the parent

corporation of American Airlines.

Apollo, the second largest system, is

operated by Galileo International, whose

airline owners are United Air Lines, US

Airways, Air Canada, and several

European airlines. Both Sabre and

Galileo International have public

shareholders. Worldspan is owned by

Delta Air Lines, Northwest Airlines,

Trans World Airlines, and Abacus, a

group of Asian airlines. The fourth

system is Amadeus, a major European

system primarily owned by Lufthansa,

Air France, Iberia, and Continental Air

Lines; Amadeus acquired System One, a

system formerly controlled by an

affiliate of Continental.

We found in our last major CRS

rulemaking, completed in 1992, that

CRSs had become essential for the

marketing of the services of virtually all

airlines. With the exception of

Southwest Airlines and a few other lowfare carriers, all U.S. airlines had found

it essential to distribute their services

through each of the four CRSs operating

in the United States because of the

importance of travel agencies in the

distribution of airline services and each

travel agency’s predominant use of a

single system. 57 FR 43780, 43783–

43784 (September 22, 1992).

In recent years seventy percent of all

airline bookings in the United States

have been made by travel agencies, and

travel agencies rely almost entirely on

CRSs to determine what airline services

are available and to make reservations

for their customers. Travel agencies rely

so much on CRSs because of their

efficiency. 57 FR at 43782. If travel

agency offices commonly used several

CRSs, travel agents would be able to

obtain information and make bookings

on a carrier even if the carrier

participated in only some of the four

systems. Each travel agency office,

however, generally uses only one

system for the great majority of its

bookings. 57 FR at 43783.

An airline’s ability to sell its services

will be significantly impaired if its

services are not displayed and offered

for sale in each CRS used by a

significant number of travel agents. If

the airline does not participate in one

system, the travel agents using that

system must call the airline to obtain

information and make bookings, which

is substantially less efficient than using

a CRS. Travel agents are less likely to

book an airline when doing so is

significantly more difficult than booking

another airline that does participate in

the agents’ CRS. As a result, the nonparticipating airline will receive fewer

bookings than it would have obtained if

it participated in the agents’ system.

Because of the importance of marginal

revenues in the airline industry, a loss

of a few bookings on each flight is likely

to substantially reduce the airline’s

profitability. 57 FR at 43783–43784.

An airline can try to mitigate the loss

of bookings caused by non-participation

in a system by establishing a direct

electronic link between the travel

agencies using that system and its own

internal reservations system, but doing

so is expensive and potentially less

convenient for travel agents. An airline

cannot create its own CRS, for entry into

the CRS business would be extremely

costly and the airline would have

difficulty obtaining a significant market

share. 57 FR at 43782–43784.

Airlines could exert some competitive

pressure on the systems if they could

encourage travel agencies to use one

system instead of another, but that has

appeared to be impracticable.

More recently, as explained below,

airlines, travel agencies, and some

systems have created new booking

services that are accessible directly by

consumers through the Internet. While

the use of these services is growing

rapidly, consumers make relatively few

bookings through these services.

Moreover, these services, except for the

websites offered by individual airlines,

use a CRS as their booking engine, so

the growth in Internet bookings may not

necessarily reduce airline dependence

on CRSs.

History of the Department’s Regulation

of CRSs

CRSs became essential for airline

distribution in the early 1980s. Each

system’s owner airline used its system

to prejudice airline competition and

give consumers misleading or

incomplete information in order to

obtain more bookings. These factors

caused the agency formerly responsible

for the economic regulation of airlines,

the Civil Aeronautics Board (‘‘the

Board’’), to adopt rules governing the

operations of airline-affiliated CRSs. 49

FR 32540 (August 15, 1984). The Board

based its CRS regulations primarily on

its authority under section 411 of the

Federal Aviation Act, later recodified as

49 U.S.C. 41712, to prevent unfair

methods of competition and unfair and

deceptive practices in air transportation

and the marketing of airline

transportation. On review the Seventh

Circuit upheld the Board’s rules. United

Air Lines v. CAB, 766 F.2d 1107 (7th Cir.

1985).

The Board’s major rules required each

system to make participation available

to all airlines on non-discriminatory

terms, to offer at least one unbiased

display, and to make available to each
47608 Federal Register / Vol. 62, No. 175 / Wednesday, September 10, 1997 / Proposed Rules

airline participant any marketing and

booking data from bookings for

domestic travel that it chose to generate

from its system. The Board’s rules also

prohibited certain contract terms that

restricted the travel agencies’ ability to

choose between systems. For example,

the Board fixed the maximum term for

travel agency contracts at five years.

After the Board’s sunset on December

31, 1984, we assumed the Board’s

responsibilities for airline regulation,

including its regulation of CRSs.

The Board included a sunset date of

December 31, 1990, in its rules to ensure

that we would reexamine the need for

the rules and the rules’ effects. We

initially conducted a study of the rules

and the CRS business as part of the

Secretary’s study of domestic airline

competition. Secretary’s Task Force on

Competition in the U.S. Domestic

Airline Industry, Airline Marketing

Practices: Travel Agencies, FrequentFlyer Programs, and Computer

Reservation Systems (February 1990).

We then conducted a rulemaking

proceeding to reexamine the rules. 54

FR 38870 (September 21, 1989)

(advance notice of proposed

rulemaking); 56 FR 12586 (March 26,

1991) (notice of proposed rulemaking);

and 57 FR 43780 (September 22, 1992)

(the final rule). While we were

completing our rulemaking, we

extended the expiration date of the

Board’s rules so that they remained in

effect until we adopted revised rules. 55

FR 53149 (December 27, 1990); 56 FR

60915 (November 29, 1991); 57 FR

22643 (May 29, 1992).

In finding that CRS rules remained

necessary to promote airline

competition, we determined that market

forces still did not discipline the price

or level of service offered participating

airlines by the systems, that CRS owners

would still use their control of the

systems to prejudice airline competition

if there were no rules, and that systems

could still bias their displays of airline

services if there were no rules requiring

unbiased displays. 57 FR at 43783–

43787.

We therefore maintained the Board’s

rules, which we strengthened in some

respects. In determining which rules to

adopt, we attempted to adopt rules that

would promote competition in the CRS

business and thereby make detailed

regulation less necessary. In particular,

we adopted rules (i) giving travel

agencies the right to use third-party

equipment and software in conjunction

with a CRS (each vendor generally had

required its subscribers to lease

equipment from itself and limited their

ability to use programs produced by

independent firms), and (ii) giving

agencies the right to use their CRS

terminals (unless owned by the vendor)

to access other CRSs and sources of

airline information. Sections 255.9. We

adopted these rules because vendors

had barred travel agencies from using

their terminals to access any other

system or database, a restriction which

discouraged agencies from using

multiple systems. We hoped that the

rules would make it likely that travel

agencies would begin using multiple

systems and databases, which would

give airlines alternate electronic

methods for providing travel agencies

with information and booking

capabilities and thereby create some

competition for the systems. 57 FR at

43797. We similarly prohibited certain

types of travel agency contracts that

unreasonably limited an agency’s ability

to use more than one system. Section

255.8.

We also adopted rules (i) requiring

each airline with a significant CRS

ownership interest to participate in each

other system at a level equal to its level

of participation in its own system, if the

other system’s participation terms were

commercially reasonable, (ii) requiring

systems to offer participating airlines

functionality that was more comparable

to that offered owner airlines, and (iii)

requiring systems to make marketing

and booking data derived from bookings

for international travel available to

participating airlines. Sections 255.5,

255.7, and 255.10.

However, our rules did not address all

of the complaints made by non-vendor

carriers, the smaller CRSs, and the travel

agencies. Some of the complaints were

not valid. Others were valid, but neither

we nor the commenters could devise

workable and cost-effective rules that

would solve the problems. For example,

we adopted no rule limiting the level of

booking fees, even though we found that

they were not disciplined by

competition, because each of the parties’

suggested rules on limiting booking fee

levels had serious flaws. 57 FR at

43816–43817.

To ensure that we would reexamine

the need for our rules and their

effectiveness, we included a sunset date,

December 31, 1997, in our rules. 14

C.F.R. 255.12; 57 FR at 43829–43830

(September 22, 1992). If we do not

readopt the rules or extend their

expiration date, the rules will end on

that date.

Our staff has begun a study of the CRS

business and airline marketing

practices. See Order 94–9–35

(September 26, 1994).

Industry Developments

There have been changes in the CRS

business and airline marketing practices

since our last major CRS rulemaking.

We are examining those developments

in our study, and we will take our

study’s findings into consideration in

this rulemaking.

One important development is the

creation of booking sites on the Internet

for use by consumers. A number of

airlines have created websites, as have

many travel agencies and some CRSs.

Although several on-line computer

services have been offering electronic

booking capabilities to consumers for

some time, the Internet sites have

created new avenues for direct bookings

by consumers. Moreover, several of the

airline websites offer consumers

discount fares that are not available

through other distribution channels.

Some industry experts believe that the

Internet will in time significantly reduce

the importance of CRSs.

Another development—electronic

ticketing—has made direct bookings by

consumers more attractive and

economical for both travellers and

airlines. Travellers using electronic

tickets no longer need paper tickets.

Before the development of electronic

ticketing, travellers making bookings

electronically still needed to obtain a

ticket either by mail or in person from

a travel agent, an airline sales office, or

the check-in counter at the airport. The

need to obtain a paper ticket limited the

efficiency advantages for consumers—

and airlines—of making bookings

electronically.

In addition, several new low-cost

airlines began operations without

participating in any CRS. Those airlines

believed that avoiding CRS

participation—and the payment of

booking fees—would help lower their

distribution costs and thereby improve

their ability to offer fares lower than

those offered by the more established

airlines, which relied on travel agencies

and CRSs for distributing their services.

The low-cost airlines’ strategy of

avoiding CRS participation initially

suggested that airlines might be able to

develop alternative distribution

methods that might discipline the prices

and quality of service offered by the

systems. However, this may not occur.

Some of these low-cost airlines—

Western Pacific and ValuJet, for

example—have announced plans to

make their services available through

CRSs, and other low-cost airlines—Reno

and Frontier, for example—have always

relied on CRS participation in their

marketing.
Federal Register / Vol. 62, No. 175 / Wednesday, September 10, 1997 / Proposed Rules 47609

Regulatory Developments Since Our

Adoption of Revised Rules

In view of the continuing changes in

the CRS business and airline marketing

practices and of requests by some airline

and travel agency firms for further

revisions in our rules, we began a study

of CRSs and airline marketing. Order

94–9–35 (September 26, 1994). We

intend to complete the study later this

year and to use it as a basis for our

analysis of the issues in this proceeding.

We will place a copy of the study in the

docket for this rulemaking when we

publish it.

We have begun two rulemakings on

specific CRS issues. We have proposed

a rule prohibiting each system from

imposing contract terms on

participating airlines that require an

airline to participate in a system at at

least as high a level as the airline

participates in any other system. We

tentatively concluded that such ‘‘parity’’

clauses unreasonably reduce

competition in the CRS and airline

industries. We asked, however, whether

we should allow a system to enforce

such a clause against an airline that

owns or markets a competing system. 61

FR 42197 (August 14, 1996).

We also proposed revisions to our

rules on CRS displays to promote airline

competition and ensure that travel

agents and their customers can obtain a

reasonable display of airline services.

Our proposals would require each

system to offer at least one display

without an on-line preference, require

every display to be based on criteria

rationally related to consumer

preferences, and bar systems from

creating displays that neither use

elapsed time as a significant factor in

selecting flights from the database nor

give single-plane flights a preference

over connecting flights in ranking

flights. 61 FR 42208 (August 14, 1996).

We have been analyzing the

comments filed in response to these two

notices of proposed rulemaking and

intend to issue a final decision soon in

those two rulemakings.

In addition, pending before us is an

enforcement proceeding resulting from a

third-party complaint filed by

Northwest against American and Sabre

Travel Information Network. Docket

OST–95–430. The case involves

American’s distribution to Sabre travel

agencies of a program developed by

Sabre that causes American flights to be

given a preferential display position.

Northwest and our enforcement office

argue that American’s distribution of

this program violates our CRS rules and

49 U.S.C. 41712 and have asked us to

reverse an administrative law judge’s

decision that held that American’s

conduct was lawful.

We are aware that other CRS practices

trouble many airlines and travel

agencies and some CRS firms. For

example, a number of airlines object to

the continuing increases in booking fees

and the airlines’ inability to exert any

check on those increases. A related

matter concerns the dispute between

some participating airlines and one or

more systems over the systems’

imposition of booking fees on

transactions that participating airlines

believe are of no benefit to them. See,

e.g., Travel Distribution Report (April

24, 1997), at 1. Many travel agencies and

some systems believe that the airline

owners of some systems unfairly tie an

agency’s access to attractive discount

fares offered by the airline to the

agency’s subscription to the airline’s

CRS. The growth of Internet booking

sites has led to requests that we extend

the coverage of at least some of our rules

to such booking sites. See, e.g., the

comments filed by Amadeus in the

parity clause rulemaking docket, Docket

OST–96–1145. In addition, American

and TWA have filed petitions for a rule

prohibiting the multiple listing of a

single flight under different airline

codes as a result of code-sharing

agreements. Dockets 49620 and 49622.

Request for Comments

We are issuing this advance notice of

proposed rulemaking to invite

comments on whether we should

readopt the rules and, if so, with which

changes. Despite the developments in

airline distribution and the CRS

business, we tentatively believe that

each of the systems continues to have

market power over airline participants

and that the terms of airline

participation are not affected by market

forces. See, e.g., 61 FR at 42198. As in

our last major CRS rulemaking, the

principal statutory authority for this

rulemaking is 49 U.S.C. 41712, which

authorizes us to define and prohibit

unfair methods of competition and

unfair and deceptive practices in air

transportation and the marketing of air

transportation.

We will examine whether the

regulation of CRS operations remains

necessary. We also intend to review

whether our rules have been effective in

promoting competition in the airline

and CRS businesses and in enabling

consumers and their travel agents to

obtain accurate and complete

information and, if not, why not and

whether they can be revised to make

them effective.

In determining which, if any, CRS

rules should be adopted, we intend to

focus as much as possible on rule

proposals that will increase competitive

market forces in the CRS industry rather

than on proposals for detailed

regulation of CRS practices. We took

this approach in our last major CRS

rulemaking. See, e.g., 57 FR at 43781.

We ask the commenters to address the

following issues:

1. Should the rules be continued? If

so, for how long? Should another review

be required and, if so, when?

Commenters who recommend that the

rules should not be continued should

address the consequences of that

recommendation on airlines,

competition among the systems, travel

agencies, and the public.

2. Have the rules been effective? Are

the rules adequate and appropriate in

light of technological changes, changes

in business conditions in the airline and

travel industries, and the rise of Internet

and on-line computer services that

enable consumers to make bookings?

3. In those areas where commenters

believe that the rules have not been

effective, should provisions be deleted

or modified and, if modified, how?

Commenters should address how the

rules have been effective or ineffective

in detail.

4. Do the changes in ownership of the

systems (all now have multiple owners

and at least one is owned in part by the

public) require changes in our approach

to regulation or in individual rules?

Should we reexamine our jurisdictional

and analytical bases for regulating CRSs,

which rely on the ownership of each

system by one or more airlines and

airline affiliates? Do the decisions by

some airline owners to reduce their CRS

ownership interests indicate that there

is less need for CRS regulation?

5. Have the rules allowing travel

agencies to use third-party hardware

and software and to use terminals not

owned by a system to access other travel

databases had any impact? Should the

rules be changed to make it easier for

travel agencies to use third-party

hardware and software and to access

other databases? For example, should

the exception allowing vendors to

restrict the use of vendor-owned

equipment be eliminated? Do one or

more dominant airlines affiliated with a

CRS use their market power in any

regional airline market to deter or block

agencies from exercising their rights

under these rules? Do systems otherwise

impose contract terms that unreasonably

deter agencies from acquiring their own

equipment or otherwise using multiple

databases or systems?

6. Does the mandatory participation

rule (section 255.7) strengthen or

weaken competition in the airline and
47610 Federal Register / Vol. 62, No. 175 / Wednesday, September 10, 1997 / Proposed Rules

CRS businesses? Should the rule be

modified to create areas where airlines

with CRS ownership interests would

have some ability to choose which

services to buy from other systems?

Should the rule instead be extended to

cover airlines that market a system?

Should the rule be extended to include

matters like access to corporate discount

fares?

7. In the parity clause rulemaking,

Delta Air Lines has contended that we

should bar systems from requiring

participation in the booking services

offered through Internet sites as a

condition to participation in the

services offered travel agency

subscribers. What impact would Delta’s

proposal have on airline and CRS

competition? Does the use of CRSs as

booking engines by many Internet

websites raise other issues that should

be addressed in the rules?

8. Do the systems’ display algorithms

injure airline competition and, if so,

how? If so, how could we prevent those

injuries without engaging in a detailed

regulation of the systems’ criteria for

editing and ranking their displays?

9. Does our rule requiring each system

to make available to participating

airlines all of the marketing and booking

data generated by the system from

bookings (section 255.10) benefit airline

competition? Are system owners or

other airlines using the data in ways

that may prejudice airline competition?

If so, how should the rule be changed?

10. We adopted a rule that generally

requires each system to make available

to participating airlines the same

functionality used by its owner airlines

(section 255.5). Has this rule been

effective? Are there any remaining

significant differences in functionality

that affect airline competition?

11. Should we address the issues of

booking fee levels and the structure of

booking fees? If so, is there a practicable

method for regulating the level of

booking fees? Is there a way to bring

market forces to bear on the terms on

which airlines participate in CRSs?

12. Do the systems inappropriately

charge airlines for agency transactions

that are unnecessary or valueless for

airline participants? Do the systems use

subscriber contract terms, such as

productivity pricing, that may

encourage unnecessary transactions by

some agencies and lead to increased

booking fee costs for airline

participants? If such problems exist,

should we adopt rules in this area?

Parties commenting on this issue should

explain why airlines can or cannot stop

illegitimate or unnecessary travel

agency transactions by taking action

against travel agencies that choose to

conduct such transactions.

13. In the past we have reasoned that

promoting the systems’ competition for

subscribers should usually promote

airline competition, although increased

competition for subscribers may lead to

increased CRS costs for participating

airlines. Does such competition among

the systems benefit airline participants?

Do systems use subscriber contract

terms that adversely affect competition

in the CRS or airline industries? If so,

how could the rules be changed to

eliminate such adverse effects?

14. Some industry participants have

asserted that some of the major airlines

with CRS ownership interests coerce

travel agencies at their hubs into using

their systems and thereby unreasonably

limit competition in both the CRS and

airline industries. Are these assertions

true? If they are, are there any

practicable rules that could be adopted

that would limit or eliminate such

practices?

15. The overseas marketing efforts of

some CRSs have been frustrated by

discriminatory conduct by foreign

airlines and other travel suppliers that

own or market a competing CRS in their

home countries. Section 255.11(b) of our

rules already exempts a CRS from

complying with certain rule

requirements in response to some types

of discriminatory conduct by a foreign

CRS. Should our rules be revised to

strengthen a U.S. system’s ability to take

countermeasures against such

discrimination?

We will, of course, consider all of the

factual and legal issues presented by the

commenters that relate to our decision

on whether to readopt or revise the

rules. We do not intend our list of

questions to foreclose commenters from

raising other issues, and we will

consider all proposals suggested by the

parties in this proceeding.

We anticipate that some parties will

urge us to extend the coverage of at least

some of our CRS rules to airline

information and booking services

available to consumers through the

Internet. If such requests are made, the

parties should discuss them in light of

the differences between the way CRSs

and Internet services are typically used

by consumers. While consumers can

directly use Internet sites, consumers

relying on travel agencies for

information and advice do not see the

CRS displays used by the travel agent.

Travel agencies hold themselves out as

unbiased sources of information, while

many websites do not. In finding a need

for CRS regulation we have cited such

factors as the usual practice of travel

agencies of using only one system, the

difficulties for travel agencies of

switching systems or using more than

one system, and the time pressures on

travel agents that tend to cause them to

book one of the first flights shown on a

display, even if flights displayed later

may better suit the traveller’s needs. 57

Fed. Reg. at 43783, 43785–43786. These

factors seem unlikely to be true for

consumer use of Internet booking sites.

Parties who want us to regulate Internet

services, whether or not they exclude

sites created by a single airline, should

explain why we should take such

action, given these differences. Parties

who object to such proposals should

also address these differences and any

other relevant differences between CRSs

and Internet booking sites.

Similarly, parties arguing that our

rules should either be cut back or

extended to Internet sites in order to

equalize the competitive burden should

explain why the regulations governing

CRSs used by travel agencies place the

systems at a competitive disadvantage

compared to booking services offered

through the Internet.

We plan to resolve the issues

presented by our notices of proposed

rulemaking on parity clauses, Docket

OST–96–1145, and on CRS displays,

Docket OST–96–1639, in those

proceedings. We are aware, of course,

that the commenters on those proposals

have asserted that we should adopt

additional rules that were not proposed

in our notices of proposed rulemaking,

such as, for example, possible changes

to the mandatory participation rule.

Those rule proposals should be raised in

this proceeding.

In addition, any party that wishes to

propose rules affecting the display of

code-sharing services is free to do so in

this docket.

Finally, we do not intend to consider

in this proceeding air transportation

issues that are not closely related to CRS

practices. While our major goal in

regulating CRS practices has been the

promotion of airline competition, we

will not consider all airline competition

issues in this docket. As a result, we do

not plan to focus in this proceeding on

such issues as the competitive effects of

override commissions or code-sharing,

notwithstanding the potential

importance of those issues.

Timetable for Proceeding

As noted above, our current rules will

expire on December 31, 1997, if we do

not extend them before that expiration

date. Given the time required for

completing this rulemaking, including

the need to give parties an adequate

opportunity to file comments and reply

comments in response to this notice and
Federal Register / Vol. 62, No. 175 / Wednesday, September 10, 1997 / Proposed Rules 47611

to our future notice of proposed

rulemaking, we will not be able to

complete this rulemaking by the current

expiration date of our rules. We

therefore intend to issue a notice of

proposed rulemaking to extend the

existing rules while we complete this

rulemaking.

We currently intend to complete our

pending study of the CRS business and

airline marketing practices before we

issue a notice of proposed rulemaking in

this proceeding. We note that we

followed a similar procedure in our last

major CRS rulemaking.

Regulatory Process Matters

Regulatory Assessment

Our CRS rules were a significant

regulatory action under section 3(f) of

Executive Order 12866 and were

reviewed by the Office of Management

and Budget under that order. As

required by section 6(a)(3) of that

Executive Order, we prepared an

assessment of the rules’ costs and

benefits. The rules were also significant

under the regulatory policies and

procedures of the Department of

Transportation, 44 FR 11034.

At this point, we do not know

whether we will propose new rules that

would have a substantial impact and

would thus be considered significant

under the Executive Order.

The comments submitted in response

to this notice should address the

potential effects any changes would

have on the economy, costs or prices for

consumers and the government, and

adverse effects on competition.

We do not expect that this rulemaking

will 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.

Any rules adopted by us regulating

CRS operations are likely to affect the

operations of many small entities,

primarily travel agencies, even though

they would not be regulated directly if

we readopted the existing rules. When

we publish a notice of proposed

rulemaking in this proceeding, we will

include an initial regulatory flexibility

analysis as required by the Regulatory

Flexibility Act.

That 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. This rulemaking will

constitute the required review of our

CRS rules.

Paperwork Reduction Act

The current rules contain no

collection-of-information requirements

subject to the Paperwork Reduction Act,

Public Law No. 96–511, 44 U.S.C.

Chapter 35. See 57 F.R. at 43834.

Federalism Implications

This request for comments 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 it does not

present 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.

Issued in Washington, DC on August 28,

1997.

Rodney E. Slater,

Secretary of Transportation.

[FR Doc. 97–23944 Filed 9–9–97; 8:45 am]

BILLING CODE 4910–62–P

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric

Administration

15 CFR Part 922

[Docket No. 970404078–7078–01]

RIN 0648–AE41

Proposed Thunder Bay National

Marine Sanctuary

AGENCY: Sanctuaries and Reserves

Division (SRD), Office of Ocean and

Coastal Resource Management (OCRM),

National Ocean Service (NOS), National

Oceanic and Atmospheric

Administration (NOAA), Department of

Commerce (DOC).

ACTION: Proposed rule; extension of

comment period.

SUMMARY: The National Oceanic and

Atmospheric Administration’s

Sanctuaries and Reserves Division

(NOAA/SRD) issued a proposed rule on

June 23, 1997 (62 FR 33768) to designate

an approximately 808 square-mile area

of Great Lakes waters on Lake Huron,

Michigan, over and surrounding

Thunder Bay, and the submerged lands

thereunder, off the northeastern coast of

the State of Michigan, as a National

Marine Sanctuary. The original public

comment period on this proposal was to

close on September 22, 1997. During

July 1997, representatives of a variety of

interests in the communities adjoining

the proposal area formed a group to

work with NOAA and the State of

Michigan on completion of the process

to consider the designation of Thunder

Bay as a National Marine Sanctuary.

Those communities requested

additional time to review the proposal

and to develop recommendations for

NOAA and the State. On July 23, 1997,

NOAA extended the public comment

period through October 31, 1997 (62 FR

39494). Pursuant to requests from

community representatives, a Sanctuary

Advisory Council (SAC) has been

established to facilitate public review

and discussion of the proposal, and to

make written recommendations to

NOAA and the State of Michigan

regarding various alternatives, and other

comments on the Draft Environmental

Impact Statement/Draft Management

Plan by October 3, 1997. The SAC

conducted its first meeting on August

26, 1997, and has recommended an

additional extension to the comment

period, to allow time for completion of

the SAC’s responsibilities. NOAA has

adopted this recommendation. This

notice extends the comment period

through November 14, 1997.

DATES: Comments on the DEIS/DMP

must be received by November 14, 1997.

ADDRESSES: Written comments should

be sent to Ellen L. Brody, On-Site

Liaison, Thunder Bay Project,

Sanctuaries and Reserves Division,

National Oceanic and Atmospheric

Administration, Great Lakes

Environmental Research Laboratory

(GLERL), 2205 Commonwealth

Boulevard, Ann Arbor, Michigan

48105–2945. Comments will be

available for public inspection at the

GLERL offices.

FOR FURTHER INFORMATION CONTACT:

Karen Brubeck at (616) 526–8434, Ellen

Brody at (313) 741–2270, or Sherrard

Foster at (301) 713–3137, ext. 151.