Federal Register / Vol. 62, No. 212 / Monday, November 3, 1997 / Proposed Rules 59313

§ 39.13 [Amended]

2. Section 39.13 is amended by

adding a new airworthiness directive

(AD) to read as follows:

American Champion Aircraft Company:

Docket No. 97–CE–79–AD.

Applicability: The following airplane

models, all serial numbers, certificated in any

category, that are equipped with wood wing

spars:

7AC

7BCM (L–16A)

7DC

S7EC

7GC

7GCB

7HC

7KCAB

S11AC

7ACA

7CCM (L–16B)

S7DC

7ECA

7GCA

7GCBA

7JC

8KCAB

11BC

S7AC

S7CCM

7EC

7FC

7GCAA

7GCBC

7KC

11AC

S11BC

Note 1: This AD applies to each airplane

identified in the preceding applicability

provision, regardless of whether it has been

modified, altered, repaired, or reconfigured

in the area subject to the requirements of this

AD. For airplanes that have been modified,

altered, repaired, or reconfigured so that the

performance of the requirements of this AD

is affected, the owner/operator must request

approval for an alternative method of

compliance in accordance with paragraph (e)

of this AD. The request should include an

assessment of the effect of the modification,

alteration, or repair on the unsafe condition

addressed by this AD; and, if the unsafe

condition has not been eliminated, the

request should include specific proposed

actions to address it.

Compliance: Required as indicated in the

body of this AD, unless already

accomplished.

To prevent possible compression

cracks and other damage in the wood

spar wing, which, if not detected and

corrected, could eventually result in inflight structural failure of the wing with

consequent loss of the airplane,

accomplish the following:

(a) At the first annual inspection that

occurs 3 calendar months or more after

the effective date of this AD or within

the next 15 calendar months after the

effective date of this AD, whichever

occurs first, accomplish the following:

(1) Install inspection holes in the top

and bottom surface of each wing in

accordance with American Champion

Aircraft Corporation (ACAC) Service

Letter 417, Revision A, dated October 2,

1997. Assure that all drainage holes are

installed as depicted in this service

letter, and install drainage holes as

necessary.

(2) Inspect (detailed visual) both the

front and rear wood wing spars for

cracks; compression cracks; longitudinal

cracks through the bolt holes or nail

holes; and loose or missing rib nails

(referred to as damage hereafter).

Accomplish these inspections in

accordance with ACAC Service Letter

406, dated March 28, 1994.

(3) If any spar damage is found, prior

to further flight, accomplish the

following:

(i) Repair or replace the wood wing

spar in accordance with Advisory

Circular (AC) 43–13–1A, Acceptable

Methods, Techniques and Practices; or

other data that is approved by the FAA

for wing spar repair or replacement.

(ii) If the wing is recovered,

accomplish the installations required by

paragraph (a)(1) of this AD, as

applicable.

(4) Install inspection hole covers on

the top and bottom surface of the wing

in accordance with ACAC Service Letter

417, Revision A, dated October 2, 1997.

(b) Within 12 calendar months or 500

hours TIS (whichever occurs first) after

accomplishing all actions required by

paragraph (a) of this AD, and thereafter

at intervals not to exceed 12 calendar

months or 500 hours TIS, whichever

occurs first, accomplish the inspection,

repair, replacement, and installation

required by paragraphs (a)(2), (a)(3), as

applicable; including its subparagraphs;

and (a)(4) of this AD.

(c) If, after the effective date of this

AD, any of the affected airplanes are

involved in an incident/accident that

involves wing contact damage (e.g.,

surface deformations such as abrasions,

gouges, scratches, or dents, etc.), prior to

further flight after that incident/

accident, accomplish the inspection,

repair, replacement, and installation

required by paragraphs (a)(2), (a)(3), as

applicable; including its subparagraphs;

and (a)(4) of this AD.

(d) Special flight permits may be

issued in accordance with sections

21.197 and 21.199 of the Federal

Aviation Regulations (14 CFR 21.197

and 21.199) to operate the airplane to a

location where the requirements of this

AD can be accomplished.

(e) An alternative method of

compliance or adjustment of the initial

or repetitive compliance time that

provides an equivalent level of safety

may be approved by the Manager,

Chicago Aircraft Certification Office

(ACO), 2300 E. Devon Avenue, Des

Plaines, Illinois 60018. The request shall

be forwarded through an appropriate

FAA Maintenance Inspector, who may

add comments and then send it to the

Manager, Chicago ACO.

Note 2: Information concerning the

existence of approved alternative methods of

compliance with this AD, if any, may be

obtained from the Chicago ACO.

(f) All persons affected by this

directive may obtain copies of the

documents referred to herein upon

request to American Champion Aircraft

Corporation, P.O. Box 37, 32032

Washington Avenue, Highway D,

Rochester, Wisconsin 53167; or may

examine these documents at the FAA,

Central Region, Office of the Regional

Counsel, Room 1558, 601 E. 12th Street,

Kansas City, Missouri 64106.

Issued in Kansas City, Missouri, on

October 27, 1997.

Mary Ellen A. Schutt,

Acting Manager, Small Airplane Directorate,

Aircraft Certification Service.

[FR Doc. 97–28984 Filed 10–31–97; 8:45 am]

BILLING CODE 4910–13–U

DEPARTMENT OF TRANSPORTATION

Office of the Secretary

14 CFR Part 255

[Docket No. OST–97–3057; Notice No. 97–

11]

RIN 2105–AC67

Computer Reservations System (CRS)

Regulations (Part 255)

AGENCY: Office of the Secretary, (DOT).

ACTION: Notice of proposed rulemaking.

SUMMARY: The Department is proposing

to revise its rules governing airline

computer reservations systems (CRSs)

by changing the rules’ expiration date

from December 31, 1997, to March 31,

1999. If the Department does not change

the expiration date in the rules (14 CFR

Part 255), they will terminate on

December 31, 1997. The proposed

extension of the current rules will cause

those rules to remain in effect while the

Department carries out an extensive

reexamination of the need for CRS

regulations. The Department tentatively

believes that the current rules should be

maintained because they appear to be

necessary for promoting airline

competition and helping to ensure that

consumers and their travel agents can

obtain complete and accurate

information on airline services.

DATES: Comments must be submitted on

or before November 18, 1997.
59314 Federal Register / Vol. 62, No. 212 / Monday, November 3, 1997 / Proposed Rules

ADDRESSES: Comments must be filed in

Room PL–401, Docket OST–97–3057,

U.S. Department of Transportation, 400

7th St. SW., Washington, DC 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 in 1992 adopted its rules

governing CRS operations—14 CFR Part

255—because CRSs had become

essential for the marketing of airline

services for almost all airlines operating

in this country. 57 FR 43780, September

22, 1992. We concluded 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. CRS practices can

injure airline competition because travel

agents rely on CRSs to provide airline

information and bookings for their

customers and because almost all

airlines rely heavily on travel agencies

to distribute their services. Our rules

will expire on their sunset date,

December 31, 1997, unless we readopt

them or extend the expiration date. We

have begun a proceeding to determine

whether the rules are necessary and

should be readopted and, if so, with

what modifications. 62 FR 47606,

September 10, 1997. We are proposing

here to extend the expiration date for

the current rules to March 31, 1999, so

that they will remain in force while we

conduct our overall reexamination of

the rules.

We have set a short comment period

of fifteen days so that we can publish a

final decision on this proposal before

the rules’ current expiration date. We

note that our advance notice of

proposed rulemaking has already given

interested persons notice of our intent to

propose an extension of the rules’

expiration date. 62 FR at 47610–47611.

The CRS Business

Four CRSs—each affiliated with one

or more U.S. airlines—operate in the

United States. A CRS consists of a

periodically-updated central database

that contains information on airline

services and other travel services sold

through the system. The major users of

the information and transaction

capabilities provided by CRSs are travel

agents, who access CRSs through

computer terminals, which are normally

leased from the system. Consumers can

also access a CRS through an on-line

computer service or an Internet website.

A CRS enables travel agents and other

users to find out what airline seats and

fares are available, book a seat, and

issue a ticket on each airline that

‘‘participates’’ in the system, that is, that

makes its services saleable through the

CRS.

Each CRS obtains most of its revenues

from airlines and other travel suppliers

participating in the system. An airline

participant pays a fee whenever the

system is used 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 fees.

While travel agencies subscribing to the

system may also pay fees, subscriber

fees, unlike airline fees, are disciplined

by competition. Many travel agencies

obtain CRS services at little or no

charge.

Regulatory Background

CRSs became essential for airline

distribution in the early 1980s. At that

time each of the systems operating in

the United States, with one exception,

was owned by a single airline (one

system was owned by a non-airline firm,

but it had a small market share and was

later sold to an airline CRS). Each owner

airline used its system to prejudice

airline competition and give consumers

biased 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 found that regulations were

essential to keep the systems from

causing substantial harm to airline

competition. The Board adopted its

regulations primarily under 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

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

limited the travel agencies’ ability to

choose which system to use.

We assumed the Board’s

responsibilities for airline regulation,

including its regulation of CRSs, after

the Board’s sunset on December 31,

1984. See United Air Lines, supra, 766

F.2d at 1109.

To ensure that we would reexamine

the need for the rules and their effects,

the Board included a sunset date of

December 31, 1990, in its rules. To carry

out that reexamination we held a

rulemaking proceeding to determine

whether the rules should be readopted

or modified. 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). Since we did not

complete that rulemaking by December

31, 1990, the rules’ original expiration

date, we extended that date to keep the

rules in effect until the rulemaking’s

completion. 55 FR 53149, December 27,

1990; 56 FR 60915, November 29, 1991;

57 FR 22643, May 29, 1992. In the

rulemaking we relied in part on the

findings made in the staff’s study of the

rules and the CRS business. Secretary’s

Task Force on Competition in the U.S.

Domestic Airline Industry, Airline

Marketing Practices: Travel Agencies,

Frequent-Flyer Programs, and Computer

Reservation Systems (February 1990).

In our rulemaking we concluded that

CRS rules remained necessary: market

forces still did not discipline the price

or level of service offered participating

airlines by the systems, CRS owners

would still use their control of the

systems to prejudice airline competition

if there were no rules, and systems

could still bias their displays of airline

services if there were no rules requiring

unbiased displays. 57 FR at 43783–

43787. We therefore readopted the

Board’s rules with several changes

intended to further promote competition

in the airline and CRS industries.

To ensure that we would reexamine

the need for our rules and their

effectiveness, our rules, like the Board’s

rules, included a sunset date, December

31, 1997. 14 CFR 255.12; 57 FR, 43829–

43830, September 22, 1992. If we do not

readapt the rules or extend their

expiration date, the rules will end on

that date.

We recently published an advance

notice of proposed rulemaking asking

interested persons to comment on

whether we should readapt the rules

and, if so, with what changes. 62 FR

47606, September 10, 1997. We did not

issue the advance notice earlier due to
Federal Register / Vol. 62, No. 212 / Monday, November 3, 1997 / Proposed Rules 59315

the on-going study of the CRS business

and the impact of the rules being

conducted by the staff, which was

begun by Order 94–9–35 (September 26,

1994) and is examining such recent

developments as the growth in Internet

booking services.

Since we adopted the rules, we have

proposed two amendments to them. One

proposed rule would prohibit each

system from imposing contract terms on

participating airlines that require an

airline to participate in a system at least

as high a level as the airline participates

in any other system, at least when the

airline participant did not own or

market a competing system. 61 FR

42197, August 14, 1996. The second

proposal would revise our rules on

CARS displays to promote airline

competition and ensure that systems

provide reasonable displays of airline

services. 61 FR 42208, August 14, 1996.

Our Proposed Extension of the CARS

Rules

We are proposing to change the

expiration date for our CARS rules to

March 31, 1999, so that the rules will

remain in effect while we conduct our

reexamination of the need for the rules

and the rules’ effectiveness. Given the

time required for completing the overall

reexamination of our rules, including

the need to give parties an adequate

opportunity to file comments and reply

comments in response to the advance

notice of proposed rulemaking and to

our future notice of proposed

rulemaking, we will not be able to

complete that proceeding by the current

expiration date of our rules.

A temporary extension of the current

rules will preserve the status quo until

we determine which rules, if any,

should be adopted. Allowing the current

rules to expire could be disruptive,

since the systems, airlines, and travel

agencies have been conducting their

operations in the expectation that each

system will comply with the rules.

Systems, airlines, and travel agencies,

moreover, would be unreasonably

burdened if the rules were allowed to

expire and if we later determined that

those rules (or similar rules) should be

adopted, since they could have changed

their business methods in the meantime.

We tentatively find that a short-term

continuation of the current rules is

necessary, primarily because of the need

to protect airline competition and

consumers against unreasonable

practices. Before adopting our current

rules we carefully considered the CARS

business and airline marketing, both as

part of the Secretary’s study of domestic

airline competition and through the

rulemaking. We concluded in that CARS

rulemaking, completed in 1992, that

CRSs were still essential for the

marketing of the services of virtually all

airlines. 57 FR 43780, 43783–43784,

September 22, 1992. Each airline’s need

to participate in each system meant that

market forces did not discipline the

terms offered by the systems for airline

participation.

Although the staff has not completed

its current study of the CARS business

and although we have only begun a

rulemaking to reexamine the need for

the rules, we tentatively believe that the

findings made in our last CARS

rulemaking on the need for CARS rules

are still valid, at least for the purpose of

a short-term extension of the rules’

expiration date. If we continue the

current rules, those regulations will

protect airline competition and

consumers against the injuries that

might otherwise occur, given our earlier

findings on the market power of the

systems and each airline owner’s

potential interest in using its affiliated

CARS to prejudice the competitive

position of other airlines. Continuing

the rules in effect should not impose

significant costs on the systems and

their owners, since they have already

adjusted their operations to comply

with the rules and since the rules do not

impose costly burdens of a continuing

nature on the systems.

The need for the rules results from the

airlines’ dependence on travel agencies,

the agencies’ dependence on CRSs, the

use by most travel agency offices of only

a single CARS, the difficulty of creating

alternatives for CRSs and getting travel

agencies to use them, and the airlines’

inability to cause agencies to use one

CARS instead of another. Because of

these factors, almost all airlines must

participate in each CARS, and the CRSs

have no need to compete for airline

subscribers.

In recent years seventy percent of all

airline bookings in the United States

have been made by travel agencies, and

travel agencies have relied almost

entirely on CRSs to determine what

airline services are available and to

make reservations for their customers.

57 FR at 43782. Few travel agency

offices make extensive use of more than

one CARS. 57 FR at 43783.

If an 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 CARS. Travel agents are less likely to

book an airline when doing so is

significantly more difficult than booking

a competing airline participating in the

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

bookings than it would obtain if it

participated in the agents’ system. The

importance of marginal revenues in the

airline industry means that an airline’s

loss of a few bookings on each flight is

likely to substantially reduce its

profitability. 57 FR at 43783–43784.

Most airlines do not have practicable

alternatives to CARS participation. An

airline could 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.

We doubt that any airline could

successfully create a new CARS, since

doing so would be extremely costly. In

addition, any new system could not

easily obtain a significant number of

subscribers. Moreover, due to the

economies of scale in the CARS

business, a system without a large

subscriber base is unlikely to be

profitable. 57 FR at 43783–43784. We

recognize that U.S. Travel Agency

Registry has announced a plan to create

a new CARS, but its system would

apparently not be available until late

1998, and a few industry sources have

questioned USTAR’s plans. See Travel

Distribution Report, vol. 5, no. 11,

August 28, 1997, at 1, 4. We will

welcome new competition in the CARS

business, but USTAR’s plans do not

undermine the apparent need for a

short-term extension of the rules.

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

not been practicable. 57 FR at 43831.

In our recent notices of proposed

rulemaking on airline parity clauses and

CARS displays, we tentatively

concluded that market forces did not

discipline the terms offered by a system

for airline participation. See, e.g., 61 FR

at 42198. The Department of Justice

filed comments in the parity clause

rulemaking which supported our

tentative findings. The Justice

Department thus stated, Justice Dept.

Comments at 2–3, Docket OST–96–1145

(footnote omitted):

Each CARS provides access to a large,

discrete group of travel agents, and unless a

carrier is willing to forego access to those

travel agents, it must participate in every

CARS. Thus, from an airline’s perspective,

each CARS constitutes a separate market and

each system possesses market power over

any carrier that wants travel agents

subscribing to that CARS to sell its airline

tickets.

We are aware of the changes in the

CARS business and airline marketing
59316 Federal Register / Vol. 62, No. 212 / Monday, November 3, 1997 / Proposed Rules

practices since our last major CARS

rulemaking, but we are reluctant to

change our existing regulations until we

have completed our study of the impact

of those changes.

Many airlines and travel agencies and

some CRSs now offer booking sites on

the Internet that consumers may use,

but few consumers currently book

airline services through the Internet.

Despite the rapid growth in the number

of consumers using the Internet for

airline bookings, airlines will probably

remain dependent on travel agencies for

most of their revenues for at least the

next few years. Furthermore, many of

the websites use a CARS for a booking

engine, so CRSs have captured a

significant share of the Internet

business.

In addition, several new low-cost

airlines began operations without

making their services saleable through

any CARS. Initially those airlines’

adoption of that strategy suggested that

airlines could compete successfully

without CARS participation. However,

some of these low-cost airlines—

Western Pacific and ValuJet, for

example—have recently announced

plans to make their services available

through CRSs, and other low-cost

airlines—Reno and Frontier, for

example—have always relied on CARS

participation in their marketing. As a

result, while Southwest has managed to

prosper without participating in any

CARS except Sabre, it appears that

virtually no other airline has been able

to duplicate Southwest’s method of

operations enough to avoid CARS

participation.

Our tentative conclusion that CARS

rules remain necessary, at least on a

short-term basis, is supported by current

airline complaints about CARS

practices. For example, a number of

airlines (including Delta, one of the

three largest airlines in the United

States and a part-owner of a CARS) have

complained about the continuing

increases in booking fees and the

airlines’ inability to exert any check on

those increases. Justice Dept. Comments

at 5, Docket OST–96–1145. There are

also disputes between some

participating airlines and some 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, vol. 5, no. 2, April 24, 1997, at

1.

Finally, there is an additional basis

for our tentative determination that we

should keep the current rules in place

pending our reexamination of the rules.

Our goals of promoting airline

competition and preventing consumer

deception were not the only bases for

our adoption of the rules. We also relied

on 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. Many of those bilateral

agreements assure the airlines of each

party a fair and equal opportunity to

compete. We have held that the fair and

equal opportunity to compete includes,

among other things, a right to have an

airline’s services fairly displayed in

CRSs. Our rules against display bias and

discriminatory treatment help to

provide foreign airlines with a fair and

equal opportunity to compete in the

United States. 57 FR at 43791–43792.

We note in that regard that the European

Union, Canada, and Australia, among

other countries, have adopted rules

regulating CARS operations that help

give U.S. airlines a fair opportunity to

sell their services in the countries

covered by the rules.

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

proposal is also not significant under

the regulatory policies and procedures

of the Department of Transportation, 44

FR 11034.

Maintaining the current rules should

impose no significant costs on the CRSs.

The systems have already taken all the

steps necessary to comply with the

rules’ requirements on displays and

functionality, and operating in

compliance with the rules does not

impose a substantial burden on the

systems. Maintaining the rules will

benefit participating airlines, since

otherwise they would be subjected to

unreasonable terms for participation,

and will benefit consumers, who

otherwise might obtain incomplete or

inaccurate information on airline

services. Several provisions of the rules,

moreover, are designed to prevent

abuses in the systems’ competition with

each other for travel agency subscribers.

When we conducted our last major

CARS rulemaking, we included a

tentative regulatory impact statement in

our notice of proposed rulemaking and

made that analysis final when we issued

our final rule. We believe that analysis

remains applicable to our proposal to

extend the rules’ expiration date. As a

result, no new regulatory impact

statement appears to be necessary.

However, we will consider comments

from any party on that analysis before

we make our proposal final.

This rule does not impose unfunded

mandates or requirements that will have

any impact on the quality of the human

environment.

Initial 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 sets forth the

reasons for our proposed extension of

the rules’ expiration date and the

objectives and legal basis for that

proposed rule.

In addition, we note that keeping the

current rules in force will not modify

the existing regulation of small

businesses. Our notice of proposed

rulemaking in our last major CARS

rulemaking contained an initial

regulatory flexibility analysis on the

impact of the rules, and we discussed

the comments on that analysis in our

final rule. Our analysis appears to be

valid for our proposed extension of the

rules’ termination date. Accordingly, we

adopt that analysis as our tentative

regulatory flexibility statement and will

consider any comments filed on that

analysis in connection with this

proposal.

The continuation of our existing

CARS rules will primarily affect two

types of small entities, smaller airlines

and travel agencies. To the extent that

airlines can operate more efficiently and

reduce their costs, the rule will also

affect all small entities that purchase

airline tickets, since airline fares may be

somewhat lower than they would

otherwise be, although the amount may

not be large.

Continuing the rules will protect

smaller non-owner airlines from certain

potential system practices that could

injure their ability to operate profitably

and compete successfully. No smaller

airline has a CARS ownership interest.

Market forces do not significantly

influence the systems’ treatment of

airline participants. As a result, if there

were no rules, the systems’ airline

owners could use them to prejudice the
Federal Register / Vol. 62, No. 212 / Monday, November 3, 1997 / Proposed Rules 59317

competitive position of other airlines.

The rules provide important protection

to smaller airlines. For example, by

prohibiting systems from ranking and

editing displays of airline services on

the basis of carrier identity, they limit

the ability of each system to bias its

displays in favor of its owner airlines

and against other airlines. The rules also

prohibit charging participating airlines

discriminatory fees. The rules, on the

other hand, impose no significant costs

on smaller airlines.

The CARS rules affect the operations

of smaller travel agencies, primarily by

prohibiting certain CARS practices that

could unreasonably restrict the travel

agencies’ ability to use more than one

system or to switch systems. The rules

prohibit CARS contracts that have a

term longer than five years, give travel

agencies the right to use third-party

hardware and software, and prohibit

certain types of contract clauses, such as

minimum use and parity clauses, that

restrict an agency’s ability to use

multiple systems. By prohibiting

display bias based on carrier identity,

the rules also enable travel agencies to

obtain more useful displays of airline

services.

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 CARS rules and their

effectiveness will constitute the

required review of those rules.

Our proposed rule contains no direct

reporting, recordkeeping, or other

compliance requirements that would

affect small entities. There are no other

federal rules that duplicate, overlap, or

conflict with our proposed rules.

Interested persons may address our

tentative conclusions under the

Regulatory Flexibility Act in their

comments submitted in response to this

notice of proposed rulemaking.

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 collectionof-information requirements subject to

the Paperwork Reduction Act, Pub. L.

No. 96–511, 44 U.S.C. Chapter 35.

Federalism Implications

The rule proposed by this notice 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 proposed

rule does not have sufficient federalism

implications to warrant preparation of a

Federalism Assessment.

List of Subjects for 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

continues to read as follows:

Authority: 49 U.S.C. 1301, 1302, 1324,

1381, 1502.

2. Section 255.12 is amended to read

as follows:

§ 255.12. Termination.

Unless extended, these rules shall

terminate on March 31, 1999.

Issued in Washington, D.C. on October 27,

1997.

Rodney E. Slater,

Secretary of Transportation.

[FR Doc. 97–29001 Filed 10–31–97; 8:45 am]

BILLING CODE 4910–62–P

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric

Administration

15 CFR Part 960

[Docket No. 951031259–7103–02]

Licensing of Private Land RemoteSensing Space Systems

AGENCY: National Oceanic and

Atmospheric Administration,

Commerce.

ACTION: Notice of proposed rulemaking.

SUMMARY: The National Oceanic and

Atmospheric Administration (NOAA)

proposes regulations revising its regime

for the licensing of private Earth remotesensing space systems under Title II of

the Land Remote Sensing Policy Act of

1992, 15 U.S.C. 5601 et seq. (1992 Act).

These proposed regulations implement

the licensing provisions of the 1992 Act

and the Presidential Policy announced

March 10, 1994. They are intended to

facilitate the development of the U.S.

commercial remote-sensing industry

and thus promote the collection and

widespread availability of Earth remote

sensing data while preserving essential

U.S. national security, international

obligations and foreign policy interests.

A fundamental principle is that

restrictions imposed on a licensee must

appropriately balance promoting

competitive capabilities of U.S.

commercial firms and the protection of

national security, international

obligations and foreign policy. The

proposed regulations also describe

when a system, though privately owned,

has received sufficient financial or other

support from the U.S. Government that

the operator may have to comply with

a nondiscriminatory data access policy

that applies to all Government systems.

These regulations reflect that policy.

DATES: Comments must be received by

January 2, 1998.

ADDRESSES: Comments should be sent

to, Charles Wooldridge, NOAA,

National Environmental Satellite, Data,

and Information Service, 1315 East-West

Highway, Room 3620, Silver Spring, MD

20910–3282.

FOR FURTHER INFORMATION CONTACT:

Charles Wooldridge at (301) 713–2024,

ext. 107 or Kira Alvarez, NOAA, Office

of General Counsel at (301) 713–1217.

SUPPLEMENTARY INFORMATION: Tile II of

the 1992 Act authorizes the Secretary of

Commerce (Secretary) to issue licenses

for operation of private remote sensing

space systems. The authority to issue

licenses has been delegated to the

Administrator of NOAA and redelegated

to the Assistant Administrator for

Satellite and Information Services.

On July 10, 1987, NOAA published

final regulations (1987 Regulations)

implementing Title IV of the Land

Remote Sensing Act of 1984 (the 1984

Act) setting forth the requirements for

obtaining a license. In 1988 the Radio

Television News Directors Association

(RTNDA) filed a Petition for Rulemaking

requesting NOAA to reopen these

regulations in light of the President’s

January 5, 1988 Decision Directive

encouraging commercial space

development. On January 18, 1989,

NOAA responded to this Petition,

agreeing to reopen the rulemaking and

incorporate certain principles favorable

to commercial development that were

consistent with the Directive. see 54 FR

1995.

Shortly thereafter, Congress began to

review the 1984 Act and, on October 28,

1992, enacted the 1992 Act which

repealed and succeeded the 1984 Act.

The 1992 Act made significant changes

to the 1984 Act, particularly with regard

to the latter’s requirement that all

unenhanced data must be provide on a

nondiscriminatory basis. The 1992 Act

also provided for judicial review of