[Federal Register Volume 62, Number 243 (Thursday, December 18, 1997)]
[Rules and Regulations]
[Pages 66272-66274]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-32897]


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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

14 CFR Part 255

[Docket No. OST-97-3057]
RIN 2105-AC67


Computer Reservations System Regulations

AGENCY: Office of the Secretary, DOT.

ACTION: Final rule.

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SUMMARY: The Department is adopting a rule which amends its rules 
governing airline computer reservations systems (CRSs) (14 CFR part 
255) by changing their expiration date from December 31, 1997, to March 
31, 1999. This amendment will keep the rules from terminating on 
December 31, 1997, and will thereby cause those rules to remain in 
effect while the Department carries out its reexamination of the need 
for CRS regulations. The Department believes that the current rules 
should be maintained during that reexamination because they appear to 
be necessary for promoting airline competition and helping to ensure 
that consumers and travel agents can obtain complete and accurate 
information on airline services.

DATES: This rule is effective on December 31, 1997.

FOR FURTHER INFORMATION CONTACT: Thomas Ray, Office of the General 
Counsel, 400 Seventh St. SW., Washington, DC 20590, (202) 366-4731.

SUPPLEMENTARY INFORMATION: When the Department adopted its rules 
governing CRS operations, 14 CFR part 255, in 1992, it included a 
sunset date for the rules to ensure that the need for the rules and 
their effectiveness would be reexamined within several years. The 
sunset date is December 31, 1997. 14 CFR 255.12. We have begun the 
process of reexamining the rules but cannot complete that task by the 
rules' current

[[Page 66273]]

sunset date. We therefore proposed to change the sunset date to March 
31, 1999. 62 FR 59313, November 3, 1997. We gave interested persons an 
opportunity to comment on our proposal, but no one except America West 
Airlines submitted comments. America West supports the proposal. We 
have determined to adopt our proposed rule.

Background

    As we explained in the notice of proposed rulemaking, in our last 
major CRS rulemaking, and in recent CRS proceedings, CRS regulations 
are necessary to protect airline competition and ensure that consumers 
can obtain accurate and complete information on airline services. See, 
e.g., 57 FR 43780, 43783-43787, September 22, 1992. CRSs have become 
essential for the marketing of airline services, and market forces do 
not discipline the price and quality of service offered airlines by the 
systems. Furthermore, the systems operating in the United States are 
each entirely or predominantly owned by one or more airlines or airline 
affiliates. Without regulations, a system's owners could use it to 
unreasonably prejudice the competitive position of other airlines or to 
provide misleading or inaccurate information to travel agents and their 
customers. 62 FR 59315, November 3, 1997.
    When we last reexamined the CRS rules, we readopted them with 
changes designed to promote airline and CRS competition. 57 FR 43780, 
September 22, 1992. Our rules included a sunset date, December 31, 
1997, to ensure that we would reexamine them after several years. 14 
CFR 255.12; 57 FR at 43829-43830, September 22, 1992.
    We have begun the process of reexamining our rules by publishing an 
advance notice of proposed rulemaking asking interested persons to 
comment on whether we should readopt the rules and, if so, whether 
changes are needed. 62 FR 47606, September 10, 1997. At the request of 
some parties, we gave the parties more time for submitting their 
comments and reply comments on the advance notice. 62 FR at 58700, 
October 30, 1997. We later invited interested persons to comment on a 
rulemaking petition filed by America West Airlines in their comments on 
our advance notice. 62 FR 60195, November 7, 1997.

Our Proposed Extension of the Current Rules

    We obviously cannot complete the rulemaking proceeding for the 
reexamination of our rules by December 31, 1997, the current sunset 
date set forth in our rules. We therefore proposed to change the rules' 
sunset date to March 31, 1999. The proposed amendment would keep the 
current rules in force while we conducted our overall reexamination of 
the rules.
    We reasoned that a temporary extension of the current rules would 
preserve the status quo while we determine whether our existing rules 
should be readopted. As we noted, the systems, airlines, and travel 
agencies have been operating with the expectation that each system will 
comply with the rules. They would be unduly burdened if the rules 
expired and were later reinstated by us, since they could have changed 
their method of operations in the meantime. 62 FR at 59315, November 3, 
1997.
    We also tentatively determined that a short-term continuation of 
the current rules was necessary to protect airline competition and 
consumers against unreasonable practices. The findings made in our last 
major CRS rulemaking on the need for CRS rules still appeared to be 
valid. Those findings indicated that the rules should be maintained to 
protect airline competition and consumers against the injuries that 
could otherwise occur.
    We further found that an extension of the rules was unlikely to 
impose significant costs on the systems and their owners, since they 
had already adjusted their operations to comply with the rules and 
since the rules did not impose costly burdens of a continuing nature on 
the systems. 62 FR 59316, November 3, 1997.
    Finally, we suggested that our obligation under section 1102(b) of 
the Federal Aviation Act, recodified as 49 U.S.C. 40105(b), to act 
consistently with the United States' obligations under treaties and 
bilateral air services agreements provided an additional ground for 
maintaining our current rules during our reexamination of their need 
and effectiveness. 62 FR 59316, November 3, 1997.
    Due to the need to make the proposed amendment effective by the end 
of 1997, we shortened the comment period to fifteen days. As we noted, 
however, the advance notice of proposed rulemaking for the 
reexamination of the CRS rules had stated that we intended to propose 
an extension of the current rules. 62 FR at 59314, November 3, 1997.

Comments

    America West was the only party that filed comments on our proposal 
to change the rules' sunset date. America West agrees with our 
tentative findings in the notice of proposed rulemaking that the 
systems have market power that requires continuing regulation and the 
findings made in our parity clause rulemaking and in our last major CRS 
rulemaking. America West further cites the complaints made by it in its 
recent petition for a rulemaking on CRS booking fee practices and 
travel agency transactions, Docket OST-97-3014, and asks that we act 
promptly on that petition.

Decision

    We will amend the rules' sunset date as proposed by our notice of 
proposed rulemaking. America West supports our proposal, and no one 
objected to it. The analysis underlying that proposal is consistent 
with the findings made by us in other recent rulemakings on CRS issues, 
as stated in our notice and America West's comments. We will, of 
course, review our past findings on the need for continued CRS 
regulation as part of our overall reexamination of the CRS rules.
    We recognize America West's interest in prompt action on its 
rulemaking petition, but we plan to address its petition when we review 
the comments and reply comments being filed in the proceeding for 
reexamining all of the CRS rules. We have already asked parties to 
include their responses to America West's petition in their comments on 
our advance notice of proposed rulemaking. 62 FR 60195, November 7, 
1997.

Effective Date

    We have determined for good cause to make this amendment effective 
on December 31, 1997, rather than thirty days after publication as 
required by the Administrative Procedure Act, 5 U.S.C. 553(d), except 
for good cause shown. In order to maintain the current rules in effect 
on a continuing basis, we must make this amendment effective by 
December 31, 1997. Since the amendment preserves the status quo, it 
will not require the systems, airlines, and travel agencies to change 
their operating methods. As a result, making the amendment effective 
less than thirty days after publication will not burden anyone.

Regulatory Process Matters

Regulatory Assessment

    This rule is a nonsignificant regulatory action under section 3(f) 
of Executive Order 12866 and has not been reviewed by the Office of 
Management and Budget under that order. Executive Order 12866 requires 
each executive agency to prepare an assessment of costs and benefits 
for each significant rule under section 6(a)(3) of that order. The rule 
is also not significant under the

[[Page 66274]]

regulatory policies and procedures of the Department of Transportation, 
44 FR 11034, February 26, 1979.
    In our notice of proposed rulemaking we tentatively determined that 
maintaining the current rules should impose no significant costs on the 
CRSs. The systems have done the work necessary to comply with the 
rules' requirements on displays and functionality. Continuing to 
operate in compliance with the rules would not impose a substantial 
burden on the systems. Maintaining the rules would benefit airlines 
using CRSs, since otherwise they could be subjected to unreasonable 
terms for participation, and would benefit consumers, who otherwise 
might obtain incomplete or inaccurate information on airline services.
    We also noted that our notice of proposed rulemaking in our last 
major rulemaking included a tentative regulatory impact statement whose 
analysis we made final in adopting the rules. In proposing to change 
the rules' sunset date, we stated our belief that the analysis remained 
applicable to that proposal and that no new regulatory impact statement 
therefore seemed necessary. We further stated our willingness to 
consider any comments on that analysis before making our proposal 
final.
    As indicated, no one filed any comments. We will therefore base 
this rule on the analysis used in our last major CRS rulemaking, as 
discussed in our notice of proposed rulemaking. We will, of course, 
undertake a new regulatory assessment as part of our review of the 
existing rules, if we determine that rules remain necessary.
    This rule does not impose unfunded mandates or requirements that 
will have any impact on the quality of the human environment.

Regulatory Flexibility Analysis

    The Regulatory Flexibility Act of 1980, 5 U.S.C. 601 et seq., was 
enacted by Congress to ensure that small entities are not unnecessarily 
and disproportionately burdened by government regulations. The act 
requires agencies to review proposed regulations that may have a 
significant economic impact on a substantial number of small entities. 
For purposes of this rule, small entities include smaller U.S. and 
foreign airlines and smaller travel agencies.
    Our notice of proposed rulemaking set forth the reasons for our 
proposed extension of the rules' expiration date and the objectives and 
legal basis for that proposed rule. We also pointed out that keeping 
the current rules in force would not change the existing regulation of 
small businesses. In addition, we presented a regulatory flexibility 
analysis on the impact of the rules in our last major CRS rulemaking. 
That analysis appeared to be valid for our proposed amendment of the 
rules' sunset date. We therefore adopted that analysis as our tentative 
regulatory flexibility statement and stated that we would consider any 
comments submitted on that analysis in this proceeding.
    We noted that the continuation of our existing CRS rules will 
primarily affect two types of small entities, smaller airlines and 
travel agencies. To the extent that the rules enable airlines to 
operate more efficiently and reduce their costs, changing the sunset 
date of the CRS rules would also affect all small entities that 
purchase airline tickets, since airline fares may be somewhat lower 
than they would otherwise be.
    We reasoned that the rules would benefit smaller airlines without a 
CRS ownership affiliation, by protecting them from certain potential 
system practices that could injure their ability to operate profitably 
and compete successfully. If there were no rules, the systems' airline 
owners could use them to prejudice the competitive position of smaller 
airlines. The rules protect smaller airlines, for example, by 
prohibiting display bias and discriminatory fees for services provided 
airlines. The rules also impose no significant costs on smaller 
airlines.
    The CRS rules affect the operations of smaller travel agencies, 
primarily by prohibiting certain CRS practices that could unreasonably 
restrict the travel agencies' ability to use more than one system or to 
switch systems. Among other things, the rules give travel agencies the 
right to use third-party hardware and software and prohibit display 
bias.
    No one filed comments on our Regulatory Flexibility Act analysis. 
We will adopt the analysis set forth in the notice of proposed 
rulemaking.
    The Regulatory Flexibility Act also requires each agency to 
periodically review rules which have a significant economic impact upon 
a substantial number of small entities. 5 U.S.C. 610. Our rulemaking 
reexamining the need for the CRS rules and their effectiveness will 
constitute the required review of those rules. Our reexamination of the 
rules will include a Regulatory Flexibility Act analysis if we propose 
new CRS rules.
    Our rule contains no direct reporting, record-keeping, or other 
compliance requirements that would affect small entities. There are no 
other federal rules that duplicate, overlap, or conflict with our 
proposed rules.
    The Department certifies under section 605(b) of the Regulatory 
Flexibility Act (5 U.S.C. et seq.) that this regulation will not have a 
significant economic impact on a substantial number of small entities.

Paperwork Reduction Act

    This proposal contains no collection-of-information requirements 
subject to the Paperwork Reduction Act, Pub. L. 96-511, 44 U.S.C. 
Chapter 35.

Federalism Implications

    This rule will have no substantial direct effects on the States, on 
the relationship between the national government and the States, or on 
the distribution of power and responsibilities among the various levels 
of government. Therefore, in accordance with Executive Order 12812, we 
have determined that the rule does not have sufficient federalism 
implications to warrant preparation of a Federalism Assessment.

List of Subjects in 14 CFR Part 255

    Air carriers, Antitrust, Consumer protection, Reporting and 
recordkeeping requirements, Travel agents.

    Accordingly, the Department of Transportation proposes to amend 14 
CFR part 255, Carrier-owned Computer Reservations Systems, as follows:

PART 255--[AMENDED]

    1. The authority citation for part 255 is revised to read as 
follows:
    Authority: 49 U.S.C. 40101, 40102, 40105, 40113, 41712.

    2. Section 255.12 is revised to read as follows:


Sec. 255.12  Termination.

    Unless extended, these rules on carrier-owned computer reservation 
systems shall terminate on March 31, 1999.

    Issued in Washington, D.C. on December 11, 1997.
Charles A. Hunnicutt,
Assistant Secretary for Aviation and International Affairs.
[FR Doc. 97-32897 Filed 12-17-97; 8:45 am]
BILLING CODE 4910-62-P