## Co r ni s h F

. H i t ch co ck A TT ORN EY A T L AW 56 14 C ONN ECT ICUT AVEN UE , NW • N O . 30 4 WASH INGTON , D.C. 20 01 5-2 60 4 (20 2) 48 9-4 81 3 • F AX : (20 2) 31 5-3 55 2

CON H @ HIT CH LAW . COM 1 May20 13

Office of the Secretary of Transportati on 120 0 N ew Jersey Avenue, S.E. Washington, D.C. 205 90
Re: Docket No. OST-20 13-0 048 (IATA Resolution 787 )
Ladies a nd Gentlemen:
I a m fil ing these comments in supp ort of the applicati on of the Internati onal Air Transport As sociation (“IATA”) for app roval of Resolution 7 87, the N ew Di stributi on Capabi li ty (“N DC”) prop osal t hat woul d set an XML standard fordistribution of i nformation ab out fare and service options.
I a m fil ing these comments as an i ndividualai r traveler. By w ay of back- 1 ground, I served as attorney, director and lega l director of the Avia tion Consumer Action Project (“ACAP”), a non-prof it consumer group f

rom 197 7 unti l the early 199 0s, a nd in those capaciti es I drafted comments , arti cles and congress ional testimony on a rang e of avi ati on issues, including anti -comp etiti ve practices in ai rline-owned computerreservati on systems (now call ed “glob al distributi on systems” or “GDSs”). In 2 000 I w as asked to serve as chairman of a new Consumer Advisory Board cr eated byOrbi tz, the first full y server-based internet travel websit e, and I did so forfive years through Orbit z’s beta period, la unch and emergence as a lea ding trav el si te. I joi ned Orbitz b ecause it wa s committed to i mplementing a poli cy goalI ha d long a dvocated, namel y, a neutral a nd unbiased display of air trav el opti ons fr om a number of carriers . Orbi tz succ eeded in doing so wi th its trai lb reaking “ma trix” t hat displa yed a w ider range of carriers and their offerings i n resp onse to a consumer searc h. The matrixwas si mil arly introducedfor other travel services, notabl y hotel and rental car options. I support approval of this appli cation b ecause it woul d set the stage for implementa tion of i mproved display s of fare and service options for passengers . F or better or worse, ai rlines hav e over the past yea rs “unbundled” a number of services

I am r ece iving n o c om pens atio n f or fil ing t hes e c om me nts , I have no expe cta tio n o f 1

rec eiving com pens atio n, and I do no t have any c lient s wh o h ave a n i nter es t, ei therd irec t or indi rec t, int his m att er.2

and now offer a menu of different service offerings, e.g ., more l egroom, onboa rd wifi, onb oard meals. Thi s evoluti on means thatpassengers can more go b eyond asking “Who’s got the lowest fare?” to a sking “What kind of service can I get for my money?” – a nd that i s all to the g ood. Unfortunately , the onl y wa y for passengersto l earn of these options at pres ent is b y goi ng to i ndividual ai rline w ebsites. Comparison shop ping i s thus time-consuming i f one wants to fi nd the full rang e of options on va rious carriers.
And that’s where the NDC comes in. NDC w ould set a sta ndardthat al lows ai rlines to communicat e their fare and service offerings to third parties, such as onli ne travel ag ents and websit e, whi ch can aggrega te data from a number of carriers and gi ve consumersa w ider sense of what options are out there. T he technology i s there, because NDC i s beingjoi ntly prop osed by IATA a irli nes, regulatory approval i s needed

. And sh ould be g ranted. Notw ithstandingthe obv ious consumerbenefits of enhanced disclosure, GDSs, travel ag ents and their al li es are ba ngingthe drum aga inst N DC, cla imi ng thatit would be anti -comp etiti ve a nd bad for travel agents, would usher in an era of “secr et ai rfares ” and woul d inva de passen ger privacy.
We’ve seen this movi e before. When Orbi tz was a nnounced , the same groups denounc ed it a s a clea r-c ut anti trust viol ati on because the i niti al founder s were five ai rlines. T he campaig n succ eeded in revvingup congres sional hearings, an a ntitrust investig ati on and regula tory scrutiny. At the end of the day, and the passage of several y ears, every gov ernment agency concluded that Orbit z should be a bl e to - operate as planned and thatthere were no anti -comp etiti ve a spec ts of Orbitz’ business plan tha t needed ch angi ng.
The i ntell ectual a rgument aga inst Orbi tz rarely rose ab ove the l evel of “Orbit z is somethingthat five b ig ai rlines wa nt. Whatelse do you need to know t o oppos e it?” To some, tha t wa s a seductive siren song and hel ped f uel opposition, not al l of whi ch was wel l-informed. Now we hea r the same siren song from many of the same parties tha t led the charge a gai nst Orbitz. They were wrong before, and they are wrong now. GDSs a nd travel a gents mayhave their own parochial reasons to oppos e ND C, but t he prop osed standard cannot seriously b e vi ewed as anti -pass enger. N DC simplyreflects an effort to facil ita te the a bi li ty of a irli nes to better inform consu mers of their choices , thus taki ng the first generati on of onli ne travel agency services to the nex t lev el. The a rguments aga inst N DC are easi ly answered:

1. NDC w ill

lea d to coll usionand jack up pr ice s for many tra vele rs. N ot so. Each airl ine wi ll have to decide foritsel f if ND C is appropria te for its offerings and which fares or services to offer. In thi s resp ect, NDC i s func tiona ll y simi la r to the
cur rent system. How thi s leads to price gougi ng i s never satisfactorilyexpla ined.3

2. NDC w ill

produc e se cre t air

fares th at many p ass engers will not be able to obtain, and th at’

s unfa ir. Tha t’s also the wa y the current system worksunless one under takes signi ficant efforts to comp arison shop between sites. The a bi li ty to customize service offerings i s hardly new or revol utionary, and there is no reason for air travel ers to have tha t option a rtificia ll y restricted to pr otect intermediaries. Also, the practice of onli ne customizing i s widelyacceptedelsewhere. F or example, if one wa nts to buy a l aptop compu ter online, one scrolls through the pages and determines how much memory to purc hase, how l arge ascr een one wants, whether to add a camera, etc. The final price becomes apparent onc e the consumer has finished the exercise. The arrived-at price is hardly a “secret” fr om any one. Instead, thatprice is something t hat the i ndividual constr ucts acc ording to his or her pr eferenc es. The fi nal price may not b e uniform for all customers , but that i s the situat ion i n the ai rline i ndus try today, where there are pr ice differentials depen ding on how many bag s one chec ks, how much legroom one wa nts, what kind of meal one wa nts to order , or whether one wants w i-fi connectivi ty i n flig ht.

3. Persona l pr ivac

y will be invaded . I t is tem pting to cast this charge as a red herring, b ut it is more in the nature of a crimson wha le. ND C wil l not require passengersto provide more informati on than theydo today, a lthough t hey ma y choose to pr ovide more data in order to obta in a dditionalofferings, and any ai rline and any intermediary w ould have an ob li gati on to protect priva cy. Di ffer ently put, if a passenger is wil li ng to provide i nformation and to “ log in” to a sit e in order to obta in more choices, he or she should be free to do so. Thi s appr oach is wi dely acceptedbyInternet users and has been for years. In closing , N DC has the potentia l to improve the passenger’s ab il ityto l earn of and pur chase per sonali zed fare/service options, depending on how i t is a dopted and used by ai rlines and i ntermediaries. Rat her than let this system evol ve, N DC’s oppon ents (who would preferthat options suchas Orbi tz never exi sted) are asking the Department to b lock NDC a nd to protec t mai nframe-based distribution systems that ma y hav e been cutti ng edge 2 0 y ears ago, when Mark Zuc kerberg was stil l i n grade school and when there was no Ama zon, eBay, Fa cebook, Googl e, Yahoo! or many of the other Internet sites that have g ai ned pop ular a ccep tance over the past two decades. Tim es change, and N DC offersthe potentia l to let consumers have the same options for pur chasing a ir travel that they hav e in ot her areas. I thus urge approval of thi s pr oposal. Thank you for the opportunity to submi t these comments. Pl ease do not hesitate to contact me i f there is additiona l i nformation thatI can provide. Sincerely y ours,
/s/ Cornish F. Hitchcock