Table of Contents I. The Petition II. Public Comments on the Petition A. Comments Supporting the Petition B. Comments Out of the Scope of the Petition III. Reasons for Consideration IV. Availability of Documents V. Conclusion I. The Petition

The NRC received and docketed a petition for rulemaking (ADAMS Accession No. ML21042B011) dated December 4, 2020, filed by Richard Arnold and Ron Johnson, on behalf of the Tribal Radioactive Materials Transportation Committee (TRMTC). On April 9, 2021, the NRC published a notice of docketing and request for comment in the Federal Register (86 FR 18477). The petitioner requests that the NRC amend its regulations in part 37 of title 10 of the Code of Federal Regulations (10 CFR), “Physical Protection of Category 1 and Category 2 Quantities of Radioactive Material,” to include advance Tribal notification requirements similar to existing State notification requirements.

The NRC identified one issue in the petition, as follows:  1

Issue: In 10 CFR part 37, the requirement for licensees to provide advance notification of certain radioactive material shipments only involves State government notifications and does not include Tribal government notifications. In contrast, the advance notification provisions of 10 CFR part 71, “Packaging and Transportation of Radioactive Material,” and 10 CFR part 73, “Physical Protection of Plants and Materials,” require licensees to provide advance notification to both State and Tribal governments for certain shipments. TRMTC states it is “concerned with the divergence that exists in Part 37 in contrast to the content that is provided in Parts 71 and 73.” The petitioner also states that “consistent notification standards must be applied to states and tribal governments as well as constituencies under their respective jurisdictions.”

The notice of receipt and docketing for the PRM invited interested persons to submit comments. The comment period closed on June 23, 2021. The NRC received 10 comment submissions comprising 63 comments from interested stakeholders, including the Nuclear Energy Institute, Midwestern Radioactive Materials Transportation Committee, Western Interstate Energy Board, High-Level Radioactive Waste Committee, Tribal Radioactive Materials Transportation Committee, Oneida Nation, The Navajo Nation, Pueblo of Sandia, and two private citizens.

The NRC binned the comments related to the petition into two categories. The following discussion provides a summary of each comment and the NRC's response to the comment. Within each bin, the NRC further grouped the comments by topic. The following discussion also provides a summary of each group of comments and the NRC's response to that group of comments.

Comment: The NRC received several comments that supported the assertion made by the petitioner that consistent notification standards must be applied to States and Tribal governments. The commenters urged the NRC to examine these discrepancies and to take appropriate action to modify the language in 10 CFR part 37 to be consistent with 10 CFR part 71 and 10 CFR part 73 advance Tribal notification provisions.

NRC Response: The NRC agrees with this comment. As stated above, the NRC is planning to conduct rulemaking to revise 10 CFR part 37 to be consistent with advance Tribal notification standards provided in 10 CFR part 71 and 10 CFR part 73. This action is also supported by NRC's Tribal Policy Statement, which established the NRC's principles to promote effective Government-to-Government interactions with Federally recognized Tribes, and to encourage and facilitate Tribal involvement in the areas over which the Commission has jurisdiction.

Comment: Several commenters described the importance of consistency between regulations applicable to States and Tribes and stated that this concept reinforces NRC's Principles of Good Regulation.

Response: The NRC agrees with this comment. As stated above, the NRC is planning to conduct rulemaking to revise 10 CFR part 37 to be consistent with advance Tribal notification standards provided in 10 CFR part 71 and 10 CFR part 73.

Comment: Two commenters stated they believed the proposed rulemaking would benefit all stakeholders. Another commenter stated that the proposed amendment would benefit licensees by creating predictability in planning for conducting radioactive material transportation.

Response: The NRC agrees with these comments. Consistency and predictability of regulations is a goal stated in the NRC's Principles of Good Regulations, which is beneficial to the regulated community and the public.

Comment: One commenter supported the petition, stating that they believed the current petition is based on an apparent oversight of ensuring complete and rigorous efforts in the notification process.

Response: The NRC disagrees with the comment. The NRC specifically said that it may consider providing advance Tribal notification for 10 CFR part 37 radioactive material in the future when responding to a public comment concerning the “Physical Protection of Byproduct Material” rule. See 78 FR 16922, 16991 (March 19, 2013).

Comment: One commenter stated that a shipment of radioactive material that was subject to the 10 CFR part 37 notification requirements to the States went through Tribal land in 2020 without notification to Federally recognized Tribes. The lack of notice caused significant concerns for the Tribe and its residents.

Response: The NRC understands this concern. The proposed rulemaking would address notification of participating Tribes.

Comment: One commenter discussed implementation of the rule, such as requiring Tribes to submit a letter to the NRC to “opt in” to receive advance notification or requiring Tribes to comply with safeguards information training requirements that are currently in place for participation in the 10 CFR part 71 and 10 CFR part 73 advance Tribal notification program.

Response: The NRC will consider the issues raised in this comment during the rulemaking process.

Comment: Several commenters stated that Tribes govern themselves and the NRC needs to recognize them as sovereign governments.

Response: The NRC agrees with this comment. The NRC recognizes the right of each Indian Tribe to self-governance and supports Tribal sovereignty and self-determination. In the Tribal Policy Statement, Principle 2 states that the NRC recognizes Tribal governments as independent from State governments, with separate and distinct authorities with inherent sovereign powers over their members and territory, consistent with applicable statutes and authorities.

Comment: Two commenters stated that Tribal governments need to be recognized and acknowledged with the same treatment and respect as States, and that they have the right to be notified if radioactive materials are being shipped through their lands.

Response: The NRC agrees with this comment. The NRC recognizes the need for States and Tribes to have consistent treatment for advance notification for Category 1 radioactive material shipments and plans to conduct rulemaking to address this issue.

Comment: The NRC received several comments underlining the importance of advance Tribal notification of radioactive shipments in order to allow the Tribes adequate time to prepare to respond in the event of an incident or accident. Several commenters also stated the importance of the Tribes' emergency support function, participation in emergency training, and commitment to protecting their Tribal lands as reasons for receiving advance notification of shipments across Tribal lands.

NRC Response: The NRC agrees with these comments and plans to conduct rulemaking to amend its regulations to improve consistency for advance Tribal notifications for Category 1 radioactive material. In accordance with Tribal Policy Statement, Principle 2, the NRC recognizes Tribal sovereignty, independent from State governments and Tribal governments' interest in being informed of activities occurring on Tribal lands.

Comment: Several commenters identified the importance for States and Tribes to coordinate and communicate for successful planning of shipments. Other commenters indicated effective communication is paramount in the instance of hazardous, radioactive material transport. Another comment stated that the public's perception of these shipments is not materially altered by the different regulatory categories, and thus the Tribes' public information responsibilities would be much the same as for irradiated reactor fuel and special nuclear material, regardless of the different types of materials being moved.

Response: The NRC agrees with the comments. The NRC's view is that the importance of communication between the States, Tribes, and the public supports the NRC's plan to conduct this rulemaking.

Three comments within the comment submissions were beyond the scope of the petitioner's request. They are summarized below.

Comment: One comment submission discussed irradiated fuel rods and how they can be rendered harmless using liquid nitrogen.

Response: This comment is outside the scope of the petitioner's request for the NRC to revise 10 CFR part 37 to require advance Tribal notification of shipments for Category 1 radioactive materials.

Comment: One commenter discussed the lack of consultation regarding the determination of transport routes and availability of resources, training, and infrastructure for Tribal emergency preparedness, response, and risk management in potential incidences of accidental radiological release during shipment.

Response: This comment is outside the scope of the petitioner's request that the NRC revise 10 CFR part 37 to require advance Tribal notification of shipments for Category 1 radioactive materials. Specifically, the commenters' topics regarding consultation for transportation routes, the availability of resources, training and infrastructure for Tribal emergency preparedness, response, and risk management are outside the scope of the petitioner's request.

Comment: One commenter discussed the importance of advanced notification to States and Tribes for shipments of Category 1 and Category 2 quantities of radioactive material.

Response: This comment is outside the scope of the petitioner's request that the NRC revise 10 CFR part 37 to require advance Tribal notification for shipments of Category 1 radioactive materials. The requirements in 10 CFR part 37 are only for advance notification of Category 1 radioactive materials and do not mention advance notification requirements for Category 2 quantities of radioactive materials. Advance Tribal notification for shipments of Category 2 quantities of radioactive material is outside the scope of the petitioner's request.

The NRC will consider the issue raised in the PRM in its rulemaking process because the NRC recognizes Tribal sovereignty and Tribal governments' interest in being informed of Category 1 radioactive material shipments that would pass through Federally recognized Tribal reservations. Revising 10 CFR part 37 would provide consistency with 10 CFR part 71 and 10 CFR part 73 regarding advance Tribal notification of certain radioactive material shipments, implement the principles in the Tribal Policy Statement, and further the NRC's commitment to its Principles of Good Regulation.

The documents identified in the following table are available to interested persons through one or more of the following methods, as indicated.

For the reasons cited in this document, the NRC will consider the issue raised in the petition in its rulemaking process. The public can monitor further NRC action on the rulemaking titled, “Advance Tribal Notification of Certain Radioactive Material Shipments,” that will address the issue in this petition by searching for Docket ID NRC-2021-0051 on the Federal rulemaking website, https://www.regulations.gov. In addition, the Federal rulemaking website allows members of the public to receive alerts when changes or additions occur in a docket folder. To subscribe: (1) navigate to the docket folder (NRC-2021-0051); (2) click the “Subscribe” link; and (3) enter an email address and click on the “Subscribe” link. Publication of this document in the Federal Register closes Docket ID NRC-2021-0051 for PRM-37-2.

Comments Invited

The FAA invites interested people to take part in the development of proposed airworthiness criteria for the Joby Model JAS4-1 powered-lift by sending written comments, data, or views. Please identify the Joby Model JAS4-1 and Docket No. FAA-2021-0638 on all submitted correspondence. The most helpful comments reference a specific portion of the airworthiness criteria, explain the reason for a recommended change, and include supporting data.

Except for Confidential Business Information as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will file in the docket all comments received, as well as a report summarizing each substantive public contact with FAA personnel concerning these proposed airworthiness criteria. Before acting on this proposal, the FAA will consider all comments received on or before the closing date for comments. The FAA will consider comments filed late if it is possible to do so without incurring delay. The FAA may change these airworthiness criteria based on received comments.

Confidential Business Information (CBI) is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this notice contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this notice, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this notice. Submissions containing CBI should be sent to the individual listed under “For Further Information Contact.” Any commentary that the FAA receives that is not specifically designated as CBI will be placed in the public docket for this notice.

The Joby Model JAS4-1 powered-lift has a maximum gross takeoff weight of 4,800 lbs and is capable of carrying a pilot and four passengers. The aircraft uses six tilting electric engines with 5-blade propellers attached to a conventional wing and V-tail. 1 The aircraft structure and propellers are constructed of composite materials. As a powered-lift, the Joby Model JAS4-1 has the characteristics of both a helicopter and an airplane. The Model JAS4-1 is intended to be used for part 91 and part 135 operations, with a single pilot onboard, under visual flight rules.

On November 2, 2018, Joby applied for a type certificate for the Model JAS4-1 powered-lift. Under 14 CFR 21.17(c), Joby's application for type certification is effective for three years. Section 21.17(d) provides that, where a type certificate has not been issued within that three-year time limit, the applicant may file for an extension and update the designated applicable regulations in the type certification basis. Because the project was not certificated within three years after the application date above, the FAA approved the applicant's request to extend the application for type certification. As a result, the date of the updated type certification basis is June 14, 2022.

Because the FAA has not yet established powered-lift airworthiness standards in title 14 CFR, the FAA type certificates powered-lift as special class aircraft. Under the procedures in 14 CFR 21.17(b), the airworthiness requirements for special class aircraft are the portions of the requirements in 14 CFR parts 23, 25, 27, 29, 31, 33, and 35 found by the FAA to be appropriate and applicable to the specific type design and any other airworthiness criteria found by the FAA to provide an equivalent level of safety to the existing standards. This notice announces the applicable regulations and other airworthiness criteria developed, under § 21.17(b), for type certification of the Joby Model JAS4-1 powered-lift.

The Model JAS4-1 powered-lift has characteristics of both a rotorcraft and an airplane. It is designed to function as a helicopter for takeoff and landing and as an airplane cruising at higher speeds than a helicopter during the en-route portion of flight operations. The electric engines on the Joby Model JAS4-1 powered-lift will use electrical power instead of air and fuel combustion to propel the aircraft through six 5-bladed composite variable-pitch propellers. The propeller blade pitch is electronically controlled and the blades are asymmetrically spaced around the hub for acoustic noise reduction. Accordingly, the Joby Model JAS4-1 powered-lift proposed airworthiness criteria contain standards from parts 23, 33, and 35 as well as other proposed airworthiness criteria specific for a powered-lift.

For the existing regulations that are included without modification, these proposed airworthiness criteria include all amendments to the existing part 23, 33, and 35 airworthiness standards in effect as of the application date of June 14, 2022. These are part 23, amendment 23-64, part 33, amendment 33-34, and part 35, amendment 35-10.

The Joby Model JAS4-1 powered-lift proposed airworthiness criteria also include new performance-based criteria consisting of part 23 standards as modified by amendment 23-64. The FAA developed these criteria because no existing standard captures the powered-lift's transitional flight modes. The proposed criteria also contain definitions specific for a powered-lift, such as flight modes, configurations, speeds, and terminology. Additionally, electric-engine and related propeller airworthiness criteria are proposed. The new requirements specific to the Joby Model JAS4-1 use a “JS4.xxxx” section-numbering scheme.

The FAA selected and designed the particular airworthiness criteria proposed in this notice for the following reasons:

The proposed installation requirements for cockpit voice and flight data recorders remain unchanged from the normal category airplane airworthiness standards in part 23. The proposed requirement to prepare Instructions for Continued Airworthiness accounts for the applicant's option to install type certificated engines and propellers or to seek approval of the engines and propellers under the aircraft type certificate.

The proposed airworthiness criteria include new or modified definitions to explain the unique capabilities and flight phases of the Joby Model JAS4-1 and the meaning of certain terms used in regulations that have been incorporated by reference. In the event of a loss of engine power, airplanes and rotorcraft inherently have the ability to glide or autorotate, respectively. Although the aircraft may sustain damage, the ability to glide or autorotate allows the aircraft to reasonably protect the occupants. However, not all powered-lift have these capabilities. To address this, the FAA proposes a definition for “continued safe flight and landing,” unique for the Model JAS4-1, that modifies language from the existing definition in § 23.2000; the FAA also proposes a new definition for “controlled emergency landing” to capture the level of performance the Model JAS4-1 must meet, equivalent to a glide or autorotation.

In addition, because many of the proposed airworthiness criteria are performance-based, like the regulations found in part 23, the FAA has proposed to adopt § 23.2010 by reference, which would require that the means of compliance used to comply with these proposed airworthiness criteria be accepted by the Administrator. Because no powered-lift consensus standards are currently accepted by the Administrator, the means of compliance for the Joby Model JAS4-1 aircraft will be accepted through the issue paper process. 2

Although part 23 (amendment 23-64) replaced prescriptive design requirements with performance-based rules that are more easily adaptable to new and novel technology, these performance-based rules were written for conventionally configured airplanes equipped with reversible flight controls for fixed-wing takeoff and landing operations. To accommodate Joby's ability to engage in vertical takeoff and landing operations, these proposed airworthiness criteria adopt language from parts 27 and 29, where appropriate, with changes to allow for safe operation of the powered-lift below the stall speed of the wing. The FAA developed proposed criteria to address the integration of alternating sources of lift: thrust-borne, semi-thrust-borne, and wing-borne. While the FAA has experience certifying indirect flight-control systems such as fly-by-wire systems, Joby's design uses a unique, integrated flight- and propulsion-control system that requires new airworthiness criteria.

In addition, the FAA proposes a new JS4.2105, which incorporates all of § 23.2105 and adds criteria in new paragraphs (f) and (g). Proposed JS4.2105(f) and (g) would ensure the pilot is capable of executing a controlled emergency landing in the event of a loss of power or thrust, whether by the aircraft's ability to glide or autorotate, or through an equivalent means that reasonably protects occupants.

Part 23 (amendment 23-64) addresses electric propulsion, but only for conventionally configured airplanes that use propulsion for forward thrust. Joby's new and novel design uses a distributed propulsion system to provide forward thrust, lift, and control. While some of these design features can be addressed by existing airworthiness standards in parts 23 and 27, other features require the development of new airworthiness criteria. The proposed airworthiness criteria address the following unique and novel powerplant installation features:

• multi-engine isolation in a distributed propulsion system,

• simplified control of distributed propulsion,

• integration of a propulsion system into aircraft flight controls, and

• energy-system crashworthiness associated with vertical takeoff and landing capability.

The proposed airworthiness criteria in JS4.2405 combine engine and propeller control functions from § 23.2405 and § 23.2425 and revise the application to capture all powerplant control functions including engine control, propeller control, and nacelle rotation. Energy system airworthiness criteria in proposed JS4.2430 would include a requirement to address energy system crashworthiness to capture the intent of § 27.952 and would delete requirements specific to liquid fuel systems. The powerplant fire-protection airworthiness criteria in proposed JS4.2440 would replace prescriptive language from § 23.2440 for designated fire zones, with generalized fire-zone language to address all powerplant-related fire threats. Electric propulsion systems introduce new fire threats from high-voltage electrical power and battery systems. Designated fire zones assume a kerosene-based fire threat, which is inconsistent with fire threats from electric powerplant installations. These proposed criteria are intended to allow for safe operation of the powered-lift using an all-electric distributed propulsion system for thrust-borne, semi-thrust-borne, and wing-borne flight.

The flight and ground loads for powered-lift are generally comprised of three types of flight configurations: vertical, transition, and forward. The proposed airworthiness criteria are not taken solely from the forward-flight requirements of part 23 (for airplanes) or the vertical-flight requirements of part 27 (for rotorcraft). Powered-lift also rely on a transitional type of lift, which may include a combination of forward and vertical flight loads. The aerodynamic flow field around the powered-lift during transitional type of lift can be considerably different from what is traditionally observed during forward and vertical flight. In some flight configurations, the powered-lift may experience a combination of forward and vertical flight loads (forces). In other configurations, the aircraft may undergo a completely new type of aerodynamic flow field, not experienced during strictly forward or vertical flight. Traditional existing airworthiness standards do not adequately represent the aerodynamic loads, used for structural design, of a powered-lift. Therefore, the FAA finds that additional airworthiness criteria are necessary for structural design. The FAA created JS4.2200 and JS4.2225 by revising §§ 23.2200 and 23.2225 to address the powered-lift structural design envelope. The FAA created JS4.2240 by revising § 23.2240 to remove level 4 airplane requirements, because the Joby Model JAS-4 aircraft is not a level 4 airplane.

In addition, the FAA proposes a new JS4.2320, which incorporates all of § 23.2320 except for § 23.2320(b). Proposed JS4.2320(b) contains a new bird strike requirement specific for the applicant's design. The FAA recognizes the threat from bird strike in the environment in which these aircraft are intended to operate is more severe than the environment that rotorcraft or part 23 fixed wing aircraft operate in today. The Model JAS4-1 has inherent design features and expected operations that potentially expose the aircraft to a higher probability of impact with birds.

The Model JAS4-1 will operate at altitudes similar to rotorcraft, and the FAA expects it will cruise at airspeeds that are the same as or greater than rotorcraft. However, the FAA expects the Model JAS4-1 will spend less time in hover compared to rotorcraft, increasing high-speed flight time. The FAA also recognizes that the JAS4-1 will be much quieter than conventional helicopter turboshaft engines and rotors. As a result, birds will have fewer cues to the existence of the vehicle due to quiet approach environments.

All of these factors combined increase the aircraft's exposure to birds. Accordingly, the FAA proposes a more comprehensive bird strike requirement for the Model JAS4-1. As cited in the Aviation Rulemaking Advisory Committee (ARAC) Rotorcraft Bird Strike Working Group (RBSWG) report, 3 an analysis of bird strike threats against rotorcraft showed the median bird size for birds involved in damaging strikes was 1.125 kg (2.5 lb). Based on that research, the FAA proposes a bird impact size of 1.0 kg (2.2-lb), consistent with rotorcraft industry testing. The applicant must perform an evaluation at the aircraft level to determine what parts of the aircraft are exposed to potential bird strikes.

The FAA also proposes a requirement for bird deterrence devices to reduce the potential for bird strikes. Research, testing, and use of bird-deterrence technology has shown to be effective in reducing bird strikes. 4 Alerting birds to the presence of the aircraft allows birds to avoid striking the aircraft. Bird deterrence systems may include, for example, light technology to aid birds in detecting and avoiding the aircraft.

The electric engines proposed for installation on the Joby Model JAS4-1 powered-lift use electric power instead of air-and-fuel combustion to propel the aircraft. These electric engines are designed, manufactured, and controlled differently than aircraft engines that operate using aviation fuel. These engines are built with an electric motor, a controller, and a high-voltage system that draws energy from electrical storage or generating systems. The engines in the Joby Model JAS4-1 aircraft are devices that convert electrical energy into mechanical energy; electric current flowing through wire coils in the motor produces a magnetic field that interacts with magnets on the rotating armature shaft. The controller is a system that consists of two main functional elements: the motor controller and an electric-power quad inverter to drive the four motors associated with an electric engine. The four motors include the drive motor, functioning as the electric engine; the position motor for adjusting propeller pitch; the position motor for the engine-tilt function; and the motor for cooling-system operation. The high-voltage system is a combination of wires, power-conditioning components, and connectors that couple an energy source to an electric engine, associated motors, and a controller.

The technology required to provide energy through these high-voltage and high-current electronic components introduces potential hazards that do not exist in aircraft engines that operate using aviation fuel. For example, high-voltage transmission lines, electromagnetic fields, magnetic materials, and high-speed electrical switches form the electric engine's physical properties. Operating at these high power levels also exposes the electric engines to potential failures, which could adversely affect safety, and that are not common to aircraft engines that operate using aviation fuel.

Part 35 contains airworthiness standards to ensure that uninstalled propellers meet the minimum level of safety that the FAA deems acceptable. Part 35 requirements are appropriate for propellers that are installed on conventional airplanes, type certificated under part 23 or part 25, that have construction and blade-pitch actuation methods typically found on such airplanes.

Emerging electric-powered and hybrid electric-powered aircraft, especially electric powered-lift that are intended for “air taxi” type operations in and near urban areas and capable of vertical and short takeoff and landing, often feature propellers designed for both horizontal thrust and vertical lift. In addition, propeller blade-pitch actuation for such aircraft typically is performed electrically, and is more extensively integrated into the aircraft's propulsion and flight-control system compared to conventional airplanes type certificated under part 23 or part 25.

Propellers are integral parts of a variety of airplane propulsion systems and, until the advent of electric engines, have been subjected to the forces of fossil-fuel-powered reciprocating and turbine combustion engines. Electric engines present different considerations due to the increased torque and potentially higher revolutions per minute.

The most basic requirement, for all conventional part 23 and 25 aircraft as well as the Joby JAS4-1 aircraft, is to reduce the risk of propeller failure or release of debris to the occupants and critical aircraft structures and components to an acceptable level. Features and characteristics of propellers must ensure that they are safe for the certification application requested.

These proposed airworthiness criteria would require functional engine demonstrations, including feathering, negative torque, negative thrust, and reverse-thrust operations, as appropriate, using a representative propeller. The applicant may conduct these demonstrations as part of the endurance and durability demonstrations.

These airworthiness criteria, established under the provisions of § 21.17(b), are applicable to the Joby Model JAS4-1 powered-lift. Should Joby wish to apply these airworthiness criteria to other powered-lift models, it must submit a new application for a type certificate.

The FAA proposes to establish the following airworthiness criteria for type certification of the Joby Model JAS4-1 powered-lift. The FAA proposes that compliance with the following criteria will provide an equivalent level of safety to existing rules.

(a) through (g) [Applicable to JAS4-1]

(a) through (e) [Applicable to JAS4-1]

The applicant must prepare Instructions for Continued Airworthiness (ICA), in accordance with Appendices A, A1, and A2, that are acceptable to the Administrator. ICA for the aircraft, engines, and propellers may be shown in a single aircraft ICA manual if the engine and propeller approvals are sought through the aircraft certification program. Alternatively, the applicant may provide individual ICA for the aircraft, engines, and propellers. The instructions may be incomplete at the time of type certification if a program exists to ensure their completion prior to delivery of the first aircraft, or issuance of a standard certificate of airworthiness, whichever occurs later.

(a) These airworthiness criteria prescribe airworthiness standards for the issuance of a type certificate, and changes to that type certificate, for the Joby Aero, Inc. Model JAS4-1 powered-lift.

(b) For purposes of these airworthiness criteria, the following definitions apply:

(1) Continued safe flight and landing means an aircraft is capable of continued controlled flight and landing, possibly using emergency procedures, without requiring exceptional pilot skill or strength.

(2) Phases of flight means ground operations, takeoff, climb, cruise, descent, approach, hover, and landing.

(3) Source of lift means one of three sources of lift: thrust-borne, wing-borne, and semi-thrust-borne. Thrust-borne is defined as when the powered-lift is maneuvering in the vertical plane and lift is predominately from downward thrust. Wing-borne is defined as when the powered-lift is maneuvering in the horizontal plane and lift is predominately from fixed airfoil surfaces. Semi-thrust-borne is the combination of thrust-borne and wing-borne, where both forms of lift are applied.

(4) Loss of power/thrust means a condition when the aircraft can no longer provide the commanded power or thrust required for continued safe flight and landing.

(5) Controlled emergency landing means the pilot is capable of choosing the direction and area of touchdown, and the aircraft is capable of reasonably protecting occupants. Upon landing, some damage to the aircraft may be acceptable.

(c) Terms used in the part 23 provisions that are adopted in these airworthiness criteria are interpreted as follows:

“Airplane” means “aircraft.”

“This part” means “these airworthiness criteria.”

(a) through (b) [Applicable to JAS4-1]

(a) through (c) [Applicable to JAS4-1]

(a) Unless otherwise prescribed, an aircraft must meet the performance requirements of this subpart in still air and standard atmospheric conditions.

(b) Unless otherwise prescribed, the applicant must develop the performance data required by this subpart for the following conditions:

(1) Airport altitudes from sea level to 10,000 feet (3,048 meters); and

(2) Temperatures above and below standard day temperature that are within the range of operating limitations, if those temperatures could have a negative effect on performance.

(c) The procedures used for determining takeoff and landing performance must be executable consistently by pilots of average skill in atmospheric conditions expected to be encountered in service.

(d) Performance data determined in accordance with paragraph (b) of this section must account for losses due to atmospheric conditions, cooling needs, installation losses, downwash considerations, and other demands on power sources.

(e) The hovering ceiling, in and out of ground effect, must be determined over the ranges of weight, altitude, and temperature, if applicable.

(f) Continued safe flight and landing must be possible from any point within the flight envelope following a critical loss of thrust not shown to be extremely improbable.

(g) The aircraft must be capable of a controlled emergency landing, after loss of power or thrust, by gliding or autorotation, or an equivalent means, to mitigate the risk of loss of power or thrust.

The applicant must determine the aircraft minimum safe speed for each flight condition encountered in normal operations, including applicable sources of lift and phases of flight, to maintain controlled safe flight. The minimum safe speed determination must account for the most adverse conditions for each flight configuration.

(a) The applicant must determine takeoff performance accounting for flight envelope and obstacle safety margins.

(b) The applicant must determine takeoff performance accounting for any loss of thrust not shown to be extremely improbable.

(a) The applicant must demonstrate minimum climb performance at each weight, altitude, and ambient temperature within the operating limitations using the procedures published in the flight manual.

(b) The applicant must demonstrate minimum climb performance accounting for any loss of thrust not shown to be extremely improbable.

(a) The applicant must determine climb performance at each weight, altitude, and ambient temperature within the operating limitations using the procedures published in the flight manual.

(b) The applicant must determine climb performance accounting for any loss of thrust not shown to be extremely improbable.

The applicant must determine the following, for standard temperatures at critical combinations of weight and altitude within the operational limits:

(a) The landing performance, assuming approach paths applicable to the aircraft.

(b) The approach, transition if applicable, and landing speeds, configurations, and procedures, which allow a pilot of average skill to land within the published landing performance consistently and without causing damage or injury, and which allow for a safe transition to the balked landing conditions of these airworthiness criteria, accounting for the minimum safe speed.

(a) The aircraft must be controllable and maneuverable, without requiring exceptional piloting skill, alertness, or strength, within the operating envelope—

(1) At all loading conditions for which certification is requested;

(2) During all phases of flight while using applicable sources of lift;

(3) With likely flight-control or propulsion-system failure;

(4) During configuration changes;

(5) In all degraded flight-control-system operating modes not shown to be extremely improbable; and

(6) In thrust-borne operation, and must be able to land safely in wind velocities from zero to a wind limit appropriate for the aircraft from any azimuth angle.

(b) The applicant must determine critical control parameters, such as limited-control power margins, and if applicable, account for those parameters in developing operating limitations.

(c) It must be possible to make a smooth change from one flight condition to another (changes in configuration, and in source of lift and phase of flight) without exceeding the approved flight envelope.

(a) The aircraft must maintain lateral and directional trim without further force upon, or movement of, the primary flight controls or corresponding trim controls by the pilot, or the flight-control system, under normal phases of flight while using applicable sources of lift in cruise.

(b) The aircraft must maintain longitudinal trim without further force upon, or movement of, the primary flight controls or corresponding trim controls by the pilot, or the flight-control system, under the following conditions:

(1) Climb.

(2) Level flight.

(3) Descent.

(4) Approach.

(c) Residual control forces must not fatigue or distract the pilot during normal operations of the aircraft and likely abnormal or emergency operations, including loss of thrust not shown to be extremely improbable on multi-engine aircraft.

(a) Aircraft not certified for aerobatics must exhibit stable characteristics in normal operations and after likely failures of the flight and propulsion control system.

(b) No aircraft may exhibit any divergent longitudinal stability characteristic so unstable as to increase the pilot's workload or otherwise endanger the aircraft and its occupants.

(a) The aircraft must have controllable minimum safe speed flight characteristics in straight flight, turning flight, and accelerated turning flight with a clear and distinctive minimum safe speed warning that provides sufficient margin to prevent inadvertent slowing below minimum safe speed.

(b) Aircraft not certified for aerobatics must not have a tendency to inadvertently depart controlled flight from thrust asymmetry after a critical loss of thrust.

(c) Aircraft certified for aerobatics that include spins must have controllable stall characteristics and the ability to recover within one and one-half additional turns after initiation of the first control action from any point in a spin, not exceeding six turns or any greater number of turns for which certification is requested, while remaining within the operating limitations of the aircraft.

(d) Spin characteristics in aircraft certified for aerobatics that includes spins must recover without exceeding limitations and may not result in unrecoverable spins—

(1) With any typical use of the flight or engine-power controls; or

(2) Due to pilot disorientation or incapacitation.

[Applicable to JAS4-1]

(a) [Applicable to JAS4-1]

(b) through (d) [Not applicable to JAS4-1]

(a) An applicant who requests certification for flight in atmospheric icing conditions must show the following in the icing conditions for which certification is requested:

(1) Compliance with each requirement of this subpart, except those applicable to spins and any that must be demonstrated at speeds in excess of—

(i) 250 knots calibrated airspeed (CAS);

(ii) V MO /M MO or V NE ; or

(iii) A speed at which the applicant demonstrates the airframe will be free of ice accretion.

(2) The means by which minimum safe speed warning is provided to the pilot for flight in icing conditions and non-icing conditions is the same.

(b) The applicant must provide a means to detect icing conditions for which certification is not requested and show the aircraft's ability to avoid or exit those icing conditions.

(c) The applicant must develop an operating limitation to prohibit intentional flight, including takeoff and landing, into icing conditions for which the aircraft is not certified to operate.

The applicant must determine the structural design envelope, which describes the range and limits of aircraft design and operational parameters for which the applicant will show compliance with the requirements of this subpart. The applicant must account for all aircraft design and operational parameters that affect structural loads, strength, durability, and aeroelasticity, including:

(a) Structural design airspeeds, landing-descent speeds, and any other airspeed limitation at which the applicant must show compliance to the requirements of this subpart. The structural design airspeeds must—

(1) Be sufficiently greater than the minimum safe speed of the aircraft to safeguard against loss of control in turbulent air; and

(2) Provide sufficient margin for the establishment of practical operational limiting airspeeds.

(b) Design maneuvering load factors not less than those, which service history shows, may occur within the structural design envelope.

(c) Inertial properties including weight, center of gravity, and mass moments of inertia, accounting for—

(1) Each critical weight from the aircraft empty weight to the maximum weight; and

(2) The weight and distribution of occupants, payload, and fuel.

(d) Characteristics of aircraft control systems, including range of motion and tolerances for control surfaces, high lift devices, or other moveable surfaces.

(e) Each critical altitude up to the maximum altitude.

(f) Engine-driven lifting-device rotational speed and ranges, and the maximum rearward and sideward flight speeds.

[Applicable to JAS4-1]

(a) through (b) [Applicable to JAS4-1]

(a) through (c) [Applicable to JAS4-1]

[Applicable to JAS4-1]

The applicant must determine the structural design loads acting on:

(a) Each engine mount and its supporting structure such that both are designed to withstand loads resulting from—

(1) Powerplant operation combined with flight gust and maneuver loads; and

(2) For non-reciprocating powerplants, sudden powerplant stoppage.

(b) Each flight control and high-lift surface, their associated system and supporting structure resulting from—

(1) The inertia of each surface and mass balance attachment;

(2) Flight gusts and maneuvers;

(3) Pilot or automated system inputs;

(4) System induced conditions, including jamming and friction; and

(5) Taxi, takeoff, and landing operations on the applicable surface, including downwind taxi and gusts occurring on the applicable surface.

(c) A pressurized cabin resulting from the pressurization differential—

(1) From zero up to the maximum relief pressure combined with gust and maneuver loads;

(2) From zero up to the maximum relief pressure combined with ground and water loads if the aircraft may land with the cabin pressurized; and

(3) At the maximum relief pressure multiplied by 1.33, omitting all other loads.

(d) Engine-driven lifting-device assemblies, considering loads resulting from flight and ground conditions, as well limit input torque at any lifting-device rotational speed.

(a) through (b) [Applicable to JAS4-1]

(a) through (b) [Applicable to JAS4-1]

(a) The applicant must develop and implement inspections or other procedures to prevent structural failures due to foreseeable causes of strength degradation, which could result in serious or fatal injuries, or extended periods of operation with reduced safety margins. Each of the inspections or other procedures developed under this section must be included in the Airworthiness Limitations Section of the Instructions for Continued Airworthiness, required by JS4.1529.

(b) For pressurized aircraft:

(1) The aircraft must be capable of continued safe flight and landing following a sudden release of cabin pressure, including sudden releases caused by door and window failures.

(2) For aircraft with maximum operating altitude greater than 41,000 feet, the procedures developed for compliance with paragraph (a) of this section must be capable of detecting damage to the pressurized cabin structure before the damage could result in rapid decompression that would result in serious or fatal injuries.

(c) The aircraft must be designed to minimize hazards to the aircraft due to structural damage caused by high-energy fragments from an uncontained engine or rotating machinery failure.

(a) through (b) [Applicable to JAS4-1]

(a) through (e) [Applicable to JAS4-1]

(a) through (c) [Applicable to JAS4-1]

(a) through (g) [Applicable to JAS4-1]

(a) through (c) [Applicable to JAS4-1]

(a) through (e) [Applicable to JAS4-1]

(a) The applicant must design flight-control systems to:

(1) Operate easily, smoothly, and positively enough to allow proper performance of their functions; and

(2) Protect against likely hazards.

(b) The applicant must design trim systems, if installed, to:

(1) Protect against inadvertent, incorrect, or abrupt trim operation; and

(2) Provide a means to indicate—

(i) The direction of trim control movement relative to aircraft motion;

(ii) The trim position with respect to the trim range;

(iii) The neutral position for lateral and directional trim; and

(iv) The range for takeoff for all applicant-requested center of gravity ranges and configurations.

(c) In addition to paragraph (a) and (b) of this section, for indirect flight-control systems:

(1) A means must be provided to indicate to the flightcrew any significant changes or degradation to the handling or operational characteristics of the aircraft during normal and abnormal system operation; and

(2) Features that protect the aircraft against loss of control, structural damage, or exceeding critical limits must be designed such that—

(i) The onset characteristics of each protection feature is smooth and appropriate for the phase of flight and type of maneuver;

(ii) There are no adverse flight characteristics in aircraft response to flight-control inputs, unsteady atmospheric conditions, and other likely conditions, including simultaneous limiting events; and

(iii) The aircraft is capable of continued safe flight and landing following failures not shown to be extremely improbable throughout the approved flight envelope and expected operational conditions.

(a) through (c) [Applicable to JAS4-1]

(a) through (b) [Applicable to JAS4-1]

(a) through (b) [Applicable to JAS4-1, including the ditching exclusion in (a)(1)]

(a) The applicant must design the aircraft to:

(1) Allow clear communication between the flightcrew and passengers;

(2) Protect the pilot and flight controls from propellers; and

(3) Protect the occupants from serious injury due to damage to windshields, windows, and canopies.

(b) The aircraft must be capable of continued safe flight and landing after a bird strike with a 2.2-lb (1.0 kg) bird. In addition, the aircraft design must include bird deterrence devices to reduce the potential for bird strikes.

(c) The aircraft must provide each occupant with air at a breathable pressure, free of hazardous concentrations of gases, vapors, and smoke during normal operations and likely failures.

(d) If a pressurization system is installed in the aircraft, it must be designed to protect against:

(1) Decompression to an unsafe level; and

(2) Excessive differential pressure.

(e) If an oxygen system is installed in the aircraft, it must—

(1) Effectively provide oxygen to each user to prevent the effects of hypoxia; and

(2) Be free from hazards in itself, in its method of operation, and its effect upon other components.

(a)(1), (a)(2), (b) through (d), (f)(1), and (g) through (h) [Applicable to JAS4-1]

(a)(3), (e), and (f)(2) [Not applicable to JAS4-1]

(a) Flight controls, engine mounts, and other flight structures within or adjacent to fire zones must be capable of withstanding the effects of a fire.

(b) Engines in a fire zone must remain attached to the aircraft in the event of a fire.

(c) In fire zones, terminals, equipment, and electrical cables used during emergency procedures must perform their intended function in the event of a fire.

(a) The aircraft must be protected against catastrophic effects from lightning.

(b) The aircraft must be protected against hazardous effects caused by an accumulation of electrostatic charge.

(a) For the purpose of this subpart, the aircraft powerplant installation must include each component necessary for propulsion, which affects propulsion safety, or provides auxiliary power to the aircraft.

(b) Each aircraft engine and propeller must have a type certificate or be approved under the aircraft type certificate using standards found in subparts H and I.

(c) The applicant must construct and arrange each powerplant installation to account for—

(1) Likely operating conditions, including foreign-object threats;

(2) Sufficient clearance of moving parts to other aircraft parts and their surroundings;

(3) Likely hazards in operation including hazards to ground personnel; and

(4) Vibration and fatigue.

(d) Hazardous accumulations of fluids, vapors, or gases must be isolated from the aircraft and personnel compartments and be safely contained or discharged.

(e) Powerplant components must comply with their component limitations and installation instructions or be shown not to create a hazard.

(a) Any power or thrust control system, reverser system, or powerplant control system must be designed so no unsafe condition results during normal operation of the system.

(b) Any single failure or likely combination of failures or malfunctions of a power or thrust control system, reverser system, or powerplant control system must not prevent continued safe flight and landing of the aircraft.

(c) Inadvertent flightcrew operation of a power or thrust control system, reverser system, or powerplant control system must be prevented, or if not prevented, must not prevent continued safe flight and landing of the aircraft.

(d) Unless the failure of an automatic power or thrust control system is extremely remote, the system must—

(1) Provide a means for the flightcrew to verify the system is in an operating condition;

(2) Provide a means for the flightcrew to override the automatic function; and

(3) Prevent inadvertent deactivation of the system.

(a) through (c) [Applicable to JAS4-1]

(a) through (b) [Applicable to JAS4-1]

(a) Each installed powerplant must operate without any hazardous characteristics during normal and emergency operation within the range of operating limitations for the aircraft and the engine.

(b) The design must provide for the shutdown and restart of the powerplant in flight within an established operational envelope.

(a) Each energy system must—

(1) Be designed and arranged to provide independence between multiple energy-storage and supply systems, so that failure of any one component in one system will not result in loss of energy storage or supply of another system;

(2) Be designed to prevent catastrophic events due to lightning strikes, taking into account direct and indirect effects on the aircraft where the exposure to lightning is likely;

(3) Provide the energy necessary to ensure each powerplant and auxiliary power unit functions properly in all likely operating conditions;

(4) Provide the flightcrew with a means to determine the total useable energy available and provide uninterrupted supply of that energy when the system is correctly operated, accounting for likely energy fluctuations;

(5) Provide a means to safely remove or isolate the energy stored in the system from the aircraft; and

(6) Be designed to retain energy under all likely operating conditions and to minimize hazards to occupants following an emergency landing or otherwise survivable impact (crash landing).

(7) [Reserved]

(b) Each energy-storage system must—

(1) Withstand the loads under likely operating conditions without failure; and

(2) Be isolated from personnel compartments and protected from hazards due to unintended temperature influences.

(3) [Reserved]

(4) [Reserved]

(c) Each energy-storage refilling or recharging system must be designed to—

(1) Prevent improper refilling or recharging; and

(2) [Reserved]

(3) Prevent the occurrence of hazard to the aircraft or to persons during refilling or recharging.

(a) through (b) [Applicable to JAS4-1]

There must be means to isolate and mitigate hazards to the aircraft in the event of a powerplant-system fire or overheat in operation.

(a) through (b) [Applicable to JAS4-1]

[Applicable to JAS4-1]

(a) through (c) [Applicable to JAS4-1]

(a) Each electrical or electronic system that performs a function, the failure of which would prevent the continued safe flight and landing of the aircraft, must be designed and installed such that—

(1) The function at the aircraft level is not adversely affected during and after the time the aircraft is exposed to lightning; and

(2) The system recovers normal operation of that function in a timely manner after the aircraft is exposed to lightning unless the system's recovery conflicts with other operational or functional requirements of the system.

(b) For an aircraft approved for operation under instrument flight rules (IFR), each electrical and electronic system that performs a function, the failure of which would significantly reduce the capability of the aircraft or the ability of the flightcrew to respond to an adverse operating condition, must be designed and installed such that the system recovers normal operation of that function in a timely manner after the aircraft is exposed to lightning.

(a) through (b) [Applicable to JAS4-1]

(a) through (c) [Applicable to JAS4-1]

(a) through (e) [Applicable to JAS4-1]

[Applicable to JAS4-1]

An applicant who requests certification for flight in icing conditions must show the following in the icing conditions for which certification is requested:

(a) The ice protection system provides for safe operation; and

(b) The aircraft design must provide protection from slowing to less than the minimum safe speed when the autopilot is operating.

[Applicable to JAS4-1]

[Applicable to JAS4-1]

(a) The pilot compartment, its equipment, and its arrangement to include pilot view, must allow each pilot to perform their duties for all sources of lift and phases of flight and perform any maneuvers within the operating envelope of the aircraft, without excessive concentration, skill, alertness, or fatigue.

(b) The applicant must install flight, navigation, surveillance, and powerplant controls and displays, as needed, so qualified flightcrew can monitor and perform defined tasks associated with the intended functions of systems and equipment, without excessive concentration, skill, alertness, or fatigue. The system and equipment design must minimize flightcrew errors, which could result in additional hazards.

(a) through (c) [Applicable to JAS4-1]

(a) through (c) [Applicable to JAS4-1]

(a) Installed systems must provide the flightcrew member who sets or monitors parameters for the flight, navigation, and powerplant, the information necessary to do so during each source of lift and phase of flight. This information must—

(1) Be presented in a manner that the crewmember can monitor the parameter and determine trends, as needed, to operate the aircraft; and

(2) Include limitations, unless the limitations cannot be exceeded in all intended operations.

(b) Indication systems that integrate the display of flight or powerplant parameters to operate the aircraft, or are required by the operating rules of title 14, chapter I, must—

(1) Not inhibit the primary display of flight or powerplant parameters needed by any flightcrew member in any normal mode of operation; and

(2) In combination with other systems, be designed and installed so information essential for continued safe flight and landing will be available to the flightcrew in a timely manner after any single failure or probable combination of failures.

The applicant must provide an Aircraft Flight Manual that must be delivered with each aircraft.

(a) The Aircraft Flight Manual must contain the following information—

(1) Aircraft operating limitations;

(2) Aircraft operating procedures;

(3) Performance information;

(4) Loading information; and

(5) Other information that is necessary for safe operation because of design, operating, or handling characteristics.

(b) The portions of the Aircraft Flight Manual containing the information specified in paragraphs (a)(1) through (a)(4) of this section must be approved by the FAA in a manner specified by the Administrator.

(a) through (c) [Applicable to JAS4-1]

(a) [Applicable to JAS4-1]

(b) through (d) [Not applicable to JAS4-1]

Ratings and operating limits must be established and included in the type certificate data sheet based on:

(a) Shaft power, torque, rotational speed, and temperature for:

(1) Rated takeoff power;

(2) Rated maximum continuous power; and

(3) Rated maximum temporary power and associated time limit.

(b) Duty Cycle and the rating at that duty cycle. The duty cycle must be declared in the type certificate data sheet.

(c) Cooling fluid grade or specification.

(d) Power-supply requirements.

(e) Any other ratings or limitations that are necessary for the safe operation of the engine.

(a) through (b) [Applicable to JAS4-1]

(a) through (b) [Applicable to JAS4-1]

(a) through (g) [Applicable to JAS4-1]

High-voltage electrical wiring interconnect systems must be protected against arc faults. Non-protected electrical wiring interconnects must be analyzed to show that arc faults do not cause a hazardous engine effect.

The engine design and construction must minimize the development of an unsafe condition of the engine between maintenance intervals, overhaul periods, or mandatory actions described in the applicable ICA.

[Applicable to JAS4-1]

If cooling is required to satisfy the safety analysis as described in JS4.2717, the cooling-system monitoring features and usage must be documented in the engine installation manual.

(a) through (b) [Applicable to JAS4-1]

[Applicable to JAS4-1]

(a) A rotor overspeed must not result in a burst, rotor growth, or damage that results in a hazardous engine effect, as defined in JS4.2717(d)(2). Compliance with this paragraph must be shown by test, validated analysis, or a combination of both. Applicable assumed rotor speeds must be declared and justified.

(b) Rotors must possess sufficient strength with a margin to burst above certified operating conditions and above failure conditions leading to rotor overspeed. The margin to burst must be shown by test, validated analysis, or a combination thereof.

(c) The engine must not exceed the rotor-speed operational limitations that could affect rotor structural integrity.

(b)(1)(i), (b)(1)(iii), and (b)(1)(iv) [Applicable to JAS4-1]

(a), (b)(1)(ii), (b)(2) through (m) [Not applicable to JAS4-1]

(a) Applicability.

These requirements apply to any system or device that is part of the engine type design that controls, limits, monitors, or protects engine operation and is necessary for the continued airworthiness of the engine.

(b) Engine control.

The engine control system must ensure the engine does not experience any unacceptable operating characteristics or exceed its operating limits, including in failure conditions where the fault or failure results in a change from one control mode to another, from one channel to another, or from the primary system to the back-up system, if applicable.

(c) Design assurance.

The software and complex electronic hardware, including programmable logic devices, must be—

(1) Designed and developed using a structured and systematic approach that provides a level of assurance for the logic commensurate with the hazard associated with the failure or malfunction of the systems in which the devices are located; and

(2) Substantiated by a verification methodology acceptable to the Administrator.

(d) Validation.

All functional aspects of the control system must be substantiated by test, analysis, or a combination thereof, to show that the engine control system performs the intended functions throughout the declared operational envelope.

(e) Environmental limits.

Environmental limits that cannot be adequately substantiated by endurance demonstration, validated analysis, or a combination thereof must be demonstrated by the system and component tests in JS4.2727.

(f) Engine control system failures.

The engine control system must—

(1) Have a maximum rate of Loss of Power Control (LOPC) that is suitable for the intended aircraft application;

(2) When in the full-up configuration, be single fault tolerant, as determined by the Administrator, for electrical, electrically detectable, and electronic failures involving LOPC events;

(3) Not have any single failure that results in hazardous engine effects; and

(4) Not have any likely failures or malfunctions that lead to local events in the intended aircraft application.

(g) System-safety assessment.

The applicant must perform a system-safety assessment. This assessment must identify faults or failures that affect normal operation, together with the predicted frequency of occurrence of these faults or failures. The intended aircraft application must be taken into account to assure the assessment of the engine control system safety is valid.

(h) Protection systems.

The engine control devices and systems' design and function, together with engine instruments, operating instructions, and maintenance instructions, must ensure that engine operating limits will not be exceeded in-service.

(i) Aircraft-supplied data.

Any single failure leading to loss, interruption, or corruption of aircraft-supplied data (other than power command signals from the aircraft), or aircraft-supplied data shared between engine systems within a single engine or between fully independent engine systems, must—

(1) Not result in a hazardous engine effect, as defined in JS4.2717(d)(2), for any engine installed on the aircraft; and

(2) Be able to be detected and accommodated by the control system.

(j) Engine control system electrical power.

(1) The engine control system must be designed such that the loss, malfunction, or interruption of the control system electrical power source will not result in a hazardous engine effect, as defined in JS4.2717(d)(2), the unacceptable transmission of erroneous data, or continued engine operation in the absence of the control function. The engine control system must be capable of resuming normal operation when aircraft-supplied power returns to within the declared limits.

(2) The applicant must identify and declare, in the engine installation manual, the characteristics of any electrical power supplied from the aircraft to the engine control system for starting and operating the engine, including transient and steady-state voltage limits, or electrical power supplied from the engine to the aircraft via energy regeneration, and any other characteristics necessary for safe operation of the engine.

(a), (e), and (g) [Applicable to JAS4-1]

(b) through (d) and (h) [Not applicable to the JAS4-1]

(a) In addition, as part of the system-safety assessment of JS4.2710(g) and JS4.2733(g), the applicant must assess the possibility and subsequent effect of incorrect fit of instruments, sensors, or connectors. Where practicable, the applicant must take design precautions to prevent incorrect configuration of the system.

(b) The applicant must provide instrumentation enabling the flightcrew to monitor the functioning of the engine cooling system unless evidence shows that:

(1) Other existing instrumentation provides adequate warning of failure or impending failure;

(2) Failure of the cooling system would not lead to hazardous engine effects before detection; or

(3) The probability of failure of the cooling system is extremely remote.

(a) A mechanical, thermal, and electromagnetic stress analysis must show a sufficient design margin to prevent unacceptable operating characteristics and hazardous engine effects.

(b) Maximum stresses in the engine must be determined by test, validated analysis, or a combination thereof, and must be shown not to exceed minimum material properties.

(a) The applicant must show, by a safety analysis or means acceptable to the Administrator, whether rotating or moving components, bearings, shafts, static parts, and non-redundant mount components should be classified, designed, manufactured, and managed throughout their service life as critical or life-limited parts.

(1) Critical part means a part that must meet prescribed integrity specifications to avoid its primary failure, which is likely to result in a hazardous engine effect as defined in JS4.2717(d)(2).

(2) Life-limited parts may include but are not limited to a rotor and major structural static part, the failure of which can result in a hazardous engine effect due to low-cycle fatigue (LCF) mechanism or any LCF-driven mechanism coupled with creep, or other failure mode. A life limit is an operational limitation that specifies the maximum allowable number of flight cycles that a part can endure before the applicant must remove it from the engine.

(b) In establishing the integrity of each critical part or life-limited part, the applicant must provide to the Administrator the following three plans for approval: an engineering plan, a manufacturing plan, and a service-management plan, as defined in § 33.70.

(a) The lubrication system must be designed and constructed to function properly between scheduled maintenance intervals in all flight attitudes and atmospheric conditions in which the engine is expected to operate.

(b) The lubrication system must be designed to prevent contamination of the engine bearings and lubrication system components.

(c) The applicant must demonstrate by test, validated analysis, or a combination thereof, the unique lubrication attributes and functional capability of paragraphs (a) and (b) of this section.

The design and construction of the engine, including its control system, must enable an increase—

(a) From the minimum power setting to the highest rated power without detrimental engine effects;

(b) From the minimum obtainable power while in flight, and while on the ground, to the highest rated power within a time interval determined to be safe for aircraft operation; and

(c) From the minimum torque to the highest rated torque without detrimental engine or aircraft effects, to ensure aircraft structural integrity or aircraft aerodynamic characteristics are not exceeded.

If the design allows any of the engine main rotating systems to continue to rotate after the engine is shut down while in-flight, this continued rotation must not result in hazardous engine effects, as specified in JS4.2717(d)(2).

(a)(1) through (a)(2), (d), (e), and (g)(2) [Applicable to JAS4-1]

(a)(3) through (c), (f), (g)(1), and (g)(3) [Not applicable to JAS4-1]

(a) The applicant must comply with § 33.75(a)(2) using the failure definitions in paragraph (d) of this section.

(b) If the failure of such elements is likely to result in hazardous engine effects, then the applicant may show compliance by reliance on the prescribed integrity requirements such as § 33.15, JS4.2709, JS4.2713, or combinations thereof, as applicable. The failure of such elements and associated prescribed integrity requirements must be stated in the safety analysis.

(c) The applicant must comply with § 33.75(d) and (e) using the failure definitions in paragraph (d) of this section.

(d) Unless otherwise approved by the Administrator, the following definitions apply to the engine effects when showing compliance with this condition:

(1) A minor engine effect does not prohibit the engine from meeting its type-design requirements and the intended functions in a manner consistent with § 33.28(b)(1)(i), (b)(1)(iii), and (b)(1)(iv), and the engine complies with the operability requirements such as JS4.2715, JS4.2725, and JS4.2731, as appropriate.

(2) The engine effects in § 33.75(g)(2) are hazardous engine effects with the addition of:

(i) Electrocution of the crew, passengers, operators, maintainers, or others; and

(ii) Blockage of cooling systems that are required for the engine to operate within temperature limits.

(3) Any other engine effect is a major engine effect.

(e) The intended aircraft application must be taken into account to assure that the analysis of the engine system safety is valid.

(a) Ingestion from likely sources (foreign objects, birds, ice, hail) must not result in hazardous engine effects defined by JS4.2717(d)(2), or unacceptable power loss.

(b) Rain ingestion must not result in an abnormal operation such as shutdown, power loss, erratic operation, or power oscillations throughout the engine operating range.

(c) If the design of the engine relies on features, attachments, or systems that the installer may supply, for the prevention of unacceptable power loss or hazardous engine effects following potential ingestion, then the features, attachments, or systems must be documented in the engine installation manual.

(d) Ingestion sources that are not evaluated must be declared in the engine installation manual.

(a) Each liquid system used for lubrication or cooling of engine components must be designed and constructed to function properly in all flight attitudes and atmospheric conditions in which the engine is expected to operate.

(b) If a liquid system used for lubrication or cooling of engine components is not self-contained, the interfaces to that system must be defined in the engine installation manual.

(c) The applicant must establish by test, validated analysis, or a combination of both, that all static parts subject to significant gas or liquid pressure loads will not:

(1) Exhibit permanent distortion beyond serviceable limits or exhibit leakage that could create a hazardous condition when subjected to normal and maximum working pressure with margin.

(2) Exhibit fracture or burst when subjected to the greater of maximum possible pressures with margin.

(d) Compliance with paragraph (c) of this section must take into account:

(1) The operating temperature of the part;

(2) Any other significant static loads in addition to pressure loads;

(3) Minimum properties representative of both the material and the processes used in the construction of the part; and

(4) Any adverse physical geometry conditions allowed by the type design, such as minimum material and minimum radii.

(e) Approved coolants and lubricants must be listed in the engine installation manual.

(a) The engine must be designed and constructed to function throughout its normal operating range of rotor speeds and engine output power, including defined exceedances, without inducing excessive stress in any of the engine parts because of vibration and without imparting excessive vibration forces to the aircraft structure.

(b) Each engine design must undergo a vibration survey to establish that the vibration characteristics of those components that may be subject to induced vibration are acceptable throughout the declared flight envelope and engine operating range for the specific installation configuration. The possible sources of the induced vibration that the survey must assess are mechanical, aerodynamic, acoustical, or electromagnetic. This survey must be shown by test, validated analysis, or a combination thereof.

When approval is sought for a transient maximum engine overtorque, the applicant must demonstrate by test, validated analysis, or a combination thereof, that the engine can continue operation after operating at the maximum engine overtorque condition without maintenance action. Upon conclusion of overtorque tests conducted to show compliance with this subpart, or any other tests that are conducted in combination with the overtorque test, each engine part or individual groups of components must meet the requirements of JS4.2729.

Each engine must be subjected to calibration tests to establish its power characteristics and the conditions both before and after the endurance and durability demonstrations specified in JS4.2723 and JS4.2726.

(a) The applicant must subject the engine to an endurance demonstration, acceptable to the Administrator, to demonstrate the engine's limit capabilities.

(b) The endurance demonstration must include increases and decreases of the engine's power settings, energy regeneration, and dwellings at the power settings or energy regeneration for durations that produce the extreme physical conditions the engine experiences at rated performance levels, operational limits, and at any other conditions or power settings that are required to verify the limit capabilities of the engine.

The engine design must demonstrate its capability to endure operation at its temperature limits plus an acceptable margin. The applicant must quantify and justify to the Administrator the margin at each rated condition. The demonstration must be repeated for all declared duty cycles and associated ratings, and operating environments, that would impact temperature limits.

The engine design must demonstrate safe operating characteristics, including but not limited to power cycling, starting, acceleration, and overspeeding throughout its declared flight envelope and operating range. The declared engine operational characteristics must account for installation loads and effects.

The engine must be subjected to a durability demonstration to show that each part of the engine has been designed and constructed to minimize any unsafe condition of the system between overhaul periods or between engine replacement intervals if the overhaul is not defined. This test must simulate the conditions in which the engine is expected to operate in-service, including typical start-stop cycles.

The applicant must show that systems and components will perform their intended functions in all declared environmental and operating conditions.

If shaft rotation is prevented by locking the rotor(s), the engine must demonstrate:

(a) Reliable rotor locking performance;

(b) Reliable unlocking performance; and

(c) That no hazardous engine effects, as specified in JS4.2717(d)(2), will occur.

The applicant must comply with either paragraph (a) or (b) of this section as follows:

(a) Teardown evaluation.

(1) After the endurance and durability demonstrations have been completed, the engine must be completely disassembled. Each engine component and lubricant must be within service limits and eligible for continued operation in accordance with the information submitted for showing compliance with JS4.1529.

(2) Each engine component having an adjustment setting and a functioning characteristic that can be established independent of installation on or in the engine must retain each setting and functioning characteristic within the established and recorded limits at the beginning of the endurance and durability demonstrations.

(b) Non-Teardown evaluation.

If a teardown is not performed for all engine components, then the life limits for these components and lubricants must be established based on the endurance and durability demonstrations and documented in the Instructions for Continued Airworthiness in accordance with JS4.1529.

The engine must provide containment features that protect against likely hazards from rotating components as follows—

(a) The design of the case surrounding rotating components must provide for the containment of the rotating components in the event of failure, unless the applicant shows that the margin to rotor burst precludes the possibility of a rotor burst.

(b) If the margin to rotor burst shows that the case must have containment features in the event of failure, the case must provide for the containment of the failed rotating components. The applicant must define by test, validated analysis, or a combination thereof, and document in the engine installation manual, the energy level, trajectory, and size of fragments released from damage caused by the rotor failure, and that pass forward or aft of the surrounding case.

The applicant must conduct functional demonstrations including feathering, negative torque, negative thrust, and reverse thrust operations, as applicable, with a representative propeller. These demonstrations may be conducted in a manner acceptable to the Administrator as part of the endurance, durability, and operation demonstrations.

(a) Maintenance of the engine may be made during the tests in accordance with the service and maintenance instructions submitted in compliance with JS4.1529.

(b) The applicant must subject the engine or its parts to maintenance and additional tests that the Administrator finds necessary if—

(1) The frequency of the service is excessive;

(2) The number of stops due to engine malfunction is excessive;

(3) Major repairs are needed; or

(4) Replacement of a part is found necessary during the tests or due to the teardown inspection findings.

(c) Upon completion of all demonstrations and testing specified in these airworthiness criteria, the engine and its components must be—

(1) Within serviceable limits;

(2) Safe for continued operation; and

(3) Capable of operating at declared ratings while remaining within limits.

(a) Applicability.

Any system or device that provides, uses, conditions, or distributes electrical power, and is part of the engine type design, must provide for the continued airworthiness of the engine and maintain electric engine ratings.

(b) Electrical systems.

The electrical system must ensure the safe generation and transmission of power, electrical load shedding, and the engine does not experience any unacceptable operating characteristics or exceed its operating limits.

(c) Electrical-power distribution.

(1) The engine electrical-power distribution system must be designed to provide the safe transfer of electrical energy throughout the electrical power plant. The system must be designed to provide electrical power so that the loss, malfunction, or interruption of the electrical power source will not result in a hazardous engine effect, as defined in JS4.2717(d)(2).

(2) The system must be designed and maintained to withstand normal and abnormal conditions during all ground and flight operations.

(3) The system must provide mechanical or automatic means of isolating a faulted electrical-energy generation or storage device from affecting the safe transmission of electric energy to the electric engine.

(d) Protection systems.

The engine electrical devices and systems must interrupt transmission of electrical power when power conditions exceed design limits.

(1) The engine electrical system must be designed such that the loss, malfunction, or interruption of the electrical power source will not result in a hazardous engine effect, as defined in JS4.2717(d)(2).

(2) The applicant must identify and declare, in the engine installation manual, the characteristics of any electrical power supplied from the aircraft to the engine, or electrical power supplied to the aircraft from the engine from energy regeneration, systems for starting and operating the engine, including transient and steady-state voltage limits, and any other characteristics necessary for safe operation of the engine.

(e) Environmental limits.

Environmental limits that cannot be adequately substantiated by endurance demonstration, validated analysis, or a combination thereof must be demonstrated by the system and component tests in JS4.2727.

(f) Electrical-system failures.

The engine electrical system must—

(1) Have a maximum rate of Loss of Power Control (LOPC) that is suitable for the intended aircraft application;

(2) When in the full-up configuration, be single fault tolerant, as determined by the Administrator, for electrical, electrically detectable, and electronic failures involving LOPC events;

(3) Not have any single failure that results in hazardous engine effects; and

(4) Not have any likely failure or malfunction that leads to local events in the intended aircraft application.

(g) System-safety assessment.

The applicant must perform a system-safety assessment. This assessment must identify faults or failures that affect normal operation, together with the predicted frequency of occurrence of these faults or failures. The intended aircraft application must be taken into account to assure the assessment of the engine system safety is valid.

Propeller ratings and operating limitations must be established by the applicant and approved by the Administrator, including ratings and limitations based on the operating conditions and information specified in this subpart, as applicable, and any other information found necessary for safe operation of the propeller.

(a) through (b) [Applicable to JAS4-1]

(a) The applicant must:

(1) Analyze the propeller system to assess the likely consequences of all failures that can reasonably be expected to occur. This analysis will take into account, if applicable:

(i) The propeller system when installed on the aircraft. When the analysis depends on representative components, assumed interfaces, or assumed installed conditions, the assumptions must be stated in the analysis.

(ii) Consequential secondary failures and dormant failures.

(iii) Multiple failures referred to in paragraph (d) of this section, or that result in the hazardous propeller effects defined in paragraph (g)(1) of this section.

(2) Summarize those failures that could result in major propeller effects or hazardous propeller effects defined in paragraph (g) of this section, and estimate the probability of occurrence of those effects.

(3) Show that hazardous propeller effects are not predicted to occur at a rate in excess of that defined as extremely remote (probability of 10 −7 or less per propeller flight hour). Because the estimated probability for individual failures may be insufficiently precise to enable the applicant to assess the total rate for hazardous propeller effects, compliance may be shown by demonstrating that the probability of a hazardous propeller effect arising from an individual failure can be predicted to be not greater than 10 −8 per propeller flight hour. In dealing with probabilities of this low order of magnitude, absolute proof is not possible, and reliance must be placed on engineering judgment and previous experience, combined with sound design and test philosophies.

(b) If significant doubt exists as to the effects of failures or likely combination of failures, the Administrator may require assumptions used in the analysis to be verified by test.

(c) The primary failures of certain single propeller elements (for example, blades) cannot be sensibly estimated in numerical terms. If the failure of such elements is likely to result in hazardous propeller effects, those elements must be identified as propeller critical parts. For propeller critical parts, the applicant must meet the prescribed integrity specifications of JS4.2816. These instances must be stated in the safety analysis.

(d) If reliance is placed on a safety system to prevent a failure progressing to hazardous propeller effects, the possibility of a safety system failure, in combination with a basic propeller failure, must be included in the analysis. Such a safety system may include safety devices, instrumentation, early warning devices, maintenance checks, and other similar equipment or procedures.

(e) If the safety analysis depends on one or more of the following items, those items must be identified in the analysis and appropriately substantiated.

(1) Maintenance actions being carried out at stated intervals. This includes verifying that items that could fail in a latent manner are functioning properly. When necessary to prevent hazardous propeller effects, these maintenance actions and intervals must be published in the Instructions for Continued Airworthiness required under JS4.1529. Additionally, if errors in maintenance of the propeller system could lead to hazardous propeller effects, the appropriate maintenance procedures must be included in the relevant propeller manuals.

(2) Verification of the satisfactory functioning of safety or other devices at pre-flight or other stated periods. The details of this satisfactory functioning must be published in the appropriate manual.

(3) The provision of specific instrumentation not otherwise required. Such instrumentation must be published in the appropriate documentation.

(4) A fatigue assessment.

(f) If applicable, the safety analysis must include, but not be limited to, assessment of indicating equipment, manual and automatic controls, governors and propeller-control systems, synchrophasers, synchronizers, and propeller thrust reversal systems.

(g) Unless otherwise approved by the Administrator and stated in the safety analysis, the following failure definitions apply to compliance with these airworthiness criteria.

(1) The following are regarded as hazardous propeller effects:

(i) The development of excessive drag.

(ii) A significant thrust in the opposite direction to that commanded by the pilot.

(iii) The release of the propeller or any major portion of the propeller.

(iv) A failure that results in excessive unbalance.

(2) The following are regarded as major propeller effects for variable-pitch propellers:

(i) An inability to feather the propeller for feathering propellers.

(ii) An inability to change propeller pitch when commanded.

(iii) A significant uncommanded change in pitch.

(iv) A significant uncontrollable torque or speed fluctuation.

The integrity of each propeller critical part identified by the safety analysis required by JS4.2815 must be established by:

(a) A defined engineering process for ensuring the integrity of the propeller critical part throughout its service life,

(b) A defined manufacturing process that identifies the requirements to consistently produce the propeller critical part as required by the engineering process, and

(c) A defined service-management process that identifies the continued airworthiness requirements of the propeller critical part as required by the engineering process.

(a) through (c) [Applicable to JAS4-1]

[Applicable to JAS4-1]

(a) No single failure or malfunction in the propeller system will result in unintended travel of the propeller blades to a position below the in-flight low-pitch position. The extent of any intended travel below the in-flight low-pitch position must be documented by the applicant in the appropriate manuals. Failure of structural elements need not be considered if the occurrence of such a failure is shown to be extremely remote under JS4.2815.

(b) For propellers incorporating a method to select blade pitch below the in-flight low-pitch position, provisions must be made to sense and indicate to the flightcrew that the propeller blades are below that position by an amount defined in the installation instructions. The method for sensing and indicating the propeller blade pitch position must be such that its failure does not affect the control of the propeller.

(a) through (c) [Applicable to JAS4-1]

The requirements of this section apply to any system or component that controls, limits, or monitors propeller functions.

(a) The propeller control system must be designed, constructed and validated to show that:

(1) The propeller control system, operating in normal and alternative operating modes and in transition between operating modes, performs the functions defined by the applicant throughout the declared operating conditions and flight envelope.

(2) The propeller control system functionality is not adversely affected by the declared environmental conditions, including temperature, electromagnetic interference (EMI), high intensity radiated fields (HIRF), and lightning. The environmental limits to which the system has been satisfactorily validated must be documented in the appropriate propeller manuals.

(3) A method is provided to indicate that an operating mode change has occurred if flightcrew action is required. In such an event, operating instructions must be provided in the appropriate manuals.

(b) The propeller control system must be designed and constructed so that, in addition to compliance with JS4.2815:

(1) No single failure results in a hazardous propeller effect; and

(2) No likely failures or malfunctions lead to local events in the intended aircraft installation.

(c) Electronic propeller-control-system embedded software must be designed and implemented by a method approved by the Administrator that is consistent with the criticality of the performed functions and that minimizes the existence of software errors.

(d) The propeller control system must be designed and constructed so that the failure or corruption of aircraft-supplied data does not result in hazardous propeller effects.

(e) The propeller control system must be designed and constructed so that the loss, interruption, or abnormal characteristic of aircraft-supplied electrical power does not result in hazardous propeller effects. The power quality requirements must be described in the appropriate manuals.

[Applicable to JAS4-1]

(a) through (c) [Applicable to JAS4-1]

(a) through (b) [Applicable to JAS4-1]

(a) through (c) [Applicable to JAS4-1]

[Applicable to JAS4-1]

(a) through (c) [Applicable to JAS4-1, except replace the reference to § 35.15 with JS4.2815, and the reference to “§ 23.2400(c) or § 25.907” with JS4.2400(c)]

[Applicable to JAS4-1]

(a) through (c) [Applicable to JAS4-1, except replace the reference to “part 33” with “these airworthiness criteria”]

The variable-pitch propeller system must be subjected to the applicable functional tests of this section. The same propeller system used in the endurance test of JS4.2839 must be used in the functional tests and must be driven by a representative engine on a test stand or on the aircraft. The propeller must complete these tests without evidence of failure or malfunction. This test may be combined with the endurance test for accumulation of cycles.

(a) Governing and reversible-pitch propellers. Thirteen-hundred complete cycles must be made across the range of forward pitch and rotational speed. In addition, 200 complete cycles of control must be made from lowest normal pitch to maximum reverse pitch. During each cycle, the propeller must run for 30 seconds at the maximum power and rotational speed selected by the applicant for maximum reverse pitch.

(b) Feathering propellers. Fifty cycles of feather and unfeather operation must be made.

(c) An analysis based on tests of propellers of similar design may be used in place of the tests of this section.

(a) through (b) [Applicable to JAS4-1]

[Applicable to JAS4-1]

(a) through (b) [Applicable to JAS4-1]

I. General Background Information

The Federal Trade Commission publishes this advance notice of proposed rulemaking (“ANPR”) pursuant to Section 18 of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. 57a, the provisions of part 1, subpart B, of the Commission's Rules of Practice, 16 CFR 1.7-1.20, and 5 U.S.C. 553. This authority permits the Commission to promulgate, modify, and repeal trade regulation rules that define with specificity acts or practices that are unfair or deceptive in or affecting commerce within the meaning of Section 5(a)(1) of the FTC Act, 15 U.S.C. 45(a)(1).

American consumers, workers, and small businesses today are swamped with junk fees that frustrate consumers, erode trust, impair comparison shopping, and facilitate inflation. For this ANPR, the term “junk fees” refers to unfair or deceptive fees that are charged for goods or services that have little or no added value to the consumer, including goods or services that consumers would reasonably assume to be included within the overall advertised price; the term also encompasses “hidden fees,” which are fees for goods or services that are deceptive or unfair, including because they are disclosed only at a later stage in the consumer's purchasing process or not at all, whether or not the fees are described as corresponding to goods or services that have independent value to the consumer. These terms may overlap—a junk fee can be a hidden fee, but not all junk fees are hidden fees.

Frequently, these unfair or deceptive fees are bundled as “ancillary products” in conjunction with loans, auto financing, or some other complicated or expensive transaction, ending up on the final bill without the consumer's awareness or express and informed consent. Junk fees are especially likely to cause consumer harm when they arise “without real notice, unconnected to any additional service, in an industry where advertising is essential.”  1 Junk fees manifest in markets ranging from auto financing to international calling cards and payday loans. A 2019 poll conducted by Consumer Reports found eighty-two percent of those surveyed had spent money on hidden fees in the previous year. 2 The respondents cited telecommunications and live entertainment as sources of hidden fees more than any other industries. 3

Junk fees not only are widespread but also are growing. In various industries, fees are increasing at higher rates than the base prices of the goods or services to which they are added. For example, in higher education and hospitality, 4 fees are increasing faster than tuition or posted room rates. After first emerging in the late 1990s, hotel “resort fees” accounted for $2 billion, or one-sixth of total hotel revenue, by 2015. 5 With rising prices, fees are becoming more prevalent, allowing some businesses to raise effective prices without appearing to do so. 6

Junk fees impose substantial economic harms on consumers and impede the dissemination of important market information. A Commission analysis of hotel “resort fees” that were mandatory and undisclosed in the posted room rates concluded such fees “artificially increas[e] the search costs and the cognitive costs” for consumers carrying out the transaction. 7 Junk fees force consumers either to accept a higher actual price for a service or product after beginning the transaction or to spend more time searching for lower actual prices elsewhere. Consumers faced with such fees pay upward of twenty percent more than when the actual price was disclosed upfront. 8 These fee practices can be found throughout the economy but appear to be particularly widespread in markets for travel such as hotels, room-sharing, car rentals, and cruises.

Tickets for live events appear to be another market with widespread junk fees. A Commission workshop focused on the event-tickets market found such fees result in significant market misallocations. Because in a price-obscuring transaction consumers initiate purchasing decisions without knowing the actual cost, “[t]ickets will not necessarily go to the consumers who value them the most.”  9 The workshop also highlighted the inability of market participants to correct this course without intervention: After a market leader took unilateral action to phase out hidden fees, the platform “lost significant market share and abandoned the policy after a year because consumers perceived the platform's advertised prices to be higher than its competitors' displayed prices.”  10 The president of another significant market actor testified before a Congressional subcommittee that, “for any single [company] to avoid being disproportionately harmed by using all-in pricing, all members of the live event ticket industry must be legally required to list all prices and fees up-front.”  11 At the Commission workshop, “each participating ticket seller that [did] not [ ] provide upfront all-in pricing [ ] favored requiring all-in pricing through federal legislation or rulemaking. ”  12 A market characterized by both consumers and merchants calling for clearer pricing suggests further Commission action may be justified.

Many measures to tackle junk fees have already been considered or implemented by Congress, federal agencies, states, and peer countries. The Full Fare Advertising Rule issued by the U.S. Department of Transportation states any “advertising or solicitation” that “states a price” constitutes an “unfair or deceptive practice . . . unless the price stated is the entire price to be paid.”  13 The Telemarketing Sales Rule defines as a deceptive act or practice the misrepresentation of, and failure to, “disclose truthfully, in a clear and conspicuous manner,” the “total costs to purchase, receive, or use, . . . any goods or services that are the subject of [a] sales offer.”  14 The Commission's Funeral Rule provides it is an unfair or deceptive act or practice “to fail to furnish accurate price information . . . for each of the specific funeral goods and funeral services.”  15 The Restore Online Shoppers' Confidence Act requires post-transaction third-party sellers online to clearly and conspicuously disclose the cost of a good or service and obtain “express informed consent for the charge” from the consumer. 16 Congress enacted the Ocean Shipping Reform Act of 2022, which grants the Federal Maritime Commission greater authority to investigate, make determinations of reasonableness about, and order refunds for, fees charged by common ocean carriers. 17 The Commission's Negative Option Rule, which regulates “a common form of marketing where the absence of affirmative consumer action constitutes assent to be charged for goods or services,” also reflects the importance of disclosure and consent in transactions. 18

The Consumer Financial Protection Bureau (“CFPB”) requested public comment on fees levied on consumer financial products or services. 19 The CFPB expressed concern such fees carry the risk that “companies are not just shifting costs to consumers” but also “taking advantage of a captive relationship with the consumer to drive excess profits.”  20 Connecticut has passed a law requiring that “any advertisement for an in-state event [ ] conspicuously disclose the total price for each ticket and what portion . . . represents a service charge.”  21 New York State recently adopted a similar law. 22 The European Union implemented a directive in 1998 requiring the “selling price,” defined as the “final price of a unit of the product,” must be “unambiguous, easily identifiable, and clearly legible.”  23

Based on the Commission's substantial work in this area, the Commission's initial view is junk fees appear to be prevalent in many sectors of the American economy. The Commission's actions to address such fees encompass “mobile cramming” charges, 24 connection and maintenance fees on prepaid phone cards, 25 account fees, 26 fees that diminish the amount a borrower receives from a loan, 27 miscellaneous fees levied on fuel cards, 28 auto dealer fees, 29 undisclosed fees for funeral services, 30 hotel “resort” fees, 31 hidden fees for academic publishing, 32 poorly disclosed ancillary insurance products, 33 membership programs, 34 and discounts for food, travel, long-distance calls, and merchandise. 35

Certain unlawful fee practices may be covered by existing rules and statutes. The Commission lacks authority, however, to seek redress for consumers or penalties against violators for everyday junk fees that fall outside those specific prohibitions. Indeed, although the Commission has brought many cases that challenge junk fees and hidden fees under Section 5 of the FTC Act, 15 U.S.C. 45, and other statutes, its current remedial authority is limited. The U.S. Supreme Court recently held equitable monetary relief, including consumer redress, is unavailable under Section 13(b) of the FTC Act. 36 Consumer redress under Section 19(b), 15 U.S.C. 57b(b), is limited and challenging to obtain without a rule violation. The Commission believes a rule addressing certain types of unfair or deceptive acts or practices involving junk fees could help reduce the level of unlawful activity in this area, serving as a deterrent against these practices because such a trade regulation rule would allow for civil penalties to be sought against violators. 37 It also would enable the Commission more readily to obtain redress and damages for consumers through Section 19(b) of the FTC Act, 15 U.S.C. 57b(b).

The Commission requests input on whether and how it should use its authority under Section 18 of the FTC Act, 15 U.S.C. 57a, to address deceptive or unfair acts or practices involving junk fees and hidden fees. Specifically, the Commission proposes addressing the following practices, which have been the subject of Commission investigations, enforcement actions, workshops, research, and consumer education, among other activities: (a) misrepresenting or failing to disclose clearly and conspicuously, on any advertisement or in any marketing, the total cost of any good or service for sale;  38 (b) misrepresenting or failing to disclose clearly and conspicuously, on any advertisement or in any marketing, the existence of any fees, interest, charges, or other costs that are not reasonably avoidable for any good or service;  39 (c) misrepresenting or failing to disclose clearly and conspicuously whether fees, interest, charges, products, or services are optional or required;  40 (d) misrepresenting or failing to disclose clearly and conspicuously any material restriction, limitation, or condition concerning any good or service that may result in a mandatory charge in addition to the cost of the good or service or that may diminish the consumer's use of the good or service, including the amount the consumer receives;  41 (e) misrepresenting that a consumer owes payments for any product or service the consumer did not agree to purchase;  42 (f) billing or charging consumers for fees, interest, goods, services, or programs without express and informed consent;  43 (g) billing or charging consumers for fees, interest, goods, services, or programs that have little or no added value to the consumer or that consumers would reasonably assume to be included within the overall advertised price;  44 and (h) misrepresenting or failing to disclose clearly and conspicuously on an advertisement or in marketing the nature or purpose of any fees, interest, charges, or other costs. 45

The Commission seeks comment on, among other things, the prevalence of each of the above practices, the costs and benefits of a rule that would require upfront inclusion of any mandatory fees whenever consumers are quoted a price for a good or service and other potential rule requirements to curtail unfair or deceptive fees, and alternative or additional action to such a rulemaking, such as the publication of additional consumer and business education materials and hosting of public workshops. In their replies, commenters should provide any available evidence and data that support their position, such as empirical data, consumer-perception studies, and consumer complaints.

On December 27, 2021, the Federal Trade Commission published a petition for rulemaking submitted by the Institute for Policy Integrity (“Policy Integrity”). 46 The petition asks the Commission to promulgate rules to address the practice it identifies as “drip pricing.” Drip pricing is defined by the petition as “the practice of advertising only part of a product's price upfront and revealing additional charges later as consumers go through the buying process.”  47 The petition itself addressed only some of the issues explored in this ANPR. The comment period for the petition closed on January 26, 2022. 48 The petition received 25 comments from individual consumers, trade associations, and industry leaders. 49 Of these comments received, only one comment, by a ticket-broker corporation, urged caution as to drip-pricing rulemaking, while the rest supported granting the petition.

The petition argues that, by initially withholding crucial pricing information, sellers manipulate market pressures to consumers' detriment. 50 Consumers then cannot effectively comparison-shop to find the best value or must devote an undue amount of time to making cost-appropriate decisions. According to the National Economic Council, these skewed market dynamics may cause consumers to “systematically . . . pay more for goods and services.”  51 Policy Integrity recommends the Commission require sellers to provide prominent indication of the entire price imposed by a seller, including all mandatory fees and service charges (but excluding optional add-on features and taxes imposed by government). 52 The petition identifies Commission authority to impose such a rule as stemming from the Commission's Section 5 mandate to protect consumers and competition by preventing unfair, deceptive, and anticompetitive practices. 53 By misrepresenting a product's true cost, drip pricing, according to the petition, deceives consumers acting reasonably under the circumstances, unfairly imposes injury not reasonably avoidable and not outweighed by countervailing benefits, and disadvantages parties who disclose entire prices upfront, which makes it an unfair method of competition. 54

Policy Integrity notes the Commission's long record of related enforcement actions, such as: preventing door-to-door encyclopedia salespersons from initially posing as advertising researchers;  55 enforcing the Telemarketing Sales Rule against parties mischaracterizing the commercial nature of their calls;  56 prohibiting a rental car company from using the misleading name “Dollar-a-Day” to lure customers;  57 and disciplining a debt-negotiation company for its false pledge to settle all client accounts for 40-60% of the debt owed. 58 Specific to drip pricing, Policy Integrity points to Commission actions including: the convening of a 2012 conference  59 and the 2019 workshop on tickets, a 2012 warning to hotel operators of potential Section 5 violations through their reservation websites, 60 and a broader declaration by then-Chair Jon Leibowitz that drip-pricing practices do “a huge disservice to American consumers.”  61

The petition identifies the Department of Transportation's 2011 Full Fare Advertising Rule as a useful regulatory precedent for requiring clear indication of “the entire price to be paid.”  62 It also highlights that the District of Columbia  63 and Nebraska  64 have filed parallel suits against Marriott and Hilton, respectively, while the City and County of San Francisco filed suits against the operators of online travel sites JustFly and FlightHub. 65 Congressional leaders recently called on the Commission to act against deceptive and unfair practices related to hidden fees in the event-ticket-sales industry. 66 Policy Integrity argues such piecemeal policies limited to particular sectors or regions cannot substitute for comprehensive nationwide regulation. 67 Policy Integrity's petition outlines the legal bases for determining an act or practice is deceptive, unfair, or an unfair method of competition, concluding that drip pricing falls under each of these categories. 68

The petition also explores at length what benefit-cost analyses may be required to promulgate the rule the petition proposes. 69 While the Commission, as an independent regulatory agency, is not subject to Executive Order 12866, it faces a similar obligation to assess the economic effect of its rulemaking under Section 22 of the FTC Act, 15 U.S.C. 57b-3. Policy Integrity cites as primary benefits of drip-pricing regulation the corresponding decrease in consumer search time and a decrease in overpriced transactions. 70 Policy Integrity considers the primary cost of drip-pricing regulation to come through private-sector compliance in the form of substantial modification of solicitation schemes and online ticket portals, with possible secondary costs from administrative and enforcement efforts. 71 Policy Integrity stresses that, because redistributed costs between buyers and sellers are “monetary payments from one group to another, that do not affect total resources available to society,” these are neither “costs” nor “benefits” in the strict economic sense. 72

Policy Integrity proposes the following rulemaking language:

Comments to Policy Integrity's petition largely supported its effort, with 24 in support and one urging caution. 74 Policy Integrity itself comments on its own petition, focusing on findings from two recent studies: “These studies find that, absent regulation, online platforms have strong incentives to hide fees and that drip pricing lowers consumers' perceived price fairness.”  75

The first study, “Deceptive Features on Platforms,” analyzed “incentives of online platforms to hide additional” mandatory fees, such as service charges, from the market. 76 Platforms have the capability either to hide the mandatory fees or to disclose them transparently to consumers upfront, and the study found, even though the platforms will not themselves receive the hidden fees or commissions, a platform still has “stronger incentives” to hide the fees than sellers do themselves. 77 This is because platforms that hide these additional fees for all sellers make “overall product prices seem lower” and “are more likely to attract more buyers.”  78 Even as sophisticated buyers might avoid these platforms, unsuspecting buyers will still use such platform and raise their revenues. There is a “spillover effect on obscuring platform fees: a platform can shroud seller fees to increase the number of buyers, and that increase in turn incentives platforms to hide their own fees.”  79 The study concludes that policies such as the Policy Integrity petition's upfront pricing model is “likely, in aggregate, to increase consumer surplus.”  80

The second study, “Many a Little Makes a Mickle: Why Do Consumers Negatively React to Sequential Price Disclosure?,” used “eye-tracking data” to analyze consumer reaction to the “timing of price disclosures and the number of sequentially presented surcharges.”  81 The study found sequential final price disclosures both increased “a consumer's perceived price complexity” and “decreased their perceived transparency of a firm's pricing.”  82 Consumers, as a result, find sequential pricing is less fair but upfront disclosure of the final price is “more transparent” and fair. 83 The study concluded drip pricing injures consumers because it increases “the amount of effort they must exert to understand the total price and to compare prices between products and sellers.”  84

The Commission received three comments from industry participants and four from consumer organizations on Policy Integrity's petition. Notably, the National Association of Ticket Brokers urges caution in its comment. 85 As a general matter, “NATB supports fair and transparent live event ticket sales and has supported a requirement of `all-in pricing' which would be the outcome of a prohibition on drip pricing.”  86 NATB warns, however, as it did in the 2019 Commission workshop on online ticket sales, a rule will be effective only if (1) it were required of every ticket seller and (2) there were “rigorous and expeditious enforcement.”  87 The NATB comment also mentions a variety of other issues facing the ticket industry, including transferability, ticket holdbacks when tickets go on sale, cancellation of season tickets, locking tickets in a single platform, deceptive websites, non-transparent fees, bots, and others. The comment letter agrees reform in the ticket market is needed, suggests the Commission take action under its existing authority, and states new federal legislation is needed to provide broader authority to the Commission. 88

On the other hand, the National Consumers League “strongly supports the petition” to promulgate rules governing drip pricing. 89 NCL notes its history of fighting drip pricing in live event ticketing, hotel accommodations, and airline tickets, having joined the Sports Fans Coalition to ask the Commission to prohibit drip pricing for live event ticketing in 2018. 90 The comment argues that, following the Live Nation-Ticketmaster merger in 2010, the “unfair and deceptive practices have gone largely unchecked.”  91 The comment notes that, while drip pricing is particularly prevalent in the live-event, hotel, and airline industries, other industries use drip pricing as well. 92

The U.S. Public Interest Research Group and Education Fund notes in its comment “[t]here are no circumstances where a reasonable person could think it's OK to reveal only part of the cost of a product or service” and “[t]ransparency is a moral obligation.”  93 The comment advocates that promulgation of a rule would ensure other industries would be required to disclose all mandatory fees, like the “full-fare advertising rule.”  94 The comment also notes the CFPB is exploring a similar effort to reduce junk fees charged by banks and other financial institutions. The comment points out a new rule would not control how much businesses charge for their goods and services; it would instead require them to disclose all those charges to the consumer at the outset of a purchase. 95

Travelers United notes it has been very active on the issue of drip pricing for over a decade. 96 The comment emphasizes the Commission has extensively studied the issue of drip pricing and published reports in the past decade. The comment notes “[e]very action has determined that drip pricing is harmful to consumers, and it undermines market competition.”  97 The comment also discusses Travelers United's extensive work with the Department of Transportation to create the Full Fare Advertising Rule, which requires airlines to disclose all mandatory taxes and fees in its advertising of ticket prices. 98 After its passage, several airlines unsuccessfully sued the DOT to overturn the rule. The comment advocates that the Commission must work to close this loophole that “allows hotel drip pricing even when accommodations are sold together with regulated airfares.”  99 Travelers United also discussed its advocacy work with NAAG which resulted in lawsuits by state attorneys general against Marriot and Hilton. The comment notes “American consumers are facing an assault of deceptive fees” and “[w]orse yet, the growth of drip pricing harms not only consumers but also sellers who attempt to be honest and decline participation in the practice.”  100

Consumer Reports likewise has opposed drip pricing for years, describing the practice as “a particularly pernicious form of `bait and switch,' made even more potent with the growing use of the internet for consumer transactions.”  101 Consumer Reports states the Department of Transportation's Full Fare Advertising Rule is a ready model and a good start, “although Consumer Reports to improve transparency for non-mandatory but common ancillary fees, such as for seat assignments and baggage.”  102

Two online ticket sellers, TickPick  103 and TicketNetwork, 104 voice their strong support for the petition and note their websites feature straightforward models that do not hide fees from consumers. Both companies stress that, without Commission intervention, companies that adopt more-straightforward pricing models will continue to play on an uneven playing field. TicketNetwork notes, according to a survey it conducted, “most major ticket marketplaces allow for this all-in model after comments from FTC Commissioner Rebecca Kelly Slaughter . . . indicated support for a move away from drip pricing.”  105 TickPick states it was the first in the industry to offer a “no-fee” marketplace and it has saved consumers more than $50 million by not charging service fees. 106 TickPick expresses that the “base price of a ticket” and the “service” or “convenience fees” are often “contrived by primary and/or secondary ticket sellers to increase consumer demand.”  107 TickPick supports elimination of drip pricing but recommends the proposed language from the petition be modified to “ensure companies are fully apprised of what is required for compliance.”  108 Specifically, the comment suggests two key principles to guide the Commission: (1) the all-in prices should be “prominently disclosed to the consumer on the ticketing platform, as well as in any advertising” before any component prices are broken out; and (2) “all-in” prices should not include taxes or any optional fees that the customer may or may not decide to purchase, and the terms “optional fees,” “service charges,” and “mandatory” or “unavoidable fees” must be carefully defined. 109

Seventeen individual consumers offer comment in support of Policy Integrity's petition. The consumers' comments evince a general sense of frustration with drip pricing, and several directly plea for the Commission to act. As Colleen Welch puts it, “There are few things more irritating when shopping than to have the final price be way more than expected due to mandatory fees.”  110 An anonymous commenter underscores the hardship these fees cause: “As someone making minimum wage, it's impossible to budget and attend these events when prices sky rocket with hidden fees.”  111 Many comments reflect that consumers are generally upset when they feel as if the price is a surprise. Amy Lebetsamer states, “My purchase should be straight-forward and I should know exactly what I'm paying for.”  112 One commenter describes receiving an unwelcome surprise when a Boston hotel slid a piece of paper under her door the night before check-out with a $50 “resort fee” that had not been previously disclosed. 113 Another commenter, Daniel Melling, expresses his dismay after seeing L.A. Lakers basketball tickets advertised as $42.00, he clicked to the checkout page and saw service fees totaling $13.95. 114 Mr. Melling states, “Drip pricing wastes time as I have to take extra steps in online purchases to reach the checkout window before the vendor provides me with a final price.”  115 Many consumers note the lack of transparency among ticket sellers is unfair because consumers are at an information disadvantage. One commenter, Janice Hough, is a travel agent who spent “HOURS” trying to figure out the total price of a trip because of the various additional fees. 116 Commenter Scott Ogawa notes that, if the Commission promulgates a rule banning drip pricing, the rule may become “self-enforcing” because consumers will be irritated by violations of new norms and look to alternative choices. 117 Other individual consumers' comments express their dismay at the practice of drip pricing and urge the Commission to take action to prevent it. 118

The comments received by the CFPB in response to its request for comments on fees imposed by providers of consumer financial products and services express the same frustrations and concerns, albeit in greater volume: The CFPB received 50,007 comments, which suggests drip pricing may be ripe for action. Many commenters submitted comments relaying their frustration with encountering hidden fees when seeking to purchase live event tickets, hotel, and travel accommodations. A graduate student, Ray Stevens, related his frustrations with travel-related companies that hide additional fees, writing, “I don't object to paying fair prices for goods and services, but in order to be responsible for myself and my family, I want to know what I will be charged up front when I do business with, and feel that what I am paying is the actual price of the purchase . . . .”  119 Tens of thousands of other comments offer a similar perspective. This parallel inquiry at the CFPB further reinforces the importance of the rulemaking proceeding initiated by the Commission with this ANPR. The CFPB does not have authority to address drip pricing beyond its jurisdiction of consumer financial products and services, but the Commission can go further and address unfair or deceptive fee practices in interstate commerce.

The Commission finds Policy Integrity's petition and the public comments submitted in response to it persuasive. Accordingly, the Commission, through its publication of this ANPR and a corresponding Order, grants Policy Integrity's petition for rulemaking.

The Commission seeks the broadest participation by the affected interests in the rulemaking. The Commission encourages all interested parties to submit written comments. The Commission also expects affected interests to assist the Commission in analyzing various options and in drafting any proposed rule. After reviewing comments submitted in response to this ANPR, the Commission may proceed with further steps outlined in Section 18 of the FTC Act and Part 1, Subpart B, of the Commission's Rules of Practice.

Members of the public are invited to comment on any issues or concerns they believe are relevant to the Commission's consideration of the proposed rulemaking. In addition to the issues raised above, the Commission solicits public comment on the specific questions identified below. These questions are designed to assist the public and should not be construed as a limitation on the issues on which public comment may be submitted. For all questions, the Commission seeks commenters' views, arguments, experiences, and the qualitative and quantitative data that support or inform their answers. 120 The Commission requests that factual data upon which the comments are based be submitted with the comments.

1. How widespread is the practice of misrepresenting or failing to disclose on any advertisement or marketing the total cost for a good or service for sale? To what extent are total costs misrepresented during the advertising or marketing of a good or service? Provide all available data and evidence that supports your answer, such as empirical data, consumer-perception studies, and consumer complaints.

2. How widespread is the practice of misrepresenting or failing to disclose on any advertisement or marketing the existence of any fees, interest, charges, or costs that cannot be reasonably avoided or are mandatory? To what extent are those mandatory fees misrepresented during the advertising or marketing of a good or service?

3. How widespread is the practice of misrepresenting or failing to disclose clearly and conspicuously on an advertisement or in marketing whether fees, interest, charges, products, or services are optional or required? To what extent is the optional or required nature of a fee, interest, charge, product, or service misrepresented during the advertising or marketing of a good or service? To what extent are such optional or required fees, interest, charges, products, or services related to the product or service that is the primary purpose of the transaction?

4. How widespread is the practice of misrepresenting or failing to disclose clearly and conspicuously on an advertisement or in marketing any material restriction, limitation, or condition that may result in a mandatory charge in addition to the cost of the good or service or that may diminish the consumer's use of the good or service, including the amount the consumer receives? To what extent are those material restrictions, limitations, or conditions misrepresented during the advertising or marketing of the good or service?

5. How widespread is the practice of misrepresenting that a consumer owes payment for any product or service the consumer did not agree to purchase? To what extent are such claims made expressly in written text or oral communications and to what extent are they made indirectly?

6. How widespread is the practice of billing or charging consumers for fees, interest, goods, services, or programs without the consumer's express and informed agreement? To what extent are third parties engaging in such practices, including add-ons and upsells to which consumers did not agree?

7. How widespread is the practice of charging consumers for fees, interest, goods, services, or programs that have little or no added value to the consumer? Are there specific industries or market sectors in which this practice occurs more often? How, if at all, should the value of fees be defined or determined?

8. How widespread is the practice of charging fees for goods or services that consumers would reasonably assume to be included within the overall advertised price? Are there specific industries or market sectors in which this practice occurs more often? Please share any evidence of consumer perception, such as copy tests or surveys.

9. How widespread is the practice of misrepresenting or failing to disclose clearly and conspicuously on an advertisement or in marketing the nature or purpose of any fee, interest, charge, or other costs? To what extent are such claims made expressly and to what extent are they made indirectly?

10. How widespread is the practice of misrepresenting that a fee or charge is a mandatory fee, charge, or tax imposed by a government entity? To what extent are such claims made expressly and to what extent are they made indirectly?

11. How widespread is the practice of misrepresenting or failing to disclose clearly and conspicuously fees or charges for terminating services or contracts? To what extent are those fees misrepresented expressly or indirectly during the marketing of a good or service?

12. For any practices discussed in Questions 1 through 11, above, does the practice cause consumer injury? If so, what type of consumer injury does it cause?

13. For each of the practices described in Questions 1 through 11, above, are there circumstances in which such practices would not be deceptive or unfair? If so, what are those circumstances, and could and should the Commission exclude such circumstances from the scope of any rulemaking? Why or why not?

14. Is there a need for new regulatory provisions to prevent the practices described in Questions 1 through 11, above? If yes, why? If no, why not?

15. How should a rule addressing the practices described in Questions 1 through 11, above, be crafted to maximize the benefits to consumers and to minimize the costs to legitimate businesses?

16. Should a rule addressing the practices described in Questions 1 through 11, above, require businesses to disclose in all advertising one price that encompasses all mandatory component parts, otherwise known as “all-in pricing”? Why or why not? Should any such rule also require that the advertised price include government-imposed taxes or fees? Why or why not?

17. Should a rule addressing the practices described in Questions 1 through 11, above, forbid misrepresentations as to the nature, optionality, value, price, recurrence, or other material features of any fees? Why or why not?

18. Should a rule addressing the practices described in Questions 1 through 11, above, including any rule requiring disclosure of all-in pricing, apply to all industries? Would such a rule be better if it expressly applied only to certain industries? Are there any industries for which such a rule should not apply? Why or why not?

19. How would a rule addressing the practices described in Questions 1 through 11, above, intersect with existing industry practices, norms, rules, laws, or regulations? Are there any existing laws or regulations that would affect or interfere with the implementation of a rule addressing the practices described in Questions 1 through 11, above?

20. Should the Commission consider publishing additional consumer and business education materials or hosting public workshops to reduce consumer harm associated with the practices described in Questions 1 through 11, above? If so, what should such education materials include, and how should the Commission communicate that information to consumers and businesses?

21. Are there other commercial acts or practices involving junk fees or hidden fees that are deceptive or unfair that should be addressed in the proposed rulemaking? If so, describe the practices. How widespread are the practices? Please answer Questions 12 through 20, above, with respect to these practices.

You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before January 9, 2023. Write “Unfair or Deceptive Fees ANPR, R207011” on your comment. Your comment—including your name and your state—will be placed on the public record of this proceeding, including, to the extent practicable, on the website https://www.regulations.gov.

Because of the public health protections and the agency's heightened security screening, postal mail addressed to the Commission will be subject to delay. We strongly encourage you to submit your comments online through the https://www.regulations.gov website. To ensure the Commission considers your online comment, please follow the instructions on the web-based form.

If you file your comment on paper, write “Unfair or Deceptive Fees ANPR, R207011” on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex B), Washington, DC 20580.

Because your comment will be placed on the public record, you are solely responsible for making sure your comment does not include any sensitive or confidential information. In particular, your comment should not contain sensitive personal information, such as your or anyone else's Social Security number; date of birth; driver's license number or other state identification number or foreign country equivalent; passport number; financial account number; or credit or debit card number. You are also solely responsible for making sure your comment does not include any sensitive health information, such as medical records or other individually identifiable health information. In addition, your comment should not include any “[t]rade secret or any commercial or financial information which . . . is privileged or confidential”—as provided in Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and Commission Rule 4.10(a)(2), 16 CFR 4.10(a)(2)—including in particular competitively sensitive information such as costs, sales statistics, inventories, formulas, patterns, devices, manufacturing processes, or customer names.

Comments containing material for which confidential treatment is requested must be filed in paper form, must be clearly labeled “Confidential,” and must comply with Commission Rule 4.9(c), 16 CFR 4.9(c). In particular, the written request for confidential treatment that accompanies the comment must include the factual and legal basis for the request and must identify the specific portions of the comment to be withheld from the public record. See Commission Rule 4.9(c). Your comment will be kept confidential only if the General Counsel grants your request in accordance with the law and the public interest. Once your comment has been posted publicly at https://www.regulations.gov —as legally required by Commission Rule 4.9(b), 16 CFR 4.9(b)—we cannot redact or remove your comment, unless you submit a confidentiality request that meets the requirements for such treatment under Commission Rule 4.9(c), and the General Counsel grants that request.

Visit the Commission's website to read this document and the news release describing it. The FTC Act and other laws the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. The Commission will consider all timely and responsive public comments it receives on or before January 9, 2023. For information on the Commission's privacy policy, including routine uses permitted by the Privacy Act, see https://www.ftc.gov/siteinformation/privacypolicy.

Today we are considering the publication of an advance notice of proposed rulemaking to address the problem of junk fees. “Junk fees” are extra charges associated with unnecessary or worthless services. Companies often fail to disclose these fees up front. Earlier this week, the Commission announced a quintessential junk fee case. According to the complaint, Passport Auto advertised a price for cars that were certified, reconditioned, and inspected. But when people went to buy a car, they were hit with charges for certification, reconditioning, and inspection.

These types of extra or redundant fees can mislead consumers or prevent them from knowing the true cost of a purchase until they've already invested substantial time and energy. At that point, they may feel like it's too late to walk away. Junk fees also prevent consumers from making accurate price comparisons, which means they end up spending more than they expected or wanted to.

These fees don't only harm consumers—they can also force honest businesses to compete on an unfair playing field. A company selling a widget for 25 dollars might lose sales to a company selling a comparable widget for 20 dollars, plus a six-dollar widget-certification fee tacked on at the end.

Junk fees have come to feel like an inevitable fact of life. Consumer Reports found that eighty-two percent of those surveyed had spent money on hidden fees in the previous year. In reality, there's nothing inevitable about this. 1 These fees are a surprisingly recent phenomenon. So-called “resort fees” at hotels, for example, first emerged in the late 1990s. By 2015, they accounted for one-sixth of total hotel revenue. That's $2 billion per year. 2 In higher education and hospitality, fees are increasing faster than tuition or posted room rates. 3

The Commission has a long track record of taking action against junk fees, and that deep experience would inform any potential rulemaking we undertake here. The FTC has regulated junk fees in sector-specific contexts, including telemarketing and funeral homes. It has also brought many enforcement cases, including against junk fees on prepaid phone cards, loan servicing, insurance-related products, and more. Merchants are free to set prices for services rendered. But when they add arbitrary, opaque fees that seem calibrated to squeeze more money out of customers—sometimes without their knowledge, or once it feels too late to back out—consumer protection laws can kick in.

Unfortunately, in areas where there is no specific rule or sector-specific law, the Commission lacks authority to seek penalties against violators or readily get financial compensation for victims. A forward-looking rule classifying certain junk fees as unfair or deceptive could give us that authority, allowing us to make wronged consumers whole and to seek penalties from lawbreakers. That, in turn, would help create a powerful deterrent against imposing junk fees. If we move forward with considering a rulemaking, we will carefully review public comments when deciding whether and how to craft a rule that would protect consumers from these potentially unfair or deceptive practices.

In fact, the public has already played a key role. Last fall, the Commission voted to make it easier for the public to submit petitions to the FTC. 4 One petition that came in concerned “drip pricing,” a business practice companies can use to try and hide junk fees. That petition helped spur the action we're announcing today. The goal of our procedural change was to make the rulemaking process more open and democratic, and I'm glad that we have been able to follow through.

I also want to extend my gratitude to staff for their hard work on this effort. I strongly support moving forward with this ANPR and beginning this process.

I'm sure that to the public some of the work we do at the Commission can seem obscure—only affecting a part of the market they don't really participate in. This matter is emphatically the opposite. There is probably no greater and universal frustration in modern American life than seeing an advertised price for a product or service and then getting to the cashier or online payment page and seeing that price balloon to what can feel like twice as much.

Unfair and deceptive pricing practices aren't just annoying, they can prey on people's sunk costs in a transaction to squeeze even more money out of them at the last minute—effectively raising prices without appearing to do so. Empirical research on hidden fees and drip pricing have suggested that these fees “cause, or even trick, people into buying things they would not otherwise.”  1 In a time when many folks need to make hard choices about what to spend money on this kind of deception is even more unconscionable.

These practices undermine effective competition as well. As I mentioned during our vote for the Earnings Claims ANPR: Markets cannot function effectively without honest and transparent pricing. A market without transparent price signals can encourage deception and rent-seeking incentivizing creative ways to extract wealth instead of providing the goods and services people value.

The FTC has done great work in combating some of these practices. We've addressed mobile cramming charges, phone card charges, and fees in discount programs for goods and travel. We've also deployed our existing rules to combat hidden fees in telemarking scams, funerals, and to prevent companies from billing consumers without authorization. But, as in other areas where we have opened a rulemaking inquiry, case-by-case enforcement has not effectively deterred these practices. Our inquiry into the prevalence and harms of practices like junk-fees, drip-pricing, resort fees, service fees, and others is as necessary as it is timely.

I want to thank BCP's Division of Advertising Practices and the Office of the General Counsel for their partnership and hard work in developing this ANPR. I look forward to hearing more from the public on this matter.

Today the Commission votes to issue an advance notice of proposed rulemaking to address how prices are conveyed to consumers. Before discussing the substance of the ANPR, two procedural issues merit attention. First, the ANPR is based on the submission of a petition for rulemaking submitted by the Institute for Policy Integrity. I encourage consumer and industry groups to monitor the FTC's rulemaking docket and take seriously the public petitions that get published there—yesterday's petition may very well become today's ANPR.

Second, I was given less than three weeks to consider a rulemaking effort that, if adopted, could impact billions or even trillions of dollars in commerce, as well as millions of consumers and companies. I posed dozens of questions, many of which went unanswered. Today's proposal could launch rules that regulate the way prices are conveyed to consumers across nearly every sector of the economy. I understand that President Biden referenced so-called “junk fees” in remarks to the White House Competition Council on September 26, just three weeks ago. 1 Chair Khan sits on that Council. And I recognize that some of these fees may be inadequately disclosed. But manufactured deadlines based on our monthly open commission meeting schedule to demonstrate that the Commission is in lockstep with the Biden Administration should not override our obligation to exercise our significant authority in sober and thoughtful ways. If FTC leadership truly believes that this proposal will result in a rule, then it is irresponsible to shortchange the Commission on the time required to perform our due diligence.

There are kernels of utility in the ANPR that I had hoped to explore with my fellow Commissioners and staff. I agree with ensuring that consumers (1) have access to sufficient information to make informed decisions and (2) are not charged for products or services they did not agree to purchase. I would have looked more favorably on a rulemaking effort narrowly focused on those issues, particularly where we have an enforcement track record. But the version of the ANPR we discuss today is sweeping in its breadth; may duplicate, or contradict, existing laws and rules; is untethered from a solid foundation of FTC enforcement; relies on flawed assumptions and vague definitions; ignores impacts on competition; and diverts scarce agency resources from important law enforcement efforts. For these reasons, I cannot support the issuance of this ANPR.

Given my concerns, I would like to highlight issues on which stakeholder input would be constructive.

• The ANPR explicitly mentions pricing practices in a wide array of industries, including auto financing, phone cards, fuel cards, payday lending, telecommunications, live entertainment, travel (including airlines, hotels, room-sharing, car rentals, and cruises), higher education, financial products and services, telemarketing, funeral services, publishing, insurance, and membership programs. Some of these sectors fall outside the FTC's jurisdiction. Of course, it is likely that a future rule will cover other industries not explicitly discussed in the ANPR, including e-commerce, retail, food services, healthcare, administration and business support, repair services, dating services, apartment rentals, commercial leasing, warehousing, logistics assistance, and professional and technical services. What other markets or industries could be covered by an omnibus pricing disclosure rule? 2

• The GDP of the United States in 2021 totaled roughly $23 trillion dollars. What percentage of the goods and services for sale in the United States would be covered by the ANPR?

• Given the potential scope of this rule, it appears likely to be exercising a claim of authority that concerns an issue of “vast economic and political significance” and thereby could implicate the Major Questions Doctrine discussed in the recent Supreme Court decision, West Virginia v. EPA. 3 What precedent would support the perspective that Congress has clearly empowered the FTC to promulgate a rule that would regulate pricing disclosures for the breadth of good and services identified in the ANPR?

• Do pricing practices and fee disclosures vary across industries and markets? How would a rule requiring that marketing materials explain the purpose of any fees, interest, charges, or other costs work with the FTC's approach to clear and conspicuous disclosures across advertising mediums ( e.g., mobile screens or television ads)? Should the FTC mandate that marketing materials aimed at sophisticated business consumers include the same breadth and depth of fee disclosures as marketing materials targeting an individual consumer?

• Do consumer expectations about pricing practices and fee disclosures for repair services differ from those for healthcare? Across what sectors do consumers have homogenous expectations around pricing and fee disclosures?

• Are the harms from inadequately disclosed fees or illegitimate fees the same in all sectors? Do all industries lend themselves to a uniform pricing regime?

• The ANPR appears to overlap with several existing regulations related to advertising and disclosures enforced by the FTC and/or other expert agencies. How would industry and markets determine which rule controls should conflicts arise?

• How does this ANPR relate to the proposed Motor Vehicle Dealers Trade Regulation Rule, approved by the Commission on June 23, 2022, which focuses on pricing practices and fee disclosures in the automobile industry?

• The Truth in Lending Act (“TILA”) and Regulation Z outline complex credit disclosure requirements for open and closed-end credit, including advertisement terms that trigger disclosures about fees, interest, charges, or other costs. This ANPR considers imposing more stringent requirements by requiring disclosure of all fees, interest, and charges regardless of whether the advertisement contains trigger terms. Are there prevalent unfair or deceptive practices that would support the FTC's adoption of more stringent advertising requirements on the marketing of consumer products, e.g., an Xbox, than the federal government imposes on the marketing of a home loan or credit card?

• The FTC enforces several laws and rules that govern when and how pricing information should be conveyed to consumers, including the Telemarketing Sales Rule (“TSR”), the Funeral Rule, the Restore Online Shoppers' Confidence Act (“ROSCA”), and the Rule Concerning the Use of Prenotification Negative Option Plans (“Negative Option Rule”). Is there evidence that we have been unable to address specific types of deceptive and unfair pricing practices, for example in the marketing of negative option transactions, with these marketing-specific rules? Do we need a rule that covers all transactions? If industry-specific rules have not prevented harm from pricing practices, how would additional rules bring about greater compliance?

• The Funeral Rule's goals are to lower barriers to price competition in the funeral goods and services market and to facilitate informed consumer choice. One way the Funeral Rule helps achieve these goals is to require funeral providers to “unbundle” the goods and services they sell and instead to offer them on an itemized basis. But this ANPR takes the opposite approach by favoring up-front, all-in pricing. How might this ANPR impact price transparency and competition?

• Section 18 rules must be based on “prevalent” deceptive or unfair practices. Notably, this ANPR references several potentially deceptive and unfair fees that have been the subject of FTC workshops, business guidance, and even investigations, but not enforcement actions. Can the FTC meet the requisite showing of prevalence without any underlying FTC enforcement?

• What evidence, beyond law enforcement, can be used to demonstrate prevalence? Can a showing of prevalence be satisfied by a workshop or roundtable? News articles?

• The ANPR defines the term “junk fees” to include “fees for goods or services that are deceptive or unfair . . . whether or not the fees are described as corresponding to goods or services that have independent value to the consumer.” How should the Commission determine whether fees correspond to goods and services that consumers value? What percentage of consumers should be the threshold? A majority of consumers? A significant minority?

• Do fees sometimes viewed as unnecessary by consumers reflect attempts by businesses to recover incremental costs? Is it reasonable for businesses to impose fees to recover incremental costs? What percentage of incremental costs can a business recover before it becomes a “junk fee”?

• The ANPR defines “junk fees” to include “goods or services that consumers would reasonably assume to be included within the overall advertised price.” What evidence does the FTC need to demonstrate consumer expectations about what services, products, or fees are covered by a published price? Should the FTC be required to demonstrate quantitative or qualitative measures of consumer expectations?

• The ANPR defines “hidden fees” as fees that “are deceptive or unfair, including because they are disclosed only at a later stage in the consumer's purchasing process or not at all.” At what point in a transaction should fees be disclosed to consumers? Is disclosing a fee before a consumer makes a purchase too late? Should disclosures occur at the same point in a transaction regardless of the industry or market? Why or why not?

• The ANPR indicates that the Commission is exploring the “costs and benefits of a rule that would require upfront inclusion of any mandatory fees whenever consumers are quoted a price for a good or service.” How would this proposal work for dynamic fees, like shipping and handling, that are based on consumer input?

• The ANPR asserts that “junk fees . . . facilitate inflation.” What evidence points to a connection between fees and inflation?

• To what extent does competition discipline suboptimal pricing practices?

• Would a government requirement for all-in pricing facilitate coordination among regulated companies in the same industry?

• Could a potential rule incentivize all-in pricing and the bundling of products and services, which would then require consumers to pay for goods and services they may not want or need?

• In 2022, including proposals that I anticipate will be voted out during the open Commission meeting, the FTC has initiated the rulemaking process for a total of six new rules. These massive regulatory undertakings require substantial FTC resources. To what extent does our current rulemaking agenda divert resources from our primary law enforcement mandate? Are there other risks associated with our apparent attempt to become a powerful legislature?

○ Are there existing or emerging threats to consumers and competition we are not pursuing because resources are focused on rules instead of cases?

○ Will the credibility of the FTC be tarnished if we pursue broad rulemaking efforts without qualitative and quantitative evidence of consumer injury?

The Commission is publishing this advance notice of proposed rulemaking pursuant to Section 18 of the Federal Trade Commission (“FTC”) Act, 15 U.S.C. 57a, and the provisions of Part 1, Subpart B of the Commission's Rules of Practice, 16 CFR 1.7-1.20, and 5 U.S.C. 553. This authority permits the Commission to promulgate, modify, and repeal trade regulation rules that define with specificity acts or practices that are unfair or deceptive in or affecting commerce within the meaning of Section 5(a)(1) of the FTC Act, 15 U.S.C. 45(a)(1).

Fake and deceptive reviews and other endorsements have long been problematic, and we have no reason to believe the market will correct this problem on its own. The commercial incentives to engage in such misconduct can be large. It can be difficult for anyone—including consumers, competitors, platforms, and researchers—to distinguish real from fake and determine the truth in this area. Further, some platforms may have mixed incentives to deal effectively with the problematic reviews and, despite some platforms purporting to take enforcement of problematic reviews seriously, fake and deceptive reviews continue to flourish on those very platforms. The sheer number of people engaged in fraudulent or deceptive reviews and endorsements makes them even more difficult to combat, especially given such content is often created by individuals or small companies, some of whom are located abroad.

Although the Commission has brought several cases involving reviews and other endorsements under Section 5 of the FTC Act, 15 U.S.C. 45, our current remedial authority is limited. Monetary relief is no longer available under Section 13(b), 1 disgorgement is not available under Section 19(b), 15 U.S.C. 57b(b), and, while the Commission has deployed new tools to combat this problem, in many cases, it remains difficult to obtain monetary relief. 2 Under these circumstances, the availability of a civil penalty remedy may provide a potent deterrent. We believe initiating a Magnuson-Moss rulemaking to address certain types of clear Section 5 violations involving reviews and endorsements would benefit consumers, help level the playing field, and not burden legitimate marketers. The rule would be designed to deter bad actors, simplify our enforcement burdens by spelling out prohibitions plainly, and subject violators to civil penalties.

The Commission has well-established guidance on endorsements and testimonials. In particular, the Endorsement Guides reportedly remain very helpful to legitimate actors in the marketplace, 3 but Commission guides are not enforceable regulations. Truly bad actors will not be deterred by Commission guidance, but the possibility of substantial civil penalties changes the economic incentives and may provide greater deterrence as to both legitimate and bad actors.

The Commission requests input on whether and how it should use its authority under Section 18 of the FTC Act, 15 U.S.C. 57a, to address certain inarguably deceptive or unfair commercial acts or practices involving reviews or other endorsements. The Commission does not propose to cover every issue addressed in the Endorsement Guides. Specifically, the Commission proposes addressing the following practices, many of which have been the subject of Commission investigations or law enforcement actions: (a) reviews or endorsements by people who do not exist, who did not actually use or test the product or service, or who are misrepresenting their experience with it;  4 (b) review hijacking, where a seller steals or repurposes reviews of another product; (c) marketers offering compensation or other incentives in exchange for, or conditioned on, the writing of positive or negative consumer reviews;  5 (d) owners, officers, or managers of a company: (i) writing reviews or testimonials of their own products or services, or publishing testimonials by their employees or family members, which fail to provide clear and conspicuous disclosures of those relationships, or (ii) soliciting reviews from employees or relatives without instructing them to disclose their relationships; 6 (e) the creation or operation of websites, organizations, or entities that purportedly provide independent reviews or opinions of products or services but are, in fact, created and controlled by the companies offering the products or services;  7 (f) misrepresenting that the consumer reviews displayed represent most or all of the reviews submitted when, in fact, reviews are being suppressed based upon their negativity;  8 (g) the suppression of customer reviews by physical threat or unjustified legal threat;  9 or (h) selling, distributing, or buying, followers, subscribers, views, and other indicators of social media influence. 10 The Commission hopes that by focusing on practices most clearly and inarguably deceptive or unfair, it can streamline its rulemaking, benefit consumers, and not burden legitimate marketers.

The Commission seeks comment on, among other things, the prevalence of each of the above practices, the costs and benefits of a rule that would address them, and alternatives to such a rulemaking, such as the publication of additional consumer and business education. In their replies, commenters should provide any available evidence and data that supports their position, such as empirical data, consumer perception studies, and consumer complaints.

The Commission seeks the broadest participation by the affected interests in the rulemaking. To that end, the Commission will proceed through an “open rulemaking,” which will provide all affected interests numerous opportunities to submit comments and to participate in the rulemaking process. The Commission encourages all interested parties to submit written comments.

The Commission also expects the affected interests to assist the Commission in analyzing various options and in drafting a proposed rule. The Commission believes public workshop conferences to discuss the various issues involving the rule are a productive and efficient means to develop the record and explore various alternatives. The Commission will also use public workshop conferences to assist the Commission in drafting a proposed rule.

In order to facilitate the greatest participation by the public in the rulemaking process, Commission staff will hold several public workshop conferences to discuss the issues noted above. Staff will announce a schedule of these conferences after the close of the comment period.

Members of the public are invited to comment on any issues or concerns they believe are relevant or appropriate to the Commission's consideration of the proposed rulemaking. The Commission requests factual data upon which the comments are based be submitted with the comments. In addition to the issues raised above, the Commission solicits public comment on the specific questions identified below. These questions are designed to assist the public and should not be construed as a limitation on the issues on which public comment may be submitted. Please identify the evidence and data source(s) that support each of your answers.

(1) How widespread is the marketing of products or services using:

a. reviews or other endorsements by nonexistent individuals or by those who did not actually use or test the product or service;

b. reviews or other endorsements by individuals who are misrepresenting their experiences with a product or service;

c. review hijacking (where a seller steals or repurposes reviews from another product);

d. paid or incentivized consumer reviews that were required to be positive or required to be negative (if of a competitor's product);

e. consumer reviews written by the owners, officers, or employees of the company offering the product or service, or their family members; or

f. Websites or other organizations or devices that purportedly provide independent reviews or opinions of products or services but are in fact created and controlled by the companies offering the products or services?

(2) How widespread is the suppression of negative consumer reviews:

a. on retailer websites because the retailers filter out and do not publish negative reviews; or

b. by marketers threatening the authors of the reviews (other than through the form contract provisions prohibited by the Consumer Review Fairness Act)?

(3) How widespread is:

a. the sale of followers, subscribers, views, and other indicators of social media influence;

b. the purchase and use for commercial purposes of followers, subscribers, views, and other indicators of social media influence?

(4) For each of the practices described in Questions 1 through 3, above, does the practice cause consumer injury? If so, what evidence demonstrates such practices cause consumer injury?

(5) For each of the practices described in Questions 1 through 3, above, does the practice cause injury to competition? If so, what evidence demonstrates such practices cause injury to competition?

(6) For each of the practices described in Questions 1 through 3, above, are there circumstances in which such practices would not be deceptive or unfair? If so, what are those circumstances and could and should the Commission exclude such circumstances from the scope of any rulemaking? Why or why not?

(7) Please provide any evidence concerning consumer perception of, or experience with, consumer reviews or other endorsements relevant to the practices described in Questions 1 through 3, above.

(8) What existing laws and regulations, other than the FTC Act, if any, cover the practices described in Questions 1 through 3, above? How do those laws affect consumers? How do those laws affect businesses, particularly small businesses?

(9) What actions, if any, have platforms taken to address the practices described in Questions 1 through 3, above? Have those actions been effective in reducing consumer harm associated with the practices described in Questions 1 through 3, above? Why or why not?

(10) What actions have others taken to facilitate or enable the practices described in Questions 1 through 3, above? For example, what types of services specifically allow marketers to engage in these practices, and who is providing these services?

(11) Is there a need for new regulatory provisions to prevent the practices described in Questions 1 through 3, above? If yes, why? If no, why not? What evidence supports your answer?

(12) How should a rule addressing the practices described in Questions 1 through 3, above, be crafted to maximize the benefits to consumers while minimizing the costs to businesses under either approach? What evidence supports your answer?

(13) Do current or impending changes in technology or market practices affect whether and how a rulemaking should proceed? If so, what are such changes and how do they affect whether and how a rulemaking should proceed?

(14) Are there foreign or international laws, regulations, or standards addressing reviews or endorsements the Commission should consider as to whether and how a rulemaking should proceed? If so, what are they? Should the Commission consider adopting, or avoiding, any of these? If so, why? If not, why not?

(15) Should the Commission consider additional consumer and business education to reduce consumer harm associated with the practices described in Questions 1 through 3, above? If so, what should such education materials include, and how should the Commission communicate that information to consumers and businesses?

(16) What alternatives to regulations should the Commission consider when addressing the practices described in Questions 1 through 3, above? Would those alternatives obviate the need for regulation? If so, why? If not, why not? What evidence supports your answer?

(17) Are there other commercial acts or practices involving reviews or other endorsements that are inarguably deceptive or unfair that should be addressed in the proposed rulemaking? If so, describe the practices. How widespread are the practices? Please answer Questions 4 through 8, 10, 11, 14, and 15 with respect to the practices.

You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before January 9, 2023. Write “Reviews and Endorsements ANPR, P214504” on your comment. Your comment—including your name and your state—will be placed on the public record of this proceeding, including, to the extent practicable, on the https://www.regulations.gov website.

Because of the agency's heightened security screening, postal mail addressed to the Commission will be subject to delay. We strongly encourage you to submit your comments online through the https://www.regulations.gov website. To ensure the Commission considers your online comment, please follow the instructions on the web-based form.

If you file your comment on paper, write “Reviews and Endorsements ANPR, P214504” on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex B), Washington, DC 20580.

Because your comment will be placed on the public record, you are solely responsible for making sure your comment does not include any sensitive or confidential information. In particular, your comment should not contain sensitive personal information, such as your or anyone else's Social Security number; date of birth; driver's license number or other state identification number or foreign country equivalent; passport number; financial account number; or credit or debit card number. You are also solely responsible for making sure your comment does not include any sensitive health information, such as medical records or other individually identifiable health information. In addition, your comment should not include any “[t]rade secret or any commercial or financial information which . . . is privileged or confidential”—as provided in Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule § 4.10(a)(2), 16 CFR 4.10(a)(2)—including in particular competitively sensitive information such as costs, sales statistics, inventories, formulas, patterns, devices, manufacturing processes, or customer names.

Comments containing material for which confidential treatment is requested must be filed in paper form, must be clearly labeled “Confidential,” and must comply with FTC Rule § 4.9(c). In particular, the written request for confidential treatment that accompanies the comment must include the factual and legal basis for the request and must identify the specific portions of the comment to be withheld from the public record. See FTC Rule § 4.9(c). Your comment will be kept confidential only if the General Counsel grants your request in accordance with the law and the public interest. Once your comment has been posted publicly at www.regulations.gov —as legally required by FTC Rule § 4.9(b)—we cannot redact or remove your comment, unless you submit a confidentiality request that meets the requirements for such treatment under FTC Rule § 4.9(c), and the General Counsel grants that request.

Visit the FTC website to read this document and the news release describing it. The FTC Act and other laws the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. The Commission will consider all timely and responsive public comments it receives on or before January 9, 2023. For information on the Commission's privacy policy, including routine uses permitted by the Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

Online shopping runs on reviews. When you're in a brick-and-mortar store, you can see the inventory. If it's a couch, you can sit on it. If it's a TV, you can watch it. But when you're shopping online, it's much harder to know what you're actually buying. That's why reviews are so crucial. If 500 other people have bought something and say it works, you can have a lot more confidence.

But what if those people were paid to leave those positive reviews? Or what if they're bots? What if the seller is hiding a thousand one-star reviews?

That's the dilemma when you shop online. Reviews are essential, but it's hard to know when they can be trusted. Precisely because of the importance of reviews, firms can face powerful incentives to game the system. Businesses have been caught leaving positive reviews for their own products or services, suppressing negative ones, and boosting bad reviews of their competitors. 1 The incentives extend beyond the seller of the product itself. The platforms that host reviews may also, in some instances, benefit indirectly from fake ratings and endorsements and have financial incentives to turn a blind eye to misconduct that brings in revenue.

These practices don't only harm the consumers who place their trust in fake reviews. They also pollute the marketplace and put honest businesses at a competitive disadvantage.

The Commission has brought several enforcement actions to address this issue. In January, for example, the Commission settled allegations that the fast-fashion company Fashion Nova had suppressed negative reviews. 2 And in August, the Commission, along with several state attorneys general, sued Roomster for allegedly flooding its rental listing marketplace with phony reviews. 3

In addition to enforcement activity, the Commission has used other authorities to try to address market-wide problems with fake reviews. Last year, the Commission put more than 700 companies on notice regarding its litigated decisions in this area, which triggered the FTC's penalty offense authority. 4 This past May, the Commission also proposed revisions to tighten its guidelines for advertisers who use endorsements and reviews and to warn social media platforms about inadequate disclosure.

With today's advance notice of proposed rulemaking, the Commission is seeking comment from the public on whether rulemaking would be an appropriate way to address the problem more systemically. A rulemaking here would provide benefits beyond the agency's other powers. The Supreme Court decision in AMG Capital Management, LLC v. FTC substantially limited our ability to seek monetary relief for harmed consumers. 5 A rule against fake reviews could enable us to obtain civil penalties and return money to consumers injured as a result of deceptive or unfair reviews and endorsements.

I am grateful to staff for their hard work on this ANPR. And I am happy to cast my vote in favor of beginning this process. It's critical that the Commission use all its authorities in order to prohibit unfair or deceptive practices—and to help consumers who have been harmed by them. I look forward to hearing from the public and stakeholders as the agency embarks on the rulemaking process.

Online reviews and endorsements of products and services play a powerful role in influencing consumer choices. From 1996 to 2018, 233 million product reviews were posted on Amazon alone. 1 Last month, my own fridge unexpectedly broke down and I had to scramble to find a repairman. Like many consumers, I relied on online reviews and other endorsements to decide whom to hire for this important task. The importance of consumer reviews to modern commerce makes the problem of fake and deceptive reviews even more pernicious. Companies like Yelp flag about 25% of reviews as “less reliable” and a recent report found that 10.7% of all Google reviews are fake. 2 These practices harm not only consumers, but also mom-and-pop businesses, like my new and excellent appliance repairman, who rely on online reviews to attract new customers.

So, I'm pleased to support today's publication of this Advance Notice of Proposed Rulemaking on Reviews and Endorsements to help ensure that people have accurate information about the products and services they buy. The ANPR asks important questions about the prevalence of these practices. Our inquiry here asks questions about practices from fake reviews by non-existent people, or people who have never actually used the product, to review suppression, and the practice of buying followers or subscribers as an indicator of social media influence.

I hope that an open inquiry into these practices will also be illuminating for the Commission. I'm troubled by the lack of transparency by platforms and the subsequent difficulty in addressing consumer harm. Companies like Amazon, for example, claim that less than 1% of their reviews are inauthentic, but this stands in stark contrast to consumer experiences and third-party estimates. 3 Deceptive reviews waste people's time and money. A recent survey has found that consumers estimated having wasted about $125 in the prior year due to “inaccurate” reviews. 4

The FTC's work on fake reviews and endorsements is a great example of our “every tool in the toolbox” approach to deterring unlawful conduct in the market. Our Endorsements Guides have been helpful in setting expectations for market participants about our enforcement priorities in this area. After the loss of our Section 13(b) authority the Commission announced a revised Notice of Penalty Offenses Concerning Deceptive or Unfair Conduct around Endorsements and Testimonials last year, allowing the agency to collect civil penalties from those law violators to whom we have provided notice. And now, with this vote, we've begun the process of considering rules that could help ensure that consumers can trust the information they use to buy goods and services, online and offline.

I want to thank BCP's Division of Advertising Practices and the Office of the General Counsel for their partnership and hard work in developing this ANPR. I look forward to hearing more from the public.

Today the Commission votes to issue an Advance Notice of Proposed Rulemaking (“ANPR”) seeking comment on a proposed rule addressing fake and deceptive reviews and endorsements. The FTC has challenged these practices, and platforms have sought to combat them, but deception continues to flourish. I agree that these practices are unlawful, and I have supported the FTC's enforcement and guidance in this area. Notably, the Commission recently authorized additional tools to address these issues—tools that we were chastised for not deploying sooner. Given recent deployment of those tools, as well as ongoing efforts to update our Endorsement Guides, I do not believe that initiating yet another Section 18 rulemaking is the best use of our scarce resources, particularly given the nature of the harm at issue here. And the opportunity cost of launching yet another rulemaking is high, because the division overseeing this rule is also charged with enforcement in the opioids arena. For these reasons, I dissent.

I appreciate that our remedial authority is limited. The Commission cannot obtain civil penalties for first-time violations of Section 5 of the FTC Act, and the Supreme Court's decision in AMG ended the Commission's use of Section 13(b) to obtain equitable monetary relief. 1 But the harm that results from the deception at issue is speculative in nature. The ANPR acknowledges that redress in matters involving deceptive review practices can be difficult to calculate, and we know that many retailers and platforms have procedures in place to screen out and reject fake reviews. An endorsement or a review may sway a consumer to purchase a product or service, in part, and should be truthful. But, in cases involving deceptive endorsements or fake reviews, there often is no allegation that the product or service did not perform as represented. The endorsement or review in many cases is not the central claim. 2

Moreover, the Commission already has a multi-pronged strategy in place to combat this issue. To educate businesses regarding their obligations, the Commission has published Guides Concerning the Use of Endorsements and Testimonials (“Endorsement Guides”) and a companion business guidance piece. Earlier this year, the Commission sought comment on potential updates and revisions to the Endorsement Guides. 3 In October 2021, the Commission issued a Notice of Penalty Offenses which, as explained in the ANPR, may enable the Commission to obtain civil penalties from marketers that use fake or deceptive endorsements or reviews. 4 Commissioner statements issued at that time lauded the resurrection of these types of Notices, describing them as unique tools that the Commission had allowed to languish and that would to allow staff to pursue the full range of actions against bad actors. 5 While the ANPR now downplays their likely impact, the agency invested non-trivial resources in drafting the Notice of Penalty Offenses, identifying potential recipients, and serving it on more than 700 entities. 6 Rather than churning out another proposed rule, perhaps we should stay the course on these initiatives and devote the incremental resources to enforcement in other critical areas.

The opportunity cost of yet another rulemaking should not be understated. Importantly, as noted above, the division that has responsibility for endorsements also oversees enforcement of the Opioid Addiction Recovery Fraud Prevention Act. Last year, after an 18-month delay not caused by staff, the Commission announced its first case under this statute. 7 For the second consecutive year, deaths from overdoses rose dramatically and now exceed the country's peak deaths from AIDS, car crashes, and guns. 8 Our citizens who suffer from opioid addiction are some of the most vulnerable people in this country; we could use our power and authority to great benefit by devoting more resources to this area.

Although I disagree with its issuance, it is worth noting that staff's approach to this ANPR is laudable. Rather than employing an “everything but the kitchen sink” approach, the ANPR is carefully tailored to focus on practices that are likely to be clear violations of Section 5. For the reasons described in this statement, I cannot support its issuance.

Accordingly, I dissent.

The proposed rule on audit standards used an incorrect RIN. The RIN used (RIN 3141-AA72) is assigned to Self Regulation of Class II Gaming Activities. The correct reference for the audit standards regulations is RIN 3141-AA68.

In proposed rule FR Doc. 2022-11482, beginning on page 33091 in the issue of June 1, 2022, make the following correction. On page 33091, correct the RIN in the document heading to read “RIN 3141-AA68”.

I. Table of Abbreviations CFR Code of Federal Regulations COTP Captain of the Port DHS Department of Homeland Security FR Federal Register NPRM Notice of proposed rulemaking § Section U.S.C. United States Code II. Background, Purpose, and Legal Basis

Skanska-Corman-McLean, Joint Venture notified the Coast Guard that it will be conducting demolition of the old Governor Harry W. Nice/Senator Thomas “Mac” Middleton Memorial (US-301) Bridge, which will occur from 12:01 a.m. on February 1, 2023, to 11:59 p.m. on February 14, 2023. The bridge is located on the Potomac River, at mile 43.3, between Charles County, MD and King George County, VA. The segment of the old bridge over waters that include the steel truss sections between Piers 13 and 16 (including the main span over the federal navigation channel) requires the use of explosives, and debris removal and hydrographic surveying equipment. Marine equipment, including barges, positioned in the Potomac River will be used to support the bridge demolition and debris removal operation. This operation also requires the use of a temporary commercial mooring buoy in the Potomac River south of the old bridge where the explosives barge will be kept. This operation will impede vessels requiring the use of the federal navigation channel. Hazards from the demolition and debris removal work include accidental discharge of explosives, dangerous projectiles, hanging ropes or cables, and falling objects or debris. The Captain of the Port, Maryland-National Capital Region (COTP) has determined that potential hazards associated with the demolition and removal of the old Governor Harry W. Nice/Senator Thomas “Mac” Middleton Memorial (US-301) Bridge would be a safety concern for anyone within or near the federal navigation channel.

The purpose of this rulemaking is to ensure the safety of vessels and the navigable waters within or near the federal navigation channel at the old Governor Harry W. Nice/Senator Thomas “Mac” Middleton Memorial (US-301) Bridge before, during, and after the scheduled event. The Coast Guard is proposing this rulemaking under authority in 46 U.S.C. 70034 (previously 33 U.S.C. 1231).

The COTP is proposing to establish a safety zone from 12:01 a.m. on February 1, 2023, to 11:59 p.m. on February 14, 2023. The safety zone would cover the following areas:

Area 1. All navigable waters of the Potomac River, encompassed by a line connecting the following points beginning at 38°21′51.57″ N, 076°59′14.53″ W, thence south to 38°21′41.35″ N, 076°59′12.33″ W, thence west to 38°21′37.90″ N, 076°59′38.25″ W, thence north to 38°21′48.14″ N, 076°59′40.45″ W, and east back to the beginning point, located between Charles County, MD and King George County, VA.

Area 2. All navigable waters of the Potomac River, within 1,500 feet of the explosives barge located in approximate position 38°21′21.47″ N, 076°59′45.40″ W.

The duration of the zone is intended to ensure the safety of vessels and these navigable waters before, during, and after the scheduled demolition and debris removal. Except for marine equipment and vessels operated by Skanska-Corman-McLean, Joint Venture, or its subcontractors, no vessel or person would be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative. The term designated representative also includes an employee or contractor of Skanska-Corman-McLean, Joint Venture for the sole purposes of designating and establishing safe transit corridors, to permit passage into or through the safety zone, or to notify vessels and individuals that they have entered the safety zone and are required to leave.

The COTP will notify the public that the safety zone will be enforced by all appropriate means to the affected segments of the public, as practicable, in accordance with 33 CFR 165.7(a). Such means of notification will also include, but are not limited to, Broadcast Notice to Mariners. Vessels or persons violating this rule are subject to the penalties set forth in 46 U.S.C. 70036 (previously codified in 33 U.S.C. 1232) and 46 U.S.C. 70052 (previously codified in 50 U.S.C. 192). The regulatory text we are proposing appears at the end of this document.

We developed this proposed rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. This NPRM has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, the NPRM has not been reviewed by the Office of Management and Budget (OMB).

This regulatory action determination is based on the size, location and time of year of the safety zone. The temporary safety zone is approximately 700 yards in width and 350 yards in length. This safety zone would impact a small designated area of the Potomac River for 14 total days, but we anticipate that there would be no vessels that are unable to conduct business. Excursion vessels and commercial fishing vessels are not impacted by this rulemaking. Excursion vessels do not operate in this area, and commercial fishing vessels are not impacted because of their draft. Some towing vessels may be impacted, but bridge project personnel have been conducting outreach throughout the project in order to coordinate with those vessels. This safety zone would be established outside the normal recreational boating season for this area, which occurs during the summer season. Additionally, vessel traffic, including recreational vessels, not required to use the navigation channel would be able to safely transit around the safety zone. Such vessels may be able to transit to the east or the west of the federal navigation channel, as similar vertical clearance and water depth exist under the next bridge span to the east and west. Moreover, the Coast Guard would issue Local Notices to Mariners and a Broadcast Notice to Mariners via VHF-FM marine channel 16 about the zone.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities.

While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section IV.A above, this proposed rule would not have a significant economic impact on any vessel owner or operator.

If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this proposed rule would have a significant economic impact on it, please submit a comment (see ADDRESSES ) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule. If the proposed rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call or email the person listed in the FOR FURTHER INFORMATION CONTACT section. The Coast Guard will not retaliate against small entities that question or complain about this proposed rule or any policy or action of the Coast Guard.

This proposed rule would not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132 (Federalism), if it has a substantial direct effect 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. We have analyzed this proposed rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.

Also, this proposed rule does not have tribal implications under Executive Order 13175 (Consultation and Coordination with Indian Tribal Governments) because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this proposed rule has implications for federalism or Indian tribes, please call or email the person listed in the FOR FURTHER INFORMATION CONTACT section.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this proposed rule would not result in such an expenditure, we do discuss the potential effects of this proposed rule elsewhere in this preamble.

We have analyzed this proposed rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule involves a safety zone lasting 14 total days that would prohibit entry within a portion of the Potomac River. Normally such actions are categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A preliminary Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the ADDRESSES section of this preamble. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to call or email the person listed in the FOR FURTHER INFORMATION CONTACT section to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places, or vessels.

We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.

Submitting comments. We encourage you to submit comments through the Federal Decision Making Portal at https://www.regulations.gov. To do so, go to https://www.regulations.gov, type USCG-2022-0895 in the search box and click “Search.” Next, look for this document in the Search Results column, and click on it. Then click on the Comment option. If you cannot submit your material by using https://www.regulations.gov, call or email the person in the FOR FURTHER INFORMATION CONTACT section of this proposed rule for alternate instructions.

Viewing material in docket. To view documents mentioned in this proposed rule as being available in the docket, find the docket as described in the previous paragraph, and then select “Supporting & Related Material” in the Document Type column. Public comments will also be placed in our online docket and can be viewed by following instructions on the https://www.regulations.gov Frequently Asked Questions web page. We review all comments received, but we will only post comments that address the topic of the proposed rule. We may choose not to post off-topic, inappropriate, or duplicate comments that we receive.

Personal information. We accept anonymous comments. Comments we post to https://www.regulations.gov will include any personal information you have provided. For more about privacy and submissions to the docket in response to this document, see DHS's eRulemaking System of Records notice (85 FR 14226, March 11, 2020).

For the reasons discussed in the preamble, the Coast Guard is proposing to amend 33 CFR part 165 as follows:

I. Table of Abbreviations CFR Code of Federal Regulations COTP Captain of the Port Columbia River DHS Department of Homeland Security FR Federal Register NPRM Notice of proposed rulemaking § Section U.S.C. United States Code II. Background, Purpose, and Legal Basis

On September 20, 2022, the City of Richland, WA notified the Coast Guard that it will be conducting a fireworks display from 8 to 8:30 p.m. on December 2, 2022 and December 3, 2022. The fireworks are to be launched from a pier located on the Columbia River near Howard Amon Park Waterfront, 80 Lee Boulevard, Richland, WA 99352 at approximate location 46°16′29″ N; 119°16′10″ W. Hazards from firework displays include accidental discharge of fireworks, dangerous projectiles, and falling hot embers or other debris. The Captain of the Port Columbia River (COTP) has determined that potential hazards associated with the fireworks to be used in this display would be a safety concern for anyone within a 600-foot radius of the launch site.

The purpose of this rulemaking is to ensure the safety of vessels and the navigable waters within a 600-foot radius of the fireworks launch site before, during, and after the scheduled event. The Coast Guard is proposing this rulemaking under authority in 46 U.S.C. 70034 (previously 33 U.S.C. 1231).

The COTP is proposing to establish a safety zone from 7:30 to 9 p.m. on December 2, 2022 and December 3, 2022. The safety zone would cover all navigable waters within 600-feet of the pier located on the Columbia River near Howard Amon Park Waterfront on 80 Lee Boulevard, Richland, WA 99352, at approximate location 46°16′29″ N; 119°16′10″ W. The duration of the zone is intended to ensure the safety of vessels and these navigable waters before, during, and after the scheduled 8 to 8:30 p.m. fireworks display. No vessel or person would be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative. The regulatory text we are proposing appears at the end of this document.

We developed this proposed rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. This NPRM has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, the NPRM has not been reviewed by the Office of Management and Budget (OMB).

This regulatory action determination is based on the size, location, and duration of the safety zone. Vessel traffic would be able to safely transit around this safety zone which would impact a small designated area of the Columbia River for less than 2 hours during the evening when vessel traffic is normally low. Moreover, the Coast Guard would issue a Broadcast Notice to Mariners via VHF-FM marine channel 16 about the zone, and the rule would allow vessels to seek permission to enter the zone.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities.

While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section IV.A above, this proposed rule would not have a significant economic impact on any vessel owner or operator.

If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this proposed rule would have a significant economic impact on it, please submit a comment (see ADDRESSES ) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule. If the proposed rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call or email the person listed in the FOR FURTHER INFORMATION CONTACT section. The Coast Guard will not retaliate against small entities that question or complain about this proposed rule or any policy or action of the Coast Guard.

This proposed rule would not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132 (Federalism), if it has a substantial direct effect 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. We have analyzed this proposed rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.

Also, this proposed rule does not have tribal implications under Executive Order 13175 (Consultation and Coordination with Indian Tribal Governments) because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this proposed rule has implications for federalism or Indian tribes, please call or email the person listed in the FOR FURTHER INFORMATION CONTACT section.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this proposed rule would not result in such an expenditure, we do discuss the potential effects of this proposed rule elsewhere in this preamble.

We have analyzed this proposed rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule involves a safety zone lasting 2 hours that would prohibit entry within 600 feet of a fireworks launch site. Normally such actions are categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A preliminary Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the ADDRESSES section of this preamble. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to call or email the person listed in the FOR FURTHER INFORMATION CONTACT section to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places, or vessels.

We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.

Submitting comments. We encourage you to submit comments through the Federal Decision Making Portal at https://www.regulations.gov. To do so, go to https://www.regulations.gov, type USCG-2022-0898 in the search box and click “Search.” Next, look for this document in the Search Results column, and click on it. Then click on the Comment option. If you cannot submit your material by using https://www.regulations.gov, call or email the person in the FOR FURTHER INFORMATION CONTACT section of this proposed rule for alternate instructions.

Viewing material in docket. To view documents mentioned in this proposed rule as being available in the docket, find the docket as described in the previous paragraph, and then select “Supporting & Related Material” in the Document Type column. Public comments will also be placed in our online docket and can be viewed by following instructions on the https://www.regulations.gov Frequently Asked Questions web page. We review all comments received, but we will only post comments that address the topic of the proposed rule. We may choose not to post off-topic, inappropriate, or duplicate comments that we receive.

Personal information. We accept anonymous comments. Comments we post to https://www.regulations.gov will include any personal information you have provided. For more about privacy and submissions to the docket in response to this document, see DHS's eRulemaking System of Records notice (85 FR 14226, March 11, 2020).

For the reasons discussed in the preamble, the Coast Guard is proposing to amend 33 CFR part 165 as follows: