[Congressional Record Volume 144, Number 46 (Thursday, April 23, 1998)]
[Senate]
[Pages S3540-S3541]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. D'AMATO (for himself and Mr. Reid):
  S. 1977. A bill to direct the Secretary of Transportation to conduct 
a study and issue a report on predatory and discriminatory practices of 
airlines which restrict consumer access to unbiased air transportation 
passenger service and fare information; to the Committee on Commerce, 
Science, and Transportation.


         the consumer access to travel information act of 1998

  Mr. D'AMATO. Mr. President, I rise today to offer legislation that 
will benefit consumers and small businessmen and women who must travel 
by air. The bill I am introducing today, the Consumer Access to Travel 
Information Act of 1998, will reverse an increasingly anti-consumer, 
anti-competitive trend in airline travel across the country.
  For three years, the major airlines have been moving to gain more 
control over the airline travel ticket distribution system. While this 
effort may seem harmless, the ramifications to consumers are 
significant. Currently, most air travelers get their information from 
one of the 33,000 travel agencies around the country. These agencies 
provide consumers with unbiased and comprehensive air travel 
information, i.e., the best flight at the cheapest fare. Without that 
independent source of travel information, there is no doubt that 
consumers will be paying more, in many cases, substantially more for 
air travel.
  The Consumer Access to Travel Information Act of 1998 is a 
reasonable, and balanced bill that is significant not only for what it 
does, but also for what it doesn't do. This legislation would simply 
require the Secretary of Transportation to investigate the behavior of 
major airlines, including discriminatory and predatory practices of 
airlines which target travel agents, other independent distributors, 
and small airlines. This is authority that the Secretary currently has 
under the Airline Deregulation Act of 1978, but has thus far not 
elected to use. This bill makes certain this investigation is 
undertaken. If it is determined that anti-competitive, discriminatory 
or predatory practices exist, the Secretary must report to Congress 
those steps the Department intends to take to address such practices.
  What this legislation does not do is regulate the airline industry. 
In fact, this legislation is a wake up call for the industry. As the 
for-profit hospital and HMO industries discovered, if consumers are 
disregarded, and anti-competitive activities are encouraged, the heavy 
hand of regulators and anti-trust remedies will soon follow. This 
investigation by DOT may bring to light practices that the airlines 
themselves may not even realize exist. It is far better to have DOT 
look into these issues and have them addressed now, than to have 
Congress begin pursuing more proactive legislative remedies in the 
future.
  Travel agents provide critical services to air travelers, and air 
travelers depend heavily upon travel agents to provide an accurate, 
broad selection of schedules, fare quotes, and ticketing services for 
all airlines. Agents quote schedules and fares, and provide ticketing 
services, to consumers on major U.S. airlines, small U.S. airlines, 
large and small international airlines, and start-up airlines.
  The travel agency community and other independent ticket distributors 
are the only efficient, independent and comprehensive sources of 
information for airline travel options. Travel agencies and other 
independent distributors comprise a considerable portion of the small 
business sector in the United States, employing over 250,000 people. 
Over 50% of travel agencies are owned by women or minorities.
  Every industry study conducted since the 1960's has concluded that 
travel agents can process reservation and ticketing transactions in any 
medium more efficiently than can airlines. Just this year, one of the 
world's largest and most efficient airlines announced the closing of 
all of its U.S. ticket offices in favor of the efficiencies of the U.S. 
travel agency industry.
  So why are multi-billion dollar airlines putting the squeeze on the 
mom and pop travel agencies? Unfortunately, the answer lies beyond just 
sucking more revenue from the travel agent. The biggest threat to the 
current airline oligopoly is the young, upstart airlines. Wherever 
these airlines operate, the major air carriers' prices are competitive. 
Wherever these airlines do not operate, the consumer pays monopoly 
prices. Small domestic airlines, many international airlines, and 
start-up airlines heavily depend upon the travel agency distribution 
system. There is no alternate distribution system available to these 
types of airlines. A less ubiquitous, less independent travel agency 
means less business for, and less competition from, the smaller 
airlines.
  As part of the effort to consolidate their market power, the airlines 
began to focus on the ticket distribution system. Twice in the last 
three years, the major airlines have initiated and supported reductions 
in travel agent commissions on the sale of air travel. In February 
alone, total travel agent commissions on domestic travel dropped 21%. 
More reductions from airlines, and greater travel agent losses, are 
expected. The number of travel agencies has decreased for the first 
time since World War II, and many more closings are expected as agency 
operating reserves are exhausted.
  As travel agents are forced out of the industry and airlines secure 
more direct consumer business, consumer alternatives will continue to 
decrease, resulting in significantly higher consumer travel costs. 
Major airlines have generally misrepresented the reason for agency 
commission cuts, citing a need to reduce expenses and pass savings on 
to consumers. In fact, airline ticket prices have steadily increased, 
there have been no consumer benefits, airlines are posting record 
profits quarter-after-quarter, and consumers are paying the highest 
airfares in history.
  Commissions are not the only way in which the airlines are using 
anti-competitive practices to pressure the travel agents. For example, 
confidential business information generated by travel agents, such as 
marketing, bookings, and sales data, is routinely shared by the 
airlines.
  Considering airlines regard themselves as competitors of travel 
agents, this is an intolerable situation for the travel agents.
  Another example of unfair treatment is the use of promotions, 
concessions, and benefits that airlines can pass on to consumers that 
are denied to travel agents. In addition the airlines operate the 
Airlines Reporting Corporation (ARC), which controls both who can 
become a travel agent and the settlement of funds between travel agents 
and the airlines.
  Internet travel servicing, one ticket distribution alternative which 
holds great promise for consumers, is also being dominated by the major 
air carriers. As a practical matter, travel agents have already been 
excluded by airlines from selling tickets booked by electronic means. 
As with conventional distribution, Internet consumers have very limited 
ability to view consolidated electronic schedule and fare information, 
much less interpret the rules, restrictions and penalties attached to 
such lower fares as might be found.
  That is why, Mr. President, Congress must pass the Consumer Access to 
Travel Information Act of 1998 before consumers are hurt further, and 
before there is an overwhelming cry to reregulate air travel.
  Mr. President, I urge my colleagues to support this legislation. I 
ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1977

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Consumer Access to Travel 
     Information Act of 1998''.

[[Page S3541]]

     SEC. 2. FINDINGS.

       The Congress finds the following:
       (1) To foster and preserve competition, national 
     transportation policy should support the continuation of 
     widespread, convenient, and efficient public access to 
     unbiased comparative air transportation passenger service and 
     fare information.
       (2) The traveling public relies upon unbiased comparative 
     air transportation passenger service and fare information 
     provided by independent retail travel agents and other 
     independent sources.
       (3) Concentrations of market power, restrictions on entry, 
     and predatory and discriminatory practices of airlines impair 
     consumer access to independently distributed unbiased 
     comparative information about air transportation passenger 
     services or fares.
       (4) If not corrected, such practices will seriously 
     restrict consumer access to the independent and unbiased 
     service and fare information provided by travel agents and 
     other independent sources.

     SEC. 3. POLICY.

       Section 40101(a) of title 49, United States Code, is 
     amended by adding at the end the following:
       ``(16) Ensuring that consumers may obtain unbiased 
     comparative information from travel agents and other 
     independent sources about air transportation passenger 
     services and fares in an efficient and convenient 
     manner.''.

     SEC. 4. STUDY; REPORT.

       (a) Study.--Not later than 60 days after the date of the 
     enactment of this Act, the Secretary of Transportation 
     (hereinafter in this Act referred to as the ``Secretary'') 
     shall undertake a study of the availability to consumers of 
     adequate unbiased information about air transportation 
     passenger services and fares. The study shall include an 
     investigation of the following practices:
       (1) Air carrier policies that deter or prevent travel 
     agents or other independent sources from using competitively 
     efficient phone systems, computer reservation systems, or 
     other electronic systems to communicate or consummate 
     transactions with the public.
       (2) Air carrier policies that deter or prevent travel 
     agents and other independent sources from offering the public 
     the same or greater concessions, benefits, or services than 
     those offered by air carriers directly to those consumers.
       (3) Discriminatory collective or joint operation of assets 
     used to offer concessions, benefits, or services to the 
     public while denying comparable access to such concessions, 
     benefits, or services through travel agents and other 
     independent sources, including joint sales activities, denial 
     of competitive tools, and denial of distribution 
     efficiencies.
       (4) Sharing of competitively significant sales transaction 
     data in violation of the confidentiality interests of the 
     travel agents or other independent sources that generated 
     such data.
       (5) As the Secretary considers appropriate, any other 
     practices which may impair consumer access to independently 
     distributed unbiased comparative information about air 
     transportation passenger services or fares.
       (b) Report.--Not later than 1 year after the date of the 
     enactment of this Act, the Secretary shall transmit to 
     Congress a report of the conclusions of the study required by 
     subsection (a).

     SEC. 5. CEASE AND DESIST ORDERS.

       The Secretary shall, after notice and hearing, order any 
     air carrier or other party engaged in any practice or policy 
     which constitutes a predatory, unfair, or deceptive practice 
     or unfair method of competition which restricts the 
     widespread, convenient, and efficient access by the public to 
     unbiased comparative air transportation passenger service and 
     fare information or the sale, booking, or distribution of air 
     transportation passenger services or products, to cease and 
     desist therefrom.
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