[Federal Register Volume 68, Number 30 (Thursday, February 13, 2003)]
[Proposed Rules]
[Pages 7325-7327]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-3606]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 68, No. 30 / Thursday, February 13, 2003 / 
Proposed Rules  

[[Page 7325]]



DEPARTMENT OF TRANSPORTATION

Office of the Secretary

14 CFR Part 255

[Docket No. OST-2003-14484]
RIN 2105-AD24


Extension of Computer Reservations Systems (CRS) Regulations

AGENCY: Office of the Secretary, Department of Transportation.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Department is proposing to amend its rules governing 
airline computer reservations systems (CRSs), 14 CFR part 255, by 
changing the rules' expiration date from March 31, 2003, to January 31, 
2004. If we do not revise the expiration date, the rules will terminate 
on March 31, 2003. This proposed extension of the current rules would 
keep them in effect while we carry out our reexamination of the need 
for CRS regulations. We have tentatively concluded that most of the 
current rules should be maintained on a temporary basis because they 
may be necessary for promoting airline competition and protecting 
consumers, although the Department may determine in its reexamination 
that the need for most or all of the rules has ended. The Department 
has previously extended the rules from their original December 31, 
1997, expiration date, most recently to March 31, 2003.

DATES: Comments must be submitted on or before February 28, 2003. Late 
filed comments will be considered to the extent possible.

ADDRESSES: To make sure your comments and related material are not 
entered more than once in the docket, please submit them (marked with 
Docket Number OST-2003-4484) by only one of the following means:
    (1) By mail to the Docket Management Facility, U.S. Department of 
Transportation, room PL-401, 400 Seventh Street, SW., Washington, DC 
20590-0001.
    (2) By hand delivery to room PL-401 on the Plaza level of the 
Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 
a.m. and 5 p.m., Monday through Friday, except Federal holidays. The 
telephone number is 202-366-9329.
    (3) Electronically through the Web Site for the Docket Management 
System at http://dms.dot.gov. Comments must be filed in Docket OST-
2003-14484.
    However, due to security procedures in effect since October 2001 on 
mail deliveries, mail received through the Postal Service may be 
subject to delays. Commenters should consider using an express mail 
firm to ensure the timely filing of any comments not submitted 
electronically or by hand.

FOR FURTHER INFORMATION CONTACT: Thomas Ray, Office of the General 
Counsel, 400 Seventh St., SW., Washington, DC 20590, (202) 366-4731.
    Electronic Access: You can view and download this document by going 
to the webpage of the Department's Docket Management System (http://dms.dot.gov/). On that page, click on ``search.'' On the next page, 
type in the last four digits of the docket number shown on the first 
page of this document. Then click on ``search.'' An electronic copy of 
this document also may be downloaded by using a computer, modem, and 
suitable communications software from the Government Printing Office's 
Electronic Bulletin Board Service at (202) 512-1661. Internet users may 
reach the Office of the Federal Register's home page at: http://www.nara.gov/fedreg and the Government Printing Office's database at: 
http://www.access.gpo.gov/nara/index.html.

SUPPLEMENTARY INFORMATION: We adopted rules governing CRS operations, 
14 CFR part 255, because almost all airlines operating in the United 
States relied on the CRSs in marketing their airline services and each 
system was then controlled by one or more airlines or airline 
affiliates. 57 FR 43780, September 22, 1992. We found then that rules 
were necessary to ensure that each of the airlines and airline 
affiliates that controlled a system did not use the system to unfairly 
prejudice the competitive position of other airlines and to ensure that 
travel agents and their customers could obtain accurate and unbiased 
information from the systems. Our rules contained a sunset date to 
ensure that we would reexamine whether the rules remained necessary 
and, if so, whether they were effective.
    As contemplated by the sunset date provision, we began a proceeding 
to reexamine whether the rules were necessary and effective by issuing 
an advance notice of proposed rulemaking. 62 FR 47606, September 10, 
1997.
    We later issued a supplemental advance notice of proposed 
rulemaking that asked the parties to update their comments. 65 FR 
45551, July 24, 2000.
    We recently issued a notice of proposed rulemaking where we 
tentatively concluded that most of the rules may remain necessary, at 
least in the short term, although we also proposed to eliminate some 
rules and to change others. 67 FR 69366, November 15, 2002. Our notice 
contains a lengthy and detailed discussion of the rulemaking issues, 
including our tentative findings on the relevant features of the 
airline distribution and CRS businesses. Comments and reply comments on 
our tentative findings on the need for CRS regulation and our proposals 
are due March 16 and May 15, 2003, respectively. 67 FR 72869, December 
9, 2002.
    By this notice we are proposing to extend the rules' expiration 
date to January 31, 2004, so that they will remain in force while we 
complete the rulemaking where we are reexamining the existing CRS 
rules. We have established a date for comments in that rulemaking 
proceeding that is only two weeks before the rules' current expiration 
date, and the reply comments are due several weeks after the current 
sunset date. We clearly cannot complete that rulemaking by March 31. 
Allowing the rules to sunset may be contrary to the public interest. 
Extending the sunset date will give us time to complete our 
reexamination of the rules as promptly as possible, so that the rules 
are updated to reflect current industry conditions and economic 
realities.
    We have set a 15-day comment period so that we can publish a final 
decision on this proposal before the rules' current expiration date.

Notice of Proposed Rulemaking

    Our notice of proposed rulemaking set forth our analysis and 
preliminary findings on the nature of the airline distribution and CRS 
businesses and on whether CRS rules appear necessary or

[[Page 7326]]

unnecessary. Important changes are occurring in the airline 
distribution system, especially the Internet's erosion of the airlines' 
dependence on the systems, and these developments may eliminate the 
need for many or all of our rules. 67 FR 69376-63977. Nonetheless, we 
tentatively concluded that at present rules should be maintained to 
protect airline competition and consumers. We have requested comment on 
whether we can eliminate some rules since airlines may have more 
bargaining leverage against the systems than we have found in past 
rulemakings, 67 FR 69368, and we will consider comments contending that 
additional rules can be eliminated or that the rules have become 
unnecessary.
    Our notice of proposed rulemaking established a 60-day comment 
period and a 30-day reply comment period. Sabre and 18 other parties 
jointly asked us to extend the comment period by 60 days and the reply 
comment period by 30 days. We granted that request because providing 
the additional time was reasonable, due to the complexity of the 
issues, the length of our notice of proposed rulemaking, and the 
inclusion of three major holidays within the comment period. 67 FR 
72869, December 9, 2002. Giving the parties adequate time for preparing 
comments will help us, since their comments should then be more 
thorough. The parties' petition to extend the comment period also 
included a request to extend the sunset date to September 30, 2003. We 
stated that we saw no reason to rule on that request and that we would 
consider that issue early this year. 67 FR 72870.
    More recently Sabre filed a petition for a fact hearing. Sabre 
alleged that our notice of proposed rulemaking did not set forth an 
adequate factual basis for our proposals. We will address Sabre's 
request in a separate notice.

Proposed Extension of the Rules' Sunset Date

    We have previously extended the sunset date five times, most 
recently to March 31, 2003. 62 FR 66272, December 18, 1997; 64 FR 
15127, March 30, 1999; 65 FR 16808, March 30, 2000; 66 FR 17352, March 
30, 2001; and 67 FR 14846, March 28, 2002.
    We are again proposing to extend the expiration date for our CRS 
rules, to January 31, 2004, in order to maintain the rules while we 
complete our reexamination of the need for the rules and their 
effectiveness. The time needed for the parties' preparation of comments 
on our proposed rules, for our consideration of their comments and 
drafting of a final rule, and for the review by the Office of 
Management and Budget (``OMB'') will prevent us from issuing revised 
final rules by March 31, 2003. By changing the sunset date, we would 
preserve the status quo until we determine which rules, if any, should 
be adopted. We have tentatively determined that doing so would be in 
the public interest.
    As noted above, in our notice of proposed rulemaking we tentatively 
concluded that the rules appear to be necessary, at least in the near 
term, to protect airline competition and consumers against potentially 
unreasonable and unfair CRS practices, despite the on-going changes in 
airline distribution and the CRS business, although those changes may 
well eliminate the need for CRS rules in the longer term. Furthermore, 
our obligation under 49 U.S.C. 40105(b), formerly section 1102(a) of 
the Federal Aviation Act, then codified as 49 U.S.C. 1502(a), to act 
consistently with the United States' obligations under bilateral air 
services agreements may justify a short-term continuation of the rules. 
67 FR 69384. We may decide in our rulemaking that the elimination of 
all or most of the rules would be consistent with our bilateral 
agreement obligations. We have asked the parties to comment on that 
issue. See, e.g., 67 FR 69399.
    In addition, any expiration of the current rules could be 
disruptive, since systems, airlines, and travel agencies have been 
conducting their operations in the expectation that each system will 
comply with the rules. Our preliminary regulatory impact assessment 
tentatively concluded that the continuation of the existing rules would 
not impose substantial costs on the systems. 67 FR 69421. If the rules 
are effective, they may also lower the costs for airline participants 
and increase the efficiency of travel agency operations. Thus, we 
tentatively believe that we should maintain the CRS rules in effect for 
10 more months, during which we intend to make our final decision on 
whether CRS rules should be readopted and, if so, with what changes. As 
stated above, we recognize the importance of adopting final rules that 
reflect current conditions in the CRS and airline distribution 
businesses, and we intend to complete our reexamination of our rules as 
soon as reasonably possible.

Regulatory Process Matters

Regulatory Assessment

    This rulemaking is a significant regulatory action under section 
3(f) of Executive Order 12866 and has been reviewed by the Office of 
Management and Budget under that order. The proposal is also 
significant under the regulatory policies and procedures of the 
Department of Transportation, 44 FR 11034.
    Maintaining the current rules for an additional 10 months should 
not, however, burden the systems with significant costs. Our notice of 
proposed rulemaking includes a preliminary regulatory assessment that 
explains why the existing rules do not appear to impose a significant 
burden on the systems or their users. 67 FR 69418-69423. We think the 
regulatory assessment included in our notice of proposed rulemaking 
should be applicable to our proposal to extend the rules' sunset date 
and that no new regulatory impact statement appears to be necessary. 
However, we will consider comments from any party on that analysis 
before we make this proposal final.
    This rule would not impose unfunded mandates or requirements that 
would have any impact on the quality of the human environment.

Small Business Impact

    Congress enacted the Regulatory Flexibility Act of 1980, 5 U.S.C. 
601 et seq., to ensure that small entities are not unnecessarily and 
disproportionately burdened by government regulations. The act requires 
agencies to review proposed regulations that may have a significant 
economic impact on a substantial number of small entities. For purposes 
of this rule, small entities include smaller U.S. airlines and smaller 
travel agencies.
    This notice of proposed rulemaking sets forth the reasons for our 
proposed extension of the rules' expiration date and the objectives and 
legal basis for that proposed rule.
    Our notice of proposed rulemaking on our overall reexamination of 
the CRS rules contains a tentative regulatory flexibility analysis on 
the rules' impact. That analysis appears to be valid for our proposed 
extension of the rules' termination date. Accordingly, we adopt that 
analysis as our tentative regulatory flexibility statement. We will 
consider any comments filed on that analysis in response to this 
proposal.
    Our proposed rule contains no direct reporting, record-keeping, or 
other compliance requirements that would affect small entities. There 
are no other Federal rules that duplicate, overlap, or conflict with 
our proposed rules.
    Interested persons may address our tentative conclusions under the 
Regulatory Flexibility Act in their comments submitted in response to 
this notice of proposed rulemaking.

[[Page 7327]]

    I certify under section 605(b) of the Regulatory Flexibility Act (5 
U.S.C. et seq.) that this regulation will not have a significant 
economic impact on a substantial number of small entities.

Paperwork Reduction Act

    This proposal contains no collection-of-information requirements 
subject to the Paperwork Reduction Act, Public Law No. 96-511, 44 
U.S.C. chapter 35.

Federalism Assessment

    This proposed rule has been reviewed in accordance with the 
principles and criteria contained in Executive Order 13132, dated 
August 4, 1999, and it has been determined that this action does not 
have 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. 
This proposed rule will not limit the policymaking discretion of the 
States. Nothing in this proposal would directly preempt any State law 
or regulation. We are proposing this amendment primarily under the 
authority granted us by 49 U.S.C. 41712 to prevent unfair methods of 
competition and unfair and deceptive practices in the sale of air 
transportation. We believe that the policy set forth in this proposed 
rule is consistent with the principles, criteria, and requirements of 
the Federalism Executive Order and the Department's governing statute. 
Comments on these conclusions are welcomed and should be submitted to 
the docket.

List of Subjects in 14 CFR Part 255

    Air carriers, Antitrust, Consumer protection, Reporting and record-
keeping requirements, Travel agents.

    Accordingly, the Department of Transportation proposes to amend 14 
CFR part 255 as follows:

PART 255--[AMENDED]

    1. The authority citation for part 255 continues to read as 
follows:

    Authority: 49 U.S.C. 40101, 40102, 40105, 40113, 41712.

    2. Section 255.12 is revised to read as follows:


255.12.  Termination.

    The rules in this part terminate on January 31, 2004.

    Issued in Washington, DC on February 7, 2003, under authority 
delegated by 49 CFR 1.56a(h)2.
Read C. Van de Water,
Assistant Secretary for Aviation and International Affairs.
[FR Doc. 03-3606 Filed 2-12-03; 8:45 am]
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