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DOT/OST | RIN: 2105-AC65 | Publication ID: Fall 2003 |
Title: Computer Reservations System Regulations Comprehensive Review | |
Abstract: The Department has regulated computer reservations systems owned by airlines or airline affiliates that are used by travel agencies. The current rules are designed to prevent the systems from unreasonably prejudicing the competitive position of other airlines and to ensure that travel agencies can provide accurate and unbiased information to the public. The Department is reexamining its rules to see whether they should be readopted and, if so, whether they should be changed in response to greater use of the Internet in airline reservations and ticketing and changes in the industry. The Department is also reviewing its policies on the requirements for disclosing fares and travel agency service fees by travel agencies. The Department has issued a notice of proposed rulemaking that tentatively concluded that most of the rules should be readopted, possibly with changes, for comment on other options, including terminating most or all of the rules. As part of this action, we are looking at ways to lessen impacts on small entities. | |
Agency: Department of Transportation(DOT) | Priority: Other Significant |
RIN Status: Previously published in the Unified Agenda | Agenda Stage of Rulemaking: Final Rule Stage |
Major: No | Unfunded Mandates: No |
CFR Citation: 14 CFR 255 14 CFR 399 | |
Legal Authority: 49 USC 41712 49 USC 40101(a) 49 USC 40113(a) 49 USC 40105 |
Legal Deadline:
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Statement of Need: The Department's existing rules require the Department to reexamine whether the rules are necessary and effective. In addition, two developments since the Department's last review of rules necessitate a reexamination. Those developments are the growing role of the Internet in airline distribution and the decline in airline control of the systems. A number of airlines obtain a large share of their bookings from their own Web sites, online travel agencies account for a significant share of all airline bookings, and no system operating in the United States is controlled by any U.S. airline. |
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Summary of the Legal Basis: The Department has the authority under 49 U.S.C. 41712 to prohibit unfair and deceptive practices and unfair methods of competition in the sale of air transportation by airlines and ticket agents. The Department accordingly may prohibit conduct by airlines and ticket agents that is likely to cause deception or violate the antitrust laws or antitrust principles. The original CRS rules were affirmed in United Air Lines v. CAB, 766 F.2d 1107 (7th Cir. 1985). |
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Alternatives: The Department will consider alternatives ranging from allowing some or all of the rules to expire at their sunset date to readopting the rules with some additional provisions. The Department has issued a notice of proposed rulemaking asking for comment on whether the Department should readopt most of the existing rules, except the rules prohibiting systems from charging airlines discriminatory fees and the rule requiring airlines with a system ownership interest to sell their services through competing systems. The Department also asked for comment on whether the rules should be phased out or eliminated, and on whether the rules should be strengthened in several respects. |
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Anticipated Costs and Benefits: The Department included a preliminary regulatory evaluation in its notice of proposed rulemaking. |
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Risks: The Department found in its last overall review of the rules that the systems had the ability and potential incentives to engage in conduct that could prejudice airline competition and cause consumers and their travel agents to receive misleading and inaccurate information on airline services. Systems had also been able to engage in practices that would deny airlines and travel agencies a reasonable opportunity to use alternative electronic services that would provide information and booking capabilities. The rules could also impose excessive costs on the systems and airlines. The Department asked for comment on whether the risks still exist in light of on-going industry developments and, if so, whether the costs imposed by the rules outweigh the benefits provided by the rules. |
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Timetable:
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Additional Information: The extensions for the existing rule are under RINs 2105-AC75 and 2105-AD00 and AD09. | |
Regulatory Flexibility Analysis Required: Yes | Government Levels Affected: None |
Small Entities Affected: Businesses | Federalism: No |
Included in the Regulatory Plan: Yes | |
Agency Contact: Thomas Ray Office of General Counsel Department of Transportation Office of the Secretary C-30, 400 Seventh Street SW. , Washington, DC 20590 Phone:202 366-4731 Email: tom.ray@ost.dot.gov |