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OST-97-3014

Travel Agent Comments

America West Airlines, Inc. (Petition for Rulemaking, Limit CRS Vendor Charges to Booking Fees / Comments in Response to ANPRM CRS)

OST-97-3014 | OST-97-2881 | October 14, 1997

Petition of America West Airlines for Rulemaking

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This petition proposes modest amendments to the CRS rules in Part 255 of the Department's Economic Regulations designed to mitigate the adverse effects of the CRS vendor charging practices that have evolved since the Department's 1992 review of those rules. CRS vendors now exploit their market power over participating carriers which pay for the booking transactions by encouraging abusive and fictitious bookings by travel agents on a CRS and requiring participating carriers to pay for them. As described in detail in this Petition, the CRS vendors have developed pricing policies which marry a requirement that participating carriers pay booking fees for unnecessary and abusive CRS transactions with incentive programs provided by the vendors to travel agents which foster the abusive CRS usage. These abusive practices include fictitious, speculative and duplicative bookings as well as passive bookings, which may be used to generate bogus reservations or improper fares and other transactions of no benefit to the participating carrier. By use of this pricing strategy, commonly referred to as either transactional or net segment pricing, participating carriers are forced to pay for a multitude of CRS transactions which are unrelated to whether any passenger travels on the airline. Thus, participating carriers are subsidizing the CRS-owning carriers through millions of dollars in excessive payments for these improper and abusive bookings. In addition, the CRS vendors further exploit their market power by refusing requests from carriers to terminate the capacity for travel agents to make passive bookings, the principal source of improper charges, or to take action to prevent other improper uses of the CRSs. These practices result, among other things, in the spoilage of airline inventory and improper over-booking situations, which, in turn, raise participating carrier costs and cause consumer harm through higher fares and delayed or unavailable flights.

Counsel: America West and Baker Hostetler, Joanne Young, 202-861-1532


Computer Reservations System Regulations

OST-97-3014 | OST-97-2881 | Published in the Federal Register November 7, 1997

Request for Comments

The Department is inviting interested persons to comment on a petition for rulemaking filed by American West Airlines that requests two new rules governing computer reservations systems (CRSs). America West asks the Department to amend its CRS rules (14 CFR Part 255) to include a prohibition against certain CRS practices that allegedly impose higher booking fee costs on airlines and enable travel agents to make transactions that damage an airline's ability to control its inventory. The Department invites persons wishing to comment on America West's proposal to include those comments in their responses to the Department's advance notice of proposed rulemaking in Docket OST-97-2881.

By: Patrick Murphy


Computer Reservations System (CRS) Regulations

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Issued July 17, 2000
Posted in Federal Register on July 24, 2000
Supplemental Advanced Notice of Proposed Rulemaking Computer Reservations System Regulations

The Department is inviting interested persons to submit supplemental comments in this proceeding where the Department is reexamining its rules on computer reservations systems. The Department is issuing this supplemental advance notice for two reasons: to invite parties to update the comments submitted earlier in this proceeding and to address the impact of industry developments that have occurred since the comments were filed, and to invite them to comment on whether the Department should consider adopting rules governing the use of the Internet for airline distribution. DATES: Comments must be submitted on or before September 22, 2000. Reply comments must be submitted on or before October 23, 2000.

By:  Bradley Mims


Computer Reservation System (CRS) Regulations

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July 24, 2000 Cited Material - Newswire/Magazine Articles Concerning the Internet Travel Industry Computer Reservation System (CRS) Regulations

Cited Material submitted by Tom Ray, Office of the Assistant General Counsel for Litigation.  

By:  DOT, Assistant General Counsel for Litigation, Tom Ray


Computer Reservation System (CRS) Regulations

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August 11, 2000 Comments of Donald Pevsner Computer Reservation System (CRS) Regulations

By:  Donald Pevsner


Computer Reservation System (CRS) Regulations

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August 29, 2000 Comments of the Air Carrier Association Computer Reservation System (CRS) Regulations

By:  ACA, Edward Faberman, 202.639.7502


Computer Reservation System (CRS) Regulations

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September 20, 2000
Electronic Submission
Comments of the American Society of Travel Agents Computer Reservation System (CRS) Regulations

By:  ASTA, Paul Ruden

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September 21, 2000 Comments of the Consumers Union Computer Reservation System (CRS) Regulations
    Attachment:  Consumer Reports Travel Letter - October 2000  

Consumers Union is concerned with the potential for the presentation of biased information by all sellers of airline tickets -- both on and off-line travel agents. Despite the declining ownership of CRSs by airlines, biased or inaccurate information is a major barrier to price competition in this market, because competition depends, in part, upon accurate and unbiased information regarding available air travel tickets. As discussed above, DOT has the clear authority to prohibit unfair or deceptive practices in the sale of air transportation. Consequently, we believe it imperative that DOT exercise this authority to promulgate new CRS rules that impose a non-bias requirement on all systems engaged in, or used for, searching and booking passenger air travel arrangements.

Counsel:  Consumers Union, Janell Mayo Duncan


Computer Reservation System Regulations

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September 22, 2000 Initial Comments of Amadues Global Travel Distribution Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)
    Attachments:  
    Service List  

Counsel:  Amadeus and Steptoe Johnson, David Coburn, 202-429-8063

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September 21, 2000   Comments of The Antitrust Institute Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

By:  Albert Foer

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September 22, 2000   Comments of Alaska Airlines and Horizon Airlines Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

Counsel:  Squire Sanders, Marshall Sinick, 202-626-6600

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September 22, 2000   Comments of America West Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

Counsel:  America West and Baker Hostetler, Joanne Young, 202-861-1532

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September 22, 2000   Comments of American Airlines

Scanned Copy

Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)
    Exhibits  
    Service List  

Counsel:  American, Bruce Wark, 817.967.5647, bruce.wark@aa.com 

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September 22, 2000   Comments of Association of Asia Pacific Airlines Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

Counsel:  Global Aviation, Charles Chambers, 202.457.0212

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September 22, 2000   Comments of British Airways Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

Counsel:  Boros Garofalo, Don Hainbach, 202.822.9070

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September 22, 2000   Supplemental Comments of Continental Airlines Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

Counsel: Continental and Crowell Moring, Bruce Keiner, 202-624-2500, rbkeiner@cromor.com

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September 22, 2000   Comments of Expedia Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

Counsel:  Expedia and Preston Gates, Donald Kaplan, 202-628-1700

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September 22, 2000   Comments of Galileo International, L.L.C Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)
    Exhibits  
    Service List  

Counsel:  Covington Addis, Carolyn Corwin 202.662.6000

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September 22, 2000   Comments of Interactive Travel Services Association Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

By:  Antonella Pinalto

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September 22, 2000   Comments of Lufthansa Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

Counsel:  Lufthansa, Arthur Molins

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September 22, 2000   Comments of Midwest Express Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

Counsel:  Silverberg Goldman, Robert Silverberg

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September 22, 2000   Comments of OAG Worldwide Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

Counsel:  Baker Hostetler, Joanne Young, 202-861-1532

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September 22, 2000   Comments of Orbitz

Scanned Copy - Part 1
Scanned Copy - Part 2

Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)
    Exhibit A: ONLINE TRAVEL AGENCIES' AFFILIATIONS WITH THE TOP 10 INTERNET SITES

Exhibit BStatement of Daniel M. Kasper

Scanned Copy

 
    Service List  

Counsel:  Zuckert Scoutt, Frank Costello, 202.298.8660, fjcostello@zsrlaw.com 

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September 22, 2000   Comments of Qantas Airways, Limited Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

Counsel:  Squire Sanders, James Dick, 202-626-6600

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September 22, 2000   Comments of United Air Lines Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)
    Service List  

Counsel:  United and Wilmer Cutler, Bruce Rabinovitz, 202-663-6960, brabinovitz@wilmer.com 

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September 22, 2000   Comments of Worldspan, L.P. Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)
    Service List  

Counsel:  Zuckert Scoutt, Charles Simpson, 202.298.8660


Computer Reservations System Regulations

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September 25, 2000   Supplemental Comments of Delta Air Lines Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

Counsel:  Delta and Shaw Pittman, Robert Cohn, 202-663-8060

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September 22, 2000   Comments of Marshall Fein Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

By:  Marshall Fein

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September 22, 2000   Comments of Northwest Airlines Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

Counsel:  Northwest, Glenn Fuller, 612.726.1231, glenn.fuller@nwa.com 

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September 22, 2000   Comments of Sabre Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

Counsel:  Sabre, Sterling Miller, stirling.miller@sabre.com 


Computer Reservations System Regulations

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September 22, 2000   Comments of American Express Travel Related Services Company  Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

By:  American Express Travel, Sarah Wynn, 212.640.5774

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September 22, 2000 Comments of Midwest Express Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

Counsel:  Silverberg Goldman, Robert Silverberg

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September 22, 2000   Comments of the National Business Travel Association Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

By:  NBTA, Marianne McInerney, 703.684.0836

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September 22, 2000   Comments of Northwest Airlines Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

Counsel:  Northwest, Glenn Fuller, 612.726.1231, glenn.fuller@nwa.com 

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September 22, 2000   Comments of the United States Travel Agent Registry Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

Counsel:  USTAR, Bruce Bishins, 416.922.6332, bruce@ustar.com 

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September 22, 2000   Comments of Travelocity.com Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)
    Exhibits:  Internet Ads, Associate Agreement  

Counsel:  Andrew Steinberg, 817.785.8108, andy@travelocity.com 

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September 26, 2000 Motion for Leave to File Late of Woodside Travel Trust Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)
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September 26, 2000 Comments of Woodside Travel Trust Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)
    Service List  

Counsel:  Ungaretti Harris, Edward Faberman, 202.639.7501


Computer Reservations System Regulations

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September 26, 2000 Comments of Consumers Alliance Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)
    Exhibits:  Letter in Support  

By:  Don Rounds


Computer Reservations System Regulations

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September 22, 2000 Comments of Balboa Travel Management Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

By:  Jose da Rosa

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September 28, 2000 Comments of Rosenbluthinteractive Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

By:  Rosenbluthinteractive, Hal Rosenbluth


Computer Reservations System Regulations

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October 23, 2000 Reply Comments of the Air Carrier Association of America

Scanned Copy

Computer Reservation System (CRS) Regulations

By:  ACA, Edward Faberman, 202.639.7502

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October 23, 2000 Reply Comments of Alaska Airlines, Inc. and Horizon Air Industries, Inc. d/b/a Horizon Air Computer Reservation System (CRS) Regulations

By:  Squire Sanders, Marshall Sinick, 202.626.6600

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October 23, 2000 Reply Comments of Amadeus Global Travel Distribution, S.A. Computer Reservation System (CRS) Regulations
    Exhibits:  Advertisements, Newspaper Columns  

By:  Steptoe Johnson, David Coburn, 202.429.8063

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October 23, 2000 Reply of American Airlines to Supplemental Comments Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)
    Attachment:  Descriptive Slide Show of Travelocity.com   

Counsel:  American, Bruce Wark, 817.967.5647, bruce.wark@aa.com 

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October 23, 2000 Reply Comments of America West Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)
    Service List  

Counsel:  Baker Hostetler, Joanne Young, 202.861.1532

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October 23, 2000 Reply Comments of British Airways Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

Counsel:  Boros Garofalo, Don Hainbach, 202.822.9070

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October 23, 2000 Supplemental Reply Comments of Continental Airlines Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

Counsel:  Crowell Moring, Bruce Keiner, 202.624.2500

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October 23, 2000 Supplemental Reply Comments of Delta Air Lines Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

Counsel:  Delta and Shaw Pittman, Robert Cohn, (202) 663-8060

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October 23, 2000 Reply Comments of Galileo International, L.L.C Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)

Counsel:  Covington Addis, Carolyn Corwin 202.662.6000

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October 23, 2000 Reply Comments of Orbitz, L.L.C

Scanned Copy

Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)
    Exhibit A:  Statement of Daniel Kasper 

Scanned Copy

 
    Exhibit B:  Joint Statement of Steven Morrison, Clifford Winston, and Robert Litan  
    Service List  

Counsel:  Zuckert Scoutt, Frank Costello, 202.298.8660, fjcostello@zsrlaw.com 

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October 23, 2000 Reply Comments of Worldspan, L.P. Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)
    Service List  

Counsel:  Zuckert Scoutt, Charles Simpson, 202.298.8660


Computer Reservations System Regulations

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October 23, 2000 Reply Comments of Interactive Travel Services Association Computer Reservation System (CRS) Regulations

Counsel:  ITSA, Antonella Pianalto

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October 23, 2000 Reply Comments of Northwest Airlines Computer Reservation System (CRS) Regulations

Counsel:  Northwest, Glenn Fuller, 612.726.1231, glenn.fuller@nwa.com


Computer Reservations System (CRS) Regulations

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October 25, 2000 Supplemental Reply Comments of Aeromexico Computer Reservation System (CRS) Regulations

The Internet travel industry will continue to evolve even more quickly than the CRS industry, and it will remain important for the Department to monitor the competitive atmosphere for airline distribution over the Internet. Should the Department conclude that its intervention in this vibrant market ultimately is necessary, that intervention should be narrowly tailored to address a particular harm.

Counsel:  Verner Liipfert, William Evans, 202.371.6030


Computer Reservations System (CRS) Regulations

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October 26, 2000 Motion for Leave to File Late of Radius Global Travel Company Computer Reservation System (CRS) Regulations
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October 26, 2000 Reply Comments of Radius Global Travel Company Computer Reservation System (CRS) Regulations
    Service List  

Counsel:  Ungaretti Harris, Edward Faberman, 202.639.7502 

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October 26, 2000 Reply Comments of United Air Lines Computer Reservation System (CRS) Regulations

Counsel:  Wilmer Cutler, Bruce Rabinovitz, 202.663.6960, brabinovitz@wilmer.com 


Computer Reservations System (CRS) Regulations

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October 27, 2000 Motion for Leave to File Otherwise Unauthorized Document and Reply of the Air Carrier Association of America to Reply Comments Computer Reservation System (CRS) Regulations
    Service List  

Competition hardly exists any longer. What CRS information is needed at dominated hubs? For example, today American has 30 flights per day from Dallas to the New York area while Legend Airlines has 4. Delta has 41 flights to the New York area while AirTran has 12. Northwest Airlines has 23 flights to the New York area while Sun Country has 2. What legitimate information do these large carriers need to have on sales to New York? Their only interest is in finding out who dares to purchase seats on the new entrant.

By:  ACA, Edward Faberman, 202.639.7502


Computer Reservations System (CRS) Regulations

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October 27, 2000

Electronic Submission

Reply Comments of Sabre Inc. Computer Reservation System (CRS) Regulations
    Exhibits:  

Counsel:  Sabre and Winthrop Stimson, Kenneth Quinn, quinnk@winstim.com


Computer Reservations System (CRS) Regulations

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October 31, 2000 Reply Comments of Southwest Airlines Computer Reservation System (CRS) Regulations

However, just as the Internet has been a positive force for change in the sale of airline tickets, it has also opened the door to potential abuse, by offering new ways for airlines to stifle competition and harm consumers through concerted action . This "dark side" of Internet ticket sales is illustrated by Orbitz, a joint venture owned by five of the nation's largest airlines. The overwhelming majority of the comments filed in this proceeding recognize this concern. Only Orbitz and its owner airlines argue that there should be no regulation of their venture, while a wide variety of other parties -  including airlines not affiliated with Orbitz, CRS's, travel agents, independent Internet sites, the American Antitrust Institute and consumer groups - all advocate some form of regulation of Orbitz and other distribution ventures that are under collective airline ownership or control.

Counsel:  Southwest, Robert Kneisley, 202.682.4534, bob.kneisley@wnco.com 


Computer Reservations System (CRS) Regulations

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November 1, 2000

Electronic Submission

Motion for Leave to File Late Reply Comments and Reply Comments of The Consumer Alliance; Arizona Consumers Council; Florida Action Coalition Team; Consumers Alliance of the Southeast; et. al Computer Reservation System (CRS) Regulations

Counsel:  Consumer Alliance, Don Rounds


Computer Reservations System (CRS) Regulations

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November 2, 2000 Reply Comments of Travelocity.Com  Computer Reservation System (CRS) Regulations
    Exhibits:  Examples of Web Pages  

Counsel:  Travelocity.Com, Andrew Steinberg, 817.785.8108, andy@travelocity.com 

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November 2, 2000 Motion for Leave to File Late of Emirates Airlines,Saudi Arabian Airlines Corporation, Taca International Airlines and Virgin Atlantic Airways, Ltd. Computer Reservation System (CRS) Regulations
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November 2, 2000 Reply Comments of Emirates Airlines,Saudi Arabian Airlines Corporation, Taca International Airlines and Virgin Atlantic Airways, Ltd. Computer Reservation System (CRS) Regulations

Counsel:  Bruce Cunningham, 281.367.0111, brucecunningham@prodigy.net 


Computer Reservations System (CRS) Regulations

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November 7, 2000 Supplemental Comments of Donald L. Pevsner, ESO Computer Reservation System (CRS) Regulations

Counsel:  Donald Pevsner


Computer Reservations System (CRS) Regulations

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January 17, 2001 Re:  State Attorneys Generals to Secretary Rodney Slater with Respect to the Orbitz Internet Web Site Computer Reservation System (CRS) Regulations

The Orbitz proponents contend that these anti-competitive concerns would be offset by benefits to consumers from lower costs and improved service. We are not so sure. Why would participants in the Orbitz scheme have an incentive to minimize costs, when they all would face the same costs? Why would they pass any cost savings on to consumers, instead of retaining them as profit? What precisely are the advantages of the promised technological improvements over existing systems? And what is it about those advantages that necessitates joint ownership of a ticketing distribution system?

In sum, we believe that Orbitz presents a number of new and serious issues that go well beyond whether DOT's existing CRS rules should be extended to an internet site operated jointly by the airlines. The claimed benefits from Orbitz seem too slight, in and of themselves and in relation to the present range of services available in the marketplace, to compensate for what may be the scheme's inherent dampening of competition among its participants and from alternate channels of distribution. We look forward to working with DOT and the Department of Justice as our review of Orbitz proceeds.

Counsel:  Attorney Generals Tom Miller, Bill Lockyer, and Eliot Spitzer


Computer Reservations System (CRS) Regulations

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March 27, 2001 Re:  Additional Information of the Interactive Travel Services Association (ISTA) Computer Reservation System (CRS) Regulations

As counsel to the Interactive Travel Services Association, we retained the services of Professor Jerry A. Hausman in the Department of Economics at MIT to perform an in-depth analysis of the potential competitive harm, alleged pro-competitive benefits, and overall competitive effect of the continuing launch of Orbitz.

Enclosed for your review and consideration in respect of both the Department's ongoing Orbitz investigation and its computer reservation system rulemakings in the above-referenced dockets, is a copy of Prof. Hausman's paper. We hope that Prof. Hausman's analysis will assist the Department as it reviews such matters.

As we believe the Department is aware, Prof. Hausman is not an airline industry consultant, but one of the most distinguished economics experts in the country, with a Ph.D. from Oxford University, an A.B. from Brown University, and 30 years of academic and industry experience. He has published a multitude of articles and testified before numerous congressional committees, courts, and federal agencies on antitrust, telecommunications, and CRS issues.

Counsel:  Pillsbury Winthrop, Jenneth Quinn, 202.775.9898, kquinn@pillsburywinthrop.com


Computer Reservations System (CRS) Regulations

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April 10, 2001 Letter of the American Antitrust Institute Computer Reservation System (CRS) Regulations

Counsel:  American Antitrust Institute, Albert Foer


Computer Reservations System (CRS) Regulations

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June 13, 2001 Supplemental Reply Comments of America West Airlines Computer Reservation System (CRS) Regulations
    Service List  

Counsel:  Baker Hostetler, Joanne Young, 202.861.1532


Computer Reservations System Regulations

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July 17, 2001 Response of Worldspan, L.P. Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)
    Service List  

As a threshold matter, Worldspan urges the Department to maintain a comprehensive approach to its analysis of the issues in this proceeding, consistent with the objectives embodied in the Advance Notice of Proposed Rulemaking in Docket No. OST-97-2881. There is no reason to alter that approach in favor of expedited piecemeal actions on individual issues. There is also no reason - at any point in this or any other proceeding - for the Department to involve itself in the business of CRS rate-making, as America West requests. The Department has, for a variety of compelling reasons, consistently rejected arguments that it should become involved in regulating booking fee levels, beyond the non-discrimination provision set forth in 14 C.F.R. § 255.6(a). The Civil Aeronautics Board took the same position. See Computer Reservation System (CRS) Regulations, Final Rule, Docket No. 47762, 57 Fed. Reg. 43,780, 43,816-17 (Sept. 22, 1992);1 Carrier-Owned Computer Reservation Systems, Final Rule, Docket No. 41686, 49 Fed. Reg. 32,540, 32,552 (Aug. 15, 1984). The record in this proceeding does not and can not support a deviation from this precedent.

In any event, America West's latest call for governmental intervention relies on serious inaccuracies and errors. Among other specious assertions, America West alleges that its Worldspan per segment booking fees increased by 22 percent in 2001 over 2000 and that, adjusted for volume, its Worldspan booking fees increased by 40.8 percent from 1998 to 2001. Neither of America West's allegations is true. In fact, America West's average cost per booking on Worldspan increased by less than three percent per year from 1995 through the first six months of 2001. Furthermore, America West's average cost per booking on Worldspan has actually declined during the first six months of 2001 compared with 2000. America West's hyperbolic claims about "exorbitant" booking fee increases are just flat wrong.

In January 2001, Worldspan implemented an innovative new pricing plan designed to reward efficiency and produce lower booking fees based on more efficient system utilization by subscribers. The decline in America West's average fees in 2001 suggests that America West is benefiting from Worldspan's plan. Heavy-handed governmental price regulation, such as America West advocates, would almost inevitably stifle such innovation, to the detriment of CRS's, consumers and carriers alike. Indeed, if America West's suggested CPI-based fee structure been in place in 2001, America West's booking fees on Worldspan during the first six months of 2001 would have been higher than they have actually been, according to Worldspan's calculations.

Counsel:  Zuckert Scoutt, Charles Simpson, 202.298.8660


Computer Reservation System Regulations

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August 10, 2001 Reply of Amadeus Global Travel Distribution to Supplemental Reply Comments of American West Airlines Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)
    Service List  

America West's latest contentions in support of its proposal do not withstand scrutiny. Its claims with respect to the Amadeus booking fee increases it has allegedly sustained are simply not correct; it has experienced only a modest Amadeus booking fee increase during the past year. As America West well knows, the cost-competitive on-line distribution options it has available to it serve as an effective competitive limit on booking fee increases. Moreover, any effort to regulate the level of CRS booking fees necessarily would be costly and complex, strain Department resources and potentially produce significant inefficiencies. As it has in the past, the Department should decline the invitation to regulate the level of booking fees.

Counsel:  Amadeus and Steptoe Johnson, David Coburn, 202.429.8063


Computer Reservations System Regulations

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September 19, 2001 Response of America West Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)
    Service List  

The SRC provided an update on recent increases in booking fees by the CRSs for the Department to consider in connection with America West's pending request for a rule to limit the annual increases in CRS charges. The data revealed that CRSs continued to exercise their market power to raise booking fees in 2001 to the supra-competitive levels described in the SRC. Based on these increases, America West again urged the Department to adopt America West's proposed rule to curb excessive price increases. Today, the survival of many airlines is at risk as traffic falls to unprecedented levels and costs continue to rise. Given the current financial situation facing the industry, it is critically important for the Department to expedite its review of CRS booking fees and issue a proposed rule as requested by America West.

Counsel:  Baker Hostetler, Joanne Young, 202.861.1532


Computer Reservations System Regulations

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March 18, 2002 Comments of Northwest Air Lines

Microsoft Word File
Extension of Computer Reservations Systems (CRS) Regulations

Northwest understands that many of the issues pending before the Department are complex, and require careful analysis. However, Northwest is concerned that the annual extension of Part 255 has become an easy escape from facing up to the fact that the CRS rules now do more anti-competitive harm than they do pro-competitive good. Northwest urges the Department to bring the pending CRS rulemaking to a conclusion in short order; to sunset the CRS rules if possible; and if not to modify Part 255 so as to fulfill the rules' original purpose of limiting CRS market power, and to take into account the significant continuing changes in the distribution of air transportation.

Counsel:  Northwest, Megan Rae Rosia, 202.842.3193, megan.rosia@nwa.com 


Computer Reservation System (CRS) Regulations

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May 2, 2002 Comments of Vanguard Airlines Computer Reservation System (CRS) Regulations

During the period we were a charter associate, Orbitz displayed inaccurate fare information about Vanguard flights, and blamed such inaccuracies on fabricated deficiencies in Vanguard's system, in short, evidencing a hostility toward us that seemed to reflect the attitude of its large­airline owners. Moreover, Orbitz has strong-armed its interpretation of a most-favored nation and in-kind promotion/exclusivity provision in a manner that we believe is not justified by our contractual agreement and is clearly anti-competitive. The cost and burden of litigation has precluded us from pursuing these claims against Orbitz, as well as the fact that Orbitz, through these provisions, may in fact become dominant in the interline ticket agency industry and thereby a critical vendor. We also find it peculiar that Orbitz has denied us the economic benefit of Charter Membership but nevertheless continues to take credit on its website for having Vanguard as a Charter Member.

We have found from firsthand experience that it is hard for a low-fare carrier to do business with Orbitz, but if the federal government continues to do nothing, it may become impossible to do business without Orbitz We urge the Subcommittee to continue being vigilant in reviewing this important matter.

Counsel:  Vanguard Airlines, Robert Rowen


Computer Reservations System (CRS)

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November 12, 2002 Final Federal Register Copy for November 15th | HTML

Advanced Copy of Notice of Proposed Rulemaking Pages 1-50

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Computer Reservations System
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In this rulemaking we must decide whether CRS practices still require regulation and, if so, which regulations are necessary, in light of the substantial changes in airline distribution and system ownership since our last reexamination of the rules.  We seek comments on whether some of the rules could be eliminated or modified to create more scope for competitive market forces.  We are in particular asking for comments on proposals to reduce regulations in ways that could give airlines more flexibility in bargaining with the systems.  We are proposing not to adopt regulations covering the sale of airline services through the Internet. 
 
We fully recognize the importance of the on-going changes in airline distribution, particularly the growing importance of the Internet as a vehicle for selling airline tickets.  These developments may make these rules unnecessary in the future.  It may be that the continuing developments in airline distribution have already given airlines additional bargaining leverage with the systems.  Several airlines have argued that the elimination of our mandatory participation rule and the rule barring systems from charging airlines discriminatory fees could enable airlines to bargain for better terms for system participation.  While the record appears to suggest that the systems continue to have market power, it may be that the airlines would have some ability to obtain better participation terms through bargaining.  We are therefore seeking comments on proposals to eliminate the mandatory participation rule and to end the rule against discriminatory booking fees. 
 
At this time, it seems necessary to maintain at least some rules to prevent practices by firms with apparent market power that would reduce competition and the adoption of alternatives to the systems.  We are therefore seeking comment on a tentative proposal to maintain some of the CRS rules and to apply them to all systems, whether or not owned or controlled by airlines.  Despite important changes in the industry, there is evidence that each of the systems continues to have market power against most airlines that could be used to distort airline competition and competition in the business of electronically providing airline information and booking capabilities to travel agents.  The systems also still appear to have the ability to engage in practices that would mislead travel agents and their customers about the availability, price, and quality of airline service options. 

By: Norman Mineta


Computer Reservations System

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November 15, 2002 Notice of Proposed Rulemaking Computer Reservations System

The Department's rules governing airline computer reservations systems (``CRSs'' or ``systems'') obligate the Department to revisit the need for CRS rules. The Department initiated this proceeding to examine whether its existing CRS rules were still necessary and, if so, whether they should be modified. The Department believes that it may be possible to eliminate some of the rules in ways that may promote competition in the CRS business and that rules regulating the sale of airline service over the Internet appear unnecessary. The Department thus is asking for comments on proposals to reduce its regulations in ways that could give airlines more flexibility in bargaining with the systems. The Department tentatively is proposing to maintain some but not all of the existing rules. The Department is also proposing to review its Statements of General Policy to clarify the requirements for the disclosure of service fees by travel agencies. DATES: Comments must be submitted by January 14, 2003. Reply comments must be submitted by February 13, 2003.

By: Thomas Ray


Computer Reservations System

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November 22, 2002 Petition for Extension of Deadlines for Submission of Comments and for Extension of CRS Rules Sunset Date Computer Reservations System

Pursuant to the "good cause" standard in the Department's rules of practice at 14 CFR § 302.9, Petitioners, consisting of three Computer Reservations Systems (Amadeus Global Travel Distribution, S.A.; Galileo International L.L.C. and Sabre, Inc.); Interactive Travel Services Association; American Society of Travel Agents, Inc.; National Business Travel Association; National Consumers League; Navigant International, Inc.; Rosenbluth International; Tzell Travel: Maritz TQ3; Colwick Travel; Protravel International; Austin Travel; Corporate Travel Planners; Altour International; WorldTravel BTI; Compass Travel, LLC and Sea Gate Travel Group LLC hereby request that the Department extend the due dates from January 14, 2003 to March 16. 2003 for initial comments on its November 15, 2002 Notice of Proposed Rulemaking in this proceeding, and from February 13, 2003 to May 15, 2003 for reply comments. In effect, Petitioners seek a 120 day initial comment period in place of the 60 day period contemplated in the NPRM, followed by a 60 day period, in lieu of a 30 day period, for replies. Petitioners also hereby request that the Department extend the sunset period set forth in 14 CFR § 255.12 of the current CRS rules from March 31, 2003 to September 30, 2003. Such an extension would accommodate the comment period extension requested here and remove uncertainty among travel distribution businesses regarding the governing rules that will apply while the Department considers the numerous comments that it will undoubtedly receive in response to its NPRM.  Petitioners also request that the Department act on this Petition no later than December 3, 2002 in order that they may know as soon as possible what deadlines they must plan to meet in this critically important proceeding.

Counsel: Sabre, David Schwarte et al.


Computer Reservation System Regulations

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November 26, 2002 Answer of Continental Airlines Computer Reservation System Regulations

Continental urges the Department to reject summarily the attempt by the world's largest computer reservations systems to prolong the status quo by seeking extension of both the comment periods in the long-pending rulemaking and the sunset date of the current outdated rules. The public interest demands expedited completion of the five-year old CRS rulemaking, and extending either the comment periods or the sunset date would defeat that goal.

Counsel:  Continental and Crowell Moring, Bruce Keiner, 202-624-2500

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November 26, 2002 Answer of Northwest Airlines in Opposition to Petition for Extension of Time Computer Reservation System Regulations

Northwest Airlines, Inc. strenuously opposes the Petition filed by the world’s three largest computer reservations systems, and others, to double the comment periods in this proceeding and to delay sunset of the existing CRS rules for the sixth time since 1997. Any further delay of this long-overdue rulemaking would be inconsistent with Secretary Mineta’s commitment to make “completion of this rulemaking proceeding a departmental priority.” The Department should deny the Petitioners’ extension requests.

Counsel:  Northwest, Megan Rae Rosia, 202-842-3193, megan.rosia@nwa.com

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November 26, 2002 Answer of Orbitz in Opposition to Petition for Extension of Time Computer Reservation System Regulations

Orbitz opposes the requested extension. The request is not really about an extension of time to facilitate extensive pleading. It is about a desire to preserve the regulatory status quo for ­as long as possible to the detriment of consumers. travel agents and airlines. The Department. in conformity with its own efforts to move this rulemaking forward and thereby to put in place CRS Rules that will better serve the public and the interests of competition, should not postpone the public benefits of updating and improving these rules by granting the request.

Counsel:  Orbitz and Zuckert Scoutt, Frank J. Costello, (202) 298-8660

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November 26, 2002 Answer of United Air Lines to Petition for Extension Computer Reservation System Regulations

United supports the Department's efforts to finalize this proceeding without further delay. Although United does not agree that interested parties need more time to submit comments, United would not oppose a limited extension of the comment deadlines established in the NPRM. United, however, strongly opposes any extension of the March 31, 2003 sunset date.

Counsel:  United and Wilmer Cutler, Bruce Rabinovitz, 202-663-6960, brabinovitz@wilmer.com 

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November 26, 2002 Re:  Correction to Counsel for Alteus International Computer Reservation System Regulations

Please note that in the above-referenced Petition for Extension, Ms. Rosemarie Christofolo was inadvertently identified as a result of a typographical error as the attorney for "Alteus" International. Ms. Christofolo should have been identified as the attorney for Petitioner Altour International.

Counsel:  Steptoe Johnson, David Coburn


Computer Reservation System

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December 2, 2002 Answer of Worldspan, L.P. Computer Reservation System
    Service List  

Hereby answers in opposition to the petition of Sabre et al. for a 60 day extension of the period in which to file comments on the Department's Notice of Proposed Rulemaking and an additional 30 day extension of the period for filing reply comments. The requested extensions are excessive and unsupported. The issues raised in the NPRM have been addressed in multiple comments filed by numerous parties in this rulemaking docket and other dockets over the past several years. The parties should not need another set of comment periods totaling six months, as requested by the petitioners, in order to finalize and articulate their positions on these issues. Other than broad assertions about the need for time to review the "voluminous record in this proceeding," the petitioners have offered no support for their significant request.

Counsel: Zuckert Scoutt, Charles Simpson, 202 298-8660


Computer Reservation System

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December 3, 2002 Answer of America West in Support of Petition for Extension of Deadlines for Submission of Comments and for Extension of CRS Rules Sunset Date Computer Reservation System

America West is concerned that among other proposed changes the elimination of both the mandatory participation and non-discrimination rules for booking fees could profoundly affect the CRS market. Rather than enhance competition and innovation, these changes could further distort competition by benefiting the largest, dominant carriers to the detriment of smaller, low-fare carriers such as America West. In this connection, it is telling that the answers opposing the relatively short proposed extension of the procedural timetable to accommodate a more careful, comprehensive analysis of the impact of the proposed rules have been filed by large carriers and Orbitz, Inc., the new online travel agency owned entirely by the largest domestic carriers.

Counsel:  America West and Baker Hostetler, Joanne Young, 202-861-1532

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December 3, 2002 Answer of American Airlines in Opposition to Petition by Sabre and Others for an Extension of the Comment Period Computer Reservation System

The continuing crisis in the airline industry creates an additional urgency to moving forward with the rulemaking in an expedited manner. As recognized by the NPRM, CRS booking fees are not determined by market forces, and have remained an uncontrollable and growing cost. American expects that its CRS booking fees in 2002 will exceed $400 million. The Depart­ment's proposed elimination of the mandatory participation rule and the non-discriminatory pricing rule, among other regulatory reforms, could create needed market pressures on CRS fees.

The current CRS rules are scheduled to sunset on March 31, 2003 (67 Fed. Reg. 14846, March 28, 2002), and now more than ever the Department should stick to that date. The petitioners' request for an extension of the comment period should be denied

Counsel:  American, Carl Nelson, 202-496-5647, carl.nelson@aa.com


Computer Reservation System

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December 3, 2002 Notice Extending Comment Period Computer Reservation System

The Department has issued a notice of proposed rulemaking that proposes to readopt and amend its existing rules governing airline computer reservations systems (CRSs) and to clarify the requirements of its Statements of General Policy on travel agency disclosure of any agency service fees. The Department is now extending the due date for comments and reply comments on this notice of proposed rulemaking to March 16, 2003, and May 15, 2003, from the original dates of January 14 and February 13, 2003.

We have determined that it would be reasonable to give commenters more time for preparing their responses to the advance notice. The issues are complex, and our notice of proposed rulemaking is lengthy. As the petitioners point out, the comment period includes three major holidays. Extending the comment period should help us, by enabling the parties to prepare comments that thoroughly analyze the issues raised by our notice of proposed rulemaking. We will therefore give commenters an additional sixty days for the comments and thirty days for reply comments. These extensions should give them adequate time for preparing responses to our notice and the comments filed by other parties without unduly delaying the completion of this rulemaking. These comment periods will be comparable to those established by us in our last major reexamination of the rules. 56 FR 12586 (March 26, 1991). As a result, we are making the comments due on March 16 instead of January 14, 2003, and the reply comments due on May 15 instead of February 13.

By:  Kirk K. Van Tine

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December 4, 2002 Response of the Air Carrier Association of America

Microsoft Word File

Computer Reservation System
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While the Department is finalizing each aspect of the CRS proposal, it should not allow this anti-competitive weapon (Section 255.10(a)) to be aimed at new entrants, and others. If the Department does not act to address the issues that have deterred airline competition, fewer passengers and communities will benefit from competitive fares.  Providing carriers with continued use of information obtained through Section 255 10(a) is contrary to the public interest and the Department's statutory responsibilities to promote competition. The studies have been thorough and definitive. It is time for the Department to "move quickly" and eliminate this method of predation.

By: Edward Faberman, 202-639-7502


Computer Reservations System

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November 30, 2002
Docketed December 5, 2002
Comments of Competitive Enterprise Institute

Word Document

Aviation Economic Rules

CEI strongly endorses DOT's decision to move in a deregulatory direction in revising its rules governing the airline industry's Computer Reservation Services. We urge strongly that the agency not back off from this position. We also urge it to go the next step by making a commitment to total deregulation as quickly as possible and commencing a proceeding to identify the issues that must be addressed during the transition to a deregulated state.

By: James DeLong


Computer Reservation System Regulations / Petition of America West Airlines, Inc.

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December 13, 2002
Docketed December 16, 2002
Reply and Contingent Motion for Leave to File of Northwest 

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Computer Reservation System Regulations / Aviation Economic Rules
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Strongly disagrees with the Air Carrier Association of America that the Department should revise the current provision on sale of marketing and booking data in Section 255.10(a) of the Computer Reservations System rules before the comprehensive CRS rulemaking proceeding is completed. Resolving any individual CRS issue(s) before the entire CRS rulemaking is completed would be inefficient and ill-advised. The Department has rejected similar requests for immediate action on Section 255.10(a) and should do so again.

Counsel:  Northwest, Megan Rae Rosia, 202-842-3193


Computer Reservations System

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December 20, 2002
Docketed December 23, 2002
Response of the Air Carrier Association of America

Word Document

Computer Reservations System

The need to level the playing field has never been greater. Dominant carriers must not be allowed to utilize data available under Section 255.10(a) to increase their domination. By taking this small step, the Department will eliminate one of the roadblocks to the expansion of competition. It is time to address this issue and not put off a decision for additional months and years. Competition must not be again put on hold.

By: Michelle Faust

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December 23, 2002 Petition of Sabre for Fact Hearing Computer Reservations System
    Appendix A  
    Appendix B  

Hereby requests that the Department of Transportation hold a Fact Hearing on its Notice of Proposed Rulemaking regarding Computer Reservations Systems, 67 Fed. Reg. 69366 (Nov. 15, 2002) . The NPRM and public record on which it rests fail to set forth, document or explain the factual foundation for this proposed rule. Without such support, the NPRM is not based on “substantial evidence,” and cannot be sustained under the Administrative Procedure Act. Without disclosure of the facts and studies relied on in crafting these regulations, public comment cannot be effective and the notice requirements of the APA are not satisfied. Without a thorough testing of party-specific adjudicative facts (such as the alleged market power of the individual CRSs regulated under this rule), the regulations violate fundamental due-process requirements.

The Fact Hearing requested here provides an effective means to avoid such serious procedural errors. If these errors are not corrected by a hearing, the NPRM will fail and five years of preparation will have been wasted. However, by holding a Fact Hearing, the Department will discover whether the fact-based economic assumptions on which its proposed rule rests are valid and whether, as a consequence, the regulations should be adopted, modified or abandoned.

Sabre supports the Department’s review of the CRS Regulations and wants to see it com­pleted as soon as is reasonable. Given the underdeveloped state of the NPRM, however, a Fact Hearing is essential. Closure must not come at the expense of careful fact-finding and substantial evidence. Those are indispensable foundations for a fair and sound rule.

Counsel:  Pillsbury Winthrop, Kenneth Quinn, 202 775-9800


Computer Reservation Systems

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December 18, 2002
Docketed December 27, 2002
Comments of Balboa Travel Management Computer Reservation Systems

By: Jose de Rosa


Computer Reservation System

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December 31, 2002 Motion of Delta Air Lines Computer Reservation System
    Service List  

On December 23, 2002, Sabre filed a 33-page Petition requesting that the Department hold an oral evidentiary hearing on the NPRM. The Petition was filed late afternoon on December 23 d, just before the beginning of the Christmas/New Years holidays, and was served by mail. The undersigned received Delta's service copy on December 30. Additional time for answers is needed, and the modest ten (10) days requested by Delta is reasonable under the circumstances. Under the Departments Rules of Practice, answers to the Petition would otherwise be due on January 3, 2003. As noted, Delta received its service copy on December 30 leaving it essentially only 2 business days to review the 33-page Petition and prepare a response. The Petition seeks extraordinary relief and raises a number of controversial legal issues. In light of the ensuing holidays and the absence of many key personnel, the Department should grant additional time for Delta and other interested parties to file responses to Sabre's Petition.

Counsel: Shaw Pittman, Robert Cohn, 202 663-8060


Computer Reservation System

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January 3, 2003 Answer of Galileo in Response to Petition Computer Reservation System
    Service List  

Like Sabre, Galileo is concerned that the Department's Notice of Proposed Rulemaking concerning computer reservations systems appears to rest on a number of suppositions that lack appropriate factual support. Galileo believes that the issues raised in this rulemaking are highly significant for the future of the travel industry and that there must be adequate procedures to ensure that the Department has a complete and accurate factual record on which to base its decisions.

Counsel:  Covington Burling, Carolyn Corwin, 202 662-6000

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January 2, 2003
Docketed January 3, 2003
Answer of Northwest Airlines Computer Reservation System
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The Department should reject the sixth request of the Air Carrier Association of America for immediate revision or suspension of the provision on sale of marketing and booking data in Section 255.10(a) of the Computer Reservations System rules. ACAA's renewed request reflects a basic misunderstanding about the way airlines use such data and underscores the need for the Department to give other parties the opportunity to comment on proposed revisions to Section 255.10(a), as required by the Administrative Procedure Act, before deciding whether to modify the provision. With the initial comment date in the CRS rulemaking only two months away, there is no justification to preempt the notice-and-comment procedures mandated by the APA and followed by the Department in this and all other CRS rulemakings.

Counsel: Northwest, Megan Rosia, 202 842-3193

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January 3, 2003 Notice Computer Reservation System

We believe that Delta's request is reasonable and that responses by other parties would assist our consideration of Sabre's petition. Given the holidays and the unusual nature of Sabre's petition, establishing January 13 as the due date for answers would give the parties an adequate time to respond without delaying the rulemaking. We therefore invite interested persons to file answers by January 13.

By: Read Van de Water


Computer Reservations System

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January 9, 2003 Proposed Rule; Notice of Petition Response Date (Federal Register Final Publication) Computer Reservations System

The Department has issued a notice of proposed rulemaking that proposes to readopt and amend its existing rules governing airline computer reservations systems (CRSs) and to clarify the requirements of its Statements of General Policy on travel agency disclosure of any agency service fees. Sabre, one of the CRSs, has filed a petition asking for a fact hearing. The Department is now establishing January 13, 2003, as the due date for responses to Sabre's petition. DATES: Responses to Sabre's petition are due January 13, 2003.

By: Thomas Ray


Computer Reservations Systems (CRS) Regulations Statements of General Policy

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January 10, 2003 Answer of Delta Air Lines to Petition of Sabre for a Fact Hearing Computer Reservations System

Delta urges the Department to proceed expeditiously with needed changes to the outdated CRS rules. Delta opposes the proposed hearing procedure suggested by Sabre since it is not required under the Administrative Procedure Act and would add significant cost, complexity and delay to the rulemaking process. Although certain of the information and data relied on by the Department in the NPRM is out-of­date, Delta expects the Department will carefully evaluate the factual information and analysis provided by commentators in response to the NPRM as it evaluates making proposed revisions to the CRS rules.

Counsel: Delta and Shaw Pittman, Robert Cohn, 202-663-8060


Computer Reservations Systems (CRS) Regulations Statements of General Policy

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January 13, 2003 Answer of Amadeus Global Travel to Petition of Sabre for a Hearing Computer Reservations System
    Service List  

The Department has previously stated that it has undertaken an informal study of airline distribution practices in connection with its assessment of the CRS business. In order that the public may more fully understand the foundation on which the Department has developed its proposals, Amadeus urges the Department to place into the record any non-confidential materials that it has received or developed during the course of that review. Further, the Department should also place into the record copies of the source materials cited in the body of the NPRM, i.e., the various articles, studies and other materials on which the NPRM relies. This will facilitate the ability of the parties to assess those materials in preparing their comments.

Amadeus supports, to the extent stated above, the limited fact hearing proposed by Sabre and urges the Department to make the materials on which it relied in fashioning the NPRM available in the public record.

Counsel:  Steptoe Johnson, David Coburn, 202 429-8063

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January 13, 2003 Answer of America West Airlines  to Petition of Sabre for a Hearing Computer Reservations System
    Service List  

A fact hearing proposed by Sabre will not only waste scarce resources at a time when airlines and other interested parties can scarcely afford it, overwhelming legal authority­ cited by Sabre itself- establishes the Department need not conduct such a hearing to preserve the validity either of the NPRM or ensure the validity of any final rule it promulgates. If Sabre disagrees with the preliminary factual or policy conclusions set forth in the NPRM should submit information and comments to the Department in an effort to convince it to promulgate a final rule adopting Sabre's positions.

Counsel:  America West and Baker Hostetler, Joanne Young, 202 861-1532

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January 13, 2003 Answer of American Airlines to Petition of Sabre for a Hearing Computer Reservations System

Much of Sabre's petition is devoted to arguing that CRSs lack market power and that CRS distribution is an improper market definition for purposes of the antitrust laws. In response to Sabre's procedural motion, American does not intend to set forth all of the evidence that clearly substantiates the Department's contrary conclusions in the NPRM. The pertinent point for purposes of Sabre's request for a hearing is that the Department's lengthy and thorough NPRM has put all parties on notice of the relevant issues and the Department's preliminary conclusions.

Counsel:  American, Carl Nelson, 202-496-5647, carl.nelson@aa.com 

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January 13, 2003 Answer of the American Society of Travel Agents Computer Reservations System

Counsel:  ASTA, Paul Ruden, 703-739-6854, paulr@astahq.com 

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January 13, 2003 Answer of Continental Airlines Computer Reservations System

Continental urges the Department to reject the eleventh-hour attempt by Sabre, the world's largest computer reservations system, to prolong the status quo by requesting a "fact-finding hearing" on questions the Department has already analyzed fully, and can continue to analyze, without oral testimony. Commencing an oral hearing here would be contrary to the Department's practice in previous CRS rulemakings and would delay this proceeding interminably. The public interest demands rejection of Sabre's petition and expedited completion of the almost six-year old CRS rulemaking.

Counsel:  Continental and Crowell Moring, Bruce Keiner, 202-624-2500, rbkeiner@crowell.com 

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January 13, 2003 Answer of Northwest Airlines Computer Reservations System

Northwest opposes Sabre’s obvious ploy to delay this proceeding and maintain the status quo by requesting an oral hearing. Neither the Administrative Procedure Act nor the Department’s rules require an oral hearing in rulemaking proceedings. Commencing a hearing here would not only be inconsistent with the Department’s practice in previous Computer Reservations System rulemakings, but also would frustrate the public interest in concluding this proceeding expeditiously. The Department should deny Sabre’s request and bring the CRS rulemaking to a close as soon as possible.

Counsel:  Northwest, Megan Rae Rosia, 202-842-3193, megan.rosia@nwa.com 

 

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January 13, 2003 Answer of Orbitz in Opposition to Petition of Sabre for a Hearing Computer Reservations System
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Sabre has petitioned for a "fact hearing" in the captioned rulemaking proceeding. Sabre argues that unless its petition is granted, "five years of preparation will have been wasted" - although Sabre, itself, did not perceive a need for a hearing until Christmas Eve of the fifth year. Sabre argues that it is "not seeking a full-scale evidentiary hearing" and that the hearing "need not delay these proceedings" - although Sabre wants the ability to cross examine not only representatives of every person submitting comments in the captioned dockets but also at least one "senior Department official" and other "persons identified by the Department as knowledgeable about the facts in the NPRM." Orbitz, L.L.C. opposes the petition, for reasons perhaps as obvious as they are well grounded. There are no material facts that cannot be addressed on the basis of the record in this matter, particularly as Sabre and others will further supplement that record. Cross examination, and the intricate procedures that inevitably would attach, would add nothing but delay. Moreover, grant of the petition would create an unfortunate precedent, legally and logically inconsistent with several decades of judicial and departmental decisions.

Counsel:  Zuckert Scoutt, Frank Costello, 202 298-8660, fjcostello@zsrlaw.com

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January 13, 2003 Response of United Air Lines Computer Reservations System

Although the Sabre and ACAA filings address different issues, both seek to disrupt the progress of this proceeding at a time when, following the submission of written comments, the Department shortly will be in a position to move forward with preparing a final rule for publication. Sabre's petition is a relatively crude delaying tactic dressed up as an elaborate, but often irrelevant, discourse on administrative law. It has been filed by a CRS vendor which, faced with the potential elimination of rules that have insulated it from competition, is intent on clinging to the status quo for as long as possible. ACAA, meanwhile, with myopic focus, continues to demand immediate Departmental action on one particular CRS-related issue, even though ACAA has provided no basis for the Department to grant its request, and the Department has made clear that "it would be more efficient for us to consider all issues in this proceeding rather than decide issues piecemeal." NPRM, at 69369. The Department should deny Sabre's petition for a hearing, reject ACAA's request for immediate action on the MIDT data issue, and instead adhere to its established procedural schedule and complete this proceeding as soon as possible. United continues to believe that the final outcome of this proceeding should be the elimination of the CRS rules altogether. In the meantime, the Department should allow the current rules to sunset as scheduled on March 31, 2003, particularly if a final rule cannot be issued within a short and clearly-defined timeframe.

Counsel:  United and Wilmer Cutler, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmer.com


Computer Reservations Systems (CRS) Regulations Statements of General Policy

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January 23, 2003 Motion for Leave to File and Reply of Sabre in Support of Petition for Fact Hearing Computer Reservations System

Several of the Answers misconstrue the purpose and proposed implementation of the Fact Hearing sought by Sabre and misinterpret certain of the cases cited by Sabre in its Petition. Sabre respectfully requests an opportunity to reply to these answers and explain how the convening of a Fact Hearing by the Department need not delay the revised procedural schedule that the Department has recently adopted for this proceeding. Grant of this motion will not unduly delay this proceeding, and acceptance of this Reply will provide the Department with a more complete record upon which to evaluate the merits of Sabre’s petition.

Counsel:  Pillsbury Winthrop, Kenneth Quinn, 202 775-9800


Computer Reservation Systems (CRS) Regulations 

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February 27, 2003 Comments of DOB Systems, LLC

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Re: Statements of General Policy

We acknowledge that the intent of the proposed MIDT rule changes is virtuous, however we believe that the effects from those proposed changes would create formidable economic and legal repercussions for the airlines currently using the data, the GDSs currently selling data, and even the groups with complaints against the data. Moreover, a short time table regarding the implementation of the proposed rule changes would only serve to further intensify those adverse repercussions. We do not believe that the impact of the changes proposed nor the actual effects of MIDT utilization have been addressed or evaluated properly.

By: David O'Bannon

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February 27, 2003 Comments of Turkish Airlines Re: Statements of General Policy

The current system, based on transparency has generated competition conditions never reached before. Proposed restrictions promote limitations of data availability to a few actors in the marketplace. This means that such data could fall into the hands of airlines in which particular travel agency chains have some kind of ownership or interests. DOT must be aware that today's parent relationships go beyond “parent carrier of a CRS”, as the environment has evolved into a much more complex scenario where we find other forms of affiliations.

By:  Turkish Airlines, Zuhal Aydin


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March 5, 2003 Position Paper of Singapore Airlines Computer Reservations System

It is common industry knowledge that CRS companies enjoy large profit margins while many of their suppliers of information (the airlines) suffer big losses or have deteriorating margins. This is due in part to the rules that govern the CRS industry. It is also no secret that CRS companies provide incentives to their travel agent subscribers for business volume, distorting competition. CRS fund such incentives by increasing the booking charges they levy on airlines. Without viable alternatives of distribution to the CRS for many years, airlines have no real alternatives.

This position paper sets out the views of Singapore Airlines on the rules proposed by the Department of Transportation governing airline reservation systems. The paper addresses the fundamental principles of creating undistorted competition in the CRS business, decreasing airline distribution cost to benefit consumers’ interests, and promoting the development of alternative distribution channels.

By:  Singapore Airlines, Yu Lin Lim


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March 7, 2003 Cited Material Submitted by Tom Ray, Office of the Assistant General Counsel for Litigation: Computer Reservations System
    Secretary's Task Force on Competition in the US Domestic Airline Industry - Airline Marketing Practices  
    Appendix 2: 1988 Regional Market Shares Based on Airline Bookings  
    Attachments:  Newspaper, Web Site, Email Articles  
    OIG Audit Report - Report on Travel Agent Commission Overrides  
    Attachments:  Newspaper, Web Site Articles  

By:  DOT, Tom Ray


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OST-97-2881 Federal Register:  March 13, 2003 Correction to the Notice of Proposed Rulemaking by The Office of the Secretary Notice of Proposed Rulemaking - Computer Reservation Systems

The Department is correcting a notice of proposed rulemaking that appeared in the Federal Register on November 15, 2002 (67 FR 69366). The notice requested comments on proposals to change the Department's existing rules on airline computer reservations systems (14 CFR Part 255) and on a possible clarification of its Statements of General Policy (14 CFR Part 399) on the requirements for the disclosure of service fees by travel agencies. The notice contained two language errors that misstated the reasoning underlying the Department's proposals and request for comment. This document corrects those errors.

By: Read C. Van de Water

OST-97-2881 March 13, 2003 Comments of Bellingham Travel and Cruise Notice of Proposed Rulemaking - Computer Reservation Systems

By: Frank Zurline

OST-97-2881 March 13, 2003 Comment of Sand Canyon Travel, Inc. Notice of Proposed Rulemaking - Computer Reservation Systems

By: Patricia Humburger

OST-97-2881 March 11, 2003 Comment of TACA International Airlines Notice of Proposed Rulemaking - Computer Reservation Systems

TACA's Demand Forecasting based on MIDT data is used for Schedule Modeling, Revenue Budgeting and day-to-day business studies. Without MIDT TACA would not be able to determine opportunities to fly to new destinations and benefit those with added service options. As well, TACA's day-to-day business studies would be severely hampered; for example, TACA measures pricing promotions by distinguishing between real growth in the market and gain of market share. In this way, TACA can focus on achieving the right balance between customer choice and industry revenues.

In conclusion, if agency level information is not available in MIDT and certain competitors withdraw from the pool of carriers sharing information, TACA will deem MIDT data as useless. Without MIDT, TACA predicts that carriers will focus inwards and become more reactive and less proactive. This will cause carriers to upset a delicate balance in the industry by engaging easily in price wars and therefore taking less chances to stimulate markets.

Counsel: Mullenholz Brimsek, John Brimsek, 202-296-8803, jrb@mbblawyers.com


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March 12, 2003 Comments of Air Canada Notice of Proposed Rulemaking - Computer Reservation Systems

Air Canada looks forward to the opportunity to participate in the U.S. DOT Rulemaking Process. We feel the timing is opportune as we are currently exploring opportunities to participate in CRS regulations reform in Canada and in the European Union. The following is a discussion of Air Canada's position with regard to specific sections of the CRS Rules and our proposed opportunities for improvement. This document has been prepared with the collaboration of various departments of Air Canada, particularly the Product Distribution department.

Counsel: Air Canada, John Baker, 514-422-7275

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March 14, 2003 Comments of Air France Notice of Proposed Rulemaking - Computer Reservation Systems
    Service List  

Air France favors the continuation of the Department's CRS Rules, and especially the current rules that prohibit CRS screen display bias and discriminatory booking fees. In these comments Air France focuses on five of the Department's key proposals for change: (1) the end of the mandatory participation rule which Air France supports; (2) the proposed end to the prohibition on discriminatory booking fees which Air France opposes; (3) the decision not to extend the CRS rules against display bias to Internet providers, or at least propose a rule to protect consumers from misleading Internet displays which Air France would favor; (4) the proposed prohibition on productivity pricing schemes in travel agency contracts which Air France supports; and (5) proposals to restrict the sale of CRS booking data which Air France opposes.

Counsel: Silverberg Goldman, Michael Goldman, 202-944-3305

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March 14, 2003 Comments of Alitalia Notice of Proposed Rulemaking - Computer Reservation Systems

Alitalia believes there is no evidence of carriers misusing MIDT data, on the contrary, this data enables carriers to improve commercial strategies and planning in order to customise services, offer better prices, increase profitability and efficiency by meeting demands of marketplace for both customers and travel agents. Transparency on information promotes competition and marketplace functions more efficiently when interested parties can access information about supply and demand chain. Alitalia strongly urges the Department to consider the heavy impacts that the proposal has on our Company’s business processes with associate consequent difficulty in finding alternative solutions at an acceptable cost, giving the economic state of the airline industry.

By:  Alitalia

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March 13, 2003 Comments of Crinell Travel Notice of Proposed Rulemaking - Computer Reservation Systems

If the Department is really interested in helping consumers, it should focus on issues other than subscriber contract terms and "switching". Instead, the Department should enact rules that prevent airlines from inhibiting the newest software travel agencies use to access airline and other travel related web sites in search of the lowest fares. The Department seems more concerned with potential monopolistic practices of airline code sharing and have lost sight of the existing monopolistic practices of airlines, when it comes to consumer information made available only through channels controlled by the airlines. If left unregulated, it will ultimately provide for limited points of access (purchase) to limited carriers and limited consumers and will most certainly not include low cost or start up airlines. The Department should also take steps to prevent CRS­affiliated airlines from exerting pressure to influence a customer's choice of travel agency.

By: David Koteskey

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March 14, 2003 Comments of Carlson Wagonlit Travel Notice of Proposed Rulemaking - Computer Reservation Systems

Counsel: Collier Shannon, Willie Hudgins, 202-342-8586, WHudgins@colliershannon.com 

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March 14, 2003 Comments of Lufthansa Systems Passenger Services Notice of Proposed Rulemaking - Computer Reservation Systems

Lufthansa Systems respectfully urges DOT not to adopt any of these restrictions on airline access to MIDT. By providing detailed and prompt information on consumer preferences and purchasing patterns, MIDT allows airlines and other market players to shape their services, compensation levels, and prices on the basis of market forces. MIDT thus not only enables these entities to operate more efficiently and reduce costs, but also to judge their customers’ needs more accurately and satisfy them more effectively. Ultimately, the consumer profits from the increased competition that comes from the ability of airlines and other entities to compete aggressively on the basis of market information gleaned from MIDT.  Lufthansa Systems agrees, however, with DOT’s observation that, although Section 255.10 currently requires that each CRS make MIDT available to all participating airlines on nondiscriminatory terms, smaller airlines are disadvantaged as a result of high MIDT prices.

Counsel:  Mayer Brown, Lily Swenson, 202-263-3300, lswenson@mayerbrown.com 

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March 13, 2003 Comments of Travel Management Partners Notice of Proposed Rulemaking - Computer Reservation Systems

Travel agents rely on CRSs to obtain a wide variety of information about available airline routes and fares. Because of the regulations adopted for CRSs, consumers and the travel agents who serve them have had access to remarkably accurate comparative information regarding fares for airline travel. The regulations have permitted travel agents to provide seamless comparisons quickly and efficiently between the fares of a majority of the airlines. CWT believes consumers have ultimately benefited not only from the participation of virtually all the airlines in CRSs, but also from competition between rival CRSs. The regulations have generally proved effective in fostering competition among airlines and CRSs. Unfortunately, the regulations have not foreclosed all avenues to anticompetitive conduct.

By: John Lewis


Computer Reservation Systems (CRS) Regulations - Extension 

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March 13, 2003 Comments of Virgin Atlantic Airways

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Extension of Expiration Date through January 31, 2004

Virgin Atlantic welcomes the Department’s proposal to retain many of its existing rules governing airline computer reservation systems. However, we are concerned by the Department’s proposals to eliminate the mandatory participation rule and the rule preventing CRSs from charging discriminatory fees. Indeed, we believe that these rules should apply to all major US airlines and CRSs, respectively. We are also concerned by the Department’s proposal to limit or eliminate access to data currently available to airlines via Marketing Information Data Tapes.

Counsel: Garfinkle Wang, Elliott Seiden, 703-522-0967, elliottseiden@gwsmplc.com 


Computer Reservation Systems

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March 17, 2003 Denial of Petition by Sabre for Fact Hearing

Federal Register Final Publication for March 18th

Notice of Proposed Rulemaking - Computer Reservation Systems

We are denying Sabre's petition for a "fact hearing" that would give each commenter the opportunity to interrogate Department staff members about the basis for the notice of proposed rulemaking's tentative findings and proposals and to cross-examine representatives from the other commenters. Such a hearing would be neither necessary nor useful. Our notice discussed in detail the basis for our proposals, and we have given the public the opportunity to file both comments and reply comments, which will enable them to present their evidence and arguments on the issues.

We agree with several of the commenters that a hearing where they can present their factual and legal arguments may be useful. We therefore plan to hold such a hearing between the end of the comment period, March 16, and the end of the reply comment period, May 15.

By: Thomas Ray, 202-366-4731

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March 17, 2003 Comments of AAA  

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Notice of Proposed Rulemaking - Computer Reservation Systems

By: Sandra Hughes

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March 17, 2003 Comments of Alaska Airlines Notice of Proposed Rulemaking - Computer Reservation Systems

Counsel: Thomas O'Grady

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March 17, 2003 Comments of Amadeus Global Travel Distribution Notice of Proposed Rulemaking - Computer Reservation Systems
    Exhibit One  

Cousnel:  Steptoe & Johnson, David Coburn, 202-429-8063

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March 16, 2003 Comments of American Antitrust Institute 

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Notice of Proposed Rulemaking - Computer Reservation Systems

By: Albert Foer

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March 17, 2003 Comments of American Express Travel Related Services Notice of Proposed Rulemaking - Computer Reservation Systems

Counsel: Sarah Wynn, 212-640-5774

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March 17, 2003 Comments of America West Airlines Notice of Proposed Rulemaking - Computer Reservation Systems

Counsel:  America West and Baker Hostetler, Joanne Young, 202-861-1532

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March 17, 2003 Comments of American Airlines Notice of Proposed Rulemaking - Computer Reservation Systems
    Exhibit 1  - New York Times Article  
Exhibit 2 - Letter from Mark Pestronk
Exhibit 3 - Affidavit of Gary Dorman
Exhibit 4 - Event Brief of Sabre Holdings 2003 Financial Outlook Analyst Conference Call
Exhibit 5 - Transcript
Exhibit 6 - Business Travel News Article
Exhibit 7 - Travel Weekly Article
Exhibit 8 - ATA Report - Airlines in Crisis
Exhibit 9 - Assoc. of European Airlines - Economic and Political Analysis
Exhibit 10 - Jet Blue Filing
Exhibit 11 - AA's EveryFare Saves TQ3 Clients 7 Percent
Exhibit 12 - Intervenor's Original Counterclaim
Exhibit 13 - Plaintiff's Original Complaint

Counsel: Carl Nelson, 202-496-5647, carl.nelson@aa.com 

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March 17, 2003 Comments of The Arab Air Carriers Association Notice of Proposed Rulemaking - Computer Reservation Systems

By:  AACO, ateffaha@aaco.org 

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March 17, 2003 Comments of Association of Asia Pacific Airlines

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Notice of Proposed Rulemaking - Computer Reservation Systems

By:  Jon Ash, 202-457-0212

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March 17, 2003 Comments of Association of Corporate Travel Executives Notice of Proposed Rulemaking - Computer Reservation Systems

By:  Mark Williams

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March 17, 2003 Comments of Asociaicion Internacional de Transporte Aereo Latinoamericano  

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Notice of Proposed Rulemaking - Computer Reservation Systems

By:  Ernesto Vasquez Rocha

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March 17, 2003 Comments of British Airways Notice of Proposed Rulemaking - Computer Reservation Systems

Counsel:  British Airways, and Boros Garofalo, Don Hainbach, 202-822-9070

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March 17, 2003 Comments of Cendent Corporation  Notice of Proposed Rulemaking - Computer Reservation Systems

Counsel: Crowell Moring, Bruce Keiner, 202-624-2500

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March 17, 2003 Comments of Continental Airlines

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Notice of Proposed Rulemaking - Computer Reservation Systems

Counsel: Crowell Moring, Bruce Keiner, 202-624-2500

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March 17, 2003 Comments of Delta Air Lines Notice of Proposed Rulemaking - Computer Reservation Systems

Counsel:  Shaw Pittman, Robert Cohn, 202-663-8060

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March 18, 2003 Comments of Expedia and Motion for Leave to File Notice of Proposed Rulemaking - Computer Reservation Systems
    Supplemental Comments of Expedia - Analyzing the Statutory and Constitutional Issues Raised by the Proposed Agency Service Fee Rule and Motion for Leave to File  

Counsel:  Squire Sanders

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March 17, 2003 Comments of Galileo International Notice of Proposed Rulemaking - Computer Reservation Systems
    Appendix to Comments  
    Effects of Orbitz  
    Appendix  

Counsel:  Covington & Burling, Carolyn Corwin, 202-662-6000, ccorwin@cov.com 

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March 16, 2003 Comments of Lan Chile Notice of Proposed Rulemaking - Computer Reservation Systems

By:  Sergio Mendoza, 562-565-6766

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March 17, 2003 Comments of The Large Agency Coalition

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Notice of Proposed Rulemaking - Computer Reservation Systems

Counsel:  Mark Pestronk, 703-591-1900, mpestonk@aol.com 

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March 16, 2003 Comments of Lufthansa

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Notice of Proposed Rulemaking - Computer Reservation Systems

Counsel:  Lufthansa, Arthur Molins

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March 17, 2003 Comments of Mercatus Center, George Mason University

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By:  Susan Dudley

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March 16, 2003 Comments of Midwest Airlines Notice of Proposed Rulemaking - Computer Reservation Systems

Counsel:  Silverberg Goldman, Robert Silverberg

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March 15, 2003 Comments of Mobility Policy Institute

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Notice of Proposed Rulemaking - Computer Reservation Systems

By:  Robert Conlan

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March 17, 2003 Comments of NFIB Legal Foundation Notice of Proposed Rulemaking - Computer Reservation Systems

By:  Karen R. Harned

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March 14, 2003 Comments of The National Business Travel Association Notice of Proposed Rulemaking - Computer Reservation Systems

By:  NBTA, Bill Conors

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March 14, 2003 Comments of National Travel Notice of Proposed Rulemaking - Computer Reservation Systems

By:  Ted Lawson

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March 17, 2003 Comments of Northwest Airlines Notice of Proposed Rulemaking - Computer Reservation Systems

Counsel:  Northwest, Megan Rae Rosia, 202-842-3193, megan.rosia@nwa.com 

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March 17, 2003 Comments of Orbitz Notice of Proposed Rulemaking - Computer Reservation Systems
    Appendix A - Letter from Susan McDermott  
    Appendix B - Efforts to Monitor Orbitz  
    Appendix C - Comments from the Office of the Inspector General  
    Appendix D - Intervenor's Original Counterclaim  
    Appendix E - Technical Corrections to the Proposed Text of Part 255  
    Service List  

Counsel:  Orbitz and Zuckert Scoutt, Frank Costello, 202-298-8660, fjcostello@zsrlaw.com 

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March 17, 2003 Comments of Progress & Freedom Foundation 

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Notice of Proposed Rulemaking - Computer Reservation Systems

Counsel:  William Adkinson

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March 16, 2003 Comments of Sabre Notice of Proposed Rulemaking - Computer Reservation Systems
    Appendix 1:  Steve C. Bishop and John Woodbury, Economic Analysis of the NPRM Proposals, Charles River Associates  
    Appendix 2:  Douglas Wilson, Casting Light on CRS Booking Fees, Edwards & Kelcey  
    Appendix 3:  Richard Fahy, Declaration  
    Appendix 4:  Preston McAfee and Kenneth Hendricks, Evolution of the Market for Air Travel Information, KeyPoint Consulting  
    Appendix 5:  Statutory Provisions Cited by the Department/CAB in Support of CRS Regulations  

Counsel:  Sabre and Winthrop Stimson, Kenneth Quinn, 202-775-9800, kquinn@pillsburywinthrop.com 

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March 16, 2003 Comments of Qantas Airways

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Notice of Proposed Rulemaking - Computer Reservation Systems

By:  Peter Kelly

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March 14, 2003 Comments of Shepherd Systems Notice of Proposed Rulemaking - Computer Reservation Systems

Counsel:  Shepherd, Chris Colaco, chris.colaco@shepherdsystems.com

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March 14, 2003 Comments of Travel Transaction Processing Corporation Notice of Proposed Rulemaking - Computer Reservation Systems

Counsel: Arent Fox, Craig Engle, 202-857-6000

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March 16, 2003 Comment of Travel Management Alliance, LLC.

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Notice of Proposed Rulemaking - Computer Reservation Systems

Counsel: Jeffrey Miller, 410-418-9200

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March 17, 2003 Comments of Travelers First Notice of Proposed Rulemaking - Computer Reservation Systems

Counsel: Robert Fellmeth, 619-260-4806, cpil@sandiego.edu 

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March 17, 2003 Comments of Travelocity Notice of Proposed Rulemaking - Computer Reservation Systems

Counsel:  Pillsbury Winthrop, Kenneth Quinn, 202-775-9800, kquinn@pillsburywinthrop.com 

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March 17, 2003 Comments of United Air Lines, Inc. Notice of Proposed Rulemaking - Computer Reservation Systems

Counsel:  Wilmer Cutler, Bruce Rabinovitz, 202-663-6960, brabinovitz@wilmer.com 

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March 17, 2003 Comments of US Airways Notice of Proposed Rulemaking - Computer Reservation Systems

Counsel:  US Airways and O'Melveny Myers. Joel Burton

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March 14, 2003 Comments of US Small Business Administration - Office of Advocacy

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Notice of Proposed Rulemaking - Computer Reservation Systems

Counsel: USBA, Thomas Sullivan

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March 17, 2003 Comments of Washington Legal Foundation Notice of Proposed Rulemaking - Computer Reservation Systems

Counsel:  David Price, 202-588-0302

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March 17, 2003 Comments of Worldspan Notice of Proposed Rulemaking - Computer Reservation Systems
    List of Exhibits  
    Service List  

Counsel:  Zuckert Scoutt, Charles Simpson, 202-298-8660


Computer Reservation Systems

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March 18, 2003 Comments of The Air Carrier Association of America

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Notice of Proposed Rulemaking - Computer Reservation Systems

Counsel:  Air Carrier Association, Edward Faberman, 202-639-7502, epfaberman@uhlaw.com 


Computer Reservation Systems

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OST-97-2881
OST-98-4775
OST-99-5888
March 19, 2003 Motion of Sabre Inc. for Confidential Treatment Notice of Proposed Rulemaking - Computer Reservation Systems

Sabre has provided its own sensitive financial and commercial information to the Department. As described in the index below, this information comes directly from Sabre's records of its own subscriber non-renewal rates and transaction costs, as well as Sabre's analyses and calcula­tions of the market shares of competing CRSs and others in the air-travel information market, which are based in part on data received by Sabre under confidentiality restrictions. See Sterling Drug v. FTC, 450 F.2d 698, 708 (1971) (market share and sales data provided to agency afforded confiden­tial treatment; did not constitute the type of information which would customarily be released to the public).

As the Department is already well aware -- and as Sabre's Comments in these dockets confirm with publicly available facts -- competition is fierce in the travel distribution industry. Disclosure of the limited, closely-guarded confidential and proprietary information for which Sabre seeks protection would cause it irreparable harm. Disclosure would give Sabre's competi­tors insights into Sabre's financial affairs, competitive analyses and commercial strategy that the competitors could not otherwise obtain. Sabre has voluntarily provided the Department with this information in order to assist the Department and provide a more complete record upon which a decision may be made. Disclosure of the information Sabre has submitted under seal would serve to chill similar disclosures in future Department proceedings.

Counsel: Pillsbury Winthrop, Kenneth Quinn, 202-775-9800, kquinn@puillsburywinthrop.com


Computer Reservations System (CRS) Regulations

OST-97-2881
OST-97-3014
OST-98-4775
OST-99-5888
April 1, 2003 Motion of Sabre for CRS Hearing Procedures, and in the Alternative, for Reconsideration of Partial Denial of Fact Hearing Computer Reservations System (CRS) Regulations General Policy

The Hearing will permit participants to provide evidence and analysis relevant to the issues raised in the Department’s November 15, 2002 Notice of Proposed Rulemaking . 67 Fed. Reg 69366. For example, the proposed rule depends on a finding that non-airline owned CRSs exercise monopoly market power, that CRS booking fees are “excessive” and supracompetitive, and that travel agents are “locked in” to such CRSs. But the underlying data referenced in the NPRM are in conflict, and the facts and information presented in the comments filed on March 17, 2003 present starkly different evidence. Indeed, although many large airlines repeat these DOT assertions, not one commenter has offered any quantifiable evidence of monopoly market power, supra­competitive pricing, or travel agent lock-in. However, many commenters such as Sabre, travel agents, and independent think tanks have contradicted such claims.

Sabre respectfully requests that the Department set forth its issues and procedures for its Hearing and, in the alternative, that the Department reconsider its partial Denial of Petition of Fact Hearing to the extent that it disallowed any testing of fact assertions in the NPRM or the Comments filed thereon. In light of the voluminous comments submitted in this proceeding, the Department should reconsider its tentative decision to hold its Hearing between now and the due date for Reply comments. Because of the need to reply to a multitude of comments and the timing of religious and school/government holidays a more meaningful discussion would occur if the hearing were held no later than 30 days after reply comments are due, or June 16, 2003.

Cited Sites:  

Counsel:  Sabre and Pillisbury Winthrop, Kenneth Quinn, 202-775-9800, kquinn@pillsburywinthrop.com


Computer Reservations System (CRS) Regulations

OST-97-2881
OST-97-3014
OST-98-4775
OST-99-5888
April 2, 2003 Answer of The American Society of Travel Agents to Sabre's Motion for CRS Hearing Procedures Computer Reservations System (CRS) Regulations General Policy

In general, ASTA believes Sabre’s proposals for the management of the hearing, in light of the Department’s declination to provide meaningful cross­examination, are constructive and feasible. They also focus on the key issues in dispute and to that extent would assist materially in building a viable record for decision. Such a record is unlikely to emerge without procedures such as Sabre proposes, since the NPRM is really an ANPRM, posing multiple contingent outcomes to be considered abstractly in relation to each other. It would be extremely helpful if the hearing procedures framed the questions to be addressed in a logical progression so that individual regulations are not discussed on the basis of multiple assumptions about various versions of partial deregulation.

We are also very concerned about the idea, set out in the order ruling on Sabre=s original motion for a fact hearing, that the oral hearing will be scheduled sometime between now and May 15. One set of the first-round comments stands about ten inches high, and contains well over a thousand pages. Trying to evaluate these materials and prepare a written reply while also preparing for and engaging in an oral hearing will be next to impossible. The hearing presentations and the written replies will both suffer. The Department should, therefore, adopt Sabre’s proposal to hold the hearing after the reply comments are filed. This will have the added advantage of permitting the parties to address the replies in their oral presentations. 

We also believe that written materials to be presented in the oral hearings, including written versions of oral testimony, which may be voluminous if recent history is any guide, should be shared with other participants on the same panel not later than 72 hours before the hearing panel begins, in order to assure a fair opportunity to absorb and respond to the documents.

Counsel:  ASTA, Paul Ruden, 703-739-6854, paulr@astahq.com


Computer Reservation Systems

OST-97-2881
OST-97-3014
OST-98-4775
OST-99-5888
April 10, 2003 Answer of American Airlines to Sabre Motion for CRS Hearing Procedures Computer Reservations System Regulations

American agrees with Sabre that the hearing should be held after the reply comments are submitted on May 15, 2003, rather than before that date. However, American disagrees that the hearing should require 30 hours spread over a four-day period, as requested by Sabre.  We do not presume to spell out precisely how the hearing should be organized, other than to recommend that the parties be grouped into panels such as CRS vendors, carriers, travel agents, and so forth. The focus of the hearing should be responding to DOT questions rather than presenting lengthy statements which would only repeat what the parties have already said in their written comments.

Finally, American opposes Sabre's alternative peti­tion for reconsideration. The Department reached a reasonable accommodation in 68 Fed. Reg. 12883 with respect to holding a hearing on CRS issues. Sabre has presented no compelling basis for the Department to alter its ruling.

Counsel:  American, Carl Nelson, 202-496-5647, carl.nelson@aa.com 

OST-97-2881
OST-97-3014
OST-98-4775
OST-99-5888
April 10, 2003 Answer of Continental Airlines Computer Reservations System Regulations

Counsel:  Continental and Crowell Moring, Bruce Keiner, 202-624-2500

 

OST-97-2881
OST-97-3014
OST-98-4775
OST-99-5888
April 10, 2003 Answer of Orbitz to Sabre Motion for CRS Hearing Procedures Computer Reservations System Regulations
    Service List  

Orbitz opposes Sabre's motion and petition, both seeking reconsideration of the Department's decision to conduct an oral argument, but not a full hearing, in this rulemaking proceeding. Only a party with unlimited resources (and Sabre comes closer to that definition than any other company in the aviation industry) and a desire to extend the status quo seriously could suggest the type of costly, time-consuming, and non-productive procedures that characterize its request. Enough is enough. The motion and petition should be denied.

To what end does Sabre propose that the Department and interested parties devote a substantial part of this spring and/or summer? The questions that Sabre raises in this pleading and raised in its earlier motion go to policy and legal issues, the types of issues that experience teaches can best be addressed in written comments and sometimes in a traditional (and time­limited) oral argument. There are no substantive factual disputes that cannot be resolved on the basis of the existing record. As Orbitz stated in its earlier answer, the retail distribution of air transportation is one of the most transparent sectors of the U.S. economy, made even more so by repeated agency and legislative inquiries. At the conclusion of the procedures that Sabre has suggested, substantial time and monies would have been expended but nothing new would have been learned.

Counsel:  Zuckert Scoutt, Frank Costello, 202-298-8860, fjcostello@zsrlaw.com  

OST-97-2881
OST-97-3014
OST-98-4775
OST-99-5888
April 10, 2003 Answer of United Air Lines to Sabre Motion for CRS Hearing Procedures Computer Reservations System Regulations

Submits the following Answer to the pleading Hearing and in the Alternative, for Reconsideration of Partial Denial of Fact Hearing.  For the reasons discussed below, United urges the Department promptly to deny Sabre's petition for reconsideration and decline to adopt the elaborate hearing procedures Sabre proposes. United also disagrees with the Department's belated determination to add a round of oral presentations to the procedures in this long-delayed rulemaking proceeding. Nevertheless, if oral presentations are allowed, they should be brief, focused, and structured in such a way as to avoid inflicting excessive costs on industry participants. Finally, United concurs with Sabre that any oral presentations should be scheduled only afar the May 15, 2003 deadline for filing written reply comments, and agrees that 30 days after those comments are filed would be a reasonable alternative, provided that such schedule would not delay the Department's conclusion of the rulemaking.

Counsel:  United and Wilmer Cutler, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmer.com 

OST-97-2881
OST-97-3014
OST-98-4775
OST-99-5888
April 10, 2003 Answer of Worldspan to Sabre Motion for CRS Hearing Procedures Computer Reservations System Regulations
    Service List  

The hearing procedures suggested by Sabre are unnecessarily complicated and are intended to create delay. Not only would a hearing utilizing those procedures span several days at minimum (and, very likely, materially longer than Sabre anticipates), but Sabre suggests that the hearing not begin until after the May 16 submission of reply comments. Those procedures would substantially decrease the likelihood that the Department would be able to complete its work on the NPRM and issue a final rule by January 31, 2004. Such delay would appear to be Sabre's objective.

Counsel:  Worldspan and Zuckert Scoutt, Charles Simpson, 202-298-8860


Computer Reservation Systems

OST-97-2881
OST-97-3014
OST-98-4775
OST-99-5888
April 10, 2003 Answer of Northwest Airlines to Sabre Motion for CRS Hearing Procedures Computer Reservations System Regulations

Northwest Airlines, Inc. hereby responds to Sabre Inc.’s motion for CRS hearing procedures, and in the alternative, for reconsideration of the Department’s partial denial of a fact hearing. The Department should grant Sabre’s Motion for reconsideration and, upon reconsideration, decline to hold any oral hearing whatsoever in the context of this rulemaking. The Department clearly has the authority to complete this rulemaking without any hearing. Indeed, as far as Northwest can recall, there has never been an oral hearing in any rulemaking conducted by the Department’s Office of the Secretary. The Department should not question its ability to complete this proceeding in the same manner as every prior OST rulemaking just because Sabre apparently has unlimited resources to deluge the Department with repeated, unfounded procedural demands.

Counsel: Megan Rae Rosia, 202-842-3193, megan.rosia@nwa.com 

OST-97-2881
OST-97-3014
OST-98-4775
OST-99-5888
April 11, 2003 Answer of Galileo International to Sabre Motion for CRS Hearing Procedures Computer Reservations System Regulations

Galileo International LLC supports the Motion for CRS Hearing Procedures and in the Alternative, for Reconsideration of Partial Denial of Fact Hearing, filed by Sabre Inc. on April 2, 2003. In particular, Galileo joins in the request that the hearing the Department has announced for this proceeding be scheduled for a date after May 15, 2003, the date when reply comments are due.  It is far more sensible to hold the announced hearing after May 15 than before that date. As the Department is aware, a large number of opening comments were filed. Galileo is still reviewing and evaluating those opening comments, and other parties presumably are doing the same. We intend to file reply comments and expect that preparation of those comments will consume substantial time. Galileo also hopes to participate in the hearing and expects that preparation of testimony will take a considerable amount of time. It will be difficult for Galileo and other parties to focus on both preparation of reply comments and preparation for a hearing in the same time period.

Moreover, it will be more efficient for both the parties and the Department if the hearing is held after reply comments are filed. This will permit all parties to review the reply comments and address any new material that is provided therein. The Department, too, will benefit from reviewing the reply comments so that it can formulate questions in light of all the submissions and obtain clarification of any new material. Galileo believes Sabre's other suggestions regarding hearing procedures are generally reasonable. In addition, for the reasons stated in Galileo's filing of January 3, 2003, Galileo supports Sabre's renewed request in the alternative for a more extensive hearing to develop the facts relevant to this proceeding.

Counsel: Covington Burling, Carolyn Corwin, 202-662-6000, ccorwin@cov.com


Computer Reservation Systems

OST-97-2881
OST-97-3014
OST-98-4775
OST-99-5888
April 16, 2003 Motion for Leave to File and Reply of Sabre to Answers to its Motion for CRS Hearing Procedures Computer Reservation System Regulations

This Reply focuses on procedures for the oral hearing which the Department concluded is necessary “to develop a better record.” Sabre’s motion was intended to assist the Department in designing an efficient yet fair process for building an accurate and transparent record. Sabre addressed the schedule, procedure and suggested topics for the hearing. Comments on each of these issues will be addressed in turn.

Counsel: Sabre and Pillsbury Winthrop, Kenneth Quinn, 202-775-9800, kquinn@pillsburywinthrop.com

Computer Reservation System Regulations

April 14, 2003

OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

Comments of Travelers First

April 23, 2003

OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

Re: Confidential Treatment Request of Sabre

I am writing in reference to the March 19, 2003, motion for confidential treatment filed by you on behalf of Sabre Inc. in the Department's computer reservations system rulemaking. Sabre requested confidential treatment under Rule 12 of the Department's Rules of Practice, 14 C.F.R. 302.12, for certain information included in the exhibits submitted with its comments. Sabre additionally suggested that interested persons be allowed access to the confidential information pending a ruling on its motion.

Some of the material is confidential information that should be withheld from public disclosure. We are prepared to grant the request for confidential treatment for table 11 of the paper by Steve Salop and John Woodbury and attachment 2 to the paper by Douglas Wilson, assuming that the same kind of information is not publicly available elsewhere. We need additional information to determine whether the remaining material covered by the motion should be given confidential treatment. That material generally consists of market share data derived from information obtained by Sabre from the computer reservations systems and other sources, often under a commitment to maintain the confidentiality of the underlying data. Granting confidential treatment to comments submitted in a rulemaking may require findings that the information is confidential and that its disclosure may cause competitive harm.

In addition, we ask that you explain how Sabre's market share data can be deemed confidential when it is derived from data that is available for a fee to other members of the public. While the information is not public, other firms in the airline and airline distribution businesses have the data, and at least one other commenter provided similar data in its public coninients.

By: DOT, Thomas Ray

April 28, 2003

OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

Comments of Southwest Airlines

CRS regulations have been in force for nearly two decades at the Department and before it the CAB. These regulations were adopted in response to persistent and pervasive actions of the largest U.S. airlines to manipulate the flow of travel information to consumers in order to gain competitive advantage over their smaller rivals. These actions succeeded in driving up smaller airlines' costs, prevented them from effectively distributing their services to the public, and distorted the information available to the travelling public. The CRS rules have significantly, but by no means totally, curbed the ability of the large carriers and CRS systems to manipulate airline competition.

Counsel: Southwest, Robert Kneisley 202-682,4534, bob.kneisley@wnco.com


May 1, 2003

OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

Correspondence of Sabre

In accordance with the terms of its motion, Sabre hereby withdraws the confidentially filed Attachment I to the paper by Douglas Wilson (Appendix 2 of Sabre's exhibits) and in its place substitutes a similar table utilizing data for which confidentiality is not sought. This table is enclosed for filing in the docket and on the public record.

Counsel: Pillsbury Winthrop, Kenneth Quinn, 202-775-9898, knquinn@pillsburywinthrop.com


May 5, 2003

OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

Reply Comments of 456 Small and Medium Sized North American Travel Agencies | Word

These proposed rules ignore history and common sense. They embark upon a misguided path of selective regulation that will have many negative consequences for consumers and competition. These rules are inconsistent, and in many places, incoherent.

While bending over backwards to favor the major U.S. airlines, these proposed rules are harmful to many others in the industry. They ignore the history of major U.S. airlines abusing their control of CRS's and other channels of distribution and will facilitate long discredited airline practices.

By: Stratton Travel, Terry McCabe, 201-405-1999 x202


Computer Reservation Systems

May 1, 2003

OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

Correspondence of Sabre

Correspondence of Sabre Inc. to Thomas L. Ray, Senior Trial Attorney, Office of the Secretary, responding to the April 23 2003 letter requesting additional information regarding Sabre's Motion for Confidential Treatment filed in Docket OST-97-2881 on March 19, 2003, and follows up the phone conversation of April 24.

Counsel: Pillsbury Winthrop, Kenneth Quinn, 202-775-9898, kquinn@pillsburywinthrop.com


May 6, 2003

OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

Notice Extending Comment Period

Notice Extending Comment Period (Federal Register Final Publication)

Notice extending comment period of the notice of proposed rulemaking that proposes to readopt and amend its existing rules governing airline computer reservations systems (CRSs) and to clarify the requirements of its Statements of General Policy on travel agency disclosure of any agency service fees. The Department is now extending the due date for reply comments on this notice of proposed rulemaking to June 9, 2003, from the curent date of May 15, 2003.

By: Tom Ray


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

May 13, 2003

Notice of Air Carrier Association of America of Intent to Participate

Counsel: ACAA, Edward Faberman, 202-639-7502, epfaberman@uhlaw.com


May 12, 2003

Notice of America West of Intent to Participate

Counsel: Baker Hostetler, Joanne Young, 202-861-1532


May 12, 2003

Notice of American Society of Travel Agents of Intent to Participate | Word

Counsel: Paul Ruden


May 12, 2003

Notice of Competitive Enterprise Institute of Intent to Participate | Word

By: Fred Smith, 202-331-1010, fsmith@cei.org


May 12, 2003

Notice of Galileo International of Intent to Participate

Counsel: Covington Corwin, Carolyn Corwin, 202-662-5338, ccorwin@cov.com


May 13, 2003

Supplement to Notice of Galileo International of Intent to Participate

Counsel: Covington Corwin, Carolyn Corwin, 202-662-5338, ccorwin@cov.com


May 13, 2003

Notice of Progress & Freedom Foundation of Intent to Participate | Word

Counsel: William F. Adkinson, (202) 289-8928, wadkinson@pff.org


May 12, 2003

Notice of Sabre of Intent to Participate

Counsel: Pillsbury Winthrop, Kenneth Quinn, 202-775-9898, kquinn@pillsburywinthrop.com


May 12, 2003

Notice of Shepard Systems of Intent to Participate

Counsel: Covington Corwin, Carolyn Corwin, 202-662-5338, ccorwin@cov.com


May 13, 2003

Notice of Stratton Travel Management of Intent to Participate | Word

By: Terry McCabe, 201-405-1999


May 12, 2003

Notice of Travelocity.com of Intent to Participate

Counsel: Pillsbury Winthrop, Kenneth Quinn, 202-775-9898, kquinn@pillsburywinthrop.com


May 12, 2003

Notice of Worldspan of Intent to Participate

Counsel: Zuckert Scoutt, Charles Simpson, 202-298-8660, cjsimpson@zsrlaw.com


May 14, 2003

OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

Notice of Public Hearing - Federal Register Publication

Draft Version - Served May 12, 2003

By: Thomas Ray


May 14, 2003

Notice of Amadeus Global Travel Distribution S.A. of Intent to Participate

Counsel: Steptoe Johnson, David Coburn, 202-429-8063, dcoburn@steptoe.com


May 14, 2003

Notice of Continental Airlines of Intent to Participate

Counsel: Crowell & Moring, Lorraine Halloway, 202-624-2500


May 14, 2003

Notice of Delta Air Lines of Intent to Participate

Counsel: Delta, Scott McClain, 404-773-6514, scott.mcclain@delta.com

May 14, 2003


Notice of Interactive Travel Services Association of Intent to Participate

Counsel: Antonella Pianalto


May 12, 2003

Notice of Large Agency Coalition of Intent to Participate

Counsel: Mark Pestronk, 703-591-1900, mpestronk@aol.com


May 14, 2003

Notice of Northwest Airlines of Intent to Participate

Counsel: Megan Rae Rosia, 202-842-3193, megan.rosia@nwa.com


May 14, 2003

Notice of Orbitz of Intent to Participate

Counsel: Zuckert Scoutt, Frank Costello, 202-298-8660, fjcostello@zsrlaw.com


May 14, 2003

Notice of Travelers First of Intent to Participate | Word

Counsel: Jim Conran, Consumersfirst@att.net


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

May 14, 2003

Re: Comments of Orbitz

We appreciate the opportunity to meet with you and your staff earlier this month on the subject of the CRS rules and how we best get the CRS business sufficiently competitive so that economic rules governing CRSs are no longer needed and can be successfully ended.

By: Paul Schoellhamer and Gary Doerohoefer


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

May 13, 2003

Notice of Mercatus Center - George Mason University of Intent to Participate

By: Jay Cochran


May 13, 2003

Notice of Southwest Airlnes of Intent to Participate

Counsel: Southwest, Robert Kneisley, 202-682-4534


May 14, 2003

Notice of United Air Lines of Intent to Participate

Counsel: United, Stephen Sawyer, 847-700-7385, steve.sawyer@ual.com


May 15, 2003

Re: Sabre Exhibits

On April 23, 2003, Tom Ray, Senior Trial Attorney in the Office of the Secretary, contacted the undersigned by letter requesting information about certain exhibits Sabre filed under seal with its comments in this proceeding. On April 30, 2003, after consulting with Mr. Ray, Sabre wrote to counsel for firms whose information (provided to Sabre on a confidential basis) was incorporated in some of the exhibits, informing them of Sabre's intent to withdraw its motion for confidential treatment and submit public record versions of these exhibits. As no party has contacted Sabre with an objection, Sabre hereby withdraws its motion for confidential treatment of the following exhibits, and submits public record versions herewith:

Appendix 1: Steve C. Salop and John Woodbury, Economic Analysis of the NPRM Proposals

Appendix 2: Appendix 2, Douglas Wilson, Casting Light on CRS Booking Fees, Edwards & Kelcey

Appendix 4: R. Preston McAfee and Kenneth Hendricks, Evolution of the Market for Air Travel Distribution

Counsel: Pillsbury Winthrop, Kenneth Quinn


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

May 16, 2003

Comments of Cindy L. Heston

By: Ms. Heston


May 15, 2003

Notice of TechNet Texas of Intent to Participate

By: TechNet, Rick White, 512-481-9925


May 16, 2003

Notice of US Airways of Intent to Particpate

Counsel: US Airways, Joseph Nash, 703-872-5265, jnah@usairways.com


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

May 19, 2003

Notice of Hewlett-Packard of Intent to Participate | Word

Counsel: Michele Blair


May 19, 2003

Notice of Washington Legal Foundation of Intent to Participate

Counsel: Daniel Popeo, 202-588-0302, dpopeo.wlf.org


May 19, 2003

Correspondence of Shepard Systems

Counsel: Covington Burling, Carolyn Corwn, 202-662-5338, ccorwin@cov.com


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

May 20, 2003

Notice of Change in Time of Public Hearing; Notice of Procedures for Hearing

On Thursday, May 22, 2003, at 9 a.m., the Department will conduct a public hearing on its pending rulemaking on computer reservations systems (CRSs). The public hearing will be held at the Marriott at Metro Center, 775 121h Street, NW., Washington, DC. This notice changes the beginning time from 9:30 a.m. to 9 a.m., sets forth the procedures for the hearing, and lists the speakers in order of appearance.

By: Read C. Van de Water


May 20, 2003

Correspondence of the Washington Legal Foundation | Word

WLF filed its request to participate on the afternoon of Friday, May 16. In its announcement of Monday, May 19, the Department stated for the first time that it would apply a cut-off time of noon, May 16. The practical effect of this noon cut-off is to exclude one proposed commenter, WLF.

WLF believes its unique perspective on the CRS proposal will be of value to the Department. In contrast with public interest groups that have expressed unqualified support for deregulation in this area, WLF is concerned that a regime of partial, one-sided deregulation of CRS systems could have serious adverse consequences.

Counsel: Daniel Popeo, 202-588-0302, dpopeo@wlf.org


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

May 22, 2003

Notice of Change in Time of Public Hearing - Federal Register Publication

On Thursday, May 22, 2003, at 9 a.m., the Department will conduct a public hearing on its pending rulemaking on computer reservations systems (CRSs). The public hearing will be held at the Marriott at Metro Center, 775 12th Street, NW., Washington, DC. This notice changes the beginning time from 9:30 a.m. to 9 a.m., sets forth the procedures for the hearing, and lists the speakers in order of appearance.

Draft Version - Served May 20, 2003

By: Thomas Ray


May 22, 2003

Re: Presentation of Sabre

The following materials were distributed at the Department's May 22, 2003 hearing. I have attached copies for the dockets above.

Counsel: Pillsbury Winthrop, David Endersbee, 202-775-9898, david.endersbee@pillsburywinthrop.com


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

May 23, 2003

Testimony of Galileo International

Counsel: Covington Burling, Carolyn Corwin, 202-662-5338, ccorwin@cov.com


May 22, 2003

Comments of Orbitz LLC

By: Gary Doernhoefer


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

May 23, 2003

Prepared Statement of William Adkinson - Senior Policy Counsel for the Progress and Freedom Foundation | Word

By: William Adkinson


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

May 21, 2003

Email from Kenneth P. Quinn (Air & Space Lawyer Magazine articles, Spring 2003)

By: Pillsbury Winthrop, Kenneth Quinn


May 21, 2003

Correspondence of Tom Ray (Flyer by Unknown Concerning Hearing)

Top #10 Questions you should be asking about the Proposed Computer Reservation System (CRS) Regulations

By: Tom Ray


May 21, 2003

Correspondence of Tom Ray (Washington Internet Daily, Christopher Warren)

Orbitz Defends its Preferential Treatment U.S. DOJ Pushes Ahead with Orbitz Anti-trust Investigation.

By: Tom Ray


May 21, 2003

Correspondence of Tom Ray (email from Kenneth Quinn of Pillsbury Winthrop)

By: Tom Ray


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

May 22, 2003

Transcript of CRS Hearing | Word

By: Heritage Reporting


May 27, 2003

Correspondence of Bob Goldner

Correspondence of Bob Goldner to Tom Ray, Senior Trial Attorney, submitting a statement made by Orbitz at the DOT hearing on the CRS rulemaking.

By: Bob Goldner


May 28, 2003

Correspondence of Tom Ray (Flyer by Unknown Concerning Hearing)

By: Tom Ray


May 28, 2003

USA Today Article

By: Alan Simpson


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

May 29, 2003

Correspondence from David Endersbee of Pillsbury Winthrop

We have started reviewing the hearing transcript the Department made available today and have found a number of errors. We respectfully suggest that the Department issue a notice requesting interested parties to submit corrections (not substantive changes) within 48 hours and reissue a corrected transcript. This will ensure accurate quotation in reply comments and prevent unnecessary confusion. Corrections to the hearing transcript.

Counsel: Pillsbury Winthrop, David Endersbee, 202-775-9875, david.endersbee@pillsburywinthrop.com


May 29, 2003

Correspondence of Tom Ray (Flyer by Unknown Concerning Hearing)

By: Tom Ray


May 29, 2003

Correspondence of Tom Ray

By: Tom Ray


May 29, 2003

Correspondence of Tom Ray (Flyer by Unknown Concerning Hearing)

By: Tom Ray


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

June 2, 2003

Delta Air Lines Errata Letter

In reviewing the May 22 hearing transcript, I realized that I misspoke when answering your question reported at page 145. Delta ticket sales through all GDS channels (including both traditional and online travel agencies) still generate more than 65% of the total revenue from Delta ticket sales. The lower figure I cited in my response to your question was for sales through traditional agents, expressed as a percentage of tickets rather than revenue.

Counsel: Delta, Scott McClain, 404-773-6514, scott.mcclain@delta.com


June 2, 2003

Motion of Galileo International to Correct Hearing Transcript

Galileo International hereby moves for correction of a portion of the transcript of the Department's hearing in these dockets, held on May 22, 2003. Following review of pages 55 through 66 of the transcript, Galileo's witness, Cathy Cupp, believes that some of the words in her testimony were erroneously transcribed. In some of these cases, the error affects the substance of the statement.

Counsel: Covington Burling, Carolyn Corwin, 202-662-6000, ccorwin@cov.com


May 30, 2003

OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

Correspondence of Sabre

This letter calls your attention on behalf of our client Sabre Holdings Corporation to an amicus brief filed by the government last week in Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, Supreme Court Docket No. 02682 (copy attached). It urges the Court to reject the "essential facilities" and "monopoly leveraging" doctrines as contrary to the text and policy of the Sherman Act. The analysis in the joint brief by DOJ's Antitrust Division and the Federal Trade Commission has special relevance to the Department's draft CRS Regulations because that proposal purports to be justified by these doctrines.

Counsel: Pillsbury Winthrop, Kenneth Quinn, 202-775-9898, kquinn@pillsburywinthrop.com


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

June 4, 2003

Comments of TechNet Texas | Word

The NPRM takes the wrong approach in at least two key areas. First, apparently in the name of protecting and facilitating the growth of air travel purchases on the Internet, which in truth does not need DOT's help, it actually hampers the backbone of electronic travel distribution, the global distribution systems that provide information to consumers and corporations about travel choices. DOT should not be in the business of choosing winners and losers in the marketplace.

By: Julie Marquard


June 4, 2003

Statement of The Technology Network | Word

We are seriously concerned about the Department of Transportation's recently proposed computer reservation system regulations and are disappointed that the Department did not take into account the dramatic impact these rules would have on us. We believe the government's objective should be to facilitate the widest possible distribution of travel content; however, these rules are poised to have a negative effect on our ability to purchase the full range of air travel through our preferred distribution channels. We do not support the imposition of a new set of onerous distribution rules that are designed to favor airlines over consumers.

By: Rick White


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

June 5, 2003

Motion of Sabre to Correct Hearing Transcript

Counsel: Pillsbury Winthrop, Kenneth Quinn, 202-775-9800, kquinn@pillsburywinthrop.com


June 5, 2003

Motion of Travelocity.com to Correct Hearing Transcript

Counsel: Pillsbury Winthrop, Kenneth Quinn, 202-775-9800, kquinn@pillsburywinthrop.com


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

June 6, 2003

Motion of Amadeus Global Travel Distribution to Correct Transcript

Counsel:Steptoe Johnson, David Coburn, 202-429-8063


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation
OST-03-14484 - Extension of Computer Reservation Systems Regulations


June 9, 2003

Reply Comments of Amadeus Global Travel Distribution

Counsel: Steptoe Johnson, David Coburn, 202-429-8063


June 9, 2003

Reply Comments of American Airlines

Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com


June 9, 2003

Reply Comments of British Airways

Counsel: Garofalo Goerlich, Don Hainbach, 202-776-3970


June 9, 2003

Reply Comments of Continental Airlines

Counsel: Continental and Crowell Moring, Bruce Keiner, 202-624-2500


June 9, 2003

Reply Comments of Delta Air Lines

Counsel: Delta, John Varley, 404-773-6514


June 9, 2003

Reply Comments of Department of Justice

Counsel: Robert Young, 202-353-7131, robert.young@usdoj.gov


Reply Comments of Expedia

Counsel: Squire Sanders, Marshall Sinick, 202-626-6600, msinick@ssd.com


June 6, 2003

Comments of the Federal Trade Commission

By: Timothy Muris


June 9, 2003

Reply Comments of Galileo International

Exhibit A - Travel Weekly, May 19, 2003
Exhibit B - Travel Weekly, May 28, 2003
Exhibit C - AQUA Software Screens

Counsel: Covington Burling, Carolyn Corwin, 202-662-6000, ccorwin@cov.com


June 9, 2003

Comments of Midwest Airlines

Counsel: Silverberg Goldman, Robert Silverberg, 202-944-3300, rsilverberg@sgbdc.com


June 9, 2003

Reply Comments of Orbitz

Exhibit A - Anaylsis of Distribution Costs
Exhibit B - Founders vs. Low Fare
Service List

Counsel: Zuckert Scoutt, Frank Costello, 202-298-8660, fjcostello@zsrlaw.com


June 9, 2003

Reply Comments of Travel Transaction Processing Corporation

Counsel: Arent Fox, Craig Engle, 202-857-6000


June 9, 2003

Reply Comments of US Airways

Counsel: US Airways, Elizabeth Lanier, 703-872-7000


June 9, 2003

Reply Comments of Worldspan

Counsel: Zuckert Scoutt, Charles Simpson, 202-298-8660


June 9, 2003

AgentWare's Position of CRS Regulatory Reforms

By: AgentWare


June 9, 2003

Reply Comments of Alaska Airlines

Counsel: Alaska, Thomas O'Grady


June 9, 2003

Reply Comments of America West Airlines

Counsel: Baker & Hostetler, Joanne Young, 202-861-1532


June 9, 2003

Reply Comments of The American Society of Travel Agents

Counsel: ASTA, Paul Ruden, 703-739-6854, paulr@astahq.com


June 9, 2003

Reply Comments of Hewlett-Packard Company

By: Pauline Nist


June 9, 2003

Reply Comments of The Large Agency Coalition | Word

Counsel: Mark Pestronk, 703-591-1900, mpestronk@aol.com


June 9, 2003

Reply Comments of Northwest Airlines

Counsel: Northwest, Megan Rae Rosia, 202-842-3193, megan.rosia@nwa.com


June 9, 2003

Reply Comments of Sabre

Counsel: Pillsbury Winthrop, Kenneth Quinn, 202-775-9800, kquinn@pillsburywinthrop.com


June 9, 2003

Reply Comments of Travelocity

Counsel: Pillsbury Winthrop, Kenneth Quinn, 202-775-9800, kquinn@pillsburywinthrop.com


June 9, 2003

WorldTravel BTI's Position Statement

By: WorldTravel, Ralph Manker


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation
OST-03-14484 - Extension of Computer Reservation Systems Regulations

June 9, 2003

Reply Comments of the Air Carrier Association of America | Word

By: Edward Faberman, 202-639-7502, epfaberman@uhlaw.com


June 9, 2003

Reply Comments of Competitive Enterprise Institute | Word

By: Brandon Cox, 202-331-1010, bcox@cei.org


June 9, 2003

Reply Comments of Interactive Travel Services

By: ITSA, Antonella Pianalto


June 9, 2003

Reply Comments of Shepherd Systems

By: Shepherd Systems, Chris Colaco, 941-747-5007, chris.colaco@shepherdsystems.com


June 9, 2003

Reply Comments of United Air Lines

Counsel: Wilmer Cutler, Bruce Rabinovitz, 202-663-6960, brabinovitz@wilmer.com


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation
OST-03-14484 - Extension of Computer Reservation Systems Regulations

June 9, 2003

Correspondence of the Competitive Enterprise Institute

Enclosed please find two articles that were cited in CEI's comments. The first is CEI's comments to the 1992 DOT CRS rulemaking. The other document is an article published on the subject of CRS from Regulation magazine. These articles are not easily available to many of the parties interested in this rulemaking. Therefore, please add these to the docket and to the website so that interested parties may access them if desired.

By: Brandon Cox


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation
OST-03-14484 - Extension of Computer Reservation Systems Regulations

Correspondence of SGTP

We received confirmation of receipt by my personal delivery at 3pm Monday, June 9, by both the security guard at the PL-401 mail room, and the Docket Manager, who took it from him.

To date, our comments have not appeared on the Comment List. How can we fax them, and get them into the record?

By: Duncan Farrell


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation
OST-03-14484 - Extension of Computer Reservation Systems Regulations

June 19, 2003

Comments of Prism Group

By: Michael Whitesage, 505-897-7800


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation
OST-03-14484 - Extension of Computer Reservation Systems Regulations

July 17, 2003

Motion for Leave to file and Supplemental Comments of Galileo

Hereby moves for leave to file the following supplemental comments in connection with the Department's rulemaking concerning computer reservations systems. These limited additional comments address important new facts and certain recent developments that Galileo could not have anticipated prior to filing of its reply comments. These supplemental comments will assist the Department in its resolution of issues relevant to the rulemaking. In addition, filing of these comments will not delay the proceeding or otherwise prejudice any party.

Important additional information about the Worldspan post-sale arrangements has now surfaced in a recent press report.' This new information reinforces the conclusion that the Department should conduct an investigation of the Worldspan post-sale arrangements and require Worldspan and its owners to place further information on the public record.

Counsel: Covington Burling, Carolyn Corwin, 202-662-6000, ccorwin@cov.com


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation
OST-03-14484 - Extension of Computer Reservation Systems Regulations

July 18, 2003

Motion for Leave to file and Supplemental Comments of Galileo - Corrected Filing

Hereby moves for leave to file the following supplemental comments in connection with the Department's rulemaking concerning computer reservations systems. These limited additional comments address important new facts and certain recent developments that Galileo could not have anticipated prior to filing of its reply comments. These supplemental comments will assist the Department in its resolution of issues relevant to the rulemaking. In addition, filing of these comments will not delay the proceeding or otherwise prejudice any party.

Counsel: Covington Burling, Carolyn Corwin, 202-662-6000, ccorwin@cov.com


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation
OST-03-14484 - Extension of Computer Reservation Systems Regulations

July 12, 2003

Comments of Radius Global Travel Company

In the NPRM, the Department noted that as to the maximum terms of travel agency contracts, it was considering the following proposals on this issue: readopting the current rule, fixing the maximum term at three years, and adopting the European Union rule. Again, we believe that the market place should set contract length. If the Department believes it must regulate this issue, the proposal that should be adopted is the European Union's rule that allows each subscriber to terminate its CRS contract without penalty on a few months notice after the contract has been in force for at least one year. If the Department adopts this alternative, agencies would be provided with notice of possible contract changes but would not be locked into a contract for a prolonged period of time. This is the only acceptable compromise.

By: Allan Slan


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation
OST-03-14484 - Extension of Computer Reservation Systems Regulations

July 23, 2003

Re: Letter from Amadeus Global Travel Distribution

Hereby submits this letter in the above-referenced dockets to correct an inaccurate representation concerning Amadeus that was made by a commenter (Galileo) and to clarify an issue raised by two other commenters (United Airlines and Sabre) concerning U.S. bilateral obligations with respect to CRS matters. This submission will aid the Department's consideration of the issues by helping to ensure that the Department's record is accurate and complete. To the extent that Amadeus requires leave to file this letter, it hereby requests such leave.

Counsel: Steptoe Johnson, David Coburn, 202-429-8063, dcoburn@steptoe.com


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation
OST-03-14484 - Extension of Computer Reservation Systems Regulations

August 1, 2003

Correspondence of Worldspan

With respect to the broader context of the Department's rulemaking proceeding, the June 30, 2003 acquisition of Worldspan by a non-airline marked the completion of the total divestiture of CRSs by U.S. airlines. Given that airline ownership of CRSs was the predicate for the promulgation of Part 255 in 1984 and the basis for continuing the CRS rules until now, the significance of this transaction to the Department's proceeding cannot be overstated. Indeed, far from triggering the need for an unprecedented and unwarranted governmental investigation of Worldspan's affairs, as Galileo requests, the consummation of the transaction strongly supports the prompt termination of Part 255 and deregulation of CRSs, which many parties (including Worldspan and the Department of Justice) have advocated.

Counsel: Zuckert Scoutt, Charles Simpson, 202-973-7926, cjsimpson@zsrlaw.com


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation
OST-03-14484 - Extension of Computer Reservation Systems Regulations

August 4, 2003

Motion for Leave to File and Supplemental Reply of Sabre

On July 31, 2003, American agreed to Sabre’s DCA-3 program which, in exchange for access to all published fares (including web fares) and other commitments, grants participating airlines a 10% booking fee discount, guaranteed for three years. Delta, Northwest and Continental joined DCA-3 in July. These airlines join United, US Airways and many smaller airlines in taking advantage of Sabre’s substantially lower booking fees.

These new developments reaffirm the robust competition among CRSs for airline business, and the power of airlines to negotiate booking fee concessions. Sabre Comments at 14-15. The Antitrust Division of the U.S. Department of Justice has now made the same point. DOJ Reply at 26. Indeed, airlines have withheld fare and inventory content from CRSs, forcing Sabre and Galileo to offer lower booking fees to get those fares and seats. This natural experiment proves that airlines do indeed have significant leverage to bargain with CRSs. While one airline economist asserted that no bargaining takes place between CRSs and airlines,2 and that the economics of Sabre’s DCA-3 program are not attractive to carriers, events of the last three weeks disprove that assertion.

Counsel: Sabre and Pillsbury Winthrop, Kenneth Quinn, 202-775-9800, kquinn@pillsburywinthrop.com


July 30, 2003

Memorandum of Kirk Van Tine

On June 16, 2003, I attended a meeting with the staff of the House Committee on Small Business and its Subcommittee on Regulatory Reform and Oversight in Room 2360 of the Rayburn House Office Building. The meeting was occasioned by the Subcommittee's request that Secretary Norman Y. Mineta testify at a hearing scheduled for June 26 regarding the rulemaking on computer reservation systems. In addition to myself, the DOT employees present were Michael Reynolds, Acting Assistant Secretary for Aviation and International Affairs, and Karin Glasgow, Associate Director, OST Governmental Affairs. Congressional staff present were Rosario Palmieri, Subcommittee Staff Director; W. Patrick Wilson, Committee staff member and Legislative Director & Special Counsel to Rep. Donald Manzullo, Chairman of the Committee; Julie Carr, Legislative Director, Congresswoman Nydia Velazquez; and Barry Pineles, Subcommittee Staff.

At the beginning of the meeting, Mr. Palmieri expressed the opinion that the initial Regulatory Flexibility Analysis set forth in the Notice of Proposed Rulemaking was inadequate in a number of respects. He then asked that the DOT representatives present explain how the Department intended to change the Regulatory Flexibility Analysis, and the proposed rules themselves, in response to his and other comments when it issued the final rules.

By: Kirk Van Tine


July 30, 2003

Memorandum of Neil R. Eisner

On June 18, 2003, representatives of the Department of Transportation attended a meeting in the offices of Congressman Ed Schrock concerning DOT's ongoing rulemaking on computer reservation systems (CRS). In addition to Congressman Schrock, the following Congressional staff members were present: L. Patrick Wilson, Legislative Director, House Committee on Small Business; Rosario Palmieri, Staff Director, Subcommittee on Regulatory Reform and Oversight; Rob Catron, Chief of Staff Chairman Schrock's personal office; and Jeff Palmore, Legislative Assistant, Chairman Schrock's personal office. The following people attended the meeting for DOT: Kirk K. Van Tine, General Counsel, DOT; Neil Eisner, Assistant General Counsel, DOT; Nicole Nason, Assistant Secretary-Designate for Governmental Affairs; and Shane Karr, Deputy Assistant Secretary for Governmental Affairs. The meeting was held in response to an invitation from Mr. Schrock, Chairman of the Subcommittee on Regulatory Reform and Oversight of the Committee on Small Business of the U. S. House of Representatives, to the Secretary of Transportation to testify at a hearing on "CRS Regulations and Travel Agencies."

By: Neil Eisner


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation
OST-03-14484 - Extension of Computer Reservation Systems Regulations

August 8, 2003

Correspondence from American Society of Travel Agents | Word

Without getting into an extended linguistic analysis of these carefully crafted phrases, Worldspan's response illustrates the very point ASTA made in its reply comments. There is nothing in the record on the extent and nature of the marketing relationships between the airlines and the CRS's other than various concessions that numerous such relationships exist. DOT cannot simply assume there is no problem here, given the provenance of the regulations. Worldspan appears to be saying: "if you don't know now, we're not going to help you find out." Given the obvious opportunity to explain the new marketing relationships that will emerge in the aftermath of the sale, it is more than a little curious that Worldspan would choose to say only that "whatever you believe is not quite right" without setting the record straight. Whatever the goal of these linguistic maneuvers, DOT has a responsibility to resolve this question before it can deregulate or re-regulate the CRS business. It alone has the power to secure the necessary information, place it in the public record for evaluation and comment and then make an informed decision.

By: Paul Ruden


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation
OST-03-14484 - Extension of Computer Reservation Systems Regulations

August 8, 2003

Reply of America West to Supplemental Comments of Galileo and Sabre

America West Airlines, Inc., files these reply comments in response to supplemental comments of Galileo International, Inc., regarding its Momentum program and Sabre, Inc. regarding its DCA-3 program. In their initial comments, Galileo and Sabre asserted they had offered discount programs which evidenced competition among CRSs for air carrier business and reflected bargaining power of airlines. America West, in its reply comments, showed these programs actually constituted further evidence of CRS market power over airlines. In newly filed supplemental comments, both Galileo and Sabre attempt to convince the Department of such competition. America West respectfully requests leave to file this reply for the limited purposes of refuting Galileo's and Sabre's new assertions and providing the Department with a full and accurate record in this proceeding.

Galileo and Sabre seek parity with Orbitz in terms of fare access while offering little in return. If Galileo and Sabre were motivated by market forces, their "discount" programs presumably would be competitive with this alternative distribution channel.

Counsel: Baker Hostetler, Joanne Young, 202-861-1532


August 27, 2003

Joint Response of America West and American Airlines

Sabre, Inc., the largest CRS with the most to lose from dismantlement of the present dysfunctional airline distribution system, has filed extensive Reply Comments in which it makes, for the first time, novel and strained legal arguments in opposition to the adoption of the Zero Booking Fee. Accordingly, America West and American respectfully request leave pursuant to 14 C.F.R. § 302.6(c), to file this Joint Response to the Reply Comments of Sabre, Inc., to ensure the Department has a full and complete record upon which to base its decision regarding the adoption of a Zero Booking Fee as part of its CRS regulations.

There is no merit to Sabre's claim that a Zero Booking Fee would violate the Fifth Amendment to the Constitution as an unconstitutional taking. Sabre erroneously relies on a number of cases involving rate regulation, in arguing a Zero Booking Fee would be unconstitutional because it is "confiscatory" and does not "permit a fair return on investment."

Counsel: American, Carl Nelsn, 202-496-5647 / America West and Baker Hostetler, Joanne Young, 202-861-1532


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

August 28, 2003

Correspondence of Rosalind Knapp responding to the Honorable George V. Voinovich

Ms. Troilo-Krings' letter to you expresses concerns about the Department's proposed rules and includes a petition that asserts that rules governing CRSs and comparable airline distribution channels remain necessary. We will ensure that a copy of Ms. Troilo-Krings' letter is included as a comment in the rulemaking docket. We will consider all of the comments on our rule proposals before making our final decision on which CRS rules should be adopted.


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

September 15, 2003

Motion for for Leave to File and Response of Sabre

Sabre seeks leave to file this response to the "Joint Response of America West Airlines, Inc. and American Airlines," filed August 27, 2003, to rebut these late-filed arguments in support of these airlines' "zero booking fee" proposal, and to alert the Department to recent factual developments that undermine those arguments. Grant of this motion will not unduly delay this proceeding, and acceptance of this Response will provide the Department with a more complete record upon which to base its ultimate decision.

Counsel: Pillsbury Winthrop, Kenneth Quinn, 202-775-9800, kquinn@pillsburywinthrop.com


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation
OST-03-16469 - Petition of Amadeus to Eliminate Sunset Date

November 7, 2003

Response of Galileo International in Support of Petition to Eliminate the CRS Rules Sunset Date

Galileo supports the Petition by Amadeus asking the Department to eliminate the current sunset date of January 31, 2004, for the existing CRS rules. Upon publication of the new rules or the deregulation of the industry, the Department should establish an appropriate transition period. Based upon the wildly divergent comments submitted to the Department regarding the NPRM, it has been impossible to predict what action the Department is likely to take. As a result, industry participants have been unable to plan appropriately to respond to any new regulatory environment that may emerge with the final rule. This is especially true in light of the complex commercial relationships between airlines, CRSs, and travel agencies that have been established over time.

Counsel: Covington Burling, Carolyn Corwin, 202-662-6000, ccorwin@cov.com


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation
OST-03-16469 - Petition of Amadeus to Eliminate Sunset Date

November 11, 2003

Response of Delta Air Lines to Petition for Rulemaking to Eliminate CRS Rules Sunset Date

No new proceeding is necessary to debate the need for a sunset provision. The Department specifically asked for commentary on whether a sunset period should be included in any new rules, and many commenters addressed this issue. Most of the commentary opposed the Department's proposal to eliminate the sunset provision. Promulgation of new rules without any sunset period creates a serious risk that any new rules will become as obsolete as the current rules soon after they are promulgated, especially in view of the rapid technological and market changes that this industry will experience in the next three to five years.

Re: Correction

Delta submits this letter to correct a factual error in its Response filed in the above-referenced dockets earlier today. The regulatory schedule cited in Delta's Response was the schedule published in the Department's October report. As Amadeus correctly states in its Petition, the updated schedule reflected in the Department's November report projects a publication date of January 19, 2004.

However, for the reasons stated in Delta's Response, this minor revision to the projected publication schedule would at most justify a brief extension of the current sunset date, not an elimination of the sunset provision. As stated in Delta's Response, Delta would not oppose a short extension.

Counsel: Delta, John Varley, 404-773-6514


November 11, 2003

Opposition of Sabre to Amadeus' Petition to Eliminate the CRS Rules' January 31, 2003 Sunset

On the eve of the 20th anniversary of CRS rules that were supposed to sunset in 1990, six years after the onset of this latest rulemaking, and days after the Department submitted its final rule to OMB, Amadeus has filed a petition to eliminate the January 31, 2004 sunset date for the rules. The CRS rules were created for an airline-controlled CRS industry that no longer exists, and before the Internet gave every consumer and travel agent a clear alternative to CRSs for checking airline flights and fares. Sabre respectfully opposes Amadeus' petition, and submits that it is time to bring this rulemaking to a close and eliminate an obsolete regulation that now lacks its original rationale.

Counsel: Sabre and Pillsbury Winthrop, Kenneth Quinn, 202-775-9800


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation
OST-03-16469 - Petition of Amadeus to Eliminate Sunset Date

November 12, 2003

Response of Northwest Airlines in Opposition to Petition for Rulemaking to Eliminate the CRS Sunset Date

Opposes the petition of Amadeus Global Travel Distribution, S.A. for a rulemaking aimed at eliminating the CRS sunset date in Section 255.12 of the current CRS rules. Amadeus' petition is another in a long series of attempts by some CRSs to prolong the current, obsolete rules, and its ploy should be rejected. There is no need to eliminate the sunset date so that parties can adjust to the final rule in this proceeding, whatever it may be, and doing so now would be unwise.

Counsel: Northwest, Megan Rae Rosia, 202-842-3193, megan.rosia@nwa.com


November 13, 2003

Answer of Worldspan to Petition of Amadeus

Worldspan opposes Amadeus' petition. Whether it is intended as such or not, the relief requested by Amadeus would produce an open-ended extension of the existing rules and remove pressure on all concerned parties to effect a changeover to a deregulated regime as promptly as possible. An open-ended extension also would be directly contrary to the established policy, embodied in the very notion of a sunset date, that the rules should terminate on a date certain in the absence of a determination that public interest considerations compel continued regulation until a future date certain. Amadeus itself recognizes that the Department is fully capable in its upcoming final rule of providing for a suitable lead-time (or lead times) between the publication and effective dates of the amended rules. Furthermore, in order to avoid a "regulatory hiatus" (if there is a real likelihood of such a hiatus and such a hiatus would be adverse to the public interest, which is not a given), in the worst case the Department could propose a modest extension of the sunset date. Nothing as drastic or overreaching as the requested elimination of the sunset date rule is needed or warranted.

Counsel: Zuckert Scoutt, Charles Simpson, 202-298-8660


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation
OST-03-16469 - Petition of Amadeus to Eliminate Sunset Date

November 14, 2003

Answer of United Air Lines in Opposition to Petition of Amadeus for Rulemaking to Elimite CRS rules Sunset Date

United has been a consistent supporter of total elimination of the CRS rules. United believes that the Department has failed to establish that it has jurisdiction to regulate non‑airline‑owned CRS vendors. In any event, the total eclipse of U.S. airline ownership of CRS systems and the pro‑competitive impact of the Internet on the air travel distribution process, which has greatly enhanced consumer choice and access to information about airline services, have obviated the need to regulate CRS services. In fact, the effect of the existing rules has been the opposite of their intent: they have undermined competition and harmed consumers by helping drive up airline distribution costs. United is not privy to the content of the draft final rule, but anticipates that, even if the Department does not terminate the rules entirely, it will at least follow the recommendations of the Department of Justice (among many others) and eliminate the patently anti‑competitive aspects of the current rules, particularly the non‑discriminatory booking fee rule and the mandatory participation rule.

Counsel: Wilmer Cutler, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmer.com


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation
OST-03-16469 - Petition of Amadeus to Eliminate Sunset Date

November 24, 2003

Motion for Leave to File and Reply of American

Full deregulation will only succeed in a properly functioning market. Because of the persistence of CRS market power, American agrees with the DOJ that "rules aimed primarily at prohibiting the exercise of CRS market power" are necessary for a transitional period prior to complete deregulation. American therefore supports the adoption of limited regulations such as a complete ban on all CRS parity clauses and restrictions on CRS payments to travel agents. Such regulations are targeted at the most extreme abuses of CRS market power. Their implementation would help to correct the current market failure that continues to plague the CRS market. Only in a market characterized by free and open competition will the goal of full deregulation succeed.

Counsel: Howrey Simon, Mark Schechter, 202-783-0800


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation
OST-03-16469 - Petition of Amadeus to Eliminate Sunset Date

November 12, 2003

Ex-Parte Communication with the Office of Management and Budget

I read your excellent November 6 speech before the American Bar Association regarding OIRA's work and the progress you have made. Through the lens of the CRS rulemaking, which you mention in the speech, I have witnessed the real world benefits of OIRA's initiatives first hand.  My colleagues and I at Sabre Holdings are most grateful for your leadership. Your identification of the CRS industry as presenting "a promising opportunity for deregulation" is extremely encouraging to us.  I hope that real, complete deregulation is achievable within the next few months -- and that pressure to keep a subset of DOT's rules in place for a "transition period" can be resisted. I sincerely believe that the continuation of any rules will seal the fate of our industry to be regulated forever. The prospect of being plunged back into another wasteful, time consuming CRS rulemaking is repugnant on every level. I thought you might like to review five of the most sensible pages that anyone submitted to the DOT docket over the course of the last seven years of this proceeding -- they are from United Airlines' reply comments last June.

By: Thomas Ray


November 6, 2003

Ex-Parte Communication with the Office of Management and Budget

By: Thomas Ray


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation
OST-03-16469 - Petition of Amadeus to Eliminate Sunset Date

November 13, 2003

Correspondence of Continental Capers Travel & Cruises

The rulemaking redirects a critical revenue stream from our travel agency to the airlines by banning CRS productivity incentives. It will invalidate the contract we spent months negotiating with our CRS company. The rules may also invalidate new contracts between CRS companies and airlines that guarantee our agency unprecedented access to fare and inventory content, and would perpetuate completely out of date rules concerning our screen displays and advertising practices. It is a hurtful and misguided wielding of government power.

The last thing travel agency owners need is for the DOT to micromanage our businesses further. There are over 23,000 travel agency locations across the United States, and their size varies from American Express corporate headquarters in New York to small mom and pop operations. The DOT has failed to conduct the legally required study about how these proposed regulations would impact small business.

By: John May


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation
OST-03-16469 - Petition of Amadeus to Eliminate Sunset Date

December 5, 2003

Motion for Leave to File and Response of Sabre to Reply of American Airlines

Sabre seeks leave to file this Response to the "Motion for Leave to File and Reply of American Airlines, Inc. to Sabre, Inc.," filed November 24, 2003, to refute American's arguments for new "transitional" regulations and to correct American's characterization of the Department of Justice's comments. Grant of this motion will not un-duly delay this proceeding, and acceptance of this Response will provide the Department with a more complete record upon which to base its ultimate decision.

Counsel: Pillsbury Winthrop, Kenneth Quinn, 202-775-9800, kquinn@pillsburywinthrop.com


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation
OST-03-16469 - Petition of Amadeus to Eliminate Sunset Date

December 5, 2003

Ex-Parte Letter to the Honorable Bob Graham

DOT agrees that it should ensure that any new CRS rules do not cause unreasonable harm to travel agencies such as Bowen Travel and Prime Travel. Many travel agencies submitted comments on the proposals. We have carefully considered all of the comments in the proceeding, and we are taking the travel agencies' concerns into account in determining which rules, if any, should be adopted. As I am sure you will understand, under DOT rules I may not discuss the merits of specific rule proposals with you because of the pending rulemaking proceeding.

By: Rosalind Knapp


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation
OST-03-16469 - Petition of Amadeus to Eliminate Sunset Date

December 1, 2003

Ex-Parte Communication from OMB - Letters from United Air Lines and Sabre

By: Stephen Sawyer of United / Ernest Gelihorn of Sabre


OST-97-2881 - Computer Reservation System Regulations
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

December 17, 2003

Motion for Leave to File and Supplemental Reply Comments of the American Society of Travel Agents to Reply of American Airlines to Sabre

Ordinarily we would not challenge the acceptance of additional comments by a party where even a remotely plausible basis for filing them was alleged. Here, however, American has used the pretext of Sabre's response to a procedural motion by Amadeus to present the Department with yet another summary of its oft-stated position that it and the other network airlines should be given a financial advantage over all other industry participants during a so-called "transition" to complete CRS deregulation. Can it be that the Department is not familiar with American's "me first" position? At this advanced state of the proceeding, American's late entry into the race for preferential treatment should be rejected on grounds that it adds nothing new to the record.

If the Department accepts American's pleading, we then say, recognizing the risk of repetition, that it would be unlawful for the Department to grant what American seeks even for one minute of transition. American asks the government of the United States to reach into the pockets of travel agencies so that it can be enriched during some "transition" period leading to full removal of the CRS regulations. As well as anything that has been filed in this massive proceeding, American's special pleading illustrates why the rules, an on-going platform for those seeking special treatment, should be terminated with extreme prejudice.

Counsel: ASTA, Paul Ruden, 703-739-5854, paulr@astahq.com


Computer Reservations System Regulations

OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

Issued December 31, 2003

Final Rule (Enhanced with Bookmarks for Easier Navigation) | Word

Final Rule - as Published in the Federal Register - January 7, 2004

The Department is amending its rules governing airline computer reservations systems to eliminate most of the rules now and to terminate additional rules as of July 31, 2004.  The Department is readopting the rules prohibiting display bias and adopting rules that prohibit systems from imposing certain types of contract clauses on participating airlines that would unreasonably restrict their ability to choose how to distribute their services.  These rules will be effective during a six-month transition period.

By: Norman Mineta


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

November 17, 2003

Re: Letter to OMB

Correspondence from William Hannigan, Sabre Holdings; Carly Fiorina, HP; Rakesh Gangwal, Worldspan, L.P; Sam Gilliland, Travelocity; Richard M. Copland, American Society of Travel Agents; Scott McNealy, Sun Microsystems, Inc.; Pamela Arway, American Express; Erik Blachford, Expedia, Inc.; Rick White, Technet; Steve Papermaster, Powershift Ventures; Robert J. Abernethy, American Standard Development Company; Marc Benioff, Salesforce.com; John J. Culbertson, Open Access, Inc.; Robin L. Curle, Zebra Imaging, Inc.; Robert Farnsworth, Sonnet Technologies, Inc.; Harry W. Kellogg, Jr. Silicon Valley Bank; Tim Hugo, CapNet; Arthur W. Coviello, Jr., RSA Security, Inc.; Nick Konidaris, Advantest America, Inc.; Roberto Medrano, Hispanic-Net; David G. Nance, Introgen Therapeutics, Inc.; Willem Roelandts, Xilnx; George M. Tronsrue, III, Monet Mobile Networks, Inc.; Geoffrey Tudor, Advent Networks, Inc., expressing their concerns about the Department's Computer Reservation System rules that have recently been sent to the OMB for review and final disposition; and stating their objections to the continuation of DOT regulation of the travel distribution marketplace in any form.


December 18, 2003

Re: Letter from Norman Mineta to Honorable Don Young

By: Norman Mineta


OST-97-2881 - Computer Reservation System Regulations - NPRM
OST-97-3014 - America West - Petition for Rulemaking
OST-98-4775 - ARTA Emergency Petition for Rulemaking
OST-99-5888 - Petition of Amadeus for Interpretation

January 8, 2004

Re: Memorandum in Response to Regulatory Planning and Review

We are submitting this memorandum in response to section 6(a)(3)(E) of Executive Order 12866, "Regulatory Planning and Review." That section requires us to identify the substantive changes between the draft rulemaking documents we submit to the Office of Management and Budget ("OMB") for review and the documents later issued, and indicate which of those changes were made at the suggestion or recommendation of OMB's Office of Information and Regulatory Affairs.

The principal difference between the draft rule submitted on November 4 and the final rule is that the final rule provides for a six‑month transition period rather than the two‑year transition period contemplated by the draft final rule. OMB did not believe that a two‑year transition period was necessary. After discussions between the Department and OMB, a six‑month transition period was agreed upon. The final rule therefore provides that the remaining rules ‑those not permitted to expire on January 31, 2004 ‑‑ will sunset on July 31, 2004. Shortening the length of the transition period resulted in some changes in the discussion on the need for maintaining any CRS rules.

By: DOT, Thomas Ray


OST-97-2881 - Computer Reservations System Regulations
OST-97-3014 - Comments in Response to ANPRM CRS
OST-98-4775 - Advance Notice of Proposed Rulemaking - Computer Reservation System (CRS) Regulations (Part 255)
OST-99-5888 - Petition for Interpretation of Computer Reservations Systems Regulations

April 14, 2004

Statements of Policy: Price Advertising | Federal Register Publication for April 21st

We continue to seek to prevent airlines and travel agencies from providing consumers with misleading or inaccurate information. To prevent such practices, we can use both our enforcement authority and our rulemaking authority. We may bring enforcement cases against airlines and travel agencies for engaging in conduct that violates section 411 even if there is no regulation or policy statement that states that the specific conduct at issue is unlawful as an unfair or deceptive practice.

As we stated in our final CRS rule, we should adopt rules regulating industry practices under section 411 only if those rules are reasonably necessary to prevent anti-competitive or deceptive practices that are likely to occur, and would cause significant consumer harm if they did occur, and only if market forces are unlikely to remedy the problem. 69 FR 977. Judged against that standard, the record in this proceeding does not justify the adoption of either proposed amendment to the policy statement.

With respect to the proposal on the disclosure of travel agency service fees, the record does not provide a factual basis for mandating a specific format for the disclosure of travel agency service fees. While consumers could benefit from a separate disclosure of any such fee, the record does not show that consumers have been harmed when travel agencies instead display a total price including such fees. Expedia, for example, represents that no consumer has ever complained that Expedia's practice of showing a total price for a trip without a separate disclosure of a service fee is misleading or hides necessary information. Expedia further argues that its display of only a total price is not deceptive. Given our decision in the CRS rulemaking that airline distribution should not be subject to industry-wide regulations unless necessary, we have concluded that the comments do not show a basis for mandating one form of fee disclosure rather than another.

By: Michael Reynolds


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