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44848 Federal Register / Vol. 70, No.

149 / Thursday, August 4, 2005 / Rules and Regulations

■ 3. Add new paragraphs (d) and (e) to 20590, 202–366–3176 or Daeleen administrative burden on carriers, but
§ 337.206 to read as follows: Chesley, Office of the Assistant General the excessive footnoting required by the
Counsel for Aviation Enforcement and rule may also serve to increase
§ 337.206 Terminations, modifications, Proceedings (C–70), U.S. Department of consumer confusion and, at best,
extensions, and reporting.
Transportation, 400 Seventh Street, provides only limited information to
* * * * * SW., Room 10118, Washington, DC consumers about the carrier that will be
(d) No new appointments may be 20590, 202–366–1617. operating a particular flight.
made under the provisions of section SUPPLEMENTARY INFORMATION: To ease the burden on carriers, United
1413 of Public Law 108–136 after requested that section 257.5(d) be
September 30, 2007; and Background reinterpreted to permit carriers to
(e) Those departments and agencies, Notice of Proposed Rulemaking provide a generic disclosure in print
excluding the Department of Defense, advertisements indicating that some of
that use the direct-hire authority These amendments follow a Notice of
the service offered may involve travel
provided in § 337.204(c) must submit to Proposed Rulemaking (NPRM)
on one or more of its listed partner
OPM a report on their implementation published in the Federal Register on
carriers. United contended that if its
of section 1413 of Public Law 108–136 January 30, 2005 (70 FR 2372). In that
proposal were adopted, the information
no later than December 31, 2006. The NPRM, the Department of
consumers obtain, in practical terms,
report must include: Transportation (Department) proposed
would not change and the burden on
(1) A description of how the agency’s to amend Part 257 of its rules, 14 CFR
carriers would be eliminated. United
implementation satisfied each of the Part 257. Section 257.5(d) requires
emphasized that print advertisements
elements laid out in §§ 337.203 and carriers in any print advertisement for serve only as the first opportunity to
337.204(b)(1)–(8), as applicable; service in a city-pair market that is inform consumers about an airline’s
(2) An assessment of the effectiveness provided under a code-sharing service offerings and consumers will,
of the authority in attracting employees arrangement or long-term wet lease to through telephone inquiries to
with unusually high qualifications to clearly indicate the nature of the service reservation offices or by reviewing
the acquisition workforce; and in reasonably sized type and identify Internet flight listings, continue to
(3) Any recommendations on whether the transporting carrier[s] by corporate receive sufficiently detailed disclosure
the authority should be extended. name and by any other name under concerning any code-sharing
[FR Doc. 05–15259 Filed 8–3–05; 8:45 am]
which the service is held out to the arrangement relevant to their travel
public. The NPRM proposed to amend plans before making any travel purchase
BILLING CODE 6325–39–P
the rule to permit carriers to disclose decisions.
generically that some of the advertised In commenting on United’s petition,
service may involve travel on another American Airlines and Orbitz urged that
DEPARTMENT OF TRANSPORTATION carrier, so long as they also identify a any change to the Department’s rule
Office of the Secretary list of all potential carriers involved in governing the disclosure of code-share
serving the markets advertised. and long-term wet lease arrangements in
The NPRM was prompted by a print advertisements be applied to
14 CFR Part 257
petition for rulemaking filed by United Internet advertisements as well.
[OST Docket No. 2004–19083] Airlines, Inc., (United) with the In issuing our NPRM, we granted
RIN 2105–AD49 Department on September 7, 2004. In United’s petition and proposed to
that filing, United asserted that the amend our rule governing code-share
Disclosure of Code-Sharing and Long- current print advertisement disclosure and long-term wet lease disclosure in
Term Wet Lease Arrangements regime required by section 257.5(d) has print advertisements to permit the
become increasingly burdensome on inclusion of a generic statement
AGENCY: Department of Transportation; network carriers while failing to provide representing that some of the advertised
Office of the Secretary. meaningful off-setting consumer service may involve travel on another
ACTION: Final rule. benefits and asked that we amend that carrier, so long as such advertisements
provision. United pointed out that a also included a list of all potential code-
SUMMARY: This action amends the rule network carrier typically publishes print share or wet lease carriers involved in
governing the disclosure of code-share advertisements offering service for serving the markets advertised.
and long-term wet lease arrangements in travel in multiple domestic and However, we pointed out that we
print advertisements of scheduled international city-pairs over a large tentatively were not persuaded that the
passenger services to permit carriers to number of alternative routings, some of same relief would be warranted with
disclose generically that some of the which are provided by carriers other respect to Internet advertisements.
advertised service may involve travel on than the advertising carrier pursuant to Rather, the Department posited that
another carrier, so long as they also a code-share or a wet lease arrangement. entities soliciting air transportation via
identify a list of all potential carriers Currently, in order to comply with the Internet can easily and clearly
involved in serving the markets section 257.5(d), such a carrier must disclose information to consumers
advertised. The action is taken in provide consumers with a detailed set of regarding each specific partner carrier
response to a petition for rulemaking disclosures that will vary depending on that serves each particular city-pair
filed by United Airlines, Inc. the number of alternative routings that route or market being advertised by
DATES: This final rule becomes effective may be available for travel in a specific using hyperlinks or other techniques.
September 6, 2005. city-pair. Compliance with the current Accordingly, the Department did not
FOR FURTHER INFORMATION CONTACT: rule results in print advertisements that propose to include Internet solicitations
Trace Atkinson, Air Carrier Fitness include numerous footnotes relating in the changes to our code-share and
Division, Office of Aviation Analysis exclusively to the disclosure of code- wet lease disclosure rule being proposed
(X–56), U.S. Department of share and wet lease arrangements. in the NPRM. However, we did solicit
Transportation, 400 Seventh Street, According to United, not only do such comments on any differences or
SW., Room 6401, Washington, DC disclosures impose a significant similarities between Internet and print

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Federal Register / Vol. 70, No. 149 / Thursday, August 4, 2005 / Rules and Regulations 44849

advertisements and the possible benefits of Part 257 with respect to explicit code- the carrier(s) actually operating the
or detriments of extending the changes share disclosure on specific itineraries, specific flight(s).
in the proposed rule to Internet including notice in schedules, oral Each of the carriers opposing the
advertising. notice to prospective passengers, and change to section 257.5(d) as proposed
written notice in itineraries, will in the NPRM urge the Department to
Discussion of Comments retain its current policy of requiring
continue to provide ample notice to
During the comment period for this passengers of the identity of the specific code-share and long-term wet
rulemaking proceeding, we received transporting carrier under code-share lease arrangement disclosure for each
twenty-eight comments and after March arrangements. The Regional Carriers city-pair enumerated in print
14, 2005, the closing date for receipt of advertisements for air service on the
support the accurate and detailed
comments, we received two additional basis that the proposed change is not
disclosure of code-sharing and wet lease
comments. Independence Air, Inc. justified by the record. Independence
arrangements for specific flight options
(Independence), Southwest Airlines, contends that the proposed revised rule
Inc. (Southwest), JetBlue, Inc. (JetBlue), before consumers purchase their flights,
contradicts the rationale used to justify
Edward Hasbrouk, who identifies whether such information appears in
the rule as initially promulgated, where
himself as an independent travel printed schedules, through telephone
the Department observed that a network
consultant and author of ‘‘The Practical reservation centers, or on Web sites.
carrier’s name may be used by
Nomad,’’ and several other individual U.S. Airways and United both point out numerous independent, separately-
commenters filed comments opposing that the proposed rule is not unlike owned and managed carriers, which
the revisions to section 257.5(d) circumstances that lawfully occur under could result in passengers erroneously
proposed in the NPRM. The American the current rule, since the current rule believing that they are traveling on a
Society of Travel Agents (ASTA) and permits generic footnotes for individual major carrier that may bear no legal
sixteen air carriers 1 filed comments city-pairs and, as such, the passenger responsibility to the passenger.
supporting the proposed rule change. cannot know the specific carrier he/she Independence further contends that
Additionally, each of the commenters will be traveling on until the consumer passengers with disabilities may be
who filed comments supporting the speaks with an air carrier representative disadvantaged by not knowing the name
Department’s proposed rule change also and a specific itinerary is selected. of the operating code-share carrier since
requested that the Department extend Additionally, United points out that regional aircraft may be less accessible
the proposed change to cover Internet as consumers may be confused because than mainline aircraft, and that the
well as print advertising. Over half of multiple footnotes must be attached to generic statement contemplated in the
the comments received from individuals some of the fares it advertises, and these revised rule will allow carriers engaged
and one air carrier, Independence, used footnotes do not actually tell consumers in code-share and long-term wet lease
the occasion to opine that, as a general whether they will be flying on flights arrangements to appear to have larger
matter, the practice of code sharing, in operated by a code-share partner, let market penetration than they do in
and of itself, is deceptive and alone the name of the carrier actually reality. JetBlue contends, and
misleading and can lead to customer operating the flight. Delta, United, and Independence essentially agrees, that
confusion. In addition, a few individual U.S. Airways contend that, absent the code-share partners may fail to provide
commenters argued that code sharing rule change, network carriers will focus the same service, aircraft or amenities
should be altogether abolished. their advertising resources on larger that a mainline air carrier can provide.
markets rather than engage in the For this reason, a passenger should be
A. Print Advertisements able to clearly understand the type of
production of what ASTA calls the
Commenters supporting the proposed ‘‘blizzard of footnotes’’ required under customer service and distinct product
change to section 257.5(d) unanimously the current rule.2 U.S. Airways and offered by the air carrier on which he or
agree that the requirements of the United agree that a failure to adopt the she will be a passenger. Southwest
current rule are unduly burdensome and proposed rule change will have a states that the NPRM does not explain
fail to provide commensurate and how relaxing the existing market-
disparate effect on smaller markets
meaningful consumer benefits. specific disclosure rule squares with the
where the level of print advertising may
American and the Regional Carriers, in Department’s policy to require full
be diminished. For example, U.S.
concurring with the proposed rule disclosure of all relevant information to
Airways states that, in markets where
change, reiterate that a generic code- consumers at the outset of their
U.S. Airways operates a variety of U.S. decision-making process. Southwest
share disclosure in a print
advertisement must list all potential Airways Express services, extensive further adds that the possibility of
carriers involved in serving the markets footnoting of code-share flights results customer confusion and the cost of
advertised. American asserts that such a in a disincentive to use multi-market specifically footnoting each flight as
disclosure provides adequate notice to city-pair advertising.3 In summation, all required by the current rule, which it
consumers that code-share or wet-lease of the supporters of the proposed rule asserts is de minimis, are insufficient
service is offered in the markets contend that it will alleviate a justifications for the Department to
advertised and that other requirements substantial administrative burden on change course in its policy regarding the
airlines who are engaged in advertising disclosure of code-share and long-term
1 Those carriers are American Airlines, Inc. code-share operations while continuing wet lease arrangements in print
(American); United Airlines, Inc. (United); Delta to guarantee that consumers receive advertisements.
Airlines, Inc. (Delta); Continental Airlines, Inc. prompt and accurate notice regarding
(Continental); Northwest Airlines, Inc. (Northwest); B. Internet Advertisements
and U.S. Airways, Inc. (US Airways), and the
following carriers collectively referred to as the 2 ASTA further asserts that these footnotes do It would appear that commenters
‘‘Regional Carriers’’: Air Wisconsin Airlines nothing to aid the consumer in his/her travel plans. Southwest, Independence, and JetBlue,
Corporation; American Eagle Airlines, Inc.; Atlantic 3 In support of this position, U.S. Airways states
in requesting that the Department retain
Southeast Airlines, Inc.; ExpressJet Airlines, Inc.; that 97 percent of these same non-hub locales are
Gulfstream International Airlines, Inc.; Mesaba serviced by network carriers and their code-share
its existing code-share rule are, in effect,
Airlines, Pinnacle Airlines, Inc.; PSA Airlines, Inc.; partners and only 3 percent of non-hub community urging the Department not to extend the
Regionsair Inc.; and Skywest Airlines, Inc. service is provided by low cost carriers. proposed rule change to encompass

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44850 Federal Register / Vol. 70, No. 149 / Thursday, August 4, 2005 / Rules and Regulations

Internet advertising. Each of the provided adequate notice of the consider a failure to disclose code-share
commenters arguing in favor of the rule practice.4 and wet lease arrangements in print
change regarding print advertisements As noted above, the Department has a advertisements to be an unfair and
urges the Department to extend the rule long history of requiring code-share and deceptive trade practice and to
to Internet advertisements as well. The wet lease disclosures in print vigorously enforce any such violations,
majority of these commenters generally advertisements. Many of the reasons for we are of the opinion that continuing to
assert that there should be no difference requiring such disclosures were require carriers to enumerate each
in the treatment afforded the two discussed in the notice of proposed specific partner carrier that serves each
advertising media. United points out rulemaking dated August 10, 1994, and particular city-pair route or market
that the issues involving code-share the final rule dated March 15, 1999.5 being advertised in a print
disclosures that may be required in However, since that time, there have advertisement is not necessary at this
conjunction with Internet advertising do been many changes in the marketplace, stage of consumer inquiry to provide
not materially differ from those including an increase in the number of adequate notice to consumers of the
provided in the footnotes that appear in carriers providing service in multiple nature of the advertised service.
print advertisements in that they are domestic and international city-pair Accordingly, we will make final our
burdensome for carriers and may also markets over a large number of proposal to amend our rule governing
confuse customers. Continental added alternative routings, many of which are code-share and long-term wet lease
that there is no reason to retain the provided by carriers other than the disclosure in print advertisements to
existing complex and burdensome advertising carrier pursuant to a code- permit a generic statement indicating
disclosures of each specific operating share or a wet lease arrangement. The that some of the advertised service may
airline on each route for service unintended practical effect of current involve travel on another carrier, so long
advertised on the Internet. Delta asserts section 257.5(d) is that carriers that rely as such advertisements also include a
that, similar to print advertising, a extensively on code sharing to serve list of all potential code-share or wet
failure to extend the proposed rule customers must now include numerous lease carriers involved in serving the
change to the Internet will have a footnotes relating exclusively to the markets being advertised.
disparate effect on small communities disclosure of code-share and wet lease With regard to the issue of code-share
because increased administrative costs arrangements in print advertisements. advertising via the Internet, as an initial
in developing highly detailed As a general matter, the more matter, we wish to make clear that
disclosures for small markets, combined information provided consumers, the ASTA’s statement that the Internet ‘‘was
with the modest numbers of potential better they are able to make informed not even mentioned’’ during the Part
passengers, would negatively impact the choices in the marketplace. However, 257 rulemaking and its suggestion that
promotion of special offers. we may have intended to abandon our
requiring the provision of too much
ASTA adds that, while at one point policy to ensure that Internet displays
information in a necessarily
the Department stated its intention as a meet the notice requirements of Part 257
complicated format can result in
matter of policy to apply any rule is incorrect. In this regard, section
increased customer confusion.
covering print advertisements to 257.5(a) specifies that, for ‘‘electronic’’
Furthermore, compliance with such
advertisements on the Internet, when schedule information available to the
requirements is often a substantial
Part 257 was adopted, the Internet ‘‘was public, ‘‘each flight’’ on which the
burden on advertising carriers.
not even mentioned,’’ which it asserts designator code is not that of the
Therefore, we must balance the needs of
suggests an intention to abandon that transporting carrier must be identified
consumers with the burden on the
policy. ASTA contends that, by a mark and the corporate name of the
marketplace of strictly regulating the carrier providing the service must be
nonetheless, there is no justification to
form and content of that information. disclosed. We have always considered
differentiate between the two media and
After careful consideration of all the public schedule information to be a
the Department should apply the same
comments in this proceeding, we form of advertising and the notice
rule to both printed and Internet
continue to be of the opinion that our requirement of section 257.5(a) is
advertising.
rule, as proposed, strikes the proper consistent with that of section 257.5(d)
Decision balance between the need of the public applicable to print advertisements.
This final rule adopts the amendment for useful information regarding their Moreover, neither the Department nor
proposed in the NPRM with respect to travel choices at the initial stage of their its Enforcement Office has ever taken
print advertisements without any inquiry and the burdens on carriers and the narrow view that ‘‘print’’
modifications or changes. We have also the public of continuing to require very advertisements are limited to those in
determined, upon reconsideration of our detailed information that may be newspapers. Indeed, the Enforcement
tentative decision, that the amendments confusing or misinterpreted when Office has provided informal guidance
proposed in the NPRM should also be considering an advertisement as a to carriers and agents that their fare
extended to cover Internet whole. We not only agree that these advertisements on the Internet involving
advertisements. footnotes are burdensome for carriers, code-share arrangements must provide
As an initial matter, we wish to note but we also see merit in the argument information consistent with Part 257.
our disagreement with the commenters that the many separate footnotes now That being said, after careful
who opined that code sharing is required where multiple markets are consideration, we have decided that the
inherently deceptive. The prohibition of contained in a single advertisement may change in the rule we are adopting
the practice is far beyond the scope also confuse customers rather than should be extended to the Internet. We
contemplated in this proceeding, which inform them of advertised services. have revised the language of section
is limited to the issue of the code-share Therefore, while we will continue to 257.5(d) to make it clear that ‘‘printed
notice required by section 257.5(d). advertisements’’ as used in the rule
4 See Final Rule, 50 FR 38508, September 17;
Furthermore, as a matter of policy, the cover those on the Internet. Although
1985, Notice of Proposed Rulemaking, 59 FR 40836,
Department has long held that code August 10, 1994; and Final Rule, 64 FR 12838, we do not believe that the types of
sharing is not inherently unfair or March 15, 1999. advertising layouts common to
deceptive so long as the public is 5 59 FR 40836 and 64 FR 12838, respectively. newsprint that gave rise to this

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Federal Register / Vol. 70, No. 149 / Thursday, August 4, 2005 / Rules and Regulations 44851

proceeding are common on the Internet, This rule is expected to have a minimal Paperwork Reduction Act
to the extent that they are similar, we economic effect and further regulatory
believe that similar treatment is evaluation is not necessary. The rule does not contain information
justified. This is the case, however, only collection requirements that require
Regulatory Flexibility Act approval by the Office of Management
so long as the code-share information
required under Part 257 is provided the The Regulatory Flexibility Act (5 and Budget (OMB) under the Paperwork
consumer using the Internet when he or U.S.C. 601 et seq.) requires an agency to Reduction Act (44 U.S.C. 2507 et seq.).
she requests further information about review regulations to assess their impact There is a current OMB control number
the fare. For example, under our on small entities unless the agency assigned to this rule, and the OMB
proposed rule, in a newsprint determines that a rule is not expected to number is 2105–0537.
advertisement where information have a significant economic impact on List of Subjects in 14 CFR Part 257
regarding all potential transporting a substantial number of small entities.
carriers involved in the markets being The Department certifies that this rule Air carriers, Consumer protection,
advertised is provided, a consumer would not have a significant economic Foreign air carriers.
calling the carrier or a travel agent and impact on a substantial number of small
requesting a specific itinerary that entities. The rule would reduce the ■ For the reasons set forth in the
involves such a code-share will, as regulatory burden on large network preamble, the Department of
required by section 257.5(b), be told carriers that rely extensively on code Transportation 14 CFR Part 257 is
before booking the flight the corporate sharing to serve customers but does not amended as follows:
name of the transporting carrier. impose any additional burdens on either CHAPTER II—OFFICE OF THE SECRETARY,
Similarly, should an Internet small or large carriers. DEPARTMENT OF TRANSPORTATION
advertisement have a similar layout and
Executive Order 13132 (Federalism)
contain similar ‘‘generic’’ code-share PART 257—DISCLOSURE OF CODE-
information, a consumer requesting This rule has been analyzed in SHARING ARRANGEMENTS AND
further information online about an accordance with the principles and LONG-TERM WET LEASES
advertised fare must, upon requesting criteria contained in Executive Order
further information about the specific 13132. The Department has determined ■ 1. The authority for 14 CFR Part 257
fare and itinerary involved, be told, as that this rule would not have a continues to read as follows:
required by section 257.5(a), the substantial direct effect on the States, on Authority: 49 U.S.C. 40113(a) and 41712.
corporate name of the transporting the relationship between the National
carrier. In this regard, nothing in this Government and the States, or on the ■ 2. Section 257.5(d) is revised to read as
final rule changes the applicability of distribution of power and follows:
section 257.5(a) to schedules displayed responsibilities among the various
on the Internet involving code-share § 257.5 Notice requirement.
levels of government, and therefore
arrangements, including the would not have federalism implications. * * * * *
requirement that such schedules (d) In any printed advertisement
include the corporate name of the Executive Order 13084
published in or mailed to or from the
carrier actually providing the service This rule has been analyzed in United States (including those
and any other name under which it accordance with the principles and published through the Internet) for
operates. criteria contained in Executive Order service in a city-pair market that is
Our Office of Aviation Enforcement 13084 (‘‘Consultation and Coordination provided under a code-sharing
and Proceedings will, of course, with Indian Tribal Governments’’). arrangement or long-term wet lease, the
continue to monitor newspaper and Because this rule would not advertisement shall prominently
Internet advertisements involving code- significantly or uniquely affect the disclose that the advertised service may
share arrangements, as well as any Indian tribal communities, and would involve travel on another carrier and
complaints from the public regarding not impose substantial direct clearly indicate the nature of the service
such solicitations, and that office and compliance costs, the funding and in reasonably sized type and shall
the Department have ample authority to consultation requirements of the identify all potential transporting
act to correct any deceptive practices or Executive Order do not apply. carriers involved in the markets being
other problems that may arise with advertised by corporate name and by
respect to such advertisements. Unfunded Mandates Reform Act
any other name under which that
Regulatory Analysis and Notices Title II of the Unfunded Mandates service is held out to the public. In any
Reform Act of 1995 (the Act), enacted as radio or television advertisement
Executive Order 12866 (Regulatory Pub. L. 104–4 on March 22, 1995, broadcast in the United States for
Planning and Review) and DOT requires each Federal agency, to the service in a city-pair market that is
Regulatory Policies and Procedures extent permitted by law, to prepare a provided under a code-sharing or long-
The Department has determined that written assessment of the effects of any term wet lease, the advertisement shall
this final rule would not be a significant Federal mandate in a proposed or final include at least a generic disclosure
regulatory action under Executive Order agency rule that may result in the statement, such as ‘‘Some services are
12866 or under the Department’s expenditure by State, local, and tribal provided by other airlines.’’
Regulatory Policies and Procedures. It governments, in the aggregate, or by the
Issued this 29th day of July, 2005, at
was not reviewed by the Office of private sector, of $100 million or more
Washington DC.
Management and Budget. The rule (adjusted annually for inflation) in any
would require the disclosure of slightly one year. The rule does not contain any Karan K. Bhatia,
less information than is presently Federal mandate that would result in Assistant Secretary for Aviation and
required and the Department expects an such expenditures. Therefore, the International Affairs.
adoption of the rule to reduce the requirements of Title II of the Act do not [FR Doc. 05–15426 Filed 8–3–05; 8:45 am]
regulatory burden currently imposed. apply. BILLING CODE 4910–62–P

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