Expert Says Computer Travel Regulations
Provide Important Test Case
WASHINGTON, D.C. - The economy may be rebounding. But, with the accent still on “may”, the Bush Administration is no doubt searching for every available tool to sustain the trend. One tried and true means is deregulation, and, according to one expert, an important deregulatory opportunity exists for the taking. But will the Administration take it?
According to Progress & Freedom Foundation Senior Policy Counsel William F. Adkinson, Jr., a major rule-making proceeding by the Department of Transportation regarding the schedule for ending the 20-year-old regulation of the computer reservation system (CRS) – the computer system travel agents use to book tickets, rooms, etc. – is a key test of the Administration’s deregulatory and pro-competitive aims. So far, the DOT has overseen “a textbook example of regulatory failure” by “add[ing] regulations that fail to keep pace with technological innovations and business changes,” Adkinson writes in a recent article.
Despite “robust competition…and the availability of alternative Internet travel sites to travel agents and passengers, CRSs remain highly regulated,” he writes. Currently, regulations dictate many terms of CRS contracts and control the display of flight information. “The proposed regulations would add even further restrictions,” Adkinson warns. Since CRSs are now independent of airline ownership and the market has been utterly transformed since the regulations began, he says deregulation is overdue.
“The bargaining power and distribution systems of airlines, the rivalry among CRSs for travel agent business and competition among travel agents ensure a competitive marketplace,” he writes. “Continued regulation not only isn’t needed to protect consumers, but in fact will harm them by impeding market-driven innovations.”
Adkinson filed official comments recently and filed earlier written comments in DOT’s rulemaking proceeding. The opinion piece cited above ran last week in the Washington Times.
The Progress & Freedom Foundation is a market-oriented think tank that studies the impact of the digital revolution and its implications for public policy. The Foundation is a 501(c)(3) nonprofit organization founded in 1993.