[Federal Register Volume 88, Number 231 (Monday, December 4, 2023)]
[Proposed Rules]
[Pages 84090-84098]
[FR Doc No: 2023-26144]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Parts 91, 121, 125, and 135

[Docket No.: FAA-2023-2270; Notice No. 24-04]
RIN 2120-AL92

25-Hour Cockpit Voice Recorder (CVR) Requirement, New Aircraft
Production

AGENCY: Federal Aviation Administration (FAA), Department of
Transportation (DOT).

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: This rulemaking would increase the recording time of cockpit
voice recorders from the mandated 2 hours to a proposed 25-hour
recording time for all future manufactured aircraft. This rulemaking
would provide accident investigators, aircraft operators, and civil
aviation authorities with substantially more cockpit voice recorder
data to help find the probable causes of incidents and accidents,
prevent future incidents and accidents, and make the FAA's regulations
more consistent with existing international requirements.

DATES: Send comments on or before February 2, 2024.

ADDRESSES: Send comments identified by docket number FAA-2023-2270
using any of the following methods:
     Federal eRulemaking Portal: Go to www.regulations.gov and
follow the online instructions for sending your comments
electronically.
     Mail: Send comments to Docket Operations, M-30; U.S.
Department of Transportation (DOT), 1200 New Jersey Avenue SE, Room
W12-140, West Building Ground Floor, Washington, DC 20590-0001.
     Hand Delivery or Courier: Take comments to Docket
Operations in Room W12-140 of the West Building Ground Floor at 1200
New Jersey Avenue SE, Washington, DC, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
     Fax: Fax comments to Docket Operations at<PHONE_NUMBER>.
    Privacy: In accordance with 5 U.S.C. 553(c), DOT solicits comments
from the public to better inform its rulemaking process. DOT posts
these comments, without edit, including any personal information the
commenter provides, to www.regulations.gov, as described in the system
of records notice (DOT/ALL-14 FDMS), which can be reviewed at
www.dot.gov/privacy.
    Docket: Background documents or comments received may be read at
www.regulations.gov/ at any time. Follow the online instructions for
accessing the docket or go to the Docket Operations in Room W12-140 of
the West Building Ground Floor at 1200 New Jersey Avenue SE,
Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Charisse Green, AFS-340, Aircraft
Maintenance Division, Office of Safety Standards, Federal Aviation
Administration, 800 Independence Ave. SW, Washington, DC 20591;
telephone<PHONE_NUMBER>; email [email protected].

SUPPLEMENTARY INFORMATION:

Authority for This Rulemaking

    The FAA's authority to issue rules on aviation safety is found in
title 49 of the United States Code. Subtitle I, section 106 describes
the authority of the FAA Administrator. Subtitle VII, Aviation
Programs, describes in more detail the scope of the FAA's authority.
    This rulemaking is issued under the authority described in subtitle
VII, part A, subpart III, section 44701. Under that section, the FAA is
charged with prescribing regulations providing minimum standards for
other practices, methods, and procedures necessary for safety in air
commerce. This regulation is within the scope of that authority since
flight data recorders are the only means available to account for
aircraft movement and flight crew actions critical to finding the
probable cause of incidents or accidents, including data that could
prevent future incidents or accidents.

I. Executive Summary

A. Overview of Proposed Rule

    This rulemaking effort proposes to amend the cockpit voice recorder
(CVR) regulations to increase the recording duration of CVRs.
Currently, CVRs are required to retain the last two hours of recorded
information. Once this 2-hour limit is reached, a CVR overwrites the
oldest data to maintain a rolling 2-hour recording. This proposal would
increase the minimum duration of CVR recordings to 25 hours. The
proposed change would affect all newly manufactured aircraft operating
under title 14 of the Code of Federal Regulations (14 CFR) parts 91,
121, 125, and 135, one year after the effective date of the final rule.

B. Statement of the Problem

    The current 2-hour recording duration requirement does not meet the
NTSB's needs for investigations and subsequent safety recommendations.
Since the NTSB issued Safety Recommendation A-18-030, it has
investigated numerous accidents and incidents where CVR data relevant
to the accident or incident has been overwritten because the relevant
recording occurred earlier than the available two hours of recording.

C. Summary of the Costs and Benefits

    Benefits of the proposed rule are expected to stem from a reduction
in accident risk and time savings. Specifically, the additional audio
of longer duration CVRs would provide authorities with more information
on events and procedures undertaken in the flight deck in investigated
incidents. This increased data may lead to new or more fully informed
FAA recommendations or policy changes that could further enhance safety
and reduce the risk that an incident becomes an accident. In addition,
updated CVR models have also revamped the CVR interface tools,
resulting in time-saving benefits. The simplified and more intuitive
tools allow personnel to be trained quicker on operation, retrieve
audio data faster, and perform additional diagnostic services to
shorten downtime. The FAA currently lacks data to predict the exact
reduction in accident risk and labor hours and requests comments on the
expected value of these benefits.
    The FAA has assessed projected compliance costs using the
incremental cost of equipping a 25-hour capable CVR over a comparable
2-hour unit to all applicable newly produced aircraft. Market research
indicates that the difference between these units is minimal, ranging
from near parity to an upper bound of approximately $4,500. Using that
upper bound, the total cost over 20 years is estimated to be $102.42
million at 7 percent present value, with annualized costs of $9.67
million. As operational procedures are expected to be similar between
the older 2-hour and newer 25-hour capable models, the FAA anticipates
no other notable costs. The FAA invites comments on the cost estimates
and assumptions.

II. Background

A. CVRs: National Transportation Safety Board (NTSB) Recommendations
and FAA Responses

    The FAA previously has engaged in rulemaking to address past NTSB
recommendations concerning CVRs.

    In December 1996, the NTSB issued Safety Recommendation A-96-171 as
a result of its investigation of an accident in January 1996.\1\ In
this accident, an aircraft touched down hard in the approach light area
short of a runway at the Nashville International Airport, resulting in
minor injuries to passengers and crew and substantial damage to the
aircraft's tail section, nose gear, and engines. During the
investigation, the NTSB was hampered by the fact that the 30-minute
closed-loop CVR tape did not include recordings of the initial approach
to the runway, the hard landing event, or the go-around because that
information had been recorded over and permanently lost after the
airplane safely stopped on the ground.\2\ As a result, the NTSB
recommended that the recording limitation for newly manufactured CVRs
meet a minimum recording duration of two hours.\3\ The FAA adopted this
recommendation in 2008.
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    \1\ NTSB. Safety Recommendation A-96-171, December 11, 1996.
    \2\ Id.
    \3\ Id.
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    In August 2002, the NTSB issued a safety recommendation letter to
the FAA, identifying delays or failures by the operator to deactivate
CVRs after reportable events as a major factor in the systemic problem
of retaining data, as information was overwritten in the remainder of a
flight with an incident or accident.\4\ The NTSB recommended that the
FAA require the CVR be deactivated immediately upon completion of
flight after a reportable incident or accident has occurred. In
response, the FAA issued Notice 8400.48, ``Cockpit Voice Recorder
Deactivation After a Reportable Event,'' on April 25, 2003. This notice
advised air carriers to add a checklist item to deactivate the CVR,
manually or automatically, immediately upon completion of a flight with
a reportable accident or incident. On October 6, 2003, the NTSB
considered Notice 8400.48 to have met the intent of Safety
Recommendation A-02-24 for aircraft operating under parts 121 and 135
requirements, but not part 91 requirements as the notice did not
address part 91 operators.\5\
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    \4\ NTSB. Safety Recommendation A-02-24, August 29, 2002.
    \5\ NTSB. Safety Recommendation Report A-18-04 at 3, October 2,
2018.
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    On March 7, 2008, the FAA amended the CVR regulations in accordance
with NTSB Safety Recommendation A-96-171.\6\ The final rule,
``Revisions to Cockpit Voice Recorder and Digital Flight Data Recorder
Regulations,'' increased the duration of certain CVR recordings,
increased the data recording rate for certain digital flight data
recorder (DFDR) parameters, physically separated DFDRs and CVRs,
improved power supply to both CVRs and DFDRs, and required certain
datalink communications received on an aircraft to be recorded if
datalink communication equipment was installed.\7\
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    \6\ 73 FR 12541 (2008).
    \7\ Id.
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    On October 10, 2018, the NTSB published an Aviation Safety
Recommendation Report titled ``Extended Duration Cockpit Voice
Recorders.'' Within this safety report, Safety Recommendation A-18-030
recommended that the FAA require all newly manufactured aircraft that
must have a CVR to be fitted with and operate a CVR capable of
recording the last 25 hours of audio. This recommendation stemmed from
an aircraft incident that occurred in July 2017 at San Francisco
International Airport, in which the flight crew of an Airbus A320 was
cleared to land on a set runway but instead lined up with a parallel
taxiway. After descending to an altitude of 100 feet above ground level
(AGL), the aircraft overflew an airplane on the taxiway. The incident
aircraft subsequently overflew a second airplane on the taxiway before
starting to climb.
    During the investigation of the incident, the NTSB found it
difficult to gather relevant information as the CVR data was
overwritten before Air Canada officials learned of the severity of the
event. The report stated that had the NTSB been able to obtain the
overwritten data, investigators would have been able to assess the
timing and content of the flight crew's conversations during final
approach, conversations during and after the go-around, and the flight
crew's crew resource management (CRM), workload, and fatigue based on
verbalizations or flight deck sounds. In this instance, the NTSB
identified several serious safety issues; however, this investigation
lacked direct evidence of the flight crew's decision making,
coordination, and perception of its environment.

B. FAA Aviation Safety Summit of 2023

    On March 15, 2023, the FAA convened an aviation safety summit,
where approximately 200 safety leaders from the aviation industry met
to discuss safety improvements in response to several recent near-miss
incidents and runway incursions.\8\ The summit focused on ways to
enhance flight safety for commercial operations, the air traffic
system, airport and ground operations, and general aviation operations.
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    \8\ The FAA. Readout from the FAA Aviation Safety Summit
Breakout Panels. March 15, 2023. Accessed from www.faa.gov/newsroom/readout-faa-aviation-safety-summit-breakout-panels.
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    As a result of discussions at the summit, the FAA committed to
initiate rulemaking that would require CVRs to capture 25 hours of
information for newly manufactured aircraft.

C. ICAO and EASA Adoption of a 25-Hour Cockpit Voice Recorder
Requirement

    In 2013, the European Union Aviation Safety Agency (EASA) proposed
an amendment that would have required large commercial aircraft
manufactured after January 1, 2019, to carry a CVR capable of recording
the last 15 hours of aircraft operation.\9\ In 2015, after considering
the comments received on the proposed amendment and after technical
review, EASA extended the recording duration requirement to 25
hours.\10\ The 25-hour mandate took effect on January 1, 2021. The
regulation requires any aircraft with a maximum takeoff weight of
27,000 kg (60,000 pounds) or more, manufactured after January 1, 2021,
to be equipped with a CVR with at least a 25-hour recording
capability.\11\
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    \9\ ``Amendment of requirements for flight recorders and
underwater locating devices,'' Notice of Proposed Amendment 2013-26,
European Union Aviation Safety Agency, December 20, 2013.
    \10\ Commission Regulation 2015/2338, 2015 O.J. Amending
Regulation (EU) No 965/2012 as regards requirements for flight
recorders, underwater locating devices and aircraft tracking
systems.
    \11\ Id.
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    In 2016, the International Civil Aviation Organization (ICAO) also
adopted a new standard calling for the installation of CVRs capable of
recording the last 25 hours of aircraft operation on all aircraft
manufactured after January 1, 2021, with a maximum certificated takeoff
mass of over 27,000 kg and engaged in commercial transport.\12\ In
adopting this standard, ICAO emphasized the value of CVR recordings in
analyzing human factors and other sounds.\13\ ICAO noted that extending
the recording duration of CVRs was necessary to cover the longest
flight duration, including pre- and postflight activities, delays, and
the time required to secure the recordings.\14\
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    \12\ NTSB. Aviation Safety Recommendation Report. ASR-18-04 at
2. October 2, 2018.
    \13\ Id.
    \14\ Id.
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    Since September 2013, the CVR technical standard in European
Organization for Civil Aviation Equipment (EUROCAE) ED-112A, ``Minimum
Operational Performance Specification for Crash Protected Airborne
Recorder Systems,'' used by all

manufacturers,\15\ already provides design standards for a 25-hour
CVR.\16\
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    \15\ All manufacturers, regardless of US-based or foreign, are
required to use this standard in order to meet the carriage
requirements in Sec. Sec.  91.609, 121.359, 125.227, and 135.151,
which reference TSO-C123, which in turn specifies ED-112A.
    \16\ GlobalSpec. ``EUROCAE ED 112.'' Accessible at
standards.globalspec.com/std/1629860/EUROCAE%20ED%20112.
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III. Discussion of the Proposal

    Since the FAA updated the CVR regulations in 2008, the NTSB has
reported issues with accessing relevant CVR data with existing 2-hour
recording duration. Numerous aircraft incidents have occurred in which
relevant CVR data was overwritten and thereby made unavailable because
of the time it took to retrieve the CVR. The lack of relevant CVR data
hampers NTSB investigations and its ability to provide appropriate
safety recommendations that can help prevent future accidents and
incidents.\17\
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    \17\ NTSB. (March 15, 2023). Transcript of NTSB Chair's Remarks
at the FAA Safety Summit. www.ntsb.gov/Advocacy/Activities/Pages/Homendy-20230315.aspx.
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    In response to Safety Recommendation A-18-030, the FAA proposes to
amend all CVR operational regulations related to CVR recording time by
expanding the recording duration from two hours to 25 hours for
aircraft manufactured one year after the date of publication of the
final rule.
    The NTSB's Safety Recommendation also included the recommendation
to retrofit the current fleet. While retrofitting the current fleet
would more expeditiously increase the number of aircraft fitted with
the newer 25-hour CVR units and, thereby, the projected benefits to
safety, the costs would be significant. Specifically, retrofitting the
current fleet would increase by two-thirds the number of aircraft
required to install 25-hour CVRs (estimated 29,561 aircraft in the
current fleet added to the estimated 43,470 aircraft being built in the
next 20 years). Further, the cost to retrofit existing aircraft with
25-hour CVRs would be several times higher than the cost to equip
future-built aircraft with a 25-hour CVR instead of a 2-hour model.
Assuming no replacement, applying a $25,000 CVR unit cost spread across
the estimated 29,651 current fleet would result in roughly $741.28
million (undiscounted) in equipment cost compared to the $195.62
million (undiscounted) in incremental upgrade costs from the proposed
rule. Retrofitting current aircraft would also incur additional costs,
such as aircraft downtime and labor hours required to replace the CVR
unit, which would further increase the total cost. Therefore, in an
effort to provide the increased benefit of making more substantive data
available to accident investigators while maintaining the lowest
economic impact on operators, this proposed rule would apply to newly
manufactured aircraft only. For more information, please see the
regulatory impact analysis in the docket.
    The proposed change would affect the following regulations:

 Section 91.609(i)(2);
 Section 121.359(i)(2);
 Section 121.359(j)(2);
 Section 125.227(g)(2);
 Section 125.227(h)(2);
 Section 135.151(g)(1)(iii); and
 Section 135.151(g)(2)(iii).

    Certificate holders operating under part 129 requirements would be
affected because, in accordance with Sec.  129.24, their CVRs are
required to record as if the aircraft were operated under parts 121,
125, or 135.

A. Cockpit Voice Recorder Capabilities and Investigative Use

    Aircraft operating under parts 91, 121, 125, and 135 are required
to be equipped with a CVR that records radio transmissions and sounds
in the flight deck to aid subsequent investigation should an accident
or incident occur. The recorder's flight deck area microphone is
usually located on the overhead instrument panel between the two
pilots.
    CVRs preserve the recent history of sounds in the flight deck and
provide unique information such as engine noise, stall warnings,
landing gear extension and retraction, and other clicks and pops. These
sounds may help an investigator to determine parameters such as engine
rpm, system failures, speed, and the time at which certain events
occur. The CVR also records communications with Air Traffic Control,
automated radio weather briefings, conversations between the pilots and
ground or cabin crew, flight crew verbalizations of intentions and
coordination, as well as the pilots' awareness of the aircraft and
flight deck information.\18\ Access to this information allows
investigators to more thoroughly investigate accident and incident
factors. Incident factors include the flight crew's procedural
compliance, distraction, decision-making, workload, fatigue, and
situational awareness.
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    \18\ NTSB. (2023) ``Cockpit Voice Recorders (CVR) and Flight
Data Recorders (FDR).'' www.ntsb.gov/news/Pages/cvr_fdr.aspx.
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    A CVR starts recording when an aircraft is powered up and will
continue to record until the aircraft is powered down or the CVR is
deactivated. Once a CVR reaches the end of its recording limit, it will
overwrite existing data with a new recording.
    CVRs typically deactivate due to two forms of power loss. The first
occurs when the CVR is deactivated after a major or catastrophic event
causing a loss of electrical power. When this event occurs, the CVR
preserves relevant audio recorded in the two hours prior to the
accident. The second form occurs during less severe incidents, such as
when the flight crew manually deactivates the CVR immediately upon
landing in order to prevent the relevant audio from being overwritten.
    After an accident or incident, the CVR data is transferred to an
NTSB lab for retrieval. The NTSB will eventually receive a readout from
the CVR software.
    Since CVRs were implemented in 1966, recording capabilities have
significantly increased from the original 30 minutes. The latest
designs employ more easily expandable solid-state memory and use fault
tolerant digital recording technique with an incorporated battery so
that recording can continue until the end of flight, even when the
aircraft's electrical system fails.
    The technical limit for recording time has expanded such that 25
hours is now well within CVR capability. In addition, because both EASA
and ICAO have adopted a 25-hour CVR recording duration minimum for
aircraft manufactured after January 1, 2021, multiple manufacturers
already produce CVRs capable of recording for 25 hours.

B. National Transportation Safety Board

    Since 2008, the NTSB has expressed concerns regarding the
availability of CVR information, the length of CVR recording time, and
how to prevent relevant information from being overwritten after an
incident or accident. The current 2-hour recording requirement has not
fully resolved the issue of overwritten data, which continues to
negatively impact NTSB investigations.
    There are two common causes for CVR data to be overwritten. First,
there may be a delay between a safety event and the flight crew
recognizing that event to be a serious incident or accident, resulting
in the relevant CVR data being overwritten as the CVR continued to
record throughout the delay. Second, the recording of a safety event
may be overwritten during the course of the flight itself (e.g., where
flight duration exceeds the 2-hour CVR recording duration).

    The NTSB reported that, in 2017, approximately 56 percent of U.S.
block times \19\ consisted of long and medium flights with durations
longer than two hours, including some international flights lasting
over 12 hours.\20\ When ICAO adopted the standard for the installation
of 25-hour CVRs in 2016, it noted that extended duration of CVRs is
necessary to cover the longest duration of flights, including pre- and
postflight activities, delays, and the time required to secure the
recordings.\21\
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    \19\ ICAO defines block time to include the moment an aircraft
is pushed back from the gate to the moment it comes to a final stop
at a gate or parking stand after landing.
    \20\ NTSB. Aviation Safety Recommendation Report. ASR-18-04 at
5. October 2, 2018.
    \21\ Id. NTSB Report, citing ``Minimum Operational Performance
Specification for Crash Protected Airborne Recorder Systems,'' ED-
112A, European Organization for Civil Aviation Equipment.
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    Since the 2-hour standard came into effect in 2008, numerous
accidents and incidents have occurred where the CVR data was
overwritten and, had it been available, would have positively
contributed to NTSB investigations. Notable incidents include the
following:

                      Table 1--Safety Events for Which Pertinent CVR Data Were Overwritten
                                                  [Up to 2018]
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         Date                 Event type               NTSB No.               Location        Event description
----------------------------------------------------------------------------------------------------------------
6/21/2018.............  Incident..............  OPS18IA015............  Chicago, IL........  Runway excursion.
4/18/2018.............  Accident..............  DCA18LA163............  Atlanta, GA........  Engine fire.
7/07/2017.............  Incident..............  DCA17IA148............  San Francisco, CA..  Taxiway line-up and
                                                                                overflight of 4
                                                                                air carrier
                                                                                airplanes by an
                                                                                Airbus A320 (46-
                                                                                hour notification
                                                                                delay).
5/09/2014.............  Accident..............  CEN14LA239............  Columbus, OH.......  Ground engine fire.
9/12/2013.............  Incident..............  CEN13IA563............  Austin, TX.........  Loss of pitch
                                                                                control during
                                                                                takeoff (4-day
                                                                                notification
                                                                                delay).
7/31/2012.............  Incident..............  CEN12IA502............  Denver, CO.........  Bird strike.
12/1/2011.............  Accident..............  WPR12LA053............  Oakland, CA........  Enroute turbulence.
6/21/2011.............  Incident..............  ENG11IA035............  Atlanta, GA........  Engine fire.
2/09/2011.............  Incident..............  ENG11IA016............  Minneapolis, MN....  Tailpipe fire
                                                                                following push
                                                                                back.
11/23/2010............  Accident..............  WPR11LA058............  Salt Lake City, UT.  On ground collision
                                                                                with tow tractor.
6/28/2010.............  Accident..............  CEN10LA363............  Pioneer, LA........  En route
                                                                                turbulence.
12/31/2009............  Incident..............  DCA10IA015............  Charlotte, NC......  Wing tip strike
                                                                                during landing.
6/29/2007.............  Incident..............  LAX07IA198............  Los Angeles, CA....  Blown tires on
                                                                                takeoff.
3/21/2006.............  Incident..............  DEN06IA051............  Denver, CO.........  Tail strike on
                                                                                landing.
10/16/2003............  Accident..............  MIA04LA004............  Tampa, FL..........  Taxiway excursion.
6/03/2002.............  Accident..............  DCA02MA039............  Subic Bay,           Abrupt maneuver due
                                                                         Philippines.         to ground
                                                                                proximity warning
                                                                                system alert and
                                                                                elevator damage.
6/02/2002.............  Accident..............  DCA02MA042............  Subic Bay,           Flight control
                                                                         Philippines.         malfunction during
                                                                                approach.
----------------------------------------------------------------------------------------------------------------

    In addition to the incidents noted by the NTSB, CVR data overwrites
have hampered several other investigations. For example, on October 21,
2009, an incident occurred on a 4-hour flight where the flight crew did
not communicate with air traffic control for about 1 hour and 17
minutes, during which time the airplane overflew its intended location
at a cruise altitude of 27,000 ft.\22\ The flight crew later reported
that ``cockpit distractions'' led to the event. The airplane's CVR had
a 30-minute recording duration; upon review, the NTSB discovered that
all pertinent information had been overwritten by the remaining two
hours and 11 minutes of the 4-hour flight.\23\ Even if the airplane had
been equipped with a CVR recording for two hours, the information still
would have been overwritten. Having lost this CVR data to overwriting,
the NTSB was unable to determine the nature of the flight crew's
distraction, the events that led to the distraction, why the
distraction lasted for as long as it did, and what mitigating
procedures or actions could have prevented that distraction.
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    \22\ Id. at 4.
    \23\ Id.
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    More recently, on January 13, 2023, a runway incursion incident
occurred at John F. Kennedy (JFK) Airport in New York, New York. The
incursion involved a taxiing Boeing 777-200 and a Boeing 737-900ER
cleared for takeoff. The Boeing 777-200 accessed a taxiway without Air
Traffic Control (ATC) clearance, crossing the runway that the Boeing
737-900ER was utilizing for takeoff. ATC was notified of the potential
conflict, cancelled the Boeing 737-900ER's takeoff clearance, and the
flight crew aborted the flight. Because the incident did not result in
any damage or injuries, the two flights eventually took off to their
respective destinations. During its investigation, the NTSB discovered
the CVR data for both flights had been overwritten.
    On February 4, 2023, a runway incursion occurred at Austin
Bergstrom International Airport (AUS) when a Boeing 767F freighter
attempted to land on a runway from which a Boeing 737-700 was also
cleared to depart.\24\ Due to poor weather conditions, the Boeing 767F
crew did not see the conflict until late in the approach, and the two
planes came close to colliding; specifically, the Boeing 767F needed to
overfly the Boeing 737-700 to avoid a collision. There were no injuries
reported to the 128 passengers and crew onboard the Boeing 737-700 or
to the 3 crew members onboard the Boeing 767F. During its
investigation, the NTSB discovered the CVR data for both flights had
been overwritten.
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    \24\ NTSB. Aviation Investigation Preliminary Report No.
DCA23LA149. Feb. 4, 2023.
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    The FAA had sought to prevent such recording issues by creating the
retention requirements found in Sec. Sec.  91.609(g), 121.343(i), and
135.152(e), where an operator must remove the recording media following
an accident or incident and keep the recorded data for at least 60
days, or longer if necessary. The FAA also provided guidance in
Advisory Circular 20-186, ``Airworthiness and Operational Approval of
Cockpit Voice Recorder Systems,'' \25\ which recommended the operator
to address CVR recording retention after an accident or incident in its
maintenance and operational programs, such as inclusion in a flight
crew checklist, or in the company standard operating procedures or
emergency procedures. However, since recording issues continue to
occur, the

FAA agrees with the NTSB that an extension to the CVR recording
duration requirement to 25 hours is warranted.
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    \25\ Advisory Circular 20-186, Paragraph 3.2.4. July 22, 2016.
www.faa.gov/documentLibrary/media/Advisory_Circular/AC_20-186.pdf.
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C. Privacy Concerns

    The FAA acknowledges that pilot-focused organizations may have
concerns regarding how the NTSB or the FAA would use the CVR data
collected for investigative purposes.
    This issue previously arose when the FAA increased the CVR
recording duration from 30 minutes to 2 hours. At that time, the FAA
determined that the investigative need and benefit of this information
outweighed these privacy concerns.\26\ The FAA maintains this stance.
The proposed increase to a 25-hour CVR recording duration would further
improve current investigative capabilities. It would also provide
investigating bodies, such as the NTSB, with more complete context
surrounding the accidents and incidents under investigation and support
their safety analyses.
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    \26\ Revisions to Cockpit Voice Recorder and Digital Flight Data
Recorder Regulations. 73 FR 12541, 12544 (March 7, 2008).
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    Importantly, this proposed increase is designed to provide more
context for any flight deck activity that might be pertinent to an
investigation. Specifically, this increase expands the possible range
of data available to investigators. This proposal does not alter or
modify the existing processes for requesting or use of this data.
Sections 91.609(g), 121.359(h), 121.227(f), and 135.151(c) specify that
the information obtained from the CVR recording is to be used for
investigation purposes and that the FAA will not use the CVR record in
any civil penalty or certificate action. This proposal does not modify
these regulations.

D. International Requirements

    ICAO and EASA both require the carriage of CVRs with 25-hour
recording duration on airplanes with a maximum certificated takeoff
mass of more than 27,000 kg. These are aircraft that have the
capability to fly transatlantic or international flights, i.e., long-
haul flights that can last ten or more hours. In contrast, the FAA
requirement would apply to all newly manufactured aircraft required to
carry a CVR, based on existing operating rules. This distinction
reflects differences between the FAA and ICAO/EASA regulatory schemes:
the FAA's existing regulatory scheme differentiates aircraft by
operation type, not by weight. This rulemaking would not change that
regulatory scheme.
    With both EASA and ICAO amending their CVR rules to require 25
hours of audio recording time, this proposed change also presents an
opportunity to ensure U.S. regulations are consistent in intent with
international authorities. This should lead to a reduction of risk for
some operators who would otherwise face conflicting requirements and
the cumbersome task of ascertaining guidance for the appropriate
authorities in an attempt to satisfy differing regulations.
Historically, the FAA has implemented CVR regulations by operation
unlike ICAO and EASA, which put forth their standards and regulations
by aircraft weight. As a result, the FAA's proposal would encompass
more aircraft than international requirements would because newly
manufactured aircraft with less than a maximum takeoff weight of 27,000
kg would be affected.

E. Conclusion and Compliance

    The FAA concurs with the NTSB's recommendation and believes that
extending CVR recording duration to 25 hours would increase aviation
safety by providing investigative bodies with more thorough context and
background surrounding accidents and incidents. This proposal would
also make FAA regulations more consistent with ICAO recommendations and
EASA requirements.
    Given that the technology already exists to implement this
proposal, the FAA proposes a compliance deadline for newly manufactured
aircraft of one year after the effective date of the final regulation.
Any aircraft with a newly issued airworthiness certificate dated on or
after that compliance date would be required to be equipped with a CVR
with 25-hour recording duration.
    In addition, the FAA will update the version of the technical
standard order (TSO) referenced in the regulatory text from TSO-C123a
to the latest version, TSO-C123c, for newly manufactured aircraft.

IV. Regulatory Notices and Analyses

    Federal agencies consider impacts of regulatory actions under a
variety of Executive orders and other requirements. First, Executive
Order 12866 and Executive Order 13563, as amended by Executive Order
14094 (``Modernizing Regulatory Review''), direct that each Federal
agency shall propose or adopt a regulation only upon a reasoned
determination that the benefits of the intended regulation justify the
costs. Second, the Regulatory Flexibility Act of 1980 (Pub. L. 96-354)
requires agencies to analyze the economic impact of regulatory changes
on small entities. Third, the Trade Agreements Act (Pub. L. 96-39)
prohibits agencies from setting standards that create unnecessary
obstacles to the foreign commerce of the United States. Fourth, the
Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires agencies
to prepare a written assessment of the costs, benefits, and other
effects of proposed or final rules that include a Federal mandate that
may result in the expenditure by State, local, and tribal governments,
in the aggregate, or by the private sector, of $100 million or more
(adjusted annually for inflation) in any one year. The current
threshold after adjustment for inflation is $177 million using the most
current (2022) Implicit Price Deflator for the Gross Domestic Product.
The FAA has provided a detailed Regulatory Impact Analysis (RIA) in the
docket for this rulemaking. This portion of the preamble summarizes the
FAA's analysis of the economic impacts of this proposed rule.
    In conducting these analyses, the FAA has determined that this
proposed rule: will result in benefits that justify costs; is not an
economically ``significant regulatory action'' as defined in section
3(f)(1) of Executive Order 12866; will not have a significant economic
impact on a substantial number of small entities; will not create
unnecessary obstacles to the foreign commerce of the United States; and
will not impose an unfunded mandate on State, local, or tribal
governments, or on the private sector.

A. Summary of the Regulatory Impact Analysis

    Benefits for the proposed rule were assessed qualitatively as the
FAA currently lacks data to make projections on the benefit totals. The
primary expected benefit is changes in safety from a potential
reduction in accident risk. The expanded available audio from this
proposed rule would provide authorities with more information on events
and procedures undertaken in the flight deck in investigated incidents.
This increased data may lead to new FAA recommendations or policy
changes that could further enhance safety and reduce the risk that a
future incident becomes an accident. The reduction in the risk of one
fatality generates benefits equal to the value of statistical life
(VSL), approximately $12.5 million in 2022 according to the Department
of Transportation (DOT).\27\ Given the annualized costs of $9.67
million from this proposed rule,

reducing the risk of a single fatality in any year due to effective
safety measures resulting from the ability to gather additional CVR
data would generate benefits greater than the expected costs.
---------------------------------------------------------------------------

    \27\ DOT. Treatment of the Value of Preventing Fatalities and
Injuries in Preparing Economic Analyses. Office of the Secretary of
Transportation. 2022.
---------------------------------------------------------------------------

    Additionally, there are some potential time-saving benefits
associated with the updated CVR model deployment. In updating their CVR
models, manufacturers also have revamped the CVR interface tools. These
simplified and more intuitive tools allow personnel to be trained
quicker on operation, retrieve audio data faster, and perform
additional diagnostic services to shorten downtime. The FAA does not
currently have enough data to predict the value of these benefits and
invites public comments on the expected totals.
    The FAA assessed the costs for the proposed rule as the incremental
cost increase of equipping a 25-hour capable CVR instead of a
comparable 2-hour unit to all applicable new aircraft being produced.
The total aircraft that will be built and equipped with the 25-hour CVR
includes projected new aircraft needed to handle future demand
increases as well as estimated replacements for the current fleet.
Market research indicates the cost increase between comparable 2 and
25-hour CVRs to be minimal, ranging from near parity to an upper bound
of approximately $4,500. Using that upper bound as the incremental cost
to equip all applicable projected new aircraft with a 25-hour capable
CVR, the estimated highest total cost over 20 years, at seven percent
present value, is $102.42 million with an annualized cost of $9.67
million (table 2). At three percent present value, the total cost is
$144.77 million with an annualized cost of $9.73 million.

                                     Table 2--Summary of Costs Over 20 Years
                                               [Millions of 2021$]
----------------------------------------------------------------------------------------------------------------
                                                         7% Present value                3% Present value
                                                 ---------------------------------------------------------------
             14 CFR operational part                Annualized                      Annualized
                                                       costs        Total costs        costs        Total costs
----------------------------------------------------------------------------------------------------------------
Part 91 \1\.....................................           $3.55          $37.57           $3.56          $52.98
Part 121........................................            3.18           33.66            3.19           47.41
Part 125........................................            0.16            1.65            0.16            2.32
Part 135........................................            2.79           29.55            2.83           42.06
                                                 ---------------------------------------------------------------
    Total \2\...................................            9.67          102.42            9.73          144.77
----------------------------------------------------------------------------------------------------------------
\1\ Consists of Part 91 turbine powered and Part 91K aircraft.
\2\ Total reflects combined costs of each CFR part.
Note: Columns may not sum to total due to rounding.

    The FAA does not anticipate other costs besides the incremental
costs of forward fitting 25-hour capable CVRs to comply with the
proposed rule. Based on the technical standards for CVRs, market
research indicates that 25-hour models tend to match the older 2-hour
variants in a manner that allows them to be swapped without much
difficulty. This compatibility implies that other operational
procedures and costs should be similar and not result in notable
change. The FAA invites comments on the expected costs for this
proposed rule.
    Please see the RIA available in the docket for more details.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) of 1980, Public Law 96-354, 94
Stat. 1164 (5 U.S.C. 601-612), as amended by the Small Business
Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat.
857, Mar. 29, 1996) and the Small Business Jobs Act of 2010 (Pub. L.
111-240, 124 Stat. 2504 Sept. 27, 2010), requires Federal agencies to
consider the effects of the regulatory action on small business and
other small entities and to minimize any significant economic impact.
The term ``small entities'' comprises small businesses and not-for-
profit organizations that are independently owned and operated and are
not dominant in their fields, and governmental jurisdictions with
populations of less than 50,000.
    The proposed rule affects CVR manufacturers by requiring the
development and certification of 25-hour capable models. A major change
to the CVR components, such as in this case, would require a
manufacturer to go through the development and certification of a new
model, which could involve extra cost and time. However, due to EASA
and ICAO standards for 25-hour capability taking effect in 2021, market
research shows that manufacturers already have developed 25-hour
compliant variants that meet FAA TSO-C123 compliance. Therefore, the
proposed regulation is not expected to result in new or significant
impacts on CVR manufacturers. The FAA invites comments on the expected
effects of the proposed rule on CVR manufacturers.
    As described in the RIA, the FAA identified six U.S. manufacturers
that would be affected by the proposed rule. Based on the Small
Business Administration (SBA) 2023 size standard for Other Aircraft
Part and Auxiliary Equipment Manufacturing (NAICS 336413),\28\ and on
publicly available data on employment for these entities, all six
identified manufacturers are large businesses that exceed the 1,250-
employee size maximum for a small business. Therefore, the FAA
certifies that the proposed rule will not have a significant economic
impact on a substantial number of small entities because the proposed
rule does not impact any small entity. The FAA welcomes comments on the
number of U.S. CVR manufacturers and this certification.
---------------------------------------------------------------------------

    \28\ Small Business Administration (SBA) Size Standards,
effective March 17, 2023, can be found at www.sba.gov/document/support-table-size-standards.
---------------------------------------------------------------------------

C. International Trade Impact Assessment

    The Trade Agreements Act of 1979 (Pub. L. 96-39), as amended by the
Uruguay Round Agreements Act (Pub. L. 103-465), prohibits Federal
agencies from establishing standards or engaging in related activities
that create unnecessary obstacles to the foreign commerce of the United
States. Pursuant to these Acts, the establishment of standards is not
considered an unnecessary obstacle to the foreign commerce of the
United States, so long as the standard has a

legitimate domestic objective, such as the protection of safety, and
does not operate in a manner that excludes imports that meet this
objective. The statute also requires consideration of international
standards and, where appropriate, that they be the basis for U.S.
standards. The FAA has assessed the potential effect of this proposed
rule and determined that it promotes the safety of the American public
and does not exclude imports that meet the recording length
requirement. As a result, the FAA does not consider this proposed rule
as creating an unnecessary obstacle to foreign commerce.

D. Unfunded Mandates Assessment

    The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires
agencies to prepare a written assessment of the costs, benefits, and
other effects of proposed or final rules that include a Federal mandate
that may result in the expenditure by State, local, and tribal
governments, in the aggregate, or by the private sector, of $100
million or more (adjusted annually for inflation) in any one year. The
current threshold after adjustment for inflation is $177 million using
the most current (2022) Implicit Price Deflator for the Gross Domestic
Product.
    The FAA determined that the proposed rule will not result in the
expenditure of $177 million or more by State, local, or tribal
governments, in the aggregate, or the private sector, in any one year.

E. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires
that the FAA consider the impact of paperwork and other information
collection burdens imposed on the public. According to the 1995
amendments to the Paperwork Reduction Act (5 CFR 1320.8(b)(2)(vi)), an
agency may not collect or sponsor the collection of information, nor
may it impose an information collection requirement unless it displays
a currently valid Office of Management and Budget (OMB) control number.
    This action contains the following proposed amendments to the
existing information collection requirements previously approved under
OMB Control Number 2120-0700. As required by the Paperwork Reduction
Act of 1995 (44 U.S.C. 3507(d)), the FAA has submitted these proposed
information collection amendments to OMB for its review.
    Summary: This notice proposes to amend parts 91, 121, 125, and 135
requirements so aircraft manufactured on or after [ONE YEAR THE
EFFECTIVE DATE OF THE FINAL RULE] that are required to be installed
with a cockpit voice recorder would be required to have a recording
limit of 25 hours, expanded from the current requirement of 2 hours.
    Use: Such a record would provide additional information to accident
and incident investigators to determine flight crew's procedural
compliance, distraction, decision-making, workload, fatigue, and
situational awareness. The expansion to 25 hours would address the
issue in which data is overwritten because the relevant recording
occurred earlier than the available two hours of recording.
    Respondents (including number of): The respondents all would be
certificate holders operating the above-referenced U.S.-registered
aircraft under parts 91, 121, 125, 129, and 135. Certificate holders
operating under part 129 requirements would be affected because, in
accordance with Sec.  129.24, a cockpit voice recorder would be
required to record as if the aircraft were operated under parts 121,
125, or 135.
    Frequency: The 25 hours of recorded data would be overwritten on a
continuing basis and would only be accessed following an accident or
incident.
    Annual Burden Estimate: This proposed requirement would not change
the current information collection activity; therefore, it does not
contain a measurable hour burden.
    The FAA is soliciting comments to--
    (1) Evaluate whether the proposed information requirement is
necessary for the proper performance of the functions of the FAA,
including whether the information will have practical utility;
    (2) Evaluate the accuracy of the FAA's estimate of the burden;
    (3) Enhance the quality, utility, and clarity of the information to
be collected; and
    (4) Minimize the burden of collecting information on those who are
to respond, including by using appropriate automated, electronic,
mechanical, or other technological collection techniques or other forms
of information technology.
    Individuals and organizations may send comments on the information
collection requirement to the address listed in the ADDRESSES section
at the beginning of this preamble by February 2, 2024. Comments also
should be submitted to the Office of Management and Budget, Office of
Information and Regulatory Affairs, Attention: Desk Officer for FAA,
New Executive Office Building, Room 10202, 725 17th Street NW,
Washington, DC 20053.

F. International Compatibility

    In keeping with U.S. obligations under the Convention on
International Civil Aviation, it is FAA policy to conform to
International Civil Aviation Organization (ICAO) Standards and
Recommended Practices to the maximum extent practicable. The FAA has
reviewed the corresponding ICAO Standards and Recommended Practices and
has identified the following differences with these proposed
regulations. The proposed rule would harmonize with ICAO regarding the
required length of the CVR recordings at 25 hours. However, the U.S.
does not regulate carriage requirements of CVRs based on the aircraft
gross weight, as do the ICAO and EASA, and the proposed rule change
would not change this. If this proposal is adopted, the FAA intends to
amend its currently filed difference on this topic with ICAO.

G. Environmental Analysis

    FAA Order 1050.1F identifies FAA actions that are categorically
excluded from the preparation of an environmental assessment or
environmental impact statement under the National Environmental Policy
Act (NEPA) in the absence of extraordinary circumstances. The FAA has
determined this proposed rulemaking action qualifies for the
categorical exclusion identified in paragraph 5-6.6f for regulations
and involves no extraordinary circumstances.

V. Executive Order Determinations

A. Executive Order 13132, Federalism

    The FAA has analyzed this proposed rule under the principles and
criteria of Executive Order (E.O.) 13132, Federalism. The FAA has
determined that this proposed action would not have a substantial
direct effect on the States, or the relationship between the Federal
Government and the States, or on the distribution of power and
responsibilities among the various levels of government and, therefore,
would not have federalism implications.

B. Executive Order 13175, Consultation and Coordination With Indian
Tribal Governments

    Consistent with Executive Order 13175, Consultation and
Coordination with Indian Tribal Governments,\29\ and FAA Order 1210.20,
American Indian and Alaska Native Tribal Consultation Policy and
Procedures,\30\ the FAA ensures that Federally Recognized

Tribes (Tribes) are given the opportunity to provide meaningful and
timely input regarding proposed Federal actions that have the potential
to affect uniquely or significantly their respective Tribes. At this
point, the FAA has not identified any unique or significant effects,
environmental or otherwise, on tribes resulting from this proposed
rule.
---------------------------------------------------------------------------

    \29\ 65 FR 67249 (Nov. 6, 2000).
    \30\ The FAA. (Jan. 28, 2004). FAA Order No. 1210.20.
www.faa.gov/documentLibrary/media/1210.pdf.
---------------------------------------------------------------------------

C. Executive Order 13211, Regulations That Significantly Affect Energy
Supply, Distribution, or Use

    The FAA analyzed this proposed rule under E.O. 13211, Actions
Concerning Regulations that Significantly Affect Energy Supply,
Distribution, or Use (May 18, 2001). The FAA has determined that it
would not be a ``significant energy action'' under the Executive order
and would not be likely to have a significant adverse effect on the
supply, distribution, or use of energy.

D. Executive Order 13609, Promoting International Regulatory
Cooperation

    Executive Order 13609, Promoting International Regulatory
Cooperation, promotes international regulatory cooperation to meet
shared challenges involving health, safety, labor, security,
environmental, and other issues and to reduce, eliminate, or prevent
unnecessary differences in regulatory requirements. The FAA has
analyzed this proposed action under the policies and agency
responsibilities of E.O. 13609 and has determined that this proposed
action would have no effect on international regulatory cooperation.

VI. Additional Information

A. Comments Invited

    The FAA invites interested persons to participate in this
rulemaking by submitting written comments, data, or views. The FAA also
invites comments relating to the economic, environmental, energy, or
federalism impacts that might result from adopting the proposals in
this document. The most helpful comments reference a specific portion
of the proposal, explain the reason for any recommended change, and
include supporting data. To ensure the docket does not contain
duplicate comments, commenters should submit only one time if comments
are filed electronically, or commenters should send only one copy of
written comments if comments are filed in writing.
    The FAA will file in the docket all comments it receives, as well
as a report summarizing each substantive public contact with FAA
personnel concerning this proposed rulemaking. Before acting on this
proposal, the FAA will consider all comments it receives on or before
the closing date for comments. The FAA will consider comments filed
after the comment period has closed if it is possible to do so without
incurring expense or delay. The FAA may change this proposal in light
of the comments it receives.

B. Confidential Business Information

    Confidential Business Information (CBI) is commercial or financial
information that is both customarily and actually treated as private by
its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552),
CBI is exempt from public disclosure. If your comments responsive to
this NPRM contain commercial or financial information that is
customarily treated as private, that you actually treat as private, and
that is relevant or responsive to this NPRM, it is important that you
clearly designate the submitted comments as CBI. Please mark each page
of your submission containing CBI as ``PROPIN.'' The FAA will treat
such marked submissions as confidential under the FOIA, and they will
not be placed in the public docket of this NPRM. Submissions containing
CBI should be sent to the person in the FOR FURTHER INFORMATION CONTACT
section of this document. Any commentary that the FAA receives that is
not specifically designated as CBI will be placed in the public docket
for this rulemaking.

C. Electronic Access and Filing

    A copy of this NPRM, all comments received, any final rule, and all
background material may be viewed online at www.regulations.gov using
the docket number listed above. A copy of this proposed rule will be
placed in the docket. Electronic retrieval help and guidelines are
available on the website. It is available 24 hours each day, 365 days
each year. An electronic copy of this document may also be downloaded
from the Office of the Federal Register's website at
www.federalregister.gov and the Government Publishing Office's website
at www.govinfo.gov. A copy may also be found at the FAA's Regulations
and Policies website at www.faa.gov/regulations_policies.
    Copies may also be obtained by sending a request to the Federal
Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence
Avenue SW, Washington, DC 20591, or by calling<PHONE_NUMBER>.
Commenters must identify the docket or notice number of this
rulemaking.
    All documents the FAA considered in developing this proposed rule,
including economic analyses and technical reports, may be accessed in
the electronic docket for this rulemaking.

D. Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act (SBREFA) of
1996 requires the FAA to comply with small entity requests for
information or advice about compliance with statutes and regulations
within its jurisdiction. A small entity with questions regarding this
document may contact its local FAA official or the person listed under
the FOR FURTHER INFORMATION CONTACT heading at the beginning of the
preamble. To find out more about SBREFA on the internet, visit
www.faa.gov/regulations_policies/rulemaking/sbre_act/.

List of Subjects

14 CFR Part 91

    Aircraft, Aviation safety.

14 CFR Part 121

    Air carriers, Aircraft, Aviation safety, Charter flights, Safety,
Transportation.

14 CFR Part 125

    Aircraft, Aviation safety.

14 CFR Part 135

    Air taxis, Aircraft, Aviation safety.

The Proposed Amendment

    In consideration of the foregoing, the Federal Aviation
Administration proposes to amend chapter I of title 14, Code of Federal
Regulations as follows:

PART 91--GENERAL OPERATING AND FLIGHT RULES

0
1. The authority citation for part 91 continues to read as follows:

    Authority:  49 U.S.C. 106(f), 106(g), 40101, 40103, 40105,
40113, 40120, 44101, 44111, 44701, 44704, 44709, 44711, 44712,
44715, 44716, 44717, 44722, 46306, 46315, 46316, 46504, 46506-46507,
47122, 47508, 47528-47531, 47534, Pub. L. 114-190, 130 Stat. 615 (49
U.S.C. 44703 note); articles 12 and 29 of the Convention on
International Civil Aviation (61 Stat. 1180), (126 Stat. 11).

0
2. Amend Sec.  91.609 by revising paragraph (i)(2) to read as follows:

Sec.  91.609  Flight data recorders and cockpit voice recorders.

* * * * *
    (i) * * *
    (2) Retains at least--
    (i) The last 2 hours of recorded information using a recorder that
meets the standards of TSO-C123a, or later revision; or
    (ii) If manufactured on or after [ONE YEAR AFTER THE EFFECTIVE DATE

OF THE FINAL RULE,] the last 25 hours of recorded information using a
recorder that meets the standards of TSO-C123c, or later revision.
* * * * *

PART 121--OPERATING REQUIREMENTS: DOMESTIC, FLAG, AND SUPPLEMENTAL
OPERATIONS

0
3. The authority citation for part 121 continues to read as follows:

    Authority: 49 U.S.C. 106(f), 106(g), 40103, 40113, 40119, 41706,
42301 preceding note added by Pub. L. 112-95, sec. 412, 126 Stat.
89, 44101, 44701-44702, 44705, 44709-44711, 44713, 44716-44717,
44722, 44729, 44732; 46105; Pub. L. 111-216, 124 Stat. 2348 (49
U.S.C. 44701 note); Pub. L. 112-95, 126 Stat. 62 (49 U.S.C. 44732
note); Pub. L. 115-254, 132 Stat. 3186 (49 U.S.C. 44701 note).

0
4. Amend Sec.  121.359 by revising paragraphs (i)(2) and (j)(2) to read
as follows:

Sec.  121.359  Cockpit voice recorders.

* * * * *
    (i) * * *
    (2) Retains at least--
    (i) The last 2 hours of recorded information using a recorder that
meets the standards of TSO-C123a, or later revision; or
    (ii) If manufactured on or after [ONE YEAR AFTER THE EFFECTIVE DATE
OF THE FINAL RULE], the last 25 hours of recorded information using a
recorder that meets the standards of TSO-C123c, or later revision; and
* * * * *
    (j) * * *
    (2) Retains at least--
    (i) The last 2 hours of recorded information using a recorder that
meets the standards of TSO-C123a, or later revision; or
    (ii) If manufactured on or after [ONE YEAR AFTER THE EFFECTIVE DATE
OF THE FINAL RULE], the last 25 hours of recorded information using a
recorder that meets the standards of TSO-C123c, or later revision; and
* * * * *

PART 125--CERTIFICATION AND OPERATIONS: AIRCRAFT HAVING A SEATING
CAPACITY OF 20 OR MORE PASSENGERS OR A MAXIMUM PAYLOAD CAPACITY OF
6,000 POUNDS OR MORE; AND RULES GOVERNING PERSONS ON BOARD SUCH
AIRCRAFT

0
5. The authority citation for part 125 continues to read as follows:

    Authority: 49 U.S.C. 106(f), 106(g), 40113, 44701-44702, 44705,
44710-44711, 44713, 44716-44717, 44722.

0
6. Amend Sec.  125.227 by revising paragraphs (g)(2) and (h)(2) to read
as follows:

Sec.  125.227  Cockpit voice recorders.

* * * * *
    (g) * * *
    (2) Retains at least--
    (i) The last 2 hours of recorded information using a recorder that
meets the standards of TSO-C123a, or later revision; or
    (ii) If manufactured on or after [ONE YEAR AFTER THE EFFECTIVE DATE
OF THE FINAL RULE], the last 25 hours of recorded information using a
recorder that meets the standards of TSO-C123c, or later revision; and
* * * * *
    (h) * * *
    (2) Retains at least--
    (i) The last 2 hours of recorded information using a recorder that
meets the standards of TSO-C123a, or later revision; or
    (ii) If manufactured on or after [ONE YEAR AFTER THE EFFECTIVE DATE
OF THE FINAL RULE], the last 25 hours of recorded information using a
recorder that meets the standards of TSO-C123c, or later revision; and
* * * * *

PART 135--OPERATING REQUIREMENTS: COMMUTER AND ON DEMAND OPERATIONS
AND RULES GOVERNING PERSONS ON BOARD SUCH AIRCRAFT

0
7. The authority citation for part 135 continue to read as follows:

    Authority: 49 U.S.C. 106(f), 106(g), 40113, 41706, 44701-44702,
44705, 44709, 44711-44713, 44715-44717, 44722, 44730, 45101-45105;
Pub. L. 112-95, 126 Stat. 58 (49 U.S.C. 44730).

0
8. Amend Sec.  135.151 by revising paragraphs (g)(1)(iii) and
(g)(2)(iii) to read as follows:

Sec.  135.151  Cockpit voice recorders.

* * * * *
    (g) * * *
    (1) * * *
    (iii) Retains at least--
    (A) The last 2 hours of recorded information using a recorder that
meets the standards of TSO-C123a, or later revision; or
    (B) If manufactured on or after [ONE YEAR AFTER THE EFFECTIVE DATE
OF THE FINAL RULE], the last 25 hours of recorded information using a
recorder that meets the standards of TSO-C123c, or later revision.
* * * * *
    (2) * * *
    (iii) Retains at least--
    (A) The last 2 hours of recorded information using a recorder that
meets the standards of TSO-C123a, or later revision; or
    (B) If manufactured on or after [ONE YEAR AFTER THE EFFECTIVE DATE
OF THE FINAL RULE], the last 25 hours of recorded information using a
recorder that meets the standards of TSO-C123c, or later revision.
* * * * *

    Issued under authority provided by 49 U.S.C. 106(f) and 44701(a)
in Washington, DC.
Lawrence Fields,
Acting Executive Director, Flight Standards Service.
[FR Doc. 2023-26144 Filed 12-1-23; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register: June 26, 2008 (Volume 73, Number 124)]
[Notices]
[Page 36314]
[DOCID:fr26jn08-40]

-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. CP08-428-000]

Venice Gathering System, LLC; Notice of Filing

June 19, 2008.
    Take notice that on June 18, 2008, Venice Gathering System, LLC
(VGS), 1000 Louisiana, Suite 4300, Houston, Texas 77002, filed an
application, pursuant to Section 7(b) of the Natural Gas Act (NGA) and
Part 157 of the Commission's Rules and Regulations, requesting approval
of the abandonment in-place of certain pipeline facilities currently
operating as part of its offshore pipeline system, in Venice, Louisiana
(VGS Lateral). The application is on file with the Commission and open
for public inspection. This filing is available for review at the
Commission in the Public Reference Room or may be viewed on the
Commission's Web site at http://www.ferc.gov using the ``eLibrary''
link. Enter the docket number excluding the last three digits in the
docket number field to access the document. For assistance, please
contact FERC Online Support at<EMAIL_ADDRESS>or toll free
at<PHONE_NUMBER>, or for TTY, contact<PHONE_NUMBER>.
    The VGS Lateral is a 20-inch pipeline, 26.2 miles in length, from
the South Timbalier 35-D Platform to a subsurface tie-in at the 26-inch
pipeline in Grand Isle 71. The abandonment of the VGS Lateral also
includes smaller laterals attached to the VGS Laterals. The VGS Lateral
has deteriorated significantly, and was significantly damaged by
Hurricane Rita in 2005. The facilities are no longer required by VGS to
meet its service obligations, and all shippers who received service on
the facilities during the last 18 months have consented to the proposed
abandonment. The VGS Lateral will be flushed to remove all hydrocarbons
and will be filled with inhibited seawater prior to final abandonment
in-place.
    Any questions regarding the application are to be directed to Cary
F. Loughman, Venice Gathering System, LLC, 1000 Louisiana, Suite 4300,
Houston, TX 77002; phone number<PHONE_NUMBER> or by e-mail at
<EMAIL_ADDRESS>    Any person wishing to obtain legal status by becoming a party to
the proceedings for this project should, on or before the below listed
comment date, file with the Federal Energy Regulatory Commission, 888
First Street, NE., Washington, DC 20426, a motion to intervene in
accordance with the requirements of the Commission's Rules of Practice
and Procedure (18 CFR 385.214 or 385.211) and the Regulations under the
NGA (18 CFR 157.10). A person obtaining party status will be placed on
the service list maintained by the Secretary of the Commission and will
receive copies of all documents filed by the applicant and by all other
parties. A party must submit 14 copies of filings made with the
Commission and must mail a copy to the applicant and to every other
party in the proceeding. Only parties to the proceeding can ask for
court review of Commission orders in the proceeding.
    Motions to intervene, protests and comments may be filed
electronically via the Internet in lieu of paper, see, 18 CFR 385.2001
(a)(1)(iii) and the instructions on the Commission's Web site under the
``e-Filing'' link. The Commission strongly encourages electronic
filings.
    Comment Date: July 3, 2008.

Kimberly D. Bose,
Secretary.
 [FR Doc. E8-14447 Filed 6-25-08; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register: November 9, 2006 (Volume 71, Number 217)]
[Notices]
[Page 65847-65851]
[DOCID:fr09no06-142]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54709; File No. SR-Amex-2006-72]

Self-Regulatory Organizations; American Stock Exchange LLC; Order
Approving a Proposed Rule Change and Amendment No. 1 Thereto, and
Notice of Filing and Order Granting Accelerated Approval to Amendment
No. 3, To Adopt New Rules To Implement on a Pilot Basis an Initial
Version of AEMI, Its Proposed New Hybrid Market Trading Platform For
Equity Products and Exchange Traded Funds

 November 3, 2006.

I. Introduction

    On August 8, 2006, the American Stock Exchange LLC (``Amex'' or
``Exchange'') filed with the Securities and Exchange Commission

(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to implement an initial version of its Auction &
Electronic Market Integration (``AEMI'') system, a new hybrid market
trading platform for equity products and exchange-traded funds
(``ETFs''). On September 7, 2006, the Exchange filed Amendment No. 1 to
the proposed rule change.\3\ The proposed rule change, as amended, was
published for comment in the Federal Register on September 14, 2006.\4\
The Commission received four comments on the proposal.\5\ On October
31, 2006, Amex filed Amendment No. 3 to the proposal.\6\ This notice
and order solicits comments from interested persons on Amendment No. 3
and approves the amended proposal on an accelerated basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 replaces and supersedes the original filing
in its entirety.
    \4\ See Securities Exchange Act Release No. 54413 (September 7,
2006), 71 FR 54318 (``Notice'').
    \5\ See Letter to Nancy M. Morris, Secretary, Commission, from
Michael A. Barth, Senior Vice President, Exchange and Market
Centers, Order Execution Services, Inc., dated September 22, 2006
(``OES Letter''); Letter to Nancy M. Morris, Secretary, Commission,
from Mary Yeager, Assistant Secretary, New York Stock Exchange LLC,
dated September 29, 2006 (``NYSE Letter''); Letter to Nancy M.
Morris, Secretary, Commission, from David A. Herron, Chief Executive
Officer, Chicago Stock Exchange, Inc., dated October 5, 2006 (``CHX
Letter''); and Letter to Nancy M. Morris, Secretary, Commission,
from Jeffrery S. Davis, Assistant General Counsel, Nasdaq Stock
Market LLC, dated October 10, 2006 (``Nasdaq Letter'').
    \6\ See Partial Amendment to Form 19b-4 dated October 27, 2006
(``Amendment No. 3''), infra Section III. The Exchange submitted
Amendment No. 2 to the Commission on October 30, 2006 and withdrew
Amendment No. 2 on October 31, 2006.
---------------------------------------------------------------------------

II. Description of Proposal

    The Commission recently approved the Exchange's new hybrid market
platform for equity products and ETFs, known as AEMI, that will
integrate automatic execution and floor-based auction trading (the
``AEMI Rule Filing'').\7\ The Exchange has proposed to adopt, prior to
the Trading Phase Date,\8\ which is set for February 5, 2007, a
modified version of the AEMI Rules, known as the ``AEMI-One Rules,'' as
a pilot program (the ``AEMI-One Pilot''). The AEMI-One Pilot would
commence with two listed equities and two ETF UTP securities. Following
a successful ten-day period of trading, up to four listed ETFs would be
added for an additional five days of trading. The Exchange would then
accelerate the deployment of all equity products and ETFs on a per-post
basis and give notice to members and publish on Amex's Web site the
timing for each group of securities being migrated to the AEMI
platform.
---------------------------------------------------------------------------

    \7\ Securities Exchange Act Release No. 54552 (September 29,
2006), 71 FR 59546 (October 10, 2006) (``AEMI Approval Order'').
    \8\ By the Trading Phase Date, each trading center intending to
qualify its quotations for trade-through protection must bring a
Regulation NMS-compliant trading system into full operation for all
NMS stocks intended to be traded during the phase-in period (i.e.,
through October 8, 2007). See Securities Exchange Act Release No.
53829 (May 18, 2006), 71 FR 30038, 30039 (May 24, 2006) (``NMS
Extension Release'') (extending compliance dates for Rules 610 and
611 of Regulation NMS).
---------------------------------------------------------------------------

    Because not all provisions of Regulation NMS are fully operative,
the AEMI-One Pilot rules are modified from their AEMI Rule counterparts
to reflect the different regulatory environments in effect before and
after the Trading Phase Date. The Exchange expects that the AEMI-One
Pilot would be in effect from shortly after Commission approval of the
AEMI-One Rules until the Trading Phase Date. At the Trading Phase Date,
the AEMI Rules would become effective and supersede the AEMI-One Rules.
The Exchange has stated that it would make this change via a filing
with the Commission to delete the AEMI-One Rules from its rulebook.
    The operation of AEMI-One would be, in most respects, consistent
with the operation of AEMI, except for the following provisions:
     A ``protected quotation'' in the AEMI-One Pilot (``AEMI-
One Protected Quotation'') is a quotation in an NMS stock that: (1) Is
disseminated pursuant to an effective national market system plan; (2)
is the best bid or best offer of a national securities exchange or a
national securities association that is at a better price than the next
trade that would occur on AEMI; and (3) is a firm manual or automated
quotation, irrespective of whether the quotation is at the national
best bid or offer (``NBBO'').\9\ In contrast, a ``protected quotation''
under the AEMI Rules is defined to be consistent with Rule 611 of
Regulation NMS \10\ and must be an automated quotation that is the best
bid or offer of an automated trading center.
---------------------------------------------------------------------------

    \9\ See Amendment No. 3, supra note 6.
    \10\ See 17 CFR 242.600(b)(58) (defining ``protected
quotation''); see also 17 CFR 242.600(b)(57) (defining ``protecting
bid'' and ``protected offer'').
---------------------------------------------------------------------------

     During the AEMI-One Pilot, not every away market center
that displays an AEMI-One Protected Quotation may be capable of
receiving intermarket sweep orders (``ISOs''), as such orders are
defined in Regulation NMS.\11\ In such circumstances, AEMI would not
utilize ISOs and instead would generate ``away market obligations.'' An
``away market obligation'' is defined in the AEMI-One Rules as an
immediate-or-cancel limit order generated by AEMI and routed to one or
more away market centers to execute against all AEMI-One Protected
Quotations up to their displayed size.\12\ If an away market that
trades a particular security were capable of receiving ISOs prior to
the Trading Phase Date, the Exchange could choose to require AEMI to
generate and utilize ISOs as the away market obligations for that
market.\13\ In contrast, the AEMI Rules effective on and after the
Trading Phase Date would provide for the use of ISOs exclusively to
comply with the trade-through provisions of Rule 611 for protected
quotations displayed at other market centers. However, during the AEMI-
One Pilot, AEMI would accept and trade all ISOs received by the
Exchange that involve securities traded on the Exchange that have made
the transfer from Amex's legacy systems to the AEMI platform, similar
to the way AEMI would operate following the AEMI-One Pilot.\14\
---------------------------------------------------------------------------

    \11\ See 17 CFR 242.600(b)(30) (defining ``intermarket sweep
order'').
    \12\ The Commission notes that the Exchange has represented that
such immediate-or-cancel orders will carry an expiration delay timer
that at the outset of AEMI-One will be set to 35 seconds for all
away market obligations. See Letter to Nancy M. Morris, Secretary,
Commission, from Claire P. McGrath, Senior Vice President and
General Counsel, Amex, dated October 31, 2006 (``Amex Request
Letter'') (requesting exemption from Section 8(d) of the ITS Plan in
connection with Amex's use of ISOs and the use of private linkages
instead of ITS for routing away market obligations).
    \13\ The Commission notes that as a condition to the Exchange
marking an order as an ISO, the Exchange must immediately send ISOs
or away market obligations, as appropriate to the trading center
whose quote the Exchange is trying to access, to all AEMI-One
Protected Quotations.
    \14\ In Amendment No. 1 the Exchange, among other things,
clarified that, during the period of the AEMI-One Pilot, a member of
the Exchange sending an intermarket sweep order to the AEMI platform
must simultaneously send an intermarket sweep order (or a comparable
order) for the full displayed size of the top of book of every other
market center displaying a better-period quotations. See proposed
Rule 131-AEMI-One. In Amendment No. 2, the Exchange revised proposed
Rule 131-AEMI-One to state ``better-priced protected quotation''
(emphasis added).
---------------------------------------------------------------------------

III. Amendment No. 3

    In Amendment No. 3, the Exchange proposed certain changes to
conform the AEMI-One Rules to the final AEMI Rules. These conforming
changes are made in Rules 24-AEMI-One, 115-AEMI-One, 128A-AEMI-One,
131-AEMI-One, and 170-AEMI-One. The Exchange also proposed the
following:
     To change the language describing how the AEMI platform
will route orders in AEMI-One to protected quotations of away markets
for trade-through purposes. As described in Amendment No. 3, an AEMI-
One Protected Quotation is any firm

quotation, whether manual or automated, that is at a better price than
the next trade that would occur on AEMI, and that is the best bid or
offer of a national securities exchange or a national securities
association. In contrast, a ``protected quotation'' under the AEMI
Rules (effective on and after the Trading Phase Date) is defined to be
consistent with Rule 611 of Regulation NMS and must be an automated
quotation that is the best bid or offer of an automated trading center
(as defined in Regulation NMS).
     To make certain changes to Rule 126A-AEMI-One to insure
that the AEMI system's handling of trade-throughs is consistent with
the ITS Plan.
     To remove the order types ``buy minus'' and ``sell plus''
from proposed Rule 131-AEMI-One(n) (and all references thereto in the
AEMI-One Rules) pending additional study of their functionality in a
Regulation NMS environment.
     To revise the descriptions of ``stop order'' in Rule 131-
AEMI-One(o) and ``stop limit order'' in proposed Rule 131-AEMI-One(p)
to provide that ``too marketable'' stop and stop limit orders for ETFs
will be executed, not rejected.
     To codify as Commentary .01 to proposed Rule 154-AEMI-One
the Exchange's interpretation that a Specialist will not be deemed to
be ``trading ahead'' of a percentage order (of which it is the agent)
if: (1) An aggressing order that executes against the Specialist's
quote ``elects'' the percentage order (making it eligible for immediate
execution); and (2) the percentage order is not executed by that
aggressing order due to insufficient remaining interest and therefore
reverts back to unelected status. Additionally, the Commentary would
provide that any subsequent trade by the Specialist for its own account
would not constitute ``trading ahead'' if the percentage order has not
been otherwise re-elected at that time.
     To revise the definitions of ``Specialist emergency
quote'' and ``stabilizing quote'' in proposed Rule 1A-AEMI-One to
provide for an upper limit (not to exceed ten) on the number of
Specialist emergency quotes that may be immediately generated under a
possible scenario in which the Specialist pairs off through another
market. Otherwise, a potentially large number of such quotations might
be required to be sent out to protect quotes of away markets, creating
excessive risk, before a tolerance breach occurs. Under the proposed
rule change, the Specialist must re-quote its market when the above
referenced limit is hit. The proposed change in the definition of
``stabilizing quote'' is a related change to provide that a stabilizing
quote would be issued if the maximum number of Specialist emergency
quotes has been reached.
     To add language to Rule 126A-AEMI-One reiterating the
obligations to other market centers that members of the Exchange who
choose to send ISOs to AEMI during the AEMI-One Pilot will have. This
requirement also appears in proposed Rule 131-AEMI-One as described
above. Such members will be obligated to protect all AEMI-One Protected
Quotations.
     To clarify the meaning of the last sentence of the
definition of an ``intermarket sweep order'' in proposed Rule 131-AEMI-
One(k), by adding the word ``protected'' before the word ``quotation.''
This sentence describes the obligations to other market centers of a
member of the Exchange who chooses to send an intermarket sweep order
to the AEMI platform during the AEMI-One Pilot. Such a member would be
obligated to protect all AEMI-One Protected Quotations.

IV. Comments

    The Commission received four comment letters regarding the proposed
rule change. One commenter, OES, asserted that the proposed routing
arrangements contemplate that Amex would inappropriately perform duties
required to be performed by a broker-dealer, such as making decisions
on when, how, and where orders are routed.\15\ New York Stock Exchange
(``NYSE'') argued that Amex's proposal constituted ``an attempt to move
forward the effective date of the Reg. NMS Order Protection Rule from
February 5, 2007 to whenever the Amex is ready to implement AEMI-One.''
\16\ NYSE also argued that Amex's proposal would violate the
Intermarket Trading System (``ITS'') Plan and give it the ability to
trade-through quotes that Amex deems slow. NYSE also observed that,
when Amex previewed its proposal with the ITS Operating Committee,
several other markets noted that it would have a negative impact on
their respective technology implementation schedules. The Chicago Stock
Exchange (``CHX'') also viewed Amex's proposed rule change as an
attempt to accelerate the Trading Phase Date and opposed Amex's
proposal to trade-through quotations Amex deems to be slow.\17\
---------------------------------------------------------------------------

    \15\ See OES Letter at 1. See also AEMI Approval Order, 71 FR at
59554, n. 103.
    \16\ See NYSE Letter at 1.
    \17\ See CHX Letter at 1.
---------------------------------------------------------------------------

    Nasdaq supported Amex's proposed rule change, characterizing it as
a ``sensible transitional approach'' that would help it prepare for the
Trading Phase Date at no or little cost to other market
participants.\18\ Nasdaq disagreed with NYSE's comments on Amex's
proposal, stating that the proposed rule change would not result in any
technical or programming impact to Nasdaq, is voluntary, and could be
implemented by Amex at any time without requiring other markets to
implement similar functionality. Nasdaq also asserted that, when Amex
previewed its plan to the ITS Operating Committee, there was no
overwhelming consensus either for or against the proposal, and this is
not unusual given that market participants often have competing
interests. In Nasdaq's view, any concerns presented at that time about
the proposal's potential impact on other markets' programming
requirements were based upon a lack of familiarity with the proposal.
---------------------------------------------------------------------------

    \18\ See Nasdaq Letter at 1.
---------------------------------------------------------------------------

    Amex responded to NYSE's and OES's comment letters.\19\ Amex
disagreed with NYSE's assertion that the Trading Phase Date is the date
on which all SRO trading centers will launch their respective
Regulation NMS-compliant systems. Rather, Amex stated that the Trading
Phase Date represents an end date by which all such systems must comply
with Regulation NMS. Moreover, Amex argued that the deadline of the
Trading Phase Date does not negate the desirability of providing a
phase-in period for a new trading system. The Exchange asserted that
the industry should have operating experience with new systems prior to
the Trading Phase Date before market participants become liable for
compliance. The Exchange also stated that its proposal would not create
any additional technical burdens on other market centers. Amex also
explained that it would not send ISOs to any market not ready to accept
them and would publish the list of markets to which it would send ISOs
prior to the Trading Phase Date.\20\ The Exchange also stated that it
would seek an exemption from the ITS Plan to the extent its proposal
required.\21\
---------------------------------------------------------------------------

    \19\ See Letter to Nancy M. Morris, Secretary, Commission, from
Neal L. Wolkoff, Chief Executive Officer, Amex, dated October 10,
2006 (``Amex Response Letter'').
    \20\ See id. at 2.
    \21\ See id. at 2; see also Amex Request Letter, supra note 12
(requesting exemption from Section 8(d) of the ITS Plan in
connection with Amex's use of ISOs and the use of private linkages
instead of ITS for routing away market obligations).
---------------------------------------------------------------------------

    In response to OES's comment letter, Amex stated that the
Exchange's routing functionality has no discretion and thus the
Exchange would not be acting in the

capacity of a broker.\22\ Amex further explained that the routing logic
is based on pre-coded functionality which seeks to route orders to the
market center displaying the best price based on price-size priority.
The Exchange also stated that it does not believe that its use of
routing logic or licensing of routing technology would undermine or
change its ability to provide a marketplace of buyers and sellers.
---------------------------------------------------------------------------

    \22\ See Amex Response Letter at 3-4.
---------------------------------------------------------------------------

    The Commission notes that, in Amendment No. 2, the Exchange amended
its proposal so that during the AEMI-One Pilot it would protect any
firm quotation, whether manual or automated, that is at a better price
than the next trade that would occur on AEMI and that is the best bid
or offer of a national securities exchange or a national securities
association. This change should address the comment made by NYSE and
CHX that the Exchange would ``be permitted to trade through quotes it
deems slow * * *.'' \23\
---------------------------------------------------------------------------

    \23\ See CHX Letter at 2; see also NYSE Letter at 1.
---------------------------------------------------------------------------

V. Discussion

    After careful review, the Commission finds that the proposed rule
change, as amended, is consistent with the requirements of the Act and
the rules and regulations thereunder applicable to a national
securities exchange and, in particular, with the requirements of
Section 6(b) of the Act.\24\ Specifically, the Commission finds that
the proposal is consistent with Section 6(b)(5) of the Act \25\ in that
it is designed to promote just and equitable principles of trade, to
remove impediments to and perfect the mechanism of a free and open
market and a national market system, and, in general, to protect
investors and the public interest. The Commission also finds that the
proposal is consistent with Section 6(b)(8) of the Act,\26\ which
prohibits an exchange's rules from imposing a burden on competition
that is not necessary or appropriate in furtherance of the Act.
Finally, the Commission believes that the proposal is consistent with
Section 11A(a)(1)(C) of the Act,\27\ in which Congress found that it is
in the public interest and appropriate for the protection of investors
and the maintenance of fair and orderly markets to assure: (1)
Economically efficient execution of securities transactions; (2) fair
competition among brokers and dealers and among exchange markets, and
between exchange markets, and markets other than exchange markets; (3)
the availability to brokers, dealers, and investors of information with
respect to quotations and transactions in securities; (4) the
practicability of brokers executing investors' orders in the best
market; and (5) an opportunity for investors' orders to be executed
without the participation of a dealer. Since the Commission has already
approved the final AEMI Rules,\28\ only those aspects of the AEMI-One
Rules that differ from the final AEMI Rules are discussed more fully
below.
---------------------------------------------------------------------------

    \24\ 15 U.S.C. 78f(b). In approving this proposal, the
Commission has considered the proposed rules' impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
    \25\ 15 U.S.C. 78f(b)(5).
    \26\ 15 U.S.C. 78f(b)(8).
    \27\ 15 U.S.C. 78k-1(a)(1)(C).
    \28\ See AEMI Approval Order, supra note 7.
---------------------------------------------------------------------------

    In its AEMI-One proposal, the Exchange stated that it will protect
all AEMI-One Protected Quotations--namely all quotations that: (1) Are
disseminated pursuant to an effective national market system plan; (2)
are the best bid or best offer of a national securities exchange or a
national securities association that is at a better price than the next
trade that would occur on AEMI; and (3) are firm quotations, regardless
of whether they are manual or automated. The Commission notes that this
level of price protection appears consistent with the ITS Plan.
    The Exchange plans to utilize ISOs to route orders to AEMI-One
Protected Quotations of those market centers capable of receiving ISOs.
For markets that are unable to receive ISOs, the AEMI-One Rules provide
for the use of an ``away market obligation'' to reach the quotations of
such markets. An ``away market obligation'' is an immediate-or-cancel
limit order generated by AEMI in connection with the execution of an
order by AEMI and simultaneously routed to one or more away market
centers to execute against the full displayed size of any AEMI-One
Protected Quotation. In addition, an Amex member may send an ISO to
AEMI during the AEMI-One Pilot only if it has simultaneously sent an
ISO (or comparable order) to execute against the full displayed size of
any AEMI-One Protected Quotation. The AEMI-One Rules provide that the
Exchange will accept and act upon all inbound, appropriately marked
ISOs received before the Trading Phase Date that involve securities
traded on the AEMI platform.
    The Commission believes that the Exchange's proposal is reasonably
designed to allow Amex and its market participants to gain experience
with ISOs before the Trading Phase Date. In a separate action, the
Commission today is exempting Amex from certain provisions of the ITS
Plan relating to the Exchange's use of ISOs and the use of private
linkages instead of ITS for routing away market obligations.\29\ This
exemption will enable Amex to implement certain provisions of the AEMI-
One Rules without violating the ITS Plan. For reasons discussed in the
Amex Exemption Letter, the Commission believes that granting Amex's
request for an exemption from certain provisions of the ITS Plan is
warranted.
---------------------------------------------------------------------------

    \29\ See Letter to Claire P. McGrath, Senior Vice President and
General Counsel, Amex, from David S. Shillman, Associate Director,
Division Commission, dated November 3, 2006 (``Amex Exemption
Letter'').
---------------------------------------------------------------------------

    The Commission does not believe that OES's comments regarding the
AEMI routing arrangements preclude approval of the AEMI-One Rules. The
Commission previously considered this comment as part of the AEMI Rule
Filing. For reasons discussed in the order approving that filing, the
Commission believes that the Exchange's arrangements for outbound
routing functionality are consistent with the Act.\30\
---------------------------------------------------------------------------

    \30\ See AEMI Approval Order, 71 FR at 59554, n. 103.
---------------------------------------------------------------------------

Accelerated Approval of Amendment No. 3

    Pursuant to Section 19(b)(2) of the Act, the Commission finds good
cause to approve the proposal, as amended by Amendment No. 3, prior to
the thirtieth day after the amended proposal is published for comment
in the Federal Register. The changes that the Exchange proposes in
Amendment No. 3 are technical in nature and raise no new issues of
regulatory concern beyond those raised in the original proposal, which
had a full notice-and-comment period. The Commission finds good cause
to accelerate approval of the amended proposal prior to the thirtieth
day after publication in the Federal Register.

VI. Solicitation of Comments on Amendment No. 3

    Interested persons are invited to submit written data, views, and
arguments concerning Amendment No. 3, including whether the amendment
is consistent with the Act. Comments may be submitted by any of the
following methods:

Electronic Comments

     ( Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml
); or

     Send an e-mail to<EMAIL_ADDRESS>Please include
File Number SR-Amex-2006-72 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-Amex-2006-72. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent amendments, all

written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room. Copies of such
filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-Amex-2006-72 and should be submitted on or before
November 30, 2006.

VII. Conclusion

    For the foregoing reasons, the Commission finds that the proposed
rule change, as amended, is consistent with the Act and the rules and
regulations thereunder applicable to a national securities exchange,
and in particular with Sections 6(b)(5) and 6(b)(8) of the Act.\31\
    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\32\ that the proposed rule change (SR-Amex-2006-72), as amended by
Amendment No. 1, be, and it hereby is, approved, and that Amendment No.
3 is approved on an accelerated basis.
---------------------------------------------------------------------------

    \31\ 15 U.S.C. 78f(b)(5) and 78f(b)(8).
    \32\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\33\
---------------------------------------------------------------------------

    \33\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Nancy M. Morris,
Secretary.
[FR Doc. E6-18978 Filed 11-8-06; 8:45 am]

BILLING CODE 8011-01-P