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The Director may designate a control area or a control zone, or any portion of a control area or a control zone, as transponder mandatory airspace if—
(1) the operation of transponders is required for the provision of an air traffic control surveillance service; or
(2) the Director determines that the traffic density in the airspace requires the operation of transponders to reduce the risk of an airborne collision with those aircraft that are required to be fitted with an airborne collision avoidance system.
The Director may designate any portion of special use airspace as transponder mandatory airspace if the Director determines that the traffic density in the airspace requires the operation of transponders to reduce the risk of an airborne collision with those aircraft that are required to be fitted with an airborne collision avoidance system.