[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
THE FUTURE OF THE REGISTERED TRAVELER PROGRAM
=======================================================================
HEARING
before the
SUBCOMMITTEE ON TRANSPORTATION SECURITY
AND INFRASTRUCTURE PROTECTION
of the
COMMITTEE ON HOMELAND SECURITY
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 30, 2009
__________
Serial No. 111-37
__________
Printed for the use of the Committee on Homeland Security
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Available via the World Wide Web: http://www.gpoaccess.gov/congress/
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__________
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COMMITTEE ON HOMELAND SECURITY
Bennie G. Thompson, Mississippi, Chairman
Loretta Sanchez, California Peter T. King, New York
Jane Harman, California Lamar Smith, Texas
Peter A. DeFazio, Oregon Mark E. Souder, Indiana
Eleanor Holmes Norton, District of Daniel E. Lungren, California
Columbia Mike Rogers, Alabama
Zoe Lofgren, California Michael T. McCaul, Texas
Sheila Jackson Lee, Texas Charles W. Dent, Pennsylvania
Henry Cuellar, Texas Gus M. Bilirakis, Florida
Christopher P. Carney, Pennsylvania Paul C. Broun, Georgia
Yvette D. Clarke, New York Candice S. Miller, Michigan
Laura Richardson, California Pete Olson, Texas
Ann Kirkpatrick, Arizona Anh ``Joseph'' Cao, Louisiana
Ben Ray Lujan, New Mexico Steve Austria, Ohio
Bill Pascrell, Jr., New Jersey
Emanuel Cleaver, Missouri
Al Green, Texas
James A. Himes, Connecticut
Mary Jo Kilroy, Ohio
Eric J.J. Massa, New York
Dina Titus, Nevada
Vacancy
I. Lanier Avant, Staff Director
Rosaline Cohen, Chief Counsel
Michael Twinchek, Chief Clerk
Robert O'Connor, Minority Staff Director
------
SUBCOMMITTEE ON TRANSPORTATION SECURITY AND INFRASTRUCTURE PROTECTION
Sheila Jackson Lee, Texas, Chairwoman
Peter A. DeFazio, Oregon Charles W. Dent, Pennsylvania
Eleanor Holmes Norton, District of Daniel E. Lungren, California
Columbia Pete Olson, Texas
Ann Kirkpatrick, Arizona Candice S. Miller, Michigan
Ben Ray Lujan, New Mexico Steve Austria, Ohio
Emanuel Cleaver, Missouri Peter T. King, New York (Ex
James A. Himes, Connecticut Officio)
Eric J.J. Massa, New York
Dina Titus, Nevada
Bennie G. Thompson, Mississippi (Ex
Officio)
Michael Beland, Staff Director
Natalie Nixon, Deputy Chief Clerk
Joseph Vealencis, Minority Subcommittee Lead
C O N T E N T S
----------
Page
Statements
The Honorable Sheila Jackson Lee, a Representative in Congress
From the State of Texas, and Chairwoman, Subcommittee on
Transportation Security and Infrastructure Protection.......... 17
The Honorable Charles W. Dent, a Representative in Congress From
the State of Pennsylvania, and Ranking Member, Subcommittee on
Transportation Security and Infrastructure Protection.......... 2
The Honorable Bennie G. Thompson, a Representative in Congress
From the State of Mississippi, and Chairman, Committee on
Homeland Security.............................................. 1
Witnesses
Mr. John Sammon, Assistant Administrator, Transportation Sector
Network Management, Transportation Security Administration:
Oral Statement................................................. 4
Prepared Statement............................................. 7
Mr. Carter Morris, Senior Vice President, Transportation Policy,
American Association of Airport Executives:
Oral Statement................................................. 9
Prepared Statement............................................. 10
Ms. Alison Townley, Principal, Henry Incorporated:
Oral Statement................................................. 27
Prepared Statement............................................. 29
Mr. Fred Fischer, Principal and Managing Partner, FLO
Corporation:
Oral Statement................................................. 31
Prepared Statement............................................. 33
Mr. Michael W. McCormick, Executive Director, National Business
Travel Association:
Oral Statement................................................. 36
Prepared Statement............................................. 37
Appendix I
Mr. Ben C. Bishop, Chief Executive Officer, Travel Card Services,
LLC:
Statement, Submitted by the Honorable Sheila Jackson Lee....... 55
Appendix II
Questions From Chairwoman Sheila Jackson Lee..................... 57
THE FUTURE OF THE REGISTERED TRAVELER PROGRAM
----------
Wednesday, September 30, 2009
U.S. House of Representatives,
Committee on Homeland Security,
Subcommittee on Transportation Security and Infrastructure
Protection,
Washington, DC.
The subcommittee met, pursuant to call, at 2:09 p.m., in
Room 311, Cannon House Office Building, Hon. Bennie G. Thompson
[Chair of the committee] presiding.
Present: Representatives Thompson, Jackson Lee, DeFazio,
Cleaver, Massa, Dent, Olson, and Austria.
Also present: Representative Lofgren.
Mr. Thompson [presiding]. The subcommittee will come to
order. The Chairwoman of the subcommittee is handling a bill on
the floor, and I have been asked to stand in her stead for
however long.
The subcommittee is meeting today to receive testimony on
the future of the Registered Traveler Program. Our witnesses
today will help us access the state of the Registered Traveler,
or RT, Program, and discuss the path forward.
I guess I can start at the outset: One of the real concerns
that I have as Chair of the full committee, and I am sure other
Members share it, I understand we have just received the
testimony of TSA, which is clearly of violation of committee
rules. That is not a good start for any hearing, and we will
move into that a little bit later.
The hearing is designed to provide stakeholders and
Congress with an opportunity to have an important dialogue
about expectations and the path forward for this program. I am
ready to work with TSA, but I also think it should consider the
views of Congress as they were expressed in H.R. 2200.
To the private sector, I want to be sure that a quick
closing of business doors not happen again. The traveling
public deserves better. Since the closing of Clear's operation,
staff has examined what happened at Clear, what TSA was doing
with the RT program, and how the market was responding.
To be sure, things are still in flux. When the subcommittee
sent a letter to Ms. Rossides earlier this summer inquiring
about the disposition of Clear's customer data and TSA's role
in it, TSA essentially washed its hands of any involvement or
oversight.
Over the course of the last few months, however, TSA seems
much more engaged in the RT program and that is a welcome
development. I encourage TSA to make no judgments about the
future of the RT program until new leadership has the time to
assess the path forward.
I am thankful, however, to Secretary Napolitano for her
response earlier this month to the letter Ranking Member King
and I sent to her in August requesting that TSA rescind its
order to AAAE demanding that its RT customer information be
deleted. This was a clear demonstration that the Secretary
wants to keep options open, and I look forward to continuing
our dialogue. I look forward to the discussion of our two
panels today.
I now yield to the Ranking Member of the subcommittee, Mr.
Dent, for an opening statement.
Mr. Dent. Thank you, Mr. Chairman. Good afternoon.
I would first like to thank all the witnesses for being
here today.
Mr. Sammon, good to see you again.
First, I am very glad to hear the President has nominated
someone for the TSA administrator. We look forward to getting
to know Mr. Erroll Southers, and pending his confirmation in
the Senate I hope we can have some strong collaboration, as we
did with his predecessor, Kip Hawley.
Mr. Sammon, I would be remiss in my duties if--to the other
Members of this subcommittee if I didn't highlight the fact
that--and our rules are pretty strict about the presentation or
submission of testimony 48 hours in advance, and, you know, it
could result in the exclusion of your testimony from the
record, barring the opening statement. Now, we are usually
pretty lenient in this subcommittee, but getting the testimony
a minute or 2 before a hearing that you knew was coming for a
few weeks is a little frustrating. I guess the only thing I
would ask is if we could have maybe Mr. Sammon read through his
testimony so we get a chance to understand it.
Mr. Thompson. Without objection.
Mr. Dent. Thank you, Mr. Chairman.
We are here today to discuss the future of the Registered
Traveler program. The program, as we all know, was created
pursuant to an act of Congress, specifically the Aviation and
Transportation Security Act, which gave TSA the authority to
establish trusted traveler programs and use available
technologies to expedite the security screening of passengers
who participate in such programs.
The concept envisioned by the Congress was to allow
individuals at no cost to the Government to voluntarily undergo
background checks and in return receive expedited screening.
This would allow limited Government resources to instead be
focused on those passengers at the checkpoint of whom little is
known.
Since its creation in 2003, DHS and its components have
rightfully taken a risk-based approach to homeland security
issues, and we see this concept incorporated into the many
aviation security layers TSA already has in place. The concept
of the Registered Traveler program falls right in line with TSA
and the Department's approach, but unfortunately, TSA has never
embraced the RT program.
In the words of my good friend, Mr. Lungren, at a recent
TSA budget hearing: Registered Traveler? Congress likes the
idea. Congress says it likes the idea. Congress repeats it
likes the idea. Congress puts it in the legislation. TSA says,
``What?'' What does it take for Congress to convince TSA and
whatever administration it is that we are serious about
Registered Traveler? Those are Congressman Lungren's words.
You know, we could sit here and debate the Registered
Traveler program, you know, public partnership--public-private
partnership that went wrong. Perhaps it was TSA's concern for
clean skin terrorists, those people who might slip through a
background check because they have no derogatory information at
that point. Maybe it was simply a clash of personalities
between TSA and the private sector service providers.
Regardless, we need to focus on how we move forward,
because let me be very clear that Congress intends for the
Registered Traveler program to move forward. In fact, 4 months
ago H.R. 2200, the Transportation Security Administration
Authorization Act of 2009, passed this subcommittee and the
full committee unanimously. It overwhelmingly passed the House
by a vote of 397 to 25 last June.
The act included a bipartisan provision on Registered
Traveler directing TSA to report on how the Registered Traveler
program could be integrated in the risk-based aviation security
operations. Additional provisions were included that built upon
the RT platform to provide expedited screening for military
personnel and for people with security clearances.
As we know, this past June, Clear, a subsidiary of Verified
Identity Pass, ceased its operations. Clear was the largest RT
service provider, operating at 18 of the 22 Registered Traveler
airports.
On one hand this was shocking news, but on the other hand
it really wasn't. Clear and the other service providers, like
FLO, who is represented here today, had been operating without
any real support from TSA despite Congress' mandate. With TSA
opposing the program at every turn, it really was only a matter
of time before the service providers ran into trouble.
After Clear ceased operations, TSA was quick to ensure that
all biographic data and personally identifiable information of
registered travelers was secure, but it was disheartening to
learn that TSA almost took action to delete and dismantle the
Central Information Management System that enabled sharing
between various registered traveler providers. This was a show,
in my view, of bad faith and just underscored TSA's lack of
support for Registered Traveler.
Fortunately, Chairman Thompson and Ranking Member King
wrote Secretary Napolitano their concerns, and to date TSA has
not deleted any information. I hope we can all learn from what
happened with Clear.
I am encouraged by the appearance of Ms. Alison Townley, of
Henry Incorporated. I understand Henry--the Henry company--is
in negotiations with Clear to purchase some of Clear's assets,
potentially succeed it in the registered traveler business.
TSA must remember that the private sector is an asset that
should be leveraged as often as we can to help us secure our
homeland. The Government can't do it all; its resources are not
infinite.
The Registered Traveler program was envisioned as a public-
private partnership so TSA could leverage the technology and
ingenuity of the private sector, and I would like to hear today
that TSA is willing to turn the page on Registered Traveler and
that TSA is committed to moving forward with this very
important program. I look forward to the testimony we are going
to hear today, and at this time I yield back the balance of my
time.
Thank you, Mr. Chairman.
Mr. Thompson. Thank you very much.
Other Members of the subcommittee are reminded that under
committee rules, opening statements may be submitted for the
record. I now ask unanimous consent that Ms. Lofgren be allowed
to sit as a Member of the subcommittee, in that she is a Member
of the full committee.
Without objection.
I welcome our first panel of witnesses: Mr. John Sammon,
assistant administrator for Transportation Sector Network
Management at TSA. Our second witness, Mr. Carter Morris, is
vice president of transportation policy at the American
Association of Airport Executives.
Again, Mr. Sammon, one of the penalties for not getting
your testimony in to the committee is that we won't have
actually read it, because we just received it. Clerk just
passed it out. Our rules of the committee clearly indicate that
we should have had this information 48 hours ahead of time, and
I would hope that when the administrator is confirmed he will
assure this committee that such lack of timeliness will only--
will not be on his official watch. So if you would, please read
your statement for the subcommittee.
STATEMENT OF JOHN SAMMON, ASSISTANT ADMINISTRATOR,
TRANSPORTATION SECTOR NETWORK MANAGEMENT, TRANSPORTATION
SECURITY ADMINISTRATION
Mr. Sammon. Again, good afternoon, Chairman Thompson,
Representative Dent, and the distinguished Members of the
subcommittee. It is my privilege to appear today before you to
discuss the Registered Traveler program.
An overview of the history, as Representative Dent went
over, the Aviation and Transportation Security Act authorized
TSA to establish requirements to implement trusted passenger
programs and use available technologies to expedite the
security screening of passengers participating in such systems,
thereby allowing security screening personnel to focus on
passengers who should be subject to more extensive screening.
Based on this legislative mandate, TSA undertook Federally-
funded pilot programs to explore new technologies, the needs of
passengers and shareholders--stakeholders--and opportunities
for private collaboration in order to develop a comprehensive
RT program. TSA worked with private industry to roll out an
expanded public-private partnership, test interoperability
among multiple service providers. Private sector partners acted
swiftly to move the program forward and establish
interoperability standards that were approved by TSA in May
2006.
Following the approval of standards, TSA developed a
comprehensive set of guidance documents allowing the private
sector to implement the interoperability pilot phase.
Implementation of the Registered Traveler Interoperability
Pilot began with the release of the RTIP fee notice in the
Federal Register. This expanded pilot was designed to test the
interoperability of biometric cards among multiple service
providers at different airports across the country.
Three RT----
Mr. Thompson. Excuse me. Excuse me. Are you reading the
testimony?
Mr. Sammon. Yes, sir.
Mr. Thompson. That is not the testimony we have.
Mr. Sammon. I am reading an oral.
Mr. Thompson. Are you reading the testimony?
Mr. Sammon. No, sir. I am not reading the testimony.
Mr. Thompson. You need to read the testimony that we just
received, all right? Read the testimony. The only reason you
have to do it, we just got it, so we are looking at it at the
same time.
Mr. Sammon. An overview of the Registered Traveler program:
The Aviation and Transportation Security Act authorized TSA to
establish requirements to implement trusted passenger programs
and use available technologies to expedite the screening of
passengers participating in such programs, thereby allowing
security screening personnel to focus on those passengers who
should be subject to more extensive screening.
Based on this legislative mandate, TSA undertook Federally-
funded pilot programs to explore new technologies, the needs of
passengers and stakeholders, and opportunities for private
collaboration in order to develop a comprehensive RT program.
During the summer of 2004, the Registered Traveler pilot
program was initiated at five airports on a staggered basis
around the country. In 2005, TSA initiated a new pilot, known
as the Private Sector Known Traveler program, at Orlando
International Airport to test the feasibility of a public-
private partnership model for the RT program.
Following the Orlando pilot, TSA worked with private
industry to roll out an expanded public-private partnership
pilot to test interoperability among multiple service
providers. The RT interoperability pilot was fee-funded.
The prospect of a terrorist not identified on a watch list
raised questions about the viability of an RT program. This
scenario was made abundantly clear in July 2005 when such
terrorists attacked the London Transit System. Accordingly, TSA
decided to devote its resources to other security-focused
initiatives.
Given the public interest in the program, however, TSA
decided to partner with private sector entrepreneurs, airlines,
and airports to facilitate a market-driven RT program provided
such a program would not create any security risk to the
system. This led to the formation of a private sector-led
program announced in February 2006.
Private sector partners acted swiftly to move the program
forward and establish interoperability standards that were
approved by TSA in May 2006, giving RT and TSA access to
interoperable biometric credentialing systems that had been
constructed in less than a year. Following the approval of
standards, TSA developed a comprehensive set of guidance
documents allowing the private sector to implement the
interoperability pilot phase.
Implementation of the Registered Traveler Interoperability
Pilot began with the release of a fee notice in the Federal
Register. The initial fee of $28 per participant covered TSA's
costs for vetting and program management.
Any additional services or costs associated with the pilot
were established by the vendor who, in turn, charged the
participant for those services. This expanded pilot was
designed to test the interoperability of biometric cards among
multiple service providers at different airports across the
country.
Three RT vendors participated in the RT pilot at
approximately 23 airports. After an evaluation of the results
of the pilot, TSA issued a notice in the Federal Register on
July 30, 2008, announcing the conclusion of the pilot.
TSA determined that this private sector program did not
provide any additional level of security. TSA determined that
the security threat assessments were not a value added to the
security process, and therefore, the $28 fee to conduct them
was not good stewardship of the taxpayer dollars. As a result,
TSA ceased conducting the STAs, or background checks, on RT
participants while enabling RT to continue as a private sector
customer service program without the TSA fee or STA.
By July 14, 2009, three vendors participating in the
pilot--Unisys Corporation, Fast Lane Option Corporation,
otherwise known as FLO, Clear Verified Identity Pass, and
Vigilant Solutions--had ceased operations. This prompted the
need for TSA to ensure the appropriate handling of participant
information that RT vendors had collected and stored throughout
the program's duration.
Accordingly, TSA instructed sponsoring airports and
airlines, the entities with which TSA has a direct RT
relationship, to ensure that RT equipment and customer
information complied with the security and privacy requirements
set forth in the TSA RT standards for security, privacy, and
compliance guidance.
In addition, during the course of the pilot TSA used two
systems, one managed directly by TSA for watch list checking
and one operated by the Association--the American Association
of Airport Executives, AAAE, under a transaction agreement with
TSA to support interoperability containing personally
identifiable information.
Since one system was directly managed by TSA and AAAE
system, interfaced with its TSA system to submit information
for STAs, TSA has been responsible for ensuring that these two
systems operate in a secure manner consistent with the
requirements of the Federal Information Security Management
Act. Among other things, this act requires agencies to secure
information maintained in information technology systems.
The data in the system owned and operated by TSA was
deleted on August 1, 2009, consistent with the applicable
records retention schedule approved by the National Archives
and Records Administration, otherwise known as NARA.
The other system, which was operated by AAAE, is referred
to as the Central Information Management System, CIMS. While
TSA immediately ceased collecting information from program
applicants at the conclusion of the pilot in 2008, TSA also
provided a 12-month transition period to allow participants who
enrolled immediately after--immediately before TSA ended the
pilot to continue to enjoy the benefit of using their RT card
at all locations regardless of the vendor.
The CIMS system continued to facilitate this
interoperability during the 12-month transition period.
However, with the conclusion of the pilot and the 12-month
transition period, TSA is reviewing its legal obligations,
including those under the Privacy Act, the Federal Information
Security Management Act, and the agreement with AAAE regarding
the information contained within the CIMS system, the Central
Information Management System.
DHS will continue to encourage interested vendors to work
directly with airports, airlines, and TSA to identify and
implement worthwhile concepts that will provide registered
travelers a benefit while still maintaining both the level of
security needed to ensure the safety of our transportation
system as well as the confidentiality of personally
identifiable information. As with any transportation security
program, TSA will maintain regulatory oversight role for any
such concepts adopted in the RT program.
In conclusion, thank you for the opportunity to discuss the
future of the RT program. We look forward to working with
Congress and other stakeholders on the future of this program
and other programs that will enhance security for the traveling
public while improving the travel experience.
I would be pleased to respond to any questions.
[The statement of Mr. Sammon follows:]
Prepared Statement of John Sammon
September 30, 2009
Good afternoon Chairwoman Jackson Lee, Representative Dent, and
distinguished Members of the subcommittee. It is my privilege to appear
before you today to discuss the future of the Registered Traveler (RT)
Program from the perspective of the Transportation Security
Administration (TSA).
registered traveler: an overview of the history
The Aviation and Transportation Security Act (ATSA) authorized TSA
to ``establish requirements to implement trusted passenger programs and
use available technologies to expedite the security screening of
passengers who participate in such programs, thereby allowing security
screening personnel to focus on those passengers who should be subject
to more extensive screening.''
Based on this legislative mandate, TSA undertook Federally funded
pilot programs to explore new technologies, the needs of passengers and
stakeholders, and opportunities for private collaboration in order to
develop a comprehensive RT program. During the summer of 2004, the
Registered Traveler Pilot Program was initiated at five airports on a
staggered basis around the country. In 2005, TSA initiated a new pilot,
known as the Private Sector Known Traveler, at Orlando International
Airport (MCO), to test the feasibility of a public-private partnership
model for the RT program. Following the Orlando pilot, TSA worked with
private industry to roll out an expanded public-private partnership
pilot to test interoperability among multiple service providers. The RT
Interoperability Pilot (RTIP) was a fee-funded program.
The prospect of a terrorist not identified on a watch list raised
questions about the viability of an RT program. This scenario was made
abundantly clear in July 2005, when such terrorists attacked the London
transit system. Accordingly, TSA decided to devote its resources to
other security-focused initiatives. Given the public interest in the
program, however, TSA decided to partner with private sector
entrepreneurs, airlines, and airports to facilitate a market-driven RT
program, provided such a program would not create any security risk to
the system. This led to the formation of a private sector-led program
announced in February 2006.
Private sector partners acted swiftly to move the program forward
and established interoperability standards that were approved by TSA in
May 2006--giving RT and TSA access to an interoperable biometric
credentialing system that had been constructed in less than a year.
Following the approval of standards, TSA developed a comprehensive
set of guidance documents allowing the private sector to implement the
interoperability pilot phase. Implementation of the Registered Traveler
Interoperability Pilot (RTIP) began with the release of the RTIP Fee
Notice in the Federal Register. The initial fee of $28 per participant
covered TSA's costs for vetting and program management. Any additional
services or costs associated with RTIP were established by the vendor,
who, in turn, charged the participant for those services. This expanded
pilot was designed to test the interoperability of biometric cards
among multiple service providers at different airports across the
country. Three RT vendors participated in the RTIP at approximately 23
airports.
After an evaluation of the results of the RTIP, TSA issued a Notice
in the Federal Register on July 30, 2008, announcing the conclusion of
the pilot. TSA determined that this private-sector program did not
provide any additional level of security. TSA determined that the
security threat assessments (STAs) were not a value-add to the security
process and therefore, the $28 fee to conduct them was not good
stewardship of taxpayer dollars. As a result, TSA ceased conducting the
(STAs) on RT participants, while enabling RT to continue as a private
sector customer service program without the TSA fee or STA.
registered traveler: an overview of the current status
By July 14, 2009, the three vendors participating in the pilot--
Unisys Corporation/Fast Lane Option Corporation (FLO), Clear/Verified
Identity Pass (VIP), and Vigilant Solutions--had ceased operations.
This prompted the need for TSA to ensure the appropriate handling of
participant information that RT vendors had collected and stored
throughout the program's duration. Accordingly, TSA instructed
sponsoring airports and airlines--the entities with which TSA has a
direct RT relationship--to ensure that RT equipment and customer
information complied with the security and privacy requirements set
forth in the TSA RT Standards for Security, Privacy, and Compliance
guidance. In addition, during the course of the RTIP, TSA used two
systems--one managed directly by TSA for watch list checking and one
operated by the American Association of Airport Executives (AAAE) under
an Other Transaction Agreement (OTA) with TSA to support
interoperability, containing personally identifiable information (PII).
Since one system was directly managed by TSA and AAAE's system
interfaced with TSA's system to submit information for STAs, TSA has
been responsible for ensuring that these two systems operate in a
secure manner consistent with the requirements of the Federal
Information Security Management Act (FISMA). Among other things, FISMA
requires agencies to secure information maintained in information
technology (IT) systems. The data in the system owned and operated by
TSA was deleted on August 1, 2009, consistent with the applicable
records retention schedule approved by National Archives and Records
Administration (NARA).
The other system (operated by the AAAE) is referred to as the
Central Information Management System (CIMS). While TSA immediately
ceased collecting information from program applicants at the conclusion
of the pilot, TSA also provided a 12-month transition period to allow
participants who enrolled immediately before TSA ended the pilot to
continue to enjoy the benefit of using their card at all RT locations
regardless of the vendor. The CIMS continued to facilitate this
interoperability during this 12-month transition period. However, with
the conclusion of the RTIP and the 12-month transition period, TSA is
reviewing its legal obligations, including those under the Privacy Act,
FISMA, and the OTA with AAAE regarding the information contained within
the CIMS system.
registered traveler: looking ahead
DHS will continue to encourage interested vendors to work directly
with airports, airlines, and TSA to identify and implement worthwhile
concepts that will provide registered travelers a benefit, while still
maintaining both the level of security needed to ensure the safety of
our transportation system, as well as the confidentiality of personally
identifiable information. As with any transportation security program,
TSA will maintain its regulatory oversight role for any such concepts
adopted in the RT program.
conclusion
Madam Chairwoman, thank you again for the opportunity to discuss
the future of the RT program. We look forward to working with Congress
and other stakeholders on the future of this program and other programs
that will enhance security for the traveling public while improving the
traveling experience. I would be pleased to respond to any questions.
Mr. Thompson. Thank you.
We now yield to Mr. Morris for 5 minutes to summarize his
statement.
STATEMENT OF CARTER MORRIS, SENIOR VICE PRESIDENT,
TRANSPORTATION POLICY, AMERICAN ASSOCIATION OF AIRPORT
EXECUTIVES
Mr. Morris. Thank you, Mr. Chairman, Members of the
subcommittee, for holding this important hearing on Registered
Traveler, and we appreciate your continued interest in the
program. I would like to emphasize just a few key points from
our written testimony.
Undertaking efforts to enhance security and efficiency at
screening checkpoints, which is exactly what the Registered
Traveler promises to do by better aligning resources with the
greatest potential threats, will become more important as
traffic returns to the aviation system. It is only a matter of
time before congestion checkpoints and associated safety,
security, and convenience issues reemerge.
Our thanks to the committee for the provisions that were
included in TSA authorization legislation to fortify the
Registered Traveler program, including enhancing background
screening for enrollees and the prospect of expedited
checkpoint processing for program participants. In our view,
these steps will help the program reach its full potential.
Many of the program enhancements envisioned in H.R. 2200
are in line with what airports and industry have long supported
with trusted traveler programs, namely interoperability,
utilization of biometric verification tied to enhanced
background checks for enrollees, screening benefits, and a
robust airport-driven private program with TSA oversight.
Looking forward, it is clear that these key elements are
necessary for a robust future trusted traveler program, and
while there may be varying degrees of interest in programs that
contain only some of these items, the more you chip away at
these core elements the less attractive the program will be to
travelers and to airports.
Reducing key program elements will also result in fewer
opportunities to create real operational partnerships between
airports and the Government that enhance security and
efficiency at the security checkpoints.
The good news is that at this point we have a firm
understanding of the key program elements that are necessary
for a viable trusted traveler program as well as the technical
expertise to make such a program work. AAAE has played a key
role in that regard through its work with Registered Traveler
Interoperability Consortium and with the development of the
Central Information Management System, or CIMS.
Working with more than 60 airports, 30 biometric and IT
management companies, and with TSA oversight, the RTIC produced
a 158-page consensus document that forms the technical
foundation of the Registered Traveler program, which grew to 22
airports served by four unique TSA-certified Registered
Traveler service providers.
The CIMS is the world's most advanced interoperable
information management system of travelers' biometric data, and
as part of RT the CIMS has been responsible for several key
functions, including processing all records for program
enrollees, interfacing with the TSA for background checks,
ensuring an unbreakable chain of trust from vetted enrollments,
to issued credentials, to the revocation of those credentials.
CIMS is the critical engine that ensures interoperability,
meaning that participants who sign up in San Francisco with one
service provider are guaranteed, recognized, and accepted that
they can travel to other airports that have chosen to
participate in the program and receive the same services and
benefits.
The CIMS should and can play a key role in any future
trusted traveler program and has maintained, in strict
accordance with TSA requirements and oversight as well as
contractual obligations with service providers, data from
program participants.
There are policy decisions that must be made as to whether
or not that data should be maintained and leveraged as the part
of a future program. In our view, it would be a step backward
to delete such data, a move that would force reenrollment for
all travelers, and with that said, we are obligated to comply
with TSA's orders in this area and we look forward to working
with the agency and this subcommittee to devise a course that
makes sense for the future of a robust trusted traveler
program.
Madame Chairwoman, while the experiences with Registered
Traveler have been far from perfect to this point, much
progress has been made to create the foundation for a viable
future trusted traveler program from a technical and
operational standpoint. If you would consider that, over 4
years, the Registered Traveler program facilitated unique new
layers of security and convenience to over 250,000 travelers
who use the aviation system the most--they volunteered to
participate, were vetted against Government terrorist
databases, and used one of the world's most secure credentials
issued to the public.
Many expedited passenger programs, in fact, around the
world have used the U.S. Registered Traveler program as a
template for similar traveler security and border crossing
programs. With that foundation and with the clear guidance and
support from Congress and TSA, we remain convinced that we can
make the promise of this program a reality.
We look forward with working with the agency and this
subcommittee to that end, and I thank you for your time.
[The statement of Mr. Morris follows:]
Prepared Statement of Carter Morris
September 30, 2009
On behalf of the American Association of Airport Executives (AAAE)
and the thousands of men and women the Association represents who
manage and operate primary, commercial service, reliever, and general
aviation airports across the country, I want to thank the subcommittee
for the opportunity to reflect on the future of Registered Traveler
(RT). We remain grateful for your long-standing interest in and support
for this important program.
The imperative to move forward with some sort of ``trusted
traveler'' program will only increase as traffic begins to return to
the aviation system, which most analysts agree will happen in the near
future. Prior to the economic downturn, the situation at many airports
was approaching unbearable with growing lines at screening checkpoints
frustrating passengers and creating a dangerous safety and security
situation. While the temporary downturn in traffic has pushed many of
these problems to the back burner, there is little doubt that they will
soon return--making it all the more important that we are here today
discussing a concept that holds tremendous promise in enhancing
security while improving efficiency in the airport environment.
I also want to take the opportunity to recognize and thank this
subcommittee and the full committee for the provisions included in TSA
reauthorization legislation--H.R. 2200--aimed at fortifying the RT
program and the trusted traveler concept. In our estimation, the
approach you have taken as part of that legislation to enhance the
background screening process for enrollees and to evaluate program
improvements, including the possibility of expediting the screening
process for program participants, are extremely helpful and important.
We firmly believe that those changes can and should be integrated into
risk-based aviation security operations at airports.
The changes you have advocated in H.R. 2200 would bring the program
in line with what airports and our industry partners have recommended
since the earliest days of discussion regarding the program. As you
know, many of these key elements--including security threat assessments
for enrollees and the utilization of technology to provide screening
benefits for program participants--were present in the early days of
the program. Unfortunately, these benefits eroded and disappeared over
time, lessening the value of the program and its attractiveness to
airports and the traveling public. The good news is that with many
important pieces in place and with many lessons having already been
learned, a successful trusted traveler program is well within our
reach.
airports have long supported trusted traveler concept and development
of rt
AAAE and the airport community have long supported the ``trusted
traveler'' concept as an innovative security layer that focuses limited
Federal resources on the areas of greatest impact within the aviation
system.
AAAE President Chip Barclay (along with Southwest Airlines
executive Herb Kelleher and law enforcement veteran Ray Kelly) was a
member of the high-level airport security Rapid Response Team created
in the immediate aftermath of 9/11 by then-DOT Secretary Norman Mineta
to deliver detailed recommendations for improving security within the
National aviation system. In its report issued in October 2001, the
Rapid Response Team determined that ``There is an urgent need to
establish a nationwide program of voluntary pre-screening of
passengers, together with the issuance of `smart' credentials, to
facilitate expedited processing of the vast majority of air travelers
and to enable security professionals to focus their resources more
effectively.''
The concept subsequently received the strong endorsement of the 9/
11 Commission and has been advocated by numerous others. The trusted
traveler concept allows for intense focus on individuals who, at no
cost to Government, voluntarily provide biographic and biometric
information, freeing resources at screening checkpoints to focus on
those for whom little is known. The result is enhanced security and
improved efficiency at screening checkpoints.
Working closely with TSA, airports, and the technology community,
AAAE has taken a leadership role over the years in championing the
concept and pursuing its Nation-wide implementation with the Registered
Traveler (RT) program. Although not directly responsible for processing
passengers at screening checkpoints, airports long ago recognized that
there was great potential value in terms of enhanced security and
efficiency with the deployment of a Nation-wide, interoperable RT
program. Airports also understood that they were uniquely situated to
bring interested parties together to chart a course that would result
in the successful deployment and operation of the program.
In June 2005, AAAE--at the urging of several of our airport
members--formed the Registered Traveler Interoperability Consortium
(RTIC). The goal of the RTIC was to establish common business rules and
technical standards to create a permanent, interoperable, and vendor-
neutral RT program. In addition to nearly 60 airports, RT service
providers and leading biometric and identity management companies were
active participants in the consensus-driven process as was the
Transportation Security Administration, which played a critical role in
establishing and ensuring compliance with stringent Federal security
standards. AAAE appeared before this subcommittee in November 2005 to
detail the work of the RTIC and airport efforts to pursue a Nation-
wide, interoperable RT program.
Throughout 2006, the RTIC worked aggressively to define, develop,
and implement the RT program at interested airports. In 2006 alone, the
group dedicated more than 500 work hours to create the RTIC Technical
Interoperability Specification, a detailed, 158-page technical
standards document approved by the TSA that serves as the technical
requirements for the interoperable RT program that eventually grew to
more than 20 airports prior to the recent cessation of the program. The
RTIC technical specification has been updated numerous times since it
was first created and serves as a living document that can be altered
to reflect future program requirements.
While there have certainly been challenges and frustrations along
the way--many of which are being explored as part of this hearing--the
experiences with the RTIC make clear that the best path forward for the
RT program--or any subsequent trusted traveler concept--is one in which
Federal resources and standards are combined with the knowledge,
expertise, and creativity of airports, airlines, and aviation-oriented
businesses. That approach led to the successful launch of RT as a
secure, interoperable, Nation-wide program, and we remain convinced
that the future of the program depends on effective partnerships
between the Federal Government and the private sector.
the central identity management system (cims)--security and
interoperability
In addition to facilitating the development of the business rules
and technical standards that proved critical to getting RT off the
ground, AAAE's owned and operated Transportation Security Clearinghouse
developed and runs a TSA-certified and audited centralized identity
management system known as the Central Information Management System or
CIMS.
The CIMS is the world's most advanced interoperable information
management system of travelers' biometric data. The first of its kind,
CIMS enables verification of registered individuals with two types of
biometrics by any certified operator at any participating airport with
the very highest level of accuracy and security. As part of RT, the
CIMS has been responsible for several key functions, including
processing all records for program enrollees, interfacing with the TSA
for background checks, ensuring an unbreakable chain of trust from
vetted enrollments to issued credentials, to revoking credentials.
Notably, the CIMS is capable of accommodating multiple biometrics,
including fingerprints and iris.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The CIMS, which is capable of processing literally millions of
enrollments from independent locations across the country, served as
the critical engine that facilitated interoperability at various
airport locations among multiple vendors. A key component of the RT
program and of any trusted traveler program going forward is
interoperability, meaning that participants who sign up in Phoenix must
be recognized and accepted as they travel to other airports that have
chosen to participate in the program, be it Denver, Atlanta, Washington
or other airports throughout the aviation system. CIMS, through its
standards-based and vendor-neutral architecture, provides the back-end
security and technology that enables interoperability. As a result of
the CIMS, the RT cards issued to over a quarter of a million
participants in the RT program are among the most secure and
interoperable non-Federally issued credentials issued to the general
public.
The CIMS was built with strict oversight from TSA and has been
audited by the agency repeatedly to ensure full compliance with the
broad array of Federal security requirements pertaining to privacy and
data protection, among others. Last year, the CIMS was recognized by
the National Electronic Commerce Coordinating Council (eC3) as the 2008
Excellence Award winner for innovation in protecting the privacy and
integrity of citizen information.
I would note that since the RT program ceased earlier this year, we
have taken every precaution to continue to protect enrollee data in
strict compliance with TSA requirements. We have been in constant
contact with the agency and stand ready to comply with any future
demands pertaining to such data.
We are proud of the CIMS and firmly believe that it holds
tremendous value as part of RT or any future trusted traveler program.
From a technical standpoint, the CIMS has proven itself invaluable,
serving as the critical hub for facilitating interoperability among
service providers and at airports across the country and for processing
necessary checks and security controls. In its 3 years in operations,
CIMS supported a system of four independent service providers at 22
airports with more than 250,000 actively enrolled participants.
Whatever shape a future trusted traveler program may take, it is clear
that the CIMS can and should continue to play a central role in
performing key functions.
airports stand ready to support a future trusted traveler program
As is evident by today's hearing, there are a number of policy
questions regarding the future of the program that must be answered by
TSA in collaboration with the Congress. Among other things,
policymakers must consider the specific role of TSA with the program,
whether it will serve as a ``front-of-the line'' service or a security
program with a resumption of security threat assessments or other
checks, and whether or not program participants should be afforded
screening benefits, such as leaving shoes on or laptops in their cases
as they are processed through checkpoints.
While airports may have differing views on some of these key
questions, there is broad agreement that any future trusted traveler
program must function primarily to enhance security and expedite the
travel experience. Those two pillars are the primary values that the
Nation's frequent air travelers want as well and that each of you as
policymakers rightly will demand. By enhancing efficiency at airport
screening checkpoints, TSA screeners will be able to better focus their
limited resources on the critical task of providing more rigorous
screening to individuals about whom we know less than those who have
voluntarily submitted their background for extensive vetting and
clearance.
The unique operational relationships between airports and TSA
forged through this program can also serve as a platform for process
and technology innovation at checkpoints. Emerging detection and
surveillance technologies can be tested as a part of the trusted
traveler process with less risk and more impact than with isolated
pilot programs.
As each Member of this subcommittee knows as a frequent traveler,
every airport is unique. A successful, long-term trusted traveler
program depends on the implementation of a technical, operational, and
business model capable of supporting individual airport needs, while
providing the common infrastructure that allows passengers to use this
capability at any airport Nation-wide. In recognition of that fact, it
is critical that any future program continue to be airport-driven and
run outside of Government with careful and consistent Government
standards and oversight.
In terms of specifics, many of the initial principles outlined by
airports and our partners working with the RTIC arguably remain as
valid today as they did some 3 years ago. At that point, RTIC members
agreed to support a system where:
Qualified applicants in the RT Program will agree to
voluntarily provide TSA-specified personal data, both
biographic and biometric, which will be used by TSA to assess
the security threat of each participant.
Service providers will be responsible for enrollment
operations, including collection and verification of personal
data of eligible applicants. Service providers must protect and
maintain all personal data related to an applicant in a secure
manner and prevent the unauthorized disclosure of the personal
data.
Service providers must securely transmit valid application
enrollment data to the Central Identity Management System
(CIMS). The CIMS will receive enrollment data from the RT
service providers and will validate and perform duplicate
checking of received enrollment data and forward data to the
TSA for security threat assessments.
The TSA will conduct the security threat assessments and
return results daily.
On receipt of notification of an acceptable security threat
assessment for an applicant, the CIMS will notify the RT
service provider for that applicant of the updated status of
the applicant and will forward the applicant's credential
information to the service provider.
The credential information sent to the service provider will
include a digitally signed biometric template generated by the
CIMS which will ultimately be placed on RT participants' cards.
The central issuance of the biometric template ensures
technical interoperability but also importantly provides a
chain of trust between an individual's biometric and the same
individual's vetted identity.
Service providers will issue and deliver participants'
membership cards (e.g. smart cards). Service providers must
notify CIMS of any future changes in the status of their
participants, such as lost or stolen cards. Service providers
are also responsible for customer service, including
communicating with applicants regarding their approval status
and responding to applicant and participant inquiries.
Service providers may not unnecessarily disclose biographic
and/or biometric data required for the purpose of the RT
Program and collected by the service provider from RT Program
applicants or participants. Service providers may not sell or
disseminate any biographic and/or biometric data required for
the RT Program and collected by the service provider from RT
Program applicants or participants for any commercial purposes
without the approval of the airport.
Participating traveler processing will occur at the
airport's security checkpoints. The placement of the RT
screening stations will be located in front of the TSA
passenger screening areas. Passengers that are not enrolled in
the RT Program or are not approved when presented at the RT
processing area will use the normal TSA security lines/lanes.
Passengers that are enrolled and approved will use the
designated RT security screening lines/lanes.
Biometric technology will be used for traveler identity
verification at the RT screening stations. Once a participant
presents their membership card, fingerprint, and iris biometric
features will be used to verify passenger identity. Proposed
biometric systems shall be currently operational, highly
accurate, cost-effective, and capable of confirming the
identities of large populations within short time constraints.
Service providers will operate the RT screening stations,
including the timely update of system and card revocation
status to ensure fast, secure, and reliable verification and
status-checking at the airport checkpoint.
Service providers are responsible for installing,
furnishing, integrating, operating, and maintaining all of
their required equipment and systems.
The RTIC will create and maintain the technical and business
rules for the RT Program. The RTIC will operate a certification
program for RT service providers to validate the conformance of
their systems, service levels, and processes with the RT
Program rules. Service providers will be required to undergo an
annual re-certification and auditing of their systems and
processes.
Service providers will market the RT program to potential
applicants and will use standardized RT Program logos and
signage within their marketing.
While some adjustments to this model may be necessary and
appropriate, it is clear that the basic framework outlined here offers
a roadmap for a re-constituted program that offers great prospects for
sustainability. We believe that these principles are in line with those
outlined by the subcommittee in H.R. 2200.
In closing, I would emphasize the tremendous work that has been
done to this point to get a viable, interoperable trusted traveler
program off the ground with RT. With all of the pieces in place from a
technical and business process standpoint, the only thing missing is
clear direction and certainty as to what a future program may entail.
The interest level of the traveling public will undoubtedly increase as
traffic returns to our Nation's airports as will the imperative to have
a workable program in place.
AAAE and the airport community remain committed to working with our
industry partners, with Congress, and with TSA to make the promise of a
trusted traveler program a reality. Thank you very much for the
opportunity to appear at this important hearing.
Ms. Jackson Lee [presiding]. Let me thank the witnesses for
their testimony, and let me place on the record that a bill
that I co-authored was on the floor of the House and we were
debating it. I thank the Members of the committee and the
Chairman of the full committee and the Ranking Member and
Members for their indulgence.
I would like to yield now for 5 minutes for his questions,
Ranking Member of the subcommittee. Mr. Dent.
Mr. Dent. Thank you, Madame Chairwoman.
Mr. Sammon, again, thanks for joining us today. I have a
series of questions that are pretty much yes or no that I would
like to get through first. From that I would like to engage you
in a little bit of dialogue.
First, GAO has used red teams in the past to test TSA's
screeners, have they not?
Mr. Sammon. Yes.
Mr. Dent. Does TSA have its own internal red teams?
Mr. Sammon. Yes.
Mr. Dent. Have TSA screening personnel failed these red
team inspections in the past?
Mr. Sammon. Yes.
Mr. Dent. So to protect the American public, TSA has
implemented several layers of security, both seen and unseen,
such as behavioral detection officers, document checkers,
terrorist watch lists, air marshals, hardened cockpit doors,
and armed pilots----
Mr. Sammon. Yes.
Mr. Dent. So I struggle with the TSA's repeated opposition
to their, you know, to the Registered Traveler program. Why are
you less concerned with the vetted flight mechanic or baggage
handler placing a bomb into the belly of an aircraft than a
vetted traveler?
Mr. Sammon. We are not opposed to it. When we looked at the
security benefit that was being provided, the terrorist watch
list essentially is the same check that you get when you buy a
passenger ticket. So the registered traveler coming to the
checkpoint had no increased benefit, from a security
standpoint, than the passenger who purchased a ticket.
Mr. Dent. Yes. I understand TSA, as I think you mentioned
in your testimony, charged $28 to conduct a criminal background
check for RT registrants. Our witnesses in the second panel
submit that those checks were never done. Were criminal
background checks ever done?
Mr. Sammon. The checks that were done were CIMS--NCIC
checks, which essentially are watching warrants checks, which
are the same checks that an officer might do for a person who
is stopped for a traffic violation. It is a name-based check,
yes.
Mr. Dent. So that is where the money went to pay for those
checks?
Mr. Sammon. Well, it also paid for the watch list checks
and vetting of people who were submitted for the Registered
Traveler program, the names that had to be vetted and also
disputes resolved, and so on and so forth.
Mr. Dent. Thank you. When Clear ceased operations, Members
of the committee were deeply troubled to learn that there was a
movement at TSA advocating for and directing that all biometric
data and personally identifiable information of RT program
participants be deleted from the RT Central Information
Management System, CIMS, database. What can you tell us about
that situation?
Mr. Sammon. Well, I think after the companies had ceased
operations, we were concerned about what would happen to the
privacy information and the privately-provided information. We
contacted these sponsors for all the vendors and went through
the procedures and processes under the Privacy Act under the
security agreements, in terms of dealing with the data, making
sure that there were not laptops left at kiosks, that the data
left in the open was secured and clean.
Upon further review, as required by the Privacy Act and
other information security acts, we took actions to secure the
data that was out there, including CIMS.
CIMS was originally put together for interoperability.
Since there was on one operating and it was no longer providing
a Federal function--Federal Government function--TSA felt that
there was a risk--though it may not be a large risk, but still
a risk that if the data was released that that privacy
information would get out. So that was our concern about
leaving a database out there that was not being used and
functioning.
Mr. Dent. Did you engage legal counsel--did legal counsel
advise TSA on this situation when it came up?
Mr. Sammon. TSA legal counsel and privacy counsel, yes.
Mr. Dent. Which statutory requirements did they--was it the
Privacy Act that you----
Mr. Sammon. Yes. It was the Privacy Act and the Federal
Information Security Management Act, and also under our
agreement with AAAE there were requirements for protecting data
if the data was not going to be used. So----
Mr. Dent. Did they think that the statutory requirement
required that the data be deleted immediately?
Mr. Sammon. I believe that they were simply moving ahead to
make sure that the data--at that time it did not look like
anyone was resuming operations, and they wanted to protect the
data and protect any leaks of that data.
Mr. Dent. My final question: Our former TSA administrator,
Kip Hawley, whom we had a tremendous respect for, was never
very fond of the RT program. Mr. Hawley was concerned about
what he called ``clean skin terrorists.'' Can you walk us
through TSA's definition of what a clean skin terrorist is?
Mr. Sammon. Yes. For instance, the terrorist who were
involved in the London subway bombings, the people who attacked
the Velasco Airport--if you ran their names on a terrorist
watch list you wouldn't find them.
Mr. Hawley, if you go back to the testimony in July 2007 on
this very subject, Mr. Hawley expressed a concern that if we
established, particularly to look at the security benefits--say
we said that registered travelers would be provided the
security benefit, say, of not taking your shoes off. This
concern would be that the terrorist would look to recruit
people who did not have a--who did not appear on watch lists
and then who could take advantage of that security loophole,
namely with shoes, because everyone else would have their shoes
checked.
So what he was referring to as a ``clean skin'' was someone
who would not show up on a watch list. Once you provide a
loophole in the security system, whether it is you can walk
through with your shoes or you can do something else, your
opposition starts about to game the system, just like when we
looked only for explosives--traditional explosives, they went
to liquids; We looked for guns, they went to box-cutters. So
when you put the rules up, and if you put a loophole, people--
your opposition is going to try to game that. That was his main
concern.
Mr. Dent. But you feel that there are always going to be--
there are always going to be clean-skinned individuals out
there who are going to try to do harm to our Nation?
Mr. Sammon. Yes, sir.
Mr. Dent. You know, Alder James, Robert Hanssen----
Mr. Sammon. Right.
Mr. Dent [continuing]. You know, didn't both of these
individuals go through far more extensive security background
checks, and didn't that also result in American casualties and
deaths?
Mr. Sammon. Yes. I have a top secret clearance, and I go
through the same security checks that everybody else does.
Mr. Dent. Thank you.
I yield back to the Chairwoman. Thanks.
Ms. Jackson Lee. Thank you very much.
Yield myself 5 minutes, and I will offer my opening
statement at the beginning of the second panel.
Mr. Sammon, thank you for being here, but the Registered
Traveler program is on life support. Clear and FLO failed its
passengers, and this hearing is to determine what our next
steps are.
So I am interested in just what TSA can and expects to do
as we move forward. Can TSA commit to reassessing whether to
provide a security benefit to the RT program?
Mr. Sammon. We are awaiting the speedy nomination of our
nominee and expect that he will, once he gets into that and
evaluates the benefits and what kind of security benefits can
be provided, and we will work closely with him and DHS, yes,
ma'am.
Ms. Jackson Lee. For the edification of all of us, we are
delighted that there is a nominee, and do you want to update us
as to whether or not he has had a Senate hearing?
Mr. Sammon. He has not yet had a Senate hearing, no, ma'am.
Ms. Jackson Lee. I look forward to engaging.
Do you think there is a role for TSA in the RT program?
Mr. Sammon. We do believe there is a role. We work with the
airports closely on all security measures and all of these
programs. We think that there is a security role, and we look
forward to working with vendors and people who want to continue
to come forward with new and better ideas to how to make it
work.
The concept is a great concept if we can provide a benefit
for people we know more about, and the trouble we have had is
just trying to make that--what is a proper amount of
information about a person that will allow you to give them the
security benefit?
Ms. Jackson Lee. Well, I think RT collapsed when TSA walked
away from conducting the security threat assessment on RT
passengers in 2008. Why did you do that?
Mr. Sammon. We looked at the pilot, examined what was
happening in the pilot, and we compared the security benefit
that they were--that RT was providing versus the security that
every other airline passenger has in a watch list check. We
concluded that there was little additional benefit, and we
thought that it did not make sense to continue charging
passengers and the vendors for another watch list check that
they would get every time they purchased a ticket.
Ms. Jackson Lee. But if we wanted to add that security
benefit, TSA, under a new administrator, would be prepared to
look at it?
Mr. Sammon. We would be happy to explore alternatives, yes,
ma'am.
Ms. Jackson Lee. Does Clear or FLO, in order to restart,
have to get permission from TSA?
Mr. Sammon. I believe they need to resubmit an application,
yes, ma'am.
Ms. Jackson Lee. How did AAAE acquire the contract for the
CIMS database?
Mr. Sammon. Ma'am, I am not completely sure.
Ms. Jackson Lee. Can you provide in writing as to whether
or not it was through a competitive process?
Mr. Sammon. Yes.
Ms. Jackson Lee. Thank you.
Mr. Morris, AAAE met with my staff several times this
summer to discuss the RT program. One briefing was held in
August--August 5. At that time nor in the days following the
company did not notify us that TSA had instructed you to
provide a plan for data deletion from CIMS the day before,
August 4. Whey did you not notify the subcommittee of this?
Mr. Morris. Yes, ma'am. We were up here talking to the
staff and were in the middle of on-going conversations with the
agency throughout August. As soon as we became aware and
received a letter from TSA that they were interested in
decommissioning the CIMS system we passed that along to
committee staff and engaged in----
Ms. Jackson Lee. What date was that?
Mr. Morris. That would have been--August 17 is when we
received the TSA letter and submitted the revised plan and
would have had a conversation on August 18.
Ms. Jackson Lee. I don't know if you have that letter or if
we have that letter, or I hope my staff will present it to me.
If not, if you would, I would just encourage you if you were in
discussions, we are all on the same team, to at least allow us
that information.
Very quickly, how did AAAE acquire the contract for the
CIMS database?
Mr. Morris. We actually worked through the Registered
Traveler Interoperability Consortium to bring together airports
and service providers around a Registered Traveler model that
TSA had insight into but did not directly participate in. It
was the recommendation of the RTIC that AAAE's transportation
security clearinghouse serve as the Central Identity Management
System, and then TSA endorsed that and engaged in another
transaction agreement with AAAE.
Ms. Jackson Lee. Do you have a quick vision for RT?
Mr. Morris. Yes. The vision for RT and many airport members
who participated in the RT program would be that it serve as a
platform--not just a technology and operational platform, but
also a relationship platform, where airports and TSA can work
together to increase both the efficiency and the security at
the checkpoints in hundreds of airports around the system.
Ms. Jackson Lee. I am going to go to Mr. DeFazio, Mr.
Olson, because I reordered the schedule of time by yielding to
Mr. Dent first. So I will be going to Mr. DeFazio for 5
minutes.
Mr. DeFazio. Thank you, Madame Chairwoman.
You know, I am probably the only Member of the committee
who was a principal on the aviation committee in creating the
TSA and was involved in the very early discussions of some sort
of known traveler, trusted traveler, or whatever you want to
call it. At the time the idea was, we didn't have an
integrated, comprehensive terrorist watch list, so we didn't
have anything to check, you know, tickets against or people's
IDs against.
The idea was, let us try and lessen the burden on the
system by having some people subject themselves voluntarily to
this process; then we will know that, you know, they are, you
know, they are travelers who can move through the system. There
was never any idea that they would avoid any part of the
security screening, and that is the--I don't see how we are
going to ever get to the point--and to Mr. Sammon, again, just
on the clean-skinned terrorist. We now have, since the
development of this program, dramatic evidence that people
without being on a watch list, without criminal backgrounds,
have committed horrific acts. Is that correct?
Mr. Sammon. Yes, sir.
Mr. DeFazio. So then at what point would the TSA feel
comfortable in degrading or eliminating portions of the
passenger screening--the physical screening--with this trusted
traveler program?
Mr. Sammon. At this point, we are not.
Mr. DeFazio. Can you envision anything that would lead us
to that point?
Mr. Sammon. There may be technologies that come along.
There may be other things that develop. I think combinations of
technologies, combinations of improved behavioral detection. I
think there are a number of things that possibly could be put
together.
But again, as I refer to looking back at the testimony in
2007, Administrator Hawley stated that the vendors associated
with the program did not want to go beyond the watch list
check. So I think you have to look at a broader list of
background information. You need to look at other kinds of
things than have been put in the initial pilot.
Mr. DeFazio. There will be subsequent testimony from Alison
Townley, when she talks, and I will--if I am here I will ask
her, but I want to know if you are familiar with it. Talking
about something that would allow same-day in-airport sales and
more pricing options and provide non-security-related
experiences, streamlined staff--how could--what would that be?
I mean, basically we are just looking at many airports of
their own volition, I think, in order to help facilitate
business travel and stop the hemorrhaging of business travelers
who are not super rich or with big, rich corporations, to give
them more certainty they have established lines for frequent
travelers, then the airports check the ID. What function other
than that does, you know--I mean, the Registered Traveler
program is essentially just another place where people can get
to the front of the line, and people are paying for that.
Mr. Sammon. Yes. I think if you look at the total amount of
time people spend in lines, particularly in years past, most of
the time was not the screening itself, it was actually standing
in line. I know that some vendors have provided--packaged that
with other services, such as concierge services, special rooms,
parking, and so on and so forth. So, I mean, it can be packaged
into a whole series of travel options, I guess.
Mr. DeFazio. Right. My concern has been, since the
inception of the program and the innovative idea that Clear had
to revenue-share with the airports, that the airports might
then be tempted to degrade the lines for the frequent business
travelers who haven't paid extra for the card and therefore
given a share of revenue to the airport. Are you aware of
anywhere where that happened?
Mr. Sammon. I am not, but I think any one of these market-
based solutions--the airports are marketing services and the
vendors are marketing services--different combinations will
result.
Mr. DeFazio. Right. Like, so Mr. Morris, right now at
Portland Airport, for free, I and other frequent business
travelers get to go to the 1K line, or whatever your
affiliation is with an airline, and you get to bypass the huge,
you know, other line there. You know, what would be--and
Portland did not participate in this program. Are you aware of
any airport that either eliminated or degraded service to non-
participants?
Mr. Morris. I am not aware.
Mr. DeFazio. Okay. This is a tremendous concern I have,
that basically we are blackmailing people into buying these
cards from a private, for-profit vendor, tacking on some other
services they really don't want or need, but they are desperate
to have more predictability in the airport. I would rather
focus on the throughput of all Americans in an efficient way.
Mr. Sammon, when are we going to get the multi-perspective
of, you know, devices? To me I think one of the biggest slow-
ups I see in the airport is, I put down my briefcase, it goes
through, there is an opaque object. They say, ``Excuse me, sir.
May we take your briefcase, walk it back around the machine and
turn it a different way?''
I say, ``Yes.'' They stop the line; they take it back. The
whole thing slows everybody down.
But that doesn't happen when you come in here because we
have multi-perspective machines. I have been arguing for years
you need them. When are we going to get those deployed in
airports?
Mr. Sammon. Well, I think part of it is part of the ARR
grants, and also the regular capital program. We are buying
more and more of the AT X-rays; we are trying to get all of
those deployed, I think by the end of next year, because that
makes a big difference.
The other thing we have done to improve the line throughput
is by separating the families, which, again, most of the family
time is taking things out, checking things, is just as you
describe, goods that get through and then have to be rechecked,
and putting them in a line that makes them more comfortable and
ensures space for businessmen who are in a hurry. So we have
taken operating changes, but in addition to that we are very
high on the multi-view X-rays to eliminate those kinds of
redundant activities.
Mr. DeFazio. Great, thank you.
Thank you, Madame Chairwoman.
Mr. Olson. Thank you, Madame Chairwoman. I greatly
appreciate the recognition.
Mr. Morris, prior to the RT program ceasing operation in
June, only 22 airports had contracts with RT service providers,
and what, in your opinion, is necessary to gain future airport
interest in the RT program?
Mr. Sammon. A bigger cut.
Mr. Morris. I would say that as the program advances many
airports, in looking at a new iteration of trusted traveler or
looking at what the screening and security benefits could be
that would be a part of that program. As Mr. Sammon mentioned,
that would not be necessarily limited to the proposition that
just because we know something more about travelers who use the
system the most that we do less in the way of screening that is
already being experienced.
But it becomes a platform that potentially can be exciting
at this important part of the airport to deploy new technology,
whether that is shoe scanners, whether that is behavior
detection, there is always going to be a new technology that is
going to bring efficiency into that business process. The
Registered Traveler program, just because of how it is set up
as a public-private partnership, aligns the incentives of
airports and TSA to work together to drive those efficiencies
and increase security.
Mr. Olson. Thank you very much. So you are saying that
working together, the airports working together with the TSA
and the RT program is what we are looking for? I mean, you
outline the process undertaken by the private sector in your
testimony regarding the Registered Traveler Interoperability
Consortium, and to make the RT program workable from a
technical perspective. So again, that sounds like what you are
saying is, working together--private sector, public sector--
that is how we can see the benefit and get this program
working?
Mr. Morris. Yes, sir.
Mr. Olson. Okay. Thank you very much.
I have a question for you, Mr. Sammon, and then I think we
will be done.
We have got some votes, Madame Chairwoman, so I will be
very quick.
But the 9/11 Commission, Mr. Sammon, recommended that
programs to speed known travelers through should be a higher
priority, I mean, permitting inspectors to focus on greater
risks. The daily commuter should not be subject to the same
measures as first-time travelers. An individual should be able
to pre-enroll with his or her identified, verified in passage,
and this Registered Traveler program does just this.
Please describe for the subcommittee your thoughts on what
the benefits are--the security benefit the Government gets from
conducting security background checks on frequent flyers as
envisioned in the original Registered Traveler program.
Mr. Sammon. Based upon the original Registered Traveler
program, the amount of security benefits that were received
from those background checks was not sufficiently greater than
the background check that we receive for every passenger who
buys a ticket. So therefore, we did not see, as it was
originally constructed, a significant difference for the
registered traveler versus the every other day airport
traveler.
Mr. Olson. Thank you very much.
I yield back my time, Madame Chairwoman.
Ms. Jackson Lee. I thank the distinguished gentleman.
Let me ask the--we have got voting logistics that we are
addressing. Let me indicate to this panel, I would like you to
stay. We will adjourn.
I am now going to read my opening remarks, and you can stay
at the table and listen when I adjourn. There are Members here
who may have questions. If you would have the kindness to stay,
we will start it with the panel for any Members that come back,
and then we will move to the second panel.
I will begin, now, my remarks for the record. The
subcommittee is meeting today to receive testimony on the
future of the Registered Traveler program. Our witnesses today
will help us assess the state of the Registered Traveler, or RT
program, and discuss the path going forward.
Before I provide some thoughts and background on the issue
at hand, I want to make several items clear: First,
notwithstanding our work over the past several months, we are
still trying to acquire information about what RT will look
like going forward. Second, we are eager to work with the
incoming TSA administrator, the recently nominated Erroll
Southers to develop an RT program that works for everyone. I do
believe, having listened to Mr. DeFazio, there are some very
valid points being made, but I want TSA to make its case.
Third, we are not here today to promote any single service
provider. Instead we want to hear from providers about the
development of a business solution that will ensure that future
RT subscribers are not deprived of the services for which they
have paid.
That is what happened this summer: Clear failed its
customers, and other RT providers, such as FLO, failed their
customers because they were too reliant on Clear. Today this
panel will lay a marker for all stakeholders as the process for
resuscitating RT moves forward, and we expect to remain an
integral part of the on-going RT in a dialogue.
In the Aviation and Transportation Security Act, Congress
encouraged TSA to implement a trusted passenger program through
which the administrator could establish expedited security
screening procedures for passengers who were vetted through
background checks and deemed to be a low security risk. As
envisioned by Congress, the security benefits of such a program
was clear: TSA could focus precious resources on high-risk
unknown passengers and potentially test new screening
technologies on those known travelers.
To carry out its duties under ATSA, TSA worked with
industry to establish technical and interoperability standards
for service providers such as Clear, and that is extra.
However, after these initial actions TSA dropped conducting
security threat assessments and criminal history background
checks from participating RT passengers.
Without these threat assessments to determine lower-risk
passengers, TSA effectively rendered this risk-based security
program impotent. Lacking the security threat assessment
component, critics call RT a head-of-the-line program,
accurately so.
Nevertheless, even without an expedited security screening
aspect, we now understand that several firms are interested in
reestablishing RT operations at airports regardless of whether
RT eventually functions as a true risk-based security program.
It appears that the private sector is poised to engage in this
market.
In light of these developments, I would like to make two
comments. First, I hope that TSA is responsive to Congress'
request, as outlined in H.R. 2200, that we make a good-faith
effort to explore a security benefit for RT. Second, I strongly
encourage the private sector to create an RT model that can
support a security benefit, but which does not rely on one.
This will protect consumers.
We have much to discuss today, as we have already begun to
discuss, including what the role of TSA should be in any future
RT program and whether the program can be leveraged or adapted
to follow a risk management approach to security screening. We
also need to understand if the program will benefit customers
as the traveling public cannot understand or cannot afford to
endure the events of this summer a second time.
This hearing provides us with a forum to articulate our
concerns about RT and discuss ideas for the path ahead. I am
looking forward to the discussion that has already pursued, and
I do think it is extremely important that we take into
consideration TSA's comments, but also that we look forward to
the new TSA administrator engaging in a vigorous discussion on
an important security issue.
This hearing is in recess. Thank you.
[Recess.]
Ms. Jackson Lee. The hearing is now resumed. I recognize
the gentleman from Missouri for 5 minutes for questions.
Mr. Cleaver. Thank you, Madame Chairwoman. I don't think I
will take 5 minutes.
I am interested, Mr. Morris, in the suspension TSA--you
have already suspension, the deletion of personal records from
the Central Information Management System, CIMS. Is there a
plan in place to allow individuals to choose to have their
records deleted, that they no longer want to participate in the
RT program? Would that plan be at the behest of TSA?
Mr. Morris. It could be at the behest of TSA or it could be
at the behest of the individual service providers. The CIMS has
a relationship directly with TSA and directly with the service
providers, but no direct relationship with the individual
customers themselves, and so while CIMS adheres to the highest
security standards from TSA and privacy standards that the
service providers committed to their customers, there doesn't
exist a relationship directly between those travelers and our
system.
Mr. Cleaver. So all individuals who participated in this
program can feel comfortable that the optimum level of privacy
will be guaranteed?
Mr. Morris. Yes, sir. Our system, a part of--and John
alluded to this in his testimony--a big part of the
relationship between CIMS and TSA was around the information
security standards that the CIMS needed to adhere to as defined
by TSA and audited by TSA.
Mr. Cleaver. The relationship between the American
Association of Airport Executives and TSA, with regard to the
RT--was that relationship beneficial?
Mr. Morris. Was it beneficial to--in serving the interest--
--
Mr. Cleaver. Yes.
Mr. Morris. [Off mic.]
Mr. Cleaver. What is the future with that relationship?
Mr. Morris. Well, we would hope that we could continue on
with that relationship with TSA. There is certainly a
significant portion of policy decisions that TSA needs to make
on their part to decide how to interface with Registered
Traveler program moving forward, but we are very open to that
and we see that relationship as adding a great deal of value to
the program.
Mr. Cleaver. Thank you.
I yield back the balance of my time.
Ms. Jackson Lee. I thank the gentleman very much.
Let me pose two questions, one to Mr. Morris. It seems that
AAAE was in a solid position this summer to follow former Clear
customers to allow--excuse me, former Clear customers to easily
switch to another provider. Is AAAE supportive of this?
Mr. Morris. I think technically it is possible to move the
individuals who had enrolled through one service provider over
to another service provider, but it wouldn't honor the
agreement in place that we had with the--that we continue to
have with the individual service providers.
Ms. Jackson Lee. What do you mean it wouldn't honor the
agreements in place?
Mr. Morris. So individual registered travelers sign up with
a service provider and become their customer, and in turn their
enrollment information is sent to CIMS to facilitate
interoperability in any contemplated security threat
assessment. But what it doesn't do is allow other service
providers to gain access to the customer information. What it
does is it creates this interoperability where the card can be
accepted by both of the service providers. So for us to take--
--
Ms. Jackson Lee. So someone new wouldn't have that scheme,
that structure? Someone totally new----
Mr. Morris. Correct. Correct, in addition to the fact that
we have the information--the enrollment information--on the
250,000 individuals who are actively enrolled in Registered
Traveler from all service providers at the cessation of
operations this past summer.
Ms. Jackson Lee. What would happen if the Clear customers
made the request themselves?
Mr. Morris. Well, I think that is something that we could
look at. Our relationship is with Clear as an on-going concern,
and the any agreement that Clear would have and privacy
standards that would follow, we would be more than willing to
look at that and do that in accordance with whatever policy
view TSA has on the transfer of that information, and of course
any advice or input from your subcommittee.
Ms. Jackson Lee. So what posture do you find yourself in
right now with respect to RT?
Mr. Morris. We find ourselves in the position of having the
parts of the Registered Traveler program in place that could
restart the program, either in the previous iteration or in
some new iteration of the system that could be more or less
from an operational standpoint turned on at a moment's notice,
engaging with TSA, engaging with the committee on what the
policy direction would be for the program moving forward, and
then ensuring our airport members the viability of the program
and that those standards are adhered to to enable that
important interoperability really is the key focus for us right
now.
Ms. Jackson Lee. With respect to a security benefit, if it
was ultimately decided by TSA and moved forward on, you could
work with that structure as well?
Mr. Morris. We could, and have.
Ms. Jackson Lee. Mr. Sammon, what posture do you find
yourself in at TSA, putting aside that you do not have an
administrator? What is TSA's present position reflected upon
its position over the last 2 years as it relates to RT?
Mr. Sammon. We are, again, we are examining our current
legal requirements regarding the data in the CIMS system----
Ms. Jackson Lee. You have possession of the data?
Mr. Sammon. No, we do not. AAAE does. If another operator
were to come forward and want to resume operations as they had
been back in July, we would be happy to entertain that, so that
would be something that if they wanted to turn back on, conduct
the activities they were conducting before we would be happy to
see that happen.
Ms. Jackson Lee. So there are two prongs. One prong is that
you would be happy to be a facilitator if someone rose to the
occasion to fill in where the others failed.
Mr. Sammon. Yes, ma'am.
Ms. Jackson Lee. The second question is whether or not you
find it beneficial to provide the security benefit----
Mr. Sammon. Yes, ma'am.
Ms. Jackson Lee [continuing]. Giving it a greater status,
of sorts. It appears that you believe that RT may be more of a
convenience than a role that TSA should play?
Mr. Sammon. As it is presently configured, it is more of a
convenience, and I think that of the three things--convenience,
security, and efficiency--we always put security first. But I
do believe, and I believe that the Secretary is open, and I
would guess that the new administrator would be open to
exploring developments in behavioral detection technology and
so on and so forth to see if there are some configurations that
may afford a security benefit. But right now we haven't seen it
in the past program, but we would be happy to discuss with the
staff and with you, as time goes on, to see what kind of
configurations they may be.
Ms. Jackson Lee. Well, we do have a second panel. I know
that time going on can be going on for a long time. I will make
a suggestion on the record that we follow this up with meetings
where we can actually provide even more enhanced discussions as
to where we are.
I think we need to assess the viability of the program once
and for all and to determine what approach this program will
take, whether it takes a direction that it now presently is
with new providers, or we add the additional security benefit
to it. I think we are all better off if we have a finality in
that particular situation.
Ranking Member Dent, did you have any further questions?
Let me thank both Mr. Sammon and Mr. Morris.
Mr. Sammon, let me, for the record, have you take note:
There was a written statement from TSA and that statement has
been submitted into the record, as well as read. Is that
correct?
Mr. Sammon. Yes, ma'am.
Ms. Jackson Lee. Thank you very much.
We now call on the second panel, please? Thank you.
As these panelists come forward, I want to thank the
witnesses as they leave the room or as they leave the table for
appearing before us today. Members of the subcommittee may have
additional questions for the first panel. We ask that you
respond to them expeditiously in writing.
We now welcome our second panel to the witness table.
Welcome our second panel of witnesses. Our first witness is
Ms. Alison Townley, a principal at Henry Incorporated, which
has a letter of intent with Clear and Morgan Stanley to
recommence Clear's operations. Ms. Townley has over 15 years of
experience launching new brands, revitalizing flagship brands,
and executing significant corporate change.
Our second witness is Mr. Fred Fischer, a principal and
managing partner at FLO, a certified RT provider. Mr. Fischer
will discuss why FLO had to stop providing services after Clear
ceased operations, whether FLO will be restarting, how to
ensure its operations will not cease again, and how TSA and
Congress can help keep RT functioning.
Our third witness is Mr. Mike McCormick, executive director
of the National Business Travel Association. Mr. McCormick has
more than 20 years of travel industry experience, most recently
as managing partner of a travel industry advisory firm.
Without objection, the witnesses' full statements will be
inserted in the record. I now ask each witness to summarize his
or her statement for 5 minutes.
Let me also, with respect to Mr. Townley--Ms. Townley,
excuse me--and Mr. Fischer, I think it is important if your
statement does not reflect it to specifically tell us what you
do and why your involvement with--in your instance, you are
taking over a company. What expertise do you bring to the table
to take over the company?
This is Registered Traveler; this is serious, if you will,
and if we are asking TSA to consider a security benefit I think
it would be helpful to me to understand what your role is and
what you bring to taking over this company, and you might
comment on its failure as it stands in your remarks.
Mr. Fischer, likewise, you are the managing partner of FLO,
and I think you will express what FLO does and also why you
stopped service.
So we will begin our testimony with 5 minutes given to Ms.
Townley.
Ms. Townley, you are recognized for 5 minutes.
Ms. Townley, would you please turn on your microphone?
STATEMENT OF ALISON TOWNLEY, PRINCIPAL, HENRY INCORPORATED
Ms. Townley. First-timer.
Ms. Jackson Lee. Thank you. That is all right.
Ms. Townley. Okay. I will start over now that people can
hear me.
Okay, so Chairwoman Jackson Lee, Ranking Member Dent, and
Members of the committee, thank you very much for inviting me
here today to participate in this important discussion about
the future of Registered Traveler in the United States. I am a
principal at Henry, Inc., which has signed a letter of intent,
as you mentioned, to purchase certain assets and liabilities of
the Clear Registered Traveler program from Verified Identity
Pass and Morgan Stanley, the senior lender.
Per your request, Chairman--Chairwoman Jackson Lee, my
background and why I am here today is business. So we believe
when we went to evaluate the Registered Traveler program and
Clear, we believe that there is a real, viable opportunity for
the private-public partnership to provide a very important
service to this country.
But first and foremost, as we all know, Registered Traveler
is a voluntary program. So my background and expertise really,
in a way, is understanding the consumer and what they are
looking for.
Now, in my past I have run businesses, but really what I
look at is, to be successful I have surrounded myself with
experts in each of the various elements that I am running. So
in grant management, I was the hub of a wheel of many disparate
parts, really just kind of bringing together the experts that
need to be there to succeed, and that is how I approach this as
well. I am not an expert in security.
So to back up, again, as I mentioned, why do we want to
invest in Clear? As I said, we think this is a real, viable--
can be viable public-private partnership in a business. Over
the past few months we have studied the Registered Traveler
program and Clear, and we believe to have a successful
Registered Traveler program is a winning proposition on many
fronts.
A successful Registered Traveler program will deliver
increased aviation security, increased checkpoint throughput,
increased airport revenue, and increased traveler convenience,
not to mention it creates jobs, and this is all at no cost to
the taxpayer.
So how will a Registered Traveler program be successful?
First, we must build a substantial base of volunteer customers.
More people who are willing to register as travelers, be
registered travelers, the more secure we believe our airways
can be. To do this we must deliver on a promise to these
consumers, and at the moment that promise is convenience.
Congress, DHS, TSA, the airports, the technology community, and
the RT industry must work together with the common goal of
improved airline security and consumer convenience, or customer
convenience.
My analogy is the sport of rowing, or crew. I represented
the United States in two Olympics in the sport of rowing, and
crew is probably one of the most team sports you will ever
find. All team members must compete in complete synchronicity
and harmony to achieve success. That is how we feel; that is
our mission for relaunching a successful Registered Traveler
program.
So what is our plan? Our plan is to restart Clear as soon
as possible. We are already talking with the DHS, the TSA, the
airports, and with the technology community.
We are gratified that the DHS and the TSA are taking a
fresh look at how RT can enhance aviation security and the air
traveler experience. We are grateful to this committee for the
leadership on RT.
We have heard loud and clear from air travelers and from
airports that they want this service back. Clear conducted a
survey in which 90 percent of their 200,000 customers said they
were interested in joining a new Clear.
For the existing customers of Clear--those who want to
return to a new Clear--first and foremost, we will make good on
their contract or on the term of their membership. So what was
left on the term of their membership we will make good. If
someone had 6 months left when Clear shut down, we will extend
their membership 6 months at no cost to them.
For those who do not want to join the new Clear, we will
destroy all of their data. So we will ask specifically each old
Clear member if they want to participate in a new program, and
at their exact discretion we will handle their data and their
membership.
So there is a strong feeling that there is a need for this,
and we feel that we can really develop a strong program that
will benefit both aviation security and customer convenience
through this base of consumers. To respond to this demand, to
keep this momentum moving, and to address some key barriers to
enrollment that the old Clear experienced, we plan to launch on
two parallel paths.
First, we will launch a streamlined process that serves
consumers now and airports' needs now. In that process, we will
have our concierge service, which--we did numerous--or Clear, I
shouldn't say we, but Clear did numerous studies over the
length of the business to find that when the concierges help
the consumers through the checkpoints the speed of throughput
increased 30 percent. So if there is an increased speed of
through the checkpoints, it really benefits all that are moving
through the checkpoints.
So at first we will launch a program in which we can have a
concierge service and help our consumers move quickly, and why
this is important is because the larger base of consumers who
sign up for this program, that then becomes a platform by which
we can incorporate the true Registered Traveler security
measures.
So simultaneously, while we are launching this first path,
we will have a second path, and that will be to work with our
partners in the Registered Traveler industry--that includes
Congress, DHS, TSA, the technology community, and the
airports--to determine what is the best, most robust form of
Registered Traveler. We believe that there is technology to
make the airways safer, but to make it a viable business that
we can sustain, the consumer has to come on board in a large
number.
Thank you very much, and I would be happy to take
questions.
[The statement of Ms. Townley follows:]
Prepared Statement of Alison Townley
September 30, 2009
Chairwoman Jackson Lee, Ranking Member Dent, and Members of the
committee: Thank you for inviting me here today to talk about the
future of the Registered Traveler (RT) program. Thank you, too, for
your continued leadership on RT.
I am a principal at Henry Incorporated, which has an agreement (the
Letter of Intent) with Verified Identity Pass, Inc. (Verified) and
Morgan Stanley, as Verified's senior lender, to purchase from Verified
certain assets and liabilities associated with the Clear RT program. My
background is in business and--specifically--launching, relaunching,
and running successful consumer brands at L'Oreal, MasterCard, Chevron,
and Nestle (Haagen Dazs). My partners and I strongly believe that the
new Clear will become a successful business, because our marketing and
technology expertise and ideas will effectively build on the progress
made by Clear to date to meet a very real and often-expressed consumer
need for air-travel convenience. There is a large and vocal population
of travelers who are seeking this kind of opportunity right now. Among
them are Clear members who are asking for the service to come back.
Of course, more registered travelers means greater aviation
security, which is a common goal of everyone involved in Registered
Traveler--from travelers to Government to airports to companies like
Clear. Because this program is purely voluntary, we must attract
members by delivering a program that is both compelling and economical.
This is best accomplished through a robust public/private partnership.
We do not want or need Government funds, but we are eager to work with
the TSA and our technology partners to deliver a program that is easy
to join and even easier to use, while advancing aviation security. This
is a win-win.
Notwithstanding the economic downturn--indeed, perhaps because of
it--RT makes more sense than ever. First, RT can improve aviation
security. With resources scarce, RT should be--at no cost to the
Government--an important tool for advancing risk management, by
increasing the number of individuals passing through Transportation
Security Administration (TSA) checkpoints who represent lower risks
because their identities have been positively verified and because they
have been vetted. No other program offers the same potential for
accountability and certainty of those passing through checkpoints--all
on a voluntary basis. Second, Clear serves a consumer demand. Even with
air travel down (a trend which will necessarily reverse course as the
economy improves), travelers still want the convenience. Just last
month, Clear conducted a broad survey of existing customers and found
that 70% of customers would return to the service when re-launched and
an additional 20% would return depending on which airports were
reopened. That's a remarkable total of 90% of customers who expressed
interest in returning to the program upon re-launch. Understandably,
many of them were frustrated about Clear's shutdown in June, but
ultimately they want it back. Third, Clear delivers revenue to airport
partners. RT can continue to be a valuable source of revenues for the
Nation's airports at a time when concessions revenues are harder to
come by and bond coverage ratios are under pressure. Through the
history of the program, Clear has paid over $6 million to airports, and
we intend to continue as a very pro-airport company focused on traveler
conveniences that are consistent with increased overall security.
Given that the case for RT continues to be a strong one, how do we
work together to make it succeed? Most importantly, we must do exactly
that: Work together. We are eager to work together with Congress.
Without the authorization provided by Congress in the Aviation and
Transportation Security Act in the immediate wake of 9/11, there would
be no RT. And, this Committee's continued bi-partisan leadership on RT,
as legislatively expressed most recently in the strong RT provisions of
H.R. 2200, the TSA Authorization Act, is absolutely vital.
We are also eager to continue working closely with Secretary
Napolitano and, subject to his confirmation, the incoming TSA
Administrator Erroll Southers, as well as their staffs. The Secretary's
vision of an aviation security system that is made ever more secure and
simultaneously more pleasant and convenient for the air traveler,
achieved through the application of technology where possible, is a
perfect fit with RT. Technological innovation is at the core of the new
Clear's DNA. We have already identified areas where new technology can
make the new Clear a more economically viable company, and a key part
of our mission is to leverage the latest technology to deliver on our
promise of security and convenience. That being said, the risk
management potential of RT can only be realized with TSA's full
embrace. We are grateful that the Department of Homeland Security (DHS)
and TSA are engaged in a fresh look at RT's potential to help realize
the Secretary's vision, and we have offered to support that effort in
whatever way would be valuable to DHS and TSA.
We are also eager to work together with our airport partners,
almost all of whom have given us positive feedback as we have met with
them to discuss the re-launch of Clear. Those airports saw Clear in
operation every day and heard from many of their customers--both before
and after Clear shut down--that Clear was a service they valued. After
all, Clear lanes were used more than 3 million times before operations
ceased. And, airports saw that Clear made checkpoints more efficient
for all travelers, not just registered travelers. Clear was able do
that because its concierges, both before and after the magnetometer,
were able to speed throughput by as much as 30 percent at Clear's
lanes. So Clear not only gave its members a predictably fast
experience, but also made the lines slightly shorter for everyone else.
This faster throughput, I should add, is what makes RT much more than a
so-called ``front of the line'' program. In short, a happy Clear
customer makes for a more satisfied airport customer, and we're
committed to re-establishing that connection.
And, perhaps most importantly, we are eager to work together with
Clear's customers (both existing and new). Let me address first how we
are proposing to work with existing Clear customers, so many of whom
are interested in joining a re-launched Clear program. We recognize the
imperative to protect our members' personal identifiable information
(PII). To that end, the PII of existing Clear members (including their
biometrics) will only be transferred to the new Clear program with the
express consent of existing Clear members--otherwise, they may choose
to have their PII destroyed by Lockheed Martin's secure data storage
facility (which is where Clear member PII is today, and was
historically, stored). In addition, all existing Clear members who
choose to continue with the re-launched program will be able to use at
no additional cost the balance of the term of their membership that
remained unused when Clear ceased operations in June. In other words,
if a member had a year remaining on her membership when operations
ceased, she will be able to use the new Clear service for a year at no
charge before coming up for renewal.
Now, let me address how we're going to work with customers more
broadly. It goes without saying that the success of RT on all fronts--
public and private--is driven by customers. The more users, the more
benefits will accrue to the benefit of aviation security. RT's
potential as a powerful risk management tool for TSA depends on a
critical mass of travelers volunteering to participate in the risk
management process of RT, as that process is ultimately defined by DHS
and TSA. And, RT's potential as a good business (that also allows for
it to be cost-free to the Government) depends on a critical mass of
travelers volunteering to pay a reasonable fee to participate.
Before ceasing operations, Clear had made substantial progress
towards the goal of a critical mass of customers, with nearly 200,000
active members whose satisfaction with Clear was demonstrated by
remarkable renewal rates in excess of 80% even after the economic
downturn took hold. Even with available airline seats down over 30%,
Clear's subscriber base increased over 50% in the year before shutdown,
and the old Clear was nearing break-even. But, the market is much
bigger. The key to attracting new customers is to deliver a compelling
value proposition. That means continuing to provide a fast and
predictable experience at airport security, while aligning the nature
of the enrollment and membership verification process (and the
associated costs) with the nature of the service we're able to provide.
How do we do that? First, I return to the imperative of a close
partnership with TSA, DHS, and Congress. We are, of course, eager to
move RT to a new level by working with TSA and DHS, for example, on the
development of an enhanced voluntary background check and vetting
process for RT members and the continuing development of new, enhanced
screening technologies at RT lanes, all at no cost to the taxpayer. The
goal would be additional enhanced throughput benefits or conveniences
at our lanes--beyond what Clear concierges can already provide. This is
precisely the type of risk management to enhance checkpoint security
that the 9/11 Commission called for.
And, we are also eager to work with DHS, TSA, and other Government
agencies like the Department of Defense (DOD) on leveraging the power
of RT's biometric platform and the biometric platforms of other
Government agencies. We look forward to working with DHS to harmonize
trusted traveler programs across the Department. And, we look forward
to working with all interested Government agencies to harmonize RT with
appropriate credential programs across agencies, so that--for example--
a DOD credential holder with top secret security clearance could access
the Clear lane, just as H.R. 2200 envisions.
However, we recognize that the important analytical work at DHS and
TSA to support the vision of RT as a valuable risk management tool,
including appropriate enhanced throughput benefits from TSA for RT
members, will not take place overnight. We stand ready to support this
analytical work in whatever way we can--and believe we have much to
offer.
In the mean time, because it is vital for us to maintain the
momentum of Clear by re-launching the program, re-engaging existing
customers and attracting new customers, we plan to pursue two parallel
paths. On one path, we will ready ourselves to install and implement
the secure biometric infrastructure required to support a robust, risk
management vision. Simultaneously, we intend to launch a streamlined
``fast pass'' process which would allow innovations like ``same day''
in-airport sales and more pricing options, while still providing
certain non-security-related conveniences for members.
The parallel introduction of this streamlined ``fast pass'' process
will address one of the most frequent complaints Clear received from
potential customers and actual customers alike--``why can't I sign up
immediately?'' Now, potential customers (like the approximately 30,000
travelers who had signed up for Clear but hadn't yet completed the
challenging multi-step enrollment process at the time that Clear ceased
operations) will be able to sign up immediately. And, once they sign up
for a ``fast pass'', it will become much easier to invite them to join
the secure, biometric risk management program and to take the
additional enrollment steps that entails.
And, that brings me to the role of technology. Both immediately and
going forward, we believe that there are terrific opportunities to
leverage technology to make the process at the RT checkpoint easier,
more convenient, and just as secure, if not more so. Wearing our
Silicon Valley hats, we are excited by the prospect of identifying
those technology opportunities and then incorporating them, to the
benefit of customers, airports, as well as our partners at DHS and TSA.
Members of the committee, thank you for your interest in Registered
Traveler. We ask for your continued support and engagement as we pursue
the promising initiatives that I've described in order to make RT a
valuable security and facilitation programs to respond to the challenge
of 9/11.
Ms. Jackson Lee. Thank you for your testimony. I now
recognize Mr. Fischer for 5 minutes, if he would summarize his
statement for the record as well.
STATEMENT OF FRED FISCHER, PRINCIPAL AND MANAGING PARTNER, FLO
CORPORATION
Mr. Fischer. Thank you, Chairwoman Jackson Lee, Ranking
Member Dent, distinguished Members of the committee. I am
honored and privileged to appear before you today representing
FLO Corporation, the only surviving RT provider today, where I
am currently a principal and managing partner.
I have been involved with Registered Traveler over the past
5 years, including senior executive positions with FLO and
Verified Identity Pass and 35 years as a travel industry
executive. I have been on the front lines working with
corporations, travel management companies, airports, airlines,
hotel chains, other industry providers, and your constituents
to implement and grow the RT program.
Since its inception, 250,000 travelers have found the RT
program to be the best aviation enhancement to come along in
years. RT has enhanced our Nation's aviation security screening
system and has provided predictability and convenience to the
airport screening process that is neither predictable nor
convenient.
We are now at the crossroads with the RT program and have
the experience and knowledge from lessons learned over the past
several years to move the program forward in an effective
manner. The failure of Clear and their shutdowns June 22 came
as a shock to the 250,000 RT members Nation-wide, to Clear's
competitors, us, FLO, and Digital Solutions, and to all who had
invested in RT.
As FLO prepares to relaunch the program in the next 30
days, we see Clear's unfortunate demise as the unique
opportunity to fix what was wrong with RT in the past and focus
on all the things that were right. Please allow me to share
with the committee my views on where--on RT and where in
partnership we need to proceed to provide all the stakeholders
with an RT program that works.
Congress, in passing the Aviation and Transportation
Security Act of 2001, authorized the TSA to administer and
oversee what was called initially a trusted traveler program,
which later was approved to run under a public-private sector
partnership. To date, the private sector has invested over $250
million and upheld its side of the partnership. The TSA has
not.
While Congress had envisioned the TSA implementing the use
of biometrics for primary and positive form of identification,
the use of background screenings to vet those utilizing the RT
lanes, and the use of advanced screening technology to allow
additional screening benefits has not been fulfilled.
Identification: While biometrics provide the best
identification available today, the TSA still required a
secondary photo ID. Vetting: To my knowledge, not a single--
single--RT applicant was ever vetted using a criminal history
records check, even though for the first 2 years of the program
applicants were charged $28 per enrollment by the TSA for such
background checks.
The committee is well aware of the trials and tribulations
of Clear's attempt to implement their now infamous shoe
scanner. The TSA has told us on many occasions that the
technology that could allow travelers to leave their shoes and
coats on and keep their laptops in their bags does not exist.
The fact that more than 90 percent of the world's airports
utilizing the latest technology do not require such divesting
is evidence that that technology does exist.
In 2001, in forming DHS and TSA, the administration
promised that the Department of Homeland Security will ensure
appropriate testing and piloting of new technologies, calling
it a national vision. The TSA has not lived up to that promise.
Since the inception of the RT program, TSA has been
constantly challenged, undermined, bullied, and publicly
berated by FLO's competitors, including some testimony in this
room. Understandably, this created a partnership that was, at
best, strained. This has resulted in the TSA having an
unfavorable opinion of both RT and its providers and has
compromised TSA's support for this essential program.
RT provides many benefits to the TSA, but the most critical
is expediting passengers from the unsecure area of the airport
to the secure side of the airport. Empirical data shows that
the RT lanes process upwards of three times as many passengers
as the general population lanes. This alone should garner TSA's
interest.
TSA's support is critical for relaunching the RT program
that your constituents are demanding. Congress is urged to
require TSA to relaunch RT as the program Congress intended:
Under the current standard, under artic, with biometrics for
primary identification, with enhanced security benefits with
tested and proven technology, and with RT members being fully
vetted.
An additional consideration should be interoperability with
DHS's Global Entry program, also referred to International RT.
Both programs should run in parallel because most of the
components are under the--honor the same and offer exceptional
benefits for the frequent traveler.
Two-hundred-fifty thousand members bought into RT in a
great part because it was TSA-sponsored. Their trust in the TSA
is now in question.
Let me talk a little bit about Clear's failure. Clear's
failure, in our view, was brought on by a number of issues:
Overstaffing at the airport, exorbitant overhead, excessive
advertising, unreasonable revenue-share components that were
not required, but primarily used to discourage and eliminate
competition. In the end it was not a lack of capital that
killed Clear, it was poor management and an unsustainable
business plan.
Of all these issues--all these issues can and will be
addressed and controlled under a relaunch by FLO or any of our
competitors. FLO has secured significant financing since
Clear's failure and plans to relaunch a National program with
or without the TSA at multiple airports in the next 30 days,
with former RT airports and new airports to RT eagerly awaiting
relaunch of this program.
It is our understanding that multiple parties, including
FLO, are analyzing the RT market. In Ms. Townley's comments I
would like to add that we have submitted a proposal to Morgan
Stanley, and at the end of this hearing today we will be
discussing that proposal moving forward and acquiring some of
Clear's former assets.
FLO has agreed to partner with a service provider that will
give us 1,000 enrollment locations across America, solving what
was a serious barrier to its greater adoption. Individual and
corporate interest in the program has not diminished. The
future of RT is bright and the demand for its offerings remains
strong.
In closing, the ultimate success of RT is the
Congressionally-mandated, TSA-sponsored program with biometric
security benefits and vetting under the current, common, artic
standard with consideration given to global opportunity--global
entry. I thank you for the opportunity today.
[The statement of Mr. Fischer follows:]
Prepared Statement of Fred Fischer
September 30, 2009
Chairwoman Jackson Lee, Ranking Member Dent, and distinguished
Members of the committee, I am honored and privileged to appear before
you today representing FLO Corporation (FLO), the only surviving
Registered Traveler (RT) provider, where I am currently a principal and
managing partner. I have been involved with the Registered Traveler
(RT) Program for the last 5 years, including senior executive positions
with FLO and Verified Identify Pass (Clear) and 35 years as a travel
industry executive. I have been on the front line working with
corporations, travel management companies, airports, airlines, hotel
chains, other industry providers and your constituents to implement and
grow the RT Program.
Since its inception, 250,000 frequent travelers have found the RT
program as the best aviation enhancement to come along in many years.
RT has enhanced our Nation's aviation security system and helped to
provide predictability and convenience to the airport screening process
that is neither predictable nor convenient.
We are now at a crossroads with the RT Program and have the
experience and knowledge from the lessons learned over the last several
years to move the program forward in an effective manner. The failure
of Clear, and their shutdown June 22 came as a shock to the 250,000 RT
members Nation-wide, to Clear's competitors (FLO and Vigilant
Solutions) and to all who had invested in RT. As FLO prepares to re-
launch the RT program in the next 30 days, we see Clear's unfortunate
demise as a unique opportunity to fix what was wrong with RT in the
past and focus on all the things that were right.
Please allow me to share with the committee today my views on RT
and where, in partnership, we need to proceed to provide all
stakeholders with an RT program that works.
tsa
On September 3, 2004 in a speech at Reagan National Airport
announcing the launch of the Registered Traveler Pilot Program,
Secretary Ridge described the program as a ``twenty-first-century
security measure, designed to improve both customer service and airline
security,'' adding that ``the use of biometrics will add another layer
of security that will certainly enhance the checkpoint experience.''
Congress in passing the Aviation & Transportation Security Act of 2001
authorized the TSA to administer and oversee what was called initially
a ``Trusted Traveler'' program which was later approved to run under a
public/private sector partnership. To date, the private sector has
invested over $250 million and upheld up its side of the partnership.
The TSA has not. What Congress had envisioned the TSA implementing,
i.e. the use of biometrics as primary and positive form of
identification, the use of background screening to vet those utilizing
the RT lanes and the use of advanced screening technology to allow
additional screening benefits have not been fulfilled.
Identification.--While biometrics provide the best identification
available today, the TSA still required a secondary photo ID, such as a
drivers license.
Vetting.--To my knowledge, not a single RT applicant was ever
vetted using a criminal history records check, even though for the
first 2 years of the program, applicants were charged $28 per
enrollment by the TSA for such background checks.
Technology.--The committee is well aware of the trials and
tribulations of Clear's attempt to implement their now infamous shoe
scanner. The TSA has told us on many occasions that the technology that
could allow travelers to leave their shoes and coats on and keep their
laptops in their bags does not exist. The fact that more than 90% of
the world's airports, utilizing the latest technology, do not require
such divesting is evidence that technology does exist. In 2002, in
forming DHS and TSA, President Bush promised that ``the Department of
Homeland Security will ensure appropriate testing and piloting of new
technologies'' calling it a ``National Vision.'' The TSA has not lived
up to that promise.
One solution is FLO's proposal for the TSA to test new technology,
utilizing the RT program at Reagan and Dulles for those Government
employees with top-secret clearance (such as employees of DoD, NSA,
FBI, CIA, FAMS). This would allow the TSA to test equipment in a live
environment without concern for the background of the travelers. This
would be a major step in adding security benefits to the program. Of
note, a number of air carriers have indicated they will move forward in
partnership if RT is more than just a ``front of the line'' program.
Since the inception of the RT program, the TSA was constantly
challenged, undermined, bullied, and publicly berated by one of FLO's
competitors. Understandably, this created a partnership that was at
best strained. This has resulted in TSA having an unfavorable opinion
of both RT and its providers, and has compromised TSA's support for
this essential program.
RT provides many benefits to the TSA, but the most critical is
expediting the passage of passengers from the unsecure area of an
airport to the secure area. Empirical data support that RT lanes
process upwards of three times as many passengers as the general
population lanes. This alone should garner TSA's interest.
TSA support is critical for re-launching the RT program that your
constituents are demanding. Congress is urged to require TSA to re-
launch RT as the program Congress intended, under the current standard,
with biometrics for primary identification, with enhanced security
benefits with tested and proven technology and with RT members being
fully vetted. An additional consideration should be interoperability
with DHS's Global Entry program, also referred to as International RT.
Both programs should run parallel because most of the components are
the same and offer exceptional benefits for the frequent traveler.
Two-hundred-fifty thousand members bought into RT in great part
because it was TSA-sponsored. Their trust in TSA is now in question.
clearinghouse services
AAAE has been providing clearinghouse services under a sole source
TSA contract and license to individual RT providers since the inception
of the RT program. Under this arrangement, RT providers pay AAAE for
each applicants processing and for RT providers to have
interoperability. In re-launching the program, to help ensure that RT
providers have access to the most cost-effective services, we suggest
that TSA move forward expeditiously with open competition and allow RT
providers to select from other vendors approved to provide
clearinghouse services.
data privacy
From its inception, the protection of the personal information and
data of the program's participants has been a priority for everyone
involved. Each provider was required to pass a rigorous screening and
certification process to insure the safety and security of its systems
and the data in question. This process took nearly 12 months and well
over a half million dollars to complete. A consortium including dozens
of private companies, over 70 airports and several Government agencies
participated in the security, privacy, interoperability, and functional
design of RT. This was critical and, in many ways, unprecedented work.
We should not now abandon this approach as we move forward. In fact, it
is this careful planning which has kept member data safe throughout the
recent transitions, changes, and shutdowns which have so greatly
impacted the program. This is a critical component that should not be
overlooked and all new vendors should be held to the same standards for
security, privacy, and interoperability to uphold and preserve the
public trust.
clear's failure
Clear's failure, in our view, was brought on by a number of issues:
Overstaffing at airports, exorbitant overhead, excessive advertising,
and unreasonable revenue share components to airports including
National revenue share, local revenue share, and minimum annual
guarantees that were not required but used primarily to discourage and
eliminate competition. In the end, it was not a lack of capital that
killed Clear, it was poor management and an unsustainable business
plan.
All of these issues can and will be addressed and controlled under
a re-launch by FLO, or any competitor.
the future of the rt program
FLO has secured significant financing since Clear's failure and
plans to re-launch a National program, with or without TSA, at multiple
airports in the next 30 days, with additional former RT airports and
airports new to RT eagerly awaiting re-launch of the program. It is our
understanding that multiple parties, including FLO, are analyzing the
RT market. It is likely that one of us may ultimately look to acquire
certain assets of Verified Identity Pass, Inc. including the CLEAR
brand, membership lists, and equipment.
FLO has agreed to partner with a service provider that will give us
1,000 enrollment locations across America, solving what was a serious
barrier to greater adoption. Individual and corporate interest in the
program has not diminished. The future of RT is bright and the demand
for its offerings remains strong.
In closing, the ultimate success of RT is a congressionally
mandated, TSA-sponsored program with biometrics, security benefits, and
vetting under the current common standard, with consideration given to
interoperability with Global Entry.
Thank you for the opportunity to appear before you today. I
appreciate your time and your continued support for this important
program that offers benefits to our Nation's frequent travelers and an
important and critical risk management tool for the TSA.
Ms. Jackson Lee. Thank you for your testimony.
I now recognize Mr. McCormick to summarize his statement
for 5 minutes.
STATEMENT OF MICHAEL W. MC CORMICK, EXECUTIVE DIRECTOR,
NATIONAL BUSINESS TRAVEL ASSOCIATION
Mr. McCormick. Thank you.
Madame Chairwoman Jackson Lee and Ranking Member Dent, I
appreciate the opportunity to appear before your subcommittee
today to discuss the importance of facilitating business travel
and really represent the business traveler at large.
National Business Travel Association has worked closely
with the full Committee on Homeland Security and with your
subcommittee over the last several years on a wide range of
important policy issues. I recently assumed the position of
NBTA's executive director and chief operating officer in late
August, and I am looking forward to continuing our productive
relationship in the years to come.
NBTA is the world's premier business travel and corporate
meetings organization. NBTA members, numbering more than 4,000
in 30 nations, include corporate travel, Government travel, and
meetings management executives as well as travel service
providers. They collectively manage and direct more than $200
billion of global business travel and meetings expenditures
annually on behalf of more than 10 million business travelers
within their organization.
This year has been a very difficult year for business
travel, in part because businesses have cut their travel
expenditure in the face of political and media pressure.
However, business travel is an essential part of economic
recovery, new jobs, and corporate productivity.
NBTA and IHS Global Insight recently released a landmark
study indicating that businesses realized more that $15 in
profit for every $1 wisely spent in business travel. This
groundbreaking research shows that companies will potentially
lose out on more than $200 billion in gross profits in this
year alone because they will not fully realize the strategic
value of business travel.
While 2009 has been challenging for the travel industry,
the sudden demise of the Registered Traveler program in June
was an unnecessary and unfortunate development. It has hindered
business productivity; it has been a major frustration for
NBTA's members and allied providers. We are grateful that this
committee has stepped forward aggressively to defend RT both as
operationally and as a policy matter while new TSA can arrive
to review the program and hopefully give it the support it
truly needs.
Throughout the public policy debate on RT, NBTA has
consistently advocated six points which we believe are the keys
to success: One, voluntary participation; two, broad
availability; three, collaboration between airports and RT
providers; four, expedited screening provided in a designated
lane that doesn't slow other travelers; five, robust protection
for data collected as part of the RT enrollment; and six,
public understanding of the benefits, costs, and security
offered by RT.
NBTA was pleased to see these points contribute to the
program's growth, and with approximately 250,000 individuals
enrolled in at least one of the service providers and a
valuable network of 21 airport locations, included crowded hubs
such as Atlanta and New York's LaGuardia.
Business travelers were very disappointed when, with only
several hours' notice, VIP's Clear terminated service and two
other smaller players were forced to suspend operations within
VIP's airport--with VIP's operations default. This development
was a sudden and unfortunate blow for business travelers.
NBTA was besieged with member inquiries, asking what they
could do to restore the program. We immediately wrote to each
airport operating RT asking them to work to restore the program
with willing providers. We further asked DHS and TSA to protect
the RT database to maximize the chance that a next-gen program
would be successful.
So moving forward, NBTA urges Congress to enact the RT
provisions in Section 234 of H.R. 2200 in the House-passed TSA
reauthorization as amended by Transportation and Infrastructure
through your leadership. TSA should reinstate security threat
assessments and background checks for RT participants and
review screening protocols that would help RT become a true
risk management tool to secure an efficient air traveler,
especially for frequent business travelers.
With the recent announcement by President Obama that he
intends to nominate Erroll Southers for the position of TSA
administrator, NBTA is hopeful that DHS and TSA will take a
fresh look at how RT may improve TSA's efficiency, strengthen
security, and facilitate frequent travelers. Even as
legislation is further considered in Congress, TSA has its own
authority under the Aviation and Transportation Security Act of
2002 to implement a robust RT program if they choose to do so.
NBTA has been a staunch supporter of Global Entry. NBTA was
very enthusiastic about the recent expansion of the Global
Entry Pilot program to offer the program at 20 U.S. airports
serving international destinations.
NBTA has heard repeated requests from Global Entry members
and their travel managers that DHS should integrate Global
Entry and domestic RT Certainly any applicant who passes the
stringent entry requirements for Global Entry should be
eligible for domestic RT.
So in closing, RT was popular among our membership and the
travelers they represent. Time is money for corporate
travelers, and the RT program makes air travel more efficient,
predictable, and convenient while enhancing security for all
Americans.
Thank you for the opportunity to appear before this
committee today, and I look forward to answering your questions
as well.
[The statement of Mr. McCormick follows:]
Prepared Statement of Michael W. McCormick
September 30, 2009
introduction
Madame Chairwoman Jackson Lee and Ranking Member Dent, I appreciate
the opportunity to appear before your subcommittee today to discuss the
importance of facilitating business travel. The National Business
Travel Association (``NBTA'') has worked closely with the full
Committee on Homeland Security and with your subcommittee over the
pasts several years on a wide range of important policy issues. I
recently assumed the position of NBTA's Executive Director and COO in
August and am looking forward to continuing our productive relationship
in the years to come.
NBTA is the world's premier business travel and corporate meetings
organization. NBTA and its regional affiliates--NBTA Asia Pacific, the
Brazilian Business Travel Association (ABGEV), NBTA Canada, NBTA
Mexico, and NBTA USA--serve a network of more than 15,000 business
travel professionals around the globe with industry-leading events,
networking, education & professional development, research, news &
information, and advocacy. NBTA members, numbering more than 4,000 in
30 nations, are corporate and government travel and meetings managers,
as well as travel service providers. They collectively manage and
direct more than U.S. $200 billion of global business travel and
meetings expenditures annually on behalf of more than 10 million
business travelers within their organizations.
2009 has been an extremely challenging year for the business travel
industry. Amid the general economic downturn, business travel has also
suffered under simultaneous attacks--one man-made and one born of
nature.
Earlier this year, business travel came under fierce attack by
politicians and the media as a frivolous expense in a time of corporate
belt-tightening and Federal assistance to struggling industries. The
so-called ``AIG effect'' led corporations, worried about being
scapegoats for conducting business travel, attending conferences, or
rewarding employees with incentive travel, to scale back their business
travel far beyond cuts in other core business functions such as
advertising, employees benefits, or information technology. In a study
conducted in February 2009, 43% of NBTA travel buyers indicated that
they had cut back on spending on travel in part due to perception
issues. As discussed later in the testimony, NBTA has recently released
research demonstrating that cutting business travel too aggressively
can have serious negative impacts on corporate productivity and
revenues.
Simultaneously, the advent of the H1N1 flu strain has scared
potential travelers and required expensive precautionary measures to be
implemented by governments, airlines, and other travel providers. The
dramatic fall-off in travel to Mexico and a warning by the European
Union not to travel to North America earlier this year may be portents
of things to come. NBTA applauds the proactive nature of the Obama
administration, working with health authorities and foreign
governments, to combat H1N1. Over-reaction to this flu could hinder
economic recovery so we look forward to close collaboration with the
Government during the upcoming flu season.
house committee on homeland secrurity's leadership on registered
traveler
While 2009 has certainly seen some bright spots in the travel
landscape, including new investments in infrastructure in the Recovery
Act and decreases in travel delays due to lighter travel volumes, the
sudden demise of the Registered Traveler program in June was an
unnecessary and unfortunate development that has hindered business
productivity and been a major disappointment to NBTA's members and
allied providers.
We are grateful that this committee has stepped forward
aggressively to defend RT, both as a policy matter and operationally,
while a new TSA leadership can arrive to review the program. In
addition to holding this oversight hearing, the committee has played an
invaluable role in ensuring that data provided by individuals enrolled
in RT has been protected from improper disclosure. The committee has
also helped protect a future RT program by convincing the
Transportation Security Administration not to order deletion of
customer information while new vendors seek to restart the program.
Most importantly, the committee included valuable language in its
Transportation Security Administration Reauthorization bill (H.R. 2200)
to require TSA to evaluate how RT may be utilized as a risk management
tool to increase TSA's efficiency, improve aviation security, and
facilitate travel for frequent air travelers.
nbta's support for registered traveler
NBTA has been a staunch supporter of RT since it was first proposed
in the aftermath of the new aviation screening protocols necessary
after 9/11. NBTA testified in support of the program on at least three
occasions before this committee and the Senate Commerce Committee.
Until recently, we believed that 2009 was going to be the year when RT
hit critical mass where it could provide great benefits to our members
and the general traveling public. In our 2009 Government Affairs
Agenda, we included RT as a policy priority: ``Building on increased
support from Congress and the executive branch, TSA should resume and
expand the security threat assessments for RT members to allow for
security checkpoint benefits.''
The premise behind RT is simple but powerful. In allocating
significant and ultimately limited resources available to screen
aviation passengers for threats to passenger aircraft, the Government
must make decisions on how to allocate their resources. NBTA believes--
as has the 9/11 Commission, the Congress, and numerous security
experts--that TSA and the private sector should work cooperatively to
provide incentives for frequent travelers to provide advance
information sufficient to identify them as low-risk, provide tamper-
proof identification verification equipment to confirm enrollees, and
provide reasonable security benefits commensurate with the reduced risk
of enrollees.
As recommended by the 9/11 Commission: ``[P]rograms to speed known
travelers should be a higher priority, permitting inspectors to focus
on greater risks. The daily commuter should not be subject to the same
measures as first-time travelers. An individual should be able to pre-
enroll, with his or her identity verified in passage. Updates of
database information and other checks can ensure on-going
reliability.'' (The 9/11 Commission Report, p. 388).
Moreover, even beyond the security aspects of RT, the
predictability of very short RT wait times generated significant
productivity gains for NBTA members and the employees they support.
While wait times have declined in the past several years due to high
TSA screener numbers and declines in aviation travel, business
travelers unwilling to risk missing a flight have been forced to plan
around worst-case TSA wait-time scenarios. So a traveler repeatedly
must spend an extra 20-40 minutes in the sterile area of the airport,
on the off-chance that the TSA screening line might be long that
particular day. Multiply those less-productive minutes across millions
of trips, and business travel productivity suffers greatly. While wait
times have decreased in past year due to declines in travel and
improvements in TSA processes, NBTA hopes the committee and TSA will
look to RT as a powerful tool when the economy recovers and our
airports and skies are more crowded than ever before.
Throughout the public policy debate on RT, NBTA has consistently
advocated 6 key points which we believe are the keys to success:
Voluntary participation (opt-in);
Broad availability;
Interoperability between airports and between RT providers;
Demonstrably expedited screening provided in a designated
lane without slowing other travelers;
Robust protection of data collected as part of RT
enrollment;
Public understanding of the benefits offered by RT, the
costs associated with participation, and the security check
process.
NBTA was pleased to see the program grow under these principals
throughout the past several years up until this summer. At its peak
this year, approximately 300,000 individuals had enrolled with one of
the service providers, and a valuable network of 21 airport locations
had come on-line. These airport locations included crowded hubs such as
Atlanta, Boston, Denver, Orlando, New York LaGuardia, New York Kennedy,
Washington Reagan, and Washington Reagan. Renewal rates were high and
satisfaction with the program's operation was solid.
One of the main attacks on RT is that the program represents
``Lexus Lanes.'' However, Registered Traveler makes airport security
lines more efficient for ALL travelers. In Orlando, RT lanes regularly
processed up to 15% of the passengers moving through the airport, using
just 10% of the TSA checkpoint lanes. RT not only gives its members a
fast, predictable experience when they arrive at airport security, but
makes the lines for everyone else shorter too. The correct analogy here
is electronic tolling (like E-Z Pass) on highways: As long as the
electronic lanes and non-electronic lanes are apportioned correctly,
everyone now goes through highway tolls faster than before electronic
tolling was invented. Similarly with RT, assuming airports correctly
deploy equipment to meet RT demand, TSA will need to use fewer
screeners, less equipment, and reduced screening space for the
remaining passengers.
In addition, NBTA has found that RT has been a welcome complement
to other concepts meant to speed travelers through security. Many
airlines now utilize preferential security queuing for first-class
passengers or premiere ``frequent flyer'' members. RT, however, can be
used across airlines and by ``road warriors'' who must purchase coach
tickets based on price, rather than by accumulating miles on a
particular airline. In addition, TSA has deployed ``Black Diamond Self
Select Lanes'' at many airports where ``expert'' travelers can choose
one lane and slower travelers such as families and individuals with
disabilities can choose another lane. However, while this concept
benefits many business travelers by giving them a faster checkpoint
process, it has no security component and essentially reorganizes
traffic rather than streamlining it.
However, the program was operating with one flaw that became
impossible for investors to ignore. The TSA itself pulled back in 2008
from the security side of the program, leaving the program as solely an
airport initiative with no security aspects. The name-based security
background check was discontinued. The biometric-based security
background check, entirely possible with enrollee fingerprint data, was
never initiated. TSA argued that it could not ensure that a ``clean
skin'' terrorist would not identify the program as a security weakness,
by exploit any changes to screening protocols to sneak weapons or
explosives on an aircraft.
After the TSA and DHS leadership ended the security aspects of RT
in July 2008, the new administration has not conducted a major review
of the program while it has considered possible candidates for the TSA
Administrator position. As month after month went by with RT acting
essentially as a competitor ``front-of-the-line'' program to airline
first-class and TSA experienced traveler offerings, investors
supporting RT vendors opted to pull their financial support for the
largest RT vendor, Verified Identity Pass, in June 2009. With only
several hours notice, VIP's CLEAR service was terminated, and the two
other smaller players could were forced to suspend operations with
VIP's airport operations defunct.
This development was a sudden and unfortunate blow for business
travelers. NBTA was besieged with members asking what they could do to
restore the program. We immediately wrote to each airport operating RT,
asking them to work to restore the program with willing providers. We
further asked DHS and TSA to protect the RT database to maximize the
chance that a next generation program would be successful. And we
worked with the Congress to have committees, such as this one, and
Members express their support for RT to the TSA.
moving forward on registered traveler
(1) NBTA urges Congress to enact the RT provisions in the House-
passed TSA Reauthorization. Section 234 in H.R. 2200 as amended by
Transportation and Infrastructure Subcommittee Chairwoman Sheila
Jackson Lee (D-TX) and Subcommittee Member Daniel Lungren (R-CA) will
enhance RT's risk management and traveler facilitation potential.
Specifically, the provision would require TSA to consider how RT can be
integrated into ``risk-based aviation security operations,'' to
reinstate security threat assessments and background checks for RT
participants, and to review screening protocols ``to realize the full
potential of the Registered Traveler Program.'' NBTA believes that the
amendment would help RT become a true risk-management tool for secure
and efficient air travel, especially for frequent business travelers.
RT was popular among NBTA members and the travelers they support: Time
is money for corporate travelers, and the RT program can make air
travel more predictable and convenient, while enhancing security for
all Americans.
(2) With the recent announcement by President Obama that he intends
to nominate Erroll Southers for the position of TSA Administrator, NBTA
is hopeful that DHS and TSA will take a fresh look at how RT may
improve TSA's efficiency, strengthen security, and facilitate frequent
travelers. Even as legislation is further considered in the Congress,
TSA has its own authority under the Aviation and Transportation
Security Act of 2002 to implement a robust RT program.
The unwillingness of TSA to utilize risk management at the
passenger checkpoint stands in stark contrast to nearly the entire rest
of the post-9/11 homeland security agenda. Consider:
The State Department and DHS manage the Visa Waiver Program,
under which half of international travelers are not
fingerprinted until they arrive in the United States, while
half undergo visa interviews and fingerprint checks before
travel;
Homeland security grants are largely distributed based on
risk-based criteria;
Cargo containers are each scored for risk factors to
identify which require more intensive screening;
TSA allows airport workers and other transportation workers
access to sensitive areas such as airport tarmacs and
transportation hubs if they have passed a background check
similar to that rejected for RT applicants by TSA;
TSA's fellow DHS agency, U.S. Customs and Border Protection,
has forged ahead with a myriad of trusted traveler programs,
including Global Entry, NEXUS, SENTRI, and FAST, that provide
streamlined entry into the United States for pre-vetted
populations.
Ironically, the reluctance of TSA to support the RT program came
during a time when TSA made great strides in strengthening the other
aspects of its layered security regime for aviation. Thus, RT
applicants still would be operating in a universe where TSA was
deploying a myriad of counter-terrorism programs including: Secure
Flight pre-flight watchlist reviews, behavorial profiling teams,
checkpoint security equipment, baggage screening equipment, canine
teams, air marshals, trained flight attendants, strengthened cockpit
doors, and armed pilots. The RT security background check would be just
one aspect of vetting RT applicants before they board a plane.
To drill down one layer deeper, we encourage Congress and the TSA
to make the following comparison. There are millions of Americans who
have undergone rigorous background checks to ensure they can be trusted
in sensitive locations or with sensitive information. These individuals
include:
Government employees and contractors with full security
clearances;
Active members of law enforcement and the military;
Transportation workers screened under the Transportation
Worker Identification Card program;
Aviation workers screened for access to sensitive areas of
the airport; and
Individuals enrolled in other DHS trusted traveler programs
such as Global Entry, SENTRI, NEXUS, and FAST.
Currently, when these individuals fly, they normally receive the
exact same screening as individuals about whom all TSA may know. In
fact, an airport worker could end a work day with direct, unsupervised
access to an airplane, but be subjected to same checkpoint screening as
everybody else if he or she wanted to fly commercial on that same plane
30 minutes later.
coordination with global entry
NBTA has been a staunch supporter of the CBP trusted traveler
program, Global Entry. Pushed for the creation and funding of the
international registered traveler Global Entry Program. In 2007, we
urged successfully that language be included in the annual DHS
appropriations bill for the creation of the program. The following
year, our efforts helped the program receive $10 million in funding to
buy and deploy enrollment and verification equipment. NBTA was the
first organization to utilize CBP's Global Entry Mobile Enrollment Unit
at the NBTA Leadership Summit in November 2008. NBTA again led the way
as the first organization to host Global Entry enrollment at a major
trade show, during the 2009 NBTA Convention. Global Entry provides low-
risk, pre-approved travelers expedited entry into the United States.
Program participants bypass regular passport control and proceed
directly to Global Entry Kiosks, where their identity is confirmed
using biometrics.
NBTA was very enthusiastic about the recent expansion of the Global
Entry pilot program to an additional 13 U.S. international airports:
Boston, Dallas, Detroit, Ft. Lauderdale, Honolulu, Las Vegas, Newark,
Orlando, Philadelphia, Sanford (Orlando), San Francisco, San Juan, and
Seattle. Combined with the 7 airports already operating (New York's
John F. Kennedy, Bush Intercontinental in Houston, Washington Dulles,
Los Angeles, Hartsfield-Jackson Atlanta, Chicago O'Hare and Miami),
Global Entry is now operational at the Nation's top 20 international
arrival airports.
NBTA has heard repeated requests from Global Entry members and
their travel managers that DHS should integrate Global Entry and
domestic RT. Certainly, any applicant who passes the stringent entry
requirements for Global Entry (including biometric and biographic
checks, a personal interview, and a thorough criminal check) should be
eligible for domestic RT.
Discussions between CBP, TSA, and RT vendors before the collapse of
the program this summer were unproductive to date. NBTA strongly
believes that an integrated DHS looking to maximize low-risk travel and
present an unified approach to the public needs to offer an unified
application and fee process for Global Entry and RT.
the value of business travel
As mentioned above, 2009 has been a difficult year for business
travel, in part because businesses have cut travel in the face of
political and media pressure. However, business travel is an essential
part of economic recovery, new jobs, and corporate productivity. NBTA
and HIS Global Insight recently released a landmark study indicating
that businesses can realize more than $15 in profits for every $1 spent
on business travel. The groundbreaking research shows that companies
are potentially losing out on nearly $200 billion in 2009 in additional
gross profits because they are not optimizing their investments in
strategic business travel.
The analysis shows a clear link between travel spending and
corporate profits, with the return on investment varying across the 15
industries examined. The study also illustrates that for each industry
there is a point at which increasing business travel spending begins to
cut into profits. Among the study's key findings:
Business Travel Contributes to Sales.--A significant and
measurable relationship exists between business travel
expenditures and sales volumes.
Sizeable Returns on Investment.--An average return on
business travel investment of 15-to-1.
Returns on Investment Vary by Industry.--Returns on
investment vary across each of the 15 industry segments in the
study.
$193 Billion in Profits at Stake.--Companies within most
industry segments are not operating at optimal travel
expenditure levels and collectively could realize $193 billion
in additional profits.
Massive Stimulative Effect on the U.S. Economy.--Increasing
travel expenditures to optimal levels could create 5.1 million
new jobs, generating more than $101 billion in tax revenue.
The study examines 10 years of data for 15 industry sectors
covering the U.S. economy, analyzing industry-level data on business
travel, business expenses, revenues and profitability in order to
establish a link between business travel and corporate profits.
Ms. Jackson Lee. I thank all the witnesses for their
testimony, and I would like to remind each Member that he or
she will have 5 minutes to question the panel.
I now recognize myself for questions, and we will then
recognize Mr. Dent, and we will recognize Mr. Cleaver and thank
them for being here. Let me also acknowledge, present was Mr.
Thompson, Mr. Massa, Mr. Lungren, and Mr. Olson, and Mr.
Austria, who were present at our hearing today.
Let me--and I think I laid the groundwork for this question
earlier--ask you, Ms. Townley, clearly and straightforwardly,
why did Clear fail and how will you ensure that that does not
happen again?
Ms. Townley. Well, first and foremost, I wasn't part of the
old Clear, but when we did our due diligence, we believe that
there is a much more economic and economically-viable way to
run the business. I think the beauty of our position and moving
forward is that we will benefit from 4 years of experience that
Clear did.
I mean, really, when Clear launched, as you all know here,
it was completely a new concept, and it was mentioned many
times here today, the private sector took this on with a
passion and went very fast and furious to put in----
Ms. Jackson Lee. But excuse me, in determining to buy the
assets----
Ms. Townley. Why did we----
Ms. Jackson Lee. Excuse me.
Ms. Townley. I am sorry.
Ms. Jackson Lee. In determining to buy the assets of
Clear----
Ms. Townley. Yes.
Ms. Jackson Lee [continuing]. You had to look at its
business plan or its format.
Ms. Townley. Yes.
Ms. Jackson Lee. Why did they fail?
Ms. Townley. Well, we think we--can I address why we think
we will succeed?
Ms. Jackson Lee. No. I would like to know why they failed.
You might lead into why you will succeed.
Ms. Townley. Okay. Why they failed was that they were
unable to rebalance their balance sheet. I mean, they couldn't
come to terms with their own financials and their balance
sheet.
So we feel that we have already restructured the balance
sheet and the company. We have already raised substantial
money. We have a list of very passionate customers.
So our plan is to relaunch the service in a way that is
more economic. So back to my testimony, that is why I think it
is very important that when the Registered Traveler program
starts again that we do this in a clear partnership with the
TSA, the Department of Homeland Security, and our airports to
make sure that this won't fail again and that there really is a
value to the consumer and that it is economic.
Ms. Jackson Lee. We appreciate very much your enthusiasm,
and you can understand our disappointment in the program
failing. So let me pursue this line of questioning.
You have a very large investment house that is investing
with you. What is the role of that investment house and what
effect are the pending lawsuits going to have on your
reorganizing of this company?
Ms. Townley. Well, we have to address all of those, and we
have a court hearing to address that. I can't go into all the
detail on that right now. I actually don't feel 100 percent
comfortable doing that, but I would be happy to follow up
later.
I can say that in terms of the consumer, our plan is to
make good on the terms of their contracts, so where the service
stopped we will, at no cost to them, restart their service and
extend the terms in the new Clear.
Ms. Jackson Lee. Do you plan to settle the claims that
airports have against Clear?
Ms. Townley. We have each airport--we are having
conversations with each airport, so we would prefer not to go
into bankruptcy, and we would prefer to find a way that we can
move forward with a new Clear.
Ms. Jackson Lee. Have you consulted with TSA on your plans?
Ms. Townley. Yes, we have. We have----
Ms. Jackson Lee. Have you asked them for a security
benefit?
Ms. Townley. We ultimately would like to get to a place
where we have a security benefit, yes.
Ms. Jackson Lee. Mr. Fischer, I am asking you the same
questions. What did FLO--or why did FLO cease operations this
summer, and how will you be sure that that will not happen
again? Maybe you can expand on competitors calling in to TSA or
being the reason for your demise.
Turn on your mic, please.
Mr. Fischer. My apologies. FLO, as a corporation, has not
failed. It is operating exactly as it was prior to Clear's
shutdown.
We suspended operations in consultation with the TSA upon
Clear's failure. This is because we sold a card that was
interoperable, and nationally our card--our FLO card--could be
used in any lane around the country.
With a majority of the lanes shut down, it wasn't in our
best interest to move forward in selling new cards and we
decided to suspend operations. We are planning to relaunch in
the next 30 days.
How do we ensure that it won't happen again? The best
answer I can give you is competition.
There was no competition in the space because it was
hampered by Clear's efforts at airports. Every airport that we
tried to bid on in joint with Clear, the number was raised into
the millions on millions minimum annual guarantees that no----
Ms. Jackson Lee. Why is that?
Mr. Fischer [continuing]. That no competitor could afford.
Clear wanted to outprice themselves in the industry. They
bought airports--and that is part of the reason for their
failure. They failed because they paid millions of dollars to
airports that wasn't necessary. They did it to beat us in
competition.
So if an airport came out and said, ``We have a bid for
Registered Traveler. We would like for you to offer some
revenue share schemes,'' in most of those bids we offered a
higher revenue share scheme. Clear came up with a scheme that
said, ``We are going to pay you $1 million guaranteed whether
we sell cards or not,'' and that is part of Clear's failure.
They found markets specifically--Little Rock, Albany, Salt Lake
City, Westchester County--where they guaranteed airports
guarantees every year and they couldn't sell enough cards to--
--
Ms. Jackson Lee. So how do you think anyone is going to
settle a claim if they owe airports such as those that you have
named for a million dollars and have not been paid yet?
Mr. Fischer. The airport that I operate in Reno, I had no
guarantee.
Ms. Jackson Lee. No, sir.
Mr. Fischer. Yes.
Ms. Jackson Lee. How do you think a company that is
guaranteed $1 million--how do you think a company that is
guaranteed $1 million, that is a outstanding claim, can--how
can that be paid off?
Mr. Fischer. I don't have that situation. I can't answer
that for Clear.
Ms. Jackson Lee. It seems to be challenging.
Mr. Fischer. It should have never been proposed in the
first place.
Ms. Jackson Lee. But it seems that it will be a
challenging----
Mr. Fischer. It will be very challenging. I----
Ms. Jackson Lee [continuing]. Proposition.
Mr. Fischer. I don't think those airports are ever going to
be paid, my opinion.
Ms. Jackson Lee. Let me, very quickly, Mr. Fischer, do
your--excuse me, Mr. McCormick, excuse me, do your travelers
and members believe that the security benefit that TSA could
provide is important to the RT program?
Mr. McCormick. Yes. It is an important component of it, but
it is not required in our minds for this to, you know, begin
again.
Ms. Jackson Lee. They would be comfortable as it is
presently structured?
Mr. McCormick. Yes.
Ms. Jackson Lee. So we need to look at it from the overall
perspective of whether or not the security benefit is a value
to the overall security of this Nation?
Mr. McCormick. Correct.
Ms. Jackson Lee. Thank you.
I recognize the gentleman from Pennsylvania, Mr. Dent, for
5 minutes.
Mr. Dent. Thanks, Madame Chairwoman.
Mr. McCormick, you drew an analogy in your testimony that
Registered Traveler lanes is like E-Z Pass lanes, in that they
allow for all passengers to go through security faster. Can you
explain this concept, and how can a speed lane for paying
customers actually decrease the wait times for nonpaying
customers?
Mr. McCormick. Well, it is really an issue of accomplishing
two things. I mean, of course our primary objective is, you
know, the need for the business traveler, and particularly the
frequent business traveler, and having them have a better, more
efficient experience at the airport. But when you take those
travelers and you put them into the special lane, it basically
allows TSA resources to focus on the first-time or infrequent
travelers who, frankly, need more time.
You know, it is all part of an overall solution that we
feel is, you know, optimal for accomplishing the objective to
get people safely through the airport and on their way.
Mr. Dent. Your testimony also included examples of how the
Department has generally embraced risk-based processing. One
example you note, TSA allows airport and other transportation
workers access to sensitive areas such as airport tarmacs and
transportation hubs if they have passed a background similar to
that rejected for RT applicants by TSA.
If TSA conducted a similar background check as they do for
SIDA badges for RT applicants, in your estimation would
travelers be willing to undergo such a check?
Mr. McCormick. I think they would. Speaking, again, for
myself and on behalf of frequent business travelers, if it
helps you get through, you know, Chicago O'Hare on a Friday
afternoon and get you home to your family faster, if it allows
you to get out on a Monday morning in virtually any airport in
a more efficient fashion, you would be willing to do it, for
those that are serious about, you know, their time and the
importance of it.
Mr. Dent. So why do you think the TSA has rejected such a
background check for--in the past?
Mr. McCormick. I can't speak for TSA, and certainly being
new in my role I haven't had an opportunity to speak with them
directly or understand why they have taken on the policy
approaches they have. But again, back to the need, the need is
there and the support of our organization, and again, over 10
million business travelers behind this effort.
Mr. Dent. Thank you.
Ms. Townley, you had testified that the Henry Company will
restart the Clear Registered Traveler program. What actions
should be taken by TSA and any successor to Clear to ensure
that the program is a viable risk-based security program?
Ms. Townley. Well, first of all I think that we have to
partner on what the end objective is, so ultimately I think
that if we all agree that Registered Traveler provides greater
security in this country, so if there is--it is all about risk
management, so increasing risk management. So the more people
we have going through Registered Traveler, the more people who
volunteer to be registered travelers, it will reduce risk.
But the bottom line is, to get people to do that we have to
make it attractive to them. So I think that we, coming from
basically Silicone Valley, coming from the Bay Area, are
already talking to technology--the technology community and
technology companies on what is the next generation? What can
we do together that will meet the standards that we need for
security but will also provide convenience so that more and
more people will be willing to do this?
Mr. Dent. Have you spoken with any Clear airports?
Ms. Townley. Yes, we have.
Mr. Dent. What is their perspective on your company
potentially or possibly succeeding to their business?
Ms. Townley. Most of the airports we have spoken to are
very positive. They were rightly frustrated and discouraged
about what happened. They understand that we are a completely
new company. But they see the need for this and they see the
benefit of it, so our plan is to be very transparent and to
partner with them and really provide this new generation of RT
to be a success.
Mr. Dent. I think you might have addressed it with
Chairwoman Jackson Lee, but you have had some dialogue with TSA
and DHS on this?
Ms. Townley. Yes, we have.
Mr. Dent. Can you restate, you know, what their thoughts
are?
Ms. Townley. Well, I would feel uncomfortable restating
their thoughts, but my impression is that we are in line, or in
the sense that we believe that we can enhance aviation security
and customer convenience with the right application of
technology, that there is--we can do that working together. So
we feel very--that they have been very open to us.
Mr. Dent. Thank you.
I will yield back. Thank you.
Ms. Jackson Lee. Thank you very much, Mr. Dent.
Now I am happy to yield 5 minutes to the gentleman from
Missouri, Mr. Emanuel Cleaver, Congressman Cleaver.
Mr. Cleaver. Thank you, Madame Chairwoman.
Mr. Fischer, I am concerned that maybe Clear was too big to
fail. Are you?
Mr. Fischer. No. I don't agree with that at all.
Mr. Cleaver. Okay. They fail, everybody else leaves. Same
thing that happened to the banks. Tell me the difference.
Mr. Fischer. Well, we haven't left.
Mr. Cleaver. So you are in full operation?
Mr. Fischer. No, we are not in full operation.
Mr. Cleaver. Okay, then you left.
Mr. Fischer. The network needs to be rebuilt, and we are
planning on rebuilding the network.
Mr. Cleaver. Yes, okay.
Mr. Fischer. Sir, if I sold you a card that was operable in
21 airports and now it was operable in one airport, that
doesn't leave me much room to operate a program.
Mr. Cleaver. That is not the point I am trying to make. You
are making another point, and it is a good point for somebody
else.
But the point I am trying to make is, Clear goes out of
business and then all operations across the country--the 20
airports, 20, 21 airports, whatever it is--they cease. Am I
right about it?
Mr. Fischer. That is----
Mr. Cleaver. Somewhat true.
Mr. Fischer. Yes.
Mr. Cleaver. Okay. Where is it not true?
Mr. Fischer. Well, we could have stayed open and----
Mr. Cleaver. No. Okay. Are there any open?
Mr. Fischer. No. There are none open.
Mr. Cleaver. Okay. So you said it is almost true?
Mr. Fischer. Well, we shut down our operations. Vigilant,
who is another operator, who operated Jacksonville and
Louisville, Kentucky, had financial problems and shut because
of financial problems.
Mr. Cleaver. Okay. So Clear was not too big?
Mr. Fischer. Clear operated 18 of the 21 airports. By
them----
Mr. Cleaver. Is that too big to fail? I mean, the point--if
someone else takes dominance and they should somehow fail, I am
concerned about whether or not the others will automatically
fail. I am on the Banking Committee. I have just seen this
repeatedly and I know that the American public is angry over
that, and I don't want to see it repeated at the airport.
Mr. Fischer. Sir, let me take another stab at it, please?
Mr. Cleaver. Okay.
Mr. Fischer. In Clear's shutdown we went out to every one
of the major airports--probably the top 10 that Clear operated.
We asked them to reopen. They have definite interest in
reopening their Registered Traveler lanes; they were all
waiting on TSA to say what they were going to do. TSA has never
made a statement on the failure of Clear and what the next step
was going to be.
So we have airports that are ready to reopen, and we could
have reopened those 10 if the TSA would have taken a stand. The
TSA did not take a stand. If the TSA would have said, ``It is
RT as usual. Go forth and reopen,'' half the network would have
been reopened within a month after Clear's failure.
It is like if a bank fails and a bank owns 90 percent of a
community's branches. Another bank is going to step in.
Mr. Cleaver. No, FDIC steps in, but the----
Mr. Fischer. Pardon my ignorance.
Mr. Cleaver. No, I mean, you don't deal with this every
day.
Here is what I know: 165,000 people didn't get their money
back.
Mr. Fischer. Okay. That is in the Clear program----
Mr. Cleaver. Yes. So, you know, of course it is only two,
so what, $400 or $500?
Mr. Fischer. Clear was charging $200. We were charging
$100.
Mr. Cleaver. Okay. So that is not going to create a lot of
havoc in people's lives like banks, but the fact is they lost
their money. Am I right?
Mr. Fischer. Well, part of the testimony earlier was the
AAAE whether we could--and we have been trying to get AAAE to
do this--to roll over a member who was in the Clear program
that is now defunct into the FLO program without having to
reregister. That would have taken a large step as to
relaunching airports also, because the biggest problem, the
hardest part for somebody to enroll in this program is to go
out to the airport, give up your biometric, give up you breeder
documents and become enrolled.
It would have been simplistic if we could have rolled over
a Clear member, and we would have honored their memberships.
That was the plan we presented to TSA and the AAAE and we still
don't have an answer on that subject. Wasn't that some of the
questioning earlier?
Mr. Cleaver. Well, okay, yes. But just you and me.
Mr. Fischer. I have been ready to relaunch from day 1.
Airports have said yes, but they are saying, ``Wait a minute,
we need guidance.'' They have not received the guidance from
the TSA.
These airports will start coming. We have two that are
going to open in the next 30 days; there are more behind that.
But still, there are a lot of airports holding out.
The biggest airport in the system was Orlando, with 51,000
members. Orlando is waiting for TSA to do something, and TSA
has said nothing since Clear shut down.
Mr. Cleaver. Ms. Townley.
Ms. Townley. Thank you.
Actually, we have been in very good, strong communications
with Orlando and they are working with us to restart, and they
want to restart with Clear. I think the other thing that is
important to note when we restart the Registered Traveler
program is that the whole interoperability agreement has to be
economically viable for all participants. Clear is the one,
really, who went out and invested the most in the 18 airports
and had the biggest exposure, and in the interoperability
everyone could use their network.
So, yes, it makes sense that when they ran into financial
trouble and couldn't, you know, balance their books they
weren't--everyone else shut down. You can call it what you want
to call it, but it shut down.
So we can't do that again. If we are going to restart this
it has to be a system where the interoperability is viable for
all participants.
Mr. Cleaver. Madame Chairwoman, I know my time is out. Can
I just----
Ms. Jackson Lee. Without objection. Gentleman is recognized
for an additional minute.
Mr. Cleaver. Thank you.
Where I am going, and that is, Mr. Fischer, where I was
trying to go, and I don't know if you were trying to keep me
from going there or----
Mr. Fischer. No, sir.
Mr. Cleaver. No, I am kidding.
What I want to know is, what is going to happen now to
prevent all of the airports--the participating airports--from
losing this fast lane should FLO go out of business?
Mr. Fischer. What is to prevent it in the future?
Mr. Cleaver. Yes.
Mr. Fischer. I think what is to prevent it is the healthy
interoperable competitive environment where we have multiple
competitors who work together, who honor each other's cards,
with a reasonable fee between us to honor each other's cards.
That is what is going to prevent us from going out.
Again, I was fully willing and able to reopen those Clear
lanes, had the capital to do it, and ran into multiple
roadblocks.
Mr. Cleaver. All right.
Thank you, Madame Chairwoman.
Ms. Jackson Lee. I think the line of questioning of both
Mr. Dent and Mr. Cleaver have been productive and very
instructive. Let me conclude with just trying to clear some
remaining points.
Ms. Townley, do you believe that you will have to--will not
have to re-compete for airports under your present venture?
Ms. Townley. No, I do not believe that. I think it is a
competitive environment.
Ms. Jackson Lee. So you believe that you will have to re-
compete?
Ms. Townley. I think in many cases we will have to prove
ourselves again and compete for their business and their trust.
Ms. Jackson Lee. So do you have a structure where you are
going after the business?
Ms. Townley. Well, we presently don't own the company yet,
but we are already working on that, yes--on the plan.
Ms. Jackson Lee. Okay.
Ms. Townley. As I said, talking to the airports. Part of
the due diligence was to make sure that these airports were
still interested. We wouldn't have pursued this if the airports
had said, ``No, we are done with you people.'' So----
Ms. Jackson Lee. Thank you.
Mr. Fischer.
Mr. Fischer. Madame Chairwoman, I would say that in answer
to your question, airports that are going to come up for bid
again will have to go through a bid process. Because there has
been a change of entity in Clear the contracts cannot be
honored, so we will have to get into a bidding process. I see
that probably that it is going to be a 3- to 4-month process at
each airport.
Ms. Jackson Lee. So we are really--well, for lack of--we
are really on the ground floor?
Mr. Fischer. Well, not necessarily. Again, I said there is
going to be two airports that are going to open in the next 30
days; we think there will be others that will come behind.
We are in a unique position at FLO because in most of the
procurement laws around the country and for these aviation
authorities, we finished second to Clear in these bids, in
these RT. We do have the right to assume their contract, as the
second position, so there may not have to be bids in certain
situations.
Ms. Jackson Lee. Well, let me tell you that I am--this is
very fuzzy, and so I know people are sensitive about their
proprietary information but I would like from the two parties,
Ms. Townley and Mr. Fischer, to get a written response as to
the next step of addressing the existing airports in the
program, what you intend to do.
Are you going to have a rebidding process? When I say that
obviously it is the airport as the actor in this. But are you
going to begin going to airports and seeking, Mr. Fischer,
representing FLO, what Clear had, or is there a line of
communication or a line of agreement where Clear keeps what
they had, or are all of these up for bid?
The second question is, there are outstanding Registered
Traveler members who have paid their money. What is happening
to those members?
Mr. Fischer. In terms of FLO, I have received two requests
for refunds and we have granted those refunds.
Ms. Jackson Lee. All right.
Mr. Fischer. Only two.
Ms. Jackson Lee. Ms. Townley.
Ms. Townley. Well, as I said, as we move forward we will
honor the terms on their--you know, when we finalize the deal
and move forward we will honor the terms on the people who want
to move forward, and the people that don't want to move
forward, we are not in a position to refund them in the new
corporation.
Mr. McCormick. If I may, on behalf of NBTA, with both these
organizations, and frankly any organization that was going to
advance the cause, we are happy to work with them and with our
membership to communicate any kind of conversion program that
they wish to put in place to bring those members on to, you
know, a new platform or into their respective companies. It is
all in our best interest.
Ms. Jackson Lee. So did you give them the list? Did they
buy the list from you, of your members?
Mr. Fischer. No.
Ms. Jackson Lee. Okay.
Have you bought the list? Do you have the list that Clear
had? I assume that is one of the assets you purchased?
Ms. Townley. Well, that will be part of the closing of the
deal.
Ms. Jackson Lee. Or is it the AAAE that has the database?
Ms. Townley. The list of Clear members is still an asset of
the company, so we haven't gotten to that position yet. But it
is an asset of the company.
Ms. Jackson Lee. Right. It is something that you have
purchased.
Ms. Townley. Right. That we would purchase, yes.
Ms. Jackson Lee. Would purchase. So if they wanted their
refund, or those that have lawsuits, let me get back again, you
will address those questions.
Ms. Townley. Yes, we will. We will address that with a
judge.
If I may also add, we will also ask each of them, even when
we have their names and numbers and everything, we will ask
them explicitly if they want to continue to participate in it,
and if they don't then, you know, obviously we will destroy
their data.
Ms. Jackson Lee. You will refund--destroy their data and
refund their money, or look at----
Ms. Townley. At the moment we are not buying that
liability.
Ms. Jackson Lee. Pardon me.
Ms. Townley. At the moment we are not buying that
liability. That has to be decided with a judge, and we have a
hearing to do that.
Ms. Jackson Lee. I see. Who will run this new effort that
you have?
Ms. Townley. It will be run by Kurtis Fechtmeyer and
myself.
Ms. Jackson Lee. That gentleman is--who is that?
Ms. Townley. Kurtis Fechtmeyer is my partner at Henry----
Ms. Jackson Lee. So it will be your company?
Ms. Townley. Well, and with a group of investors.
Ms. Jackson Lee. Okay. Again, let me respect the
proprietary information, but are you bringing anyone to the
table with expertise in the traveling public?
Ms. Townley. Yes. We have already have contracts with a
number of the original Clear core team, so we have a very
strong technology team, we have both an operations team from
core, and we have additional new staff from the industry.
Ms. Jackson Lee. Mr. Fischer, with FLO do you expect to be
cooperating with this newly-reorganized company?
Mr. Fischer. We do. We believe interoperability is the core
of the success of the program.
Ms. Jackson Lee. But you will be looking to secure more
airports. How many did you have before?
Mr. Fischer. We had one previously.
Ms. Jackson Lee. What are you attempting to do at this
point?
Mr. Fischer. We have proposals out to 11 currently.
Ms. Jackson Lee. Well, let me----
Mr. Fischer. May I, for a second?
Ms. Jackson Lee. You certainly may.
Mr. Fischer. With regards to the privacy of the Clear data
and the selling of the Clear data, the Clear privacy policy,
which I was a member, which the committee has----
Ms. Jackson Lee. The Clear, I am sorry----
Mr. Fischer. Clear privacy policy when you sign up as a
member of Clear, which the committee has a copy of, clearly
states that the membership data can only be sold to another
operating RT providing. In this case, we are the only operating
RT provider, and in our view, probably challengeable in the
courts, we are the only ones that can acquire that data.
Ms. Townley. We are going through the process to also be
recognized as a registered RT provider. We started this process
2 months ago, so please forgive me if I am not as, you know,
adept at some of these questions as my partner here.
Ms. Jackson Lee. When do you----
Ms. Townley. We acknowledge that.
Ms. Jackson Lee. When do you expect to be in status to
acquire----
Ms. Townley. Well, we are moving very quickly and we have a
very good and strong agreement with Morgan Stanley and our
other investors, and it should happen very quickly. We assume
that we will be up and running in airports this winter.
Ms. Jackson Lee. Right.
But Mr. Fischer, what point are you making? That you are
ready now?
Mr. Fischer. We are ready now.
Ms. Jackson Lee. Are you suggesting that you are being
blocked from getting that data?
Mr. Fischer. Absolutely not. Like I said earlier, we have a
proposal in to Morgan Stanley that we submitted yesterday and
having a further conversation this afternoon, so we may be able
to buy that data, and I am saying there is a possibility we
may. But the point is, nobody should be able to buy that data
that not approved vendor, and right now there is no approval
process by the TSA. They have hands off right now.
Ms. Jackson Lee. But you are an existing approved vendor.
Mr. Fischer. So according to the policy of Clear, we are
the only ones that can buy that data. That is certainly
challengeable in court.
Ms. Jackson Lee. Let me just--to both of you, do you want
the RT program to be a security program? Ms. Townley.
Ms. Townley. Yes.
Ms. Jackson Lee. Mr. Fischer.
Mr. Fischer. Absolutely.
Ms. Jackson Lee. So you are looking for TSA to work through
its concerns and provide the security benefit?
Mr. Fischer. Yes, ma'am. But we will launch without the
TSA.
Ms. Jackson Lee. Well, you will just have the RT and----
Mr. Fischer. Front-of-line customer experience, yes.
Ms. Jackson Lee. Using the scheme that we have?
Mr. Fischer. Correct.
Ms. Townley. But it won't be RT? Is that what you are
saying?
Mr. Fischer. No, we will use biometrics; we will continue
under the arctic spec under the program that was in place
before.
Ms. Jackson Lee. Ms. Townley, you are not disadvantaged by
the fact that you are just approaching this and putting your
proposals together. We don't operate that way. We appreciate
your being here for us and answering our questions to the best
of your ability, as Mr. Fischer and Mr. McCormick.
You can imagine that you are leaving us with somewhat,
however, of an empty plate. I cannot pretend to participate in
business workings, but I would say to you that time is of the
essence for whatever structure is to be achieved.
I know that there are representatives, though they are not
on the panel as we speak, but there are representatives from
TSA, and among the many issues that we have I would say to the
note-takers and representatives from TSA that there needs to be
an answer as to if not the benefit aspect, the posture that TSA
is taking. I would ask that that response come to me, as
Chairperson, and this committee in its entirety.
So I would expect that committee staff will be back in
touch with TSA for us to get an understanding on the question
raised. We have not heard from TSA.
I think what this hearing has demonstrated is that there is
a great deal of confusion, and that we need a robust dialogue
that includes Congress. We need to reanalyze, in the coming
months, just what we wish to accomplish.
There are many Americans who believe in the RT program, and
we are told by the traveling public that it is a viable
program. Far be it from the Government to be interested in
undermining what may be viable.
But I do believe there needs to be clarity, and I frankly
know that all of you would acknowledge, so I will say it for
you, you disappointed the traveling public during the summer
months, and I am not sure how you will secure their confidence
again, but I think it is important for the private sector to
attempt to do that.
As a city that has a major airport, among many other
cities, I am somewhat baffled by promises of large sums of
money beyond revenue and beyond the traveling percentages. It
is an enormously confusing structure.
I think, Ms. Townley, you will have to explain that
business structure even as you are in court or out of court, in
a manner away from this hearing room if that will help you,
because if this is going to be the same structure again, then
we are fearful that we will again misrepresent to the traveling
public.
So I am very grateful for your presence here today, and I
do appreciate the interest of preserving this program. So you
are complimented for being here and for helping us think
through how we will reserve--or preserve, excuse me--the
traveling program that many would like to have in the
Registered Traveling program.
With that in mind and the Ranking Member having no further
questions, and ready to move, let me thank all the Members for
their testimony and let me likewise indicate that we may have
further questions. Members of the subcommittee may have
additional questions for you and we ask that you respond to the
expeditiously in writing. As well, we hope that we will begin
to have answers that we can utilize.
Recognizing that there are no further questions, this
hearing is now adjourned.
[Whereupon, at 4:44 p.m., the subcommittee was adjourned.]
A P P E N D I X I
----------
Statement Submitted For the Record by Ben C. Bishop, Chief Executive
Officer, Travel Card Services, LLC
September 24, 2009
The Registered Traveler Program was established by the U.S.
Transportation Security Administration (``TSA'') under the
Transportation Security Act of 2003. The Registered Traveler Program
was designed to identify airline passengers who posed a minimal
security risk, and then provide those passengers access to faster and
simpler processing at airport security checkpoints. The TSA was
responsible for setting the program's standards, compliance, and
regulations. The private sector was and is responsible for enrollment,
enrolled customer verification, and related services. Technical
operability is the key to deploying a national interoperable Registered
Traveler Program across multiple airports. The Registered Traveler
Interoperable Consortium (RTIC) was formed at the inception of the
Registered Traveler Program and makes specific technical
recommendations on: System messaging, ensuring a chain of trust,
optimizing the use of biometrics, leveraging Smart Cards, ensuring
system security, protecting privacy, and ensuring cross-provider
interoperability.
In July 2009 both Clear (Verified Identity Pass, Inc.) and Vigilant
Solutions, LLC (PreferredTraveler) unexpectedly closed their Registered
Traveler operations. The exit of Clear's Verified Identity Pass and
Vigilant's Preferred Traveler card from the Registered Traveler Program
has created what we believe to be a vacuum that has been created in
airports across America. Currently, there has been a displacement of
more that a quarter million Registered Traveler customers. As a result
of the recent closure of Registered Traveler operations at the 21
airports, the National Business Travel Association (NBTA), the world's
premier business travel and corporate meetings organization, has
expressed disappointment, and has urged the Transportation Security
Administration (TSA) and U.S. airlines to revitalize the Registered
Traveler program to provide greater efficiency and security to business
travelers, specifically ``to keep the program alive and make certain it
becomes a true risk-management tool for secure and efficient air
travel.''
The RT program: The technology, processes, and procedures that were
developed, piloted and implemented in this first proven public/private
endeavor of its kind was a success. Travel Card Services, LLC strongly
believes that staying true to the approved and proven platform is
critical for Service Providers, Airports, and the traveling public.
Since there remain questions about TSA's continued involvement, DHS's
oversight and potential for security benefits in the future, we would
ask for your continued support in maintaining the implemented
requirements for existing and future RT Service Providers. It is
concerning to imagine what could happen without controls or oversight
in place to protect the highly sensitive data collected and maintained.
Changes in how and what information is collected and the medium
used, would go against many years of developing, with Government
oversight and approval, the fine-tuning of the criteria required, the
security measures put in place and the security of members, collected
data; not to mention interoperability among providers and the real
potential of additional benefits and venues for the platform. The RT
program is more secure than Global Entry, where DHS continues to expand
the risk-based international RT program. The spirit of the program is
the same, a risk-based domestic Registered Traveler program as Congress
mandated in the original Aviation & Transportation Security Act of
2001.
Travel Card Services, LLC was formed to fill this void and has
developed its business plan to provide the Registered Traveler Program
at airports. The program will continue to maintain and be answerable to
all of the proven procedures, technology, and safeguards of the
original program. Currently Travel Card Services, LLC and FLO Corp. are
the only two approved RT Service Providers that are operable,
capitalized, and have the proven technology to re-open the RT Platform
in airports throughout America. TSA support and Congressional oversight
will ensure that this needed program can be reinstituted and successful
permanently!
We would therefore ask that TSA continue its support and oversight
of the program that it helped create, at the very least that an arm of
the Federal Government get involved and get behind this proven program
that can without a shadow of a doubt, prove that you are who you say
you are.
A P P E N D I X I I
----------
Questions From Chairwoman Sheila Jackson Lee of Texas for Mr. John
Sammon, Assistant Administrator, Transportation Sector Network
Management, Transportation Security Administration
Question 1. What is TSA's role in the RT program?
Answer. Due to the completion of the Registered Traveler (RT)
Interoperability Pilot on July 30, 2008, the formal transition of RT to
a fully private-sector model, and completion of the year of Federally
guaranteed interoperability announced at 73 Fed. Reg. 44275 (2008), the
Transportation Security Administration no longer directly regulates the
RT business model.
Section 567 of the Fiscal Year 2010 Department of Homeland
Appropriations Act Conference Report states:
`` . . . any company that collects and retains personal information
directly from individuals who participated in the Registered Traveler
program shall safeguard and dispose of such information in accordance
with the requirements in: (1) The National Institute for Standards and
Technology Special Publication 800-30, entitled `Risk Management Guide
for Information Technology Systems'; and (2) the National Institute for
Standards and Technology Special Publication 800-53, Revision 3,
entitled `Recommended Security Controls for Federal Information Systems
and Organizations'; (3) any supplemental standards established by the
Assistant Secretary, Transportation Security Administration.''
Such companies will be required to provide written certification to
the TSA Assistant Secretary that such procedures are consistent with
the minimum standards outlined in sections (1)-(3) above.
Question 2. If a firm, such as Clear or Flo, wants to restart, does
it need permission from TSA? What is the process?
Answer. The Transportation Security Administration (TSA) currently
does not need to approve any application to be a Registered Traveler
(RT) service provider if the applicant's intent is to provide expedited
security line services at airports. At present, all vendors are
approved to participate as RT service providers provided that they
enter into an agreement with an airport or air carrier.
Section 567 of the Fiscal Year 2010 Department of Homeland
Appropriations Act Conference Report states:
`` . . . any company that collects and retains personal information
directly from individuals who participated in the Registered Traveler
program shall safeguard and dispose of such information in accordance
with the requirements in: (1) The National Institute for Standards and
Technology Special Publication 800-30, entitled `Risk Management Guide
for Information Technology Systems'; and (2) the National Institute for
Standards and Technology Special Publication 800-53, Revision 3,
entitled `Recommended Security Controls for Federal Information Systems
and Organizations'; (3) any supplemental standards established by the
Assistant Secretary, Transportation Security Administration.''
Such companies will be required to provide written certification to
the TSA Assistant Secretary that such procedures are consistent with
the minimum standards outlined in sections (1)-(3) above.
Question 3. How did AAAE acquire the contract for the CIMS
database? Was this a competitive process?
Answer. The American Association of Airport Executives (AAAE) was
awarded as an Other Transaction Agreement (OTA) for the development,
deployment, and maintenance of the Registered Traveler (RT) Central
Information Management System (CIMS) database. This OTA was awarded on
a single source basis due to AAAE's pre-existing infrastructure and
relationships within the airports.
This decision was in accordance with the Section 528 of Pub. L.
109-90, the Department of Homeland Security Appropriations Act, fiscal
year 2006, which states:
``The Secretary of Homeland Security shall utilize the Transportation
Security Clearinghouse as the central identity management system for
the deployment and operation of the Registered Traveler program and the
Transportation Worker Identification Credential program for the
purposes of collecting and aggregating biometric data necessary for
background vetting; providing all associated record-keeping, customer
service, and related functions; ensuring interoperability between
different airports and vendors; and acting as a central activation,
revocation, and transaction hub for participating airports, ports, and
other points of presence.''
Question 4. It seems that there are other, similar models available
from which TSA can borrow to improve the RT program. Has TSA looked at
the Global Entry program as a model for implementing a trusted
passenger program?
Answer. The Transportation Security Administration (TSA) explored
the feasibility of incorporating elements of the Customs and Border
Protection's (CBP) Global Entry program to enhance Registered Traveler
(RT).
Global Entry uses an automated kiosk to perform identity
verification and other checks that meet the requirements for the
passport control primary inspection performed at a U.S. port of entry.
This function is substantially different from the security needs at TSA
security checkpoints due to the differences in the nature of the
threats that each is seeking to counter. Unlike passport control
inspection, TSA must perform the physical screening of passengers and
their carry-on baggage. Consequently, the Global Entry model has only
limited applicability to the environment in which Registered Traveler
would operate.
TSA will continue to coordinate with other components of the
Department of Homeland Security on potential best practices to apply to
an RT program. Part of this coordination includes the exchange of
lessons learned, where applicable, with Global Entry and other trusted
traveler programs. For example, the programs share information about
the biometric technologies used to verify identity.
Question 5. Please explain TSA's roles and responsibilities in
ensuring that service providers and AAAE properly manage participants'
personally identifiable information.
Answer. During the pilot phases of Registered Traveler (RT), the
Transportation Security Administration (TSA) developed documents and
policies to safeguard RT customers' Personally Identifiable Information
(PII) in a manner consistent with the Privacy Act requirements and the
National Institute of Standards and Technology standards for
information security. RT service providers (vendors), sponsoring
entities (airports and airlines), and contracting partners (the
American Association of Airport Executives (AAAE) as manager of the
Central Information Management System (CIMS)) subscribed to these
safeguards in order to participate in the pilots.
In the RT pilot, airports and airlines served as sponsoring
entities for the vendors who offered RT services. TSA required the
sponsoring airports and airlines to ensure the RT vendors' compliance
with information security practices to protect RT customers from
unauthorized use or disclosure of the customers' sensitive biographic,
biometric, and other information. Via the Other Transaction Agreement
(OTA), TSA required AAAE to meet specific requirements to safeguard
PII, including complying with the Privacy Act and the Federal
Information Security Management Act (FISMA), as well as completing
recurrent privacy training and executing a non-disclosure agreement.
Question 6. Is there a process for easily transferring Clear
customers to Flo, upon the request of customers?
Answer. Such a transaction would be a result of negotiations
between two private sector companies. Consequently, Transportation
Security Administration cannot comment on this activity.
Question 7. Will a reengineered Clear need to re-compete for the
former Clear's airports?
Answer. The Transportation Security Administration does not have
information concerning nor have responsibility for whether sponsoring
airports or airlines may require any company operating under the
``Clear'' brand to renegotiate or re-compete to provide renewed
services.
Question 8. Please comment on technology that TSA has recently
looked at in terms of passenger checkpoint screening, particularly in
terms of expedited screening of shoes, laptops, jackets worn on
individuals, et cetera.
Answer. The Transportation Security Administration (TSA) is working
with industry and other Government components to develop technologies
for passenger checkpoint screening.
In the near-term, Advanced Technology (AT) X-ray systems will be
deployed to checkpoint lanes and will be upgraded with enhanced
capabilities. The upgrades are planned to include automated detection
algorithms, multiplexing, and liquid threat detection capability in
order to better screen laptops and liquids, as well as maintain or
increase detection abilities.
TSA has piloted stand-alone shoe-scanning technology in the past,
and its development remains a priority. Currently, TSA and the
Department of Homeland Security's Science and Technology Directorate
are collaborating with vendors to develop technology to meet this goal.
TSA continues to drive technology development and enhancements
toward improving security and the passenger experience, while at the
same time respecting privacy, safety, and health concerns.
Question 9. With TSA recently conducting more active oversight over
the RT program, please describe what you have learned in meeting with
service providers and other industry stakeholders. How has their input
impacted TSA's decision-making with regard to the future of RT?
Answer. After Registered Traveler (RT) providers ceased operations
and following the Transportation Security Administration's (TSA)
efforts to ensure the security of personal information collected during
the pilot, TSA has responded to inquiries from potential new RT
vendors. TSA has stated that it does not need to approve applications
for an RT service provider if the intent is simply to provide expedited
security line services at airports. Instead, the sponsoring airport or
airline would need to reach an agreement with the vendor to provide
such services.
The future of RT as a potential security program continues to be
reviewed within the Department. TSA remains open to receiving feedback
and ideas from stakeholders.
Question 10. What does it mean for a service provider to be
certified in this process? In your opinion, can any service provider
that is certified commence operations at any willing airport? What
about service providers that are not yet certified but wanting to do RT
business; how does TSA interact with them?
Answer. At present, the Transportation Security Administration
(TSA) does not need to approve any application to be a Registered
Traveler (RT) service provider if the intent is to provide expedited
security line services at airports. Instead, the sponsoring airport or
airline would need to reach an agreement directly with the vendor to
provide such services.
Given these current circumstances, the use of the concept of
certification is not applicable. There are no certifications for this
process.
Questions From Chairwoman Sheila Jackson Lee of Texas for Mr. Carter
Morris, Senior Vice President, Transportation Policy, American
Association of Airport Executives
Question 1. AAAE met with staff several times this summer to
discuss the RT program. One briefing was held on August 5. At that
time--nor in the days following--you did not notify us that TSA had
instructed you to provide a plan for data deletion from CIMS the day
before, August 4. Why did you not notify the subcommittee of this?
Answer. As was highlighted in the question, AAAE was notified
verbally by TSA on August 4 that the agency would require the
decommissioning of the CIMS. In the immediate aftermath of that
notification, AAAE was intensely focused on assessing the association's
options and determining its obligations to TSA as well as to RT service
providers with whom AAAE had contractual arrangements regarding RT
customer data. AAAE remained in contact with TSA following the August 4
verbal directive and suggested a number of modifications pertaining to
the TSA-proposed notification and consultation period with service
providers and other technical requirements.
The official notification from TSA directing AAAE to decommission
the CIMS (attached to this document as requested below in question 3)
did not follow until August 14. At that point, AAAE had developed a
detailed decommissioning plan in recognition of the fact that TSA had
clear legal authority to order the decommissioning of the CIMS. I had a
conversation with subcommittee staffer Tom McDaniels on August 18
detailing where things were in the process at that point. I
subsequently followed up with Mr. McDaniels via email and shared with
him the decommissioning plan.
We greatly appreciate the subcommittee and full committee's
successful efforts to this point to prevent the decommissioning of the
CIMS and the elimination of important data.
Question 2. At the hearing, you mentioned a conversation with staff
that included said notification weeks later. Who was included in this
conversation?
Answer. I had a detailed phone conversation with Tom McDaniels on
Tuesday, August 18. I followed up on the same date with an email to Mr.
McDaniels sharing the CIMS decommissioning plan.
Question 3. Please provide the subcommittee with the letter TSA
transmitted to you regarding the decommissioning of the CIMS database.
Answer. The TSA letter dated August 14 is attached.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Question 4. How did AAAE acquire the contract for the CIMS
database? Please provide the process and the opportunities to compete.
Answer. AAAE operated generally under an Other Transaction
Agreement (OTA) with TSA that was signed in October 2006 and that
expired in October 2008. The OTA defined AAAE's role in the RT program
and specified the requirements that AAAE was compelled to comply with
in that role. AAAE received no Federal funds for operation of the CIMS.
The CIMS system and AAAE's specific role in operating CIMS were
defined and universally supported by all members of the Registered
Traveler Interoperability Consortium (RTIC). As I mentioned in my
written testimony, the RTIC was established in 2005 with a goal of
establishing common business rules and technical standards to create a
permanent, interoperable, and vendor-neutral RT program. In addition to
nearly 60 airports, RT service providers and leading biometric and
identity management companies were active participants in the
consensus-driven RTIC process as was TSA, which played a critical role
in establishing and ensuring compliance with stringent Federal security
standards.
Throughout 2006, the RTIC worked aggressively to define, develop,
and implement the RT program at interested airports. The group created
the RTIC Technical Interoperability Specification, a detailed, 158-page
technical standards document approved by the TSA that served as the
technical requirements for the interoperable RT program that eventually
grew to more than 20 airports prior to the recent cessation of the
program. Again, the CIMS system and AAAE's specific role in operating
CIMS were defined as part of that process and universally agreed to by
RTIC participants. AAAE executed individual but transparent contracts
with each approved RT service provider to adhere to the RTIC
specifications and TSA security policies.
Question 5. Please explain the financial side of the arrangement
among AAAE, service providers, and airports. In particular, please tell
us how much money AAAE charges per customer for its clearinghouse
services.
Answer. AAAE's financial involvement with the RT program is limited
to the standard and transparent contracts negotiated with the service
providers for CIMS services. The fees charged were $1.80 or $2.40 per
initial enrollment, depending on whether or not the service provider
chose ``up-front'' payment of certain development costs or annual
volume based transaction fees. Those decisions were made by each
individual service provider. These fees were charged to recover the
costs incurred by AAAE to develop and maintain the system and were
agreed to through the RTIC consensus process.
Question 6. Is AAAE supportive of a competitive process for
awarding the clearinghouse services?
Answer. AAAE has worked over the course of the past 5 years with a
broad-based group of airports and technology and service providers
through the RTIC process to enable an interoperable system that
provides little to no barrier to entry for RT service providers. Over
that time, the there was intense discussion among the group about
whether centralized services were necessary and if so how they would be
provided. The consensus of the group, through a formal and documented
process, was that a trusted third party must be used to operate
centralized services necessary to enable the security,
interoperability, and TSA vetting portions of the overall RT
operations. AAAE agreed to provide those services with an understanding
that contracts from the service providers would be established over a
sufficient time frame to cover the expense of development and
maintenance of such a system. The service providers put contracts in
place with AAAE to develop CIMS, and AAAE met or exceeded all
commitments made to the service providers. We believe that any future
competitive process must take into account these standing, mutual
commitments made among AAAE and industry to establish the RT program.
AAAE is proud of the CIMS and firmly believes that it holds
tremendous value as part of RT or any future trusted traveler program.
From a technical standpoint, the CIMS has proven itself invaluable,
serving as the critical hub for facilitating interoperability among
service providers and at airports across the country and for processing
necessary checks and security controls. In its 3 years in operations,
CIMS supported a system of four independent service providers at 22
airports with more than 250,000 actively enrolled participants.
Whatever shape a future trusted traveler program may take, it is clear
from our perspective that the CIMS can and should continue to play a
central role in performing key functions in a way that balances the
interests of airports, service providers, technology companies, TSA,
and the traveling public.
Question 7. AAAE is a leading industry representative for airports.
Do you think there is a conflict of interest in being a sole provider
for RT clearinghouse services?
Answer. No. In fact, AAAE was given its role as the trusted third
party for centralized services to ensure that the interests of all
parties--airports, service providers, technology companies, TSA, and
the traveling public--were balanced. AAAE's role ensures that no single
entity has undue leverage over the program. Again, the role of AAAE
with the CIMS was defined by and agreed to by all members of the RTIC
in recognition of the value AAAE offered as a trusted third-party
provider of services for the RT program. AAAE's CIMS system ensures
that the needs of all participants are met and that the program is
permanent, interoperable, and vendor-neutral. Without a trusted
centralized network, the complexity and cost of interoperability and
security would prevent easy entry into the RT business by firms that
are able and interested to provide the service, resulting in less
competition and higher costs.
Question 8. What are your airport members saying to you in general
about RT and the future of the RT program?
Answer. A number of airports have long seen the value in a trusted
traveler concept and continue to see potential value in a future RT
program, particularly as traffic--and lengthy checkpoint lines--
inevitably return to airports across the country. From the local
airport perspective, the program must offer adequate choice in
potential service providers and sufficient flexibility to allow for the
development of innovative solutions that cater to local needs. To meet
those needs and gain widespread support from the airport community, it
is clear that any future program must include several core elements,
including security benefits, interoperability and an environment in
which airports can choose from multiple RT service providers that meet
TSA-established specifications and standards.
Question 9. What is the nature of AAAE's relationship with the
various service providers since the cessation of operations at Clear?
Have you been in contact with any service providers that wish to start
RT operations?
Answer. Service providers have been in contact informally with AAAE
since the cessation of operations by Clear. Several of the previously
operational and new entrant service providers have expressed interest
in commencing operations and are looking for AAAE support and the
continued activity of the RTIC. To date, however, AAAE has received no
formal requests for the resumption or commencement of operations from
any RT service provider.
Questions From Chairwoman Sheila Jackson Lee of Texas for Ms. Alison
Townley, Principal, Henry Incorporated
Question 1. Please explain how the pending lawsuits against Clear's
parent company will affect your restart at airports.
How will Clear settle claims from airports?
Question 2. Does your plan for Clear rely upon a security benefit
from TSA?
Question 3. Have you consulted TSA on your plans? Please provide
dates and topics.
Question 4. Explain your recent meetings with TSA and what
direction or information you have received from the agency in
accommodating your plans to re-start operations?
Question 5. As you know, the RT program greatly benefited from the
fact that participating firms were interoperable. Now that the rule for
interoperability lapsed this summer, what is your view on whether the
program should be interoperable going forward?
Question 6. With the various stakeholders receiving portions of
revenue, including airports, technical support vendors, and AAAE, can
the new Clear make money?
Answer. Thank you for inviting me to testify before the
Subcommittee on Transportation Security and Infrastructure Protection
on the future of the Registered Traveler (RT) program. It was my
pleasure to do so.
Again, we are gratified by your leadership on RT, as expressed not
only through hearings like that of last month, but also through
legislation like the strong RT provisions in H.R. 2200, the TSA
Authorization Act.
As you know, we are optimistic about the future of RT. We are
confident in our ability to build on the successes of Clear, while
learning from its failures. It is worth remembering that Clear laid a
great foundation. Clear had approximately 200,000 active customers when
operations ceased, and approximately 30,000 more people had signed up
for Clear but not yet completed the cumbersome in-person enrollment
process. Even after the economic downturn had taken hold, Clear enjoyed
renewal rates in excess of 80%. There was a reason that Clear lanes
were used more than 3 million times--members liked the service.
In short, Clear was nearing profitability but had not yet achieved
it, and Clear was ultimately unable to restructure its senior lender
debt, which was essential to securing the new funding that was required
to continue operations.
Henry Incorporated now has an agreement to restructure the debt; we
have committed investors; and we have a new vision of how to: (i) Use
technology to drive costs down, and (ii) address one of the biggest
barriers to substantially greater membership--the multi-step enrollment
process. You have asked whether our plan for Clear relies on a security
benefit from TSA. The answer is no. You have also asked whether we
believe the new Clear will be able to make money. The answer is yes.
Our business plan calls for Clear to become profitable absent a TSA
security benefit. That being said, we do share Congress' belief that
the RT program has the potential to be a powerful risk management tool,
and we are eager to work with TSA on developing RT into a tool which
will enhance aviation security by allowing TSA to appropriately
expedite vetted members of the program, so that TSA can apply more of
its resources to un-vetted travelers.
Henry Incorporated has spoken several times with representatives of
DHS and TSA about how we envision the new Clear program operating and
how we would like to work together with DHS and TSA going forward on
the development of RT. The three primary discussions took place on
August 20, September 18, and September 29 of this year. Other less
formal calls have also taken place over the last 3 months, as well.
What we have heard from DHS and TSA in our discussions about their view
of the future of Registered Traveler was consistent with the following
excerpt from Mr. Sammon's written testimony for the recent hearing:
``DHS will continue to encourage interested vendors to work directly
with airports, airlines, and TSA to identify and implement worthwhile
concepts that will provide registered travelers a benefit, while still
maintaining both the level of security needed to ensure the safety of
our transportation system, as well as the confidentiality of personally
identifiable information. As with any transportation security program,
TSA will maintain its regulatory oversight role for any such concepts
adopted in the RT program.''
We believe this is a promising basis on which to move forward. We
were also gratified by Erroll Southers' recent testimony on RT before
the Senate Commerce Committee. With respect to the proposed re-Iaunch
of Clear itself, TSA has provided no specific feedback to this point.
You have asked how Henry Incorporated is dealing with the airports
that were operated by Clear. We have had discussions with many of the
existing Clear airports, and our plans to re-launch Clear at those
airports have been almost universally well-received. As a general
principal, we plan to pay Verified Identity Pass' arrears at airports
where we re-launch Clear. The mechanisms of these relaunches will
likely vary airport-by-airport. Because our discussions with those
airports are on-going, I don't have details to provide right now, but I
will do so as our discussions progress.
You have asked for our views on interoperability. We believe that
competition in RT is healthy and that interoperability can facilitate
healthy competition, provided that service providers negotiate
appropriate usage fees with each other to prevent ``free riding.'' Once
TSA refines its views on how the technical and other standards of RT
are to evolve, we look forward to pursuing interoperabiIity with other
service providers.
Let me address, as well, how we are proposing to work with existing
Clear customers, so many of whom are interested in joining a re-
launched Clear program. We recognize the imperative to protect our
members' personal identifiable information (PII). To that end, the PII
of existing Clear members (including their biometrics) will only be
transferred to the new Clear program after existing members have been
given both advance notice of the proposed transfer and the opportunity
to instead have their PII destroyed by Lockheed Martin's secure data
storage facility (which is where Clear member PII is today, and was
historically, stored).
In addition, all existing Clear members who choose to continue with
the re-launched Clear program will be able to use--at no additional
cost--the balance of the term of their membership that remained unused
when Clear ceased operations in June. In other words, if a member had a
year remaining on her membership when operations ceased, she will be
able to use the new Clear service for a year at no charge before coming
up for renewal. We will, of course, respect the decision of existing
Clear members who choose not to continue with the re-launched program;
by definition, they will not be moving from Verified Identity Pass to
Henry Incorporated as part of the transaction, so any financial
obligations to those existing members will remain with Verified
Identity Pass.
You have asked how the pending class action litigation will impact
the transaction between Verified Identity Pass and Henry Incorporated.
There is a pending motion by the plaintiffs for a preliminary
injunction to prevent Verified Identity Pass from transferring member
PII. Verified Identity Pass has asserted that such an injunction is
unwarranted, given that (as described above) no member PII can be
transferred without the consent of the member. Although we are not a
party to the litigation, this strikes as a sensible position. In any
case, we will contact your staff after the first conference before the
presiding judge (which is actually taking place this afternoon), if any
additional information becomes available.
Please feel free to contact me at any time with any questions. In
addition, Charles Simon is always available to you.
Questions From Chairwoman Sheila Jackson Lee of Texas for Mr. Fred
Fischer, Principal and Managing Partner, FLO Corporation
Question 1. Do you think AAAE plays an important role in the RT
process?
Answer. Response was not received at the time of publication.
Question 2. Do you think AAAE should have a role in RT going
forward?
Answer. Response was not received at the time of publication.
Question 3. What are the concerns of airport operators where you
have made initial contact for restarting RT?
Answer. Response was not received at the time of publication.
Question From Chairwoman Sheila Jackson Lee of Texas for Mr. Michael W.
McCormick, Executive Director, National Business Travel Association
Question. Do you think the pricing structure for RT needs to be
changed to accommodate business travelers? Is the annual fee amount a
problem?
Answer. Prior to the discontinuation of services, the biggest
obstacles of enrollment were the uncertainty of benefits offered by the
Registered Traveler programs and the relatively limited number of
locations travelers could use the program.
NBTA is supportive of the program expanding airport operations and
have encouraged airports to make it a part of their operations. NBTA
believes a solid network of lanes across the country would be positive
factor impacting the business travelers' decisions to enroll.
In addition to a solid network, the value of the RT programs to
travelers will increase dramatically if the security component is
reinstated and background checks are resumed. As travelers were willing
to pay for a dedicated lane, travelers are likely to pay for the
conveniences of not removing one's shoes and keeping the computer in
its bag.
Should these issues be positively addressed, it will be up to the
providers to price the product so that the market will bear the costs
and the service thrives.