[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]







    FAA'S 2020 NEXTGEN MANDATE: BENEFITS AND CHALLENGES FOR GENERAL 
                                AVIATION

=======================================================================

                                HEARING

                               before the

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD
                             JUNE 11, 2014

                               __________



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



            Small Business Committee Document Number 113-072
              Available via the GPO Website: www.fdsys.gov






                                  _____

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                   HOUSE COMMITTEE ON SMALL BUSINESS

                     SAM GRAVES, Missouri, Chairman
                           STEVE CHABOT, Ohio
                            STEVE KING, Iowa
                         MIKE COFFMAN, Colorado
                      BLAINE LUETKEMEYER, Missouri
                     MICK MULVANEY, South Carolina
                         SCOTT TIPTON, Colorado
                   JAIME HERRERA BEUTLER, Washington
                        RICHARD HANNA, New York
                         TIM HUELSKAMP, Kansas
                       DAVID SCHWEIKERT, Arizona
                       KERRY BENTIVOLIO, Michigan
                        CHRIS COLLINS, New York
                        TOM RICE, South Carolina
               NYDIA VELAZQUEZ, New York, Ranking Member
                         KURT SCHRADER, Oregon
                        YVETTE CLARKE, New York
                          JUDY CHU, California
                        JANICE HAHN, California
                     DONALD PAYNE, JR., New Jersey
                          GRACE MENG, New York
                        BRAD SCHNEIDER, Illinois
                          RON BARBER, Arizona
                    ANN McLANE KUSTER, New Hampshire
                        PATRICK MURPHY, Florida

                      Lori Salley, Staff Director
                    Paul Sass, Deputy Staff Director
                      Barry Pineles, Chief Counsel
                  Michael Day, Minority Staff Director



















                            C O N T E N T S

                           OPENING STATEMENTS

                                                                   Page
Hon. Sam Graves..................................................     1
Hon. Nydia Velazquez.............................................     2

                               WITNESSES

Hon. Michael P. Huerta, Administrator, Federal Aviation 
  Administration, Washington, DC.................................     3
Ms. Paula Derks, President, Aircraft Electronics Association, 
  Lee's Summit, MO...............................................     9
Mr. Tim Taylor, President and CEO, Free Flight Systems, Inc., 
  Irving, TX, testifying on behalf of the General Aviation 
  Manufacturers Association......................................    11
Mr. Bob Hepp, Owner, Aviation Adventures, Manassas, VA, 
  testifying on behalf of the Aircraft Owners and Pilots 
  Association....................................................    13
Mr. Kenneth J. Button, Director, Center for Transportation, 
  Policy, Operations and Logistics, George Mason University, 
  Arlington, VA..................................................    15

                                APPENDIX

Prepared Statements:
    Hon. Michael P. Huerta, Administrator, Federal Aviation 
      Administration, Washington, DC.............................    24
    Ms. Paula Derks, President, Aircraft Electronics Association, 
      Lee's Summit, MO...........................................    28
    Mr. Tim Taylor, President and CEO, Free Flight Systems, Inc., 
      Irving, TX, testifying on behalf of the General Aviation 
      Manufacturers Association..................................    32
    Mr. Bob Hepp, Owner, Aviation Adventures, Manassas, VA, 
      testifying on behalf of the Aircraft Owners and Pilots 
      Association................................................    39
    Mr. Kenneth J. Button, Director, Center for Transportation, 
      Policy, Operations and Logistics, George Mason University, 
      Arlington, VA..............................................    44
Questions and Answers for the Record:
    Questions and Answers to Hon. Michael Huerta from Hon. Judy 
      Chu........................................................    52
    Questions and Answers to Hon. Michael Huerta from Hon. Grace 
      Meng.......................................................    54
    Questions and Answers to Hon. Michael Huerta from Hon. Mick 
      Mulvaney...................................................    56
Additional Material for the Record:
    National Business Aviation Association (NBAA)................    59

 
    FAA'S 2020 NEXTGEN MANDATE: BENEFITS AND CHALLENGES FOR GENERAL 
                                AVIATION

                              ----------                              


                        WEDNESDAY, JUNE 11, 2014

                  House of Representatives,
               Committee on Small Business,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 1:00 p.m., in Room 
2360, Rayburn House Office Building. Hon. Sam Graves [chairman 
of the Committee] presiding.
    Present: Representatives Graves, Chabot, Luetkemeyer, 
Hanna, Schweikert, Collins, Rice, Velazquez, Schrader, Chu, 
Meng, and McLane Kuster.
    Chairman GRAVES. Good afternoon, everybody. And we will 
call this hearing to order.
    Today, the Committee is going to examine the FAA's 2020 
NextGen mandate, and how it is going to affect small businesses 
in the general aviation community.
    General aviation includes about 360,000 aircraft carrying 
166 million passengers to 5,000 public airports in the U.S., 
many of which have no scheduled air service. More than two-
thirds of these 25 million flight hours per year are for 
business purposes. In addition to more than 2,500 small 
businesses that provide air transport services, general 
aviation employs about 1.2 million people and contributes 
approximately $150 billion to the overall GDP.
    The NextGen initiative is a project of the Federal Aviation 
Administration designed to modernize the United States' 
aviation system by using satellite-based and digital 
technologies to make air travel more predictable, convenient, 
safe and reliable. At a time when many airports in the United 
States experience high levels of congestion and safety concerns 
are prevalent, the NextGen initiative offers some very positive 
solutions.
    As part of NextGen, the FAA is mandating that by January 1, 
2020, all aircraft operating in most controlled airspace be 
equipped with technology systems that are capable of 
broadcasting continuous, precise positional information to 
ground stations and other aircraft. This technology is known as 
Automatic Dependence Surveillance-Broadcast Out, or what we all 
refer to as ADS-B Out.
    Despite the deadline, the general aviation community 
estimates that so far, only a few thousand out of more than 
150,000 general aviation aircraft that are going to be required 
to equip with this new technology have done so. It seems that 
cost, a potential installation backlog, and uncertainty 
surrounding the mandate are creating obstacles to compliance 
among the general aviation industry. It is important to address 
these challenges if we are going to reap the potential safety 
benefits that this new technology offers.
    We are very fortunate to have with us today the 
administrator of the FAA, as well as a group of general 
aviation industry representatives and businesses who are going 
to be affected by this mandate, and we look forward to hearing 
their perspectives regarding the NextGen mandate, its economic 
impact on the general aviation community, and the solutions to 
accelerate and make possible the widespread adoption.
    I would like to thank all of our witnesses, the first panel 
obviously and the next panel, for being here, and I recognize 
Ranking Member Velazquez.
    Ms. VELAZQUEZ. Thank you, Chairman Graves.
    General aviation operators and the services they provide 
play a key role in our nation's economy. They fly to towns not 
served regularly by big airlines, take families on sightseeing 
tours, and train the next generation of commercial pilots. In 
fact, general aviation directly generates more than $20 billion 
annually and has an overall economic impact of nearly $80 
million, employing nearly half a million workers.
    General aviation's future success, however, is linked to 
continually improving safety across the entire civilian 
aviation industry. With this goal in mind, the FAA has embarked 
on the NextGen initiative, a large-scale modernization of air 
traffic control utilizing the global positioning system and 
other technologies. GPS provides pilots and air traffic 
controllers numerous advantages over the old radar-based 
system, namely access to precise real-time data on an 
aircraft's position, altitude, and speed that does not degrade 
in bad weather or over rough terrain.
    The FAA has mandated by 2020, most aircraft will need to be 
equipped with ADS-B Out and equipment to broadcast GPS data to 
both air traffic control and other aircraft in the area. By 
combining these technologies, FAA hopes to improve general 
aviation safety records, increase utilization of air space on 
airports, and reduce environmental impact from noise and 
emissions. ADS-B is also likely to help rescuers locate 
survivors more quickly in the event of an accident.
    However, these benefits are not free. In its rulemaking, 
the FAA estimated the cost of equipment to the general aviation 
fleet will be between $1.3 and $4.5 billion. Some industry 
stakeholders suggest ADS-B could cost $1,000 to $30,000 per 
aircraft.
    During today's hearing, I am interested in learning whether 
these costs will come down as more equipment is certified and 
installation ramps up. There has also been criticism that FAA's 
outreach on the 2020 mandate is lacking. Since not all aircraft 
will need to be equipped, pilots and small operators have 
become confused about whether the requirements apply to them. 
This could result in planes unnecessarily adding this equipment 
or unintended violations. Providing clear, concise instruction 
on the mandate should be an FAA priority going forward. In 
addition, delays in certification are another area of concern. 
These delays could prevent new businesses from opening and 
existing businesses from complying with the 2020 mandate.
    Pursuing policies that can improve safety are necessary. 
However, they must be data driven, clearly articulated, and 
with minimal delay to prevent excessive industry burdens. More 
sophisticated avionics technology promises a new era in 
civilian aviation, one that is safer, more efficient, and 
better for the environment. However, all of us must work 
together to ensure delays and costs are minimized.
    I thank the panel of witnesses for traveling here today, 
and I look forward to their testimony.
    I yield back, Mr. Chairman.
    Chairman GRAVES. Our first witness today is the Honorable 
Michael Huerta, the administrator of the Federal Aviation 
Administration. In that role he oversees the safety and 
efficiency of the largest aerospace system in the world, and he 
manages a $15.9 billion budget and over 47,000 employees. He is 
also responsible for leading the FAA's multi-billion NextGen 
initiative.
    Administrator, thank you for being here, and we appreciate 
your testimony.

STATEMENT OF MICHAEL P. HUERTA, ADMINISTRATOR, FEDERAL AVIATION 
                         ADMINISTRATION

    Mr. HUERTA. Good afternoon, Chairman Graves, Ranking Member 
Velazquez, Members of the Committee. And thank you for the 
opportunity to speak with you today about NextGen and the 
benefits and challenges of equipping aircraft to take advantage 
of NextGen capabilities.
    Even though it has been more than 100 years since the 
Wright Brothers made history at Kitty Hawk, the thrill and 
wonder of flight comes alive each time a general aviation pilot 
takes to the skies. Our aircraft are far safer today and they 
are much more powerful, and NextGen procedures give general 
aviation pilots unprecedented access to runways across America 
thanks to GPS.
    NextGen technology brings weather and traffic information 
into the cockpits and gives pilots better situational awareness 
which enhances safety. The entrepreneurial spirit shown by the 
Wright Brothers, which this Committee supports, is alive and 
well in general aviation. The industry contributes about $40 
billion per year to our nation's gross domestic product and it 
creates a half million jobs. NextGen strengthens this economic 
engine by making our nation's airspace more efficient.
    One of the foundations of NextGen is satellite-based 
surveillance. As we have discussed, the technical name is 
Automatic Dependent Surveillance-Broadcast (ADS-B). We have 
completed installing the ground infrastructure required for 
ADS-B--more than 630 transceivers nationwide. This is an 
extremely important milestone and I am proud of the work that 
has brought us to this point.
    But what does this mean? What benefits does this bring to 
the general aviation pilot? There are considerable benefits 
available right now to those who equip with ADS-B long before 
the 2020 mandate.
    We now have ADS-B coverage in remote areas where radar 
coverage was limited before. This includes the Gulf of Mexico, 
mountainous regions in Colorado, and low altitude airspace in 
Alaska. ADS-B helps pinpoint hazardous weather, and it gives 
pilots important flight information, such as temporary flight 
restrictions and notices to airmen.
    The highly precise GPS-based surveillance provided by ADS-B 
is also improving our ability to perform lifesaving search and 
rescue operations. Air traffic controllers have better 
information about an airplane's last position, thus helping to 
take the search out of search and rescue.
    ADS-B technology allows general aviation pilots for the 
first time to see what air traffic controllers see. Cockpit 
displays show the location of aircraft in the sky around them, 
creating an environment of shared situational awareness. Pilots 
are already seeing the additional benefits of ADS-B in better 
weather, better traffic, and situational awareness, and we 
believe that they will equip to enjoy these benefits.
    ADS-B Out is a foundational element of NextGen that allows 
us to bring these benefits and a host of others to airspace 
users. And I want to clarify that equipage for ADS-B out will 
only be required in certain airspace. That is airspace where we 
require transponders today so that aircraft can be seen by 
controllers. Now, this, of course, includes air space located 
around busy airports. But if a pilot flies in uncontrolled 
airspace where no transponder is required today, there is no 
requirement to equip the aircraft.
    Now, we are confident that the general aviation community 
sees the advantage of investing in the new technology, and ADS-
B is no exception. Right now, owners of 74,000 general aviation 
aircraft have chosen to equip with a type of GPS technology 
known as Wide Area Augmentation System (WAAS). This is not 
required by any rule, but WAAS allows pilots to use NextGen 
approaches at smaller airports that do not have instrument 
landing systems. This opens up access to airports across the 
country, and many WAAS receivers already come as a package with 
ADS-B Out.
    Nevertheless, we are very aware that increased technology 
requires investment, and we are doing everything we can to 
facilitate low-cost alternatives for the general aviation 
community. To meet the minimum requirements for ADS-B Out, you 
need three things: a GPS receiver, an extended squitter or 
universal access transceiver, and an antenna. You can buy just 
these three things, or you can integrate with other 
technologies and capabilities.
    We have done a lot of work to certify a range of products, 
and companies are responding, which spurs competition in the 
marketplace. We encourage aircraft owners to equip soon so that 
they can take advantage of the benefits of NextGen. The 
increased accuracy, predictability, and enhanced safety that 
come with NextGen are taking aviation to heights that no one 
could have imagined in the early days of aviation. We 
appreciate your help in laying the groundwork for a modern air 
transportation system that will benefit generations to come.
    This concludes my oral testimony today. Thank you for the 
opportunity to be here with you, and I look forward to 
answering your questions.
    Chairman GRAVES. Thank you, Administrator.
    Obviously, they just called a series of votes, and we will 
try to run through questions real quick and then we will go to 
the next.
    And mine, which I will just go right into, when we passed 
the FAA Reauthorization back in 2012, a lot of people do not 
realize, but Congress put together a program to incentivize and 
accelerate obviously NextGen installation through FAA loan 
guarantees, and it has been two years and this financing 
mechanism has yet to be started within the FAA. And I am just 
curious about the implementation of that. And also, have you 
considered using the SBA to enter into an understanding with 
them or get best practices? They obviously deal with this sort 
of thing all the time and they are very well equipped to 
process them. But I would be very curious where we are in that 
process.
    Mr. HUERTA. Sure. As you pointed out, the Act did include 
permissive authority to establish a new loan guarantee program, 
and in 2012, we had two public meetings and issued two market 
surveys to seek input from interested stakeholders on which 
NextGen capabilities are needed, and then also what would 
happen in the face of this financing opportunity. We also held 
meetings with aircraft operators and potential private 
partners. In December 2013, an interested private partner 
submitted an application to the FAA for an incentives program 
specifically targeted at general aviation. We are currently 
reviewing that application, and we are working with the DOT's 
Credit Council. The DOT does oversee other lending programs on 
the viability of the application and the program.
    We do currently lack one provision, and that is the 
necessary appropriations authority in order to implement 
partnership incentive programs with a private investor. But, as 
we work through the application, that is something we would 
need to work through with the appropriators.
    Now, this would certainly accelerate NextGen equipage. We 
believe it would do that, and we also know that there are 
currently many other private sector nonsubsidized lending 
sources that are out there to pilots, including a program that 
is being overseen by AOPA.
    Chairman GRAVES. And we would love to help you out with 
that, too, as far as appropriations. We do think that it can be 
run much like some of the SBA programs in terms of ultimately 
being neutral in terms of revenues and fees being able to cover 
everything obviously. But we would love to work with you and 
work through that process because I think it is a program that 
is going to work. And I do not think the appropriations request 
has ever actually been made either, and we have to have a 
request from FAA, too, before we can move forward.
    Mr. HUERTA. Yes. And it would be based on the scoping of 
the program. And since we have this single application that we 
are looking at, it would be based on what comes out of that.
    Chairman GRAVES. Ranking member?
    Ms. VELAZQUEZ. Mr. Chairman?
    Okay, I would like to ask you, what do you need the 
appropriations for?
    Mr. HUERTA. The Congress long ago recognized that 
authorizations for agencies to provide loan guarantee programs 
could have an impact on the Treasury if the potential liability 
was not recognized. So pursuant to the Federal Credit Reform 
Act of 1990, there is a requirement that loan guarantees be 
accounted for in an appropriations act, notwithstanding any 
other provision of loss. So what we need in an appropriations 
act is essentially the ability to enter into the program.
    Ms. VELAZQUEZ. But also under the act, the costs of 
guaranteeing and administering the loan program could be upset 
by fees charged to lenders and borrowers similar to the 7(a) 
program.
    Mr. HUERTA. Sure.
    Ms. VELAZQUEZ. My question to you is have you ever 
contacted SBA so that you could draw from their experience in 
this area?
    Mr. HUERTA. Yes. And we have contacted everyone that 
administers guarantee programs, and essentially, what the 
appropriation deals with is not specifically an appropriation 
of the fee.
    Ms. VELAZQUEZ. Okay.
    Mr. HUERTA. What this is an appropriation for is a risk 
premium as for any lending program in the situation which could 
emerge of a loan default or something like that. That is what 
we need the authority for.
    Ms. VELAZQUEZ. Okay. What happens if a small operator 
cannot get equipped in time due to conditions out of their 
control, like supply chain issues or installation backlogs?
    Mr. HUERTA. Well, as of today, we have no installation 
backlogs, nor do we have a backlog in certifying repair 
stations to do the installation. We are still five and a half 
years ago, and it is for that reason that we encourage people 
to get ahead of this so as to ensure that we do not have an 
installation backlog as we get to January 1, 2020. And we do 
think there are benefits for early adopters because they are 
able to take advantage of the safety benefits, as well as the 
operational benefits that come from deployment of ADS-B. We do 
not want people to wait.
    Ms. VELAZQUEZ. Okay. FAA's strategy right now is to bring 
everyone into compliance at roughly the same time. Can you 
explain the pros and cons of this approach?
    Mr. HUERTA. Well, the requirement was implemented in 2010, 
and it provided a 10-year implementation period for commercial, 
non-commercial, all users of the national air space system to 
be equipped with ADS-B Out by 2010. And the reason for that is 
that you can only have the safety benefit, as well as the 
foundational efficiency benefits that come through ADS-B if 
everyone is equipped. Otherwise, there is no incentive because 
you will have a moving target. So you need everybody in the 
program in order to get the benefits across the national air 
space system as a whole.
    Ms. VELAZQUEZ. Okay. Thank you.
    Thank you, Mr. Chairman.
    Chairman GRAVES. Mr. Collins?
    Mr. COLLINS. Thank you, Mr. Chairman. I will be relatively 
quick.
    As a VFR general aviation pilot, I can tell you, you have 
answered my questions. My biggest concern would be the 
exemption for someone flying in uncontrolled airspace. I think 
that is necessary. You have answered the question. I also think 
your 10-year rollout is quite reasonable, and the fact that you 
can get benefits today, I can imagine a lot of people would go 
ahead and move forward. And there is always a cost issue to 
most anything. I do not think the cost here--for most people 
flying airplanes, there is a basic cost in that hobby, and 
while there is a cost here, I do not think that is going to be 
a detriment to those who want to continue flying, and I think 
the safety far outweighs it. So I applaud everything you are 
doing there.
    But let me bring up one thing maybe a little bit off topic. 
I was county executive of Erie County when Colgan Flight 3407 
went down a mile from my house. That was about five years ago. 
And as frustrated as I was and others with some of the FAA 
delays on the safety issues that came out of the Airline Safety 
and FAA Extension Act in 2010, they are mostly now implemented. 
The pilot fatigue, the pilot training, and the new licensing 
requirements are all now implemented and that is good, but 
could you quickly update me on the last remaining piece, which 
is the pilot record database? In this case, the pilot had 
failed several check rides. He did not disclose that on his 
application to Colgan. There was no way for Colgan to verify 
that, in fact, this particular pilot--and it was 100 percent 
pilot error--crashed because of the lack of knowing that he was 
frankly just not qualified. Can you update me, and those in 
Western New York especially, where we stand on the database?
    Mr. HUERTA. Sure. To go back to the beginning, the Act 
required a 90-day period to begin the development on the pilot 
records database, and we did meet that. We established an 
aviation rulemaking committee in February of 2011, which 
delivered their report to us later that year in July. In 
August, we issued what we call an info. That is an information 
for operators to ensure that the industry is aware of the need 
to retain records, all in anticipation of the development of 
the planned pilot records database. In August of 2012, we 
conducted two IT proof of concept tests to determine whether we 
have a workable technical solution because this is information 
that comes from a whole lot of different sources. Based on 
those results, we did initiate a rulemaking and are currently 
working toward the development of the notice of proposed 
rulemaking, which we hope to publish soon.
    Mr. COLLINS. Any guestimate on when this might be finished?
    Mr. HUERTA. I will have to take an IOU and get back to you.
    Mr. COLLINS. Yeah, could you?
    Mr. HUERTA. Yes.
    Mr. COLLINS. I get questioned about that all the time.
    Mr. HUERTA. Sure. Okay.
    Mr. COLLINS. I yield back, Mr. Chairman.
    Chairman GRAVES. Mr. Schrader?
    Mr. SCHRADER. Thank you, Mr. Chairman.
    Thank you for coming, Administrator. I appreciate it very 
much.
    Can you describe briefly your outreach to the industry 
before the mandate came out and stuff so we have a clear 
impression of how the stakeholders are involved?
    Mr. HUERTA. We are working with the various industry groups 
that represent the segments of the general aviation industry. 
You will be hearing from them in the second panel here on this 
hearing. That includes the manufacturers who represent the 
avionics manufacturers, as well as many of those that are in 
the business of the installations. We are working with the 
electronics industry, who represents both users, as well as 
repair stations that supply it, the Aircraft Owners and Pilots 
Association.
    Mr. SCHRADER. I was referring to before the mandate and 
stuff.
    Mr. HUERTA. Before the development of this it was done 
through the standard public process that we would do in terms 
of outreach for any rule that we would develop and any 
mandatory notice and comment in consultation with stakeholders.
    Mr. SCHRADER. Questions come up about why not use the SBA 
for the loan program and you indicated that there are a bunch 
of agencies that do have loan incentive programs. The SBA I 
would respectfully suggest is uniquely set up to do that sort 
of thing. Rather than have the agency itself recreate another 
process or bureaucracy within itself, it might be smart to 
contract out with the SBA or pick an agency, but SBA is small 
business friendly. They get that. They have a lot of experience 
with the guarantee-type programs. Have you actually talked to 
the SBA and gotten involved with them in a discussion along 
these lines?
    Mr. HUERTA. I have not but our credit team and our finance 
team have talked extensively with the government partners, you 
know, about how to structure this. But to be clear, we are not 
proposing to set up a bureaucracy or an office to do this. The 
application we have is from a private lending entity that we 
would simply be providing the guarantee behind.
    Mr. SCHRADER. Okay. And I am fine with a private entity as 
long as they are reputable and will follow through on that. I 
just would suggest it might be smart to have at least someone 
to compare the two, make sure to compare apples with apples 
frankly. But I think it is an option there.
    Mr. HUERTA. Sure.
    Mr. SCHRADER. And then the request for the appropriation 
authorization. That is a technicality it sounds like. When do 
you think given, working with the provider, maybe the outreach 
here to the SBA, when do you think that might occur?
    Mr. HUERTA. It has to be done in an appropriations act, and 
so it is however that----
    Mr. SCHRADER. It is probably next year is what you are 
suggesting unless there is a specific bill that deals with this 
alone?
    Mr. HUERTA. Probably. Yes.
    Mr. SCHRADER. Okay. Okay.
    And then I guess I just want to thank you personally for 
how the agency works. I have had opportunity to reach out to 
the agency on more than one occasion. We get responses. We get 
telephone calls back. The contract tower program is a big deal 
for a lot of small airports around the country, a lot of 
general aviation folks. And we had an airport in Aurora we were 
concerned about personally, but I think you guys played 
straight with us, talked about what was in the appropriation 
bills or not and how that might happen, and I just appreciate 
the way the agency conducts itself and wish other agencies 
would do the same thing.
    With that, I yield back, Mr. Chair.
    Mr. HUERTA. Thank you.
    Chairman GRAVES. Thank you very much.
    With votes, we will go ahead and move to that. If any other 
members have a question for the administrator, please submit it 
and I will make sure you get it.
    Mr. HUERTA. Thank you.
    Chairman GRAVES. And I would hope to--I do not know if you 
can leave one of your staff around to hear the industry experts 
on the next panel.
    Mr. HUERTA. Absolutely. We will.
    Chairman GRAVES. That would be fantastic. And we appreciate 
you coming up, and I apologize for the votes, but thank you 
very much for taking the time.
    Mr. HUERTA. Thank you, Mr. Chairman.
    Chairman GRAVES. And we will go ahead and seat the next 
panel while we are in recess, and we will be gone for a little 
bit.
    [Recess]
    Chairman GRAVES. All right. We will call the hearing back 
to order. I apologize again for the vote series in the middle 
of this. But our first witness today is Ms. Paula Derks. She is 
the president of the Aircraft Electronics Association, which is 
based in Lee's Summit, Missouri, which I am very proud to 
represent.
    As president of AEA, Ms. Derks presides over an 
organization that provides regulatory representation, training, 
and member services to more than 1,300 general aviation and 
electronics entities in 43 countries. She was named president 
of AEA in 1996 after beginning her career there as managing 
editor of Avionics News.
    Thank you for being here. I appreciate your testimony.

  STATEMENTS OF PAULA DERKS, PRESIDENT, AIRCRAFT ELECTRONICS 
ASSOCIATION; TIM TAYLOR, PRESIDENT AND CEO, FREEFLIGHT SYSTEMS, 
  INC.; BOB HEPP, OWNER, AVIATION ADVENTURES; KENNETH BUTTON, 
  DIRECTOR, CENTER FOR TRANSPORTATION, POLICY, OPERATIONS AND 
                           LOGISTICS

                    STATEMENT OF PAULA DERKS

    Ms. DERKS. Chairman Graves, Ranking Member Velazquez, and 
members of the U.S. House Committee on Small Business, thank 
you for the opportunity to appear before you today to speak 
about the benefits and the challenges of the NextGen mandate on 
the general aviation industry.
    My name is Paula Derks, and I am president of the Aircraft 
Electronics Association, and as Congressman Graves said, we are 
an international organization representing nearly 1,300 
companies of which nearly 80 percent are small businesses. 
Included in our membership are nearly 200 avionics 
manufacturers, many of whom are producing systems to meet ADS-B 
Out requirements.
    Our largest category of membership is the 900-plus 
government-certified repair stations with approximately 700 of 
those located here in the United States and certified by the 
FAA to maintain and install avionics, and an additional 200 
repair stations in more than 40 countries around the world.
    My comments today will focus on three primary areas. Number 
one, industry's ability to meet the mandate. Number two, 
certifying new equipment and receiving field approvals on the 
installation. And number three, the refocused effort needed 
from the FAA leadership to expedite implementation of this 
safety-enhancing technology and sign off on the 
congressionally-authorized financial incentives for the 
aircraft operator.
    Right here today on this date, repair stations have the 
capacity to perform ADS-B installations at a rate necessary for 
the expected 160,000 general aviation aircraft to comply with 
the mandate by January 1, 2020. Obviously, demand is expected 
to increase as the deadline nears, and a recent survey of our 
membership indicates that more than 75 percent of the 700 U.S. 
repair stations will expand and hire new employees and new 
technicians and support staff. This alone is job creation.
    But industry has received mixed signals from the FAA in 
regards to the mandate, and this leads to confusion, rumors, 
and mistrust of the very agency charged with implementing the 
Next Generation Air Transportation System in our nation.
    As you might imagine, when it comes to being forced by a 
government mandate to spend hard-earned, personal cash to 
upgrade when benefits to the consumer have not yet been fully 
realized, it is not an easy sell. But since the mandate was 
first announced in 2010, my association, along with our sister 
associations, have worked hard to educate industry and 
encourage early equipage.
    From day one, Administrator Huerta's office has been a 
vocal proponent of NextGen. They have promised a reasonable 
transition, and they have worked to make sure the ground 
infrastructure is in place, only to have their efforts derailed 
by the back office of the FAA, whose individual interpretation 
of the rules, excessive micromanagement on projects, and 
personal opinions compete with the overall objectives of this 
program.
    Rumors are swirling that the mandate will be extended. 
These rumors and mistruths create a very confused consumer. 
Several of our repair stations tell us that their customers, 
the aircraft operators have decided to wait until the last 
minute to equip because they assume the FAA will operate as 
usual, with delays, and they will have to extend the deadline 
to equip.
    And for operators who have decided to equip early, the FAA 
is still a constraint. We have a member in Las Vegas who 
supports a helicopter fleet operator wanting to equip a fleet 
of 90 helicopters. He currently has the correct ADS-B equipment 
installed, but because his aircraft has not been FAA 
``approved'' for ADS-B operations, he cannot turn the system 
on.
    Keep in mind, the systems he is installing in this fleet 
have already been approved by the FAA in thousands of 
airplanes, but because this is a fleet of helicopters, the 
approvals do not count. So the penalty for this operator, who 
is willing to early equip, is experiencing six months of costly 
administrative burden and tens of thousands of dollars in 
certification fees.
    To avert a chokehold as early as 2016, the certification 
and approval process must be streamlined. The AEA is also 
helping promote the NextGen GA Fund. This fund is designed to 
take advantage of the public-private partnership funding 
authorized by Congress. It creates low interest, privately-
funded government back loans for aircraft operators. The lack 
of FAA's willingness to embrace the fund is a testimony to the 
cancer that has reaped havoc on the agency for the past decade. 
The agency seems to have a culture of ``cannot,'' rather than a 
culture of ``can do.'' We simply ask the FAA administrator to 
restore the culture of ``can do'' to his agency and encourage 
his agency and encourage his workforce to work with the 
industry. This should be a partnership with a shared goal, and 
that being safety and efficiency. It is this type of historical 
culture that has created the greatest general aviation industry 
in the world.
    In closing, the challenges that we ask Congress to address 
include an effort by the FAA to incentivize aircraft owners by 
immediately signing the loan guarantee certificate for the 
NextGen GA Fund, streamlining the certification and approval 
process, and restoring aircraft owners' confidence in the FAA 
that this deadline will not be extended and their money will be 
well spent.
    Thank you for this opportunity to testify on behalf of the 
general aviation electronics industry.
    Chairman GRAVES. Our next witness is Tim Taylor, who is the 
president and CEO of FreeFlight Systems, which is an aviation 
manufacturing company based in Texas that is developing 
innovative solutions to assist in NextGen compliance.
    Mr. Taylor has 35 years of leadership experience in the 
aerospace and defense industries, and prior to starting 
FreeFlight Systems, he was the CEO of Elbit Systems of America, 
a global defense electronics and commercial aviation company. 
There, he pioneered new technology-based systems for customers, 
including Gulf Stream Aerospace and Federal Express. Mr. Taylor 
is testifying today on behalf of the General Aviation 
Manufacturers Association.
    We appreciate you being here and look forward to your 
testimony.

                    STATEMENT OF TIM TAYLOR

    Mr. TAYLOR. Chairman Graves, Ranking Member Velazquez, and 
other distinguished members of the Committee, my name is Tim 
Taylor, and I am president and chief executive officer of 
FreeFlight Systems. Today, I have the privilege of also 
representing the General Aviation Manufacturers Association, 
and I am honored to provide testimony to the Committee on their 
behalf.
    I appreciate the opportunity to discuss today the benefits 
of the nation's transition to NextGen for general aviation and 
to highlight the importance and ability of industry to meet the 
FAA's 2020 Automatic Dependent Surveillance or ADS-B Out 
mandate. As the leader of a small aviation manufacturing 
business, I thank the Committee for holding this hearing and 
look forward to describing how NextGen avionics, specifically 
ADS-B equipage, is readily available, affordable and easy to 
install.
    FreeFlight Systems designs, manufacturers, and supports 
electronic systems that enable the NextGen air traffic 
management transformation. We certified our first ADS-B Out 
radio in 2011, obtained our first installation approvals in 
2012, and have delivered around 1,000 ADS-B radios and around 
3,000 ADS-B position sources since then.
    As a small business, we made the investments, over $3 
million, upfront to allow aviation operators the ability to 
meet the FAA's 2020 ADS-B mandate. In short, we have already 
accomplished the ``heavy lifting'' required to make our 
solutions readily available, affordable, and easy to install. 
We are seeing rapid acceleration today in the adoption and 
installation of ADS-B systems in both airborne and airport 
surface vehicle applications.
    FreeFlight Systems does all this as a small business in 
Texas that currently employs 53 people. We either perform or 
source our manufacturing in the United States, predominantly in 
Texas, but we are also part of the global aviation industry, 
exporting around 40 percent of our products.
    The potential benefits of NextGen to the aviation community 
are significant. The transformation enables improved safety, 
increases the capacity of the airspace system, and reduces the 
cost and complexity of air traffic control. For GA operators, 
many of these benefits, such as access to weather and traffic 
information, or ADS-B In, are immediately available upon 
appropriate equipage, but realizing the full-potential of 
NextGen across the national airspace system will require 
significant additional work by the FAA.
    The more airplanes that equip, the more dramatic the 
improvements in capacity and safety become. The full potential 
can be realized only when all aircraft in controlled airspace 
are equipped, which the FAA has mandated by January 1, 2020. 
The rule and mandate were established early in 2010, giving 
aircraft operators 10 years to equip. Equipment manufacturers 
have had longer. The system architecture was finalized in 2007 
and the rules and requirements have not changed substantially 
since then. The ground infrastructure for the system is largely 
deployed and is operational across the country. There are no 
regulatory or infrastructure barriers to full equipage to meet 
the mandate. This long-term stability is essential if small 
businesses are to participate in the NextGen transformation.
    For the light end of GA, ADS-B equipment can be relatively 
inexpensive and easy to install. FreeFlight Systems offers 
complete solutions today at a list price that is less than 
$4,000. That is what it looks like as a small system. And we 
are seeing installation times that are typically in the 20 to 
40 range, for a total cost of $6,000 to $8,000. This estimate 
includes rule compliant ADS-B Out, as well as ADS-B In for 
aircraft that have no modern avionics at all. In newer 
aircraft, ADS-B In, for example, can utilize existing display 
to show beneficial situational awareness. In an older aircraft 
that has not seen a new piece of avionics since the 1960s, ADS-
B can simply utilize an iPad.
    For NextGen to be effective, however, systems users need to 
adopt the technology. For the system to work to its full 
potential, every aircraft that enters controlled airspace needs 
to meet minimum equipage standards or it will 
disproportionately disrupt operations. A mandate is the only 
way to ensure that happens and to ensure that everybody who 
invested in the new system, industry users and government, get 
the return they deserve on the investments that they have made.
    In our view, the best incentives from government and 
industry are already in place: infrastructure, a firm schedule, 
stable requirements, and aggressive pricing. However, there is 
always more that could be considered.
    One area of concern is the inconsistency in the application 
of certification standards across different FAA branches and 
regions. Many NextGen programs are being given priority in 
modification approvals, but strong leadership and training can 
address these inconsistencies, reducing delays, and increasing 
the number of installers willing to aggressively price and 
perform ADS-B installations.
    Low interest, government-backed financing has been 
discussed in the marketplace and authorized by Congress and is 
popular among FreeFlight customers. Congress should examine how 
this can be made to move forward.
    The timely introduction of NextGen technologies is vital 
supporting the safe and efficient operation of our nation's 
airspace system and to maintaining U.S. global leadership in 
aviation. Any wavering or mixed signals hurt NextGen progress, 
safety, and small businesses that are playing by the rules.
    Thank you for the opportunity to testify this afternoon, 
and I look forward to answering any questions that you may 
have.
    Chairman GRAVES. Thank you, Mr. Taylor.
    Our next witness is Bob Hepp, who is a retired Army 
lieutenant colonel and owner of Aviation Adventures, which is a 
flight training school based in nearby Manassas. After 
graduating from Bowling Green State University and obtaining 
his private pilot certificate in 1977, Mr. Hepp joined the 
Army, and in 1989 started Aviation Adventures with one aircraft 
operating off a public ramp in Laughton, Oklahoma. Aviation 
Adventures has won the Aircraft Owners and Pilots Association 
Outstanding Flight School Award twice and won its 2013 
President's Choice Award for innovative contributions to the 
flight training community.
    Mr. Hepp is testifying on behalf of AOPA, and we appreciate 
you being here and look forward to your testimony.

                     STATEMENT OF BOB HEPP

    Mr. HEPP. Thank you, Chairman Graves, Ranking Member 
Velazquez, and members of the Committee. I am Bob Hepp, the 
owner of Aviation Adventures, a flight school with locations in 
Manassas, Warrenton, Stafford, and Leesburg, Virginia.
    Our staff of 41 employees provides flight instruction at 
all levels from initial flight training through the Airline 
Transport Pilot certification. We also provide rental aircraft.
    I am also representing the Aircraft Owners and Pilots 
Association (AOPA). I have been a member of AOPA since 1981. 
AOPA's mission is to effectively represent the interests of its 
more than 350,000 members as aircraft owners and pilots 
concerning the economy, safety, utility, and popularity of 
flight in general aviation aircraft.
    My testimony today will cover the following points:
    One, the general aviation community has long supported the 
move from ground-based to satellite-based navigation. However, 
at this time, the benefits associated with the FAA mandate are 
unclear and inadequate for many general aviation users.
    Number two, the FAA's mandate to equip ADS-B Out by 2020 is 
costly and will be prohibitive for most small flight schools, 
businesses utilizing aircraft, and recreational aviators.
    Three, providing low-cost loans for GA equipage and 
leveraging existing cockpit technologies, such as handheld 
devices, can help move NextGen modernization forward without 
imposing unmanageable burdens on small businesses.
    For most general aviation pilots, there is no direct 
benefit of the ADS-B Out mandate. Complying with the mandate 
will simply allow pilots to continue using the national 
airspace system that they are using today. Complying will be 
prohibitively expensive for many small aviation businesses, 
including flight schools. Aviation Adventures owns and operates 
39 aircraft. I estimate that the total cost to equip these 
aircraft for minimal compliance with the ADS-B mandate will be 
$312,000, a major investment for small businesses and many 
flight schools, one that many flight schools will be unable to 
make.
    Unlike investing in additional aircraft or facilities, the 
money spent on ADS-B Out equipment will not bring a direct 
return because it will not increase our customer base, will not 
allow us to serve more clients, provide new capabilities, or 
otherwise help grow our businesses. For that reason alone, it 
is not currently a sound business decision to equip early.
    Continuing uncertainties about exactly what the FAA will 
ultimately require to fulfill the mandate and the tendency of 
technology prices to drop over time are further disincentives 
to equip early. We have already seen a decrease in prices for 
ADS-B equipment, just as Mr. Taylor just showed us, since the 
mandate was finalized in 2010, making it in the best interest 
of business owners and aircraft owners to wait before making 
that investment.
    Because of the high cost and low return on equipping for 
the 2020 mandate, general aviation operators need a little 
assistance. The establishment of a fund to continue low-cost, 
federally guaranteed loans to equip GA aircraft could provide 
the financing needed to meet the mandate.
    Handheld devices currently provide ADS-B In information, 
significantly enhancing safety at very nominal cost. Many 
aircraft operators are already using handheld devices in the 
cockpit, and similar technology could be used to provide ADS-B 
Out.
    In conclusion, I believe in its current form, the current 
ADS-B Out mandate fails to provide affordable benefits and 
support for general aviation operators. We look forward to 
working with the FAA to help develop affordable ADS-B solutions 
for general aviation operators and to help the FAA in their 
efforts to educate the general aviation community on the 
benefits and options provided by these solutions.
    On behalf of the 41 employees of Aviation Adventures and 
the more than 350,000 members of AOPA, I appreciate your 
leadership in addressing the concern of the GA industry and 
also to continue to help small businesses thrive and grow 
nationwide.
    Thank you for the opportunity to appear before the 
Committee.
    Ms. VELAZQUEZ. I am sorry. I am kind of lost. I am just 
working on the questions as I listen to you.
    Yes, Mr. Chairman, it is my pleasure to introduce Kenneth 
Button. He is the university professor of Public Policy at 
George Mason School University, where he is the director of the 
Center for Transportation Policy, Operations, and Logistics. He 
has published or has in press some 80 books and over 400 
academic papers in the field of transportation economics, 
aviation policy, and related subjects. Professor Button is the 
editor of numerous academic journals in the fields of aviation 
and aerospace policy, tourism, and transportation. Prior to 
coming to George Mason University in 1997, he served as a 
transportation expert for the OECD and taught at several 
universities throughout the world. Welcome.

                  STATEMENT OF KENNETH BUTTON

    Mr. BUTTON. Thank you very much, Chairman Graves, Ranking 
Member Velazquez, and Committee members.
    We are clearly going through an age of technical change. We 
are moving from a technology in aviation, which is probably 80 
years old, to one which is really 20 years old. I do not mean 
that in any insulting fashion. We want a technology which is 
robust. We do not want today's technology.
    This change is clearly causing friction. It is not easy. My 
recent experience has mainly been in Europe. We have something 
like 35-40 countries trying to move forward in a single 
European skies, very similar to the NextGen initiative here. I 
would warn of delaying any introduction of ADS in this country. 
Europe has done this so far once. There were plans in Europe to 
introduce ADS for new aircraft from 2013, a retro fit from 
2015. That has been pushed back for two years, and probably 
another pushback is coming. That is not the way to incentivize 
introduction of new technology. So I would hope people will 
stick firmly to the 2020 deadline. I think it is very important 
that this is done.
    In terms of the benefits, the pros, if you like, of ADS, I 
think there are safety benefits but they increase exponentially 
as more people adopt the technology. It is no good having one 
or two people. And in the long term, I think one has to think 
of a full arrangement including ADS In as well as ADS Out.
    Aviation is growing in this country, and giving the 
licensing I believe it was yesterday of a drone service in 
Alaska, we are going to see unmanned vehicles out there as well 
in larger numbers, I believe, over the next 20 or 30 years. And 
there is a need to actually integrate the two sectors, the 
manned and the unmanned. And I think moving towards ADS is one 
element in that.
    In terms of the costs, which I think can be questioned in 
some senses, it is not an easy thing to adopt a new technology. 
It does cost money. The FAA has put money into the ground 
facilities. That is not a small sum of money, and the airlines, 
the commercial airlines are putting equipment in and the 
general aviation community area. I think that the costs 
sometimes which are missed in the general aviation community 
are the time it takes to put this equipment in. A lot of 
general aviation does involve commercial activities--air taxis, 
training activities, business jets, and there is a downtime 
equipping the new technology. So the cost is not simply the 
financial cost of acquiring the technology; it is also the 
implementation and setting up of the arrangements to have it 
installed.
    There are other issues which I think have been discussed. I 
want to spend a couple of minutes though just talking about the 
transition. Transitions into any new technology have two 
elements if they are of any use, a stick and a carrot. The 
stick in this case is you have got to have it in place by 2020. 
Bang. The carrot it seems to me is the problem. The initial 
ruling was made in 2010. That is four years ago. There should 
be some initial thought about how to incentivize early uptake 
of that point. You do not wait until halfway through and then 
move forward to a situation of offering loan guarantees, et 
cetera, to help people adopt the new technology. There is a 
problem here. Partly, obviously, there seems to be some 
difficulty with the FAA implementing the current arrangements, 
but one would hope perhaps one would move more rapidly at the 
early stages to get people to equip much more quickly so you do 
not get any potential backlog.
    Other countries are doing things differently and it is 
worthwhile looking at them. I am not saying they are better. I 
personally do not think that they are. Canada tends to be using 
a sort of geographical outward movement taking airspace which 
is currently under no radar control and introducing ADS there 
and expanding it geographically outwards. Other countries, I 
believe Australia, are trying to expand it downwards, higher 
flights requiring equipping before flights at lower levels. So 
there are options. I am not all together sure they actually are 
better than the ones in the U.S. I think the bigger bang 
approach here where everyone has to have it in controlled 
airspace is a wise and sensible one. My concern is quite simply 
that the incentive structure has not been developed quite as 
thoughtfully as it might have been. I appreciate within that 
there are budgetary constraints at the macroeconomic level 
which would slow this down, but I one would hope that the FAA 
will now move forward more rapidly and get moving on putting in 
place the finance which is going to be available to help with 
the adoption of ADS.
    Thank you very much.
    Chairman GRAVES. Thank you very much.
    We will move to questions, and we will start with Mr. 
Hanna.
    Mr. HANNA. Thank you.
    There is pretty much unanimity here that--and who can blame 
anyone for believing that bureaucracies will not meet 
deadlines, make rules clear, put people in a position where 
they spend money that they find out that they did not have to, 
or did not have to in time, or to your point, Ms. Derks, 
technology changes.
    So the biggest thing you are all asking for is some degree 
of certainty. There are plenty of ways to finance things. We 
could do it through the Small Business is one of them. It 
strikes me that you cannot blame people for waiting until the 
last syllable of recorded time with our history on most 
everything in government. I am a pilot. I certainly would not 
go out and--you know, I bought an ELT that I was required to 
buy to transfer frequency. Sam knows about it, and I still do 
not need the old one, and it is years. So, and I can really 
appreciate Mr. Huerta's point, the administrator, who is moving 
forward to do his job and it is just--it is more about setting 
deadlines, meeting deadlines, having guarantees, and Flight 
School has some 32 planes you said?
    Mr. HEPP. Thirty-nine.
    Mr. HANNA. Thirty-nine planes. You know, $300,000 is a lot 
of money, but let us be honest. You need to train all those 
pilots to use this equipment because it is going to be what 
they are going to use. So certainty for you makes a big 
difference, too. And you can probably do it easily over time, 
but much less easier if you put it off, but you are not really 
sure that you do not have to or could not put it off.
    I wish I had a question to ask you. I just sympathize with 
all of you. I wonder though, Mr. Hepp, because you are right in 
the thick of this. You are in a tough industry training people, 
very expensive feet and a lot of people, so you are probably 
the person who is most detrimentally affected being in the low 
end of GA with all due respect. So you are kind of prepared to 
do this but you are concerned that you are going to do things 
that will not benefit you that cost you a lot and maybe the FAA 
will make a mess of it. Would you like to respond?
    Mr. HEPP. That is pretty much the crux of the issue is that 
as Ms. Derks pointed out, like anything else, if you buy a flat 
screen to put up in your house today, the only thing you are 
going to be guaranteed is that next year or two years from now 
you can pay half the price for that same TV. And the same thing 
is going on in electronics, just like Mr. Taylor just pointed 
out to us. So there is no incentive to wait. The only thing 
that is going to happen is that capabilities are going to go 
up, the prices are going to come down, the mandate date may 
shift backwards. It may change. They may abandon it. They had 
the microwave landing system a number of years ago that they 
started and it went away. So the only thing that we know is 
that what we are dealing with today is not going to be what it 
ends up in final state. So there is no incentive right now for 
an operator to equip early but the benefits come from, as 
Professor Button pointed out, from everybody going out there 
and equipping early because it does not do any good to have 
that technology available in your cockpit if there is nobody 
out there transmitting the ADS-B Out signal to be received.
    So that is the issue that we are at, and if everybody waits 
till the last minute, we are not going to have the capacity----
    Mr. HANNA. But every incentive is pointing to the notion 
that people should wait till the last minute----
    Mr. HEPP. Exactly.
    Mr. HANNA.--because of the way the process is not just 
rolled out, but to Ms. Derks's point, the way technology is put 
together, the way pilots can--I mean, I cannot tell you the 
number of GPSs I have owned in my life and there is always 
something new, fancier, better that really is better. I am just 
glad I am not you today.
    Mr. Taylor, do you want to----
    Mr. TAYLOR. Yeah, I would like to talk to that a little 
bit.
    I am in the technology business. I am the GPS guy. The GPS 
in this thing--this is a UAT. This is a transceiver with GPS in 
it. The GPS in that is a 2003 kind of vintage WAAS GPS. It has 
been updated a little bit in the last couple of years, but that 
technology is mature and I cannot make--that particular GPS, I 
cannot make it any smaller. I cannot make it any less 
expensive. And certify. There are certain minimum standards we 
have to meet with this kind of equipment that you cannot go 
below. This is a primary air traffic control device. You put it 
on your aircraft and from that moment on other aircraft around 
you, the rest of the world is depending entirely on what comes 
out of this box to make decisions about separation, movement of 
aircraft, and so on. So the standards that you have to meet are 
not going to drop--they are not going to drop below the 
standards of day-to-day. They were well thought out. They were 
well established. I cannot build this any cheaper. I am telling 
you. I cannot build this any cheaper than I am selling it 
today. This is priced--I am buying materials in quantities of 
1,000. I am not selling in thousands. I am selling in hundreds, 
so I am taking risks on that. But that is the price. The cost 
is not going to go down of the equipment.
    And I think in terms of the rules themselves, in my 
testimony I am asking the rules not to change. I think the 
rules should not change. I think the rules will not change. I 
think it would be very nice to really hear the FAA in some 
consistent and concrete way tell us.
    Barriers to equipage, we are seeing people equip.
    Just one more little thing. I am sorry.
    There are benefits today, by the way. So the FAA provides 
to users of this equipment traffic information, weather 
information. That comes today. You do not need everybody to 
equip to that. That happens today. For flight school, we can 
provide you fleet tracking, so you can use the ADS-B technology 
to track the assets that you have flying for safety, for fuel 
efficiency, for many reasons. So the raw technology is really 
just a cornerstone of many, many, many exciting applications, 
many of which are available today.
    Mr. HANNA. My time is expired. Thank you for your 
indulgence.
    Chairman GRAVES. Ms. Velazquez?
    Ms. VELAZQUEZ. Professor Button, you mentioned that other 
countries have taken a different approach to implementing 
satellite-based air traffic control. For example, Canada's 
geographical spread system. Do you think a different approach 
would have fewer negative impacts than FAA's current strategy?
    Mr. BUTTON. Probably not. I think that the big thing you 
have to remember about the United States is the sheer scale. It 
dwarfs any other general aviation market in the world. There 
are some figures in my written documentation to give you an 
impression of this.
    I think when you have a large market of this kind you 
really have to go for a big bang approach. It is pretty 
heterogeneous. Markets interact with one another and I think of 
these as markets. I am an economist by training, so I think the 
U.S. has actually been very wise in taking a big bang approach. 
It is not totally big bang because uncontrolled flight space 
does not require ADS. It does not have complete coverage of the 
system, but it is fairly reasonable I think given the nature of 
the country, given the nature of general aviation here.
    Ms. VELAZQUEZ. Thank you.
    Ms. Derks and Mr. Taylor, you both mentioned rumors that 
the FAA may delay the 2020 mandate, yet the administrator today 
stated that that will not happen. I would like to hear why you 
think there will be a delay?
    Ms. DERKS. As of today, we do not know that there will be a 
delay. I am simply expressing that those are the stories and 
the rumors in industry right now that based on FAA's past 
history, there most likely will be a delay. In the past five 
decades, I do not know of one avionics mandate that has not 
received an extension by the FAA. And I think I can speak for 
Mr. Taylor, we are both asking for the FAA not to extend this 
mandate; to try to meet the January 1, 2020 mandate and work 
with industry to help us educate the consumer as well.
    Ms. VELAZQUEZ. Okay.
    Mr. TAYLOR. Just to add, we hear it from customers. This is 
where we hear the rumor. When we are talking to customers about 
equipping, then one of the reasons that they give is the reason 
you gave. The FAA has never successfully brought one of these 
programs in on time. And that is the concern.
    I agree with Paula. The FAA seems to be doing all the right 
things in terms of providing the framework, providing the 
rules. We are not seeing any sign that they are wavering. But a 
couple of years ago I was hearing them shouting from the 
rooftops that there will be no wavers, no exceptions. You have 
got to do that. I have not heard that so much recently, so it 
would be nice to hear that shouting from the rooftops again.
    Ms. VELAZQUEZ. Okay. So you all touch on the need for a 
loan guarantee program to help general aviation operators 
purchase equipment. Is there any data available to support this 
assertion?
    Mr. TAYLOR. I can give you a very small sample. We are a 
small company. So two weeks ago we made 70 outgoing calls to 
people who had asked about the system and who we had quoted to 
but had not purchased. And we asked them, are you going to 
approach this? What is the decision? Seventeen of them 
purchased, which was wonderful, by the way. Ten said they were 
waiting for the loan guarantee program.
    Ms. VELAZQUEZ. They are waiting for the loan guarantee 
program.
    Mr. TAYLOR. It had been announced. We had announced it. We 
thought it was happening. So that was it. And then the others 
were various not decided yet.
    Ms. VELAZQUEZ. I am troubled with the fact that in 
reference to the question made by the chairman and followed by 
me regarding the loan guarantee program, he stated that they 
needed appropriation language or an appropriation. And when I 
read the statute, the reauthorization, it says ``Subject to the 
ability of appropriated funds, the secretary may use a 
financial instrument to facilitate public-private financing for 
the equipage of general aviation and commercial aircraft. To 
the extent appropriations are not made available, the secretary 
may establish the program provided the costs are covered by the 
fees and premiums authorized by the section.''
    So what it means, Mr. Chairman, is basically that they have 
the authority to create a program that is offset with the fees. 
So we should send a letter to the administrator asking for 
clarification. And if, in fact, there is no appropriation, the 
fact of the matter is that they have not submitted a request 
for such an appropriation. So clearly, the message is that they 
have no intent to create such a program. The authority is there 
and we should request clarification or a certain date as to 
when they are going to have a program up and running.
    I would like to ask Professor Button, as you know, 
congestion around airports results in delays and reduces safety 
if air traffic control cannot accurately track flights both in 
the air and on the ground. How does ADS-B technology help 
controllers better manage traffic around airports?
    Mr. BUTTON. Well, in a number of ways. One is you have 
immediate information, the current system of primary 
surveillance where you send the beam out and it bounces back. 
There are gaps in the information. So you have got more 
continuity in the information flow you have got.
    There is the ability also to see them fairly easily. I 
think the main advantage will come with congestion when you get 
both a full implementation of ADS In and Out. So the airlines 
can come through and they can sort of interact with one 
another. It is a difference between commercial aviation--
scheduled commercial aviation I should say accurately, and 
other forms of aviation in the sense that they are in sense 
operated from the ground. They have ground controllers who 
maneuver the commercial aircraft we fly in to put them in order 
for landing to make connections and so on. That would be 
improved. UPS is clearly using it in some of the freight 
carriers which is advantageous to them.
    General aviation, not many places are going to have a huge 
impact on congestion I do not think because a lot of the flying 
is done at relatively small airports. Not always, of course. So 
the main gains I think here with congestion are probably more 
with the commercial scheduled carriers because they can manage 
their schedule better. But, of course, there are some airports 
which do have a quite significant general aviation, 
particularly business aircraft coming in, and there again, the 
controllers have more information exactly where things are.
    And the other factor, I think, is the weather information 
we keep forgetting. There is some free information in this. 
Weather information and other information of that kind can also 
affect decisions of pilots of how to approach delayed flights 
and so on which can be helpful in congestion control.
    Ms. VELAZQUEZ. Thank you.
    Thank you, Mr. Chairman.
    Chairman GRAVES. Mr. Luetkemeyer?
    Mr. LUETKEMEYER. Thank you, Mr. Chairman.
    A lot of the questions I had have already been asked here, 
so let me just start with Mr. Hepp, you mentioned a while ago 
something about a handheld device. Has the technology gone to 
where it is a handheld device now or something smaller and 
easier to handle, cheaper, or something like that? Are we 
headed that direction?
    Mr. HEPP. What is available right now is ADS-B In 
technology in a handheld form.
    Mr. LUETKEMEYER. Do you consider that handheld?
    Mr. HEPP. This is an installed--this would go actually 
installed on the aircraft, but apparently, there are 
applications, iPad applications out there ForeFlight, Garmin 
Pro, several others that then can be mated with an antenna 
using either Wi-Fi or Bluetooth technology, and that antenna is 
entirely--it has got a self-contained battery. You just turn it 
on, set it someplace where the antenna has a view of the sky, 
and you get all of the ADS-B In information that is available. 
So any aircraft that is equipped with ADS-B Out technology, you 
will see that aircraft pop up as traffic on an iPad screen. And 
also, the weather information that Professor Button was talking 
about is available from the ADS-B sites that are now--I believe 
that array of sites is fairly robust in the U.S. So weather 
information then is also immediately available to pilots at a 
very low cost. The antennas out there currently run in the 
neighborhood of $800, and then the iPad and the applications 
for the iPad are somewhere between $75 and $150.
    So for that minimal investment, you can get all or most of 
the benefits of ADS-B on the inside, but the requirement is for 
ADS-B Out to broadcast your position information so that other 
ADS-B users with an In capability can see your position.
    Mr. LUETKEMEYER. Okay.
    Someone mentioned a while ago something about drones. Do 
drones have to have this device? Mr. Button, is that you?
    Mr. BUTTON. Very good question, actually. I have no idea. 
One would hope they probably do. There has only been one 
licensed grantor as far as I understand and that was to inspect 
pipelines in Alaska. That was yesterday, I believe. But 
clearly, the FAA is looking at drones very carefully and they 
presumably--I have not thought about this--come under general 
aviation. Hot air balloons do, so drones presumably might have 
to.
    Mr. LUETKEMEYER. Mr. Taylor?
    Mr. TAYLOR. There is work ongoing right now on this, and 
the FAA recently set up five different test sites across the 
country to manage integration of UAVs and manned aircraft at 
different levels. One was in Texas. A&M is doing it. One is in 
Nevada. And I think you will see that technology will become 
part of the solution for putting ummanned vehicles in the 
airspace. But in terms of----
    Mr. LUETKEMEYER. So it is not required right now?
    Mr. TAYLOR. It is an airspace rule, so the way the FAA 
and--we are on the Joint Government Industry Working Group for 
ADS-B, and the way it has been explained in that working group 
is that it is an airspace rule. So it does not matter if you 
are an F-16 or a UAV or a home build.
    Mr. LUETKEMEYER. Gotcha.
    Mr. TAYLOR. You are going to have to comply with the rule 
to operate in that part of the airspace.
    Mr. LUETKEMEYER. Very good.
    Mr. TAYLOR. May I also comment quickly on the ADS-B Out 
technology again and the handheld? We firmly believe that you 
cannot, should not use any kind of portable technology for ADS-
B Out. For ADS-B In, I agree. But for Out, as I was saying 
earlier, you land at an airport in a small aircraft with a 757 
landing next to you, he is going to be making decisions, and 
air traffic control is making decisions of safety of life for 
him and for his people based on what you are saying coming from 
your aircraft, and I think you do not want that to be from 
something you put in your pocket and walk away from the 
aircraft with. It is just not that kind of technology. It has 
to be installed, verified, and proven.
    Mr. LUETKEMEYER. Very good. Thank you.
    Mr. Button, Professor Button, you talked about some of the 
stuff that went on in Europe with regards to delays. What was 
the outcome of the continue to delay, delay, delay? Were there 
negatives? I mean, people get hurt, costs go down, that is a 
positive. What did you see from those constant delays?
    Mr. BUTTON. Well, as far as I know, there are no detailed 
studies of this. There are no studies of this. It is very 
difficult to pick up because of the----
    Mr. LUETKEMEYER. If something does not happen.
    Mr. BUTTON. It does not happen--it's counterfactual if you 
like what is going on.
    Mr. LUETKEMEYER. Right.
    Mr. BUTTON. I think it is rather indicative to have a 
bigger problem in Europe. The European initiative of the Single 
European Sky of which ADS is a component is really to 
integrate--it depends how you do your numbers--37 different 
systems. You have got one system with the FAA here. So the 
problems are different. General aviation is hardly mentioned in 
the discussions quite bluntly.
    Mr. LUETKEMEYER. Okay.
    Mr. BUTTON. Military aviation is because we share disparate 
military airspace, but general aviation is not a major 
consideration.
    Mr. LUETKEMEYER. Thank you. My time is up.
    Thank you, Mr. Chairman.
    Chairman GRAVES. Quick question for Ms. Derks.
    If we do not start doing some installation pretty quickly, 
we are going to run into a real backlog problem. Would you 
agree? If you just do the numbers?
    Ms. DERKS. Most definitely. If you do the math, when we can 
safely do 100 installs today, today's date, but every day that 
is delayed and every day that there might not be incentives 
such as a government-backed loan program, those daily installs 
will increase. And you do the math. With the approximately 700 
U.S.-based repair stations that are capable of doing ADS-B Out 
installs, you can quickly surmise that we are going to have a 
huge backlog.
    Chairman GRAVES. My final question for each one of you, 
real quick, if you could give the FAA one piece of advice on 
moving forward with this, now is your opportunity. What would 
it be?
    Mr. Button, I will start with you.
    Mr. BUTTON. You are looking at me. Get moving with the 
cash.
    Chairman GRAVES. Mr. Hepp?
    Mr. HEPP. I think if they worked a little harder to educate 
the general aviation public as to what the benefits and the 
timeline and reinforce that they are either going to slip the 
timeline or they are going to hold on the timeline, and then to 
make it very, very clear to operators at each level, whether it 
be a flight school, an individual operator, or a business that 
owns an aircraft, a charter operation, each type of business, 
to let them make informed decisions on when they are going to 
equip their fleet, what makes the most sense for them to equip 
their fleet to meet the requirements of the 2020 mandate.
    Chairman GRAVES. Mr. Taylor?
    Mr. TAYLOR. I would say hold fast to the mandate, hold fast 
to the rules, and provide leadership for your field operations 
so there is consistent application of regulation across all 
installs.
    Chairman GRAVES. Ms. Derks?
    Ms. DERKS. And I am going to expand on that. I would ask 
them to better communicate--headquarters to the aircraft 
certification offices to the flight standards, district 
offices, to the rotorcraft, the airport or airplane 
directorate, and the small airplane directorate, communication 
so that they are uniform in their regulations and their 
certifications and in their installation approvals as well. And 
to please sign the loan guarantee for the finance incentive 
program.
    Chairman GRAVES. Well, I want to thank you all for 
participating today, and your testimony is going to help us 
better understand both the benefits that the FAA's NextGen 
initiative is going to provide, as well as the challenges to 
the GA community, what it is going to face in complying with 
that 2020 mandate. And it is clear that widespread industry 
adoption is going to be vital in this whole process. But in 
order for it to occur, the GA community has to have a way of 
equipping.
    It has been an honor for me and the other Committee members 
to hear the FAA administrator and to hear you all, the industry 
leaders, and I appreciate you coming in. Some of you from a 
long way.
    But I would ask unanimous consent that members have five 
legislative days to submit statements and supporting materials 
for the record.
    Without objection, that is so ordered.
    And with that, the hearing is adjourned. Thanks.
    [Whereupon, at 2:45 p.m., the Committee was adjourned.]
                            A P P E N D I X


    STATEMENT OF MICHAEL P. HUERTA, ADMINISTRATOR, FEDERAL AVIATION 
  ADMINISTRATION, BEFORE THE COMMITTEE ON SMALL BUSINESS, FAA'S 2020 
NEXTGEN MANDATE: BENEFITS AND CHALLENGES FOR GENERAL AVIATION, JUNE 11, 
                                 2014.


    Chairman Graves, Ranking Member Velazquez, Members of the 
Committee: Thank you for the opportunity to speak to you today 
about the Next Generation Air Transportation System (NextGen), 
the 2020 mandate, and the benefits and challenges of ADS-B 
equipage for general aviation.

    Through NextGen, the FAA is changing the way the National 
Airspace System (NAS) operates to achieve greater efficiency 
and predictability in air travel. NextGen will improve safety 
and support environmental initiatives such as reducing 
congestion, noise, emissions and fuel consumption through 
increased efficiency. NextGen will allow the NAS to expand to 
meet future demand and support the economic viability of our 
country's aviation system. Through NextGen, the FAA is moving 
from ground-based surveillance and navigation to more dynamic 
and accurate airborne-based systems and procedures in order to 
enhance capacity, reduce delay, and improve environmental 
performance.

    Automatic Dependent Surveillance-Broadcast (ADS-B) is a key 
component of NextGen, which will move air traffic control (ATC) 
from a radar-based system to a more precise satellite-derived 
aircraft location system. ADS-B equipment combines an 
aircraft's positioning source, aircraft avionics, and a ground 
infrastructure to create an accurate surveillance interface 
between aircraft and ATC. The baseline installation of ADS-B 
ground station is now complete, so operators who equip now will 
see benefits now--there is no need to wait until 2020.

    ADS-B has many benefits for users of the NAS, including the 
general aviation community. ADS-B provides air traffic 
controllers with more accurate information to help keep 
aircraft safely separated in the sky and on runways. With ADS-
B, controllers get an update of aircraft position almost 
continuously, compared to every five seconds or longer with 
radar. This improves the precision of our tracking, leads to 
enhanced safety and greater efficiency, and ultimately results 
in a smoother flow of air traffic.

    Since ADS-B ground stations are easier to install and offer 
a greater distance of coverage than radar towers. We have also 
been able to expand access through ADS-B. We now have ADS-B 
coverage in remote areas where radar coverage was limited due 
to constraints on the surface or over bodies of water, such as 
in the Gulf of Mexico, mountainous regions in Colorado, and low 
altitude airspace in Alaska. Operators in those areas are 
seeing benefits, including increased flight hours by virtue of 
being able to operate in periods of low visibility.

    The improved accuracy, integrity and reliability of 
satellite signals over radar means it will be possible to 
safely reduce the minimum separation distance between aircraft 
and increase capacity in the nation's skies. Increased equipage 
by the aviation community will allow the benefits of the ADS-B 
to be realized and benefit all users of the NAS.

    Equipage and Benefits of ADS-B Technology

    ADS-B consists of two different services: ADS-B Out and 
ADS-B In. ADS-B Out periodically broadcasts information about 
each aircraft operating within the NAS, such as identification, 
current position, altitude, and velocity, through an onboard 
transmitter. ADS-B Out provides air traffic controllers with 
real-time position information that is, in most cases, more 
accurate than the information available with current radar-
based systems. With more accurate information, ATC will be able 
to position and separate aircraft with improved precision and 
timing.

    All users operating in designated airspace must be equipped 
with ADS-B Out avionics by January 1, 2020. The rule does not 
preclude other navigation sources; it simply requires that 
aircraft flying in certain airspace be equipped with avionics 
that meet performance requirements. The designated airspace 
includes Class A, B, and C airspace, as well as Class E 
airspace areas at or above 10,000 feet mean sea level (MSL) 
over the 48 contiguous United States and the District of 
Columbia, excluding the airspace at and below 2,500 feet above 
the surface. This airspace is more complex, with relatively 
diverse users. The rule also requires that aircraft operating 
in the airspace within 30 nautical miles (NM) of the nation's 
busiest airports be equipped with ADS-B Out capabilities. This 
will enhance safety, efficiency, and performance around those 
airports.

    If you never fly into ADS-B designated airspace, there is 
no requirement to equip your aircraft with this technology. For 
the most part, the ADS-B Out requirement covers the same 
airspace where transponders are required; just as some aircraft 
are not required to be equipped with transponders, not all 
aircraft will need to be equipped with ADS-B Out. Users who 
never fly into designated airspace will not be impacted by the 
new requirements at all. In those cases, equipping with ADS-B 
technology is optional, but the benefits of ADS-B technology 
are available to any user who equips their aircraft.

    ADS-B In technology allows pilots, including general 
aviation pilots, to see what air traffic controllers see: 
displays showing the location of aircraft in the sky around 
them. This creates an environment of shared situational 
awareness that allows for greater safety and efficiency. ADS-B 
In displays in the cockpit also pinpoint hazardous weather and 
terrain, and give pilots important flight information, such as 
temporary flight restrictions. Operators who have equipped with 
ADS-B In technology are already seeing these benefits in the 
cockpit.

    Flight Information Service-Broadcast (FIS-B) and Traffic 
Information Service-Broadcast (TIS-B) are free services that 
are automatically transmitted to aircraft equipped to receive 
ADS-B In. FIS-B provides a broad range of textual/graphical 
weather products and other flight information to users, 
including the general aviation community; it includes the 
following:

           Aviation Routine Weather Reports (METARs)

           Non-Routine Aviation Weather Reports (SPECIs)

           Terminal Area Forecasts (TAFs) and their amendments

           NEXRAD (regional and CONUS) precipitation maps

           Notice to Airmen (NOTAM) Distant and Flight Data 
        Center

           Airmen's Meteorological Conditions (AIRMET)

           Significant Meteorological Conditions (SIGMET) and 
        Convective SIGMET

           Status of Special Use Airspace (SUA)

           Temporary Flight Restrictions (TFRs)

           Winds and Temperatures Aloft

           Pilot Reports (PIREPS)

    TIS-B is an advisory service that increases pilots' 
situational awareness by providing traffic information on all 
transponder-based aircraft within the vicinity of the ADS-B In 
equipped aircraft receiving the data. The costs of these 
broadcast services are absorbed by the FAA, so NAS users do not 
pay any subscription or usage fees for traffic, weather, or 
aeronautical information services.

    Nearly seventy-five percent (75%) of weather-related 
general aviation accidents are fatal. Free traffic and weather 
information automatically transmitted to the cockpit is 
something the general aviation community benefits from. General 
aviation pilots with proper equipage are already taking 
advantage of these nationwide services.

    When displayed in the cockpit, this information also 
improves the pilot's situational awareness in aircraft not 
equipped with a traffic alert and collision avoidance system 
(TCAS/airborne collision avoidance system (ACAS). Equipage for 
ADS-B In is not required under FAA regulations, but users who 
are equipping with both ADS-B Out and In are seeing the wider 
range of functionality afforded by ADS-B than those only 
equipping with ADS-B Out.

    Challenges and Solutions Moving Forward

    We are confident that users of the NAS, including the 
general aviation community, will see the advantages to ADS-B as 
they continue to equip and begin using the technology it 
offers. But, we also realize that increased technology 
generally requires increased investment for the government, 
private industry, which includes both large and small 
businesses, and individual aircraft owners. The FAA has made a 
significant investment in infrastructure to enable the 
technology being delivered through NextGen, including ADS-B. We 
are now calling on users of the NAS to equip their aircraft in 
a way that allows us to maximize the benefits of NextGen in 
designated airspace.

    We are doing everything we can to ameliorate the burden on 
operators and facilitate low-cost alternatives for the general 
aviation community. Users already have a wide range of options 
to meet the 2020 mandate, if it will impact them. A variety of 
manufacturers have rule-compliant technology in various 
different price ranges on the market today. We commend the 
industry for what they are doing to facilitate equipage, and we 
look forward to continuing to work with stakeholders in this 
important endeavor. As required by Section 221 of the FAA 
Modernization and Reform Act of 2012 (P.L. 112-95), FAA is 
evaluating financing options and considering loan guarantee 
programs, but we also encourage users to take advantage of the 
financing options already available on the private market and 
through their respective associations.

    The FAA believes that ADS-B technology is a key component 
in achieving many of the goals set forth in the NextGen 
Implementation Plan. The ADS-B Out equipage requirement is a 
major step toward establishing an air traffic system that 
accommodates future requirements and responds to shifts in 
demand from users by leveraging enhanced surveillance 
capabilities to increase capacity and efficiency of airspace 
use. ADS-B technology not only assists in the transition to a 
system with less dependence on ground infrastructure and 
facilities, but also creates capabilities for precision and 
accuracy, which in turn will make the system more operationally 
and environmentally efficient.

    Mr. Chairman, this concludes my statement. I would be happy 
to take questions at this time.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



                    Testimony of Tim Taylor

          President and CEO, FreeFlight Systems, Inc.

  On Behalf of the General Aviation Manufacturers Association

                  Committee on Small Business

                 U.S. House of Representatives

FAA's 2020 NextGen Mandate: Benefits and Challenges for General 
                            Aviation

                         June 11, 2014

    Introduction

    Chairman Graves, Ranking Member Velazquez, and other 
distinguished members of the Committee, my name is Tim Taylor, 
and I am president and chief executive officer of FreeFlight 
Systems. Today, I have the privilege of also representing the 
General Aviation Manufacturers Association (GAMA) and am 
honored to provide testimony to the Committee on their behalf.

    I appreciate the opportunity to discuss today the benefits 
of the nation's transition to the Next Generation Air 
Transportation System (NextGen) for general aviation (GA) and 
to highlight the importance and ability of industry to meet the 
Federal Aviation Administration's (FAA) 2020 automatic 
dependent surveillance-broadcast (ADS-B) Out mandate. As the 
leader of a small aviation manufacturing business, I thank the 
Committee for holding this hearing and look forward to 
describing how NextGen avionics--specifically ADS-B equipage--
is readily available, affordable, and easy to install.

    At a basic level, NextGen represents the shift from the 
existing radar-based air traffic control (ATC) system to a more 
automated aircraft-centered, satellite-based system. FreeFlight 
Systems designs, manufactures, and supports electronics systems 
that enable and support the NextGen air traffic management 
transformation. We are experts in the essential technologies at 
the heart of NextGen and we apply these technologies to 
platform equipage across a broad spectrum of air and ground 
vehicles, and to infrastructure development and services.

    Since NextGen equipage presents unique challenges from a 
retrofit perspective, we have focused on developing a series of 
core elements that can be easily installed into the diverse, 
and often quite old, aircraft fleet. We certified our first 
ADS-B Out radio in 2011, obtained our first installation 
approvals in 2012, and have delivered around 1,000 ADS-B radios 
and around 3,000 ADS-B position sources since then.

    As a small business, we made the research and development 
investments--more than $3 million--upfront to allow aviation 
operators the ability to meet the FAA's 2020 ADS-B mandate. In 
short, we have already accomplished the ``heavy lifting'' 
required to make our solutions readily available, affordable, 
and easy to install. We are seeing rapid acceleration today in 
the adoption and installation of ADS-B systems in both airborne 
and airport surface vehicle applications.

    FreeFlight Systems does all this as a small business 
located in Texas that currently employs 53 people. We either 
perform or source out manufacturing in the United States, 
predominantly in Texas, but we are also part of the global 
aviation industry, exporting around 40% of our products. I 
should note that our exports are enabled in part by the Export-
Import Bank of the United States (Ex-Im). Ex-Im guarantees 
credit that we grant to offshore customers, allowing us to 
access cash from our commercial banking partners at the point 
of sale. Like Free Flight, many other small manufacturers 
across the country depend on Ex-Im and we hope Congress will 
move the reauthorize the Bank before the end of September when 
the current authorization expires.

    Why NextGen Matters to GA

    While today's hearing focuses on ADS-B, I would like to 
note that ADS-B is only one of a number of core capabilities 
that make up the broader NextGen program, including Data 
Communications (DataComm), Performance-Based Navigation (PBN) 
and System-Wide Information Management (SWIM), to name a few.

    The potential benefits of NextGen to the aviation community 
are significant. The transformation enables improved safety, 
increases the capacity of the airspace system, and reduces the 
cost and complexity of ATC. For GA operators, many of these 
benefits are immediately available upon appropriate equipage, 
but realizing the full potential of the broader NextGen 
programs across the National Airspace System will require 
significant additional work by the FAA.

    Before ADS-B, information on aircraft position was gathered 
by radar systems only and then used by air traffic controllers 
to separate aircraft. The current ATC system does this by 
drawing a bubble around each aircraft that represents its 
possible positions. As long as the bubbles do not touch, 
separation is assured. Using radar, these bubbles can be tens 
of miles across, and they are updated every 12 seconds or so. 
In contrast, an aircraft that is equipped with a rule-compliant 
ADS-B Out system is broadcasting key parameters once per 
second, along with a parameter that precisely describes the 
size of the bubble, for that aircraft. These ADS-B bubbles can 
be tens of feet across instead of miles.

    This high-quality, high-update rate broadcast allows ATC to 
better manage airspace and air traffic management, becoming 
more automated and less dependent on human decision-making. The 
transmitted information is also available to other aircraft 
that are equipped with an ADS-B In system, so pilots get that 
same high-quality traffic picture right in their cockpits. The 
FAA also provides an additional uplink to ADS-B users of Flight 
Information Services, which includes local and national 
graphical weather pictures, as well as important information 
about meteorological and other conditions across the system.

    This high-precision traffic picture has other benefits. 
Fleet operators, such as flight schools, can track their 
aircraft and ensure that they are operating in accordance with 
plan and procedure. Additionally, if an aircraft should 
experience difficulties, ATC can provide quick and precise 
direction to the aircraft.

    The more airplanes that equip, the more dramatic the 
improvements in capacity and safety become. The full potential 
can be realized when all aircraft in controlled airspace are 
equipped, which the FAA has mandated by January 1, 2020. The 
rule and mandate were established early in 2010, giving 
aircraft operators 10 years to equip. Equipment manufacturers 
have had longer. The system architecture was finalized in 2007 
and the rules and requirements have not changed substantially 
since then. The ground infrastructure of the system is largely 
deployed and is operational across the country. There are no 
regulatory or infrastructure barriers to full equipage to meet 
the mandate. This long-term stability is essential if small 
businesses are to participate in the NextGen transformation.

    ADS-B Compliant Equipment is Readily Available

    In addition to providing a consistent set of rules and 
requirements, as well as providing a 10-year window to equip 
aircraft, the FAA has taken other positive steps to ensure that 
rule-compliant equipment is available and ready for the 
marketplace.

    In several cases, the FAA formed ``in-kind'' partnerships 
with early adopters, such as Gulf of Mexico helicopter 
operators, and collaborated with them to work on installation 
and certification efforts, solve problems, and capture lessons 
learned. FreeFlight Systems was chosen by several of these 
early adopters to provide the avionics equipment for these 
activities and, in each case, it was a rich learning 
environment that allowed us to improve our product. Many of 
these aircraft have now been operating for several years, 
providing additional opportunities to test and develop the 
system. The products that FreeFlight Systems offers today are 
already third-generation, as we have been able to incorporate 
lessons from these early activities.

    Many other manufacturers have participated in these proving 
exercises across all strata of the National Airspace System. 
Mature, rule-compliant equipment is available today from 
multiple vendors for light GA, rotorcraft, business aviation, 
and airline transport aircraft. More products are entering the 
market this year. They are being offered both by the 
traditional major avionics suppliers and by some specialist 
small businesses, such as FreeFlight Systems. In fact, some of 
the major brand products are private-label versions of these 
small business offerings.

    In 2013, FreeFlight Systems was pleased to be awarded a 
direct FAA contract in full and open competition to replace 
early version ADS-B units with rule-compliant systems for 
several hundred aircraft in Alaska. These aircraft were part of 
the original Capstone ADS-B development program.\1\ This 
contract gave FreeFlight the opportunity to install our ADS-B 
equipment in a variety of aircraft types typical of the larger 
GA fleet. This experience gave us firsthand knowledge of 
installation complexity, time, and cost.
---------------------------------------------------------------------------
    \1\ FAA: ``The Capstone Project was a joint industry and FAA 
research and development effort to improve aviation safety and 
efficiency in Alaska. Under Capstone, the FAA provided avionics 
equipment for aircraft and the supporting ground infrastructure. The 
Capstone Project operated from 1999 to 2006, and its success in Alaska 
laid the groundwork for the nationwide deployment of ADS-B.'' (http://
www.faa.gov/nextgen/implementation/programs/adsb/wsa/archival/)

    FreeFlight Systems today offers rule-compliant ADS-B radios 
suitable for light GA \2\ and rotorcraft in a variety of 
configurations, with optional internal global positioning 
system (GPS) receivers. We have installation approval for 
several hundred aircraft types (fixed and rotary wing), and we 
are constantly adding to this list. Additionally, we provide a 
range of rule-compliant, low-cost, stand-alone position sources 
that are compatible with other suppliers' ADS-B radio offerings 
for all aircraft segments.
---------------------------------------------------------------------------
    \2\ Aircraft weighing less than 12,500 pounds.

---------------------------------------------------------------------------
    ADS-B Compliant Equipment is Affordable and Easy to Install

    For the light end of GA, ADS-B equipment can be relatively 
inexpensive and easy to install. FreeFlight Systems offers 
complete solutions today at a list price that is less than 
$4,000, and we are seeing installation times that are typically 
in the 20 to 40 hour range (with--$2,000 to $4,000 for labor), 
for a total cost of $6,000 to $8,000. This estimate includes 
rule compliant ADS-B Out, as well as ADS-B In. In a newer 
aircraft, ADS-B In can utilize an existing display to show the 
beneficial navigation/situational information. In an older 
aircraft that has not seen a new piece of avionics since the 
1960s, ADS-B In can simply utilize an iPad. Costs can be lower 
for aircraft that already have some elements of the system. 
Using the same products, uncertified aircraft can be equipped 
for less than $4,000. These prices appear to be acceptable to 
the light aircraft market.

    For larger aircraft, the costs become more dependent on the 
type of transponder fitted. For most aircraft, there is an 
upgrade path for the transponder and a FreeFlight Systems 
position source that lists in the range of $2,500 for light GA 
to $11,000 for larger aircraft. FreeFlight Systems offers a 
complete package for aircraft that operate in 18,000 feet to 
24,000 feet range for $7,600. For heavier aircraft, the total 
cost is driven by the transponder manufacturer. Installation 
times for these systems are well within aircraft maintenance 
scheduled downtimes.

    Why the ADS-B Out Mandate is Important

    In the past few weeks, we have seen aircraft near-misses at 
major airports in the United States. Management of aircraft in 
crowded airspace is a complex, fast-moving, four-dimensional 
puzzle. The nation's air traffic controllers do an amazing job 
maintaining separation between aircraft. However, the tools 
they have at their disposal today have remained largely 
unchanged for decades, while capacity, aircraft performance, 
and aircraft mix are increasing dramatically. NextGen provides 
the capability to completely re-think and re-tool air traffic 
management.

    For NextGen to be effective, however, there needs to be a 
change in infrastructure and a change in aircraft equipage. The 
FAA has implemented the infrastructure and has provided details 
and complete rules for equipage, but for the system to work to 
its full potential, every aircraft that enters controlled 
airspace needs to meet minimum equipage standards or it will 
disproportionately impact operations. Think of all the ADS-B 
aircraft, safely inside their small bubbles, flowing smoothly 
in and around an airport. One un-equipped or poorly-equipped 
aircraft enters the picture with a bubble that is tends of 
miles across, pushing everybody else out of position and 
disrupting the system until it is safely out of the way. To 
avoid that scenario, everybody has to equip, and to equip 
properly. A mandate is the only way to ensure that happens, and 
to ensure that everybody who invested in the new system--
industry, users, and government--gets the return they deserve 
on the investments they have made.

    The mandate also provides the framework for implementation 
of the system and equipage. In the light GA segment alone, 
there are almost 200,000 aircraft in the United States today. 
Not all of those are flying, of course, and not all of them 
need to enter controlled airspace, but between 120,000 and 
140,000 aircraft need to equip. Currently, only some 4,000 of 
those aircraft are equipped.

    With approximately 2,000 days between now and January 1, 
2020, we need to equip 60 to 70 aircraft per day--including 
weekends and holidays--or 85 to 100 aircraft per work day. As a 
nation, we comfortably have the capacity to equip at this rate, 
but only if there is reasonable linearity.

    Incentivizing Equipage

    The government has provided the environment to make 
equipage by January 1, 2020 possible. Industry has stepped up 
to provide the equipment at the right price point and has the 
capacity to install it. Before considering other actions that 
could be taken to further incentivize equipage, it is worth 
considering actions and messages that could damage the gains 
already made--snatching defeat from the jaws of victory.

    First and foremost, the mandate must remain in effect and 
the aviation community has to believe it will hold. If the 
community thinks there is any chance of delay, equipage will 
stop.

    Second, the rules that have been put in place need to stay 
in place--and the community has to believe that also. There are 
some well-intentioned initiatives like ``Low Power Surveillance 
Equipment'' (LPSE) that are designed to provide equipage 
options for aircraft like gliders with special needs. The 
general population sees this as an opening of the door to lower 
standards--and equipage will slow down while they wait to see 
how that plays out. FAA should consider such options where 
appropriate, but FAA also needs to clearly articulate that this 
is a limited exception and the fundamental requirements will 
stay in place.

    Additionally, the idea that has been suggested by some that 
equipage is going to get cheaper as we get closer to the 
deadline is misleading and a major reason for delay. The prices 
we are offering for equipage now are artificially low. 
FreeFlight Systems is making high-volume purchases and we have 
reduced our margin expectations to get products in the market 
at an acceptable price point. As volumes start to go up, we 
will not be able to hold these low prices. The same is true for 
installation. Forward-thinking installers, just like forward-
thinking equipment suppliers, are offering low prices to get 
equipage started.

    In our view, the best incentives from government and 
industry are already in place: infrastructure, a firm schedule, 
stable requirements, and aggressive pricing. However, there is 
always more that could be considered.

    Low interest, government-backed financing has been 
discussed in the marketplace, and authorized by Congress, and 
is popular among FreeFlight customers. FreeFlight Systems 
announced a partnership with the Nexa Capital NextGen GA 
equipage fund and aircraft owners have responded favorably. I 
believe more aircraft owners would equip as the Nexa program 
becomes available, or other programs with a similar format 
develop. Unfortunately, the implementation of these financing 
options have faced delays and I urge Congress to examine ways 
to expeditiously move them forward.

    Additionally, inconsistency in the application of 
certification standards across different FAA branches and 
regions is a barrier to equipage and innovation in all areas of 
aircraft modification. Many NextGen programs are being given 
priority in modification approvals, but strong leadership, 
training, and consistent application of standards will reduce 
delays and increase the number of installers willing to 
aggressively price and perform ADS-B installs.

    Conclusion

    The timely introduction of NextGen technologies is vital to 
supporting the safe and efficient operation of our nation's 
airspace system, and to maintaining U.S. global leadership in 
aviation.

    The nature of the transformation is such that there are 
multiple opportunities for small businesses to participate, and 
a stable government position on equipage standards and timing 
for equipage are essential elements to the success of the 
transformation itself and to small business involvement.

    Government and industry, both large and small, have worked 
in harmony to ensure that equipment is available at the right 
price, that there is plenty of time to plan and execute 
installation, and that the infrastructure is in place to 
provide both immediate and potential longer-term benefits to 
those who equip today.

    While some initiatives could perhaps speed up the ongoing 
equipage of the fleet, the absolute key to meeting the equipage 
deadline is to hold fast to the current rules and schedules. 
Any wavering or mixed signals hurt NextGen progress, safety, 
and small businesses that are playing by the rules.

    Thank you for the opportunity to testify this afternoon, 
and I look forward to answering any questions that you may 
have.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



    Chairman Graves and Members of the Committee:

    I am Bob Hepp, Owner of Aviation Adventures.

    Aviation Adventures is a highly regarded flight school with 
locations in Manassas, Warrenton, Stafford, and Leesburg, 
Virginia. Our staff of 41 employees provides flight instruction 
at all levels from initial training through the Airline 
Transport Pilot certificate. We also provide rental aircraft to 
certificated pilots.

    I started Aviation Adventures in 1989 with one aircraft and 
myself as the only instructor. Today we have 39 aircraft and 
are known as the premier flight school in Virginia and the 
leader in providing training in Technologically Advanced 
Aircraft.

    I am also representing the Aircraft Owners and Pilots 
Association (AOPA) of which I have been a member since 1981. 
AOPA is a not-for-profit individual membership organization 
representing more than 350,000 members nationwide. AOPA's 
mission is to effectively represent the interests of its 
members as aircraft owners and pilots concerning the economy, 
safety, utility, and popularity of flight in general aviation 
(GA) aircraft.

    My testimony today will cover the following key points:

          1. The General Aviation community has long supported 
        the move from ground-based to satellite-based 
        navigation. However, at this time, the benefits 
        associated with the FAA mandate are inadequate and 
        unclear for general aviation users.
          2. The FAA's mandate to equip for ADS-B (Automatic 
        Dependent Surveillance - Broadcast) Out by 2020 is 
        costly and will be prohibitive for most small flight 
        schools, businesses utilizing aircraft, and 
        recreational aviators.
          3. Providing low-cost guaranteed loans for GA 
        equipage and leveraging existing cockpit technologies, 
        such as handheld devices, can help move NextGen 
        modernization forward without imposing unmanageable 
        burdens on small aviation businesses.

                            General Aviation


    As pilots flying in the United States, we are fortunate to 
have access to the safest and most efficient air transportation 
system in the world. The aviation network of 5,200 public-use 
airports, complemented by the more than 13,000 privately owned 
landing facilities is a unique national resource. General 
aviation is a significant economic engine that contributes 
approximately $150 billion to the annual gross domestic product 
and approximately 1.2 million jobs in communities nationwide. 
Each year, 170 million passengers fly using personal aviation, 
the equivalent of one of the nation's major airlines.

    General aviation is of special importance to small 
businesses, and a significant amount of all general aviation 
flights are conducted for business and public services. 
Additionally, the Small Business Administration has estimated 
that approximately 94% of the firms that provide cargo and 
passenger air transportation services are considered small 
businesses, as are 90% of businesses involved in the 
development and manufacture of aircraft and parts.

    In addition to these businesses, general aviation activity 
directly supports thousands of small businesses from flight 
schools to repair shops to line operations. Thousands more 
small businesses of every type use general aviation to 
transport personnel, move products, extend their geographical 
reach, meet clients, provide support services, and manage 
distant operations.

                           The ADS-B Mandate


    Effective January 1, 2020, any aircraft operating in busier 
airspace where a Mode C transponder is required today, will 
also be required to carry an ADS-B Out transmitter. The rule 
does not mandate ADS-B In equipage and does not impact the 
current transponder requirement--menaing aircraft will continue 
to be required to carry their transponders in addition to this 
requirement for ADS-B Out equipage after 2020.

    Unlike most rulemaking activities which are safety based, 
the basis of the mandate is to support the FAA's Next 
Generation Air Transportation System (NextGen). The FAA has 
indicated that the mandate will not greatly increase or 
decrease safety, but is necessary to move forward with NextGen.

             Lack of Benefits for General Aviation Equipage


    For more than 20 years AOPA has supported the transition 
from ground-based infrastructure to satellite-based systems. 
AOPA also supports ADS-B provided it is affordable and delivers 
clear, tangible benefits to users. The Association is hopeful 
that changing technology and modifications to the 
implementation approach will make ADS-B more valuable to the GA 
community. However, at this time, it is difficult to identify 
adequate benefits in the current ADS-B implementation strategy.

    For most general aviation pilots, there are no direct 
benefits of the ADS-B Out mandate. Rather, complying will 
simply allow pilots to continue using the national airspace 
system as they do today.

     Mandate Is Costly And Could Be Prohibitive to Small Businesses


    Aviation Adventures owns and operates 39 aircraft for 
flight training and rental. The ADS-B mandate will require 
significant changes to these aircraft, including the removal of 
some equipment and possibly the redesign of the control panel 
to accommodate the new equipment.

    The actual avionics required to meet the mandate would cost 
approximately $5,000 per aircraft. Additional costs associated 
with changes to the control panel and installation of the new 
equipment would add approximately $3,000 to $4,000 per 
aircraft. I estimate that the total cost to equip my fleet will 
be $312,000 for minimal compliance--a major investment for a 
small business and one many small aviation businesses will be 
unable to make.

    I recently participated in a Flight School Conference with 
88 Flight Schools in attendance. The topic of investing in 
avionics upgrades was part of the discussion. When the question 
was asked how many flight schools were profitable and could 
afford to invest in new avionics, representatives of only three 
schools indicated they were ready to make such an investment.

    Unlike investing in adding aircraft or facilities, the 
money spent on ADS-B Out equipment will not bring a return 
because it will not increase our customer base, allow us to 
serve more clients, provide new capabilities, or otherwise help 
grow the business.

    For that reason alone, it is not a sound business decision 
to equip early since there will be no return on investment.

    Continuing uncertainties about exactly what the FAA will 
ultimately require to fulfill the mandate further reduces the 
incentive to equip the aircraft in advance of the mandate. 
Business owners are reluctant to make a large investment in new 
equipment when that equipment may ultimately not meet FAA 
requirements.

    The tendency of technology prices tend to drop 
significantly over time also serves as a disincentive to equip 
early. Anyone who purchased a large flat screen television a 
few years back is familiar with this phenomenon. A television 
that I purchased a few years ago when the technology was 
relatively new cost $3,000. Today, the same television can be 
purchased new for just $800. Similar trends apply in avionics. 
We have already seen a decrease in prices for ADS-B equipment 
since the mandate was finalized in 2010. It is in the interest 
of business owners to wait for further price drops before 
investing in new equipment.

      Loans and Existing Technology Can Help More NextGen Forward


    Because of the high cost and low return on equipping for 
the 2020 mandate, general aviation operators need assistance to 
equip. The establishment of a fun to provide low-cost, 
federally guaranteed loans to equip GA aircraft could provide 
the financing needed to help the GA community meet the mandate.

    At the same time, maximizing the utility of existing 
cockpit technology can help move NextGen modernization forward 
without imposing unmanageable hardships on general aviation 
operators.

    Handheld devices can provide ADS-B In information, 
significantly enhancing safety at nominal cost. Many aircraft 
operators are already using these handhold devices in the 
cockpit, and the same devices could be used to provide ADS-B 
Out.

    By focusing on providing added capabilities to GA operators 
using existing cockpit equipment, the FAA could increase 
operational efficiency. Providing precision approaches to 
airports that don't already have them would allow pilots to 
make all-weather use of airports that do not currently have 
that capability. Offering surveillance outside of the existing 
radar footprint would increase safety for operators flying at 
low altitudes and outside of large airports. Additional 
capabilities could include more efficient point-to-point 
navigation and better routing through congested airspace. 
Together, these capabilities can boost general aviation use and 
the resulting economic impact by saving fuel and time, 
increasing safety, and lowering the cost of flying.

                               Conclusion


    In conclusion, I believe the current ADS-B Out mandate 
fails to provide the needed benefits and support for general 
aviation operators and businesses to equip. At the same time, 
there are a number of steps the FAA can take to move NextGen 
modernization forward while promoting safety, encouraging 
general aviation activity, and reducing the burdens on small 
general aviation businesses.

    By creating a fund to provide low-cost guaranteed loans and 
leveraging existing equipment to provide benefits like improved 
point-to-point navigation, extended surveillance, and precision 
approaches at airports not currently served, the FAA can take 
advantage of the equipment already in cockpits, keep NextGen 
moving forward, and help GA businesses thrive.

    On behalf of the 41 employees of Aviation Adventures and 
the more than 350,000 members of AOPA, we appreciate your 
leadership in addressing the concerns of the general aviation 
industry so that it can continue to help small businesses 
nationwide grow and thrive.

    Thank you for the opportunity to appear before this 
Committee.
    Federal Aviation Administration's 2020 NextGen Mandate: 
          Benefits and Challenges for General Aviation

           Kenneth J. Button PhD, AcSS, FCILT, FCIHT

                      University Professor

                    School of Public Policy

                    George Mason University

  Evidence to the U.S. House of Representative's Committee on 
                         Small Business

         Room 2360 of the Rayburn House Office Building

                         June 11, 2014

    BACKGROUND

    There have been considerable technical advances in air 
traffic navigation over the past 30 years leading to 
potentially safer and, from a commercial perspective, more 
efficient air travel network. The changes allow, for example, 
reduced separation between aircraft that permit greater 
flexibility in routing. In particular, a move from ground-based 
radar technology to satellite systems offers many long-term 
advantages. There are a multiplicity of air navigation 
providers around the world currently developing, and at various 
stages of implementing, a wide-range of new technologies aimed 
at developing a common platform for satellite based navigation 
and control systems. The challenges nationally and 
internationally to bringing about a shift to satellite systems 
are both technological and economic in nature.

    As with any change, reaching an accord on common standards 
and transitioning this into a working system is not a simple 
technical matter. In terms of costs, there is the need for new 
equipment, an inevitable transitional wastage from duplication 
as the old and new systems overlap in time, and considerable 
stranded costs as technically sound radar based systems are 
made economically redundant. There are still concerns about the 
technical reliability of the systems being introduced, and, for 
example, their capacity to handle large volumes of information, 
particularly in the transition phase, and, as far as general 
aviation is concerned, over the anonymity of the information 
obtained. Added to this is the matter of how the new system is 
to be financed. There have been problems in the past in 
financing and administering the ground based elements of the 
system. The 2012 FAA Air Transportation Modernization and 
Safety Improvement Act, for example, was the first 
reauthorization of Federal Aviation Administration funding 
since 2007; the Administration had the uncertainty of 23 
extensions in the interim.\1\
---------------------------------------------------------------------------
    \1\ This is a topic that is not dealt with here but has posed 
practical issues in the United States as well as elsewhere; e.g. see; 
Office of Inspector General, Audit Report: Federal Aviation 
Administration's Contraction Practices are Insufficient to Effectively 
Manage its Systems Engineering 2020 Contracts Federal, Report Number: 
ZA-2012-082, 2012.

    The automatic dependent surveillance-broadcast (ADS-B) 
technology that forms one of the cornerstones for the new 
approach to air navigation, and which is to be a requirement 
for use of certain United States airspace by 2020, is a 
cooperative surveillance technology for tracking aircraft.\2\ 
The Federal Aviation Administration rule requiring the uptake 
of this technology was announced in 2011. The system relies on 
aircraft or airport vehicles broadcasting their identity, 
position and other information derived from on-board systems. 
The information is more accurate than that available to primary 
systems, such as radar surveillance.
---------------------------------------------------------------------------
    \2\ Strictly the ADS-B system relies on two avionics components--a 
high-integrity GPS navigation source and a data link. The current 
transponder or RVSM maintenance requirements are not changed or 
affected by the ADS-B rule.

    The ADS-B Out signals transmitted from an aircraft can be 
captured for surveillance purposes on the ground but only on 
board other aircraft equipped for ADS-B In. The latter enables 
airborne traffic situational awareness, spacing, separation and 
self-separation applications; basically it provides a three 
dimensional halo around each plane. With ADS-B In an aircraft 
essentially determines its own position via satellite 
navigation and broadcasts this via a radio frequency with 
knowledge of what is going on about it. For a comprehensive 
ADS-B structure without primary surveillance by radar, all 
planes must be equipped with both ADS-B Out and In. This is a 
long-term objective, simple location is with some additional 
---------------------------------------------------------------------------
information is the short-term objective.

    The issues addressed here focus on three interrelated 
areas:

           The pros and cons of ADS-B
           Payment for the system
           The phasing-in of ADS-B

    THE PROS AND CONS OF ADS-B

    The ADS-B concept is at the core of both the $40 billion 
Next Generation Air Transportation System (NextGen) which was 
initiated in 2009 in the United States and of Single European 
Sky ATM Research (SESAR) in Europe that was initiated in 1999.

    The European Single Sky initiative has a somewhat different 
objective to NextGen. The United States challenge is to replace 
a unified radar based system that has grown in a rather ad hoc 
way and thus in need of serious efficiency improvement to 
handle traffic growth. The Federal Aviation Administration, for 
example, has estimate that increasing congestion in the air 
transportation system of the United States, if unchanged, would 
cost the American economy $22 billion annually in lost economic 
activity by 2022. In addition to addressing this, NextGen is 
specifically seen as reducing aviation fuel consumption and 
emissions. In contrast, the European challenge is to initially 
reduce the large number of air navigation service providers 
from nearly forty to a one; i.e. structurally to make it akin 
to the American system. Despite difference in motives, there is 
agreement between the United States and EUROCONTROL over broad 
approaches towards interoperable satellite based systems.

    The issue of general aviation, while of considerable 
importance in the United States, has attracted little attention 
in Europe with its Single European Sky initiative quite simply 
because it is of a far smaller order of magnitude. For example, 
while there were 209,034 registered general aviation planes in 
the United States in 2012, there were 21,462 in Germany in 
2013, 32,410 in France in 2011, 19,850 in the United Kingdom in 
2013, and 3,657 in Switzerland in 2012.\3\
---------------------------------------------------------------------------
    \3\ General Aviation Manufacturers Association, 2013 General 
Aviation Statistical Databook & 2014 Industry Outlook, Washington DC, 
2014.

    The United States will require the majority of aircraft 
operating within its airspace to be equipped with ADS-B Out by 
1 January 2020; the specific categories of airspace involved 
are seen in TABLE 1. These are airspaces where a more basic 
transponder is already required.\4\ There is no requirement for 
aircraft to have ADS-B In capabilities by January 1, 2020.\5\ 
In terms of general aviation the requirement has been variously 
estimated to affect between 157,000 to 165,000 aircraft \6\.
---------------------------------------------------------------------------
    \4\ They are also required at all altitudes within 30 miles of some 
airports and some other flights over water.
    \5\ The Federal Aviation Administration is publishing its final 
rule justified this; ``Standards for ADS-B In air-to-air applications 
are still in their infancy ... it is premature to require operators to 
equip with ADS-B In at this time.''
    \6\ General aviation includes businesses engaged in on-demand 
passenger or cargo charter flying; corporate flight departments; owner-
flown aircraft; flight schools; companies offering aircraft fuel, 
storage, maintenance and parts; and aircraft sales, brokerage and 
rental firms.


                                 TABLE 1
------------------------------------------------------------------------
              Airspace                             Altitude
------------------------------------------------------------------------
A                                                  All aircraft equipped
B                                                  All aircraft equipped
C                                                  All aircraft equipped
E                                                     Above 10,000ft MSL
                                              but not below 2,500 ft AGL
------------------------------------------------------------------------


    One of the major challenges of NextGen is to develop a 
system that caters for the requirements of a diverse range of 
air transport users, often with quite distinct characteristics 
and needs. At one level are large civil scheduled commercial 
airlines that in 2013 had 642 million passenger enplanements in 
the United States and carried 19,729 million lbs of cargo and 
mail. The scheduled passenger carriers currently operating with 
wafer thin financial margins and with a legacy of inabilities 
to even recover their operating costs, often see the burden of 
even the small cost per revenue passenger mile as difficult to 
justify at the operational level. At the longer-term, strategic 
level, however, the ability to increase the reliability and 
capacity of services across large networks is generally seen as 
a significant development. In contrast, the scheduled cargo/
express carriers that tended to enjoy higher margins, have 
largely been more enthusiastic about the change with; for 
example, UPS, has adopted it because it is seen as a tool for 
improving fleet operations with it knowing exactly where planes 
are (and de facto where consignments are) when outside of radar 
surveillance and for managing their flights in real time.\7\ 
FedEx has supported it for similar reasons.
---------------------------------------------------------------------------
    \7\ The more efficient use of aircraft and the consequential lower 
fuel burn is also likely to have env8ironmentally beneficial effects, 
see US Government Accountability Office, Aviation and the Environment: 
NextGen and Research and Development Are Keys to Reducing Emissions and 
Their Impact on Health and Climate, GAO-08-706T, 2008.

    More generally, the recent events involving commercial 
scheduled passenger flights AF477 and MH370 has brought a 
heightened public awareness of the inadequacies of modern air 
navigation systems, or at least their deployment, and in the 
inability to locate flights all of the time. The costs of 
trying to locate a crashed plane are high both in economic and 
human terms; something that extends to general aviation. 
General aviation crashes are more common than for scheduled 
flights, which is not surprising because they represent about 
96% of the United States air fleet, but involve fewer details 
and injuries per incident; e.g. there were 1,471 accidents in 
---------------------------------------------------------------------------
2012 resulting in 432 fatalities.

    While it is important to be wary of making comparisons, 
particularly when data is collected in different ways, this 
situation can be put in the context of commercial aviation 
being about 50 times safer and car travel 20 times safer than 
general aviation in terms of fatalities per hour traveled 
between 2002 and 2012. (The use of alternative matrices, such 
as accidents or serious injury, changes the picture slightly 
ADS-B should reduce the accident rates for general aviation and 
make research and rescue operations more effective and less 
costly. While most general aviation accidents occur at or near 
airfields, some, often weather related, are in more remote 
locations. The extent to which the types of flights involved 
would come under the 2020 ADS-B regulation is, however, 
unclear.\8\ A full ADS-B strategy may well produce far greater 
benefits for the marginal costs it would entail.
---------------------------------------------------------------------------
    \8\ There seems to be no single gathering of information of the 
search costs involved when a general aviation plane goes missing, a 
simple search of the Web, however, provides numerous examples.

    Even large planes get lost. The most tragic and best know 
cases are perhaps the Uruguayan Air Force Flight 571 that 
crashed in the Andes in 1972 because of bad navigation, and 
AF477 into the South Atlantic partly because of poor 
information on altitude, but there are regular instances of 
aircraft landing by mistake at the wrong airports in the United 
States; luckily accidents are rare.\9\ ADS-B Out, and ADS-B In 
more so, provides a mechanism for pilots and ground control to 
have greater awareness of aircraft locations. ADS-B In, for 
example, reduces the risk of runway incursions with cockpit and 
controller displays that show the location of aircraft and 
equipped ground vehicles on airport surfaces. In addition, ADS-
B Out can provide local information regarding real-time weather 
conditions.
---------------------------------------------------------------------------
    \9\ http://www.iasa.com.au/folders/Safety--Issues/others/wrong-
ways.html provides a list of commercial aircraft landing at the wrong 
airport. There appears to be no complete record of general aviation 
incidents of a similar kind.

    Putting a money value on these benefits, and others that 
are general aviation specific is difficult. There will be 
savings in fuel, weather information will be better, and 
provided automatically, and flying should be safer beside other 
things. Putting a price on such changes is not easy. The 
Federal Aviation Administration has put a value of $200 million 
on the identifiable benefits to the sector, but argues that 
wider benefits are extensive. Additionally, given the massive 
heterogeneity of the general aviation fleet, there will 
inevitably by wide variations across beneficiaries. What this 
should also be set against, and to my knowledge has not been to 
date, is the current situation whereby general aviation uses 
approximately 16 percent of air traffic control services but 
contributes only 3 percent of the costs \10\.
---------------------------------------------------------------------------
    \10\ US Department of Transportation's Inspector General Office, 
Use of the National Air Space System, CR-2008-028, Washington DC, 2008.

    But what is often missed in these types of very static 
calculations is the allocation of costs during a transition 
when operating both radar and satellite based systems. As 
transfer takes place the amount of traffic using primary 
surveillance will decline while that using ADS-B based systems, 
and especially when ADS-B In is widely adopted, will increased 
implying a much higher cost burden being placed on those using 
radar surveillance. The burden, for example, of the radar-based 
system on general aviation would increase significantly if 
scheduled airlines moved to comprehensive ADS-B navigation 
---------------------------------------------------------------------------
systems.

    PAYMENT FOR THE SYSTEM

    There is no-such thing as free lunch, and moving to 
satellite based air navigation requires resources. In 
particular, unlike primary radar-based surveillance, full ADS-B 
requires equipping aircraft so that they can interact with 
other aircraft and ground installations in much wider range of 
ways. This means that its use involves two distinct costs to 
users; one to reflect the infrastructure costs involved and 
another the costs of the on-board equipment.

    The costs of equipping a plane varies according to such 
things as whether it is a retrofit, whether it includes both 
ADS-B Out and In, or just the former, and the extent to which 
equipment offers information beyond that required for 
certification. Given these facts, the estimated costs range 
from $4,000 to $17,000 to equip an aircraft with ADS-B Out, 
although in the case of new aircraft there is the off-setting 
cost of a saving from not having a separate transponder fitted. 
The costs of ABS Out and In equipment has been estimated to 
cost up to $30,000. In addition, there are annual costs 
associated with the ground infrastructure of the system and, in 
the short-term, of operating the current radar surveillance 
system. There is certainly no consensus on the aggregate costs 
in involved; e.g. a Federal Aviation Administration estimate 
suggests that the cost to equip general aviation aircraft from 
2012 to 2035 would range anywhere from $1.2 to $4.5 billion.

    There has been little market-based incentive for early 
adoption of a new technology like ADS-B where many of the 
benefits are not immediate. Indeed, the reverse is almost the 
case because the main gains come after widespread adoption and 
``first movers'' have the burden of having equipped with only 
partially useful equipment; the network economies take time to 
be realized.

    There is some intended financial support for general 
aviation from the NextGen GA Fund \11\ to help up-grade 
existing aircraft to meet the Federal Aviation Administration's 
2020 deadline. The fund is a public-private partnership between 
the United States Congress, the aerospace industry and the 
private-sector investment community. It began with a capital 
base of $550 million with the intention of eventually provide 
some $1.3 billion in financing to the general aviation sector 
over 10 years. It is focused on the more costly retrofits; 
those of over $10,000. This measure, however, has come some 
time after the notification of the 2020 requirement, and thus 
has done little to stimulate early adoption of the necessary 
avionics.
---------------------------------------------------------------------------
    \11\ http://www.nextgenfund.com/

    In addition to the money costs of fitting ADS-B In there is 
in the case of the existing general aviation fleet, the time 
costs of retrofitting that can take from a day or so to more 
than a week. For those elements of the fleet that are used for 
such as training, taxi, charter, and business travel this is a 
de facto financial cost as aircraft are out of action. 
Additionally, while many flights may fall outside of the 
Federal Aviation Administration's 2020 requirement, there will 
inevitably occasions when planes that are normally used at 
lower altitudes will be brought within the ADS-B threshold. 
This means that for users of these aircraft there will be a 
requirement for ADS-B Out equipment that is not always needed, 
and maybe seldom needed; ``portable'' equipment is not really 
---------------------------------------------------------------------------
an option.

    THE PHASING-IN OF ADS-B

    The United States has chosen a particular path for phasing 
in ADS-B, it is not the only possible way of doing this and 
some other countries have taken different routes; the 
differences may be due the underlying objectives sought, the 
nature of the traffic, or the broader institutional structures 
involved.

    While NextGen entails large scale infrastructures 
investment, the United States aircraft fleet is both large and 
diverse and the Federal Aviation Administration has sought to 
embrace a large part of this fleets' use of airspace as one 
action by mandating it an make use of the ADS-B system. The 
creation of the ground infrastructure began in August 2007 when 
the FAA awarded ITT Corp. a contract to develop and build a 
nationwide network of 794 ADS-B ground stations. This is also 
essentially what is happening in Europe, with planes with a 
weight above 12,600lb or a max cruise of over 250 knots being 
required to carry ADS-B from 2017, and new planes from 2015 
(originally this was 2015 and 2013 respectively but there has 
been slippage). This has all the pros-and-cons of any big-bang 
strategy (actually more of a medium bang because ADS-B In is 
not included.) with high set-up costs but a relatively quick 
flow of benefits and more solid information to help individual 
actors make decisions.

    The approach helps shorten the transition tot he satellite 
based systems, and gives a clear target for those involved. The 
latter is not just important for aircraft users but also for 
those that manufacture the hard and software that is required 
on the plane and ground, and those that conduct the equipage of 
the existing fleet. It removes some of the production 
uncertainties and allows the build-up of necessary equipage 
capacity. In the long-run it is likely that all aircraft will 
require to be fitted with at least ADS-B Out, and possibly ADS-
B In, equipment and advanced notice would allow new aircraft to 
be prepared for this, and lessen the costs of retrofitting. 
This latter factor can reduce the costs of producing the 
hardware and lead to greater diversity in the products offered; 
a number of alternative models become financially viable to 
produce. Added to this, a substantial market has room for a 
large number of suppliers thus keeping up competitive pressures 
and minimizing prices.

    The evidence of retrofitting the United States general 
aviation fleet is that to-date progress has been slow. Data 
from the Federal Aviation Administration suggest that by early 
2014 less than 1,500 aircraft met certification requirements. 
This is well below the trend required to meet the 2020 target, 
although some caveats should be taken into account. First, not 
all the planes that are ultimately likely to fly in the 
designated ADS-B Out required airspace will need to do so by 
January 1st 2020, and some of the existing fleet will be out of 
service by that date anyway for other reasons.\12\ Second, the 
existing equipage facilities are likely to be expanded as 
demand increases for retrofitting; this is, after all, a 
commercial activity with financial rewards coming from the 
equipage service. Third, there is some general evidence from 
other areas that when there are mandatory requirements, 
economies of experience have some effect with both money and 
time costs of installing a new technology at the micro-level 
falling as more operations are completed.
---------------------------------------------------------------------------
    \12\ The United States active general aviation fleet fell from 
223,700 to 209,034 between 2010 and 2013, although the Federal Aviation 
Administration forecasts growth as economic recovery takes place. The 
degree to which this growth will involve the new entry of aircraft to 
the United States fleet will affect retrofitting needs.

    Other countries have adopted slightly different road maps 
for change. Canada has essentially adopted more of what may be 
called a ``geographical spread system'' under which ADS-B 
capacity has been provided over some areas that have no radar 
surveillance, e.g. the Hudson Bay where separation has been 
reduced from 80 nautical miles to five. A variation on this 
them is to spread the technology vertically, beginning say with 
A and B airspace, this similar to the Australian approach. The 
underlying problem with all these approaches is that underlying 
any significant change in air navigation, and indeed in any 
transportation sector, namely that users are not static and 
---------------------------------------------------------------------------
many move between parts of the overall system.

    CONCLUSIONS

    Changing any air navigation system is difficult, not least 
because the existing structure cannot be closed down while the 
new is introduced. The United States, with the world's largest 
air transportation system, typifies the sorts of compromise 
that have to be made in piecemeal change. The hope is that 
NextGen will, once fully in place, provide a more flexible 
long-term framework within which air traffic can grow 
efficiently to the benefit of the country. Nevertheless, the 
change has not been proving easy, and never seemed likely to 
be.

    The move to the use of satellite surveillance represents a 
significant improvement to air navigation, filling gaps in the 
existing radar based systems and offering enhanced and faster 
information flows. While the initial adoption of ADS-Out in the 
United States will provide only some of the potential benefits 
of a full ADS system it, nevertheless, will impact positively 
in terms of safety and more efficient use of air space; there 
seems to be general agreement on this. The costs to both the 
aviation sector and taxpayer are not small, and the expenses of 
retrofitting part of the general aviation fleet to meet new 
certification standards by 2020 are equally far from 
negligible. It is perhaps unfortunate that incentives for early 
adoption have been slow to transpire, but firm mandates have 
been shown to stimulate market responses that allow targets to 
be met.
    Questions from Members of the Committee on Small Business

         Rep. Judy Chu (CA-27) Question for the Record

 Small Business Committee Hearing: FAA's 2020 NextGen Mandate: 
          Benefits and Challenges for General Aviation

         Question for FAA Administrator, Michael Huerta

                  Hearing date: June 11, 2014

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

    We're here today to talk about how we can help small 
businesses operate in the NextGen space. In addition, I am 
concerned with the fact that it has been a struggle to achieve 
the government-wide 23% goal of federal contracts that should 
be awarded to small business.

    I have a minority-owned, small business in my district that 
is involved in the NextGen movement. Located in Claremont, CA, 
NBP has worked with the FAA for the past 40 years. They are 
evolving the existing legacy equipment to NextGen, 
specifically, the Integrated Control Monitoring System (ICMS), 
that monitor and control navigational and visual aids on the 
airfield. In fact, their ICMS system is installed in 15 
airports across the country, which includes some of our busiest 
airports like Chicago O'Hare and Atlanta. It has been operating 
for over 12 years and has a great safety record.

    However, in March of this year, the VP of Technical 
Operations Services at the FAA, Mr. Vaughn A. Turner, issued a 
Memorandum that stated the FAA would ``not support any new 
installations of ICMS, maintenance and logistics of the ICMS in 
the National Airspace System.'' Instead, the memo states that 
the FAA recommends ``installation of the Universal Interlock 
Controller (UIC) in lieu of ICMS.'' The UIC, the memo states, 
is an ``FAA-developed system and has FAA-provided logistics, 
training'' and support.

    Question 1:

    To me, it sounds like the FAA is in direct competition with 
a small business in my district. Can you tell me if the FAA has 
a plan for developing or using this type of technology--similar 
to the ICMS?

    FAA Response:

    The FAA's policy, consistent with OMB mandates, is not to 
compete with the private sector in the provision of goods and 
services. When alternatives are available, the FAA strives to 
return the greatest value to the taxpayer. In this instance, 
the FAA has an existing system that uses different technology 
to perform Instrument Landing System (ILS) control, interlock, 
and monitoring functions. The FAA began developing this system 
in 2005 and it is operational at 12 airports. Engineering to 
expand these functions to include monitor and control of other 
navigational aids beyond ILS began in 2011. The decision to use 
the existing system took into account the fact that the 
government already owned a highly reliable and safe 
infrastructure that can be deployed, maintained, and enhanced 
very cost effectively.

    Question 2:

    Small business is the backbone of America and it's what 
keeps our country working. This is why we must continue 
supporting policies and actions that support the growth of 
small businesses, particularly those like NBP that have a 
performance record in delivering quality products. Now, I 
understand that NBP has been working with the FAA for the past 
few months to address issues that were raised by FAA's 
officials. They recently met with Chief Operating Officer, Teri 
Bristol, and the VP of Technical Operations, Vaughn Turner. 
Could you provide any updates on this situation?

    FAA Response:

    The FAA maintains a very robust small business program and 
has met or exceeded government-wide small business goals in all 
categories for years. Part of our program is providing access 
at all levels to small businesses that want to discuss concerns 
and opportunities for contracting with the FAA. We appreciate 
the opportunity to meet with NBP to discuss their concerns, and 
there will be subsequent discussions in the near future.
           Rep. Grace (NY-6) Questions for the Record

 Small Business Committee Hearing: FAA's 2020 NextGen Mandate: 
          Benefits and Challenges for General Aviation

         Question for FAA Administrator, Michael Huerta

                  Hearing date: June 11, 2014

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

    Administrator Huerta -

    Thank you for being here today.

    As you know, my constituents have had many struggles with 
airplane noise. I represent a district that is between 
LaGuardia and JFK, an area that is in the busiest air space in 
the country. With new route procedures, such as TNNIS, the 
NextGen mandate, Airspace Redesign, and now the Metroplex study 
on the horizon, it's difficult to make sense of what the FAA is 
really working on at this moment.

    When the TNNIS procedure was made permanent, the FAA erred 
by not informing the community and elected officials. Since 
then, communication with the FAA has been better, but still has 
room for improvement. Dennis Roberts, the Director of Airspace 
Service at the Air Traffic Organization, said in a recent 
briefing that the recently established New York Airport 
Roundtables would be helpful for the FAA to communicate with 
our communities. These roundtables were created because of 
community advocacy and my work soon after coming to Congress. 
Although 11 other major airports had these roundtables, New 
York City was left without a proper venue for community 
concerns. I ask that FAA use these roundtables to ensure my 
constituents are kept up to date with any changes and new 
information from the FAA. I am pleased, and I'm sure my 
constituents are as well, that the Metroplex studies will use 
one Environmental Assessment or Environmental Impact Statement 
when analyzing the air space. This is a marked improvement over 
individual airports being studies, as the proximity of the 
airports should not be ignored.

    I also ask that as Phase 1 of Metroplex is initiated in 
January, 2015, that the LaGuardia and Kennedy Roundtables 
receive consistent updates.

    Question 1:

    Please let me and my office know of how we can be helpful 
with this process. The noise pollution over my district is a 
top concern, and I want to work with the FAA to remedy these 
problems as quickly as possible.

    FAA Response:

    The FAA has had positive experiences in other metropolitan 
areas with community-based roundtables. As we stated at the 
JFK-LGA meeting on June 18, 2014, the FAA commends the NYNJPA 
and community representatives for the establishment of the 
roundtables for the three major New York metropolitan airports. 
These forums provide a venue whereby communities, the NYNJPA 
and the FAA alike can share information and work toward 
resolution of issues. The FAA will collaborate with the NYNJPA, 
as sponsors of the Roundtables, making its leadership available 
to share updates on the NY Metroplex project as it takes shape. 
The FAA appreciates the support your office has offered with 
this important project.

    Question 2:

    One of the biggest benefits of the NextGen Initiative will 
be reducing the environmental impacts of noise and emissions. 
Can you explain how the 2020 Mandate reduces carbon emissions 
and reduces noise pollution around airports?

    FAA Response:

    The 2020 ADS-B Out mandate will impact noise and emissions 
through the following capabilities:

           Increased ability to fly Optimal Profile 
        Descents (OPDs) through initial application of Ground-
        based Interval Management - Spacing (GIM-S)

                    The goal of the GIM-S tool is to increase 
                OPD use at major NAS airports; OPDs have been 
                shown to decrease emissions and decrease noise 
                for some noise sensitive areas during arrival 
                and approach

           More efficient en route metering and 
        conflict resolution using ADS-B in the User Request and 
        Evaluation Tool (URET) and Traffic Management Advisor 
        (TMA)

                    The improved accuracy of ADS-B as an input 
                to decision support tools, such as URET and 
                TMA, provides for more efficient operations.

           More efficient ATC management of surface 
        movement using the ADS-B Surface Surveillance 
        Capability (ASSC)

                    The ASSC tool will also decrease carbon 
                emissions on the surface at the airports where 
                implemented.

           More efficient spacing and optimal routing 
        in non-radar environments (Gulf of Mexico, Mountainous 
        Regions of Colorado, low-altitude Alaska)

                    Even in non-radar regions, aircraft 
                equipped due to the rule may impact noise and 
                emissions. For example, the primary helicopter 
                operator in the Gulf of Mexico has reported a 
                noticeable reduction in noise complaints 
                surrounding regional heliports after ADS-B 
                surveillance was implemented. The increase in 
                IFR services after ADS-B implementation has 
                driven an increase in the use of higher 
                altitude Instrument Flight Rules (IFR) routes 
                that are relatively quiet as compared to lower 
                altitude Visual Flight Rules (VFR) 
                trajectories.

    All of the capabilities mentioned above reduce fuel burn 
and the requisite carbon emissions. The estimates performed for 
the rulemaking suggested a decrease near 18 million tons of 
carbon dioxide by 2035.
       Rep. Mike Mulvaney (SC-5) Question for the Record

 Small Business Committee Hearing: FAA's 2020 NextGen Mandate: 
          Benefits and Challenges for General Aviation

         Question for FAA Administrator, Michael Huerta

                  Hearing date: June 11, 2014

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

    Mr. Huerta, the FAA has ruled that aircraft operators equip 
for ADS-B Out by 2020. However, a follow-on requirement for 
ADS-B In was sidetracked when an FAA aviation rulemaking 
committee (ARC) concluded that the required multi-billion-
dollar investment by airline and general aviation operators 
cannot be justified at the present time.

    Question 1:

    In order to ensure sufficient buy-in by airline operators, 
do you plan to lay out the business case for ADS-B In and other 
long-term NextGen programs?

    FAA Response:

    In order to develop the business cases and ensure buy-in 
for the aviation community, the FAA has used Other Transaction 
Agreements (OTAs) to help expedite early adoption of ADS-B by 
air carriers. Through OTAs with industry partners, the agency 
is able to demonstrate real benefits of advanced ADS-B In 
applications and procedures while allowing the FAA to share 
costs and risks with the participants. The use of ADS-B In 
applications will give the agency and airlines detailed cost 
and benefit data, and encourage other airlines and operators to 
equip early to capitalize on ADS-B benefits. For example, in 
2009, the agency began a partnership with United Airlines to 
demonstrate an ADS-B In-Trail Procedures application in the 
Oakland Oceanic Flight Information Region. An operational 
evaluation of this capability is ongoing. This demonstration 
has validated the equipment performance standards that were 
published in 2011. In May 2012, the FAA made the decision to 
fund the integration of In Trail Procedures into the automation 
system for use by air traffic controllers. This will fully be 
operational in 2017.

    Based on ADS-B-In application research and feedback from 
the Aviation Rulemaking Committee (ARC), the major near-term 
benefits from ADS-B-In will be generated by Interval Management 
applications. Current FAA plans call for an Investment Analysis 
Readiness Decision for changes to the automation systems to 
support Interval Management to occur this year, with a Final 
Investment Decision to occur in 2016. If these investment 
decisions are made on this schedule, then FAA would expect to 
be able to commence support of Interval Management operations 
by 2020-2021. Interval Management avionics could be available 
in the 2017-2020 timeframe.

    Question 2:

    Given your background in the private sector, are you 
persuaded that airlines today will receive a return on their 
investment on NextGen equipage? Why or why not?

    FAA Response:

    Airlines that have chosen to equip and use NextGen 
technologies are already seeing a significant return on their 
investment. US Airways, for example, is saving $14.7 million 
per year using Optimized Profile Descents at its hub in 
Phoenix. JetBlue is using ADS-B routes over the Gulf of Mexico 
to avoid lengthy reroutes around thunderstorms, thereby meeting 
scheduled arrival times. Horizon Air is using RNAV GPS (WAAS 
LPV) approaches that enable consistent access to small 
airports, thus avoiding cancellations and delays, and is 
annually saving 500,000 gallons of fuel. Horizon has equipped 
its entire fleet with WAAS. Alaska Airlines is using RNP 
approaches into Juneau and is saving $15 million a year by 
avoiding cancellations and delays. Because airlines have 
different operating models for their businesses, it's hard to 
pinpoint when a particular airline will recoup its investments 
for NextGen equipage. Some airlines may choose to invest in 
equipping its entire fleet with the full suite of NextGen 
technologies and the training to use those technologies. Others 
may choose to equip and train differently, depending on the 
services that they provide.

    NextGen benefits will accrue as more aircraft become 
equipped because the national airspace system will overall 
operate more efficiently. There is a direct correlation between 
equipage levels and NextGen system benefits.

    Question 3:

    Mr. Huerta, as you know, the U.S. aviation industry has 
lost billions of dollars and hundreds of thousands of jobs over 
the last decade. While our commercial and general aviation 
industries are recovering, I'm concerned that these gains could 
be mitigated by the tax increases and regulatory policies 
advocated by this administration. The President's FY 2015 
budget included over $4 billion in new or higher aviation taxes 
and fees, including a new $100 per aircraft departure fee that 
is projected to cost operators $1 billion annually.

    What is your position and that of the DOT on the proposed 
increases in the industry's taxes and regulations? Do you think 
these taxes and regulations undermine the global 
competitiveness and economic viability of our aviation 
industry? Why or why not?

    FAA Response:

    The FAA recognizes the critical role aviation plays in 
supporting jobs and generating significant economic activity 
for the country. Aviation is a global industry and we have to 
continue our heritage as world leaders in aviation and setting 
the safety standard for others to measure against and engage 
our partners internationally. The FAA's mission is to provide 
the safest and most efficient aerospace system in the world. In 
promulgating new regulations, the agency considers the impact 
on affected users and industry. We rely primarily on excise 
taxes and fees collected from users of the national airspace to 
fund the FAA. In order to more equitably distribute the cost of 
air traffic services across the aviation community, the 
Administration proposes in the FY15 Budget Request to Congress 
that the Department of Transportation establish a new surcharge 
for air traffic services of $100 per flight. Military aircraft, 
public aircraft, piston aircraft, air ambulances, aircraft 
operating outside of controlled airspace, and Canada-to-Canada 
flights would be exempt. The revenues generated by the 
surcharge would be deposited directly into the Airport and 
Airway Trust Fund. The health of the Trust Fund is critical to 
ensuring FAA's ability to fulfill our mission and serve our 
diverse set of aviation stakeholders, most importantly the 
traveling public, but also industry.

    Other fees beyond the $100 per flight air traffic services 
fee that the Administration has proposed on the aviation 
industry pertain to the Department of Homeland Security.

    As part of the upcoming Reauthorization, the FAA looks 
forward to working with Congress and aviation stakeholders on 
funding and other policy issues.




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