[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
THE NEED TO REFORM THE FEDERAL AVIATION ADMINISTRATION AND AIR TRAFFIC
CONTROL TO BUILD A 21ST-CENTURY AVIATION SYSTEM FOR AMERICA
=======================================================================
(115-15)
HEARING
BEFORE THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
MAY 17, 2017
__________
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
BILL SHUSTER, Pennsylvania, Chairman
DON YOUNG, Alaska PETER A. DeFAZIO, Oregon
JOHN J. DUNCAN, Jr., Tennessee, ELEANOR HOLMES NORTON, District of
Vice Chair Columbia
FRANK A. LoBIONDO, New Jersey JERROLD NADLER, New York
SAM GRAVES, Missouri EDDIE BERNICE JOHNSON, Texas
DUNCAN HUNTER, California ELIJAH E. CUMMINGS, Maryland
ERIC A. ``RICK'' CRAWFORD, Arkansas RICK LARSEN, Washington
LOU BARLETTA, Pennsylvania MICHAEL E. CAPUANO, Massachusetts
BLAKE FARENTHOLD, Texas GRACE F. NAPOLITANO, California
BOB GIBBS, Ohio DANIEL LIPINSKI, Illinois
DANIEL WEBSTER, Florida STEVE COHEN, Tennessee
JEFF DENHAM, California ALBIO SIRES, New Jersey
THOMAS MASSIE, Kentucky JOHN GARAMENDI, California
MARK MEADOWS, North Carolina HENRY C. ``HANK'' JOHNSON, Jr.,
SCOTT PERRY, Pennsylvania Georgia
RODNEY DAVIS, Illinois ANDRE CARSON, Indiana
MARK SANFORD, South Carolina RICHARD M. NOLAN, Minnesota
ROB WOODALL, Georgia DINA TITUS, Nevada
TODD ROKITA, Indiana SEAN PATRICK MALONEY, New York
JOHN KATKO, New York ELIZABETH H. ESTY, Connecticut,
BRIAN BABIN, Texas Vice Ranking Member
GARRET GRAVES, Louisiana LOIS FRANKEL, Florida
BARBARA COMSTOCK, Virginia CHERI BUSTOS, Illinois
DAVID ROUZER, North Carolina JARED HUFFMAN, California
MIKE BOST, Illinois JULIA BROWNLEY, California
RANDY K. WEBER, Sr., Texas FREDERICA S. WILSON, Florida
DOUG LaMALFA, California DONALD M. PAYNE, Jr., New Jersey
BRUCE WESTERMAN, Arkansas ALAN S. LOWENTHAL, California
LLOYD SMUCKER, Pennsylvania BRENDA L. LAWRENCE, Michigan
PAUL MITCHELL, Michigan MARK DeSAULNIER, California
JOHN J. FASO, New York
A. DREW FERGUSON IV, Georgia
BRIAN J. MAST, Florida
JASON LEWIS, Minnesota
CONTENTS
Page
Summary of Subject Matter........................................ v
TESTIMONY
Hon. Calvin Scovel III, Inspector General, U.S. Department of
Transportation................................................. 10
Joseph W. Brown, President, Hartzell Propeller, Inc.............. 10
Robert W. Poole, Jr., Director of Transportation Policy, Reason
Foundation..................................................... 10
Paul M. Rinaldi, President, National Air Traffic Controllers
Association.................................................... 10
Dorothy Robyn, Independent Policy Analyst........................ 10
PREPARED STATEMENTS SUBMITTED BY WITNESSES
Hon. Calvin Scovel III........................................... 70
Joseph W. Brown.................................................. 90
Robert W. Poole, Jr.............................................. 97
Paul M. Rinaldi.................................................. 105
Dorothy Robyn.................................................... 116
SUBMISSIONS FOR THE RECORD
Hon. Bill Shuster, a Representative in Congress from the State of
Pennsylvania, submission of the following:
Letter of May 4, 2017, from Hon. James N. Mattis, Secretary
of Defense, to Hon. John McCain, Chairman, Senate Committee
on Armed Services.......................................... 40
Letter of February 10. 2016, from Ronald P. Brower, Corporate
Secretary, NetJets Inc., et al., to Mr. Shuster............ 126
Press release, ``SWAPA Urges House Passage of AIRR Act,''
February 25, 2016.......................................... 127
Press release, ``Allied Pilots Association endorses AIRR
Act,'' March 3, 2016....................................... 129
Letter to members of the National Air Traffic Controllers
Association (NATCA) from Paul Rinaldi, President, NATCA, et
al......................................................... 131
Hon. Calvin Scovel III, Inspector General, U.S. Department of
Transportation, responses to questions for the record from Hon.
Bill Shuster, a Representative in Congress from the State of
Pennsylvania, and Hon. Frank A. LoBiondo, a Representative in
Congress from the State of New Jersey.......................... 88
Hon. Rick Larsen, a Representative in Congress from the State of
Washington, submission of the following:
Written statement from the Professional Aviation Safety
Specialists................................................ 133
Written statement from the National Business Aviation
Association................................................ 140
Hon. Peter A. DeFazio, a Representative in Congress from the
State of Oregon, submission of article, ``Inspectors Say a
Major Canadian Airline Disaster is `Likely,' '' by Carl Meyer,
National Observer, April 3, 2017............................... 147
ADDITIONS TO THE RECORD
Written statement from the Helicopter Association International.. 151
Written statement from Jeff Martin, Executive Vice President
Operations, JetBlue Airways.................................... 154
Letter of May 24, 2017, from Gerald L. Dillingham, Ph.D.,
Director, Physical Infrastructure Issues, U.S. Government
Accountability Office, to Hon. Bill Shuster, Chairman, House
Committee on Transportation and Infrastructure................. 159
Letter of June 1, 2017, from Stephen L. Johnson, Executive Vice
President, Corporate Affairs, American Airlines, to Hon. Bill
Shuster, Chairman, House Committee on Transportation and
Infrastructure................................................. 164
Letter of June 1, 2017, from Steve Morrissey, Vice President,
Regulatory and Policy, United Airlines, to Hon. Bill Shuster,
Chairman, House Committee on Transportation and Infrastructure. 165
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
THE NEED TO REFORM THE FEDERAL AVIATION ADMINISTRATION AND AIR TRAFFIC
CONTROL TO BUILD A 21ST-CENTURY AVIATION SYSTEM FOR AMERICA
----------
WEDNESDAY, MAY 17, 2017
House of Representatives,
Committee on Transportation and Infrastructure,
Washington, DC.
The committee met, pursuant to notice, at 10:04 a.m. in
room 2167, Rayburn House Office Building, Hon. Bill Shuster
(Chairman of the committee) presiding.
Mr. Shuster. The committee will come to order.
I now recognize Mr. LoBiondo for a motion.
Mr. LoBiondo. Pursuant to rule 1(a)1 of the rules,
Committee on Transportation and Infrastructure, I move that the
chairman be authorized to declare recess during today's
hearing.
Mr. Shuster. The question is on the motion.
All those in favor, signify by saying aye.
All those opposed, signify by saying nay.
In the opinion of the Chair, the ayes have it, and the
motion is agreed to.
I want to thank everybody for being here today. This is an
important hearing we are having here today and talking about
some, what I consider to be, extremely important legislation.
And I believe everybody on the committee, both sides of the
aisle, believe that the reauthorization of the FAA, reforming
it to making it a better system for all Americans, is extremely
important to all of us.
The way America travels, moves goods, and conducts business
today depends on an efficient transportation network. And in
order to remain competitive, we need a 21st-century
infrastructure with modern, 21st-century technology.
This is especially true of our aviation system, but the
fact is the FAA's infrastructure is increasingly obsolete, and
its technology is still cemented in the last century. And to
just quote my colleague, my esteemed colleague from Oregon, in
a hearing we had not too long ago, he said that ``The FAA is
the only agency of Government worse at procurement than the
Pentagon.'' Congress has tried to reform it. It didn't stick.
We have got to try something different to get it to be more
agile, to give us the 21st-century equipment and software we
need.
Then there is the issue of the actual sort of shape of the
FAA bureaucracy. Congress, back in 1986, gave the FAA the
license to reform personnel practices to deal with some of the
mid-level management bulge and to streamline the agencies and
decisionmaking process, but that didn't take either.
And he goes on to propose a 21st-century, constitutionally
chartered corporation in order to accomplish these goals and
make it self-funding, self-sufficient, and not subject to
appropriations or shutdowns or anything else that a Congress
might imagine.
Now, I think that we can see by that statement, and I think
as we talk here today, we agree there is a problem. There is a
solution at hand. It is just the forum that we are going to
debate vigorously on what we think is the best outcome. But as
a result, over these past 30 years, the shocking amount of
taxpayer dollars that we have wasted over the last 3\1/2\
decades, over $50 billion, and that is why this is one of my
highest priorities this year is a comprehensive FAA reform and
reauthorization bill.
So far this year we have held reauthorization hearings
looking at air transportation, manufacturing, airports, and new
entrants and innovations. Today we will focus on the need for
air traffic control reform, divesting the high-tech service,
24/7 service business, from Government and shifting it to an
independent, not-for-profit entity.
It is appropriate we are holding this hearing during
Infrastructure Week. No other single infrastructure reform has
as much potential to improve travel for the average American
flyer or to ensure our hard-earned leadership in aviation.
Although our aviation system is safe, the FAA's structure
and how air traffic is managed have been broken for decades.
The decisions we make in the FAA reauthorization bill this year
will either move us toward a 21st-century aviation system
America needs or doom us to repeating the failures of the past
over and over again.
Everyone should be reminded of what happens if we choose
the status quo. It means our system will be subject to more
budget constraints, sequestration, and threats of Government
shutdowns. Sequestration isn't gone. In 2013, sequestration led
to furloughs and reduced operations, controller hiring and
training suffered, and the FAA bureaucrats tried to shut down
contract towers.
Fiscal constraints continue to be tight--so is the Federal
budget--and that is not going to change anytime soon, and it
may get worse. We continue to rely on the unstable,
dysfunctional annual appropriations cycle. We have had no
stand-alone transportation appropriations bill since 2006, and
over that time period Congress has passed 42 continuing
resolutions to keep Government doors open.
The FAA also relies on authorizing legislation, and it took
Congress 23 short-term extensions over 5 years before it passed
the previous long-term FAA authorization bill.
Under these conditions, the FAA bureaucracy has been trying
to undertake a high-tech modernization of air traffic control
systems for over three decades. It is not working, and it is
never going to work. Sadly, in today's digital age, our
controllers still manage planes with paper strips, which of
course I have brought a few to remind people of that. And if
anybody hasn't been in a control tower, they ought to go into a
control tower and see it.
Some argue that the latest attempt to modernize--NextGen--
is showing some signs of progress, but we all know any progress
is incremental at best, and only in locations where the FAA
partnered with the private sector. And let's remember, the name
``NextGen'' was really just a rebranding of the FAA's ongoing,
failed efforts to modernize the system. ``NextGen'' is just a
marketing term, not an actual technology or innovation, but it
sounds catchier, so Congress will fund it year after year.
But the bottom line is there should be far more progress by
now. Money has never been the problem. Congress has provided
more than $7.4 billion for NextGen since 2004. Results are the
problem. According to the FAA's own calculations, the return on
the taxpayers' $7.4 billion investment has only been about $2
billion in benefits. And we have still got a long way to go.
According to the DOT inspector general in 2014, the
projected initial cost for NextGen was $40 billion, but they
have said it could double or triple and be delayed another
decade. Over the years, the FAA has described NextGen as a
transformation of America's air transportation network. They
also said it will forever redefine how we manage the system.
But in 2015, the National Research Council confirmed what
was already becoming painfully clear. According to the NRC, the
original version of NextGen is not what was being implemented.
It is not broadly transformational, and it is not a fundamental
change in the way the FAA handles air traffic. Only in the
Federal Government would such a dismal record be considered a
success.
While the FAA continues to fall behind, the rest of the
world is moving on, with new technologies, without the United
States involvement. Nothing less than America's leadership is
at stake in an industry that we pioneered and have led since
Kitty Hawk.
Some have proposed targeting reforms to fix the FAA's
problems, but that is an approach we have already tried many,
many times, starting in the 1980s. Since 1995, Congress has
passed various reforms to allow the FAA to run more like a
business.
Procurement reform in 1995 for the FAA to develop a more
flexible acquisition management system. Additional reforms in
1995 exempt the FAA from most Federal personnel rules and
allowed the FAA to implement more flexible rules for hiring,
training, compensating, and assigning personnel. Procurement
reforms in 1996 developed a cost accounting system.
Additional personnel reforms in 1996 allowed FAA to
negotiate pay. Organizational reforms in 2000 to establish a
COO position. Additional reforms to allow greater pay so the
FAA could recruit good candidates, particularly for a COO
position. Additional reform in 2000 by the Executive order to
create the Air Traffic Organization.
Organizational reforms in 2003 to establish the Joint
Planning and Development Office to better coordinate NextGen.
Reforms in 2012 to establish a chief NextGen officer. Property
management reforms in 2012 to allow a better process for
realignment and consolidation of facilities.
All have failed to result in the FAA being run more like a
business. The FAA has always performed like a massive
bureaucracy and will continue to. It is the only DOT agency
that serves as both transportation service provider and safety
regulator. Regulating itself is an inherent conflict of
interest, and separating the two functions is simply good
Government. It is time for reform that is truly
transformational.
Real change can be difficult--we have learned that over the
years--but the broader lesson over the last several decades is
that the true risk lies in doing nothing. Last year's bill that
passed out of committee will serve as a framework for new
legislation, but we are open to change. We want to talk to
people and get their ideas, and that is what we hope to hear
today.
As we continue to move forward, our air traffic control
reform proposal will be based on the following principles.
Create an independent, not-for-profit corporation to provide
air traffic services. Fund the new service provider by fees
assessed for air traffic service. Free the new service provider
from governmental dysfunction, political interference, and the
uncertainty of the Federal budget process.
Create a governance structure that is right-sized and
balanced, and a board with sole fiduciary responsibility to the
organization. And I need to repeat that: fiduciary
responsibility. That is a legal term. If you are on a board of
directors in the United States, and you have the fiduciary
responsibility, it is not to who appointed you to the board; it
is to the board. It is to that organization is who you are
responsible for, and that is the law. That is just not some pie
in the sky. People can be removed and be prosecuted if they are
not doing their fiduciary responsibilities.
Ensure connectivity, access to the airspace, and the
continuity of air services for general aviation, small and
rural communities, and airports that serve them. And let me for
the record remind people, I am from a rural district. I have
one very small airport. I doubt I have more than a handful of
people that work for the airline industry, but I have several
hundred GA pilots.
So if anybody thinks that I want to harm the GA or rural
communities, they just don't know who I am and where I am from
because I am committed to make sure what we do protects small
and rural communities and protects the GA community. The GA
community is over a $1 billion industry. Why in the world would
I want to harm an industry that produces so much good for this
country?
We want to ensure full access to airspace and air services
to support our armed services and their national security
mission. Free the air traffic control business from the FAA's
bureaucratic procurement process and the appropriations cycle.
End the Federal Government's decades long pattern of costly,
delayed, and failed management of modernization. Give the new
service provider the ability to access financial markets,
leverage private funding for multiyear capital projects needed
to modernize the system.
Allow the FAA to focus on its safety mission and
certification mission. Ensure continued oversight of the air
traffic services by the FAA, DOT, and Congress.
And, of course, lots of people are out there saying that
that is not what we are going to do, but let me be clear: the
FAA, the Department of Transportation, and Congress will still
maintain vigorous oversight to the airspace of this country and
ultimately allow all users of the system, including airline
passengers and the general public, to realize the significant
benefits of a modern air traffic control system, including
decreases in delays, flight times, and congestion.
Previous efforts to reform the FAA and modernize the system
teach us that the only way to realize these benefits is to get
the Government out of the way. As President Ronald Reagan said,
``Government is not the solution to the problem; Government is
the problem.'' And we see all over the world people turning to
the private sector, whether it is Europe or it is Asia,
Australia, New Zealand, Canada, look around the world.
Countries, governments are looking to partner with the private
sector because they see they do it better.
Since the introduction of the AIRR Act [Aviation
Innovation, Reform, and Reauthorization Act] over a year ago,
this has been an ongoing process of education and discussion.
We have held over 130 meetings with stakeholders, including
both supporters and opponents of the AIRR Act. We have had
numerous meetings with Members of the House, the Senate, the
White House, and other committees. These meetings have been
extremely productive and given us new ideas to improve the
legislation.
As I said, I want to hear the same thing from today's
witnesses. What are your ideas that we can build upon on the
principles that I have outlined? We have also gone to Canada to
see their system firsthand, and we will go again with more
Members. And I would encourage any Member that wishes to go on
May 25, Thursday, in the afternoon, we will be heading up to
Canada and coming back on May 26 to, again, go up there not so
we can imitate their system but to learn from the lessons of
their system, to learn to help to fix our own broken structure.
Over 60 countries have followed this kind of reform, and it
has worked in each case. Opponents of reform either ignore the
evidence or must believe we are less capable than the other 60
countries, and for me that is a bit outrageous. We are the
United States of America. We can do this. We can do this better
than anybody else. So it is time for us to take a look and to
move forward.
Air traffic control is not inherently a governmental
function. It is a 24/7 technology service. For those who worry
that the system is too complex, I would say this. The most
complex thing in the airspace is not the air traffic control
system; it is the airplane. It is the people at Boeing and
Airbus and Cessna and the people that build these aircraft.
That is the most complicated thing in the system.
And the FAA already oversees those highly sophisticated
private sector aircraft manufacturing, maintenance, and flight
operations at arm's-length. We don't build airplanes today; the
Government doesn't, and that is the most complex thing in the
system.
Overseeing air traffic control is not going to be more
complicated than anything else the FAA already does. This
transformational reform will fix our obsolete and dysfunctional
air traffic control structure, move beyond the wasteful,
inefficient status quo, and benefit all of the users of the
system.
Ultimately, reform will give the American flyer a safe,
efficient, aviation system, using 21st-century technology to
ensure more on-time departures, more direct routes, using less
fuel, which will be better for the environment, and less wasted
time on the tarmac.
Ladies and gentlemen, again, I thank the witnesses for
being here. And with that, I will yield to the ranking member
for an opening statement.
Mr. DeFazio. Thank you, Mr. Chairman. Jim would have been
proud. That is the longest opening statement since former
chairman Jim Oberstar, but you only did it in one language. So
we could have--we could add a simultaneous translation perhaps.
Thanks for the time, Mr. Chairman. First off, I spent about
over an hour with Dr. Dillingham from the GAO, who I would say
is the foremost expert and the longest term critic of the FAA,
its procurement process, and movement toward a 21st-century
system. And I am not aware that any other member of the
committee has spent that time with him, and he has not been
invited to testify.
He has a different story to tell today, and he thinks it
will be a mistake--and I am paraphrasing--but we are now on the
cusp of a 21st-century system that will be the envy of the
world. And he and other experts--MITRE Corporation, others--say
a massive change now, where you cleave the FAA into parts, you
leave the most vital thing to our manufacturers' certification,
subject to appropriations, sequestration, and shutdowns.
You leave the most vital thing that is important to the
American public, which is safety and oversight of safety,
subject to sequestration, shutdowns, and political meddling.
The only thing that gets moved is the ATO, and the ATO would be
moved and essentially effectively controlled by the airlines. I
note the airlines aren't here today, perhaps because they
haven't looked so great recently in public, and I would also
note that the airlines themselves have had outages 36 times,
major outages, 36 times since 2015.
I am not aware that the national air traffic control system
has had a major disruption, with the exception of deliberate
sabotage by a contractor who knew how to get the system and the
backup system. But the airlines, on their own, with no
sabotage, have managed to melt down their dispatch and their
reservation systems 36 times, stranding millions of people, so
they can do it better. Right? That is an interesting question.
So I think that members of this committee that want to be
educated on this should take--and maybe we can invite them in
here and spend that hour with Dr. Dillingham and hear the story
of how things have changed and the progress we are making and
the potential for disruption at this point in time.
In terms of funding, the FAA is currently projected over
the next decade to be 97 percent self-funded. Unfortunately,
the way our colleagues around here and the budget process
works, despite the fact they are self-funded, they can be
sequestered or shut down. That is a simple, simple fix. Take it
off budget; make it into a trust-funded program. They are
raising the revenues. That is a simple fix.
No, we are going to cleave it in half, put vital functions
over here, still subject to sequestration and shutdown, and
take this one part and put it over here and say somehow they
are going to self-fund.
Now, the question of course is, how are they going to self-
fund? The airlines have told me time and time again they hate
the ticket tax, they hate the ticket tax. They say, ``That is
our money.''
I say, ``No, it is not your money. I buy a ticket, I pay
the tax, the tax goes to the Government. It is not your
money.''
They say, ``No, no. That affects the price of the ticket,
and competition and everything else. It is a horrible thing.''
So if they do away with the ticket tax, there goes 70
percent of the revenues. What are they going to put in its
place? It is going to be a per operation charge, or something.
We don't know. Congress will have no say over this.
Now, there will be a board, if I could have that slide, and
a construct which is--we will show here--for the person running
the slides, if you could put up this slide, please. And this is
the new construct. Anything that affects competition will go
through this process. The board makes a decision about a new
approach, a new route, new fees.
All that goes through this process and then goes to the
Secretary. The Secretary will have established a large, new
office of consultants within his, or at this point her, office
who will advise the Secretary, he will have a limited period of
time, and if the Secretary and the board disagree, they go to
court. Now that is a great way to deal with new approaches,
funding, and a whole bunch of other things.
Congress will have nothing to say about what people or the
American people are charged for running this system. When the
ticket tax goes away, what happens to the AIP [Airport
Improvement Program]? What happens to safety? What happens to
certification?
We had testimony from a gentleman in here who has an
intriguing new model to serve small and mid-sized cities. And
he said his biggest problem is certification, and he said
people are good at the FAA. There aren't enough of them doing
certification. They don't have enough funding.
Well, is this new enlightened board going to generously
fund that also? We have assurances, ``Don't worry about those
things.'' You can put that down now.
Now, we have heard other things here that are, you know, an
interesting construct, which is we are way behind because we
don't use ADS-B [automatic dependent surveillance-broadcast].
If I could have the first slide, please. Can we get a slide?
OK. This is the oceanic airspace, and you will notice that
a vast majority of the planes are in oceanic control by U.K.
and Canada. So they are using ADS-B. Makes sense. Now, we are
not. Currently, airlines pay, to have satellite-based
navigation, a fee in this low part of the chart. There aren't
that many because people do the loop to the north.
So, in fact, you know, we have--NAV CANADA has one aircraft
in continental airspace for every aircraft in oceanic airspace.
We have 1 aircraft in oceanic airspace for every 51 in the air
over the United States of America.
Now go to the second slide. Oh, by the way--yes, go to the
second slide. Now, see all that yellow? That is the U.S. That
is going to be totally ADS-B, satellite-based, in 2020, with an
exception.
The airlines have petitioned and been given permission from
the FAA for exceptions because many of their older planes do
not have modern enough GPS systems to use the new ADS-B. The
airlines, again, have petitioned that they have a number more
years before those planes would be able to use the ADS-B
system--not the FAA, the airlines themselves.
Now, Canada is going to continue to have a radar-based
system because they don't have much domestic traffic. And so we
are being criticized because we won't pay a bunch of money for
the few planes that use our oceanic airspace, but we are going
to put, you know, 100 times that many plans under ADS-B in
2020.
Now, here is my fear. My fear is there were disruptions in
Canada, there were disruptions in Great Britain, including the
bankruptcy of the system, and a bailout, and, you know, every
system that has transit, and all the others in the world have
gone to Government-based corporations or Government-controlled
corporations.
And there are only two countries that have gone the other
way. And MITRE has done studies; others have done studies.
There will be a period of disruption, particularly when you are
cleaving the agency in half, and the certification people over
here who have to certify the new approaches, who have to
certify the new equipment, oh, they are on furlough because the
stupid Congress did another shutdown or sequestration. Oh, but
the ATO is up and running. Well, you can't use those new
approaches because the people over here who have to certify it
can't work.
Now, splitting this agency in half does not make sense to
me. Now, the chairman talked about the failed reforms. I sat
down with the FAA Administrator, who also has not been invited
to testify before this committee on this subject, who I think
has made tremendous strides and brought the agency way under
control compared to anyone else in recent history.
And he said, well, they failed because Congress failed to
say that the trolls at OMB and the Secretary couldn't meddle.
So the proposed reforms didn't go forward because OMB took
control, as they do over too many things, and then the
Secretary messed with it and they ended up with a system--I
know, Mr. Poole, you find this amazing, you know, but, you
know, that is the way it happened, and these did not go
forward.
So, simply, you can just say we are going to give authority
to reform procurement, we are going to give authority to reform
personnel, to the head of the FAA whose proposals will not be
subject to OMB because they are now self-funding, and will not
be subject to meddling by the Secretary of Transportation and
her staff. That would be a significant way to get there. Put it
off budget.
It is already raising the revenue it needs, but, no, we are
going to have a new corporation that is going to figure out a
different way to raise revenue, and, oh, by the way, forget
about safety, forget about certification. They are
afterthoughts over there in the Government, not funded by any
stable source.
I have invited a witness today, and I hope people listen
carefully, Joe Brown. He is the president of Hartzell
Propeller. His family has been involved in the aviation
business since the Wright Brothers, actually.
It is an interesting story, but he won't have a chance to
tell that today because I want him to focus on his experience,
both in that industry and as a pilot, and to talk about what he
sees as the things that are at risk as a pilot, a GA pilot in
this country, and things that we have done that are
extraordinary for GA pilots that would be at risk in a new
system because, why would the commercial airlines give a darn
about all those GA airports and all those new, improved
approaches and updating those, because that costs money and
that is not in their interest. They don't use them. They don't
care.
So we will hear from him, and I think his testimony is
going to be a little more compelling than a couple of think-
tank people that we are going to hear from yet again and again
and again. But we haven't heard from the FAA Administrator, we
haven't heard from Dr. Dillingham, but Ms. Robyn is here for
the second or third time, and Mr. Poole for the umpteenth time
from his wonderful rightwing think-tank.
So that is what we have before us, Mr. Chairman. I do think
there are things we could agree upon, but, you know, I do not
believe that privatizing the ATO is the answer.
Thank you.
Mr. Shuster. Well, I thank the gentleman. You almost
equaled my opening statement. You were 2 minutes short. But,
look, this hearing is going to be about--it has to be about
knocking down things that just aren't true. What Mr. DeFazio
puts up on his chart, it is not my proposal. I don't know whose
proposal it is. It may be Mr. DeFazio's proposal, but it is not
mine. And let me just start off. To undermine the whole thing,
start at the very, very top. It says on his chart if they
decide to increase passenger aviation taxes, they cannot--they
cannot--this new entity cannot increase taxes. They don't--
under law, they cannot do that.
Second, it says the corporation decides to change--let me
finish with that.
Mr. DeFazio. Are we having a debate, or are we having a
hearing?
Mr. Shuster. Well, we are going to have a debate, I think.
The only person that can raise taxes is the United States
Congress. So that is patently false.
The second thing at the top is the corporation decides to
change ATC safety procedures. That can't happen. They have to
come back to the regulator, to the FAA. So, again, I don't know
whose chart this is. It is certainly not my chart. So as we
move forward, I hope folks----
Mr. Young. You might want to call that fake news.
Mr. Shuster. I don't want to go there. I don't want to go
there.
And just one other point that the gentleman said,
Congress--he said Congress and OMB failed. He is absolutely
right. He is making my case. We have to take this out of the
Congress, out of the OMB, stopping the way they operate. It is
crazy. But, again, I am concerned that he is taking it all out.
Will there be any oversight in his new idea of how to run it?
But, again, this chart, the chart that he put up there,
that is not my chart. So, ladies and gentlemen, I have got to
be very clear on that.
Mr. DeFazio. Mr. Chairman, if I could rebut for 1 minute.
Mr. Shuster. You certainly can.
Mr. DeFazio. Thank you, Mr. Chairman. They can set user
fees. User fees I consider to be taxes. I consider the ticket
tax to be a user fee, but we can argue semantics over that. But
they are going to determine how the system is funded, which is
tantamount to taxation without review by the Ways and Means
Committee or Congress.
And, secondly, I am not proposing--I am proposing to give
the FAA Administrator that authority free of OMB and
secretarial interference, and also we would give them a budget
that is free from sequestration and shutdowns through their own
funding mechanism. Congress would set the funding, if it needs
to be adjusted. Congress could intervene if they felt the
reforms weren't warranted, unlike in your privatized system.
Thank you, Mr. Chairman.
Mr. Shuster. I thank the gentleman, and we will now go to
our witnesses. I would like to welcome again our panel. I
believe everybody has testified before us before on at least
one occasion, or maybe a few.
First, the Honorable Calvin Scovel III, the inspector
general of the United States Department of Transportation. He
has been here many times.
Joseph W. Brown, the president of Hartzell Propeller,
Incorporated. I believe you testified in 2014, so this is your
second time here.
Mr. Robert Poole, director of transportation policy at the
Reason Foundation, who has been thinking deeply about this
subject for many years.
Mr. Paul Rinaldi, the president of the National Air Traffic
Controllers Association, who has been before us before.
And Dorothy Robyn, the independent policy analyst and
former Clinton administration official, who, again, has been
through the wars on this many, many times, and we appreciate
you being back here to look at your insights.
So, again, I look forward to hearing your testimony. I ask
unanimous consent that our witnesses' full statements be
included in the record. And without objection, so ordered.
Since your written testimony has been made part of the
record, the committee would request that you limit your oral
testimony to 5 minutes.
And with that, Mr. Scovel, you may proceed.
TESTIMONY OF HON. CALVIN SCOVEL III, INSPECTOR GENERAL, U.S.
DEPARTMENT OF TRANSPORTATION; JOSEPH W. BROWN, PRESIDENT,
HARTZELL PROPELLER, INC.; ROBERT W. POOLE, JR., DIRECTOR OF
TRANSPORTATION POLICY, REASON FOUNDATION; PAUL M. RINALDI,
PRESIDENT, NATIONAL AIR TRAFFIC CONTROLLERS ASSOCIATION; AND
DOROTHY ROBYN, INDEPENDENT POLICY ANALYST
Mr. Scovel. Chairman Shuster, Ranking Member DeFazio,
members of the committee, thank you for inviting me to testify
on FAA's efforts to implement reforms and modernize the
National Airspace System. My testimony today will focus on
OIG's past and ongoing work regarding FAA's efforts to
implement various agencywide reforms, as well as its progress
and challenges with NextGen.
Mr. Shuster. Can you pull the mic a little closer to you?
Mr. Scovel. Yes, sir.
Mr. Shuster. Don't be afraid of it.
Mr. Scovel. While my office does not make policy
recommendations, I will also discuss how other countries have
structured their aviation systems and highlight key factors
that policymakers may wish to consider in evaluating FAA's
structure.
Over the last two decades, FAA has made several reforms in
response to congressional mandates to improve operations, cost
effectiveness, and management. These include establishing new
employee compensation systems, as well as an acquisition
management system. FAA has also undertaken multiple
reorganizations to improve the agency's efficiency and reduce
expenses.
In addition, FAA achieved more than $2 billion in cost
savings over a 13-year period by outsourcing flight service
stations.
Despite this progress, FAA's reforms have not achieved
their intended cost or productivity outcomes. Instead, budgets
have increased, with a 35-percent increase in FAA's total
budget after adjusting for inflation between fiscal years 1996
and 2015.
In addition, FAA's productivity initiatives for its air
traffic controller workforce have not yielded improvements, in
part because FAA did not establish measurable productivity and
cost goals or metrics.
FAA's reforms have also fallen short in improving its
ability to deliver key NextGen technologies on time and within
budget. This is due to longstanding management weaknesses, such
as overambitious plans, unreliable cost and schedule estimates,
unstable requirements, and ineffective contract management. For
example, FAA has made progress with its six NextGen
transformational programs, such as installing the ground system
for ADS-B. However, FAA has not determined when the programs
will start delivering benefits or how they will improve the
flow of air traffic or controller productivity.
Although FAA currently estimates the six projects at $5.7
billion, their total costs and completion dates remain unknown,
in part because their requirements continue to evolve.
Furthermore, weaknesses with internal controls and
oversight problems have hindered FAA's contract management,
which we found in our reviews of sole source, service support,
and small business set-aside contracts. To its credit, FAA has
worked with industry to identify and launch some of the highest
priority NextGen capabilities. For example, a key priority is
performance-based navigation, or PBN, which allows more fuel-
efficient aircraft routes and reduces airport congestion.
FAA fully deployed these procedures at the northern
California metroplex in 2015, well ahead of schedule. FAA has
also deployed new technologies at some airports to enhance
controller-to-pilot data communications and runway operations,
yet many risks remain to complete these and other NextGen
priorities, and full benefits for users remain years away.
Key challenges include addressing community noise concerns
with PBN routes, resolving avionics issues, and integrating
complex, onboard systems and controller technologies.
As Congress, the administration, and stakeholders consider
FAA's structure, other nations may offer a helpful comparison.
At the request of this committee, we reviewed the aviation
systems of Canada, France, the United Kingdom, and Germany. All
four have separated their safety and oversight functions, which
remain Government-controlled, from the air traffic control
functions.
Air traffic control has been commercialized--their term--
into air navigation service providers via various
organizational structures. These providers finance their
operations through user fees, and may finance their
infrastructure and modernization efforts with long-term bonds
and other debt instruments. They also embark on smaller
modernization efforts and roll them out incrementally using a
variety of methods, such as modifying commercial off-the-shelf
products.
Yet, any discussion on FAA's structure should consider our
Nation's unique characteristics. As you know, the U.S. runs the
busiest and most complex aviation system in the world, with
more operations each year than the other four nations combined.
Safety, financing, and labor issues will also be key questions.
Ultimately, safety will remain the top priority in
overseeing our National Airspace System. Regardless of what the
future looks like, strong controls and oversight will be vital
to maintain a safe, innovative transportation system.
This concludes my statement, Mr. Chairman. I look forward
to answering questions you or the committee may have.
Mr. Shuster. Thank you, Mr. Scovel.
And with that, Mr. Brown, you may proceed.
Mr. Brown. Chairman Shuster, Ranking Member DeFazio,
members of this committee----
Mr. Shuster. You can bring your mic closer. Get right up
close to it because then we can hear you better. We want to
make sure----
Mr. Brown. Is this better?
Mr. Shuster. Better.
Mr. Brown. Chairman Shuster, Ranking Member DeFazio, and
members of the committee, I would like to thank you for
inviting me here today. My name is Joe Brown, and I come today
as a businessman and a pilot. I also represent a company called
Hartzell Propeller, a 100-year-old aviation business whose
roots trace to the Wright Brothers.
Located in rural Ohio, we do our business out of a 4,000-
foot runway that takes us all over this country to our
customers, in Texas and Florida and Georgia and Minnesota, and
everywhere in between. Because our customers build airplanes,
they are around airports. Our business depends, and their
business depends, on the amazing infrastructure that the
citizens of this country have put into the national airspace.
And we also depend on another thing, which is the
incredible freedom to fly that we enjoy in this country. And
because of those things, we have made a market in this country
like no other for aviation, and we are very grateful for that
and deeply invested.
Now, as a pilot, 400 to 500 hours a year my office is the
cockpit. And when I fly, I find a modern system, a high-
functioning system, and I have seen it evolve over time right
before my eyes. I find controllers that do their job well. I
find easy access and powerful technology.
I can file a flight plan from my smartphone and get my
proposed route, back before I get to the airport, in a text.
When I take off, I have GPS navigation systems on board that
allow me to fly point-to-point all over this country. A couple
of months ago, I took off out of the Dallas/Fort Worth metro
area and got cleared direct to Burlington, Vermont, 1,300 miles
ahead.
And while I am flying, I have the veil of safety brought to
you by ADS-B which is, in fact, deployed, giving me traffic
callouts and separation cues and weather in my route of flight.
And when I come in for landing, I can pick from 3,000 precision
approaches brought to me by a NextGen feature called WAAS [Wide
Area Augmentation System], including at my home airport, which
I value tremendously on foul weather days.
So the bottom line for me is, NextGen is working. It works
for me every day, and it is getting stronger all the time. And
from a technology standpoint, I believe we are on the right
track.
It is proper to ask in modernization, where should we go
next? Many are arguing that what we should do is spend the next
5 to 7 years focusing on the structure and the governance of
our Air Traffic Organization. I don't like that risk profile. I
don't think we should be distracted.
As a businessman, I think that what we will find is that we
will raise more questions than we can answer, questions that
don't have clear answers, and questions that will burn up
precious time trying to answer, like how will we assure equity
among users, and how will we finance this organization, and
what borrowing risk can it take.
And what about new market entrants; how do they fit into
this picture? And that doesn't even address whether the people
are better served by the structure after we transfer so much
national wealth to it.
Because I am a business guy, I get to evaluate a lot of
companies, and I have bought several. And we have a simple
framework when we are looking at an investment. We say, what
are its strengths? Can they be leveraged? Do they differentiate
it in the business we are trying to do? And what are its
weaknesses, and do we understand those weaknesses, and can we
fix them?
And when both of those things are true, we buy that company
because we know if we elevate strengths and reduce weaknesses
that we will create value. And in my calculus, the ATO presents
exactly that risk profile--enormous strengths, world-class
systems, and very specific weaknesses that we can address.
The conclusion I have drawn is that we should not spend 5
to 7 years distracted by change, knowing that things take
longer and cost more, with the hope that at the end this
restructuring journey will deliver a big payoff.
What is next? I think that we should stay on track with the
technology plans that the NextGen Advisory Committee and the
FAA have agreed to. The stakeholders are already aligned, and
the technology that is in the field works, and there is more
technology coming.
Let's keep tuning and strengthening the collaboration that
has been driving so much progress. Even Government overseers
recognize that the NextGen Advisory Committee is having impact,
and it has been run by an airline executive, so clearly the
strongest voice is setting the priorities.
Let's expand on the technologies that are already deployed.
For example, DataComm is in the field today at 55 towers in the
country and will be delivering en route services to aircraft by
2019. NextGen is deployed and getting better all the time, but
let's tackle specific weaknesses that we have in the system,
like the way we finance the FAA and the ATO, and the way we
give them mechanisms for doing long-term capital planning and
investment.
And, finally, let's work on that ATC infrastructure. There
are a number of ways that private-public partnerships could put
these guys in better buildings. In the next 5 to 7 years, we
could have them all in better buildings.
I encourage us to take a different path to think about
options that are fixing the fixable and elevating strengths.
Thank you for the time today. I look forward to questions.
Mr. Shuster. Thank you very much, Mr. Brown.
Mr. Poole, you may proceed.
Mr. Poole. Good morning, Mr. Chairman, Ranking Member
DeFazio. As some of you know, I have been researching this
subject for close to four decades. Most recently, I have been
part of two working groups, one for the Business Roundtable and
the other for the Eno Center.
Both groups have concluded that we have major fundamental
funding and structural problems and that corporatization of the
ATO is the best solution. That was also the conclusion that the
FAA Management Advisory Council reached unanimously in their
2014 report that called for corporatizing the ATO.
My focus this morning is primarily on the issue of
governance. The Business Roundtable group recommended a
nonprofit corporation in which customers and other stakeholders
govern. This is basically a user co-op, except for the addition
of other stakeholders----
Mr. Shuster. Can you pull that mic a little closer to you?
Mr. Poole [continuing]. Users.
Mr. Shuster. That thing moves, I think. Pull the whole box
towards you.
Mr. Poole. All right.
Mr. Shuster. Please. Thank you.
Mr. Poole. The structure proposed is basically a user co-op
with the addition of other stakeholders.
And the governance model that was proposed in last year's
bill, as recommended by BRT [Business Roundtable] and Eno, was
intended to be a U.S. adaptation of NAV CANADA's nonprofit,
stakeholder-governed corporation, running in the best interests
of all the stakeholders. But the stakeholder board from last
year has been described misleadingly as giving control over the
airspace to the major airlines.
This, of course, has led to serious concerns from general
aviation groups, people in small towns with small airports, and
rural legislators. But in a nonprofit, user co-op, there are no
shareholders. Every board member has an equal vote with any
others, so even if there were airlines on it, which there won't
be, they would only have a small minority of the members, and
they could easily be outvoted by other members because all
votes are equal. It is not like in a corporation where you have
preferred shareholders.
Now, this model is consistent with international aviation
law, with ICAO [International Civil Aviation Organization]
principles, and with global best practices. And the proposal
did not originate with the airlines. I would like to set the
record straight on that. The Business Roundtable group began in
2011, made an initial presentation to A4A [Airlines for
America] in the spring of 2012.
We got a pretty cool, if not negative, reception at that
point. No one wanted to restart the battles that had raged over
this issue in previous decades. Everything changed in the
spring of 2013, thanks to the sequester. Controller furloughs,
a closed FAA Academy, threatened closure of 189 contract
towers, got everybody's attention. In response, A4A, NATCA
[National Air Traffic Controllers Association], and AOPA
[Aircraft Owners and Pilots Association] all requested new
conversations with the BRT working group.
And, in May 2013, all three groups in the conference room
at Business Roundtable agreed that an air traffic control
corporation--converting the ATO into a corporation, self-funded
and out of the Federal budget, was the best approach.
After this happened, that fall, Governor Engler and several
others briefed Chairman Shuster on the proposal. This was not
coming from the airlines.
The BRT group included a former FAA Administrator, a former
Chief Operating Officer of the ATO, two former senior officials
of U.S. DOT, and several consultants. Our governing model, as I
said, was patterned after NAV CANADA's. Their stakeholder board
represents airlines, general aviation, unions, and the
Government, plus four other private citizens selected by the
stakeholder members.
No board member at NAV CANADA can hold any paid position in
an aviation organization. It is a system that really works. And
of four seats elected by airlines, two are from major airlines,
retired people. One is from an air tour company, and one is
from a regional airline serving the Far North.
Now, the U.S. is larger and has a much larger general
aviation community. GA, as a key stakeholder, should have more
than one seat. Since small airports are so vital, airports
definitely are a stakeholder that should be electing a board
seat as well.
And I think in terms of the airlines, regional airlines and
cargo airlines should be defined as stakeholders in addition to
perhaps two seats from the major carriers. My written testimony
gives one example of a proposed 15-member stakeholder board.
Let me close with the concerns of small airports. Having
airports and regional airlines as stakeholder is part of the
answer, but Congress needs to deal with the fears about loss of
control towers at small airports and worries that somehow
service might be dropped in rural areas.
First of all, Congress could specify that any airport
meeting a reasonable benefit-cost test should be assured of
getting tower services, which is the standard today.
Second, FAA would be in charge of aviation safety, and no
changes in procedures or equipment could happen without its OK.
They might be proposed by the corporation, but would have to
pass muster with the FAA, and could not be done unilaterally.
Third, ATO's inadequate funding today gives airports the
short end of the stick. There has been a moratorium on contract
towers since fiscal year 2014. So small airports are losing
today, not getting what they need, because of FAA's ongoing
budget problems.
A self-funded corporation would mean improvements for small
airports, thanks, number one, to predictable user fee revenues
and a financed capital improvement program for facilities.
Secondly, a corporation would very likely implement remote
tower technology that would increase the benefits from having a
tower because of better surveillance, and reduce the costs;
therefore, the benefit-cost ratio would be higher, and more
small airports would qualify. This would be a boon for small
airports, not a detriment.
That concludes my testimony, and I will be happy to deal
with questions.
Mr. Shuster. Thank you very much, Mr. Poole.
And with that, Mr. Rinaldi, you may proceed. Thank you.
Mr. Rinaldi. Good morning, Chairman Shuster, members of the
committee. Thank you for the opportunity to testify----
Mr. Shuster. Microphone.
Mr. Rinaldi [continuing]. In front of you today.
Mr. Shuster. Slide that whole thing towards you, the whole
box. There you go.
Mr. Rinaldi. How about that? We currently run the largest,
safest, most efficient, most complex, most diverse airspace
system in the world. It contributes $1.5 trillion to our gross
domestic product and provides over 12 million American jobs.
Our National Airspace System is unique, unequalled, and
unrivaled by any country. This is due, in large part, to the
impeccable work the men and women that I represent do every
day. NATCA members guide approximately 70,000 flights per day
in the United States, ensuring over 900 million passengers
arrive safely at their destination every year.
The United States airspace system is considered the gold
standard in the aviation community, but that status is at risk.
Unstable, unpredictable funding and the status quo threaten it.
We need a stable, reliable, predictable funding stream to
operate our current system and allow for growth in the United
States aviation system.
Although NATCA is calling for change, we cannot support any
proposal without fully reviewing all its details. It is not
only that we oppose the status quo, which is very much broken,
we also oppose any system that would put ATC in a for-profit
model.
In order for NATCA to consider support of any proposal, it
must meet our four core principles of reform. First, any new
system must keep the safety and the efficiency of the National
Airspace System the top priority.
Second, any reform must protect our members' employment
relationship. This must maintain our members' pay, benefits,
retirement system, healthcare system, as well as their work
rules and our contract.
Third, any reform system must have a stable, predictable
funding stream, adequately enough to support air traffic
control services, growth, new users, staffing, hiring,
training, long-term modernization projects. Also, this reform
must provide a stable funding stream through the transition
period.
Fourth, any reform must maintain a dynamic, diverse
aviation system that continues to provide services to all
segments of the aviation community and to all airports across
America. I cannot emphasize enough how important it is to
continue to provide services to many of the diverse users in
the National Airspace System.
Both large and small, new and old, big city to rural
America, the United States has a vibrant, general aviation
community that relies upon us. Rural America's economic success
is tied to access to the National Airspace System.
Last year, NATCA supported the AIRR Act of 2016 because it
met these four core principles. While we do not believe there
is only one solution to the problems, we will carefully review
all proposals using the same standard. Please don't take
NATCA's position as a need for stable, predictable funding as
to mean the appropriators have not done their job.
The appropriators in both chambers of Congress on both
sides of the aisles have done their job well. The problem stems
from lack of regular order we have been experiencing for over
10 years now. This lack of regular order has led to stop-and-go
funding, many threats of shutdown, and our current staffing
shortage.
We are at a 28-year low of fully certified controllers. We
have 10,532 certified controllers; approximately 3,000 are
eligible to retire at this time.
In addition, unstable funding has prevented on-time
implementation of NextGen modernization projects. NATCA takes
pride in our role in partnering with the FAA in developing and
implementing important modernization projects. We have
successfully worked on many over the years. Unfortunately, all
have been impacted by uncertainty of funding.
If you just look at fiscal year 2018, as we approached
April 28 of this year, the FAA shifted its focus from NextGen
to shutdown. We then received a 1-week funding extension,
followed by a 5-month funding bill. While we are elated over
the funding bill, 5 months is certainly no way to plan for the
future in aviation.
Congress needs to pass an FAA reauthorization bill that
provides stable, reliable, predictable funding. Congress should
exempt the FAA employees from indiscriminate sequester cuts.
Otherwise, we will see a hiring freeze, reduced staffing,
furloughs, delays, reduced capacity, and suspension of key
NextGen programs.
I want to thank you for calling this hearing. We must all
remain vigilant and focused on the horizon as we try to expand
and modernize the National Airspace System.
Thank you.
Mr. Shuster. Thank you, Mr. Rinaldi.
And with that, Ms. Robyn, you may proceed.
Ms. Robyn. Thank you, Chairman Shuster, Ranking Member
DeFazio, members of the committee. I appreciate being here this
morning.
I am a policy wonk, and I am a Democrat. I testified before
some of you during the 5 years I spent in the Obama
administration, first as the Deputy Under Secretary of Defense
for Installations and Environment, and then as the GSA Public
Buildings Commissioner following the scandal at GSA.
Previously, I spent 8 years on President Clinton's White
House economic team, where during his second term I was the
point person on aviation and air traffic control, among other
issues, a policy focus I maintained after leaving the White
House, first at Brookings and then as an economic consultant.
The first point I want to make this morning is that
corporatization of the air traffic control system is not a
radical idea, nor is it a Republican idea. The Clinton
administration tried unsuccessfully to do this in 1995 with its
proposal to create a self-supporting Government corporation,
USATS, which would be run by a CEO and a board and regulated at
arm's-length by the FAA.
At the time, only four countries had corporatized their air
traffic control system. Now more than 60 other countries have
done so.
The second point I want to make is that the rationale for
USATS applies no less today than it did in 1995. Let me briefly
restate it.
One, air traffic control is not an inherently governmental
function. To repeat, it is not inherently governmental. Keeping
planes safely separated is complex and safety-critical, but it
is a purely operational process that follows well-established
rules.
Like running an airline or manufacturing a Boeing 787, air
traffic control can be performed by a nongovernmental entity as
long as it is subject to oversight by FAA safety regulators
whose job is inherently governmental.
Two, precisely because of the operational nature of the air
traffic control system, the Federal Government is poorly suited
to running it. The consensus of countless blue ribbon
commissions and expert reports is that air traffic management
is a 24/7 technology-intensive service business trapped in a
regulatory agency that is constrained by Federal budget rules,
burdened by a flawed funding mechanism, and micromanaged by
Congress and the Office of Management and Budget.
Is it a monopoly? Yes. At least for now. But the telephone
system was a monopoly for many years, and we didn't have the
Government operate that.
My final--the final rationale for USATS, the current
arrangement is flawed on safety grounds. This is important.
Echoing safety experts worldwide, ICAO, the International Civil
Aviation Organization, has long called for the air traffic
control regulator to be independent of the operation it
regulates in order to avoid conflicts of interest. We are one
of the only industrial nations in which the same agency both
regulates and operates the air traffic control system.
In sum, 22 years after USATS was dead on arrival when it
got to Congress, the international aviation community treats
air traffic control as a commercial service business, and most
countries have spun it off as an autonomous self-supporting
entity, both to give it the agility that a business needs and
to provide the necessary separation from the safety regulator.
The U.S. has gone from failed innovator to laggard.
The current proposal, the AIRR Act, differs from USATS in
one important way. USATS was a Government corporation because
that was the only model that existed in 1995. NAV CANADA, which
came along a short time later, has shown us a better approach
for the reasons you have heard and that we will discuss further
this morning.
Had NAV CANADA existed in 1995, I strongly suspect that it,
rather than New Zealand's Government corporation--the best
model at the time--would have been the prototype for the
Clinton administration's USATS proposal.
In closing, let me say that I have listened long and hard
to the arguments made by opponents of the chairman's proposal,
particularly Democrats. I look forward to discussing these
criticisms this morning, but I think it is a mistake to view
this proposal as ideological, as one committee member
characterized it last year.
I believe in a robust Federal role in many areas, and I
think the Federal Government gets far too little credit for its
accomplishments. But I also believe that the Federal Government
has often excelled by recognizing where its direct involvement
is necessary, and where it is not, to achieving its objectives.
And sometime I would like to tell you about privatized
military family housing as the greatest quality of life program
the Defense Department has ever implemented. That is not
ideology; that is good Government.
Thank you.
Mr. Shuster. Thank you very much, Ms. Robyn.
We are going to start with questions. I would ask all
Members to stick to 5 minutes. If we need to go to a second
round, I will be more than happy to indulge.
First question I have to Mr. Brown. Mr. Brown, I really
appreciate you being here. It is the second time you have
testified before this committee, and you and I have sat down I
think on a couple of occasions to talk privately about your
concerns in the industry and in general.
And of all the witnesses there, I feel like I am a kindred
spirit with you. I was a business owner myself, so I know what
you do every day, getting up, making sure you are meeting the
bills, making sure your operations are functioning. And, again,
in a world that you have got to deal with an agency like the
FAA sometimes can be challenging.
But as a business owner, would you allow your businesses to
grow a budget, your operational budget, 95 percent over a 10-
or 15-year period, while at the same time the cost of service
increases 75 percent and all the while you are losing
customers? Would that be something that you would tolerate as a
business owner?
Mr. Brown. Of course not. I would be very concerned about
that if I was a business owner.
Mr. Shuster. Absolutely. And I would, too. And I think you
are absolutely on the mark. When you look at a business, you
look at the strengths, what can you leverage, how can you make
it stronger, and the weaknesses, and can you change them.
And so I would say on that business model, when you are in
the business world, that works. But when you are dealing with
the Federal Government, that weaknesses part, there is not a
way we can change this. We have tried for 30 years to change
it, and the only way to do it, I believe, is separation.
I also--I don't want to speak for Mr. DeFazio, but he
believes separation, but looks different than I do. So, again,
I really appreciate you being here. I appreciate you laying
out. But the thing we are really up against here is trying to
change something that has not been able to be changed for 35
years, and that is the real challenge we face here and we have
to address.
But thank you so much for being here. I appreciate that.
I would like to ask Mr. Rinaldi, I brought the paper strips
here today that I was introduced to by Mr. Rinaldi. These are
the paper strips of the DC area TRACOM [Terminal Radar Approach
Control] for 1 day. This is what we use. And, Mr. Rinaldi,
could you talk to me a little bit about the paper strips? Why
do we use them, and what is our most modern towers? I think we
have our most modern towers we can throw up on the screen
there.
Mr. Rinaldi. Well, those are paper strips that we stuff all
day long in our towers across the country and move--as we move
the control of an airplane from position to position, we pass
the strip to controller to controller.
We have tried, and we are actually in the process one more
time--and this is another reason why an interruption in funding
could be a problem--we are working right now with the agency
and with Leidos on a new program that would actually move that
to 100 percent electronic as other countries around the world
are using electronic.
It is an efficiency thing. If you look at our new towers in
San Francisco----
Mr. Shuster. Is that San Francisco?
Mr. Rinaldi. That is San Francisco right there on a foggy
day, which happens a lot in San Francisco, and ground stops.
The controller is actually just moving paper around that little
work area because--just to keep some type of order of how the
airplanes are going to come out.
Mr. Shuster. And can they put up the Las Vegas tower, too?
Mr. Rinaldi. That is the first--yes, that is Las Vegas
right there. These are both brandnew FAA facilities. They are--
--
Mr. Shuster. They are the most modern.
Mr. Rinaldi. Well, they are the newest facilities. They
were actually supposed to have an electronic flight strip
program in them. The problem is, because of reduced funding, we
were never able to make it on time. So we are using paper now,
which is still very safe. We are just losing some efficiencies.
Mr. Shuster. Right.
Mr. Rinaldi. But we would like to get to an electronic
flight strip program as they use around the world.
Mr. Shuster. And the thing that tipped me off that this is
the most modern tower you have is that is a plastic container
they are putting them in, not a wooden crate. So they have
advanced to plastics, so that is pretty impressive. But show us
the NAV CANADA tower. That is--can you talk a little bit about
what NAV CANADA does?
Mr. Rinaldi. Well, as you can see, the controller has a
good line of sight, head is not down looking at paper. All the
information is in front of them, and it is definitely more
efficient.
Mr. Shuster. And can I ask you one further question? Would
you say that the London airspace is the most or least complex
airspace in the world?
Mr. Rinaldi. I would say that--around London Heathrow; is
that what you are talking about?
Mr. Shuster. Yes.
Mr. Rinaldi. London Heathrow Airport, I would say it is a
very busy, complex airspace----
Mr. Shuster. Extremely complex. And what system are they
using?
Mr. Rinaldi. They are using the NAV CANADA flight strip
program.
Mr. Shuster. NAV CANADA. OK. All right. I thank you very
much for that, and I yield to Mr. DeFazio.
Mr. Rinaldi. Thank you.
Mr. DeFazio. Thank you, Mr. Chairman.
Mr. Brown, I don't think you quite got a chance to respond
to Mr. Shuster's question. Would you like to expand on your
answer there?
Mr. Brown. Yes, I would. The way that I have been thinking
about this is as a businessman, and I think the national
airspace is a fundamental economic driver in our country. Our
country is more aviation centric than any other country in the
world. You can see that in the traffic patterns, in the
utilization, in the number of pilots.
And the way I think about this whole, what is the value of
return on the level of investment that we make in our ATO and
our airspaces, what industry have we created in this country?
What are the returns on that industry?
So what I think is that when you have a question like that
sent to somebody like me, I immediately go to the larger and
very, very significant economic value of an industry that
exists uniquely in this country. We are the market leader in
aircraft production of every type and stripe. We are the market
leader in engine production of every type and stripe. We have
the best avionics manufacturers in the world, and that is
generating an enormous public return in tax revenues and jobs.
So I think you have to put all of the economic value in the
bucket before you ask a question that is just yes or no, in my
opinion.
Mr. DeFazio. Thank you. Mr. Rinaldi, I am sure you are
familiar with the 2002 collision between DHL and a Russian
passenger aircraft under the aegis of Skyguide, the Swiss
Government corporation. What caused that?
Mr. Rinaldi. That was caused between lack of communication
between ANSPs.
Mr. DeFazio. And wasn't there one person on duty who had
multiple tasks because----
Mr. Rinaldi. It was a fatigue issue with the controllers
also.
Mr. DeFazio. Right. So a little bit problem with cutbacks
in the controller workforce under the private corporation. Oh,
but they have kept safety oversight separate; is that correct,
from the Government corporation?
Mr. Rinaldi. That is correct.
Mr. DeFazio. Yes.
Mr. Rinaldi. That is correct.
Mr. DeFazio. When is the last time we had an air-to-air
collision here due to a controller error?
Mr. Rinaldi. A very long time, and I don't like to talk
about it.
Mr. DeFazio. Right. So you must have said at least 20 times
during your testimony and your answer--funding, stability,
sequestration, furloughs, talking about the new--our much more
sophisticated electronic flight strips, which are going to
integrate other aspects of the system and have much more
capability than the much more static model used by NAV CANADA
that actually was offered to the FAA a decade ago here, and
they didn't think it made it up with all the new capabilities
of NextGen.
And I think you said there--you weren't saying, ``I don't
think it will work.'' You said, ``We are worried about delays
and reduced funding,'' did you not?
Mr. Rinaldi. That is correct. I have no doubt we will be
able to develop our own system. It really comes from we are
working collaboratively with the manufacturer, along with the
FAA. It really comes from a lack of funding or funding
uncertainty as we move forward.
Mr. DeFazio. So, Mr. Scovel, would you agree that that is a
significant problem?
Mr. Scovel. I would, Mr. DeFazio. Funding is a significant
problem, as you and Mr. Rinaldi have pointed out. However, I
would also say that there are other issues to bear in addition
to funding.
Mr. DeFazio. That is fine. But, and so, let's see, if I
think about it, funding, sequestration, shutdowns, that all has
to do with Congress. So if we had the FAA with its current
funding sources, 97 percent projected over the next 10 years,
so just a few efficiencies would get us to 100 percent self-
funded without meddling, exempt them from sequestration and
shutdowns, would that solve many of your concerns? I am not
saying all, but would that solve many of your concerns, Mr.
Rinaldi?
Mr. Rinaldi. Yes. As I said in my opening statement, we
don't believe there is one answer to the problems here, but we
do believe the status quo is unacceptable, and we would not
look at a for-profit model. But we would look at anything that
was proposed and just hold our core principles against what----
Mr. DeFazio. Well, let me just interrupt. Quickly, Mr.
Brown, when we had, you know, our last hearing, one of the many
Mr. Poole has been to, he said if there was a problem and ATC
became insolvent, customers would have to pay more. And then
the question, of course, becomes, if it then fails, who is
responsible? Who would be responsible if the ATC failed
financially in this country?
Mr. Brown. Now, that is one of my risk calculus when I
think about this problem. The day the assets move out of the
public sector and into the private sector, we have moved the
essence of the system and the people with it. And there is no
way we can spend 1 day without that system full functioning and
healthy and thriving. And so all the financial risk accrues to
the people regardless of where that monopoly reports.
Mr. DeFazio. So too big to fail.
Mr. Brown. Too big to fail is my concern.
Mr. DeFazio. I think I have heard that before. Thank you.
Mr. Shuster. I thank the gentleman.
With that, Mr. LoBiondo.
Mr. LoBiondo. Thank you, Mr. Chairman.
Mr. Scovel, for you, over 3 years ago, Mr. Larsen and I
directed the FAA and the NextGen Advisory Committee to come up
with four capabilities that could provide near-term benefits,
given the constrained Federal budget that we work with. These
priorities were supposed to be the low-hanging fruit, the
things the FAA could get done and prove to the industry that
they can deliver the benefits.
I think I am now hearing you say that for many of the NAC
priorities full implementation of all capabilities and a
realization of those benefits remain years away. So the
question for you, Mr. Scovel, is: why are the NAC priorities or
the easy things taking 6 to 7 years to implement?
Mr. Scovel. Thank you, sir. You are right. The four NAC
priorities have been the focus of effort for both industry and
FAA. Perhaps unbeknownst at the time, or certainly not fully
appreciated at the time, there were significant risks to each
of them, whether we are talking about PBN, DataComm, surface
operations, or multiple runway operations. Each of those
presented its own problems in bringing them to fruition.
I would say that right now we are at the point where the
timeframe of 2019 is perhaps when DataComm in the en route
environment will begin to be implemented, through maybe 2021
will be what we in my office are calling a pivot point for the
realization of benefits from these four NAC priorities.
Mr. LoBiondo. So with this pivot point, I mean, what is
your assessment if we don't make this? I mean, does this ripple
out for how long, or can you talk about that a little bit?
Mr. Scovel. Sure. We don't know. Yes, FAA has had problems,
it is no secret, making completion deadlines before, honoring
representations to Congress and the Secretary as to where they
are in different programs.
FAA, together with the NAC, have an implementation program
and a working group that is birddogging it as closely as they
possibly can. However, the problems that are outlined in my
written statement are significant. They may yet derail the
program to some extent. The choice, at that point, is to
continue to press forward. So it may go on beyond 2020, 2021,
but at this point we don't know.
Mr. Brown. Congressman, would it be OK if I added something
to that?
Mr. LoBiondo. Yes.
Mr. Brown. One of the things that I don't think is getting
fair discussion in the modernization effort that we are in is
that first you have to invent and deploy the technology, which
has generally been the FAA's purpose. But then the user
community has to equip, and in many cases change equipment to
experience the benefits. And that is exactly where we are right
now, and that is why there is an inflection point coming up.
We have ADS-B fully deployed on a nationwide basis in terms
of the ground structure, but only a percentage of the aircraft
flying enjoy the benefits because they are not ADS-B compliant.
Likewise, that will be true of DataComm and other technologies.
So where we are right now is the FAA has done a lot of
heavy lifting, and the users have to equip. And in the next
several years, that is why the transformative change is going
to flow into the system.
Mr. LoBiondo. I would like to yield my time to Mr. Shuster.
Mr. Shuster. I thank the gentleman. I just want to point
out we continue to come back to this argument that--and not an
argument, but the facts are it is the Congress and it is OMB
and the political process that causes a big part of these
problems, along with the bureaucracy.
So taking an agency out of Government, and already going
right to failing and going bankrupt, if everybody recalls, on
9/11 we injected I think it was $15 billion into the airline
industry to prop them up. We had to have an aviation industry.
So I am not willing to sit here and say this agency is
going to fall because I don't believe it is, because most of
the money can be provided by the users. And if you look at the
model that we have been looking at in Canada, they have a
reserve fund. They did not require the Federal Government of
Canada to inject money.
The British did, the British for-profit. And as Mr. Rinaldi
says, I have no intent, I would not--I would oppose going for a
for-profit organization. I think that, again, using this as too
big to fail, we faced that in 2001, but there are models out
there that we can look at and learn from to make sure that they
are set up in a proper form.
But the most important thing--and, again, I keep hearing
agreement over and over again--it is the bureaucracy, it is
OMB, it is the Congress, the starts and stops would cause these
problems.
With that, I recognize Mr. Larsen for questions.
Mr. Larsen. Thank you, Mr. Chairman. First off, I would ask
unanimous consent for the written statement of PASS
[Professional Aviation Safety Specialists] and the National
Business Aviation Association to be entered in the record. Mr.
Chairman, unanimous consent?
Mr. Shuster. Yes.
[The written statements of the Professional Aviation Safety
Specialists and the National Business Aviation Association are on pages
133-146.]
Mr. Larsen. Thank you very much.
So, for Mr. Rinaldi, you are a member of the FAA's
Management Advisory Council; is that correct?
Mr. Rinaldi. I am, sir.
Mr. Larsen. So on March 15 of this year, the MAC, shorthand
is MAC, issued a letter calling for reforms that would not
require splitting up the FAA, and you signed the letter, along
with other members of the MAC. So do you agree with the MAC's
recommendations, or how should we read that, from your end of
things?
Mr. Rinaldi. I do. As I said in my opening statement, there
are many ways to fix this problem. We don't think there is just
one. Just so you do know, that letter was circulated. I did
offer edits, and it was not incorporated into it, but I do
support that letter, that we need stable, predictable funding,
and flexibility in our budgets.
Mr. Larsen. And there are different--and you argued there
are different ways to achieve that goal.
Mr. Rinaldi. Absolutely.
Mr. Larsen. Yes, right.
Inspector, we heard in some comments today that the air
traffic control system is safe, but it is broken. I fly 2,306
qualified air miles one way on United Airlines and back again
for my commute. Can the system be safe and broken, or should I
drive?
Mr. Scovel. It is safe, of course, and that is----
Mr. Larsen. How can it be safe if it is broken? It seems to
me that there is a fundamental argument going on here that says
we have to go to privatization because the system is broken
that actually controls the airspace. And if it is broken, I
don't know how it could be--happen to be safe, and so it would
support the privatization argument.
However, if it can't be safe and broken, it would seem to
undermine the whole argument for privatization.
Mr. Scovel. I would characterize the system currently
certainly as safe, and the record shows that. For a number of
years now, there have been no commercial aviation fatal
accidents. As far as broken, I would take issue with that
characterization. I would say certainly modernization has been
lagging far behind where it should be, but it is not broken.
Mr. Larsen. Well, that is good to hear. I will cancel my
car rental.
Mr. Brown, I just want to explore a separate issue with
you, but it is tied because we are trying to get an
authorization bill done. And I think largely there is
bipartisan support on a lot of issues, including with
differences around the edges, UAS incorporation into the
airspace, certification reforms.
It seems to me all of these are being held up by this
debate on the ``to be or not to be'' question with regards to
privatizing the air traffic control system. Can you talk a
little bit, again just briefly, about why certification is
important, and why some of these other issues are important
that we move forward on, but yet we ourselves are lagging on
getting them done because we continue this debate over and over
on privatization?
Mr. Brown. I am happy to do that. I would say that Congress
has been incredibly supportive of the idea of facilitating
improved ways to market through certification. We have had
great support and friends in Congress come to our aid to try to
make our United States aviation industry as strong as possible,
and that has been matched with very good appropriations support
as well.
So the thing is is we all tend to agree that there are
opportunities, and we tend to line up behind them. What is
troubling is when they get stopped in mid-stride because they
can't get into the regulatory basis. And what that means to me
is that we are market leaders in all of our product categories
in aviation, and when we can't go to market in the ways that
these reforms allow us to do, well, then somebody else is
gaining on our heels, and at the end of the day I always care
about extending competitive advantage.
Of course, the other thing that has often been a problem is
that if you create uncertainty, customers have no idea whether
they want to invest now or later, and they err on the side of
later. So for me there is something really important about
keeping the vital function of certification up and running and
manifesting the reforms that we all agree to.
Mr. Larsen. Well, I appreciate hearing that, and I wanted
to be sure folks did hear that. I thought that would be the
answer. It is just that this main point is that this is not--we
are not working on a privatization bill. We are working on an
FAA reauthorization bill. It has many moving parts, many of
which we agree on, Democrats and Republicans, and yet it is
being--those are being held up by this one debate. And it seems
to me we can move forward on the things we agree on moving
forward.
So I yield back. Thank you.
Mr. Shuster. I thank the gentleman and now recognize
Chairman Young.
Mr. Young. Thank you, Mr. Chairman, and thanks for having
this hearing. This is a very interesting one. But you know my
interest in--my interest in my State. Eighty percent of our
communities are not connected by highways. We have--in that
area of aviation, we have 700 airstrips, more than any State in
the union, by the way. We have 8,000 pilots and 10,000 per
capita as far as aircraft.
And my interest in general aviation--and the chairman and I
have discussed this before--and as long as Alaska is taken care
of and their need for general aviation are not being run by the
larger airlines, I will be somewhat interested in what we are
doing.
And it means a lot to me some of you haven't been--and I
think, Mr. Brown, you did fly in Alaska; did you not?
Mr. Brown. I sure did.
Mr. Young. For, what, 2 years?
Mr. Brown. I had a chance to spend a few weeks up there
flying around the back country.
Mr. Young. OK. And did you have any trouble with air
traffic controllers?
Mr. Brown. I did not.
Mr. Young. That is good because----
Mr. Brown. They are few and far between.
Mr. Young [continuing]. I think they are some of the best.
But I would like to ask, Mr. Scovel, did Canada file--its
system file for bankruptcy?
Mr. Scovel. Not that I am aware, sir.
Mr. Young. Are you sure? I am just curious about that
because that always concerns me.
I would suggest, Mr. Chairman, my interest, I think we may
be addressing the one spot is--probably the best part in the
FAA is the air traffic controllers. But the FAA itself, the
management, is not in good shape. I don't know how you change
that. I think maybe we ought to spend our time on studying the
regulations that they pass. I don't know, the last time I
checked there was a book about that big of regulations, why the
FAA doesn't work.
I have a classic example in Alaska where they came down
with a regulation where a village that does not have navigation
or an onsite weather reporter or any modern technology have not
done so, aircraft would come in, and because--it is perfectly
clear, aircraft can come in, but cannot land because they have
to have someone on the ground to tell them what the weather is.
That is the regulation.
So I think, Mr. Chairman, I am interested in seeing what we
can do about revamping the whole FAA, but not the air traffic
controllers so much, but the system they have is badly managed.
And if we can do that, I am willing to listen to a lot of
things you have got to suggest.
Mr. Shuster. Will the gentleman yield the rest of his time
to me?
Mr. Young. Yes.
Mr. Shuster. I appreciate the gentleman saying that, and
that is what we are after. And the gentleman knows, maybe I
should say the gentleman is guilty because you have been here
since 1973 or 1974.
Mr. Young. Abraham Lincoln and I flew airplanes. Go ahead.
Mr. Shuster. You were involved in every one of those
reauthorizations, and you know better than anybody else----
Mr. Young. That is right.
Mr. Shuster [continuing]. That they have not worked. They
have failed every single time. I think there are some in this
room that might say--and I won't point them out--that 25 years
ago there were four or five layers of management at the FAA.
Today there are 9 or 10. That is what we do across the system
in Government.
We say we are going to reform something and we just put a
couple more layers in there. We never take the system down and
rebuild it, and that is what you do when you have a failed
system. You take it out, you say we are going to do something
different, and, again, we have got lots of ability to look
around the world to see who has worked and who hasn't worked.
Mr. Brown, I think you made a very great point. Something
that I believe in, and part of my passion for this is to get
the certification right. We are the leaders in the world. We
invented aviation. But you said something else very important.
When you can't go to market with your products because of the
certification process, the competition is nipping at your
heels.
Well, if we don't fix certification, they are not just
going to nip at your heel; they are going to take big chunks
out of the back of your leg and eventually they are going to
cause you real problems in the marketplace. So this
certification is critical--critical--to this reform that I am
putting forward.
And when you look at what the MITRE Corporation said in
their report, first of all, they interviewed six of the
different CAAs around the world, and it was unanimous stating
that the separation of CAA from air traffic control provision
was worth it. Among the benefits expressed are an increase in
focus by the regulator and the ANSP--the focus on safety by the
regulator and the ANSP and improved efficiency.
That is what I am talking about here. If you separate them,
you make the FAA focus on their core mission and that safety
and that certification. Now they are running this big
organization, and they are doing a lousy job of it. And, again,
when I point my finger at the FAA, as my mother always told me,
there are three fingers pointing back. And that is the
Congress, OMB, the administration.
This is an opportunity to take it out and let it function
like it has been able to around the world. And getting
certification right is absolutely paramount in what I am trying
to accomplish and what we hope to be able to accomplish in this
reform.
And with that, I yield to Ms. Norton.
Ms. Norton. Thank you very much. Mr. Chairman, if I may say
so, especially under my colleagues on the other side,
structural reform has always proved very difficult. Almost all
the structural reforms that have been made in the United States
have been made by Democrats, and they are not calling for
structural reform as we have just done with the Affordable
Healthcare Act.
I have a question. It could be Mr. Poole, it could be Mr.
Reason. It is a question that is a rising issue and one that I
have requested a hearing on. It has to do with airplane noise.
When I say ``a rising issue,'' I mean all over the United
States.
Here in my own jurisdiction--and I represent the people of
the Nation's Capital--but across--so much so across the Nation
that we formed a Quiet Skies Coalition, a bipartisan coalition,
to respond to issues that, by the way, NextGen has just left
right out there. NextGen, we are making progress in the air; on
the ground, people are complaining.
And, of course, as a result of those complaints, I have
been able to have the FAA come to see me. I have asked for a
hearing by this committee, and I would like to get some
responses about how this private corporation might respond to
an issue like Quiet Skies.
So who would my constituents and the constituents of my
colleagues call if they had noise complaints? Mr. Reason, Mr.
Poole?
Mr. Poole. My understanding, Congresswoman, is that this
would still be the FAA as the safety regulator that would have
to approve procedures or deny new procedures. And so if
procedures are changed so that noise goes up in a community
impact, it would be the FAA's jurisdiction to say yes or no or
how to modify it. It would not be the corporation's discretion
to just unilaterally do those things.
Ms. Norton. Did you have----
Mr. Shuster. If the gentlelady would yield----
Ms. Norton. Yes.
Mr. Shuster [continuing]. I can answer that question also.
Ms. Norton. Yes, sir. Yes.
Mr. Shuster. Will the gentlelady yield?
Ms. Norton. Yes, sir, I will. But it will not take from my
time, I hope.
Mr. Shuster. Mr. Poole is absolutely correct. If there is a
noise issue, or flight patterns change, there is a NEPA
[National Environmental Policy Act] process and major Federal
actions that the FAA will continue to have after this
transaction. Again, let me dispel the notion. This organization
is not going to control the airspace. It is going to operate in
the airspace with the FAA control over it.
And so they have to go through this Federal process by the
NEPA, which is the FAA sets up a review process and approves
significant airspace changes. So if there is--and especially
related to metroplex's major large-scale airspace redesign
projects, they are going to have to go to the FAA, conduct a
NEPA review, and any action taken will have to, again, be
approved through the FAA.
So, once again, this is not just giving away willy-nilly,
the airspace. We will still--not only will we own the airspace;
we will still have oversight over the airspace.
And I yield.
Ms. Norton. I thank the chairman for his response. And I
have never heard of anything so bureaucratic in my life. In
fact, I can't understand why we could leave one part of this
operation under Government control and take the other part--
even though both are vital to all we do in the skies, I have
never heard of efficiency being--and, by the way, I hope my
time wasn't taken because the chairman had an intervention,
which I think was appropriate.
So I don't understand how you could bifurcate the system,
expect it to be more efficient, expect it to be more safe.
Now, let me take an elephant in the room off the table. I
will do it, if I may, by asking Mr. Rinaldi, have you received
any assurances from any of the proponents of this bill
concerning collective bargaining, pensions, other workers'
rights? Because otherwise I see a fresh controversy on top of
the many controversies this bill has already given us. Mr.
Rinaldi?
Mr. Rinaldi. Thank you for the question, Madam. At this
time, there is no bill in front of us, so there is nothing I
can compare it to. In the 2016 AIRR Act, there was strong
language that gave us a fair bargaining process, and that was
in there, and also a robust transition period that would allow
us to keep everything we have and keep the workforce whole.
Ms. Norton. And I take it you would insist upon that in
exchange.
Mr. Rinaldi. Absolutely. That is bullet number 2 of reform.
Ms. Norton. Thank you very much.
Mr. Shuster. I yield the gentlelady an extra 30 seconds,
since I took some of your time.
Ms. Norton. That is all right. With that question, I yield
back.
Mr. Shuster. I thank the gentlelady.
And with that, Mr. Barletta is recognized for 5 minutes.
Mr. Barletta. Thank you, Mr. Chairman. I would like to
address some comments made by Mr. Brown. Mr. Rinaldi, you are
one of the foremost experts on aviation and air traffic safety
in the world. Would you support a legislative proposal that
jeopardized safety?
Mr. Rinaldi. Absolutely not. That is our first core
principle.
Mr. Barletta. Would you support a proposal that jeopardized
national security?
Mr. Rinaldi. Absolutely not.
Mr. Barletta. Would you support a proposal that further
weakened our ability to modernize the aviation system?
Mr. Rinaldi. Absolutely not.
Mr. Barletta. Finally, do you support the air traffic
control proposal and the AIRR Act last year?
Mr. Rinaldi. I did, yes.
Mr. Barletta. Thank you.
Mr. Poole, some have suggested that ATC reform is a
giveaway of assets. We understand that taxpayers have already
paid for them in fuel, ticket, and cargo taxes. If a new entity
had to buy them, won't the same people pay twice?
Mr. Poole. That is correct, Congressman. They have been
paid for by aviation excise taxes over the years, and all we
are talking--we are not talking about selling the system or
giving it away.
We are talking about transforming the existing Air Traffic
Organization into a better organizational model that would be
insulated from the travails of the Federal budget, and able to
operate as it should be, like a business, paid for by its
customers.
Mr. Barletta. Dr. Robyn, as a public policy expert, what is
your response to such an allegation?
Ms. Robyn. As to the question of whether the assets should
be transferred at no cost: It has been handled different ways.
In the Canadian case, there was some payment for assets. I can
certainly see the argument that Bob Poole makes, however. I
think if that were the only debate, then we would be making
real progress, if we could agree on everything except what the
dollar price on the assets should be.
Mr. Barletta. Thank you.
Thank you, Mr. Chairman.
Mr. Shuster. Thank you, Mr. Barletta.
Mr. Sires is recognized.
Mr. Sires. Thank you, Mr. Chairman. You know, my colleague
said he takes the plane home every week. I take the train home
every week, and it is safe or broken, but I don't expect you to
say anything, Mr. Scovel.
My issue is I have problems when we get compared to Canada.
Big problems.
Mr. Shuster. Mr. Sires, can you speak more directly into
the mic? We didn't quite hear you.
Mr. Sires. I will have to eat it if I get any closer.
Mr. Shuster. Like you are going to kiss it.
Mr. Sires. I have a problem when we get compared to Canada.
It reminds me of the argument with the health bill. They have a
great health system. We don't. Canada only has 40 million
people; we have 350 million people. It is a lot easier to set
up a health system for a country that only has 40 million
people.
I have some fears regarding this. They have 40 towers; we
have 500 towers. Obviously, can you assure me that, if we go
this route, that we are not too large to fail? Because I also
have a concern regarding the airlines. I think the airlines are
getting so big that it is very difficult to manage, and I
raised that issue the other day when we had a hearing here.
Can you assure me that my fears are wrong, that this big
effort, I am wrong about it? Well, I will start with Mr. Brown.
Mr. Brown. I love flying in Canada, and I love the country
of Canada, but I do not----
Mr. Sires. Well, I don't dislike the country of Canada.
Mr. Brown. Exactly. But I don't think----
Mr. Sires. I just don't want to be compared to Canada.
Mr. Brown [continuing]. I don't think the comparison of our
national airspace and management system to Canada is anything
other than an exercise in gleaning some observations. But it is
not proper to directly compare. I mean, for sure, in our
system, we are driving a much more substantial portion of our
economy out of the aviation sector and the airspace that
supports it.
I mean, we have 10 times more pilots, 50,000 flights a day.
It is a wholly different organization. So for me, when I think
about Canada, I believe that they made a choice that they
thought suited their purposes with the role of aviation and its
infrastructure, but we are faced with entirely different
objectives here.
And as far as I am concerned, the system that we have been
living in has done a masterful job of adjudicating all of the
interests of stakeholders, all of the interests of our
expansive country and the States that are in it, and their
needs. And so I can applaud things they have done that have
worked for their country, but I also very much applaud things
we have done in our country.
And I would take exception to one thing Ms. Robyn said,
which is she characterized our system as a laggard. That is
just false. We have the technology deployed in our system today
that no other country can rival. We lead in our NextGen
initiative. So, you know, I am pretty proud of where we are
and, by the way, I know it because I fly it. It is not a
mystery, and it is not a theory.
Mr. Sires. Thank you.
Mr. Poole, can you answer?
Mr. Poole. Yes. First of all, Canada's system is the second
largest in the world in terms of flight operations. So it is
the best comparator we have. You know, we are nine times bigger
in terms of flight activity, but their model has worked
extremely well for 20 years. It is not too big to fail, and
neither would ours be.
If you go to the credit markets, the people who finance
revenue bonds for these, they give investment grade ratings to
the Brits, the Germans, the Australians, the Canadians, because
they have a dependable user fee revenue stream that you can
basically bank on.
And neither NATS nor NAV CANADA declared bankruptcy. Both
were hit hard by 9/11 because of the North Atlantic traffic.
NATS was brandnew and got an additional investment from their
two main owners, the British Government and the airline group.
NAV CANADA simply raised their rates somewhat, maybe I think it
was 10 or 15 percent for a couple of years, and built up their
reserve fund. And since then they have a substantial reserve
fund, in case of another serious downturn, that they can work
through without having to----
Mr. Sires. Mr. Scovel, can you just--I have got 30 seconds
left.
Mr. Scovel. Sure. As you know, my office looked at the air
traffic control organizations for the other four countries, and
we were told by officials in those organizations that they
considered part of their borrowing authority to be leveragable
or be recognized by private lenders because ultimately, should
something drastic go wrong, the Government would step in behind
them.
I am not representing that that would be the case here.
That is your policy call to make. I am simply relaying what
officials for other air traffic control organizations have told
us about their systems.
Mr. Sires. Join those four countries that were on the hook;
is that what you are saying?
Mr. Scovel. Conceivably. They may be. There would be policy
calls for their legislatures and executive branches.
Mr. Sires. Thank you, Mr. Chairman.
Mr. Shuster. Thank you.
I now recognize Mr. Meadows for questions.
Mr. Meadows. Thank you, Mr. Chairman.
Mr. Poole, let me follow up a little bit on what you were
just talking about in terms of the Canadian system versus the
air traffic control system here in the United States because
there are people that would say, well, we are 10 times the size
of that in Canada.
And so as you look at that larger size, let's talk about
scalability. Is there any way that you can look at the
scalability of the Canadian model versus what we would employ
here and make some conclusions?
Mr. Poole. Sure. First of all, we already have the scale.
We are not talking about building from scratch an air traffic
system. We already have the scale, the facilities, the
technology.
Mr. Meadows. So what you are saying is----
Mr. Poole. We are talking about an organizational model.
Mr. Meadows [continuing]. Because of what we already have
in place, that we can make better----
Mr. Poole. We can easily transition to a different
governance model and a different funding model, and hopefully
that will lead over time to an organizational culture that is
more innovative, that can innovate and implement things faster
than the large bureaucracy at FAA.
The inspector general reports for 25 years have said FAA
continually fails to manage programs properly. They take far
longer than they were scheduled. NAV CANADA has a superb track
record on that. If you scale up NAV CANADA's capital
investment, annual capital investment to our size, and say what
would we be investing if we had their system, they are
accomplishing all their modernization for, in equivalent terms,
half of what we spend on capital investment.
Mr. Meadows. Hold on. Let me make sure I understand that.
They are actually improving their system for half of the cost
that we are spending?
Mr. Poole. Yes, sir. Demonstrated fact.
Mr. Meadows. Mr. Scovel, would you agree with that? Because
I saw you shaking your head yes on a lot of the things he was
saying. Don't ever play poker, by the way, but go ahead.
[Laughter.]
Mr. Scovel. Wouldn't dream of it. No, and if I was shaking
my head, it wasn't necessarily to agree or to assent. My
office, quite frankly, hasn't examined that part of NAV
CANADA's operation. We don't know the degree to which their
capital improvement program might compare against our scaled up
system.
Mr. Meadows. All right. So when will NextGen be completed,
Mr. Scovel? We have had other--this is not your first rodeo,
nor mine, so at what point will NextGen be completed? Because
we continue to allocate unbelievable sums of money, and I hear
at best ambiguous dates of when it will be completed. So what
does the inspector general's office say?
Mr. Scovel. Well, let me say, first, FAA's estimate is 2030
at a cost of $36 billion split between Government and private
industry.
Mr. Meadows. But would you agree that this has been one of
the few times that we can see that even under this best case
scenario we continue to exceed an unlimited budget?
Mr. Scovel. I would have to say we don't know. We don't
know what the total cost might be, nor do we know what the
completion date will be. It is important to note, though, that
NextGen----
Mr. Meadows. Do you not see why that would be a problem for
somebody who is a fiscal hawk like me, that we continue to
allocate money with no end in sight?
Mr. Scovel. Absolutely.
Mr. Meadows. All right. Mr. Brown, let me come to you. I am
a little confused because you seem like you are a business guy.
Are you a business guy?
Mr. Brown. I would certainly think so.
Mr. Meadows. OK. Well, as a business guy--and I am one,
too--are you suggesting that we need more Federal control?
Mr. Brown. I am suggesting that we have a system that is
delivered and----
Mr. Meadows. That is not what I asked. It is a great answer
to a question I didn't ask. Are you suggesting that we need
more Federal control?
Mr. Brown. I am suggesting our control is proper.
Mr. Meadows. All right. So let's talk about general
certification, something you probably know, and it is one of my
sweet spots being from North Carolina. Would you say that we
need more Federal control in the certification process?
Mr. Brown. I think what we have is proper.
Mr. Meadows. So you don't want it to be more streamlined?
Mr. Brown. But that is not the same as reducing control.
That is about efficiency.
Mr. Meadows. Well, it is. It is about regulation, so at
some point you have to transfer that. So let me go and let me
tell you where I am concerned with. We have got NextGen that
may or may not get done by 2030. We continue to spend billions
of dollars. In fact, I have stakeholders who continue to
implement it from a stakeholder standpoint, and from a Federal
Government standpoint we are lagging behind.
We actually have monies that have been allocated for
NextGen that get kind of pilfered over to maintain legacy
computer systems under the FAA. I have under good authority
that we are doing that, and so as we look at that, why would
you suggest that the Federal Government can do something more
efficiently than perhaps private stakeholders?
Mr. Brown. You know, my calculus----
Mr. Meadows. Can the Federal Government run your business
better than you do?
Mr. Brown. I would hope not.
Mr. Meadows. I would hope not either. So why would you
suggest that they can do that here?
Mr. Brown. Well, because we are talking about a range of
interests here that is much larger than my business. I mean, my
business, I get to pick my product, I get to pick my customers,
I get to decide what I think the value proposition is, I get
course corrected by----
Mr. Meadows. And it is efficient that way, right?
Mr. Brown. Yes. But the point----
Mr. Meadows. So what if we had stakeholders who were making
the same exact decisions that you are making with some
parameters that are out there, wouldn't you think that that
would be more efficient?
Mr. Brown. Actually, you have outlined my top concern,
which is that if this organization picks their customers and
picks their service level and picks their product, they are no
longer going to be----
Mr. Meadows. But the chairman has already said that that
can't happen. We have an airspace that is available to
everybody.
Mr. Shuster. The gentleman's time has expired.
Mr. Brown. Thank you for making that point.
Mr. Shuster. Mr. Brown, you can finish if you wish.
Mr. Brown. I believe that I have made my point, which is
that the thing about this enterprise, one of the things that I
am concerned with, is that it is a coalition of stakeholders
with a shared purpose, which is to serve their own ends. And
the thing that I like about the Federal role in our airspace
today is that it adjudicates an enormous diversity of needs in
this community. Whether it is the Alaskan pilot who is flying
kids to school or whether it is my business in Ohio or air
tractors in Olney, Texas, they all have a seat at the table.
And this has been demonstrated in this room today.
Mr. Meadows. Yes. My time has expired. I appreciate it.
Thank you, Mr. Chairman.
Mr. Shuster. I thank the gentleman.
I now recognize Mr. Johnson for questions.
Mr. Johnson of Georgia. Thank you, Mr. Chairman. I think I
am probably like most Americans, and what we really want out of
the air traffic control system is safety, safe operation.
And, Mr. Scovel, in your testimony you stated that, since
1958, the FAA has overseen the safe operation of the busiest
and most complex air traffic system in the world. And you
stated during your testimony that there have been no commercial
aviation accidents over the past few years. Do you believe,
sir, that the American-controlled airspace is the safest
airspace in the world?
Mr. Scovel. I haven't looked at all the others, sir, but I
would say it is definitely safe. We are in the golden era of
aviation safety right now.
Mr. Johnson of Georgia. Well, we are in the golden era, and
I think, Mr. Rinaldi, you mentioned that we are the gold
standard of air traffic control in the world; did you not?
Mr. Rinaldi. We are, sir, the largest, safest, most
efficient.
Mr. Johnson of Georgia. And, Mr. Brown, you fly every--
well, you put in 500 hours a year minimum flight time, and you
are strongly committed to the concept that our airspace is safe
and that the operations that make it safe are up to par, and it
is joyful to fly under that system.
Mr. Brown. I agree. And most pilots will tell you it is one
of the most amazing experiences you can have, and it is
something the Government does extremely well.
Mr. Johnson of Georgia. Now, Mr. Poole, you would not
disagree with that; would you?
Mr. Poole. No, I don't disagree at all. We have a very
safe----
Mr. Johnson of Georgia. We have a safe air traffic control
system.
Mr. Poole. Right. But we are paying a price----
Mr. Johnson of Georgia. Well, I am going to get to that in
second.
Mr. Poole. OK.
Mr. Johnson of Georgia. I mean, we are safe, and we have
been safe since 1958 under FAA control, and the argument is
being made that we need to change that. Mr. Brown, I think I
heard from both you and Mr. Rinaldi the concept of if it ain't
broke, don't fix it.
And, Mr. Scovel, I heard you, in terms of there have been
some FAA reforms that have not achieved the expected outcomes
in the areas of personnel, acquisition, and organizational
reforms. But those failures don't lead you to the conclusion
that the air traffic control system should be privatized,
correct?
Mr. Scovel. Respectfully, I don't believe that is my call
to make. The Congress and the administration are the
policymakers, the decisionmakers. I am trying to present
information for your consideration in making those decisions.
Mr. Johnson of Georgia. Thank you.
And, Mr. Poole, you are an advocate for privatization. You
are an advocate to turn the air traffic control system over to
the free markets. Your website for the Reason Foundation states
that the Reason Foundation is committed to advancing the values
of individual freedom and choice, limited Government, and
market-friendly policies.
So I am assuming that you would be of the mind, as stated
by the chair of the committee, that Government is the problem
and not the solution. And so, therefore, you want to take the
Federal Government or the FAA out of this equation, which has
been so safe for Americans----
Mr. Poole. May I respond?
Mr. Johnson of Georgia [continuing]. Since at least 1958?
And, Ms. Robyn, you agree with him, and you say that, first
of all, the air traffic control system can be performed or can
be run more effectively by a nongovernmental entity, and you
also say that Government is poorly suited to run----
Ms. Robyn. Yes.
Mr. Johnson of Georgia [continuing]. The air traffic
control system----
Ms. Robyn. Yes.
Mr. Johnson of Georgia [continuing]. Despite the comments
that we have heard from Mr. Scovel, Mr. Brown, and Mr. Rinaldi,
and the clear fact that we haven't had--I mean, our airspace is
safe. But you say that----
Ms. Robyn. Could I respond, please?
Mr. Johnson of Georgia. You say that it could be done
better. Why do you say that?
Ms. Robyn. If we wanted to have the safest system possible,
we would keep----
Mr. Johnson of Georgia. We don't have it now?
Ms. Robyn [continuing]. Keep all planes----
Mr. Johnson of Georgia. We don't have the safest----
Ms. Robyn. If we wanted to have a----
Mr. Johnson of Georgia. We don't have the safest system
now?
Ms. Robyn. If we wanted to have perfect safety----
Mr. Johnson of Georgia. Isn't it--OK. Well, let me ask----
Ms. Robyn [continuing]. You would leave----
Mr. Johnson of Georgia [continuing]. You this question.
Isn't it a fact that we have the safest air traffic control
system in the world right now?
Ms. Robyn. We have a system that is operated and regulated
by the same entity. That----
Mr. Johnson of Georgia. Is it a good one? Isn't it a good
one, though?
Mr. Shuster. The gentleman's time has expired.
Ms. Robyn. That is----
Mr. Shuster. But if the gentleman wishes to allow the
witness to answer----
Ms. Robyn. We are not in compliance----
Mr. Shuster [continuing]. Would you--Ms. Robyn, 1 second.
The gentleman's time has expired. If you want, though, I will
allow her to finish answering the question or not. It is up to
you.
Mr. Johnson of Georgia. Please respond.
Mr. Shuster. Ms. Robyn.
Ms. Robyn. If we wanted to have zero accidents, we would
have the air traffic control system keep all planes on the
runway. You would have no planes in the air. That would
guarantee perfect safety. That is, obviously, not what you
want. You want a system that contributes to the economy while
being safe. We haven't----
Mr. Johnson of Georgia. That is not the kind of system that
we have.
Mr. Shuster. The gentleman's time has expired. Ms. Robyn,
thank you very much for answering the question.
With that, I recognize Mr. Woodall for 5 minutes.
Mr. Woodall. Thank you, Mr. Chairman. Since my friend from
Georgia and I share a county back home, I will just pick up
where he left off with Ms. Robyn.
I appreciate your written testimony because I think so
often, as perhaps your exasperation shows, we----
Mr. Shuster. Can you speak into the mic, Mr. Woodall?
Mr. Woodall [continuing]. We have a tough time talking to
each other about these----
Mr. Shuster. Speak directly into the mic. We can't hear you
very well.
Mr. Woodall. After you have given that advice to every
member of the panel, you would have thought I would have
internalized that, Mr. Chairman. I cannot pull my box closer,
though, as--I can pull the chair closer.
Ms. Robyn, I want you to help me with the language to talk
about this issue because it does seem when we talk about change
so often we end up with--it is Mr. Weber's big head that I
can't get past. I can't move both the microphone and--Mr.
Weber, can I--thank you.
[Laughter.]
Mr. Woodall. It is just between me and Ms. Robyn here that
we are working on it. It is a physical manifestation.
Mr. Weber. Mr. Chairman, do I get equal time?
Mr. Woodall. It is a physical manifestation of your head.
It is not an ego issue. It is actually a physical.
Help me with the language about how we talk about this,
because I have been to see the NAV CANADA operation. And
thinking about Mr. Poole's reference to scalability, it does
seem like the successes they have had we could have in an
exponential fashion. And it is not as if this is the chairman's
idea or the President's idea.
This is something that policy wonks have been talking about
for decades. Help me create this conversation in a language--I
sit on the Budget Committee. I hear my friend Mr. DeFazio say,
``Well, you know, if only we could fund the system better and
deal with sequestration and get Congress to work better,'' yes,
those are kind of the issues we have been working on for three
or four decades, and we have only finished the budget process
on time four times in 40 years. So help me talk about this in a
nonpartisan way.
Ms. Robyn. The FAA is two-hatted. It does two very
different things. It regulates all aspects of aviation, and
that is an inherently governmental activity. You cannot write a
contract that makes it possible for the private sector to carry
that out. It requires judgment calls that the private sector
can't make.
It also operates in the air traffic control system. That is
not inherently governmental. That is operational. That is no
different than when GSA goes to the private sector and has them
build a building. It is not an inherently governmental
activity.
The idea that the regulatory part of the FAA needs help, I
agree with Mr. Brown. The idea, though, that in order to fix
that you don't spin off the nongovernmental part, that is
illogical to me. That is exactly what you want to do--spin off
the noninherently governmental part, so that the FAA can focus
on its regulatory function.
Mr. Woodall. Well, let's talk about that just for a moment
because I agree with Mr. Brown. The American taxpayer, the
American flying public, has invested an amazing amount of time
and treasure into building what is the busiest airspace on the
planet.
So when we talk about changing that from a governmental
function to a--well, I don't know anybody who talks about a
private function. I hear them talk about a corporatized
function, a cooperative function. Tell me what that looks like.
Ms. Robyn. Well, so we--in the Clinton administration, we
proposed a Government--we proposed moving into a Government
corporation because that was the only model that existed. That
model works very well in many parts of the world. But in this
country, Government corporations are politicized and they
cannot function effectively as businesses.
And so NAV CANADA has come up with a model that takes it
out of Government altogether, and that is appropriate. It works
in theory and, more important, it has worked in practice
beautifully.
Mr. Woodall. The business folks that I talk with back home
often prefer the devil they know to the devil they don't know.
Ms. Robyn. Yes.
Mr. Woodall. And I can only imagine the strain it puts a
private operator under to say, ``We are going to yank the
pendulum back and forth with the political winds.'' But it was
the conclusion of the Clinton administration that the best way
to avoid the political winds in this space was this spinoff
proposal?
Ms. Robyn. Yes. Yes, absolutely. Yes. This was something
proposed early on. It came out of a blue ribbon commission, one
of many that has looked at this issue, and we proposed it in
1995. It was dead on arrival on Capitol Hill.
Mr. Woodall. Mr. Chairman, I think Mr. Brown was right when
he talked about all of the amazing economic developments and
successes that have been the product of our second-to-none
airspace system. I hope that we can follow this pattern to keep
the politics out and move us on to best-in-world space.
Mr. Shuster. You are absolutely right. And, again, as I
said earlier, there is no way I want to mess up, screw up, the
economic impact that the aviation industry across the board
has.
So, with that, I yield to Mr. Carson for 5 minutes.
Mr. Carson. Thank you, Chairman.
Mr. Brown, it seems the FAA is already in the process of
implementing much of the NextGen infrastructure you are calling
for. We have been told that 2020 deadlines will be met. As a
pilot, sir, can you tell us about the NextGen technology that
is already online and how you are using it? And do you believe
we need to replicate these systems through privatization?
Mr. Brown. Great question. I was just thinking about this
about a month ago or so. I took off from Piqua, Ohio,
population 20,000, from a small airport and flew to Albany,
Georgia, a small town with a very vital aviation manufacturer
that is a global leader and a big exporter. I flew point to
point. Because of GPS navigation, I had en route weather on the
way, and I shot a WAAS approach into Albany, Georgia, precision
to the numbers.
Now, these two towns, in the grand scheme of things, in the
grand scheme of our national airspace, have been treated to
their resources to build two global leaders in their space and
have the airport infrastructure to thrive.
And I look at that as a perfect example of how Government
in this case is working for the economy, because without that
kind of infrastructure and the technology that is driving the
flying to and from those places, I don't think these businesses
would be located in Piqua, Ohio, or Albany, Georgia. And,
frankly, I think that is a victory for the people.
Mr. Carson. Thank you, sir.
Lastly, this is a general question. I am very concerned
that, as introduced, this new private air traffic control panel
does not include one of the largest users of U.S. airspace, the
DoD. I would like to hear from any of the witnesses their view
on how this will impact the close coordination that currently
takes space and takes place, and what impact there will be to
our national security.
Ms. Robyn. I will answer that, and let me start by saying
that, although I spent 3 years in the Pentagon, air traffic
control was not part of my portfolio. I did, however, work very
closely with the people in the Air Force who have the day-to-
day liaison with the FAA. I worked with them on issues of
interference of wind turbines and long-range radar among other
things.
The Department of Defense has huge equities in the National
Airspace System. DoD manages 15 percent of the national
airspace. DoD has 15,000 aircraft, which is more than all U.S.
commercial airlines put together. DoD depends heavily, as a
user, on the air traffic control system.
And they support the spinoff of the air traffic control
system. There is a letter from Secretary Mattis to Senator
McCain stating that while it has to be done carefully, so as to
protect the arrangements that are currently in place, it is not
inconsistent with national security.
Mr. Carson. Sure. Yes, sir.
Mr. Poole. This is an issue that has come up in every one
of the 60 countries that has corporatized their system in one
form or another. Australia today has a joint project between
the Australian military and Airservices Australia to modernize
the overall basic air traffic software.
It is being developed jointly, will be used jointly, with
side-by-side military and civilian controllers. There are side-
by-side military controllers in NATS in the U.K. working
together. This is pretty much a routine function now.
And, in fact, there is an annual conference on military air
traffic control that is cosponsored by the Air Traffic Control
Association in conjunction with the ATCA's own national
conference each year.
So this is an issue. As Dorothy Robyn said, it needs to be
handled very carefully to be sure that all the current
procedures are incorporated, but it is not considered a problem
anywhere in the world that I am aware of.
Mr. Carson. Thank you, Mr. Chairman. I yield back.
Mr. Shuster. I thank the gentleman. I appreciate the
gentleman's question.
I want to offer for the record a letter from Secretary of
Defense Mattis. Some have said the DoD has come out in
opposition to this. Well, this letter does not say that, and
any suggestion of it is false. Secretary Mattis has indicated
his support for moving ATC service out of the FAA in a letter
he wrote to Senator McCain who requested that.
So without objection, I want to offer this for the record.
[The information follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Mr. Shuster. And with that, Mr. Rokita.
Mr. Rokita. I thank the chairman.
I thank the chairman for holding this hearing. I thank the
witnesses for their testimony.
Starting with you, Mr. Brown, knowing that you are a
private pilot and a member of GAMA [General Aviation
Manufacturers Association] and active in AOPA and so on and so
forth, and for the record and for the committee members,
knowing that you fly 400 hours per year, which is about four
times the average general aviation pilot, you are familiar with
the system.
Do you believe that general aviation pilots have a right to
access airports of any size?
Mr. Brown. Not only do I believe that, I experience it.
Mr. Rokita. Yes, on a daily basis. Talk into the
microphone, please.
Thank you.
Should they be denied access to an airport?
Mr. Brown. No, not on principle.
Mr. Rokita. Can you talk about the danger that would pose
to the aviation ecosystem that we are all a part of if that
were to happen?
Mr. Brown. That is an existential threat to the business.
Access is everything to the pilot who buys equipment I make and
airplanes they fly.
Mr. Rokita. Right, and every one of those pilots pays into
the system, right?
Mr. Brown. Yes.
Mr. Rokita. How?
Mr. Brown. Through the fuel tax.
Mr. Rokita. Yes, and it is more than adequate for what we
use of the system, right?
Mr. Brown. Yes, and it is not bureaucratic, and it is real
time, and there is no bureaucracy associated with it.
Mr. Rokita. Right. And it is not that we want to fly into
international airports every day or cause any problems, but the
fact is we have a right to do that because we paid into the
system.
And sometimes, like for example your customers, you may
need to access an airport like that.
Mr. Brown. Correct.
Mr. Rokita. So what are the dangers of a board made up of
some members of the ecosystem where board governance suggests
that you can have control of a board with as little as 30
percent of the seats?
What dangers does that pose to general aviation if this is
all board controlled in terms of access?
Mr. Brown. One concern I have is that on such a board, you
would have centers of gravity that would begin to overwhelm
minority voices of any sort and preclude the arrival of new
entrants that might have a radical impact in our economy.
Mr. Rokita. Absolutely, which makes the point that it is
good to have a disinterested party in this or a referee or an
umpire to decide these issues like we have right now in FAA, or
if the members of this witness table who agree with the
chairman's proposal here would really want privatization, if
they would propose a plan that actually does that because right
now the proposal at least in the AIRR Act, and who knows what
we are going to see here when this language is produced, does
not do that.
I used to be the Secretary of State of Indiana. I know
about privatizing Government assets. We received $3.8 billion
when we leased the Indiana toll road with Governor Mitch
Daniels. What we did not do is give a monopoly away. We did not
take the toll road and give it to an interested party or a
board made up of interested parties. We put it out for bid.
So if we really want to privatize something, which is
apparently the proposal here, why are we not talking about
something like that?
We did not give the Indiana toll road to the truckers and
say, ``Oh, I am sure you will take care of the cars, too, and I
am sure you will not limit access to the on and off ramps that
exist along the Indiana toll road, especially when you truckers
want to get steel to or from one of those mills up in northwest
Indiana.''
Because it would not work. It does not make sense, just
like this board made up of interested stakeholders, to use
Congressman Meadows' term for it, will not work either.
Mr. Rinaldi, if I can paraphrase your testimony, it seems
like a lot of it was focused on funding and sequester and
Government shutdown and the fits and starts that go along with
that, and I completely agree with you.
You also heard Ranking Member DeFazio say, and it is
accurate, 97 percent of FAA funding is on its own. It is not
from the general fund, and there was a suggestion made that one
way to solve this and the problems you bring up in your
testimony is to just take it off budget.
Now, I am vice chairman of the House Budget Committee. I am
not here to necessarily say that that is the right answer or
that I support it, but is that not an answer?
They said there is certainly more than one answer to this
problem that we are talking about in this hearing today.
Mr. Rinaldi. Absolutely. There is more than one answer, and
that is a legitimate answer.
Mr. Rokita. We could take care of all of that simply by
taking this off budget. Again, 97 percent of the funding is not
coming from the general fund anyway.
Mr. Rinaldi. Yes. That is a good answer.
Mr. Rokita. Chairman, my time has expired.
Mr. Shuster. I thank the gentleman.
Where am I? Ms. Frankel is recognized for 5 minutes.
Ms. Frankel. Thank you.
Well, I will just start off by being a little snarky. You
know, we put a businessman in charge of the country, and all I
can say is OMG about that, and every agency would like to be
exempted from sequestration, and I have a solution for that,
which is to privatize those of us who are not doing our job.
All right. So enough for the humor. Listen. I am not a mean
person, but just on the issue of transparency, and first I want
to thank you all and not to impugn anyone's integrity, but we
have a list of different organizations or people who are for
the privatization, who are against it. Different airlines are
for; some are for, some are against. Consumers groups are for
and against.
Could you just tell me here, anybody, do any of you consult
with any of these and get paid or consult with any organization
or are discussing employment with them? Those of you who are in
the public sector included?
OK. Just wave your hand.
Ms. Robyn. No.
Mr. Brown. No.
Mr. Rinaldi. No.
Ms. Frankel. OK. All right. Thanks.
So I am trying to simplify this, which is probably not a
smart thing to do, but I am trying to understand it. It sounds
to me like there were a number of reasons, those of you who
would support a change in the system.
One has to do with a consistency in the funding; is that
correct? I know the air traffic controllers did really
emphasize that.
Then I think another issue was trying to move more
efficiently towards a more modern safety technology. Is that
one of them?
And then I think one of the issues was having the
regulators separated from the operators. That was it.
Is there another issue there that I am missing?
Mr. Poole. Well, there is another big issue.
Ms. Frankel. OK. Which is that?
Mr. Poole. And that is the organizational culture of FAA,
which gets into the procurement problems, chronically over
budget, late delivery of things, not getting productivity out
of new technology in the way that it should be done.
Ms. Frankel. OK.
Mr. Poole. That is a big problem.
Ms. Frankel. Good. Thank you. I do not know why that
skipped my mind, but that is the one I had my next question
about. OK?
What kinds of things do you think this new organization
could do that the Government is not able to do? I mean, what
will you be skipping?
And what would be the potential unintended consequences? I
would like those who are for this movement to give us your
opinions on that.
Mr. Poole. Well, I will start. I mean, one thing would be
to be able to hire and pay the best talent from private
industry as program managers and as expert engineers and
software people.
There are good people in the FAA, but they are hamstrung in
a system that has a lot of basically career lifers who are
happy to be in a process that is very time-consuming and that
has numerous people who can say no at many points along the
way, that drags out the process, and if you have people who are
not performing well, it is very difficult to get rid of civil
servants.
Ms. Frankel. Does anyone want to defend the honor of the
civil servants?
Mr. Rinaldi. I will be happy to.
Ms. Frankel. Yes, go ahead.
Mr. Rinaldi. As I said in my opening statement, we have by
far the best aviation professionals in the world working for
the FAA.
Aside from the funding stream, one of the things we would
also like to see fixed is something that Ranking Member DeFazio
also brings up is the procurement requirement process and the
multi-agency oversight, which then puts us into a bureaucratic
laden process of requirements and procurement, and it delays
our process of implementing new technology.
Ms. Frankel. I would guess that that bureaucracy, which can
drive everybody crazy, was probably gotten, in part, there
because of abuses I am going to guess and to try to avoid that,
right?
Mr. Rinaldi. I think every time we have a hearing there is
more oversight that goes into it. So it kind of self-fulfills
itself every time we have a hearing of something that is not
working right within Government.
Ms. Frankel. I only have 15 seconds.
The contract towers, what happens to them?
Mr. Rinaldi. Well, we represent 94 of those contract towers
and the members that work there. It is very important to us to
keep service open to all facilities across the country, all
airports, and to continue to have a very diverse system,
whether it is big city or rural America.
Ms. Frankel. Thank you, Mr. Chair. I yield back.
Mr. Shuster. I thank you, Ms. Frankel.
Ms. Frankel, I am not familiar with all of the new words on
the computer. OMG, does that mean ``oh, man, he's good''?
With that I yield to Mr. Westerman.
Mr. Westerman. Thank you, Mr. Chairman, and thank you for
your leadership on this important issue.
I have had the opportunity to visit some control towers,
and the first thing I would like to say is to acknowledge that
we have some amazing men and women that are working in our air
traffic control towers, doing an excellent job.
And we have an air traffic control system that works. The
proof is in the pudding. You can see it working every day.
I am relatively new to Congress, and I am new to this
committee, but I have a unique background having practiced as a
professional engineer for nearly 25 years. Much of my work
involved analyzing processes and technologies and helping my
clients stay on the cutting edge. I have seen organizations
that failed to even embrace technology, and they usually went
out of business. I have seen organizations that embraced but
failed to implement technology, and they usually went out of
business.
To be successful in business, you have to not only embrace
new technology, but you have to implement it properly.
Now, ATC is not going to go out of business regardless of
the technology it embraces or implements because, quite
frankly, it is too critical to fail. And it has been said, and
it has been said in this meeting today, ``if it ain't broke,
don't fix it.''
However, I believe this is not a question of a broken ATC,
an ATC that does not work, or even an ATC that refuses to
embrace new technology. This is a question of how to implement
the best technology and operate the safest and most efficient
system in the world so that our airline passengers and general
aviators get the maximum benefits.
I am studying our existing systems. I am visiting
installations and learning as much as I can about the latest
technology. I can confidently say that even though technology
may be embraced, it is not being successfully implemented as
well in the U.S. as it is relative to other systems.
I am from a rural district. I have got one contract-manned
tower in my district. There is lots of general aviation and
lots of aerospace manufacturing located at the rural airports
in my district. Mr. Brown even mentioned airports like these in
his testimony.
I am thinking of an airport I visited just a few weeks ago
in Mena, Arkansas, that has a lot of aerospace manufacturing
there. It is in the mountains, and the radar cannot see it.
They had a radio tower that got blown down in a tornado a
few years ago that still has not been fixed. So if you are
trying to take off from Mena, you have to pull out on the taxi
and call up the air traffic control on your cell phone and try
to get clearance to take off, but they still found a way to
make it work.
But the point is the last thing I want to hurt is rural
airports or service to rural America. I want to see it
improved.
Mr. Rinaldi, some of the opponents of ATC reform claim that
new service providers would be able to deny access to sovereign
airspace in a small community and general aviation airports.
From the perspective of those actually providing air traffic
control, how do you respond to those claims?
Mr. Rinaldi. Thank you, sir. Thank you for the question.
Air traffic controllers have a very simple philosophy when
it comes to providing service to all users. It is first come,
first serve, and when a general aviation aircraft enters into
our airspace or whether it is a commercial airline, it is to
expedite their process as safely as possible.
And so we provide service to all users of the system.
Mr. Westerman. Ms. Robyn, I first want to say I appreciate
your testimony. I have been in a number of hearings that have
been held by the Aviation Subcommittee leading up to this. We
have heard some pretty inflammatory rhetoric intended to scare
small communities about the future of their commercial air
service.
I have got two EAS [Essential Air Service] airports, one of
them in my hometown, but two of them in my district, as well as
numerous smaller ones. So I have a vested interest in making
sure this is not the case.
Do you think a more innovative and agile ATC provider will
ultimately provide more options to more communities, such as
the usage of remote towers?
I have seen some of those, and it is amazing technology.
Ms. Robyn. I do, yes, and I think that is critical. I do
not understand this assumption that some are making that this
entity, a corporatized entity, would somehow be a threat to
small communities and rural airports. Air traffic control is a
network. The nature of networks is that the bigger they are,
the lower the cost. It is relatively inexpensive to add a node
to that network, particularly if you can go to newer technology
like remote towers.
This small communities argument has been made. It was made
in opposition to airline deregulation. It was made in
opposition to trucking deregulation. It is part of the playbook
of people who oppose change.
All of those changes, I would argue, have been very, very
good for our economy. Small communities, I do not see any
reason that they would be hurt by this. It is not in the
airlines' interest or certainly not in the controllers'
interest; it is not in Government's interest; it is not in the
stakeholders' interest to have that happen.
Mr. Westerman. Thank you.
Mr. Shuster. Thank you.
Mr. Lipinski is recognized for 5 minutes.
Mr. Lipinski. Thank you, Mr. Chairman.
I think it is very important, and I have talked with the
chairman, and he has always and continues to have an open mind
on this, and I think it is going to be very important to see
the text of the bill to have a better understanding of what
exactly is in there.
Ms. Norton spoke earlier about concerns about noise around
airports, and that is a major concern that I have. I have
Midway International Airport in my district, O'Hare not too far
away. As the patterns flying in and out of those airports has
changed in recent years, there have been a lot of constituents
of mine who had a lot of complaints, and we have gotten the FAA
now say they are going to do a better job of listening and
paying attention to what some of these issues may be.
I have a great concern moving ahead about what exactly the
rules are going to be in the future if we did have an ATC moved
under a corporation. The chairman says that NEPA would still
apply, but I have concerns about what exactly is going to
happen to the FAA.
Is the corporation going to propose the patterns and then
the FAA has to then have their say on that, approve them or not
approve them?
That is a concern that I have. Mr. Rinaldi, I do not know
if you have any. The bill that we had last year, do you know
anything about what that would have done?
Mr. Rinaldi. Well, the regulatory and certification process
would have stayed within the FAA. So it would still be
ultimately the FAA overseeing noise complaints and new
procedures.
Mr. Lipinski. Would they have the authority then or would
there just be a back-and-forth with the corporation over it?
The corporation propose and the FAA then have to approve or how
would that work?
Mr. Rinaldi. Hypothetically, it is hard to answer that
question right now, but I will tell you while we are moving
forward with metroplex and PBN in many cities, the FAA is going
out and doing joint community meetings along with the users and
the stakeholders to explain what we are trying to accomplish in
making the skies greener, safer with less noise.
But keep in mind as the technology makes it to be more
precise on approaches, there are certainly winners and losers
when it comes to noise. That is a fact, and that is a true
fact.
Mr. Lipinski. Obviously, my concern is to make sure that my
constituents and all around the country, those who are going to
be impacted by these changes, are going to be able to have a
say, and right now their say is through us here in Congress and
through the FAA. I want to make sure that occurs.
But I want to move on to another question before I run out
of time. I am concerned that some of the estimates for the
timeline for a new ATC corporation are near a decade. We heard
earlier 5 to 7 years, and my concern is about air traffic
controller hiring.
Will there be a troubling lack of accountability and
transparency as this occurs and make ATC hiring and staffing
difficult, if not almost impossible, to do during this
transition period, Mr. Rinaldi?
Mr. Rinaldi. One of the things we would really have to see
in the bill is a very robust transition period where we would
seek a stable, predictable funding stream so that we can
continue to hire and accomplish the goals of the agency while
it is still in control and if it was going to a not-for-profit,
federally chartered company at the same time, that it would be
a robust transition period enhancing the safety of the system,
at the same time continuing to hire, train and modernize the
system.
Mr. Lipinski. The control of the academy for training air
traffic controllers, who would have that control?
Mr. Rinaldi. I believe in the AIRR Act of 2016, that was
left up to the transition on who would actually still control
the FAA Academy in Oklahoma City.
Mr. Lipinski. So that was not laid out there?
Mr. Rinaldi. I do not believe it was.
Mr. Lipinski. It is to be determined further on.
All right. Thank you very much. It is something that I look
forward to seeing the bill and the details, and I look forward
to maybe having another hearing at that point.
But I thank the chairman, and I yield back.
Mr. Shuster. I thank the gentleman.
With that I recognize Mr. Smucker.
Mr. Smucker. Thank you, Mr. Chairman.
I'd like to pick up where my friend, Mr. Westerman, left
off and further clarify some of the issues that he raised.
One is there seems to be some confusion in the debate about
what we call ``use of airspace'' and who will and who will not
be making decisions about that. In fact, I believe that some
are perhaps incorrectly conflating airline service, business
decisions and the provision of providing the ATC's services.
Mr. Rinaldi, you specifically addressed that by saying that
you simply provide the services to whoever shows up in the
airspace essentially. But I guess I would like to further
clarify that.
Mr. Poole, maybe I will ask you. Could you please clarify
to me that the new entity that is being proposed will simply
provide those ATC services to any entity wishing to receive
those services?
And I will put it in a slightly different way. Will this
ATC entity decide where airlines fly?
Mr. Poole. Absolutely not, Congressman. Airlines will
decide where they want to fly, and presumably the system will
accommodate any desires that they have of where to fly. This,
of course, includes air taxis, regionals as well as major
carriers.
We are not privatizing the airspace. We would only be
privatizing or corporatizing the provision of the air traffic
services, including the financing of new facilities and new
technology.
But all of the safety regulation and ownership of the
airspace remains with the Federal Government in the form of the
FAA. That is very, very clear-cut.
Mr. Smucker. Thank you. I appreciate the clarification.
Mr. Poole, I will ask you another question. The district
that I represent in Pennsylvania includes three smaller
airports, no major international or domestic airport in the
district, but each of these smaller airports serve a county and
are critically important. They are economic drivers in the
county, and so concerns have been raised.
I just want to ask you directly about any potential impact
of this system on the smaller airports. I have one in
particular, the Chester County area of my district, that has an
application in for a control tower, and it is just an example.
Mr. Poole. Right.
Mr. Smucker. But I guess I want to hear again. I want to be
sure. Do you think we will see under this program an
improvement for small airports?
And if so, how?
Mr. Poole. I do think there will be an improvement. For one
thing, because of FAA funding limitations, we have this
moratorium on new contract tower approvals that has been going
on since fiscal year 2014, and the only way that could be
lifted today is if there were a significant budget increase for
FAA or they cut out some other funding for other things like
NextGen and so forth that nobody would really want to see.
The best hope, I think, for small airports and expanding
the reach of control towers is a better funded organization
that is also one that adopts a new technology that increases
benefits and reduces cost so that the contract tower benefit-
cost ratio can be higher for small airports that might not
qualify today with a conventional several-hundred-foot-tall
structure, but could easily afford a contract tower and
actually get better service from it.
Mr. Smucker. Thank you.
One quick question, Mr. Brown. You asserted that
nongovernmental air service provider would somehow be outside
of democratic oversight, and I just want to point that just a
few weeks ago we had executives here from United, American,
Southwest, and Alaska who were sitting right here in this room
where you are and getting grilled by folks up here.
Congress oversees the entire aviation sector, including
regulated private businesses. So I would just like to hear. Can
you explain why you believe that a regulated air traffic
service provider would be outside of democratic oversight?
Mr. Brown. It is my understanding that this would be
empowered as a business that can effectively decide what it
invests in, how much it borrows, what technologies it picks,
maybe what----
Mr. Smucker. But still with congressional oversight.
Mr. Brown. Well, are we going to have a committee for how
they spend their money and what they invest in and where they
deploy PAPIs [precision approach path indicators] and VASIs
[visual approach slope indicators] and where they put up the
next DataComm tower?
Because if we are, why would we carve it out?
Mr. Smucker. All right. Thank you.
I yield back my time.
Mr. Shuster. I thank the gentleman.
That is what we have today, the United States Congress it
is called, and it is not functioning well, and that is what we
are trying to get away from so it can operate more like you,
Mr. Brown, operate, which, again, you have an extremely
successful business, but you decide that based on business
decisions, not based on whether Bill Shuster wants a tower or
does not want a tower.
So with that I yield to Mr. Duncan, not I am sorry. Not Mr.
Duncan. Mr. Payne is recognized. I am sorry.
Mr. Payne. Thank you, Mr. Chairman.
Listening to all of this testimony and the different
opinions, the American taxpayer has invested more than $50
billion in air traffic control systems in just the last 20
years. Under the chairman's proposal to privatize ATC last
year, the Federal Government would have handed over ATC assets
worth billions of dollars to a private corporation free of
charge.
If the ATC corporation was to hit financial or operational
difficulties and needed to be taken over by the Government, it
is my understanding, per the takings clause of the
Constitution, the Congress would have to pay to reacquire the
ATC assets. We would have to pay for what we gave away for
free.
What does the panel think about this? Mr. Scovel?
Mr. Scovel. Thanks.
As I mentioned earlier, I do not believe it is my role,
sir, as inspector general to express an opinion on a purely
policy call like that.
However to your point about valuation of assets
specifically, our work each year to audit departments'
financial statements, to include FAA's financial statements,
has shown us that the net book value of FAA assets that might
reasonably be considered for transfer to a nongovernmental
agency at the end of the last fiscal year amounted to $13.7
billion.
Ideally or probably a lesser figure than that would be
actually transferred if the Congress and the administration
were to agree to take air traffic control out of Government,
but nonetheless, that is a policy decision for you to consider.
A valuation of those assets in any event, whether it is
with the request or requirement that the new entity pay back
the Government, is still going to be required because potential
lenders and borrowers are going to want to see what the value
of collateral is that they are putting up their money against.
Mr. Payne. Thank you.
Mr. Brown?
Mr. Brown. I think people are trying to solve problems
here, and I, frankly, respect the dialogue.
I am not a status quo guy. I actually think there are real
opportunities to improve the management of the FAA, and I have
found very often in the certification side, they are willing to
listen.
But among the things I am concerned about, besides equity
in the system, is whether the logic makes sense in the risk-
reward profile. I mean, this is a real question to me, and I am
just asking it as a business guy.
I am here because I make my living selling products into
aviation, but the lineup that I am concerned about is if we
assure the workforce that the future is as they need it to be
for the purposes of serving their interests, and we underwrite
the risk of this enterprise, more surely than anything else I
know that to be true. When we are perhaps enjoined in
litigation with this enterprise when it is challenged on things
that it does and when we give up our assets, some $20 billion,
to do it and empower a monopoly, when I look at that
enterprise, I want it to report to the people unequivocally.
It has served us well for 50 years. It will serve us well
in the future, and so I wrote in my testimony this is a
question of principle for me. It is not a question of
challenging other members' objectives or motivations. It is an
honest disagreement about the policy play here.
Mr. Payne. OK. Thank you.
Mr. Poole?
Mr. Poole. Well, in the hypothetical event of a bankruptcy,
which I guess is what you were talking about as a possibility,
you have a liquidation in a bankruptcy, in which case a takings
clause thing I do not think would apply. Creditors would be the
ones dealing with the bankruptcy situation, and they would
potentially be in a position to look for a different operator
to take over and restart the system.
Mr. Payne. But if there were no takers, if the Government
had to step back in?
Mr. Brown. Well, what if there are takers? I mean, the net
effect of your scenario there is that we transfer $20 billion
to a company who makes bad bets, and they end up owned by the
Bank of New York. That is a bad outcome. Those might be the
credit providers.
Mr. Poole. They might be the credit providers.
Mr. Payne. Mr. Rinaldi, in your testimony you talked about
the concern for your membership. Any time anything is
streamlined, if you think that your benefits and things are
going to stay the same under that scenario, I have got a bridge
to sell you, too.
But could you answer the question?
Oh, I'm sorry.
Mr. Rinaldi. What was the question? What bridge do you want
to sell me?
Mr. Payne. That is not that question. The original question
that I asked that I laid out, but my time has expired. I guess
you were not listening.
Mr. Rinaldi. I was listening.
Mr. Shuster. I thank the gentleman.
There are limits to all infrastructure, technologically and
human, and because of that we are taking a 5-minute break.
[Recess.]
Mr. Shuster. The committee will come to order.
I now recognize the vice chairman of the full committee,
Mr. Duncan, for 5 minutes.
Mr. Duncan. Well, thank you, Mr. Chairman.
And as some people here will recall, Mr. Poole and I think
others, I chaired the Aviation Subcommittee for 6 years, from
1995 until 2001, and Speaker Gingrich asked me to hold the
first hearings on the proposed Air Traffic Control Corporation.
Ms. Robyn, I think, will remember that.
At that point I think almost everybody, maybe with the
exception of Mr. Poole, was opposed to it, but Chairman Shuster
has done an amazing job now and has brought some groups and
people onboard that were not in favor of this proposal at the
time.
But I am sorry I did not get to hear Mr. Rinaldi's and Ms.
Robyn's testimonies because I had other meetings, but I do want
to say to Mr. Brown that I was impressed by your testimony, and
I can assure you that I think your people will tell you that
general aviation has not had a stronger supporter than I have
been, and I am sure that the chairman will do everything
possible to make sure that general aviation's concerns are
heard loud and clear in any proposal that we end up with in
this regard.
But, Mr. Scovel, you have been with us several times
before, and you know that I have had concerns for a long time
about some of these costs and the delays and so forth.
I noticed in your testimony, you say, ``However, FAA has
not fully identified the total costs, the number of segments,
their capabilities or completion schedules for any of the six
programs. In addition, FAA has not determined when the
transformational programs will start delivering benefits or how
they will improve air traffic flow or controller
productivity.''
These cost things concern me, and you told me in response
to questions that I asked in a 2014 hearing, you stated, ``We
are probably looking years beyond 2025, perhaps another 10
even, and we are probably also looking at the total
expenditures in an order of magnitude two to three times that
of the initial $40 billion estimate to achieve the original
plan.''
I am wondering: Do you stand by those statements that you
made in 2014 or what is the situation now?
And also you heard Mr. Brown basically say that everything
is going pretty good.
Mr. Scovel. Thanks, Mr. Duncan.
As part of your introduction, you mentioned your long
service on the committee. I still wear with pride the label
that you gave me at probably my very first appearance before
the committee where you said, ``Mr. Scovel, you are the
committee's hired skeptic.'' So I appreciate that and my staff
does, too, because that fits our role.
Mr. Duncan. You and I have been around for a long time.
Mr. Scovel. Yes, we have. Thank you.
I do stand by those numbers, and what I meant to convey
when I said that was the uncertainty of the numbers at that
point. The numbers appear to have changed a little bit recently
because FAA's estimates have come to $36 billion, a completion
date thereabouts 2030 or so, but still the uncertainty remains
because at least for the six NextGen transformational programs,
FAA's segmentation practices in managing those acquisitions
have not led to any kind of clear understanding as to total
cost or ultimate completion date.
So we are still very much in an uncertain environment with
regard to those programs and the price tags. It is clear what
has happened over time though is that those programs have
become part of a more general and rolling implementation of
modernization efforts, to be sure. FAA, to its credit, has
worked much more closely with industry over the last couple of
years and the NAC to get their priorities down, and FAA has
been working hard to execute on those.
So I do want to be fair certainly to the agency when I say
that, but cost and completion dates are still much uncertain.
Mr. Duncan. All right. Ms. Robyn, you said that your
original proposal when you worked on it was dead on arrival.
Why do you think that was and where do you think we are now?
Tell me what you think is different now.
Ms. Robyn. I think it was dead on arrival because it,
frankly, imposed additional financial burden on the users.
At the time, more of the funding of the air traffic control
system came from the general fund as opposed to ticket taxes.
We, the Clinton administration, our highest priority was
balancing the budget, and so our proposal entailed a bill for
the users that was unacceptable.
So I think for the airline industry that was a problem. I
think for House Democrats it was much of what you hear today.
It was an opposition to something that was seen as not
privatization, but something like that.
I think this is a great debate. I think we're making
progress. We are arguing over the value of the assets that get
transferred. You know, there are proposals to create a
Government corporation. Admittedly, it would have the
regulatory function as part of it, which is, I think, highly
flawed, but I think we have advanced the debate.
Mr. Duncan. Well, my time has gone by so quickly. Just
quickly I would like to ask Mr. Brown there are, they tell me,
some 60 countries that have done some form of privatization. We
visited them in New Zealand and certain other countries. Have
you talked to some of the general aviation people in some of
these other countries?
Of course, I know general aviation is very small in many of
those countries.
Mr. Brown. Yes.
Mr. Duncan. Have you visited or looked into that any?
Mr. Brown. I have, and I think those countries made choices
they thought were sensible for their taxpayers and their public
interest and, frankly, for the scale and scope of their
aviation industries, which are quite, quite small.
So my reference point in many of those countries is that
general aviation is already a miniscule part of the economy.
People do not fly. They do not have the freedom to fly. They do
not create pilots. They do not build airplanes.
And so in my mind, they are taking a function that is not
critical to their economy and they are outsourcing it. In my
mind, in our country what we do with our national airspace is,
in fact, an economic engine and a critical one, and I think it
works pretty darn well, and that is where the origin of my
interest and my point of view come from.
Mr. Duncan. All right. Thank you very much, Mr. Chairman.
Mr. Shuster. I thank the gentleman.
Ms. Titus is recognized for 5 minutes.
Ms. Titus. Thank you, Mr. Chairman.
It is interesting what Ms. Robyn just said. Her bill was
dead on arrival because airlines wanted it but they did not
want to pay for it. Now that they are getting it free, they
seem to be all in and it does not seem to be dead on arrival. I
find that interesting.
Ms. Robyn. No.
Ms. Titus. But the question I want to ask is to Mr. Poole.
I want to go back.
We hear a lot about the assets. Let's talk about the people
who are involved. You, Mr. Poole, and the Reason Foundation and
your donor network have been talking for decades about
privatizing all aspects of Government, not just the FAA.
In fact, in 2010, you wrote a piece for
downsizinggovernment.org that was a project of the CATO
Institute, and you talked about the need to privatize and
commercialize the air traffic system back then.
One of the major arguments that you made was the cost of
running the system, and in particular, you went into extensive
detail about the history of air traffic controllers and the
cost of salary and benefits to those professionals who operate
the system. You noted that two-thirds of the FAA's operational
expenses are due to what you called the high cost of labor.
You have gone on to reference the efficiency of Canada
where they have downsized the system, ``shrunk the system'' I
think was the term, and cut down on the number of towers.
So considering all that you have written in this issue, and
now we have this bill before us, I want you to walk me through
exactly how you are going to address the high cost of labor as
you make the system more efficient.
Mr. Poole. Well, thank you for letting me clarify. What we
have seen in countries such as Germany and Canada and others
that have corporatized their systems is not downsizing the
controller workforce. In many cases, Canada in particular, the
need was to increase the controller workforce which was low
because of decades or many, many years of underfunding by
Transport Canada.
The downsizing that could take place is in the middle
management ranks, the bureaucracy, because it is so many layers
and so convoluted that it extracts a high cost out of the
users, whether they are paying aviation user taxes or actually
direct user fees.
That is where the need for looking at that cost is. It is
in the middle management ranks of the bureaucracy, not in the
day-to-day controller workforce that is undersized for the task
at hand today.
As Paul Rinaldi has said, we are at a low point of
certified professional controllers today, and it is partly
because of the shutdown of the training academy that was out of
commission for nearly a year, and also because of some
politicization of the selection process that has now been
partly overturned, thanks to Congress.
So we do have problems, but it is not controllers. It is
the bureaucracy.
Ms. Titus. I wish that reassured me, but when you talk
about efficiency and cutting costs and high cost of labor and
benefits and controllers are part of that system, I do not know
that I believe that that is where you are going to stop, is at
so-called middle management.
But I would ask Mr. Rinaldi. He is sitting right there next
to you. He represents these folks. It is not just you. A number
of conservative media outlets keep talking about high labor
costs, high labor costs. Let's get more computers. Let's have
fewer people.
So I would ask you, Mr. Rinaldi: Just what assurances do
you have that once your members are under control of a private
system that is dominated by representatives of for-profit
companies who are looking to run the system as cheaply as
possible because it is about their bottom line, you heard they
did not want to pay for it before, but they are getting it free
now.
How do you know your members are going to be protected once
this current contract is over?
Mr. Rinaldi. Thank you, Madam Congresswoman.
Great question. First of all, we have nothing in front of
us to actually compare to see exactly what type of worker's
protections would be in the new language. So anything I would
say would be speculating.
But I will tell you we are a highly trained, highly
skilled, highly efficient workforce, and we keep hearing about
Canada. We keep hearing about the United States. We run roughly
10 times the traffic they do in Canada, but only 5 times the
amount of controllers. We are highly efficient.
And I stand behind the work of the air traffic controllers
in this country, and I put them against anybody else in the
world because we have the best in the world.
Ms. Titus. I totally agree with that, and that is why I
want to be sure they are protected under any kind of new system
going forward.
Mr. Rinaldi. Me, too, and I am with you.
Mr. Shuster. And I would just say, and I think Mr. Rinaldi
said this before, under the AIRR Act from last year, we had
support from the air traffic controllers as well, if I could
for the record, submit letters of support from NetJets,
Southwest Airlines Pilots' Association, the Allied Pilots
Association, and NATCA.
So I would like to submit these letters for the record.
Without objection, so ordered.
[Letters of support and written statements from NetJets, Southwest
Airlines Pilots' Association, the Allied Pilots Association, and NATCA
are on pages 126-132.]
Mr. Shuster. And with that I recognize Mr. Mitchell for 5
minutes.
Mr. Mitchell. Thank you, Mr. Chair, and thank you for all
of the witnesses remaining for a long day.
Mr. Scovel, you note in your report that FAA reform efforts
have not slowed the overall cost growth or improved the
productivity, and you talk about the fact that their budget
between 1996 and 2015 grew by 95 percent.
Also, earlier Mr. Duncan referenced that the hope is--I
stress ``hope''--the $36 billion will be the cost to get
NextGen up, and sometime around 2030 it may come to fruition. I
am hoping to still be around in 2030.
Let me ask you a question, Mr. Brown.
Am I wrong, Mr. Scovel, that that accurately portrays your
analysis?
Mr. Scovel. Yes, it is correct.
Mr. Mitchell. Mr. Brown, like you I am a private business
guy. I am an aircraft owner. I have owned several aircraft. In
fact, one of your props was on one of them. Thank you.
If you had a business that could not tell you what it was
going to cost to put out a set of products, could not tell you
when they were going to get it done, but said eventually we
will get there, how likely is it that you would buy that
business or keep it?
Mr. Brown. That would not be in the category of strong
indicators for that business.
Mr. Mitchell. Thank you.
Mr. Brown. And it would cause me to ask a lot more
questions.
Mr. Mitchell. Well, let me go to the next question. We talk
about the value of the assets. There has been a lot of
discussion about that. Mr. Scovel, how do we, quote,``pay for
the assets,'' and I use that term loosely in the case of the
FAA? How do we pay for those assets that we already have?
Mr. Scovel. Mostly they are funded by excise taxes on
ticket sales, gas taxes from GA users. There is an infusion, as
well, from the general fund.
Mr. Mitchell. And, Mr. Brown, you have a lot of assets in
your business, and what depreciation schedule do you use on
them?
Mr. Brown. Seven years on capital equipment.
Mr. Mitchell. About 7 years you have fully depreciated
them. Usable life on a lot of the equipment is what, 10 years?
Mr. Brown. Yes. It can be longer, but yes.
Mr. Mitchell. Not much longer, especially not in major
capital.
Mr. Scovel, what is the average age of some of the
equipment that is in the FAA right now? Air traffic
controllers.
Mr. Scovel. The air traffic control structure is aging and
getting older by the minute, obviously. The en route centers
that manage high-altitude traffic, maybe 50 years on average,
25 years on average for terminal radar approach control.
Mr. Mitchell. I would like someone to explain to me maybe
in writing some way why we are losing our mind about, quote,
``the value of these assets'' when, in fact, in the real world
outside these hallowed halls, the value of the assets is less
than zero.
In fact, the question is how you dispose of them if, in
fact, there were a value on those and you could not use those
assets because that is what we are talking about. We are
talking about assets that have gone beyond the half-life yet we
somehow would think we were giving it away to somebody.
In fact, some of these assets we want someone to take them
away.
A followup question also if you can, Mr. Poole. The
countries that have gone to some version of privatization,
third party other than the Government running the ATC system,
60 countries or so, they all had safe, relatively safe airline
or flight systems before they divested, right?
Mr. Poole. Yes, they did, and the study that was done by 3
universities about a decade ago looked at I think it was 5
years before and after comparison of 10 of those countries and
found that safety did not go down in any of them, and it was
either the same or better following the corporatization.
Mr. Mitchell. Mr. Rinaldi, same question. Have they all had
safe systems as they made their transition?
Mr. Rinaldi. Yes.
Mr. Mitchell. Any of your cohorts around the world say,
``Oh, my God, we have gone to a third party or a privatized
system and the world is now threatened?''
Mr. Rinaldi. Completely opposite. Most of them would never
go back to Government structure.
Mr. Mitchell. See, I have flown Canada's system. I have
flown Europe's system, and I have, for better or worse, flown
the system here. I have got some interesting routing we could
talk about, Mr. Brown. Flying back to Detroit through Fort
Wayne was an interesting route. That was quite helpful.
The point is that we had a lot of discussion about
bifurcating the FAA. Just because it was together when they
created this thing, somehow there has been discussion that it
is a terrible thing to talk about making it more efficient and
separating it, like somehow it is a holy ground.
It is not working well. It is costing us a ton of money. If
the argument is we just throw more money at it we hope it will
get better, we say in my company hope is not a plan. It is a
last step before desperation. We are at desperation.
One more comment, which is about the discussion about being
controlled by the outside stakeholders. Big parts of my
district are powered by rural electric cooperatives, lots of
stakeholders, lots of interests, and those people would not
give that up for the world because do you know what? It
actually worries first about the customers and service and not
about the politics, about what you talked to here about
sequestration and all the other mess. It worries first about
are we delivering the service we promised to deliver.
That is my hope for ATC reform and a board that has a
fiduciary interest to deliver the service at a cost we can
actually manage.
Thank you, sir. My time is up. You have been patient, and
you rapped your gavel. I am done.
Mr. Shuster. I thank the gentleman.
And next is Mr. Weber is recognized for 5 minutes.
Mr. Weber. Thank you, Chairman.
Mr. Scovel, when you had your comments you said you had
identified some longstanding management weaknesses. Can you
elaborate on those?
Mr. Scovel. They were. Yes, thanks for the opportunity.
By management weaknesses I am referring to those in FAA's
acquisition practices. We cited in our testimony overambitious
planning. ADS-B and ERAM [En Route Automation Modernization]
would be key examples of that. I cited in our testimony the
need for stable requirements for acquisitions to be
successfully executed.
ERAM and the SWIM [System Wide Information Management]
programs would be examples of where FAA had shortcomings in
that area.
Contract oversight, generally, across the board. As we have
audited FAA's programs, we have found areas that needed
significant improvement, all the way from incentive fees to the
requirement, FAA's own requirement, for independent Government
cost estimates in sole source contracting. Some FAA
acquisitions personnel were not even following their own
requirements.
So as you can see, there have been some significant
shortcomings along the line. They have affected not only the
NextGen programs proper but others that are in support of other
areas of air traffic control and NextGen.
Mr. Weber. My first year on the committee I know you said
that you had received the label of the committee's biggest
skeptic.
Mr. Scovel. Hired skeptic.
Mr. Weber. Hired skeptic.
Mr. Scovel. And if I may, I was not skeptical of the
committee. I was skeptical----
Mr. Weber. I am glad you clarified that.
Mr. Scovel [continuing]. Of information, of proposals, of
information, with the idea of bringing data for the committee's
consideration.
Mr. Weber. OK. Great. How long have you been the hired
skeptic?
Mr. Scovel. A little over 10 years now, sir.
Mr. Weber. Ten years. OK. So you have been doing this and
watching this FAA for 10 years. Is that fair?
Mr. Scovel. Yes, sir.
Mr. Weber. You said there were some requirements for them
to continue to evolve. So fix those problems you just laid out
for us. What are those requirements?
If they were to stay in place, how does it evolve?
Mr. Scovel. If FAA were to retain responsibility for air
traffic control, first, continue to consult extensively with
stakeholders. Where FAA has gone off the rails, largely it is
because they have not done that.
Mr. Weber. And you would think that the new process that
the chairman is submitting would continue to consult with
stakeholders?
Mr. Scovel. Well, stakeholders would play a large role in
decisionmaking under a proposal as I understand how it may
ultimately be.
Mr. Weber. Well, they will have a board that has been
discussed back and forth, but in that scenario, they would be
in constant communication with the stakeholders, their
businesses, the different parts of the group.
Go ahead.
Mr. Scovel. I am sorry. I may have misunderstood your
predicate. I thought you were asking if FAA were to keep
responsibility for air traffic control.
Mr. Weber. Well, it was, but you are saying if they
continue to be, and I am saying contrast that with what the
recommendation here is, and that is that they would definitely
be doing that. Go to step 2.
Mr. Scovel. They do. Focus on the acquisition system
because as I understand it, that's the essence of the aviation
community or users' dissatisfaction right now with FAA.
It is not on the safety side. We have all recognized FAA
right now is in what I called earlier the golden era of
aviation safety through its own efforts, industry's efforts,
Congress' efforts, as well as the efforts of my office.
But where dissatisfaction is arising, it is in the air
traffic control modernization area. So focus on FAA's
acquisition practices, the acquisition management system, which
is the regulation that governs FAA's practices and needs to be
updated. It needs to be revised. The workforce needs to be
properly certified and trained.
All of those things that I talked about earlier about
planning and good requirements need managerial attention.
Mr. Weber. Could be done in the new system that the
chairman is proposing. Let me stop you if I may because I am
running out of time.
Mr. Poole, stand-alone airports, we have got a couple small
ones.
Well, let me do this first. Mr. Rinaldi, you said that you
all represented 40 or something of those airports?
Mr. Rinaldi. Ninety-four.
Mr. Weber. Ninety-four. Thank you.
Mr. Poole, back to you, what happens to those airports now?
Mr. Poole. Well, those airports are owned by municipalities
usually. They get funding from the AIP Grant Program. None of
that would change. AIP would continue to be an FAA function and
do that.
The main criterion affecting those small airports is
whether they have a tower or not, and if they have a tower and
it is obsolete and needs to be replaced, how is it going to get
paid for and can it be afforded?
That is where I think, first of all, the legislation can
spell out that everybody is entitled to a tower that meets the
benefit-cost ratio, and the financing capability and openness
to better technology of the corporation would very likely adopt
remote towers as a more cost-effective way to be able to expand
the scope of tower services to small airports that may not
qualify today, but probably could with a better benefit-cost
ratio.
So I think there is a very bright future for small
airports.
Mr. Weber. OK. Thanks for elaborating.
Mr. Chairman, I yield back.
Mr. Shuster. I thank the gentleman.
Mr. LaMalfa is recognized for 5 minutes.
Mr. LaMalfa. Thank you, Mr. Chairman.
Much discussion on the reform of FAA and air traffic
controllers, and no doubt the controllers are doing very well
with what they have to work with, but when we see the potential
here for improvement with reform, I think a previous GAO report
showed that reforms like we are talking about would have really
no negative impact on safety. In many cases, safety improved.
What we have not seen is that throwing more money at it,
FAA had not really improved; if anything, even in some cases a
negative effect.
The potential for savings, as we have seen with the oft
spoken of Canada system, shows that we can have a very positive
effect on safety as well as saving money.
So what I wanted to ask Mr. Poole and Ms. Robyn would be:
Do we really expect that these savings that would be achieved
can be actually passed down to the consumers on what they would
expect for their cost?
Mr. Poole. Well, that is an obviously good question to ask,
and that depends really on is there a competitive airline
market. If there is a competitive airline market, then lower
costs are more likely to be passed on in ticket prices, for
example, than if there is not a competitive market.
I think there are some concerns being raised about how
competitive our airline market has gotten to be in recent
years. I mean, there are some things we do not have time to
discuss here, things Congress could do to try to make the
airline market somewhat more competitive than it has been.
Mr. LaMalfa. OK. Ms. Robyn, similar? Ditto?
Ms. Robyn. Yes, and I think in addition to passing savings
on, I think you are trying to expand the system to allow more
throughput, and you need new technology to do that. We are not
at the cutting edge of that.
You need new technology in order to allow for an expansion
of the system.
Mr. LaMalfa. For both of you again, if we were to move in
this direction of ATC privatization, smaller airports, rural
airports, you know, the threat of towers closing, what might be
the expectations we would see for rural airports.
Just in general, I know we have been touching on it here in
general, but what is it going to mean for rural airports and
their viability?
Mr. Poole. Well, I will repeat what I said a few minutes
ago. I really think that a better funded system able to do
large scale capital financing, one of its priorities would be
facility replacement and some degree of consolidation, but also
expanding the scope.
Right now, as I said, we have a moratorium on contract
towers. FAA has a moratorium that is denying a couple dozen
airports that are on a waiting list. Some of them have already
qualified in terms of benefit-cost ratio, but there is just no
funding available for FAA to do that.
A well-funded system that is focused on serving its
customers better and open to aggressively using new technology,
like remote towers, I think, offers the best future I can
imagine for small airports in this country.
Mr. LaMalfa. Thank you for that.
I am running out of time. I want to jump to Mr. Scovel for
a second here talking about contract towers.
So they are pretty important at smaller service airports
and general aviation, et cetera. Up to 50 percent of civilian
airports that have military operations use contract tower
airports.
Now, it is very important to have these operations, which
is around 250 of them in the country. Would you comment please,
Mr. Scovel, on the value of the contract towers to air traffic
safety and efficiency in our Nation's system and the cost
effectiveness of this to FAA and as well as taxpayers?
Mr. Scovel. Yes. At this committee's request, we reviewed
the FAA's Federal contract tower program several times, and we
have concluded that generally they are as safe; they are as
well respected and appreciated by users as FAA operated towers;
and on average, they save or avoid for FAA $1.5 million per
year in costs versus FAA operated towers.
Mr. LaMalfa. Per tower?
Mr. Scovel. Per tower, correct.
Mr. LaMalfa. Significant. OK.
Mr. Scovel. We would cite Federal contract towers as a
missed opportunity for FAA. We understand that in recent years
there have been funding difficulties perhaps, but well before
that FAA had opportunities to pull more towers into the Federal
contract tower and took a pass.
It has been a decade or longer since FAA has moved any
towers into the Federal contract tower program.
Mr. LaMalfa. Perhaps we should move more of them.
Mr. Scovel. It depends on funding.
Mr. LaMalfa. Always that.
Mr. Scovel. Yes, sir.
Mr. LaMalfa. Thank you, Mr. Chairman.
Mr. Shuster. I thank the gentleman.
Mr. Perry is recognized for 5 minutes. Finally, Mr. Perry.
Mr. Perry. Finally. Well, I have not been here half of the
meeting.
Ladies and gentlemen, thank you for your time.
I had a lengthy question for Mr. Scovel about contract
towers, but I think I missed half of them and Mr. LaMalfa just
asking them.
Suffice it to say the only thing I want to add in case it
has not been added it is important to note that 47 percent of
all military operations at civilian airports are at contract
tower airports.
I am a rotary wing guy. So you know, not too much on the
low altitude and route chart. The sectional is probably more
important, but that having been said, it seems to me based on
at least the answer I got to hear regarding my colleague's
question that you feel that they are efficient and cost
effective to the FAA and to the taxpayer.
Is that a fair summation, Mr. Scovel?
Mr. Scovel. Yes, completely fair.
Mr. Perry. OK. Thank you.
And I know that is not necessarily the context of this
hearing, but I think the context is, well, I will just use
this. Between 1996 and 2012, the FAA's budget increased by 95
percent. Meanwhile productivity decreased substantially, and I
am talking about personnel procurement and organizational
reforms.
Doing the same thing over and over again, while I
appreciate Mr. Brown saying we can tweak this, my argument
would be that we have tried and tried to it seems not great
effect, and I think I am probably be kind, right? Not great
effect.
Let me ask you this, probably Mr. Poole and Mr. Rinaldi. I
am really interested in the UAS propagation in the United
States and the UTM, and I am wondering in the context of what
we are talking about, the proposal policy model that we are
talking about, if either one of you could describe what you
feel your organization, especially you, Mr. Rinaldi, would feel
needs to be in place if that is currently missing for us to
come to some kind of UTM.
Because we have put requirements on the FAA to come up with
something here and there are deadlines, but I feel like we are
just way behind, and I just want to make sure that there is not
something we are missing from your viewpoint.
Mr. Rinaldi. Thank you, sir.
Safely integrating UAVs into our airspace is a monumental
task, and it has taken a lot of resources in the FAA and
certainly distracting us from working on NextGen as we are
working on bringing UAVs into and incorporating them into our
system.
So one of the things I would like to see is some type of
user fee base for these UAVs so they actually can pay into the
Aviation Trust Fund right now and pay for the system like
everyone else does pay for the system.
Mr. Perry. Is there a model that you know of regarding some
kind of a participation for maybe commercial users as opposed
to incidental private?
I am just curious.
Mr. Rinaldi. That is a great question.
Mr. Perry. It is an important concept.
Mr. Rinaldi. It is a great question, and I think everybody
is kind of scratching their head right now because they are not
using fuel, and we base mostly on fuel or ticket tax, and they
would not have either of that. So we actually have to come up
with a new concept.
Mr. Perry. So it might be like miles flown or something
like that?
Mr. Rinaldi. Well, I am really not sure how it would work.
Mr. Perry. It would be a user fee? Well, OK. That is an
important part of the discussion. I'm glad you brought it up.
Mr. Poole, what is your input? Do you know what the
airlines want to see in integrating?
Mr. Poole. I have no idea what the airlines think about
this.
Mr. Perry. OK.
Mr. Poole. I do think there is a possible bifurcation
between the very low altitude, mostly hobbyist uses of UAS,
where there is a lot of interest in some kind of non-FAA
private solution to this that Silicon Valley folks are talking
about in cooperation with NASA.
So I think we need to separate that in terms of being
different from the controlled airspace in which our airliners
and many private planes fly.
Mr. Perry. But there are going to be incursions into
controlled airspace whether it is an air drone or----
Mr. Poole. Yes, that is a significant problem we need to
deal with.
Mr. Perry. There are incursions now in both controlled and
uncontrolled airspace, which is part of the issue, and I feel
like we need to get to it.
But does anybody else have something to add?
Mr. Rinaldi. No, we do see a lot of incursions today and a
lot of spottings that commercial airlines are seeing, and I
think the sooner we can safely integrate them and come up with
a process, the safer the system will be.
Mr. Perry. So while I would agree with you it does divert
some attention, resources, time, energy, what have you, you
cannot just ignore the fact.
Mr. Rinaldi. No, I would not ignore it.
Mr. Perry. I think that is really, really foolish, right?
Mr. Rinaldi. It is an emerging technology, an emerging user
into the system, and it is a very important user into the
system.
Mr. Perry. And I think actually to a great extent it can be
an enhancement. I mean, some of the technologies that are
emerging, especially in the navigation arena itself, could be
used commercially to greatly enhance.
I was talking to the gentleman next to me and now my time
has expired, Mr. Chairman, but you know, as an aviator myself,
the sky is unlimited. You know, I am limited on the ground when
I pull out of the parking lot. I have got to stay on the road
or I am going off-road, and yet we have the same system since I
have been flying for 20 or 30 years now. I essentially have got
to take off and then go get on the highway instead of just
going literally from point to point.
I do not know what the savings is estimated at going
literally from point to point, but it has got to be monumental
over thousands and millions and billions of flights,
commercially or otherwise.
Anyway, Mr. Chairman, I yield. Thank you.
Mr. Shuster. I thank the gentleman.
With that, Mr. Sanford is recognized for 5 minutes.
Mr. Sanford. I thank the chairman.
I just want to bore down just for 1 second. I guess I will
begin with you, Mr. Rinaldi. From an air traffic control
standpoint, a blip is a blip, right?
Mr. Rinaldi. Well, not necessarily. We work all airplanes
safely and efficiently. There are some heavy aircraft that you
need to weight turbulence separation. So each blip, you know,
for lack of a better term, gets treated safely and efficiently,
but there are different ways to work them.
Mr. Sanford. Fair enough. But the wing tip vertices off of
a Piper Cub is going to be very different than the wing tip
vertices off a 747 in term of separation.
Mr. Rinaldi. Absolutely.
Mr. Sanford. That is what you are getting at, but from the
standpoint of management, it is essentially the same, right?
Mr. Rinaldi. Yes.
Mr. Sanford. So I think that one of the things that I have
heard particularly from the cargo carrier side is the fear that
if you move, are they going to be disproportionately impacted
in that they weigh more.
From a traffic control standpoint, they do not take more
time. They do not really use more stuff, but are they going to
be disproportionately impacted relative to other small
aircraft?
And I just love it. I see you shaking your head up and
down. I do not know if it means yes or no, but I would love to
hear some of your all's thoughts on that because I think that
is one of the things as we go through these deliberations we
have really got to ferret out.
Yes, ma'am.
Ms. Robyn. On the pricing side, most economists would say
the current approach of funding the air traffic system through
the ticket tax is very inefficient because it is not correlated
with the cost that users impose on the system, and so you want
to go to a cost-based system.
What the rest of the world uses is a weight and distance
charge, and they use weight because they cannot fully cover
their costs typically with just a distance charge. You want to
charge marginal costs, but you want to cover your full cost,
and weight is a way of doing that.
It is called Ramsey pricing in economic terms, and the
cargo folks object to that. And I think there is some really
important analysis to be done about just how big that weight
component has to be.
I think there is reason to think that the FAA may overstate
their fixed costs, which is what requires you to have a weight
component to the charge. There is a tendency for regulated
utilities to overstate their fixed costs versus their marginal
costs.
So I think this is a really important issue, and I do not
think we should just blindly adopt the standard weight and
distance charge.
Mr. Sanford. Yes, sir.
Mr. Poole. I have looked into this. In a 2001 Reason
Foundation study, we actually had a lot of dialogue with one of
the major cargo carriers, and they persuaded us that a strict
weight-distance formula would cause a significant increase in
the cost share that they would pay.
And we came up with an idea that said, ``All right. Look
at''----
Mr. Sanford. And let me interject. It is ultimately not
they pay. It is we pay.
Mr. Poole. Well, ultimately, yes.
So what we came up with was we looked at the flight
patterns by time of day, and it turned out that most of the
cargo flights do not take place at the busy times of day or at
the busiest hubs at those times of day.
And so if you put into the pricing formula a congestion
factor, that you could basically hold the cargo carriers' share
to about what it is today without having to discard the global
standard of an overall weight-distance formula.
ICAO does permit congestion related factors going into
airport and air traffic pricing. Hardly anybody does it except
the U.K. major airports, Heathrow and Gatwick, but that is
consistent with ICAO charging principles.
And I think that is a way that should be definitely
explored for the cargo airlines.
Mr. Sanford. I think that is fascinating in that if you
look at this notion of optimizing the use of our structure in
this country, I think this notion of going to premium pricing
based on congestion or load is going to become a bigger and
bigger issue, whether it is on surface transportation, air
transportation or other.
I see I have 25 seconds, but it looked like you had a
thought down there at the end, but maybe you did not.
Mr. Scovel. I have many thoughts, sir, but not on this
particular subject. Thank you.
[Laughter.]
Mr. Sanford. Fair enough. With that I yield back, Mr.
Chairman.
Mr. Shuster. I thank the gentleman.
Mr. Davis is recognized for 5 minutes.
Mr. Davis. I bet I can guess that thought: When is this
going to be over?
And then you have got Members like me that keep coming in
and out. I apologize that we are shuttling back and forth
between two different committee hearings today, but this is a
very important one, one that I believe from many of the
responses that we have heard today and many of my colleagues
that it centers on what is really this debate of what is the
cost of doing nothing.
I mean, it has already cost the taxpayers billions of
dollars to put towards NextGen, and we are not seeing the
progress that we as America, with the air system that we have,
be upgraded to even be able to compete on the same level with
some of our allies.
I cannot help to compare it to work that has already been
done, and we discussed this today. You have, what has been done
in Canada, what has been done in the United Kingdom.
Canada has bought twice the technology at half the cost,
and has done so in one-third of the time.
So let me start with you, Mr. Rinaldi. What do you think
would be the cost of doing nothing?
Mr. Rinaldi. Yes, status quo or doing nothing is
unacceptable. September will be here before we know it. We will
be looking at another possible Government shutdown, and as I
said in my opening statement, as we lead up to a shutdown, the
FAA turns their attention from NextGen or from UAV
implementation to shutdown procedures.
For the last 10 years, this happens a couple of times a
year, and we lose this time. It is 4 or 5 weeks leading up to
it; 5 weeks on the back end of it, and they are not sure what
sequester is going to bring us if we actually do get a budget
and do get a bill passed or what type of cuts we are going to
have into the aviation system.
A lot of discussion about rural America. I will tell you
and you remember, sir, that when sequester hit in 2013, the FAA
looked at closing over 238 air traffic control towers.
Mr. Davis. That was a very interesting list. It contained a
lot of them in my district.
Mr. Rinaldi. Most of them were in rural America,
absolutely.
Mr. Davis. Well, thank you.
Mr. Poole, do you have any comments on this?
Mr. Poole. I think almost everything has been said, but I
think on technology, the comparison with NAV CANADA is
brilliant because they have things that we are only planning
now. They have fully rolled out nationwide controller pilot
data link, while we are looking at maybe 6 or 8 years before we
have that in en route airspace.
They have across the North Atlantic very soon satellite-
based positioning thanks to their investment in Aireon, this
satellite-based global coverage. All of the places that do not
have radar, which is 70 percent of the earth's surface, will
now have radar-like separation possible because NAV CANADA and
several other ANSPs have invested in that and are now
subscribing to it, and FAA was unable to invest and cannot
figure out how to subscribe to it.
So the idea that we are the gold standard, the most modern
in the world is no longer true, and the more the status quo
continues, the less that is going to be true. We are going to
be falling farther and farther behind the state of the art.
Mr. Davis. Well, as we wind this hearing down, I want to
make sure that we reiterate a few points. This new ATC entity
is not going to decide where airlines or anyone can and cannot
fly, correct?
Mr. Poole. That is correct. They will not decide anything
about where airlines fly.
Mr. Davis. Thank you.
And, Ms. Robyn, I want to address some more information
that I have seen about the motives of the board under the AIRR
Act proposal. Despite the fact that the bill clearly states
that two directors will be appointed by the Secretary of
Transportation to act in the public interest, some have
questioned the motives of the board.
Can you describe your understanding of the governance of
the board and how it will actually operate?
Ms. Robyn. Congressman Mitchell referred to the electric
cooperative in his district, and it is analogous to the
cooperatives we have in the utility industry, and the
agriculture and insurance sectors.
Mr. Davis. And they work, right?
Ms. Robyn. Yes, they work beautifully. Air traffic control
provision is still a monopoly. I think technology will change
that, but for the time being it is still a monopoly. So you
need a design that protects against any kind of monopoly abuse.
And the Canadian model does that by having the stakeholders
select the board members, and the board members are
fiduciaries, as the chairman emphasized in his introduction.
They have a fiduciary responsibility. That has been critical to
NAV CANADA's success.
Mr. Davis. And quote of the day, entities like this that
are already operational work beautifully. So I appreciate that.
And we as policymakers----
Mr. Shuster. Keep going.
Mr. Davis. Thank you.
We as policymakers do not have a lot of time here. You
know, we can sit and debate what is working and what is not,
and Mr. Rinaldi mentioned that the FAA has got to deal with not
only NextGen but UAS technology, which I once questioned an
official about what Canada is doing correctly.
We do not have a lot of time to fix this. Today is the time
to act. Now is the time to act, which is why this is so
important.
So thank you.
Mr. Shuster. I thank the gentleman.
We do not have much time, but we do have time for Mr.
DeFazio to have 5 minutes and me to have 5 minutes because they
have called a vote, and we have got 12 minutes and 28 seconds.
So I will strictly enforce the 5-minute rule.
Mr. DeFazio. OK. Thank you, Mr. Chairman.
I just want to point out in the DoD memo there is a
sentence, ``And recognizes the potential risks regarding DoD's
national security responsibilities.''
I would like to put in the record an article from the
National Observer in Canada. Headline, ``Inspectors Say a Major
Canadian Airline Disaster is `Likely,' '' and they talk about
the major cutbacks in the safety which was retained by the
Government.
And then I would move on. Ms. Robyn, do you remember
Executive Order 13180 by President Clinton?
[The National Observer article entitled, ``Inspectors Say a Major
Canadian Airline Disaster is `Likely,' '' is on pages 147-150.]
Ms. Robyn. Is that the one that created the ATO?
Mr. DeFazio. The one that says air traffic control is an
inherently governmental function.
Ms. Robyn. Yes, the date of that is December 7th, and they
were----
Mr. DeFazio. Thank you. Thank you, Ms. Robyn. I do not have
time. Ms. Robyn, I do not have time. Thank you.
So, Mr. Scovel, so we just kind of said, oh, our assets are
old and someone down there said they are not worth anything.
How old is that? I think that is 13, right? That is
Houston, valued at $62 million. Then, of course, we have
property in Long Island, kind of valuable.
I mean, have you broken out the assets in terms of property
values?
In Canada they valued the system, and they had to pay for
it, correct?
Mr. Scovel. They did.
Mr. DeFazio. OK. And the inspector general in Canada,
auditor general, and this is Canada, little, dinky Canada, they
paid $1.5 billion, and we are proposing that nothing would be
paid here and there is no value, and they said it was
undervalued at $2.6 billion.
How old was their system? Because you are saying our system
is old and decrepit and these guys say it is not worth
anything. Was theirs brandnew, spiffy back then?
Mr. Scovel. No.
Mr. DeFazio. OK. So they paid for it, but here we have a
much larger investment that we are going to transfer for free,
and of course, we have the whole problematic thing about
taking.
And you valued it at $13.7 billion. How much of that would
you depreciate?
Mr. Scovel. How much of that would depreciate it?
Mr. DeFazio. No, I mean what is land value versus building?
You do not know?
Mr. Scovel. That is the infrastructure alone. I do not
believe it involved the property value.
Mr. DeFazio. OK. So it is quite valuable.
Now, let's go to small airports. Almost everybody on that
side is sensitive to GA. They represent more rural districts,
and we heard that they will not direct where people fly.
That is correct, but this board will decide where we
invest. Here is the statement of the CEO of Jet Blue. ``We also
need to direct infrastructure improvements into the regions of
the country that will produce the most benefits, like the
Northeast Corridor.''
The airlines get four seats on that board. That is the
opinion of Jet Blue. We heard the same thing from the former
CEO of United and, oh, by the way, there is no airport
representative on the board whatsoever, at least as the bill
was written last year.
So we say we are going to protect rural interests. We are
going to pretend it.
Now, Mr. Brown, you talked about WAAS. There are 4,421
WAAS. Did those come for free? And do they have to be
maintained, updated?
Mr. Brown. Well, the FAA like night owls produce them one
airport at a time until they arrived on my doorstep, and I was
amazed by them, but they got paid for by the user fees and fuel
taxes that fueled the system.
Mr. DeFazio. Yes. We heard how much money has been wasted,
except we have been investing in things like that which are not
valuable to the commercial industry.
Except for maybe Jackson Hole and a couple other places,
does the commercial industry use those?
Mr. Brown. Anybody can use those if they have the right
equipment. The problem is most of their airlines do not have
the right equipment.
Mr. DeFazio. Well, that is interesting.
Does anybody know of another country in the world that is
ready to turn on a ground-based ADS-B system in 2020 for all of
their air traffic? Anybody who is so equipped, any other
country in the world doing that, ground-based domestically, not
over the ocean?
Mr. Poole. Australia. It is already in operation.
Mr. DeFazio. OK. So we have got one, and we are going to be
there, too.
So we hear a lot about this over the ocean stuff. I am not
particularly concerned about the tiny fraction of over the
ocean flights we control and whether or not they get free ADS-B
because there are not that many planes to worry about the
congestion and flying closer together, whereas domestically we
may get some benefit from the system, but it still begs the
question of how many planes can you land at the same time at
many of our airports, which has to do with airport scheduling.
Revenues, apparently there is an assumption that Congress
will repeal the ticket tax. I mean, right now our current taxes
are yielding about $14 billion a year, and the ATO is $11.1
billion. So that assumes Congress is going to repeal
substantial taxes, I assume.
That is correct, and then the new board will determine how
to pay for the ATO.
OK. I see a nodding of the head, yes.
Thank you, Mr. Chairman.
Mr. Shuster. I thank the gentleman.
And let me start off first by saying that investment will
not be directed by this new board. There will still be eight IP
funds that will be going directly out to these small and
medium-size airports around the country. So that is not
actually accurate.
One of the things that Ms. Titus brought up, which I think
is very, very important and she was directing it to Mr. Rinaldi
was about the air traffic controllers, and let me tell you one
of my biggest concerns in this proposal is that we make sure we
move those highly trained, highly technical, highly skilled,
efficient air traffic controllers to the new system. And if you
do not do them the right way, one-third of them--I think I am
correct--one-third of the certified controllers can retire
tomorrow if they are not happy.
So for me that is something very important, and I can tell
you I have been criticized by conservative groups around this
town because they just do not get it. You have to take the
qualified workforce with you.
So, Mr. Rinaldi, I know we talked a little bit about the
count going up at NAV CANADA. The controller count goes up.
What are your thoughts on not only the controller count, but
middle management?
Mr. Rinaldi. Well, if you look at, and it was brought up
earlier, NAV CANADA when they were in Government, they had
roughly 6,700, 6,800 employees, of which 2,000 were air traffic
controllers.
Now that it is a highly functioning, not-for-profit
corporation, they have about 4,300 employees, of which 2,000 of
them are roughly air traffic controllers.
So the controller workforce stayed the same or went up a
little bit. It is the middle management that they attrited
through retirements in a humane way, and they just did not
backfill those positions.
I call a lot of that, you know, between the middle
management within the agency and the multilayers of contractors
they have within the agency also, it is one of the things that
is already being privatized out there with all of these
contractors within FAA headquarters.
I call that the ``clay.'' It actually stops good things
from happening at the very top, and things that are happening
trying to change at the operational level.
Mr. Shuster. And so those of us that are not geologists,
nothing permeates down and nothing permeates up, correct?
Mr. Rinaldi. Yes.
Mr. Shuster. I understand what ``clay'' is then.
Mr. Rinaldi. It is 15 levels of no to get to yes.
Mr. Shuster. Exactly. And then finally, I just wanted to
make the point here that, first of all, something was said
along here that the airspace would be restricted.
We made it clear in AIRR 1 but maybe not clear enough to
make sure that this new entity will not be able to restrict
airspace. The plan, plain and simple, we are going to
strengthen that language to make sure the general aviation
community knows they are not going to be restricted by this new
entity.
That is the FAA having the regulatory oversight of this if
that is the case to do something like that.
Second, when we talk about NAV CANADA, our system is 10
times larger. No doubt about it. I believe because we are so
big and so complex, that is a reason to move to the system so
that we can manage it much better.
You know, we are already scaled to a size to handle those
greater operations, 3,000 facilities, 14,000 controllers, 6,000
technicians, 5,000 managers. We are scaled to handle this
today.
And then I might add, again, and this is something that is
very troubling to me and it should be troubling to anybody who
is in the business world, we are 9 to 10 times larger,
depending on how you want to measure it, than Canada. We spend
25 times to 28 times more in CapX than they do.
And as was mentioned by Mr. Davis, the former CEO of NAV
CANADA said, he gets twice as much technology at half the cost
three times as fast.
So, again, as a business owner, a former business owner, if
we are spending 25 to 28 times more in CapX and we are getting
very little for it, that is a real problem. That is a real
problem for the American taxpayer. That is a real problem for
the system.
If we were doing it efficiently, my goodness, how we could
drive the costs down, and as I spoke to the folks in NAV
CANADA, and I think everybody understands, this is a volume
business, and if we go to the system, our volume is so
tremendous it will dramatically drive down the cost, and we
will have more money out there to do things to help more
communities, to do things to help the efficiency, the
technology, the employees.
So, again, this is something we have got an opportunity,
and I said to the airlines when I was here last time when they
did something very wrong, we have an opportunity here to do
something very right, and I hope we seize this opportunity
because I am afraid it is not going to come along again.
Ms. Robyn, I think I am the first one who called you the
right name today.
[Laughter.]
Mr. Shuster. I know you have been engaged in this for a
number of years. You started in the Clinton administration, and
I appreciate all of the value you bring here, as well as Mr.
Poole and Mr. Brown. Thank you so much for being here today.
Your perspective is very valuable to us.
Again, I want to reiterate. I am a GA guy. I am a rural
guy. There is nothing I want to do to hurt those people who are
my constituents, but I think what we have at hand here is
something to help the United States of America to continue for
us to be the leader in aviation around the world.
So again, thank you all for being here today. I appreciate
your time.
And I would ask unanimous consent that the record of
today's hearing remain open until such time as our witnesses
have provided answers to any questions that may be submitted to
them in writing.
And I ask unanimous consent that the record remain open for
15 days for any additional comments or information submitted by
the Members and witnesses to be included in the record of
today's hearing.
Without objection, so ordered.
I would like to thank the witnesses again, and there are no
other Members, so we are adjourned.
[Whereupon, at 1:38 p.m., the committee was adjourned.]
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