[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
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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:]
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    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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