tv Hearing Considers FAA and Air Traffic Control Reforms CSPAN May 30, 2017 3:02pm-6:34pm EDT
code breaker. anthony tell youully. and timothy orr, co-author of "never call me a hero" about the by that of midway. watch the battle of midway 70th anniversary special on friday beginning at 9:30 a.m. on american history tv on c-span3. the federal aviation administration is implementing a new air traffic control system that utilizes satellite technology called nextgen. it should shorten routes, save time and fuel, and reduce delays. but the system itself has been facing delays. up next, the transportation department inspector general testifying on how the new system is being implemented.
>> the committee will come to order. i now recognize mr. lobiondo for a motion. >> pursuant to rule 1-a-1, i move that the chairman be authorized to declare a hearing on today's hearing. >> all those in favor signify by saying aye. 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're having here today. and we're talking about what i consider extremely important legislation. and i believe everybody on the committee, both sides of the aisle, believes reauthorization of the faa, reforming it, 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 industry 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. to quote my colleague, my esteemed colleague from oregon in 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 got to try something different to get it to be more agile, to give us 21st century equipment and software we need. then there's the issue of the actual sort of shape of the faa bureaucracy. congress in 1986 gave the faa license to reform personnel practice, to deal with mid-level
management bulge, but that didn't take either. and he goes on to propose a 21st century constitutionally chartered corporation to accomplish these goals and make it self-funding, self-sufficient, and not subject to appropriations or shutdown or anything else that congress might imagine. as we talk here today, we agree there is a problem. there is a solution at hand. it's just the form that we're 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've wasted over the last 3 1/2 decades, over $50 billion, that's why this is one of my highest priorities this year, is a comprehensive faa reform and reauthorization bill. so far this year we've held reauthorization hearings looking at air transportation, manufacturing, airports, and new
entrants and innovations. today we'll 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's an appropriate we're holding this hearing during infrastructure week. no other single infrastructure reform has as much potential to improve travel for the average american flier 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 decision 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 government
restraints, sequestration and threats of government shutdown. sequestration isn't gone. in 2013, sequestration led to full l furloug furloughs. fiscal constraints continue to be tight in the federal budget. that's 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 standalone 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 years before it passed a long term faa bill. we have been trying to undertake a high tech modernization of the air traffic control system for
over three decades. it's not working and it's never going to work. sadly, in today's digital age, our controllers still manage planes with paper strips, which i've brought a few to remind people of that. if anybody hasn't been to a control tower, they out ght to to a control tower and see of this some argue that nextgen is showing signs of progress. but we know that progress is incremental is best and only in locations where the faa partnered with the private sector. the name nextgen was just a rebranding of failed efforts to modernize the system. nextgen is just a marketing term, not an actual technology and innovation but it , but it catchy to congress will fund it year after year. money has never been the problem. congress has provided $7.4 billion for nextgen since 2004. results of the problem. according to the faa's own
calculation, the $7.4 billion invested has only yielded $2 billion in benefits. according to the d.o.t. inspector general, the projected initial cost for nextgen was $40 billion. but they've said it could double or triple and be delayed another decade. over the years the faa has described nextgen has transformation of america's air transportation network. they've said it will 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 is not 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's an approach we have already tried many, many times. starting in the 1980s. since 1995, congress has passed many reforms to allow faa to run more like a business. procurement reform for a more flexible acquisition management system. additional reforms in 1995 exempt the faa from most federal personnel rules and allow 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 the faa to reorganize pay. additional reforms to allow greater pay to 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 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 d.o.t. agency that serves as service provider and safety regulator. regulating itself is an inherent complication of interest. it's time for reform that is truly transformational. real change can be difficult. we've learned that over the years. but the broader lesson over the last several decades is 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's 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 association, and i need to repeat that, fiduciary responsibility, that's a legal term. if you're on a board of directors in the united states, and you have the fiduciary responsibility, it's not to who pointed you to the board. it's to the board, to the organization, who you're responsible for. that's the law.
that's not pie in the sky. people can be removed and prosecuted if they're not doing their fiduciary responsibilities. ensure connectivity, access to the airspace, and the continuity of air services for general aviati aviation, small and rural communities, and airports that serve them. 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'm from, because i'm committee to make sure that we do protects small and rural communities and protects the ga community. the ga community is over a billion-dollar 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. and the federal government's decades-long pattern of costly delay, failed management of modernization. give the new service provider the ability to 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, d.o.t., and congress. of course lots of people are saying that's not what we're 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 modern air traffic control system including decreases in delays,
flight times, and congestion. 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's europe or it's asia, it's 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 air act over a year ago, this has been an ongoing process of education and discussion. we've held over 130 meetings with stakeholders, including both supporters and opponents of the air act. we've had numerous meetings with members of the house, the senate, the white house and other committees. these meetings have been extremely productive and give us new ideas to improve the legislation. as i said, i want to hear the same thing from today's witness witnesses. what are the ideas that we can build upon, upon the principles
that i've outlined? we've gone to canada to see their system firsthand, and i encourage any member who wishes to go, may 5th, thursday, in the afternoon, we'll be heading up to canada and coming back may 26th, 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's worked in each case. opponents of reform either ignore the evidence or must believe we are less capable than the other 60 countries. to me, that's a bit outrageous. we're the united states of america. we can do this. we can do this better than anybody else. so it's time for us to take a look and to move forward. air traffic control is not inherently a governmental function. it's 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's the airplane. it's the people at boeing and airbus and the cessna, the people that build these aircraft. that's the most complicated thing in the system. and the faa already oversees those highly sophisticated private sector aircraft, manufacturing, and maintenance operations at arm's length. we don't build airplanes today. the government does. that's 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. the transformation reform will fix our obsolete air traffic control structure, move beyond the wasteful, inefficient status quo, and benefit all the users of the system. ultimately, reform will give the american flier 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. with that i will yield to the ranking member for an opening statement. >> thank you, mr. chairman. jim would have been proud, that's the longest opening statement since chairman jim oberstar, but he only did it in one language. we could have 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's procurement process and movement toward a 21st century system. and i'm not aware that any other members of the committee has spent that time with him, and he has been invited to testify. he has a different story to tell today. and he thinks it would be a mistake, and i'm 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 other will cleave the faa into parts. you leave the most vital thing to our manufacturers, certification subject to appropriations, sequestrations, 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 meddles. the only thing that gets moved is the ato. and the ato would be moved and essentially, effectively, controlled by the airlines. i know 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'm 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 reservations systems 36 times, stranding millions of people. so they can do it better, right? that's an interesting question. so i think that members of this committee who want to be educated, maybe we can invite him in here and spend an hour with dr. dillingham and hear about the process we're making and the potential for disruption at this time. in terms of funding, it's projected over the next decade to be 97% self-funded. unfortunately the way our colleagues around here and the budget process works, despite the fact that they're
self-funded, they can be sequesterd or shut down. that's a simple fix. take them off the budget. no, we're 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 that somehow they're going to self-fund. the question is how are they going to self-fund. the airlines tell me time and time again, they hate the ticket tax, they hate the ticket tax, they say, it's our money. i tell them, it's not your money, i pay the ticket tax, it goes to the government. they say, no, it affects the price and competition. so if they do away with the ticket tax, there goes 70% of the revenues. what will they put in its place? a per operation charge. 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'll show here for the person running the slides, if you could put up -- come on, come on -- could you 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 then goes through the second. the second will have established a large new office of consultants within his or at this point her office who will advise the secretary in a limited period of time. and if the secretary and the board disagree, they go to court. now, that's a great way to deal with new approaches, funding, and a whole bunch of other things. congress will have nothing to a say about what people or the american people are charged for running the system.
when the ticket tax goes away, what happens to the aip program, what happens to safety, what happens to certification? we had testimony from a gentleman who here who has an intriguing new model to serve small and mid-sized cities. he says the biggest problem is certification. he says the people are good at the faa. there aren't enough of them doing certification. they don't have enough funding. 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. we've heard other things that are, you know, an interesting construct. which is, we are way behind because we don't use avsb. if i could have the first slide, people. can we get a slide? okay. this is the oceanic airspace. and you'll notice that the -- a vast majority of the planes are in oceanic control by uk and canada.
so they're using avsb. makes sense. we're not. currently airlines pay to have satellite based navigation, a fee. in this lower 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 one for every 51 in the air over the united states of america. now go to the second slide. by the way -- oh, go to the second slide. now, see all that yellow? that's the u.s. that is going to be totally adsb satellite based in 2020. the airlines have 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 avsb. the airlines, again, have petitioned that they have more years before those planes would be able to use the adsb 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. so we're 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 planes under adsb in 2020. now, here's 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's only two countries that have gone the other way.
and miter has done studies, others have done studies. there will be a period of disruption, particularly when you're 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're on furlough because the student congress did another shutdown or sequestration, oh, but the ato is up and running, but we 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. the chairman talked about the failed reforms. i sat down with the faa administrator who also has not been invited to testify 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 mettle. 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, but that's the way it happened. and these did not go forward. simply, you could 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're 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's already raising the revenue it needs, but no, we're going to have a different corporation that's going to figure out a different way to raise revenue, and by the way, forget about safety, forget about certification, they're afterthoughts over there in the government, not funded by any stable source. i've invite a witness today, and i hope people listen carefully, joe brown.
he's the president of hard sell propeller. his family has been involved in the aviation business since the wright brothers, that's an interesting study, but he won't have a chance to tell it today because i want him to focus on his experience both in that industry and as a pilot, to talk about the things he sees that are tat risk as a ga pilot in this country, and the things that we've done that are extraordinary for ga pilots that are at risk in this new system because why would commercial airlines be concerned with that, because that costs money. it don't use him,ed th they don care. i think his testimony will be more compelling than the think tank people we've heard from again and again. we haven't heard from him.
that's what we have before us, mr. chairman. i do think there are things we can agree upon. i do not believe that privatizing the ato is the answer. thank you. >> i thank the gentleman. you almost equalled my opening statement. you were too short. this hearing is going to be about -- it has to be about knocking down things that just aren't true. the -- what mr. defazio puts on his chart, it's not my proposal. it may be mr. defazio's proposal but it's not mine. let me 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. under law they cannot do that.
second, it says the corporation decides to change -- let me finish with that. well, we're going to have a debate, i think. the only person that could raise taxes is the united states congress. so that's 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. again, i don't know whose chart this is. it's certainly not my chart. as we move forward -- >> you might want to call that fake news. >> i don't want to go there. i don't want to go there. one other point, the gentleman said congress and omb failed. he's absolutely right. he's making my case. we have to take this out of the congress, out of the omb, stopping the way they operate. it's crazy. but again, i'm concerned that he's 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's not my chart. so ladies and gentlemen, i've got to be very clear on that.
>> mr. chairman, if i could rebut for one minute. >> you certainly can. >> thanks, mr. chairman. they can set user fees. i consider user fees to be taxes. i consider ticket factiotaxes t user fees. it's taxation without review by the ways and means committee or the congress. secondly, i am proposing to give the faa administer authority free of omb and secretarial interference. 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. >> 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, inspector general of the department of transportation. joseph w. brown, i believe you testified in 2014. this is your second time here. mr. robert poole, director of the transportation policy at the research 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. dorothy robyn, independent policy analyst and former clinton administration who has been through the wars on this many times, we appreciate you being back here. i ask unanimous consent that our witnesses' full statements be included in the record. without objection, so ordered. the committee would request that you limit your oral testimony to five minutes. with that, mr. scovel, you may proceed. >> chairman shuster, ranking
member defazio, members of the committee, thank you for allowing me to testify on faa's efforts to implement reforms and modernize the national system. my testimony today will focus on various agency-wide reforms as well -- >> can you pull the mike it'll closer to you. >> yes, sir. >> don't be afraid of it. >> my office does not make policy recommendations. i will also discuss how other countries have structured their aviation systems and highlight key policy factors that we may wish to consider. over the last two decades faa has made simply 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 multireorganizations to improve the agency's efficiency and
reduce expenses. in addition, faa achieved more than $2 billion in cost savings over an is over a 13-year period. budgets have increased with a 35% 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 measurement 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 adsb. however, faa has not determined when the programs will start delivering benefits or how they will improve air traffic flow 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 the 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 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, revolving avionics issues and integrating complex on board systems and control technologies. as congress, the administration, and stakeholders consider faa 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 projects. yet any discussion on nextgen'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. >> thank you, mr. scovel. with that, mr. brown, you may proceed. >> chairman shuster, ranking member defazio, members of the committee. >> bring your mike closer. get it right up close so we hear you better. >> is this better? >> better. >> chairman shuster, ranking member mr. defazio, and members of the committee, i would like to thank you for inviting me here today. my name is joe brown. i come today as a businessman and a pilot. i also represent a company called hartsell propeller, a company whose roots trace to the wright brothers. 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're on airports. our business depends and their business depends on the amazing infrastructure that the citizens of this country have put into the national airspace. we also depend on another thing, the amazing freedom to fly. because of those things, we've made a market like no other for aviation and we're very grateful for that and deeply invested. as a pilot, 4 to 500 hours a year, my office is the cockpit. when i fly, i find a modern system, a high functioning system, and i've 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 he 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-ft. worth metro area and got cleared to burlington, vermont. while i'm flying, i have traffic callouts and weather throughout my flight. when i land, i can pick from 3,000 precision approaches brought to me by a nextgen feature called w.a.s. including at my home airport, which i value tremendously on foul weather days. the bottom line for me is nextgen is working. it works for me every day. and it's getting stronger all the time. and from a technology standpoint, i believe we're 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 five to seven years focusing on the structure and 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 the 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'm a business guy, i get to evaluate a lot of companies. and i've bought several. and we have a simple framework when we're looking at an investment. we say, what are its strengths? can it be leveraged? can we differentiate it in the businesses we're trying to do? what are its weaknesses and what deunderstand those weaknesses and can we fix them?
the atl presents exactly that profile. the conclusion i've drawn is we should not spend five to seven 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's 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's in the field works, and there's more technology coming. let's keep tuning and strengthening the collaboration that's been driving so much progress. even government overseers recognize that the nextgen advisory committee is having impact. and it's 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, data com 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 like the way we finance the faa and the ato and the way we give them mechanisms for long term capital planning and investment. finally, let's work on the atc infrastructure. there are a number of ways that private/public partnerships could put these guys in better buildings in the next five to seven years, we could have them all in better buildings. i encourage us to take a different path to fixing the fixable and elevating strengths. thank you for the time today. i look forward to questions. >> thank you very much, mr. brown. mr. poole, you may proceed. >> good morning, mr. chairman, ranking member defazio. as some of you know, i've been researching this subject for close to four decades. most recently i've been part of two working groups, one for the business roundtable and the
other from the eno center. both groups have concluded 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. business roundtable group recommended a nonprofit corporation which customers and other stakeholders govern. this is basically a user co-oop -- >> can you pull the mike a little closer? that thing moves, i think. pull the whole box towards you, please. >> and the governance model proposed in last year's bill as recommended by the rt and eno was intended to be a u.s. adaptation of nav canada's
nonprofit stakeholders governed corporation, running in the best interests of all the stakeholders. but the stakeholders board has been described misleadingly as giving control of the airspace to the major airlines. this of course has led to series 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 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 it could easily be outvoted by other members, it's not like in a corporation where you have preferred shareholders. this model is consistent with global best practices. and the proposal did not originate with the airlines. i can like to set the record
straight. the business roundtable group gave an initial presentation in the spring of 2012. we got a pretty cool if not negative reception at that point. everything changed in the spring of 2013, thanks to the sequester. controller furloughs closed the faa academy, threatened closure of 189 contract towers, got everybody's attention. in response, a-4-a, nafca and aopa all requested new conversations with the brt working group. in may 2013, all three groups at the conference room in business roundtable agreed that an air track of 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, governoreni governor englar and several others briefed the administrator.
two former senior officials of usdot and several consultants. our governing model was patte n ned after nav canada's. no board member at nav canada can hold any paid position in an aviation organization. it's a system that really works. and of their four airline 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. the u.s. is larger and has a much larger general aviation community. ja is a key stakeholder and should have more than one seat. 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 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 stakeholders 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 costs test should be assured of getting to our services which is the standard today. second, faa would be in charge of aviation safety. and no changes in procedures or equipment could happen. they might be proposed by the corporation. they would have to pass muster with the faa, it 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 what they need because of faa's ongoing budget problems. self-funded corporation would mean improvements for small airports thanks number one to predictable user fee revenues and a financed capital improvement for facilities. secondly, remote tower technology would increase the benefits from having a tower because of better surveillance, reduce the costs, therefore the benefit/cost ratio would be higher, more small airports would qualify. this would be a boon for small airports, not a detriment. that conclusion my testimony and i'll be happy to deal with questions. >> thank you, mr. poole. mr. rinaldi? >> good morning, chairman shoeser, members of the committee. thank you for the opportunity to testify. >> microphone. slide that whole thing towards you. the whole box. there you go. >> how about that? we currently run the largest, safest, most efficient, most complex, most diverse air system
in the world. it contributes $1.5 billion to the gross domestic product and provides 12 million american jobs. our national airspace system is unique, unrivaled by any country. this is due in large part day. the members guide approximately 70,000 flights per day and ensuring over 900 million passengers arrive safely at their destination every year. the united states aviation system is considered the gold. standard in aviation community. but that status is at risk. unstable, unpredictable funding and status quo threatens it. we need a stable, reliable, predictable funding stream to operate the current system and allow for growth in the united states aviation system. although they're calling for change. we cannot support any proposal without fully reviewing all its details. that's not only -- it's not only that we oppose the status quo, which is very much broken. we also oppose any system that would put apc in a for-profit
model. in order for them to consider support of any proposal must meet our four core principles of reform. first, any new system must keep the safety and efficiency of the national air space in top priority. second, any reform must protect our members employment relationship. this must maintain members pay, retirement system, health care system, as well as their work rules and 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 transition period. fourth, any reform must maintain 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 both large and
small, new and old, big city to rural america. the united states has a vibrant journal aviation community that relies on us. rural, america's economy, success is tied to access the national air space system. last year, naka supported the air act of 2016. because it met these four principles. while we do not believe there is only one solution to the problem, we will be -- all proposals using the same standard. please don't take this as a need for stable predictable funding as to mean the appropriators have not done their jobs. it stems from lack of regular order we've been experiencing for years now. it's led to many threats of shutdown and our current staffing shortage. we're at a 28 year low of certified controllers. we have approximately 3,000 are eligible to control at this time. we take pride in our role with partnering with the faa and
developing and implementing important monetization projects. that successfully worked on many over the years, unfortunately all have been impacted by uncertainty of funding. if you look at fy 2018 as we approached april 28th of this year. they shifted in its focus from next gen to shutdown. we received a one week funding extension followed by a five month funding bill. we're elated over the funding bill, five months is no way to plan for the future. congress needs to pass an fa reauthorization bill that provides stable, reliable, predictable funding, congress should exempt the faa employees from indiscriminate funding cuts. otherwise we'll see reduced capacity and suspension of key next gen programs. i want to thank you for calling this hearing. we must remain focused as we try to expand and modernize the
national air space system. thank you. >> thank you. with that, you may proceed. >> thank you. chairman, ranking member, members of the committee. i appreciate being here this morning. i am a policy wonk and i'm a democrat. i testified before some of you during the five 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 eight years on president clinton's white house economic team where during his second term i was the point person on aviation, policy focus i maintained after leaving the white house first at berkings and then as an economic consultant. the first point i want to make this morning is 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 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 funding. 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 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 micro managed by congress and 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. the final rationale, the current arrangement is flawed on safety grounds. this is important. echoing safety experts worldwide, 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're 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 get 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 to give it the agility the business needs and to provide the necessary separation from the safety regulator. the u.s. have gone from failed innovator to laggard. the current proposal, the air act, differs from usats in one important way. it was a government corporation. because that was the only model that existed in 1995.
canada, which came along short -- a short time later, has shown us a better approach for the reasons you've heard and that we'll discuss further this morning. had they 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 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 etiological has one committee member characterized it last year. i believe in robust role 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 the involvement is necessary and where it is not to achieving its objectives. and sometime i'd like to tell you about privatized military housing as the greatest quality of life program the department
of defense has ever implemented. that's not etiology, that's good government. >> thank you, very much. we'll start with questions. i'd like to ask the members to stick to find minutes. if we need to take to a second round, i'll be more than happy indulge. first question i have, mr. brown, i really appreciate you being here. it's the second time you've testified for this committee and you and i sat down on a couple ns gerally.s to talk about you and of all the witnesses i feel like i'm a kindred spirit with you. i was a business owner myself. i know what you do every day, getting up and making sure you're meeting the bills and making sure your operations are functioning in a world that you've got to deal with an agency like the faa can be challenging. as a business owner, from 19 -- would you allow your businesses to grow a budget, your operational budget 95% over a 10 or 15-year period. while at the same time the cost
of service increases 75% and all the while you're losing customers. would that be something that you would tolerate as a business owner. >> of course not i'd be very concerned about that. >> i think you're absolutely on the mark. when you look at the business, you look at the leverage. how can you make it stronger. the weaknesses and can you change them. and so i would say, on that business model when you're in the business world, that works. but when you're dealing with the federal government, that weakness is part, there's not a way we can change this. we've tried for 30 years to change it and the only way to do is, i believe. is separation. i also -- i don't want to speak for mr. defazio he believes separation looks different than i do. i appreciate you being here and laying out. the thing we're really up
against here is trying to change something that's not been able to be changed for 35 years. that's the real challenge we face here and have to address. thank you so much for being here. appreciate that. i would like to ask mr. rinaldi, i bought the paper strips here. these are the paper strips, the dc area tray com for one day, this is what we use. can you talk to me a little bit about the paper strips, why do we use them and what's the most modern towers, i think we have the most modern towers you can throw up on the screen there. >> those are paper strips that we stuff all day long in our towers and 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're actually in the process one more time, and this is another reason why an interruption in funding can be a problem. we are working right now with the agency and with litos on a new program that would move to that 100% 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 -- >> is that san francisco. >> that's san francisco right there, on a foggy day, which happens a lot in san francisco. and ground stops -- the controller is moving paper around. that little work area because -- just to keep some type of order of how the airports are going to come out. >> could they put up the las vegas tower, too? >> that's las vegas right there. these are both brand new faa facilities. >> they're the most modern. >> well, they're the newest facilities. they were actually supposed to have an electronic flight strip program in them. because of reduced funding, we were never able to make it on time.
we're using paper now, which is still very safe. we're losing some efficiencies. but we would like to get to an electronic flight strip program as they use around the world. >> the thing that tipped me off that that's the most modern tower you have. show us the nav canada. can you tell us what they do? >> as you can see the controller has a good line of site. head's not down looking at paper. all the information is in front of him. and -- he has a good line of sight. it's definitely more efficient. >> can i ask one further question, would you say that the london air space is most or least complex air space system in the world? >> i would say that around london heathrow. is that what you're talking about? i would say it's complex. >> extremely complex. >> what system are they using. >> they're using the canada flight strip program. >> thank you very much. i yield to mr. defazio. >> mr. brown, i don't think you quite got a chance to respond mr. schuster's question, would you like to expand on your
answer there? >> yes, i would. the way that i've been thinking about this, as a businessman, i think that national air space is a fundamental economic driver in our country. our country is more aviation centric than any other place in the world. you can see see that with the system and the number of pilots. the way i think about this whole, what is the value return on the level of investment that we make in our ato and our air spaces what industry have we created in this country what are the returns on that industry. so what i think is 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 country. we're the market leader. of aircraft production. engine production of every type and stripe. we have the best avionic manufacturers in the world. that's generating an enormous return in tax revenues and jobs.
i think you have to put the economic in the bucket before you ask a question that's just yes or no in my opinion. >> i'm sure you're familiar with the 2002 collision between dhl and a russian passenger aircraft. under the ages of sky dive, the swiss government corporation, what caused that. >> that was caused between lack of communication between ansp. >> wasn't there one person on duty who had multiple tasks. >> it was an issue with the controls also. >> right a little problem with cut back and work force under the private corporation. but they have kept safety oversight separate, is that correct? >> that is correct. >> when is the last time we've
had an error due to error. >> very long time and i don't like to talk about it. >> you must have said 20 times, during your testimony and your answer, funding stability, sequestration, furloughs, talking about the new -- our much more sophisticated flight strips which could integrate other aspects of the system and have much more capability than the status model used by nac canada that was offered to us a decade ago here and they didn't think it made it up with all the new capabilities of next gen. i think you said there, you weren't saying i don't think it will work. you said we're worried about delays an reduced funding, did
you not. >> that's correct. i have no doubt we'll be able to develop our own system. it really comes from we're working collaboratively with the manufacturer with the faa. it comes from a lack of funding or funding on certainty as we move forward. >> will you agree that's a significant problem? >> i would. funding is a significant problem as you have pointed out. however, i will also say that there are other issues that can bear in addition to funding. >> 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% projected over the next ten years, just a few efficiencies would get us to 100% self-funding without metalling. would that solve your concerns? >> like i said we believe the status quo is unacceptable and we would not locate a for profit model. we would hold our core -- >> let me just interrupt. quickly, mr. brown. when we had, you know, last hearing one of the many mr. pool been to, he said, if there was a problem in atc became insolvent, customers would have to pay more. and then the question, of course, becomes, if it then fails, who's responsible. who would be responsible for the atc failed in this country. >> that's one of my risk calculus when i think about this
problem. the day the assets move from the public sector into the private sector, we moved the essence of the system and the people with it. there's no way we can spend one day without that system healthy and full functioning and thriving. and so all the financial risk regardless of where that monopoly -- >> too big to fail is my concerned. >> i think i've heard that before. >> thank the gentleman, with that. >> thank you, mr. chairman. over three years ago, mr. larson and i directed the faa and the next gen advisory committee to come up with four capabilities
that could provide near-term benefits giving 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'm now hearing you say that for many of the nat priorities, full implementation of all capabilities and the realization of those benefits remain years away. so the question for you is, why are the nak priorities are the easy things taking six to seven years to implement? >> thank you, sir. you're right. the four priorities have been the focus for effort for both industry and faa. perhaps, unbeknownst at the time, we're certainly not fully
appreciated at the time there were significant risk to each of them whether we're talking about pbn, or multiple runway operations, each of those presented its own problems in bringing them to fruition. i would say right now we're at the point where the time frame of 2019, perhaps, when data com and the en route environment begins to be implemented through 2021 will be what we in my office are calling a pivot point of the realization of benefits from these four nak priorities. >> so with this pivot point, i mean, what's 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.
>> sure. we don't know. yeah, faa has had problems. it's no secret making completion deadlines before honoring representations to congress and programs. faa together with the nac have a working group that's bird dogging it as closely as they possibly can. 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. at this point, we don't know. >> would it be okay if i added something to that? >> yes. >> one of the things i don't think is getting fair discussion in the modernization effort that we're in is that first you have to invent and deploy the technology which has generally
been the faa's purpose. but the user community has to equip and in many cases change equipment to experience the benefits. that's exactly where we are right now. and that's why there's an inflection point coming up. we have that fully employed on a daily basis but only a percentage of the aircraft flying enjoy the benefits because they're not adsb compliant. where we are right now is the faa has done a lot of heavy lifting and the users have to equip. in the next several years that's why it's going to flow into the system. >> i'd like to yield my time. >> i think 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's the congress and it's omb and the political process that causes these big -- big part of these problems along with bureaucracy. taking an agency out of government and going into failing and going bankrupt.
if everybody recalls 9/11, we injected $15 billion into the airline industry. to prop them up. we had to have an aviation industry. i'm not willing to sit here and say this agency is going to fall, i don't believe it is. most of the money can be provided by the users. if you look at the model that we've been looking at canada, they did not require the federal government of canada to inject money. the british did, the british for profit and mr. rinaldi said, i had no intent. i would oppose going for profit organization. i think that, again, using this as too big to fail, we faced that in 2001. there are models out there that we can look at and learn from to make sure they're set up in a proper form. the most important thing, i keep hearing agreement over and over again, it's the bureaucracy and omb and congress, the starts and
stops will cause these problems. i recognize mr. larson. >> thank you, mr. chairman. i would like to ask the written statement of pass to be entered into the record, mr. chairman? can you announce consent? >> yes. >> thank you very much. so for mr. rinaldi, you're a member of the advisory counsel; is that correct? >> i am. >> march 15 is -- mac, issued a letter calling for reforms that would not require splitting up the faa and you signed the letter along with the members of the mac's recommendation or how should we read that? >> i do. as i said, there are many ways to fix this problem. we don't think there's just one. just so you do know, that 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. >> and you argued there are different ways to achieve that goal. >> absolutely. >> we heard in some comments today that the air traffic control system is safe, but it's broken. i fly 2,306 qualified air miles one way on united airlines and back again for my commute. can this system be safe and broken or should i drive? >> it is safe, of course. and that's -- certainly -- >> it seems to me it's fundamental argument going on here, we have to go to privatization because the system is broken that actually controls the air space. if it's broken, i don't know how
it could be safe and how so would support the privatization argument, however, if it can't be safe and broken, it would seem to under mine the whole argument for privatization. >> i could characterize the system it currently safe. and the record shows that. for a number of years now no commercial aviation fatal accidents. as far as broken, i would take issue with that characterization. i would say modernization has been lagging far behind where it should be, it's not broken. >> well, that's good to hear. i'll cancel my car rental. mr. brown, i just want to explore a separate issue with you. it's tied, because we're trying to get an authorization bill done and i think largely it's bipartisan support on a lot of issues, including -- with differences around the edges, uas, incorporation into air space, certification reforms, seems to me all of these are being held up by this debate to
be or not to be question with regards to privatizing aircraft control system. can you talk about why certification is important, why some of these other issues is important that we move forward on, but yet we're -- we are seldom getting them done because we're continuing the debate over and over on privatization. >> i'm happy to do that. i would say that congress has been incredibly supportive of the idea of facilitating approved 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's been matched with very good appropriation support, as well. so the thing is, we all tend to agree that there are opportunities and we tend to
line up behind them. what's troubling when they get stopped in mid stride because they can't get into the regulatory basis. what that means to me is when we can't go to market in the ways reforms allow us to do, somebody else is gaining on our heels. at the end of the day, i also care about extending competitive advantage. if you create uncertainty, customers have no idea whether they want to invest now or later an they err on the side of later. so for me there is something about keeping certification up and running and manifesting the reforms we all agree to. >> i thought that would be the answer. it just is that this main point is we're not working on a privatization bill weir working on a faa reauthorization bill has many moving parts, many of which we agree on, democrats and republicans and yet it's being -- those are being held up by this one debate. it seems to me we can move forward on the things we agree
on moving forward. so i yield back. thank you. >> thank you, gentlemen. now recognizing chairman young. >> thank you for having this hearing. this is an interesting one. but you know my interest in my state that 80% 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. 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 and not being run by the larger airline s i will be interested in what we're doing. and it means a lot to me. some of you haven't been there. i think you did fly on alaska, did you not?
for two years? >> i had a chance to spend a few weeks up there flying around the back country. >> did you have any trouble with air traffic controllers? >> i did not. >> i think they are some of the best. did canada system file for bankruptcy? >> not that i'm aware, sir. >> are you sure? i'm curious about that. that concerns me. i would suggest, mr. chairman, my interest i think we may be addressing the one spot the best part of 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 studying the regulations that they pass. i don't know if the last time i checked 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 onsite weather reporter or any modern technology, air traffic
can come in and because it's perfectly clear, aircraft can come in but cannot land because they don't have someone on the ground to tell them what the weather is. that's a regulation. so i'm interested in seeing what we can do about revamping the whole faa, but not the air traffic controller so much but the system they have is badly manage. if we can do that i'm willing to listen to a lot of things you suggest. >> appreciate the gentleman saying that. and that's what we're after and the gentleman knows -- maybe i should say the gentleman is guilty because you have been here since 1973 >> abraham lincoln and i flew airplanes. >> you know better than anybody else they have not worked. they failed every single time. some in this room might say 25 years ago there were four or five layers of management at the faa. today there are nine or ten. that's what we do across the system.
we say we are going to reform something, we put a couple more layers in there. we never take the system down. and rebuild it. that's what you do with a failed system. you take it out and say you're going to the something different and we have ability to look around the world and say who is working and what is not working. mr. brown you made a great point. something i believe in and part of my passion for this is to get the certification right. we are the leaders in the world and invented aviation but when you can't go to market with your products because of the certification process, the competition is nipping at your heels. if we don't fix certification they are going to take big chunks out of the back of your leg and cause you problems. the certification is critical to the reform i'm putting forward. when you look at what the miter corporation said in their report, first of all they
interviewed six of the different caa around the world and was unanimous stating the separation of caa from air traffic control was worth it. an increase in focus by the regulator and the ansp -- the focus on safety by the regulator and the ansp in improved efficiency. that's what i'm talking about here. if you separate them, you make the faa focus on their core mission and that safety and that certification, now they're running this big organization and doing a lousy job of it. when i point my finger at the faa as my mother always told me there is three fingers pointing back. congress, omb, the administration. this is an opportunity to take it out and let it function like it has been around the world and getting certification right is paramount to what i'm trying to accomplish in this reform. with that i yield to 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're not calling for structural reform as we just have tone with the affordable health care act. i have a question mr. poole, it is a question that is arising issue and one that i have requested a hearing on that has do with airplane noise. when i say a rising issue i mean all over the united states. in my own jurisdiction and i represent the people of the nation's capital. but so much so across the nation that we formed quiet skies coalition, a bipartisan coalition to respond to issues that -- by the way next general is just left out there, on the ground, people are complaining. and of course as a result of those complaints, i've been able to have the faa come to see me.
i've 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 likewise, who would my constituents and the constituents of my colleagues call if they have noise complaints? >> my understanding is that this would still be the faa as a safety regulator that would have to approve procedures or deny new procedures. if procedures are changed so that noise goes up, it would be the faa to say yes or no or how to modify it. it is not the corporation's discretion do those things. >> i can answer that question also.
>> yes, sir. but it will not take from my time, i hope. >> if there is a noise issue or flight patterns change there is a need for process and need for major actions that the faa will continue to have. let me dispel the notion, this organization is not going to control the airspace, it's going to operate in the airspace with the faa over it. so they have to go through this federal process by need the faa sets up a review process and approves significant air space changes. they're going to have to go to the faa, conduct a review and any action taken will have to again be approved through the faa. once again, this is not given away willy-nilly, the air space. not only will we own the air space we will have oversight over the air space.
>> i thank the chairman for his response. and i've 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've 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. i don't understand how you could bifurcate the system. expect it to be more efficient, expect it to be more safe. let me take an element on the table, i will do it by asking mr. rinaldi, have you received any assurances from any of the proponents of this bill
concerning collective bargaining, pensions, other workers' right? because otherwise i see a fresh controversy on top of the many controversies this bill has already given us. >> thank you for the question, ma'am. at this time there is no bill in front of us. there's nothing i can compare it to. in the 2016 air act there was a strong language that gave us a fair bargaining process and that was in there. and also, a pro bust transition period that would allow us to keep everything we have and to keep the work force whole. >> and i take it you would insist on that in any change. >> absolutely. that's bullet number two of reform. >> i gave you an extra 30 seconds. since i took some of your time. >> that's okay. i yield back. >> and with that, mr. barletta. >> mr. rinaldi you are one of the foremost experts on air
traffic safety in the world. would you support a proposal that jeopardized safety? >> absolutely not. that's our core principle. >> would you support a proposal that jeopardized national security? >> absolutely not. >> would you support a proposal that weak pd our ability to modernize the aviation system. >> absolutely not. >> did you support the air act last year? >> i did. yes. >> some have suggested that it is a give away of assets. we understand that taxpayers have paid for them in fuel, ticket and cargo taxes. if a new entity would have to
buy them won't the same people play twice? >> that's correct, congressman. they have been paid for by aviation excise taxes over the years. and all we're talking -- we're not talking about selling the system or giving it away we're talking about transforming it 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. >> doctor, as a public policy expert what is your response to such an allegation. >> the assets should be transferred at no cost. it has been handled different ways in the canadian model.
>> before you pass me on let me explain to you why my curiosity. in mr. hill's testimony maybe i'll bipass. his testimony speaks about the threats we hear about all of the time in here, russia and china. he also speaks about the concerns that we have. he says both will continue to pursue range as a means to reduce military effectiveness. what i thought you were going to tell me is that it was in line of this is another layer of war that we must be ready to fight. i'm not sure when you have russia and china, i would like to know to the extent you can tell me here today, what exactly does this all mean in terms of our military and what was -- what do you need when you come to see us in order tonight that battle? >> first of all we don't talk about a war in space. we talk about a war that extends into space. >> is that something that's unrealistic? could our satellites be the first target?
once you take out our satellites you are basically destroyed our effective communication mechanism. >> they are talking about a full range of cape abilities that range everywhere from reversible jamming all the way up that we saw from china in 2007. we want to deter that. >> mr. hill, would you like to excellent on it? >> and i say in my testimony, there is evidence that everybody is looking for a war in space. it is about the issues that they have, political differences that countries have. it is their conclusion that if they want a military option they have to be able to act in space as well. as you're suggesting it could be early. >> thank you. i yield back. >> i recognize mr. frank for five minutes. >> thank you for being here and all you do for the cause of
human freedom. do you believe we need a more robust space sensor lay are to adequately to our space assets? >> i think it's impairtive we have demand of fairness like any other war funding domain. >> should we treat space as a war fighting domain? >> space is a war fighting domain just like air, land and sea. we need to treat it that way. observations but it's not proper to directly compare. i mean, for sure in our system we're driving a much more substantial portion of our economy out of the aviation sector and the air space that supports it. i mean, we have ten times more pilots, 50,000 flights a day. it's a wholly different organization. when i think about canada i believe they made a choice that they thought suited their purposes with the role of aviation in its infrastructure but we are faced with entirely different objectives here. as far as i'm concerned the system we have been living in as done a masterful job in adjudicating our needs. but i applaud things they have done and what we have done in
our country. she characterized our system as a laggert. that is just false. we have the technology in our system today that no other country can rival. we lead in the next-gen initiatives. i know it and fly it. it's not a theory. >> mr. poole? >> first of all, canada's system is the second largest in the world in terms of flight operations. it's the best comparer we have. but their model has worked extremely well for 20 years. it is not too big to fail. if you go to the credit markets, people who finance revenue bonds, they give investment grade ratings because they have a dependable user fee revenue stream that you can basically bank on. and so -- neither -- have declared bankruptcy.
both were hit hard by 9/11. nats was brand-new and got investment from their two main owners, the british government and the airline group. nav-canada raised their rates for a couple years and built up their reserve and since them they have a substantial reserve fund in case of a serious downturn. >> can you have -- i have 30 seconds left? >> as you know, my office looked at the air traffic control organizations for the other four countries and we were told that they consider part of their borrowing authority to be leverageable or to be recognized by private lenders because ultimately, should something drastic go wrong, the government would step in behind them. i'm not representing that that would be the case here. that's your policy call to make.
i'm simply relaying what officials for other air traffic control organizations have told us about their systems. >> those four countries were on the hook? >> conceivably, they may be. the policy calls for their legislatures in the executive branch. >> thank you, mr. chairman. >> thank you. now recognize mr. meadows for questions. >> thank you, mr. chairman. mr. poole let me follow up 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're ten 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 you can look at
the scalability of canadian model versus what we would employ here and make some conclusions? >> sure, sure. first of all, we already have the scale. we're not talking about building from scratch. we already have the scale, facilities and technology. >> what you are talking about is because of what we already have in place we can make better -- >> we can transition to a different governance and funding model and that will hopefully lead to a culture that can implement things faster than the inspector general said continually fail to manage programs properly. they take far longer than they were scheduled. nav-canada has a superb track
record on that. if you scale them up to our size and say what would we be investing in we had their system, they are accomplishing all of their modernization for half of what we spend on capital investment. >> let me make sure i understand that. they're improving their system for half of the cost? >> yes, sir. demonstrated fact. >> would you agree with that? i saw you shaking your head yes. don't ever play poker by the way, but go ahead. >> 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 operations. we don't know the degree to which their capital improvement program might compare against ours scaled up. >> when will nextgen be completed?
we continue to allocate amounts of money. this is not your first rodeo, nor mine. we continue to allocate unbelievable sums of money. and i hear at best ambiguous dates of when it will be completed. what does the inspector general's office say? >> faa's estimate is 2030 at a cost of $36 billion between government and private industry. >> would you agree this is one of the few times that we can see that even under this best-case scenario we continue to exceed an unlimited budget. >> we don't know what the total cost might be, nor do we know what the completion date will be. it's important to note, though -- >> do you not see why that would be a problem for someone who is a fiscal hawk like me that we continue to allocate money with no end in sight? >> absolutely. >> mr. brown, i'm confused because you seem like a business guy. are you? >> i would think so. >> as business guy are you suggesting we need more federal
control? >> i'm suggesting we have a system that's -- o >> that's not what i asked. a great answer to a question i didn't ask. are you suggesting we need more federal control? >> i'm suggesting our control is proper. >> let's talk about general certification, something you probably know and it's one of my sweet spots being from north carolina. would you say we need more control in the certification process. >> i think what we have is proper. >> you don't want it to be more stream lined. >> that's not the same as reducing control. >> it is about regulation. at some point you have to transfer that. let me tell you where i'm concerned. we've got next-gen that may or may not get done by 2030. we continue to spend billions of dollars. i have stake holders who continue to implement from the a stake holders standpoint and
from a federal government standpoint we are lagging behind. we have moneyies that have been allocated for next-gen that are pilfered over to maintain legacy computer systems you should the faa. i have under good authority that we're doing that. as we're looking at why would you suggest that the federal government can do something more efficiently than perhaps private stake holders? can the federal government run your business better than you do? >> i would hope not. >> i would hope not either. why would you suggest they can do that here? >> because we're talking about a range of interests here that is much larger than my business. my business i get to pick my product and customers and decide what i think the value proposition is. i get course corrected -- >> and it's efficient that way. >> yeah. >> what if we had stake holders who are making the same
decisions you're making with parameters out there. wouldn't you think that would be more efficient. >> you have outlined my top concern which is if this organization picks their kuchlss and picks their service level and product -- >> the chairman has said that can't happen. we have an air space that is available to everyone. >> gentleman's time has expired. >> mr. brown, you can finish. >> the thing about this enterprise, one of the things i'm concerned with is it's a coalition of stake holders with a shared purpose which to serve their own ends. the thing i like about the federal role in our air space today it is adjudicates an enormous variety of needs. whether it's my business in ohio or air traffic in texas, they all have a seat at the table. this has been demonstrated in this room. >> my time is expired. >> thank the gentleman. recognize mr. johnson for questions. >> thank you, mr. chairman. i think i'm probably like most of americans and what we really want out of the air traffic
control system is safety. safety operation. and and 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 air space is safest air space in the world? >> i haven't looked at all the others, sir but i would say it's definitely safe. we are in the golden era of safety right now. >> we're in the golden era and mr. rinaldi you mention wed are the gold standard of air traffic control in the world. did you not? >> we are, sir. with largest, safest, most efficient. >> and mr. brown, you fly -- you
put in 500 hours a year, minimum flight time, and you are strongly committed to the concept that our air space is safe and that the operations that make it safe are up to par and you are -- it's joyful to fly under that system. >> i agree. and most pilots will tell you it's one of the most amazing experiences you can have and it's something the government does extremely well. >> now, mr. poole you would not disagree with that? >> not at all. we have a safe air traffic control system but we're paying a price. >> i'm going the get to that in a second. we're safe and we've 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. scofield 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? >> not -- respectfully i don't believe that is my call to make. the congression and the administration are the policymakers, the decision makers. i'm trying to present information for your
consideration in making those decisions. >> 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'm 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 since -- >> may i respond? >> since at least 1958. and ms. robin you agree with him. and you say that first of all, the air traffic control system can be performed -- can be run more effectively by a
non-governmental entity. and you also say that government is poorly suited to run the air traffic control system. >> yes. >> despite the comments that we've heard from mr. scofield and mr. brown and mr. rinaldi and the clear fact that we haven't had -- i mean, our air space is safe. but you say that -- >> could i respond, please? >> you say it could be done better. why do you say that? >> because if we wanted to have the safest system possible -- >> we don't have it now? >> it would keep -- >> we don't have the safest system now? >> if you wanted to have perfect safety -- >> isn't it a fact that we have
the safest air traffic control system in the world right now? >> we have a system that is operated and regulated by the same entity. >> is it a good one? isn't it a good one, though? >> the gentleman's time is expired. but if he wishes to allow an answer -- one second. i will allow her to finish answering the question or not. up to you. >> please respond. >> 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 is obviously not what you want. you want a system that contributes to the economy while being safe. >> that's not the system -- >> the agreement was gentleman's time is expired. thank you for answering the question. i recognize mr. woodall for five minutes.
>> i'll pick up where he left off with ms. robin. i appreciate your written your testimony. because i think so often as -- as perhaps your exasperation shows we just. >> speak into the mic mr. woodle. >> we have to abc speak directly into the mic. >> after you've given that advice to every member of the panel you'd have thought i'd have internalized that mr. chairman. i corn pull my box closerky pull the chair closer. ms. robynn i want 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 it's mr. westbound eing big head i can't get hast. mr. weber he shall thank you. it's just between me and ms. roben we're working on. >> mr. chairman do i get equal time. >> it's a physical manifestation
of your head it's not an ego issue m. help me with the language how we talk about i've been to see the naf canada operation and think plg pool's reference to scaleability it seems like the successes they've had we could have in an exponential fashion illustrate not as if this is the charm ace or president's idea. this is something policy wongs have being be been talk about for decade pfrmt i sit who are the budget committee ahere my friend mr. dpaz owe saying only if we could fund the system better and deal with sequestration and get congress to work better those are the issues we've been working on three or four decades only finished the budget process time in 40 times in 40 years let me help help me talk about this in a nonpartisan way. >> the faa is two habit.
it regulates all aspects of aviation that is an governmental activity. you cannot write a contract that makes it possible for the private secretarier to carry that out. it is simply requires judgment calls that the private sector can't make. it also pralts -- and the air traffic control system. there is nothing -- that is not inherently governmental. that is operational. that is no different than when gsa goes to the the private sector and has them build a building. it is not an inherently governmental activity. the idea that yes the safety -- the regulatory part of the faa needs help. that part 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's illogical to me. that's exactly what you want to do. that's spin off the nongovernmental part so the faa
can folk on stick to its knitting focus oh on the regulatory function. >> let's talk about that a moment because i agree with mr. brunn .american taxpayer, the flying public has invested an amazing amount of time and treasure into building what is the busiest airspace on the planet we we talk about changing that from a governmental function to a dishneau tsh well i don't know i don't know anybody talks about a private function a privatized function a cooperative function. tell me what that looks like. >> well there -- so we in the clinton administration we proposed a -- we proposed moving into a government corporation because that was the only model that existed. and it's not -- and the problem with that model, it works well in many parts of the world. but in this country governmental -- government corporations are politicized. and they cannot function as
businesses. and so naf canada has come up with a model that takes it out of government altogether. that's appropriate. it works in theory and more important it's worked in practice beautifully. >> the business folks that i talk with become home often prefer the devil they know to the devil they don't know. >> yes. >> i can only imagine the strain is o it puts a private operator to under to say we're yanging the pendulum back and forthwith the political winds. but it was the conclusion of the clinton administration the best which to avoid the political winds in in space was this spinoff proposal. >> yes, absolutely. this was something proposed early on, came out of a blue ribbon commission, one of many that has looked at this issue we proposed it in 1995. and it was dead and arrival and capitol hill >> 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 -- of our second
to none airspace system. i hope we can follow this paternity to the politics out and move us on to best in world zblas you're absolute will i right 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 with that yield to mr. carson for five minutes. >> thank you, chairman. mr. brown, it seems the fa. a is already in the process of implementing the next jenn fraz you're calling for we've been told 2020 deadlines will be met. as a pilot, sir can you tell us about the next jenn technology already online and how you're use going do you believe we need to recommend i kate the systems through private aization >> great question. i was just think bag this about a month or or so i took from oh hoif a."
20,000 and blue blue flew to albany georgia with a yafation leader and global exporter. i flew point to point gus the because of gps navigation a and i shot at was approach in albany, georgia precision to the numbers these two tounds in the grand scheme of things, national airspace have been treated to the resources to build to you 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's driving the flying to and from the places, i don't think these businesses would be located in pickway ob ohio or albany, georgia frankly that's a victory for the people. >> thank you, sir. lastly this is a general question i'm very concerned as introduced this new private air traffic control panel depose not include one of the largest users
of airspace, the dod. i'd like to hear from any witnesses their view how this impacts the close coordination that currently takes space and place and what impact it will be to national security. >> i'll answer that. let me start by saying although i spent three years in the pentagon i -- that air traffic control was not part of my portfolio. i did however work close i with the people in the air air force have the day to day leasen with the faa. i worked with them on issues of interference wind turbines and -- long range radar. the department of defense has a -- huge equities if the airspace system any manage 15% of it this they have 15,000 aircraft which is more than the airline industry put together. they depend heavily as a user on the air traffic control system.
and they support -- they support the spinoff of the air traffic scroll control system and there is a letter from secretary mat toys secretary mccain -- senator mccain stating that it has to be done carefully so as to protect the arrangements currently in place. it's complicated. but, bottom line is that it is -- this is not inconsistent with national security. >> sure yeses sir. >> this has come up in every one of the 60 corporation that is corporatized their system in one form or another n aufrmts has a joint project between the australian military and air service australia to modernize the overall air traffic software being developed jointly will be used jointly with side by side military and civilian controllers, side by side civilian and military controlsers in nates in the uk
working together. process this is a routine function this military and -- in fact there is an annual conference on a recall air traffic control cosponsored by the air traffic control association in corrosion with the afca zone confrontation as dorothy said it need to be handled carefully to be sure that all the current procedures are incorporated. but it's not considered a. problem anywhere in the world i'm wore of. >> okay. thank you mr. chairman i yield back. >> i appreciate the gentleman. the 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. this letter does in the say that. and any suggestion it's false -- secretary mattis indicated he his support for removing. he wroer wrote a letter to mr. skmien who requested that without to objection i i want to offer that for the record.
. mr. rocketa i thank the witnesses for their testimony. i change thank you the chairman starting with you mr. brown knowing you're a private pilot, a member of gama and active in aopa and so forth. and for the record committee enemies know that you fly 400 hours a year which is about four times to it average general aviation pilot you're familiar with the system. do you believe that general achgs pilots have a right to access airports of any size of any -- >> not only do i believe that i experience it. >> yeah. >> on a daily basis. talk into the microphone, please. thank you. should they be denied access to any airport? >> no. not on principle. >> 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.
>> that is an existential threat to the business. access is everything to the pilot that buys equipment i make and the airplanes they fly. >> right and every one of he is the pilots play pays into the system right. >> yes. >> how arthrothrough the fuel tax. >> and it's more than adequate for what we use of the system right. >> yes and it's not bureaucratic and it's realtime and there is no bureaucracy ray associatewood it. >> right it's not that we want to fly into international airports every day or cause problems but is we have sta right to do that because we paid into the system sometimes like in the example of your customers you may need to access an airport like that. >> correct. >> right. and so what are the dangers of a board made up of all members -- or some members of ecosystem where you know board governance suggests you have can voel control of a board with as little as 30% of the seats --way dangers does that toes to pose to general aviation if it was all board controlled in terms of access? >> one concern i have is that on
such a boards you would have centers of gravity that overwell minority voices of any sort and preclude of arrival of new entrants that have a radical impact oh in the economy. >> absolutely which beg ds shall did which makes the point that we have -- it's good to have a disinterested party in this or a referee or ump pyre to decide the issues like we have right now in the fa. a or the members of this witness table who are -- who propose -- who are 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 is the in air act and who knows what we're going to see when language is produced frmtd doenlts do that i used to be the secretary of indiana. i i know about privatizing government assets.
we received $3.8 billion when we leased the india toll road with governor mitch daniels what we didn't do is a give a monopoly away we didn't 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 don't we -- why aren't we talking about something like that? we didn't give the indiana anna toll rod road to the truckers and say i'm sure you'll take kir of the cars too and i'm sure you won't limit access to the on and off ramps that exist along the indian and toll roads especially when you truckers want to get steel to or from one of the mills up in northwest indiana, because it wouldn't work. it doesn't make sense. just like this board made up of interested stake holders to use kmesman meadows term for it
won't work either. . . mr. rinaldi if i can paraphrase your testimony it seems like a lot of it 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 ranging member dpaz owe -- and it's accurate. 97% of faa fund something on its own not from the general fund. and there was a suggestion made one way to solve this and the problems you bring up in your testimony is to just take it off budget. i'm vice chairman of the bunlt i'm not here to necessarily say that's the right answer or that i potter it but isn't that an answer? you said there is -- there is certainly more than one answer to this problem that we're talking about bt absolutely more than one answer that is legitimate yes. >> we could take care of that simply by taking this off budget where again 97% of the funding isn't coming from the general fund anyway. >> yes.
>> right. that's a good answer. >> chairman. my time has expired. >> i thank you, gentleman. where am i? ms. frankel. five minutes. >> i'll just start off i've been a little isn't that correcty. we put a businessman in charge of the country and all i can say is omg about that. and every -- every agency -- every agency would like to be exempted from sequestration. and i have a solution for that which is to privatize those of hughes are not doing our job. all right. so enough for the humor. i wanted -- listen i happened -- i am not a mean person but just on the issue of transparency and first of all i want to thank you 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 fror om vo for some against zoumer groups foreand against do any do any of you consult with any of these -- get paid and consult with any organizations or discuss employment with them? those of you who are in the public sector included? okay. just wave your hand if it's -- >> no. >> no. >> no. >> all right. thanks. so i'm trying to simplify this which is probably not a smart thing to do. but i'm trying to understand it. it sounds to me like there were a number of reasons those ever you who are -- would support a change in the system -- one has to do with the -- a consistency in the funding. is that correct? that's the -- i know the air traffic controllers did really emphasize that. then i think the other one -- foreissue 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 not having -- having the regulators separated from the operators. that was it. is there another issue there that i'm missing? >> well, there is another big issue. >> okay which one is that. >> that is the organizational culture of faa which gets in the procurement. s chronically overbudget late delivery of things, not getting productive out of new technology in the way that it should be done. >> okay -- >> that's a big problem. >> all right good -- thank you. i don't know why that skipped my mind but that's the one i had my next question about. okay. which is what kind of things do you think in new organization could do that the government is not able to do? i mean, what -- what will you be
skipping? and would there be -- what would be the potential unintended consequences? which i would like those who are for this movement to you know give us your opinion on that. >> well i'll 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 on software people. there are good people in the faa. but they're hamstrung in a system that has a lot of basically career lifers who are happy to be in a process process that's very time consuming and has numerous people who can say no many points along the which, drags out the process. and if you have people who are not performing well, it's very difficult to get rid of civil servants. >> does anyone want to defend the honor of the civil servants. >> i will be happy to.
>> go ahead. >> as i said in my opening state your name we have by far the best aviation professionals working for the faa. aside from the funding stream one of the things we would like to see fixed is something that rank and member dpaz owe brings up it statute procurement process and the multi-agency oversight, which then puts us into a bureaucratic laden process of requirements and procurement and delays our process of implementing new technology. >> i would guess that those -- that bureaucracy which can drive everybody crazy was probably got there in part because of announcing -- i'm going to guess and try to avoid that. >> every time we have a hearing there is more oversight goesing into it kind self-fulfills itself every time we have a hearing of something that's not working right within government. >> and -- i only have 15
seconds. the contract towers, what happens to them? >> well we represent 94 of those contract towers and the members working there. it's important to us to keep service to 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. >> thank you. mr. chair i yield back. >> i thank you ms. frankel. i'm not familiar with the new words on the -- on the computer omg does that mean, oh, man, he is good? with that i yield to mr. westerman. >> thank you mr. chairman and thank you for your leadership on this important issue. i've had the opportunity to visit some control towers and the first thing i would like tories is to acknowledge that we have some amazing men and women working in our air traffic
control towers toing an excellent job. and we have an air traffic control system that works and the proof is in the pudding. you can see it working every day. now, i'm relatively new to congress. and i i am new to this committee process. but i have a unique background having practiced as a professional engineer nearly 25 years. much of my work involved analyzing processes and technologies and helping my clients stay on the cutting edge. i've seen organization that is failed to even embrace technology and they usually went out of business. i've seen organization that is embraced by 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 the blemt properly fatc is not going out of business because of the technology it embraces or implements. it is too critical to fail. it's been said in this meeting
today that if if ain't broke don't fix it. however, i believe this isn't a question of a broken atc, an atc doesn't work or atc that refuses to embrace new technology. this is a question how to implement the best technology and how to operate the the safest and most efficient system in the world so our airline passengers and general afiaters get the maximum benefits. i'm studying our existing system. i'm visiting installations and learning as much as i can about the technology. i can confidently say even though technology may be embraced it's not being successfully implemented as well in the u.s. as it is relative to other systems. i'm from a rural district. i've got one contract man pd tower in my district. there is lots of general aviation and lots of aerospace manufacturing located at the rural airports moua my district. mr. brown even mentioned
airports like these in his testimony. i'm thinking of an autoairpt i vited a few weeks in mena arkansas that has aerospace manufacturing there. it's in the mountains. and it's not -- the radar can't see it. they had a tower -- a radio tower that got blown down in a tornado a few years ago hasn't been fixed. if you're trying to take off from mena you have to pull out on the taxi and call. the air traffic control on your cell phone, and try to get clearance to take off. so -- but it's -- thaefr 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. and mr. rinaldi, some of the opponentsants of at kprchlt reform proclaim claim knew you service providers would be toibl to deny service to in general
aviation airports. from the perspective of those providing air traffic control how do you respond to those claims. >> 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's first come first serve. and when a general aviation aircraft enters into our airspace or whether it is a commercial airline, rits database- to expedite this process as safely as possible. and so we provide service to all -- all users of the system. >> and mrs. roben -- first i want to say i appreciate your testimony. and in a number of hearings that have been held by the aviation subcommittee leading up to this we've heard some pretty ininflammatory rhetoric intended to scare small communities about the future of air service. i've got two eas airports one of them in my hometown but two 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, which i've seen some of those and it's amazing technology. >> i do. yes. and i think that's critical. i don't understand this -- this assumption that some are making that -- 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 is. it's relatively inexpensive to add a node to that airport particularly if you go to user technology like remote towers. this has been an argument -- the small skmunt's argument has been made it was made in opposition to airline deregular regulation.
made in opposition to trucking deregulation. it is a --s it part of the play book of people who oppose changes, all of those changes i would argue have been very, very good for our economy. small skmunts l communities i do not see any reason they would be hurt by this. it is not in the airlines' interest or certainly not in the controller's interest, not no government interest not no in the stakeholders' interests to have that happen. >> thank you. >> thank you mr. lipinski is recognized five minutes. >> thank you mr. chairman. i think it's very important that -- i talk with the chairman and he is always continued to ask me to have an open mind on this. and i have. i think it's going to be very important to the text of the bill to have a better understanding what have exactly is in there. ms. norton had spoke earlier
about concerns about -- about noise around airports. and that's a major concern that -- that i have at midway airport in my district o'hare not too far away. and as the patterns flying in and out of the those airports has changed in recent years -- there's been a lot of constituents tsh shall discuss me of mine -- who had a lot of complaints we have gotten the faa now to be more -- they say they are going to do a better job of listening and paying attention to what some of the issues may be. my concern -- i have a great concern moving ahead -- what exactly the rules are going to be in the future if we did have a atc moved under a corporation. the chairman says that nepa would still be -- would still
apply. but i have concerns aboutway exactly is going to happen. is the fa. a -- is the corporation going to propose the patterns and then the faa has to -- have to then have their say on that and improve them or not approve them? and a concern that i have -- mr. rinaldi -- i don't know if you have any -- the bill that we had last year -- do you know anything about what that would have done? >> well, the regulatory and the certification process would have stayed within the fa. a. so it would -- o still be ultimately the fa. a overseeing noise complaints and new procedures. >> would they have the authority then to -- would they just be a back and forth with the corporation over it? the corporation proposed and the faa then have to approve? or if how would that work?
>> hypothetically it's hard to answer that question right now. but i will tell you, while we're moving forward with the metroplex and pbn in many cities the fa. a is doing joint community meetings along with the users and stake holders to explain what we are trying to accomplish in making the skies greener, safer with less noise. 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 a true fact. >> obviously my concern is to make sure my constituents, those who are going to be all around the country a those impacted by these changes are going to be able to have a say and right now their say is through us here in congress to the fa. a. and i want to make sure that that occurs. but i want to move on to another question before i run out of time. i'm concerned at some of the
estimates for the time line for a new atc corporation are nearly a decade we heard earlier 5 to 7 years. and my concern base air traffic controller hiring. will this not -- will there be troubling lack of accountability and transparency as this occurs and make atc hiring and staffing difficult if not -- if not almost impossible during the transition period, mr. reined y in. >> one of the things we would really have to see in the bill is a robust transition period where we still have -- we would seek a stable predictable funding stream to we can continue to hire and accomplish the goals of the agency while it's still under cell. and if it was going to not for profit federally chartered company at the same time that it would be a robust transition period, enhancing the safety of this system, at the same time
continuing to hiring, train and modernize the system. >> the -- the control of the edema for training air traffic controllers, who would have -- who would have that control? >> i believe in the air act of 2016 that was left up to the transition head who would still control the faa edema in oklahoma city. >> that was not laid out. >> i don't believe it was. >> thank you very much. it's something that -- i look forward to seeing with the bill and the details. and look forward to maybe having another hearing at that point. but i thank the chairman yield back. >> i thank the gentleman. with that recognize mr. sh mucker. >> thank you mr. chairman. i'd like to pick up where my friend mr. westerman rest off. further clarify some of the issues he raised. one is there seems to be some confusion in the debate about
the what we call use of airspace and who will and who won't be making decisions about that. and 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 -- you simply provide the services who ever shows up in the airspace essentially. but i guess i'd like to further clarify that. mr. pool could you please clarify to me that the new entity that's being proposed will simply provided the atc services to any entity wishing to receive those service. i'll put it a slightly different way. will this atc entity decide where airlines fly. >> absolutely not congressman. airlines decide where they want to fly.
and presumably the system will accommodate any desires that they have of where to floi. this of course includes air taxis, regional as well as major carriers. we are not privatizing the airspace. we would only be privatizing oh are 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's very, very clear cut. >> thank you. i appreciate the clarification. mr. pool i'll 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 small airports serve a county and/or are critically important- they're economic drivers in the county. and so there is -- concerns have been raised. and i want to ask you directly
one that adopts new technology that increases benefits and reduces costs. so 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 get better service. >> thank you. one quick question. mr. brown. you asserted that nongovernmental air service provider would somehow be outside of democratic oversight i think is what you said. i just want to point -- just a few weeks ago we had executives here from united, american, southwest and alaska, sitting right here in this room where you are and getting grilled by folks up here. congress oversees the sbar aviation sector, including regulated businesses. just like to hear can you explain why you believe a regulated air traffic service provider would be outside of democratic oversight.
>> it's my understanding that this would be empowered as a business that can effectively decide what it invests, how much it borrows, what technologies it picks, maybe what. >> but still with congressional oversight. >> well, are you -- are we going to have a committee how they spend their money and what they invest in and where they comply, pappie sand vasc where they put up a data come tour. >> because if we are how way woe carve it out. >> thank you yield back my time. >> thank you that's what we have the united states congress it's called and it's not functioning well. that's what we're trying to get away from it can can operate more like you mr. brown operate you you have a extremely business but you decide that based on business decision he is not based on whether about shufter wants a tower or doesn't want a tower. with that i yield to --s mr. duncan. i'm sorry -- not mr. kungen. we have -- i don't know flew.
>> mr. payne. >> mr. payne is recognized i'm sorry. >> thank you mr. chairman. you know, listening to all this testimony and the different opinions, the american taxpayers have invested more than $50 billion in air traffic control system in just the last 20 years. unthe 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. in the -- if the atc corporation was to hit financial or operational difficulties, and needed to be taken over by the government it's my understanding, per the takings
clause of the constitution, that 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? >> thanks. as i mentioned earlier i don't believe it's my role, sir as inspector general to express an opinion on purely policy call like that. however, to your point about valuation of assets specifically, our work has led -- you are duty each year to audit the departments financial statements to include faa's financial statements -- has shone us that the net book value of fa. a assets that might reasonably be considered for transfer to a nongovernmental agency at the end of the last fa amounted to $
$13.7. ideal oi or less than that an actual figure would be transferred if the congress and administration were to agree to take air traffic control out of government then but nonetheless that's a policy decision for you to consider. . a valuation of the those assets in any event wsh whether with the request or requirement that the new entity pay back the government an accurate valuation is still going to be required, because potential lenders and borrowers want to see what the value of collateral is they're putting up money against. >> thank you, mr. brown? >> i think people are trying to solve problems here. and i frankly respect the dialogue. i'm not a status quo guy. i actually think there are real opportunities to improve the management of the faa. i have found off 199the certification side they're willing to listen. but the amongs things i'm
concerned beside equity in the system is whether the logic makes sense in the risk reward profile this is a real question i'm just asking it as a business guy. i'm here because i make my living selling products into aviation. but the lineup that i'm 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 which are perhaps enjoinld? litigation with in enterprise when challenged on things that it does. and we we give up our assets some $20 billion to do it and empower a monopoly when i look at that enterprise i want it report to the people unequivocally. it's served us well 50 years. it will serve us well in the future. so i wrote in my testimony this is a question of principle for me it's not a question of challenging other members object he was. or motivations. it's an honest disagreement
about the policy play here. >> okay. thank you. mr. pool. >> well in the hypothetical event of a bankruptcy which i guess is what you were talking about as a possibility, you have a like i hadation in a bankruptcy in which case a takings clause thing i don't 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. >> but if the -- if the government -- if there were no takers if the government had to step back in. >> well what are their there are takers. >> the net effect of your scenario is that we transfer $20 billion to a company making bad bets and they end up owned by the bank of new york. that's a bad outcome. >> knows might be the credit provider. >> they might be credit
providers. >> mr. rinaldi, in your testimony you talked about the concern for -- for your membership. any time anything is streamlined or if you think that your benefits and things are going to stay the state your name under that scenario, i got a bridge to sell you, too. but could you answer -- answer the question. >> oh, i'm sorry what was the question? >> what bridge do you want to sell me? >> well that's -- that's not -- that's not that question. the original question that i asked that i laid out. but my time is expired i guess you weren't listening. >> no i was listening i just. >> i thank the gentleman. there are limits to all infrastructure, technologically and human because of that we're taking a five minute break.
>> the committee comes to order i now recognize the vice chairman of the full committee mr. duncan. >> five minutes. >> thank you mr. chairman and as some people here recall, mr. pool and i think others. i chaired the aviation subcommittee for six joers from 1995 until 2001. and speaker ginrich asked me to hold the first hearingsen oh the air traffic control corporation. ms. roben i think will remember that. and i think at that point almost everybody maybe with the exception of mr. pool was opposed to it. and so forth. but the chairman- the chairman shufter has done an amazing job and brought groups and people onboard that were not in favor of the proposal at the time. but i -- i'm sorry that i didn't get to hear mr. rinaldi and ms. robynn's testimonies because i had other meetings.
but i want to say to mr. brown that fs i was impressed by your testimony. and i can assure you that i think your people will tell you the general achgs has not had a stronger than i've been and i'm sure the chairman will do everything possible to make sure that general aviations's concerns are heard loud and clear in any proposal we end end up with in this regard. mr. scovel you've been with -- been with us several times before. and you know i've had concerns for a long time about the some of these costs and the delays and so forth. so then i -- i noticed in your testimony you say, however faa has not fully identified the total cost, number of segments capabilities or completion schedules for any of the six programs and in addition ff arranges a-has not determined wle the trfrpgsle programs will start bifurcates or how they will improve air traffic control or productivity.
these cost things concern me. you told me in response to questions i asked you at a 2014 hearing. you stated quote we are looking years beyond 2025 perhaps another 10 even. and we are probably also looking at total expenditures in order of magnitude, two to three times that of the initial $40 billion estimate to achieve the original plan. i'm wondering, do you still stand by those statements that you made in 2014? or what's the -- what's the situation now? then you also heard mr. brown basically say that everything is going pretty good. >> 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 mere at probably my very first appearance before the committee where you said mr. scovel you're the committee's hired skeptic. so i appreciate that. and my staff does too because
that fits our role. >> you and i have have been a long time. >> yes we have thank you. . i do stand by the numbers. what ient 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, completion date there base, 2030 or so. but still the urn certainty remains bus at least for the sixes transformational program taken the title of negligence again pfa. a ert segmentation practices and managing those acquisitions have not led to any kind of clear understanding as to total costs or ultimate completion date. so we're still very much in an uncertain environment with regard to those programs. it's clear what's happened over time though. is that those programs have become part of a more general
and rolling implementation of modernization efforts, to be sure. fa. a to it's credit has worked much more closely with industry over the last couple of years. and the nack to git their priorities down. and fa. a has been working hard to execute on those. i do want to be fair certainly to the agency when i say that. but cost and completion dates still much uncertain. >> all right. miss robynn, you said that your original proposed when you worked it on was dead and arrival. is that -- what do you think -- why do you think that was and where do you think we are now? what's -- tell me what you think is different now. >> i think it was- it was dead and arrival because it -- it frankly imposed an additional financial burden on the -- on
the users. the -- more of the funding of the air traffic control system came from the general fund as opposed to ticket tans taxes we in the clinton administration our highest priority was balancing the budget. our proposal entailed a bill for the users that was unacceptable. so i think for -- i think for the airline industry that was a problem. i think for house -- house democrats it was much of what you hear today. it was a -- an opposition to -- to something that was seen as not privatization but something like that. i think -- i think this is a great debate. i think we're making progress. we're arguing over the value of the assets that get transferred. i mean we're- 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 flou flawed. >> my time has gone by so quickly just quickly i'd like to ask mr. brown, there is -- they tell me some 60 countries that have done some form of privatization. and we visited them in new zealand and certain other countries. have you talked to some of the general aviation people in some of the other countries? of course i know general aviation is very small in many of those countries what's your -- have you visited or looked into that any? >> i have. and i think those countries made choices they thought were sensible for taxpayers and public interests. and fibrinly for the scale and scope of their aviation industries, which quite quite small. and so you know my reference point in many of those countries is the general aviation is already a minuscule part of the economy. people don't fly don't have the freedom to fly they don't create pilots don't build airplanes.
so in mind they're taking a function that isn't critical to their economy and they're outsourcing it. in my mind in our country what with he do with our national airspace is in fact a economic engine and a critical one. and i think it works pretty darn well. and that's where the origin of my interests and my point of view come from. >> thank you very much mr. chairman. >>ening that the gentleman. miss titus i recognized fore. >>. airspace want to do but didn't want to pay if now getting it free seem to be all in doesn't seem ton dead on arrival i find that interesting. the question i want to ask is to mr. pool i want to go back we hear oolts about the the assets let's g dauk process the he wants people involved. in your doan donor network have been talked talking for decades about privatizing all aspects of government not just the fa. a. in fact in 2011 you 2010 a peace
for downsizing the government .org that is a projects. cota institute you talked about the need to privatize and commercialize air traffic system back then. one of the major arguments 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 call the high cost of labor. you've gone on to reference the efficiency of canada where they have downsized the system. shrunk the system and so considering you have written on this issue -- now we have this bill before us i want you to walk me through exactly how you're going to address the high cost of labor as you make in
system more efficient. >> well, thank you for letting me clarify what we've seen in countries such as germany and canada and others that have corporatized their systems is not downsizing the controller workforce. in many cases in 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 in the middle management ranks, the bureaucracy because it's so many layers and so convoluted that it extracts a high cost out of the users, whether they're paying aviation user taxes or actually direct users fees. that's where the need for -- for looking at that cost is. it's in the middle management ranks of the bureaucracy, no in the day to day controller workforce that is undersized for the task at hand today.
as paul rinaldi said we're at a low point of certified professional controllers today. and that's partly because of the shutdown of the training edema out of commission nearly aier 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's not -- it's not because -- it's not controllers. it's the bureaucracy. >> the i wish that reassured me but when you talk about efficiency and cutting cost and high cost of labor, and benefits, and controllers are part of that system, i don't know that i believe that that's where you're going to stop is at middle -- so culled middle management. but i'd ask mr. rinaldi he is sitting there next to you he represents these folks it's not just you. a number of conservative media outlets keep talking about high labor costs high labor costs let's get more computers fewer
people. i would ask you mr. rinaldi just what assurances do you ever that once your members are under control of a private system that's dominanted by represent he was of for profit companies looking to run the system as cheaply as possible because it's about their bottom line -- you heard they didn't want to pay for it before but they're getting it free now -- how do you know your members are going to be protected once this current contract is over? >> thank you makd congresswoman? cigarette question we have nothing in front us to compare to see what type of workers protections would be in the new language. so are anything i would like say would be speculating pu by will tell you we are ary highly train highly skilled highly efficient workforce. and we keep hearing about canada keep hearing about the united states. well we run roughly 10% -- 10 times thement a of traffic they do in canada with only five times the amount of controllers. we are highly efficient 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 are the best in the world. >> i totally agree with that. and that's why the i want to be sure they are protected under any kind of new system. >> me too and i'm with you. >> i would just say that under -- i think mr. rinaldi said this before under the care act from last carrier we got support from the air traffic controllers as well as if i could for the record submit letters of support from net jets pilots southwest pilots association. the allied pilots association and that so i'd like to submit these letters for the record without objection. so ordered. and with that, i recognize mr. mitchell for five minutes. >> thank you, mr. chair and thank you for all of the witnesses remaining through a long day. mr. scovel, you note in your report that fa. a reform efforts have not slowed
the overly cost growth or improved the productivity. you talk about the fact that the budget between 96 and 2015 grew by 95%. you also earlier -- mr. hunter referenced that the hope is -- i stress hope -- the $36 billion would be the cost to next again up around 2030 it may come to fruition. epii'm hoping to be around then. i'm asking you a question mr. brown am i wrong mr. scovel that's accurately proper trays for analysis. >> yes it is, correct. >> mr. brown like you i'm a private business guy. aircraft owner. i've owned several aircraft. in fact one of your props is on one. thank you. >> if you had a business that couldn't tell you what it was with going to cold front a set of products. couldn't tell you when they were going to get it done but aid said eventually we'll get there how likely is it you'd by that business or keep it? >> that would not be in the category of strong indicators
for that business. >> thank you. >> and it would cause me to ask a lot more questions. >> let me go to the next question then. we talk about the value of the assets. there's a lot of discussion about that. mr. scovel, how do we pay for the -- quote, assets -- i do use that term loosely in the faa. how do we pay for the assets we already have? >> mostly they're funded by excise taxes on ticket sales, gas taxes from ga users. there is a small infusion as well from the general fund and. >> and mr. brown, you have a lot of assets in your business. and what depreciation schedule do you use on them? >> seven years on capital yimt. >> at about seven years you fully depreciated usable lift on the equipment is what ten zbleers yeah can be longer, yeah. >> not much longer especially not in major capital. mr. scovel what's the average age of some of the equipment in the fa. a right now? >> the air traffic.
>> air traffic control. >> the structure it is aging and getting older by the minute obviously. the on route centers that manage high altitude traffic may be 50 years on average, 25 years on average. for terminal radar approach yoel. >> i'd like someone to explain to me maybe in writing some which why we are losing our mind about the quote value of the assets when in fact in the real world outside the hallowed hals the the value of the assets is less than zero. the question is how you dispose of them if in in fact there were values in those if you use the assets that's what we're talking about we're talking about assets gone beyond the half life account yet somehow we think we're ig giving them away in fact some of assets we we want someone to take them away. follow up question also if you can mr. pool, the countries that have gone to some version of privatization, third party other than government running their atc system, 60 countries or so they all had safe relatively
safe airline or flight systems before they divested right. >> yes they did. and the study that was done by three universities by a decade ago looked at i think it was five year before and after comparison of ten of the countries. and found that safety didn't go down in any of them. and it was the same or better following the corporatization. >> mr. rinaldi same question. they all had safe systems as they made that transition? >> yes. >> and any of your cohoerts around the world say my god beef we've gone a third party private ieszed system and the world is now threatened. >> completely opposite most of them would never go back to government structure. >> see i've flown canada system a europe's system for better for worse flown the system here i've got some interesting routing we could talk about mr. brown. flying back to the detroit through ft. wayne interesting route that was quite helpful. the point is we had- there is a lot of discussion about bifurcating the faa just because
it was together wle they it ray created this thing somehow it's a discussion to talk about making it more fishes somehow it's a holy ground. it's not working we well. costing us a ton of money yet the argument the architect is to throw more money at it and we hope it will get better. hope is not a plan, it is a last step before desperation. one more comment which is a discussion about being controlled by the outside stakeholders. big parts of my district are powered by rural cooperatives. and those people wouldn't give that up for the world because it actually worried first about the customers in service and not about the politics about what were talked here, about sequestration. are we delivering the service we promise to deliver. that is my hope for atc reform. and the board has a fiduciary interest to liver at a cost we
can manage. >> i thank the gentleman. next is mr. weber. >> mr. skovel, when you had your comments you said you identified long standing management weaknesses can you elaborate on those. >> yes. thanks for the opportunity. we cited in our testimony over ambitious planning, adsb and e ram would be testimony for that. acquisitions to be successfully executed. eram and the swim programs would be examples where the faa had shortcomings in that area. across the board, as we have audited faa programs, we have found areas that needed
significant improvement all the way from incentive fees to requirement. which some faa acquisition personnel weren't even following their own requirements. as you can see, there have been significant shortcomings along the line. affected not only the next gen program proper but others that are in support of other areas of air traffic control and next gen. >> my first year on the committee, i know you said you had received a label the committee's biggest skeptic. >> hired skeptic. and if i may, i wasn't skeptic of the committee. >> glad you clarified that. >> skeptical of proposals of information with the idea of bringing data for the committee's consideration. >> great. how long have you been the hired
skeptic? >> a little over ten years. >> ten years, so you have been doing this and watching this faa for ten years, is that fair? >> yes, sir. >> you said there were requirements. fix those problems. what are those requirements. if it were to stay in place, how does it evolve. >> if faa were retain responsibility for air traffic control. first continue to consult with stakeholders. largely it is because they haven't done that. >> and you think the new process that the chairman is submitting would continue to consult with stakeholders? >> bell, stakeholders would be in charge under a proposal as i understand it may ultimately -- >> they would have a board that has been discussed back and forth. in that scenario in constant
discussion with stakeholder and different parts of the group. >> i thought you were asking if faa were to keep responsibility for air traffic control. >> it was, but i am saying contrast that with what the recommendation is here and that is they would definitely be doing that, go to step 2. >> focus on the acquisition system. that is the essence of the aviation community or users dissatisfaction right now with faa. it is not on the safety side as we have recognized faa right now is what i call the golden era of aviation safety. through its own efforts, congress's efforts, the efforts of my office. where dissaesks is arising it is in the air traffic control
modernization era. so focus on acquisition practices, the acquisition management stmg whi management system. it needs to be updated. the workforce properly certified and trained. planning -- >> could be done in the new system that the chairman is proposing. mr. poole, stand alone airports, well let me do this first, mr. rinaldi, you said you all represent 40 of those airports? >> 94. >> thank you. mr. poole, what happens to those airports. >> well those are owned by municipalities, they get funding by aia grant program. none of that would change. the main criterion affecting those small airports is whether
they have a tower or not and if they have a tower and how can it be repaired. and the financing capability and openness to better technology of the corporation would likely adopt remote towers as a cost effective way to be able to expand the scope of tower services to small airports. i think there is a very bright future for small airports. >> thank you for elaborating, i yield back. >> mr. lamalfa. >> thank you. no doubt, controllers are doing very well with what they have to work with, but when we see the
potential here for improvement with reform in the previous gao report showed that reforms like we are talking about would have no negative impact on safety. in many cases safety improved. and what we haven't seen is throwing more money at it, faa had not really improved anything but even in some cases negative effect. potential for savings, off spoken canada system shows that we can have a positive effect on safety as well as saving money. can we expect these savings that would be achieved can be passed down on consumers? >> that is a good question to ask. and that depends on is there a competitive airline market.
if there is a competitive airline market, lower costs are more likely to be passed on, than if there is not a competitive market. there are concerns being raised on how competitive our airline market has gotten to be and there are things congress can do to make the airline market somewhat more competitive than it has been. ms. robyn? similar? ditto? >> if i were trying to expand the system allow more through put. you need new technology to do that. we are not at the cutting edge to do that. new technology in order to allow for an expansion of the system. >> for both of you, again, if we were to move in this direction,
atc privatization, smaller airports, rural airports, the threat of towers closing, what might be the expectations we would see for rural airports in general. what is it going to mean for rural airports and their viability? >> i will repeat what i just said, i think a better funded and 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 mem more tor yum that is denying a couple dozen airports that are on the waiting list. 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 its technology like remote towers overs the best future for these smaller airports. >> i want to jump to mr. scovel for a second, talking about contract towers, they are pretty important in smaller service airports and general aviation, et cetera. and that airports have up to 50% of civilian airports 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 on the value of the contract towers to air traffic safety and efficiency in our nation's system and the cost effective to faa as well as
taxpayers. >> yes. at this committee's request we reviewed the faa contract tower program several times and we concluded that generally they are as safe, 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. >> per tower? >> per tower, correct. we would cite federal contract towers as a missed opportunity for faa we understand there have been funding difficulties 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 moved any towers into the federal contract tower
program. >> perhaps we should move more? >> it depends on funding. >> mr. perry recognized for five minutes. finally. >> finally. thanks for your time. i had a lengthy question about contract towers but i think i missed most of them. and mr. lamalfa just asked them. the only thing i want to add that it is important to note 47% of all military -- i am a rotary wing guy, so you know, not too much on the low altitude charts, the sectional is probably more important. it seems to me based on the answer i got to hear from regarding my colleagues question that you feel that they are efficient and cost effective to the faa and to the taxpayer, is that a fair summation?
>> yes. completely fair. thank you. and i know that is not the context of the hearing. but i think the context is, between '96 and 2012, the faa budget increased 95% meanwhile productivity decreased substantially. which you know, doing the same thing over and over again, well i appreciate mr. brown saying we can tweak this, but may argument would be we have tried, and tried to it seems not great effect. le let me ask you this, probably mr. poole and mr. rinaldi. i am really interested in the uas propagation 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 can 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 chyme utm. we put requirements, but i feel we are way behind. and i want to make sure that there is not something we are missing from your viewpoint. >> safely integrating uav into our air space is a monumental tax. and taking a lot of resource from the faa. and distracting us. so one of the things i would like to see is some type of user fee base from the uavs so they can pay for the system like everyone else pays for the system. >> is there a model that you
know of regarding some kind of participation for maybe commercial users as opposed to incidental private, i am just curious. >> it is a great question and i think everybody is scratching their head right now because we are not using fuel and we base on fuse or ticket tax. so we have to come up with a new concept. >> so might be miles flown or something like that? >> well, i am not sure how it would work. >> okay. well that is an important part of the discussion, and i am glad you brought it up. mr. poole, what is your input. do you know what the airlines want to see integrating. >> i do know there is a lot of interesting -- i think there is a possible bifurcation between the low altitude, there is a lot of interest in some non-faa sort
of private solution to this that silicon valley folks are talking about in cooperation with nasa. we need to separate that in terms of being different from the controlled air space which are airliners and many private planes are flying. >> there are incursions now in both controlled and noncontrolled air space which is part of the issue. and i feel like we need to get to it. anybody else have something to add? >> no we do see a lot of incushio incursions and a lot of spottings that are being seen. the safer the system will be. >> it does divert some attention, resources, time, energy, what have you, you can't ignore the fact. >> no. i would not ignore it. it is an emerging technology. >> to a great extent it can be
an enhancement. some of the technologies that are emerging can be used commercially. i know my time is expired mr. chairman, but as an aviator myself, you know, the sky is unlimited. i am limited on the ground when i pull out of the parking lot, i have 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. i get a take off and go get on the highway. instead of literally from point to point. and going literally from point to point. but it has to be monumental over thousands and billions of flights commercially or otherwise. mr. chairman, i yield. thank you. >> i thank the gentleman. and with that mr. sanford is
recognized. >> thank you, chairman, i want to bore down for just one second, beginning with you mr. rinaldi, from an air traffic control standpoint, a blip is a blip, right? >> not necessarily. we work all airplanes safely and efficiently. there is heavy aircraft that you need weight turbulence separation. so each blip for lack of a better term gets treated safely and efficiently but there are different ways to deal with them. >> is going to be different than a wing type from a 747. but from the standpoint of management, it is essentially the same. >> yes. >> the fear that you move, you know, are they going to be
disproportionally impacted. think weigh more. from a traffic control standpoint, they don't take more time, are they going to be disproportionally impacted. i see you shaking your head up and down. i think that is one of the things that as we go through these deliberations we need to ferret it out. >> on the prices side, most economists would say the current approach of pricing based on the ticket tax is inefficient because it isn't correlated on the -- what the rest of the world uses is a weight and distance charge. and they use weight because they can't fully cover their cost typically with just a distance charge. that's, you want to charge
marginal cost but 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 really important analysis to be done about just how big that weight component has to be. there is reason to think that the faa may overstate their fixed cost which is what requires you to have a weight component to the charge. there is a tendency for regulated utilities to overstate their fixed cost versus their marginal cost. so i think this is a really important issue. and i don't think we should just blindly adopt the standard weight and distance charge. >> yes, sir? >> i have looked into this in a 2001 reason foundation study we had a lot of dialogue with one
of the major cargo carriers. and they persuaded us that a strict weight difference formula would cause a significant difference in the cost share that they would pay -- >> and let me interject. it is not they pay, it is we pay. >> so what we came up with is we looked at the flight patterns by time of day and it turned out most of the cargo flights do not take place at the busy times of day or at the busiest hubs. so if you put into the pricing formula a conjecture factor, you can hold the cargo share to what it is about today. does permit congestion related factors.
hardly anybody does it other than the uk and -- >> i think that is fascinating in the way 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, or load transportation. it looked like you had a thought there on the end but maybe you didn't. >> i have many thoughts but not on this particular issue. >> fair enough. >> mr. davis recognized for 5 minutes. >> i bet i can guess this thought. when is this going to be offer. this is a very important hearing today. one that i believe from many of the responses that we 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 already cost the taxpayers billions of dollars to see the, to put towards nextagain anextgen and we are not seeing the progress with being america with the air system that we have to be upgraded to compete on the same level of some of our allies. i can't help but to compare with work that has already done. what has been done in canada, in the united kingdom. canada has bought twice the technology at half the cost and has done so in a third of the time. so let me start with you, mr. rinaldi, what do you think would be the cost of doing
nothing. >> status quo or doing nothing is unacceptable. september will be here before we know it and looking at another possible shutdown. and as i said in my opening statement, as we lead up to a shutdown, the faa turns their attention to shutdown procedures. and it happens a couple of times a year and we lose this time. and it is four or five weeks leading up to it. five weeks on the back end of it. and they are not sure what sequester is going to bring us if we get a budget or a bill pass. a lot of discussion about rural america. i will tell you and you remember, sir, that when sequester hit in 2013, the fa looked at closing over -- air
traffic controllers. >> mr. poole, do you have comments on this? >> almost everything has been said, but the comparison with nav canada is brilliant. they have things that we are only planning -- they have fully rolled out nationwide control panel data link. they have across the north atlantic very soon satellite based positioning thanks to their investment in airion. this satellite based global coverage. 70% of the earth's surface will now have radar receiver because nav canada is now investing in that and are subscribing to it. the idea that we are the gold standard most modern in the world is no longer true.
and the more the status quo continues the less that is going to be true because we keep falling behind. >> this new atc entity is not going to decide where airlines or anyone can or cannot fly correct? >> that is correct. they will not decide anything about where airlines fly. and ms. robyn, despite the fact that the bill clearly states that two directors will be appointed by the secretary of transportation to acts in the public interest, some have questioned the motive of the board. can you describe your understanding of the governance of the board and how it will actually operate? >> congressman mitchell referred
to the cooperative in his district and it is analogous to the cooperatives we have in the utility interest -- >> and they work, right? >> they work beautifully. it is still air traffic control provision is still a monopoly, for the time being. so you need a design that protects against any kind of monopoly abuse. and the canadian model does that by having the stakeholders on the select and board members. and the board members are fiduciary. they have a fiduciary responsibility that has been critical to nav canada system. >> so i appreciate that. and we as policy makers -- >> keep going. >> thank you.
we as policy makers don't have a lot of time here. we can sit and bdebate work is working and what is not. we don't 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. >> thank the gentleman. we have time for mr. defazio to have five minutes. and me to have five minutes. >> thank you, mr. chairman, i want to point out in the dod memo, recognizes the potential risk regarding dod responsibilities -- i would like to put in the record an article from canada headline inspectors say major airline disaster likely and they talk about the major cut backs in safety which was retained by the government.
and ms. robbiyn do you remember executive order by president clinton. >> is that the one that created the ato? >> air traffic control is the -- >> yes the date of that -- >> thank you. i don't have time. miss robyn, i don't have time. thank you. mr. scovel. so we said our assets are old and someone said they aren't worth anything. that is houston valued at 62 million. and then we have property at long island. kind of valuable. have you broken out the assets in terms of property values. in canada they valued the system and had to pay for it, correct? they did. and the inspector general in canada said they paid, this is little dinky canada.
they paid 1.5 billion and we are proposing that nothing would be paid here. how old was their system? you are saying our system is old and decrepit. was theirs brand new, spiffy back then? >> no. >> so here we have a larger investment that we are going to transfer for free. and you valued it at 13.7 billion. let's say you know, how much of that would depreciate? >> how much would depreciate it? >> what is land value, versus building -- >> that is the infrastructure alone, i don't believe it involves the property value. >> so it is quite valuable. now let's go to small airports. almost everybody on that side is sensitive to ga. they represent rural districts. they will not direct where people fly.
that's correct. but this board will decide where we invest. here is the statement of the ceo of jet blue. we need to direct infrastructure improvements into the regions of the country where it will produce the most benefits. the airlines get four seats on the board. that is the opinion of jet blue and heard the same thing from the former ceo of united. and there is no airport representative on the board whatever, at least, since the board was written last year. now mr. brown, you talked about wes, there are 14,024 wes, did those come from free? >> the faa produce them one airport at a time and i was amazed by them but they got paid for by the user fees and fuel taxes that fuels the system.
>> except for maybe jackson hole and a couple of other places does the commercial industry use those? >> anybody can use those if they have the right equipment. the problem is most of the ar airlines don't have the right equipment. >> anybody know of another country in the world that is ready to turn on a ground base system for 2020 for all of their equipment. anybody? ground base domestically not over the ocean. >> australia. already in operation. >> we have one. and we are going to be there too. so you know, we heard a lot about this over the ocean stuff. you know, i am not particularly concerned about the tiny fraction of over the ocean flights we control and whether or not they get free adsb. there are not that many planes worrying about the congestion
and flying close together. it still begs the question how many planes can you land at the same time at many of our airports which has to do with airport scheduling. apparently there is an assumption that congress will repeal the ticket tax. right now, our current taxes are yielding about $14 billion a year. and the ato is 11.1. so that assumes congress is going to repeal substantial taxes i assume. correct. and then the new board will determine how to pay for the ato. i see a nodding of the head yes. thank you mr. chairman. >> i thank the gentleman. and let me start off by saying first investment will not be directed by the board. there will still be eight ip funds that will be going out to these small airports around the country. so that is not actually
accurate. one of the things that miss titus brought up which is important. was about the air traffic controllers. and one of my biggest concerns is that we make sure that we move the highly trained highest air traffic controllers to the new systems and if you don't do it the right way a third can retire tomorrow if they are not happy. i have been criticized by conservative groups around this town because they don't get it. so mr. rinaldi, we talked about the count going up at nav canada. what is your thoughts on not only the controller count but middle management. >> if you look up, it was brought up earlier. with nav canada, they had roughly 6700, employees.
now that they are a high functioning not-for-profit corporation, about 4300 employees which 2,000 of them are roughly air traffic controllers. so the workforce stayed the same and went up a little bit. it is the middle management that they attributed through retirement and they didn't back flow those positions. and the multilayers of contracto contractor they have within the agency also. a call that the clay. it actually it stops good things from happening at the top and it is, you know, things that are happening, trying to change at the operational level. >> for those of us who are not
geologists. >> 15 levels of no to get to yes. >> the restriction, the air space would be restricted. we made it clear in air one but maybe not enough to make sure that this new entity would not be able to restrict air space. make sure the general aviation community knows they are not going to be restricted by the new entity. second, when we talked about nav canada and our system is ten times larger. no doubt about it. i believe because we are so big and so complex, that's a reason to move to this system. so we can manage it much better. we are already to the scale to handle those greater operations. 5,000 managers, we are skaelcalo
hnl today. and this is something that is troubling to me and should be troubling to someone in the business world. we are nine to ten times larger to canada. and we spend 25 times to 28 times more in cap x than they do. and as was mentioned by the former -- half the cost, three times as fast. so again, as a former business owner, if we are spending 25 to 28 times more in cap x and getting little for it, that is a real problem for the american taxpayer and for the system, and if we were doing it efficiently, we could drive the cost down. and i spoke to the folks at nav canada, this is a volume business. we will have more money out there to do things to help more communities. to do things, the efficiency,
the technology, the employees. so this is something that 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 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 know you have been engaged in this for a number of years. you started in the clinton administration and i appreciate the value you bring here. as well as mr. poole, mr. brown. i am a ga guy, i am a rural guy, there is nothing i want to do to hurt those people that are my constituents, but we have something to help the united states of america to continue to be the leader in aviation around the world. appreciate your time. and i would ask you to ask consent that the record of
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