Transcripts For CSPAN3 Hearing Considers FAA And Air Traffic

Transcripts For CSPAN3 Hearing Considers FAA And Air Traffic Control Reforms 20170518

Thusburg maryland book festival. Starting at 10 00 p. M. Eastern, not the cleaver family. At 10 35, Melvin Goodman author of whistleblower of the kraimt yts author Sharon Weinberger at 12 15 p. M. Discussion her book the imagine nears of war, the untold story of darpa, the Pentagon Agency that changed the world. At 1 0015 eastern, the decisive years, 1970 stoichl 1980. At 2 15 p. M. Sidney blumenthal, the political life of Abraham Lincoln 1849 to 1856. And at 3 15, a missing naval officer in the pacific and his familys quest to bring him home. Watch our live all day coverage of the book festival starting saturday at 10 00 a. M. Eastern on cspan 2s book tv. Next, the Inspector General for the Transportation Department gives an update on the federal aviation administrations nextgen projects to modernize and change to a satellitebased air Traffic Control system. Other topics include whether the air Traffic Control system should be partially private advertised. Congressman bill shuster chairs the committee. The committee will come to order. I now recognize mr. Lobe and doe for a motion. Pursuant to rule 1 a 1 of the rules committee on transportation infrastructure, i move that the chairman be authorized to declare recess during todays hearing. The questions on the motion all those in favor signify with saying aye. Aye. All those significant ny by nay neigh. The ayes have tantd motion it agreed to. I want to thank everybody for being here today. This is an important hearing were having here today and talking about somewhat i consider extremely important legislation and i believe everybody on the committee, both sides of the aisle believe that the reauthorization of the faa reforming it, making it a better system for all americans is extremely important to all of us. The way america travels, moves goods and conducts Business Today depends on an Efficient Transportation Network and in order to remain competitive, we need a 21st century with modern 21st Century Technology. This is especially true of our Aviation System. But the fact is, the faas infrastructures increasingly obsolete and its technology is still cemented in the last century. And to just quote my colleague, esteem colleague from oregon in a hearing we had he said that the faa is the only agency worse at procurement than the pentagon. Congress has tried to reform it, it didnt stick. We got to try Something Different to get it to be more agile to give us 21st century wooemtd equipment and software we need. Then theres the issue of the sort of shape of the faa bureau crosscracy. Congress gave the faa the license to reform personal practices to deal with some of the midlevel management bulging, streamline the agencies and Decision Making process but that didnt take either. And he goes on to propose a 21st century constitutional chart an organization and make it selffunding, selfsufficient, and not subject to appropriations or ship downs or anything else that a Congress Might imagine. Now, i think that we can see by that statement and i think in well as we talk here today we agree there is a problem. There is a solution at hand, its just the form that were going to debate vigorously on what we think is the best best outcome. But as a rut over these past 30 years, the shocking amount of taxpayer zlarz that weve wasted or the last 3. 5 decades, over 50 billion, thats why this is one of my highest priorities this year say comprehensive faa reform and reauthorization bill. So far this year weve had reauthorizations hearings looking at air tropz partation, manufacturing, airports and new entrance in innovations. Today well focus on the need for air Traffic Control reform divesting the hightech sker vis 24 7 Service Business from government and shifting it to an independent, notforprofit entity. Its appropriate were holding this hearing during infrastructure week. No other single infrastructure reform has as such potential to improve travel for the average american flyer or to ensure our hardearned leadership in aviation. Although our Aviation System is safe, the faa structure and how air traffic is managed have been broken for decades. The decision we make in the faa reauthorization bill will year will either move us toward a 21st century Aviation System american needs or doom us to repeating the failures of the post over and over again. Everyone should be remind of what happens if we choose the status quo. It means our system will be subject to more budget constraints, sequestration, and threats of Government Shutdowns. Sequestration isnt gone. In 2013, sequestration led to furloughs and reduced operations, controller highing and training sufrds and the faa bureaucrats tried to shut down contract towers. Fiscal constraints continue to be tight so in the federal budget and thats not going to change anytime soon and it may get worse. We continue to rely on the unstable, dysfunctional annual appropriation cycle. Weve had no standalone transportation appropriations bill since 2006 and over that time Period Congress has passed 42 continued resolutions to keep government doors open. The faa also relies on authorizing legislation and temperature took congress 23 shortterm extensions over five years before it passed previous longterm faa authorization bill. It has been trying to undertake a hightech modernization of air Traffic Control system for over three decades. Its not work and its never going to work. Sadly in todays digital age we still manage planes with paper strips which i have brought a few to remind people of that. And if anybody haz hasnt been in a control tower, they ought to go into a control tower and see it. Some argue that the late ef attempt to morn nize nextgen is showing some signs of progress. But its only incremental at best and only in locations where the faa partnered with the private sector. And lets remember the name nextgen was a rebranding ever the faas on going failed efforts to modernize the system. Nextgen is a marketing term not an Actual Technology or innovation but it sounds catchier so they will fund it year after year. But the bottom line is there should be far more progress than now. Congress has provided 7. 4 billion for nextgen since 2004. Results are the problem the. I cord together calculations the 7. 4 billion invested has only been about 2 billion in benefits and weve still got a long way to go. According to dot Inspector General in 2014, the projected initial cost for nextgen was 40 billion, but theyve said it could double or triple and be did he laid another decade. Over the years the faa has described nextgen as transform mag of americas air transportation network. It also said it will forever redefine how he we manage the system. But in 2015 the National Research council confirmed what was already becoming painfully clear. According to nrc, the original version of nextgen is not what was being implemented. It is not broadly transformational and not fundamental change in the way faa handles air traffic. Only in the federal government with such a dismal record be considered a success while the faa continues ton fall behind the rest of the world is moving on with new technologies, without the United States involvement. Nothing less than americas leadership is at stake. In an industry that we pioneered and have led since kitty hawk. Some have reposed targeting reforms to fix the problems but thats an approach weve already tried many, many times. Starting in the 1980s. Since 1995 Congress Passed various reforms to allow the faa to run more like a business. Procurement reform in 1995 for the faa to develop a more flexible Acquisition Management system. Additional reforms in 1995 exempt the faa from most federal personal 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 reforms in 96 allowed them to negotiate pay, organizal reforms in 2000 to establish a coo position, additional reforms to allow greater pay so the faa could recruit good candidates particularly for a coo position. Additional reform in 2000 by the executive order to create the air traffic organization. Organizational reforms in 2003 to establish the joint planning and Development Office to better coordinate nextgen. Reforms in 2012 to establish a chief nextgen officer. Property management reforms in 2012 to allow a Better Process for realignment and consol occasion facilities. All have failed to result in the faa being run more like a business. The faa always has always performed like a massive bureaucracy and will continue to. It is only dot agency that sevsz as both Transportation Service provider and safety regulator. Regulating itself is an inherent conflict of interest and separating the two functions is simplily good government. Its time for reform that is truly transformational. Rhee change can be difficult, weve learned that over the years. But the broader lesson over the last several decades is that had the true risk lies in doing nothing. Last years bill, that passed out of committee will serve as a framework for new legislation, but we are open to change. Wasnt to talk to people and get their ideas and thats what we hope to hear today. As we continue to move forward or our air Traffic Control reform proposal 8 be based n aught following principles. Create an independent not for Profit Corporation to provide air Traffic Service dollars. 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 the federal budget process. Create a governance structure that is right sized and balanced and a board with sole fiduciary responsibility fot organization, thats a legal term. If youre on the board of directors in the United States and you have a fiduciary duty, its not what appointsed you to the board, its to that is who youre responsible for and thats the law. Its not some pie in the sky. People kk removed and pros kutsed if theyre not doing their fiduciary responsibilities. Ensure connectivity, access to the airspace and continuity of air services for general aviationa, small and Rural Communities and airports to serve them. Let me for the record remind people im have 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 dont know who i am and where im from because im committed to make sure what we do protects small and Rural Communities and protects the ga community. The ga community is over a billiondollar industry. Why in the world i would want to harm an industry that produces so much good for this country . We want 10 to sure 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 faas brew crat tick process and the psych. And the decade long pattern of costly delayed failed management of morn zation. Give the new Service Provider the ability to leverage prooifd private funding for multiyear Capital Projects needed to morn nooiz the system. Allow them to focus on the Safety Mission and certification mission. Ensured continue oversights the air Traffic Service bitz faa, dot, and congress. And people are out there saying thats not what were going to do. The faand at department of transportation and congress will still maintain vigorous oversight to the airspace of this country. And ultimately allow all user of the system, including Airline Passengers and the general public to realize the significant benefits of morn air Traffic Control system, including decreases in delays, flight times and congestions. Previous efforts to reform the faa westbound modernize the system tooemz teaches that the only way to realize these ben fits fits is to get the government out of the way. Government not the solution to the problem, government is the problem. And we see all over the world people turning to the private sector whether its europe, asia, australia, new zealand, canada, look around the world. Countries, governments are looking to partner with the private sector because they see they do it better. Since the introduction of the air act over a year ago, this has been an ongoing process of education and discussion. Weve held over 130 meet wgsz stakeholders including both supporters and opponents of the air act. Weve had numerous meetings with members of the house, the senate, white house, 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 todays witnesses, what are your ideas that we can build upon on the principles that ive outlined. Weve also gone to canada to see their system firsthand and we will go again with more members and i would encourage any member that wishes to go on may 25th, thursday, in the after the noon well be heading up to canada and coming back on 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 fix our own broken structure. Over 60 countries have followed this kind of reform and its worked in each case. Opponents of reform either ignore the evidence or must believe we are less capable than the other 60 countries. And for me, thats a bit outrageous. Were the United States of america. We can do this and do it better than anybody else, so its time for us to take a look and to move forward. Air Traffic Control is not inherently governmental function, its a 24 7 technology service. Purchase foes 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, its the airplane. Its the people at boeing and air bus and says that and the people that build these aircraft, thats the most. Com complicated thing in the system. And the faa already oversees those highly sophisticated aircraft manufacturing and Flight Operations at arms length. We dont build airplanes today, the government does and thats the most complex things in the system. Overseeing air Traffic Control is not going to be more complicated than anything else the faa already did z. This transfor medication reform will fim our 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 flyer a safe, efficient Aviation System using 21st Century Technology to ensure more ontime departures, more direct routes using less fuel which will be better for the environment, and less wasted time on the tarmac. Ladies and gentlemen, again, i thank the witnesses for being here and been that i will yield to the Ranking Member for an Opening Statement. Thank you, mr. Chairman. Jim would have been proud, thats the longest Opening Statement since former chairman jim and longest term critic of the faa as preterm process and Movement Toward 21st century system. Im not aware that any other member of the committee has spent that time with him and hes not been invited to testify. He has a different story to tell today. He thinks it will be mistake and im 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 corporations say a massive change now, we aclooef ta acleve into parts 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 meddling. 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 arent here today, perhaps, because they havent 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. Im not aware that the air Melvin Goodman<\/a> author of whistleblower of the kraimt yts author Sharon Weinberger<\/a> at 12 15 p. M. Discussion her book the imagine nears of war, the untold story of darpa, the Pentagon Agency<\/a> that changed the world. At 1 0015 eastern, the decisive years, 1970 stoichl 1980. At 2 15 p. M. Sidney blumenthal, the political life of Abraham Lincoln<\/a> 1849 to 1856. And at 3 15, a missing naval officer in the pacific and his familys quest to bring him home. Watch our live all day coverage of the book festival starting saturday at 10 00 a. M. Eastern on cspan 2s book tv. Next, the Inspector General<\/a> for the Transportation Department<\/a> gives an update on the federal aviation administrations nextgen projects to modernize and change to a satellitebased air Traffic Control<\/a> system. Other topics include whether the air Traffic Control<\/a> system should be partially private advertised. Congressman bill shuster chairs the committee. The committee will come to order. I now recognize mr. Lobe and doe for a motion. Pursuant to rule 1 a 1 of the rules committee on transportation infrastructure, i move that the chairman be authorized to declare recess during todays hearing. The questions on the motion all those in favor signify with saying aye. Aye. All those significant ny by nay neigh. The ayes have tantd motion it agreed to. I want to thank everybody for being here today. This is an important hearing were having here today and talking about somewhat i consider extremely important legislation and i believe everybody on the committee, both sides of the aisle believe that the reauthorization of the faa reforming it, making it a better system for all americans is extremely important to all of us. The way america travels, moves goods and conducts Business Today<\/a> depends on an Efficient Transportation Network<\/a> and in order to remain competitive, we need a 21st century with modern 21st Century Technology<\/a>. This is especially true of our Aviation System<\/a>. But the fact is, the faas infrastructures increasingly obsolete and its technology is still cemented in the last century. And to just quote my colleague, esteem colleague from oregon in a hearing we had he said that the faa is the only agency worse at procurement than the pentagon. Congress has tried to reform it, it didnt stick. We got to try Something Different<\/a> to get it to be more agile to give us 21st century wooemtd equipment and software we need. Then theres the issue of the sort of shape of the faa bureau crosscracy. Congress gave the faa the license to reform personal practices to deal with some of the midlevel management bulging, streamline the agencies and Decision Making<\/a> process but that didnt take either. And he goes on to propose a 21st century constitutional chart an organization and make it selffunding, selfsufficient, and not subject to appropriations or ship downs or anything else that a Congress Might<\/a> imagine. Now, i think that we can see by that statement and i think in well as we talk here today we agree there is a problem. There is a solution at hand, its just the form that were going to debate vigorously on what we think is the best best outcome. But as a rut over these past 30 years, the shocking amount of taxpayer zlarz that weve wasted or the last 3. 5 decades, over 50 billion, thats why this is one of my highest priorities this year say comprehensive faa reform and reauthorization bill. So far this year weve had reauthorizations hearings looking at air tropz partation, manufacturing, airports and new entrance in innovations. Today well focus on the need for air Traffic Control<\/a> reform divesting the hightech sker vis 24 7 Service Business<\/a> from government and shifting it to an independent, notforprofit entity. Its appropriate were holding this hearing during infrastructure week. No other single infrastructure reform has as such potential to improve travel for the average american flyer or to ensure our hardearned leadership in aviation. Although our Aviation System<\/a> is safe, the faa structure and how air traffic is managed have been broken for decades. The decision we make in the faa reauthorization bill will year will either move us toward a 21st century Aviation System<\/a> american needs or doom us to repeating the failures of the post over and over again. Everyone should be remind of what happens if we choose the status quo. It means our system will be subject to more budget constraints, sequestration, and threats of Government Shutdown<\/a>s. Sequestration isnt gone. In 2013, sequestration led to furloughs and reduced operations, controller highing and training sufrds and the faa bureaucrats tried to shut down contract towers. Fiscal constraints continue to be tight so in the federal budget and thats not going to change anytime soon and it may get worse. We continue to rely on the unstable, dysfunctional annual appropriation cycle. Weve had no standalone transportation appropriations bill since 2006 and over that time Period Congress<\/a> has passed 42 continued resolutions to keep government doors open. The faa also relies on authorizing legislation and temperature took congress 23 shortterm extensions over five years before it passed previous longterm faa authorization bill. It has been trying to undertake a hightech modernization of air Traffic Control<\/a> system for over three decades. Its not work and its never going to work. Sadly in todays digital age we still manage planes with paper strips which i have brought a few to remind people of that. And if anybody haz hasnt been in a control tower, they ought to go into a control tower and see it. Some argue that the late ef attempt to morn nize nextgen is showing some signs of progress. But its only incremental at best and only in locations where the faa partnered with the private sector. And lets remember the name nextgen was a rebranding ever the faas on going failed efforts to modernize the system. Nextgen is a marketing term not an Actual Technology<\/a> or innovation but it sounds catchier so they will fund it year after year. But the bottom line is there should be far more progress than now. Congress has provided 7. 4 billion for nextgen since 2004. Results are the problem the. I cord together calculations the 7. 4 billion invested has only been about 2 billion in benefits and weve still got a long way to go. According to dot Inspector General<\/a> in 2014, the projected initial cost for nextgen was 40 billion, but theyve said it could double or triple and be did he laid another decade. Over the years the faa has described nextgen as transform mag of americas air transportation network. It also said it will forever redefine how he we manage the system. But in 2015 the National Research<\/a> council confirmed what was already becoming painfully clear. According to nrc, the original version of nextgen is not what was being implemented. It is not broadly transformational and not fundamental change in the way faa handles air traffic. Only in the federal government with such a dismal record be considered a success while the faa continues ton fall behind the rest of the world is moving on with new technologies, without the United States<\/a> involvement. Nothing less than americas leadership is at stake. In an industry that we pioneered and have led since kitty hawk. Some have reposed targeting reforms to fix the problems but thats an approach weve already tried many, many times. Starting in the 1980s. Since 1995 Congress Passed<\/a> various reforms to allow the faa to run more like a business. Procurement reform in 1995 for the faa to develop a more flexible Acquisition Management<\/a> system. Additional reforms in 1995 exempt the faa from most federal personal 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<\/a> system. Additional reforms in 96 allowed them to negotiate pay, organizal reforms in 2000 to establish a coo position, additional reforms to allow greater pay so the faa could recruit good candidates particularly for a coo position. Additional reform in 2000 by the executive order to create the air traffic organization. Organizational reforms in 2003 to establish the joint planning and Development Office<\/a> to better coordinate nextgen. Reforms in 2012 to establish a chief nextgen officer. Property management reforms in 2012 to allow a Better Process<\/a> for realignment and consol occasion facilities. All have failed to result in the faa being run more like a business. The faa always has always performed like a massive bureaucracy and will continue to. It is only dot agency that sevsz as both Transportation Service<\/a> provider and safety regulator. Regulating itself is an inherent conflict of interest and separating the two functions is simplily good government. Its time for reform that is truly transformational. Rhee change can be difficult, weve learned that over the years. But the broader lesson over the last several decades is that had the true risk lies in doing nothing. Last years bill, that passed out of committee will serve as a framework for new legislation, but we are open to change. Wasnt to talk to people and get their ideas and thats what we hope to hear today. As we continue to move forward or our air Traffic Control<\/a> reform proposal 8 be based n aught following principles. Create an independent not for Profit Corporation<\/a> to provide air Traffic Service<\/a> dollars. Fund the new Service Provider<\/a> by fees assessed for air Traffic Service<\/a>. Free the new Service Provider<\/a> from governmental dysfunction, political interference, and the uncertainty the federal budget process. Create a governance structure that is right sized and balanced and a board with sole fiduciary responsibility fot organization, thats a legal term. If youre on the board of directors in the United States<\/a> and you have a fiduciary duty, its not what appointsed you to the board, its to that is who youre responsible for and thats the law. Its not some pie in the sky. People kk removed and pros kutsed if theyre not doing their fiduciary responsibilities. Ensure connectivity, access to the airspace and continuity of air services for general aviationa, small and Rural Communities<\/a> and airports to serve them. Let me for the record remind people im have 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<\/a>, they just dont know who i am and where im from because im committed to make sure what we do protects small and Rural Communities<\/a> and protects the ga community. The ga community is over a billiondollar industry. Why in the world i would want to harm an industry that produces so much good for this country . We want 10 to sure full access to airspace and air services to support our armed services. And their National Security<\/a> mission. Free the air Traffic Control<\/a> business from the faas brew crat tick process and the psych. And the decade long pattern of costly delayed failed management of morn zation. Give the new Service Provider<\/a> the ability to leverage prooifd private funding for multiyear Capital Projects<\/a> needed to morn nooiz the system. Allow them to focus on the Safety Mission<\/a> and certification mission. Ensured continue oversights the air Traffic Service<\/a> bitz faa, dot, and congress. And people are out there saying thats not what were going to do. The faand at department of transportation and congress will still maintain vigorous oversight to the airspace of this country. And ultimately allow all user of the system, including Airline Passengers<\/a> and the general public to realize the significant benefits of morn air Traffic Control<\/a> system, including decreases in delays, flight times and congestions. Previous efforts to reform the faa westbound modernize the system tooemz teaches that the only way to realize these ben fits fits is to get the government out of the way. Government not the solution to the problem, government is the problem. And we see all over the world people turning to the private sector whether its europe, asia, australia, new zealand, canada, look around the world. Countries, governments are looking to partner with the private sector because they see they do it better. Since the introduction of the air act over a year ago, this has been an ongoing process of education and discussion. Weve held over 130 meet wgsz stakeholders including both supporters and opponents of the air act. Weve had numerous meetings with members of the house, the senate, white house, 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 todays witnesses, what are your ideas that we can build upon on the principles that ive outlined. Weve also gone to canada to see their system firsthand and we will go again with more members and i would encourage any member that wishes to go on may 25th, thursday, in the after the noon well be heading up to canada and coming back on 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 fix our own broken structure. Over 60 countries have followed this kind of reform and its worked in each case. Opponents of reform either ignore the evidence or must believe we are less capable than the other 60 countries. And for me, thats a bit outrageous. Were the United States<\/a> of america. We can do this and do it better than anybody else, so its time for us to take a look and to move forward. Air Traffic Control<\/a> is not inherently governmental function, its a 24 7 technology service. Purchase foes 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<\/a> system, its the airplane. Its the people at boeing and air bus and says that and the people that build these aircraft, thats the most. Com complicated thing in the system. And the faa already oversees those highly sophisticated aircraft manufacturing and Flight Operations<\/a> at arms length. We dont build airplanes today, the government does and thats the most complex things in the system. Overseeing air Traffic Control<\/a> is not going to be more complicated than anything else the faa already did z. This transfor medication reform will fim our air Traffic Control<\/a> structure, move beyond the wasteful inefficient status quo and benefit all the users of the system. Ultimately, reform will give the american flyer a safe, efficient Aviation System<\/a> using 21st Century Technology<\/a> to ensure more ontime departures, more direct routes using less fuel which will be better for the environment, and less wasted time on the tarmac. Ladies and gentlemen, again, i thank the witnesses for being here and been that i will yield to the Ranking Member<\/a> for an Opening Statement<\/a>. Thank you, mr. Chairman. Jim would have been proud, thats the longest Opening Statement<\/a> since former chairman jim and longest term critic of the faa as preterm process and Movement Toward<\/a> 21st century system. Im not aware that any other member of the committee has spent that time with him and hes not been invited to testify. He has a different story to tell today. He thinks it will be mistake and im 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 corporations say a massive change now, we aclooef ta acleve into parts 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 meddling. 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 arent here today, perhaps, because they havent 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. Im not aware that the air Traffic Control<\/a> system has had a major disruption with the exception of deliberate sabotage by the contractor who knew how to get the system and back up system. The airlines have managed to melt down their reservation system, so they can do it better, right . Thats an interesting question. So i think that members of this Committee Want<\/a> to be educated on this, should take and maybe we can invite them here and spend that our and hear the stories of how things have changed an the progress were making and potential for disruption at this point in time. In terms of funding, the faa is currently 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 theyre self funded, they can be sequestered and shutdown. Thats a simple, simple fix. Take it off budget. Make it into a trust funded program, they are raising the revenues. Thats a simple fix. No, were going to cleve in half and take this one part and put it over here and say somehow theyre going to self fund. The question, of course, is how are they going to self fund . The airlines have told us time and time again they hate the ticket tax. I buy a ticket, i pay a tax. They say, no, that effects the price of the ticket and competition and everything else. If they do away with it, there goes 70 of the revenues what are they going to put in its place. Its going to be per operation charge, we dont know. Congress will have no say over this. There will be a board, if i could have that slide, and a construct, which is well show here for the person running the slides, if you could put up put up this hotel. Anything that effects competition will go through this process. The board makes a decision about a new approach, a new route, new fees, all of that goes through this process and goes to secretary. The secretary will have established a large new office of consultants within in his or at this point, her office, who will advise the secretary of a limited period of time. If the secretary and the board disagrees, they go to court. Thats a kbraet wgreat way to d new approaches and funding. Congress will have nothing to say about what people or the American People<\/a> are charged for running this system. When the ticket tax goes away, what happens to the ap program, what happens to safety, what happens to certification, we had testimony from a gentle man here to serve small and mid size cities, he said his biggest problem is certification. People are good at the faa, there arent enough of them, they dont have enough funding. Is this new enlightened board going to generously fund that also. We have assurances, dont worry about those things. Now, weve heard other things here that are, you know, interesting construct, which is, we are way behind because we dont use adsb. If i could have the first slide please. Can we get a slide. Okay. This is the oceanianic air space. And youll notice that the vast majority of the planes are in oceanic control by uk and canada. Theyre using adsb, make sense. Were not currently airlines pay to have satellitebase navigation a fee in this lower part of the chart, there arent that many. People do the loop to the north. So, in fact, you know, we have canada had one airaircr. We have one aircraft, in oceanic craft for every 51 in the air over the United States<\/a> of america. Now, go to the second slide. Oh, by the way go to the second slide. You see all that yellow, thats the u. S. That is going to be totally adsb satellite based in 2020, with an exception, the airlines petitioned given permission for the faa for exceptions because many of their older claims do not have modern enough gps systems to use the new adsb, the airlines, again, have petitioned that they have number 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 radarbased system because they dont have much domestic traffic. Were being criticized because we wont pay a bunch of money for the few planes that use our oceanic air space, but were going to put 100 times that many planes under adsb in 2020. There were disruptions in canada, there were disruptions in great britain, including the bankruptcy of the system and a bailout. And, you know, they every system that has transent and all the other governmentbased corporations or governmentcontrolled corporations, theres only two countries that have gone the other way, and others have done studies, there have been a period of disruption, when youre getting the the certification who have to certify the new equipment, oh, theyre on furlough because the Stupid Congress<\/a> did another shutdown or sequestration. You cant use those new approaches because the people over here who have to certify it cant work. Now, splitting this agency in half does not make sense to me. Now, the chairman talked about the failed reforms. I sat down with the administrator who also has not been invited to testify before this committee on this subject, who i think has made tremendous strides and brought the agency way under control compared to anyone else in recent history. He said, well, they failed because congress failed to say that the trolls at omb and the secretary couldnt meddle. So the proposed reforms didnt go forward because omb took control, as they do over many things. The secretary messed with it. I know you find this amazing, thats the way it happened. And these did not go forward. So, simply, you can say were going to give authority to reform procurement. Were going to give authority to reform personnel to the head of the faa whose proposals will not be subject to omb because theyre 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. Its already raising the revenue it need. Going to figure out a different way to raise revenue, oh by the way, forget about safety and certification, their after thoughts over there in the government, not funded by any stable source. Ive invited a witness today and i hope people listen carefully, joe brown. Hes the president of hard sell propeller, his family has been involved in the Aviation Business<\/a> since the wright brothers, actually. Its an interesting story. He wont have a chance to tell that today because i want him to focus on his experience both in that industry and as a pilot and to talk about what he sees as the things that are at risk, as a pilot, a ga pilot in this country and things that we have done that are extraordinary for ga pilots that would be at risk in a new system why would the commercial Airlines Give<\/a> a darn about all the new improved approaches and updating those, because that cost money. Thats not in their interest, they dont use them, they dont care. So well hear from him. I think his testimony is going to be a little more compelling than a couple of thinktank people that well hear from him. We havent heard from faa administrator. Mr. Pool from the umpteenth time. I think there are things we can agree upon, but, you know, i do not believe that privatizing the ato is the answer. Thank you. Well, thank the gentleman. You almost equalled my Opening Statement<\/a>, you were twominutes short. This hearing is going it has to be knocking down things that just arent true. Whats put up on the chart, its not my proposal. I dont know whose proposal it is. It may be his proposal, its not mine. Let me start off to under mine the whole thing, start at the very very top. It says in 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 have a debate, i think. The only person that can raise taxes is United States<\/a> congress, so thats patently false. The second thing at the top is the corporation decides to change acc safety procedure. That cant happen, they have to come back to the regulator, faa. Again, i dont know whose chart this is its not my chart. You might want to call that fake news. I dont want to go there. Just one other point that the gentleman said, he said congress and omb failed, hes absolutely right. Hes making my case. We have to take this out of the congress and stopping the way they operate. Its crazy. But, again, im concerned hes 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, thats not my chart, so ladies and gentlemen, ive got to be very clear on that. For one minute. You certainly can. Thank you mr. Chairman, they can set user fees, i consider to be taxes. I consider the ticket tax to be user fee. We can argue semantics over that. Theyll determine how the system is funded, which is without review by the ways and means committee. Secondly, im proposing to give the faa administrator that authority free of omb and secretarial interference and also we would give them that budget that is free from sequestration and shutdown. Congress will set the funding if it needs to be adjusted. Congress can intervene thank you, mr. Chairman. Well now go to our witnesses. Thank you, gentlemen. I would like to welcome, again, our panel. I believe everybody has testified before us before at least one occasion or it may be a few. First the Honorable Department<\/a> of transportation has been here many times, joseph w. Brown, the president of propeller corp. I believe you testified in 2014, so this is your second time here. Mr. Robert pool, director of transportation policy at the Research Foundation<\/a> who has been thinking deeply about this subject for many years. The president of the national air Traffic Control<\/a>lers association has been before us before. And dorothy, the independent policy analyst and former Clinton Administration<\/a> official, who, again, has been through the wars on this many, many times. We appreciate you being back here to look at your insight. I ask you that our witnesses full statements be included in the record. Without objection so ordered. Since your written testimony has been made part of the record. To five. Thank you for inviting me to testify on the efforts to implement reforms and modernize the National Air Space<\/a> system. My testimony will focus on the past and on going work regarding the efforts to implement various agency wise reforms, as well as its progress and challenges with can you pull the mic a little closer to you . Sorry. Dont be afraid of it. My office does not make policy recommendations. I will also discuss how other countries have structured their Aviation System<\/a>s and highlight key factors that policy makers may wish to sr. In evaluating the structure. Over the last two decades, faa has made several reforms in response to improve operations cost effectiveness and management. These include establishing new Employee Compensation<\/a> systems, as well as Acquisition Management<\/a> system. And undertaken reorganizations to improve the agencys efficiency and reduce expenses. In addition, faa achieved more than 2 billion in cost savings over a 13year period by out sourcing Flight Service<\/a> stations. Despite this progress, faa reforms have not achieved their intended cost or productivity out comes. Instead, budgets have increased with a 35 increase in faas total budget after adjusting for inflation between fiscal years 1996 and 2015. In addition, faas Productivity Initiative<\/a> has not yielded improvements. In part because faa did not establish measurable productive and cost goals or metrics. Faas reforms have also fallen short in improving its ability to deliver technology on time and within budget. This is due to longstanding management weaknesses, such as over ambition plans, unreliable cost and schedule estimates, unstable requirements and ineffective contract management. For example, faa has made progress with its six next gen transformational program. However, faa has not determined when the programs will start delivering benefits or how theyll improve air traffic flow or productivity. They currently estimate the six projects at 5. 7 billion. Their total cost and completion dates remain unknown. In part because their requirements continue to evolve. Furthermore, weaknesses with internal controls and oversight problems have hindered faas contract management, which we found in our reviews of sole source, service support, and Small Business<\/a> set aside contracts. To its credit, faa has worked with the industry to identify and launch some of the highest priority next gen capabilities. For example, a key priority is performance based navigation or pbn, which allows more fuel Efficient Air<\/a>craft routes and reduces airport congestion. Faa fully deployed these procedures in 2015, well ahead of schedule. Faa has also deployed new technologies at some airports to enhance controller pilot Data Communications<\/a> and runway operations. Yet, many risks remain to complete these and other next gen priorities and full benefits for users remain years away. They include addressing noise concerns, resolving aif i dont know a avionics issues. Other nations may offer comparison. At the request of this committee, we review the aviations system of canada, france, the United Kingdom<\/a> and germany. All four have separated their oversight functions which remain government controlled from the air Traffic Control<\/a>led functions. Air Traffic Control<\/a> has been commercialized, their time, into air navigation Service Provider<\/a>s via various organizational structure. These providers finance their operations through user fees and may finance their infrastructure with longterm bonds and other debt instruments. They also embark on smaller modernization efforts and roll them out incrementally using a variety of methods such as modifying commercial off the shelf products. Yet, any discussion, on next gen structure should consider our nations unique characteristics, as you know, the u. S. Runs the busiest and most complex Aviation System<\/a> 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 safely will oversee the top, regardless of what the future looks like, it will be vital to provide safe system. I look forward to answering questions you or the committee may have, mr. Chairman. Thank you. And with that, mr. Brown, you may proceed. Chairman, Ranking Member<\/a>, members of this committee. You can bring your mic closer. I like to thank you for inviting me here today. I also represent a company called, 100yearold Aviation Business<\/a> whose routes trace to the we do our business 4,000 foot runway that takes us all over the country to our customers in texas, florida, georgia, and minnesota and everywhere in between. Our business depends and their business depend on the amazing infrastructure that the citizens of this country have put into the National Air Space<\/a>. We also depend on another thing, which is the incredible freedom to fly that we enjoy in this country and because of those things weve made a market in this country like no other for aviation and were 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, highfunctioning system. Ive seen it evolve over time right before my eyes. I find controllers that do the job well. I find easy access and powerful technology. I can file a flight plane and get my proposed route back before i get to the airport in a text. When i take off. I have gps Navigation Systems<\/a> on board that allow me to fly point to point all over this country, a couple of months ago i took off out of dfw and got cleared direct burlington, vermont 1,300 miles away. While im flying i have the vail of safety, giving me traffic call outs and separation queues and weather in my route of flight. When i come in from landing, i can pick from 3,000 precision approaches brought to me by next gen feature. So the bottom line for me is, next gen is working. It works for me every day and its getting stronger all the time. From a technology standpoint, i believe were on the right track. Its 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 structure and the governance of our air traffic organization. I dont like that risk profile. I dont 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 dont 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. What about new market entrance, how do they fit into the picture. That doesnt even address whether the people are better served by the structure after we transfer so much National Wealth<\/a> to it. Because im a business guy, i get to evaluate a lot of companies and ive bought several. We have a simple framework when were looking at an investment. We say what are its strengths. Can they be leveraged, do they differentiate it in the business were trying to do. What are its weaknesses and do we understand them and can we fix them. When both of those things are true, we buy that company. If we elevate strengths and reduce weaknesses. Well create value. The ato presents exactly that risk profile, enormous strengths, world class systems and very specific weaknesses that we can address. The conclusion ive drawn is that we should not spend 5 to 7 years distracted by change, knowing the things take longer and cost more with the hope that at the end this restructuring journey will deliver a big pay off. Whats next, i think, that we should stay on track with the technology plans that the next Gen Advisory Committee<\/a> and faa agreed the stake holders are already aligned and the technology in the field works and theres more technology coming. Lets keep tuning and strengthening the collaboration thats been driving so much process. Even overseers recognize the Advisory Committee<\/a> is having impact. Its been run by airline executive. Clearly its setting the priorities. Lets expand on the technologies that are already deployed, for example, data com is in the field today at 55 powers in the country well be delivering en Route Services<\/a> by 2019. Next gen is deployed and Getting Better<\/a> all the time. Lets tackle specific weaknesses that we have in the system like the way we finance faa and fto and the way we give them mechanisms for doing longterm Capital Investment<\/a> and planning. There are a number of ways private Public Partnerships<\/a> could put these guys in better buildings in the next five to seven years we can have them all in better buildings. I encourage us to take a different path to think about options that are fixing the fixables, thank you for the time today. I look forward to questions. Thank you very much, mr. Brown. Mr. Pool, you may proceed. Thank you, mr. Chairman. As some of you know, ive been researching the subject for close to four decades. Most recently ive been part of two working groups, one for the eno center. Both groups have concluded that we have major fundamental funding and structural problems and corporatization of the ato is the best conclusion. Thats the conclusion that the Advisory Counsel<\/a> reached unanimously in the 2014 report that called for corporatizing the ato. The focus this morning is on the issue of governance, they recommended a Nonprofit Organization<\/a> in which customers and other stake holders govern. This is basically user call up, except for the edition can you pull the mic closer. That thing moves, i think. Pull the whole box towards you. All right. Please, thank you. The structure propose is a user coop with the addition of other stake holders. The governors model that was proposed in last years bill as recommended by the r. T. And eno was intended to be adaptation of nonprofit stake holder production. But the boards from last year has been described misleadingly as given control over the air space to the major airlines. This, of course, has led to serious concerns from general aviation groups, people in small towns and small airports and rural legislatures. But in a nonprofit user coop, there are no shareholders. Every board member has equal vote with any others so even if there were airlines on it, which there wont be. They would only have a small minority of the members and they could easily be out voted by other members, all votes are equal, its not Like Corporation<\/a> where you have preferred shareholders. This model is consistent with International Aviation<\/a> law and with global best practices. And the proposal did not originate with the airlines. I would like to set the record state, the business Round Table Group<\/a> began in 20111. Made an initial presentation in the spring of 2012. We got a pretty cool, if not negative reception at that point. No one wanted to restart the battles that had raged over this issue in previous decades. Everything changed in the spring of 2013, thanks to the sequester. Controller furloughs, closed faa academy, threaten closure of slt contra 189 contractors got everybodys attention. They all requested new conversation with the brt working group. In may 2013, all three groups in the Conference Room<\/a> at business round table agreed that a an air Traffic Control<\/a> corporation taking converting the ato into Corporation Self<\/a> funded and out of the federal budget was the best approach. After this happen, that fall, briefed chairman on the proposal. This is not coming from the airlines. Brt group included a former faa administrator. Former chief operating officer of the ato. Two former senior officials and several consultants. Our governing model, as i said, was patterned, their stake holder board represents airlines, general aviation, unions and the government, plus four other private citizens selected by the stake holder members, no board member can hold any paid position in an aviation organization. Its a system that really works. And of their four airlines 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<\/a> serving the far north. The u. S. Is larger and has a much larger general Aviation Community<\/a>. Jaa should have more than one seed. Since theyre so vital, airports definitely are a stake holder that should be electing a board seed, as well. I think in terms of the Regional Airline<\/a>s and Cargo Airlines<\/a> should be defined as stake holders in addition to, perhaps, two seats from the major carriers. My written testimony gives one example of proposed 15 member stake holder board. Let me close with concerns of small airports. Having airports and Regional Airline<\/a>s as stake holder is part of the answer. Congress needs to deal with the fears about loss of control powers and small airports and worries that the somehow service might be dropped in rural areas. Congress could specify that any airport meeting a reasonable benefit cost test should be assured of getting Tower Services<\/a>, which is the standard today. Second, faa would be in charge of aviation safety and no changes in procedure or equipment could happen, but they might be proposed by the corporation, would have to pass muster with the faa could not be done unilateral. Third, ato inadequate funding today gives airports the short end of the stuck. There has been a moratorium on contract tower since 2014. Small airports are losing today in what they need because of faas on going budget problems. Self funded corporation would mean improvements from small airports thanks to prodiktble user fee revenues and financed Capital Improvement<\/a>. Secondly, corporation would likely implement Remote Tower Technology<\/a> that would increase the benefits from having a tower because of better surveillance, reduce the cost, the benefit cost ratio would be higher, this would be a boom for small airports, not detriment. That concludes my testimony and ill be happy to deal with questions. Thank you, very much. Morning chairman and members of the committee, thank you for the opportunity to testify. Microphone. Most diverse air space system in the world. Contributes 1. 5 trillion to Gross Domestic Product<\/a> and provides over 12 million jobs. Its unique, unequal and unrivalled by any country. This is due in large part to the impeccable work the men and women that i represent do every 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<\/a> Aviation System<\/a> is considered the gold. Unstable, unpredictable funding and status quo threatens it. We need a stable, reliable, predictable funding stream to operate the Current System<\/a> and rely for growth in United States<\/a> Aviation System<\/a>. Although theyre calling for change. We cannot support any proposal without fully reviewing all its details. Thats not only its not only that we oppose the status quo, which is very much broken. We also oppose any system that would put apc in a forprofit model. In order for them to consider support of any proposal must meet our four Core Principles<\/a> of reform. First, any new system must keep the safety and efficiency of the National Air Space<\/a> and 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<\/a> services, growth, new users, staffing, hiring, training, longterm modernization projects. Also this reform must provide a Stable Funding<\/a> stream through transition period. Fourth, any reform must maintain dynamic, diverse, Aviation System<\/a> that continues to provide services to all segments of the Aviation Community<\/a> 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<\/a> general rural, americas economy, success is tied to access the National Air Space<\/a> system. Last year, naka support the air act of 2016. While we do not believe there is only one solution to the problem, we will be all proposals using the same standard. For stable predictable as to the appropriateness have knocked on their job. They stem from black, weve been experiencing for all stop and go funding, and our current staffing shortage. And certified controllers approximately 3,000. And implementation of next gen partnering and important modernization 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 fivemonth while were elated, theyre no way to plan for the future and aviation. Congress needs to pass an fa reauthorization bill that provides stable, reliable, predictable funding, congress should exempt the faa employees from indiscriminate. 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<\/a> system. Thank you. With that, you may proceed. Thank you. Chairman, Ranking Member<\/a>, members of the committee. I appreciate being here this morning. I am a policy wonk and im 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 following the scandal of gsa. Previously i spent eight years on president clintons White House Economic Team<\/a> where during his second term i was the point person aviation, policy focus i maintained after leaving the white house first at berkings and then comiccon sul tant. The first point i want economic consultant. The first point i want to make, air Traffic Control<\/a> system is not a radical idea, nor is it a republican idea. The Clinton Administration<\/a> tried unsuccessfully to do this in 1995 with its proposal to create a self supporting Government Corporation<\/a> usats, which would be run by ceo and a board and regulated at arms length by the faa. At the time, only, four countries had corporatized their air Traffic Control<\/a> 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<\/a> 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 wellestablished rules, like running an airline or manufacturing a boeing 787, air Traffic Control<\/a> 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<\/a> system, the federal government is poorly suited to running it. The consensus of countless Blue Ribbon Commission<\/a>s and expert reports is that air Traffic Management<\/a> is a 24 7, Technology Intensive<\/a> service, business, trapped in a Regulatory Agency<\/a> 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 didnt have the government operate that. The final rationale, the current arrangement is flawed on safety grounds. This is important. Echoing Safety Experts<\/a> worldwide, the International Aviation<\/a> organization has long called for the air Traffic Control<\/a> regulator to be independent of the operation it regulates in order to avoid conflicts of interest. Were one of the only industrial nations in which the same agency both regulates and operates the air Traffic Control<\/a> system. In sum, 22 years after usats was dead on arrival, when it get to congress, the International Aviation<\/a> community treats air Traffic Control<\/a> as a commercial, Service Business<\/a> and most countries have spun it off as an 0 ton mouse, self supporting entity and to provide the necessary separation from the safety regulator. The u. S. Have gone from failed innervater to laggered. The current proposal, the air act, differs from usats in one important way. It was a Government Corporation<\/a>. 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 youve heard and that well discuss further this morning. Had they existed in 1995, i strongly suspect that it, rather than new zealands Government Corporation<\/a>, the best model at the time, would have been the prototype for the Clinton Administration<\/a> proposal. In closing, let me say that i have listened long and hard to the arguments made by opponents of the chairmans proposal, particularly democrats. I look forward to discussing these criticisms this morning. But i think it is a mistake to view this proposal as eat logical as one committee characterized 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 objectives. And sometimes i can tell you by privatized and the defense implemented. Thank you, very much. The questions five minutes if we need to take to a second round, ill be more than happy indulge. First question i have, mr. Brown, i really appreciate you being here. Its the second time youve testified for this committee and you and i sat down on a couple of caoccasions to talk about yo concerns generally. And of all the witnesses i feel like im a kinderred spirit with you. I know what you do every day, getting up and making sure youre meeting the bills and making sure your operations are functioning in a world that youve 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 15year period. While at the same time the cost of Service Increasing<\/a> and all the while youre losing customers. Would that be something that you would tolerate as a business owner. I think youre absolutely on the mark. When you look at the business, how can you make it stronger. The weaknesses and can you change them. And so i would say, on that Business Model<\/a> when youre in the business world, that works. But when youre dealing with the federal government, that weakness is part, theres not a way we can change this. Weve tried for 30 years to change it and the only way to do is, i believe. Is separation. I also i dont want to speak for mr. Defazio he believes separation looks different than i do. I appreciate you being here and laying out. The thing were really up against here is trying to change something thats not been able to be changed for 35 years. Thats 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. Renaldi, 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 whats 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 were 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<\/a> is that San Francisco<\/a>. Thats San Francisco<\/a> right there, on a foggy day, which happens a lot in San Francisco<\/a>. And ground stops the controller is moving paper arou around. Thats las vegas right there. These are both brand new faa facilities. Theyre the most modern. Well, theyre the newest facilities. They were actually suppose to have an electronic fliegght str program in them. Because of reduced funding, we were never able to make it on time. Were using paper now, which is still very safe. Were losing some efficiencies. But we would like to get to an electronic flight strip program as they use around the world. As you can see the controller has a good line of site. All the information is in front of him. And he has a good line of sight. Its 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 hethrow. Extremely complex. What system are they using. Theyre using the canada flight strip program. Thank you very much. I yield to mr. Defazio. Mr. Brown, i dont think you quite got a chance to respond mr. Shulsters question, would you like to expand on your answer there. Yes, i would. The way that ive been thinking about this, as a businessman, i think that National Air Space<\/a> is a fundamental economic driver in our country. Our country is more aviation sen tri cent dc ric than any other place in the world. 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 exist uniquely in country. Were the market leader. We have the best aif i dont know avionics in the world. I think you have to put them all in the bucket thats yes or no, in my opinion. Im sure youre familiar with the 2002 collision between dhl and russian passenger aircraft. Under the ages of sky dive, the swiss Government Corporation<\/a>, what caused that. That was caused between lack of communication and between ansp. Wasnt there one person on duty who had multiple tasks. It was an issue with the controls also. And but they have kept safety oversight separate, is that correct . When is the last time weve had an error due to error. Very long time and i dont like to talk about it. You must have said 20 times, funding, stability, sequestration, furloughs, talking about the new much more sofisticated that could integrate other aspects and have much more capability than the much more static model used by nav canada that was offered to decade ago here and they didnt think made it up with all the new capabilities of next gen. I think you said there, you werent saying i dont think it will work. You said were worried about delays an reduced funding, did you not. Thats correct. I have no doubt well be able to develop our own system. It really comes from where working clab ra tiffly with the manufacture with the faa it comes from a lack of funding or funding on certainty as we move forward. Will you agree thats 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 all of those, would that solve many of the concerns . Yes, i believe we would not look at a for profit model, we would look at anything thats proposed and hold our 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, whos responsible. Who would be responsible for the atc failed in this country. Thats one of my risk calculus when i think about this problem. The day they moved into the private sector, weve moved the essence of the system and the people with it. Theres no way we can spend one day with that system, and so all the financial risk regardless of where that monopoly. Too big to fail is my concerned. I think ive 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<\/a> to come up with four capabilities that could provide nearterm benefits giving the constrained federal budget that we work with. These priorities were suppose to be the lowhanging fruit, the things the faa could get done and approve to the industry that they can deliver the benefits. I think im 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. Youre right. The four priorities have been the focus for effort for both industry and faa. Perhaps, unbeknownst at the time, were certainly not fully appreciated at the time there were significant risk to each of them whether were talking about pbn, or multiple runway operations, each of those presented its own problems in bringing them to fruition. I would say right now were at the point where the time frame of 2019, perhaps, when data com and the on 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, whats your assessment if we dont make this . I mean does this ripple out for how long or can you talk about that a little bit. Sure. We dont know. Yeah, faa has had problems. Its no secret making completion deadlines before honoring representations to congress and programs. Faa together with the nac have a working group thats bird dogging it as closely as they possibly can. The problems that are outlined 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 dont know. First you have to employ the technology which has been the faa purpose. But the User Community<\/a> has to equip and in many cases change equipment and thats exactly where we are right now and thats why theres an Inflection Point<\/a> coming up. We have ads fully employed but only percentage of the aircraft flying enjoy the benefits because theyre not adsb compliant. Where we are right now the faa has done a lot of heavy lifting and the users have to equip. In the next several years thats why its going to flow into the system. Id 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, its the congress and its 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. We had to have an Aviation Industry<\/a>. Im not willing to sit here and say this agency is going to fall, i dont believe it is. Most of the money can be provided by the users. If you look at the modern that weve 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. Renaldi said, i had no intent. I would impose going for profit organization. I think that, again, using this as too big to fail, we face that in 2001. There are models out there that we can look at and learn from to make sure theyre set up in a proper form. The most important thing, i keep hearing agreement over and over again, its the bureaucracy and omb and congress, the starts and stops will cause these problems. I recognize mr. Larson. Thank you for the written statement of pass and to be entered into the record. Mr. Chairman. You announced it. Thank you very much. So for mr. Renaldi, youre a member of the Advisory Counsel<\/a>; 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 macs recommendation or how should we read that . I do. As i said, there are many ways to fix this problem. We dont think theres 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<\/a> system is safe, but its broken. I fly 2,003 qualified air miles one way on United Airlines<\/a> and back again for my commute. Can this system be safe and broken or should i drive . It is safe, of course. And thats certainly it seems to me its fundamentalal argument going on here, we have to go to privatization because the system is broken that actually controls the air space. If its broken, i dont know how it could be safe and how so would support the privatization argument, however, if it cant be safe and broken, it would seem to under mine the whole argument for privatization. I could characterize the system it currently safe. No commercial aviation fatal accidents. As far as broken, i would take issue with that karcharacteriz n characterization. I would say modernization has been lagging far behind where it should be, its not broken. Well, thats good to hear. Ill cancel my car rental. Mr. Brown, i just want to explore a separate issue with you. Its tied, because were trying to get an authorization bill done and i think largely its 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 air Traffic Control<\/a> system. Can you talk a little bit about why certification is important and why some of these other issues are important that we move forward on but we ourselves are lagging on getting them done because we continue to debate over and over on privatization. I will be happy to the that. I will say congress has been incredibly supportive of facilitating improved ways to market. We have had friends come to our aid to make our United States<\/a> Aviation Industry<\/a> as strong as possible and thats been matched with good appreciations support as well. The thing is we all tend to agree there are opportunities and we tend to line up behind them. Whats troubling is when they get stopped in mid stride because they cant get into the regulatory basis. And what that means to me is that we are market leaders in all of our product categories in aviation and when we cant go to market in the ways these reforms allow us to do, then somebody else is gaining on our heels. At the end of the day i always 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 forms we all agree to. I thought that would be the answer. It just is that this main point is were 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 its being those are being held bullpen i this one debate and it seems to me we can move forward on the things we agree on moving forward. So i yield back. Thank you. 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 as long as alaska is taken care of and their need for general aviation and not being run by the Larger Airlines<\/a> i will be interested in what were doing. And it means a lot to me. Some of you havent been there. I think you did fly on alaska, did you not . For two years . I spent a few weeks up there flying around the back country. Did you have any trouble with air Traffic Control<\/a>lers . I did not. I think they are some of the best. Did canada system file for bankruptcy . Not that im aware, sir. Are you sure . Im 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 Control<\/a>lers. But the faa itself, the management is not in good shape. I dont know how you change that. I think maybe we ought to spend our time studying the regulations that they pass. I dont know if the last time i checked a book about that big of regulations why the faa doesnt 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 its perfectly clear, aircraft can come in but cannot land because they dont have someone on the ground to tell them what the waerds is. Thats a regulation. So im interested in seeing what we can do about revamping the whole faa, but not the air Traffic Control<\/a>ler so much but the system they have is badly manage. Appreciate the gentleman saying that. And thats what were after and the genots, 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. Thats 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. Thats what you do with a failed system. You take it out and say youre going to the Something Different<\/a> 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. Part of my passion is to get the certification right. We are the leaders in the world and invented aviation but when you cant bo to market with your products because of the certification process, the competition is nipping at your heels. If we dont 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 im putting forward. When you look at what the Miter Corporation<\/a> 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<\/a> 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. Thats what im talking about here. If you separate them, you make the faa focus on their core mission and that safety and that certification, now theyre running this Big Organization<\/a> and doing a lousy job of it. When i point my finger at the faa there are Three Fingers<\/a> pointing bag. The congress, the 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 im 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<\/a> that have been made in the United States<\/a> have been made by democrats and theyre not calling for structural reform as we just have tone with the Affordable Health<\/a> 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<\/a>. In my own jurisdiction and i represent the people of the nations capital. But so much so across the nation that we formed quiet skies coalition, a Bipartisan Coalition<\/a> 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, ive been able to have the faa come to see me. Ive 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 . Mr. Reason, mr. Poole is this. 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 corporations 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. This organization is not going to control the air space. Its going to operate in the air space with the faa control over it. So they have to go through this federal process by need the faa sets up a review process and approvings significant air space changes. Theyre 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 willynilly, 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 ive never heard of anything so bureaucratic in my life. In fact i cant 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. Ive never heard of efficiency being and by the way i hope my time wasnt taken because the chairman had an intervention which i think was appropriate. I dont understand how you could bifurcate the system. Let me take an element on the table by asking mr. Rinaldi, have you received any assurances from any proponents of this bill concerning collective bargaining, pensions, other workers rights, because otherwise i see a fresh controversy on top of the many controversies this bill has already given us . Thank you for the question, maam. At this time there is no bill in front of us. Theres nothing i can compare it to. In the 2016 air act there was a Strong Language<\/a> 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. Thats bullet number two. I gave you an extra 30 seconds. Thats okay. I yield back. And with that, mr. Barletta fwlch. Mr. Rinaldi you are one of the foremost experts on air Traffic Safety<\/a> in the world. Would you support a proposal that jeopardized safety . Absolutely not. Thats our core principle. Would you support a proposal that jeopardized National Security<\/a> . Absolutely not. Would you support a proposal that weak pd our ability to modernize the Aviation System<\/a>. I would not. Did you support the air act last year . I did. 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 thats correct, congressman. They have been paid for by aviation excise taxes over the years. And all were talking were not talking about selling the system or giving it away were talking about transforming it into a better organizational model. That would be insulated from the tremendous vails 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<\/a> 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. There was some payment for it. I can certainly see the argument that bob makes. I think if that were the only debate, i think it would be making Real Progress<\/a> if we could agree on everything except what the dollar price on what the assets is. Thank you. Thank you, mr. Chairman. Thank you mr. Barletta. Thank you, mr. Chairman. I take the train home every weekend. I dont expect you to say anything. I have my issue is i have problems where big problems can you can you speak more directly into the mike . I didnt quite hear you. Like youre going the kiss it. I have a problem when we are compared to canada. Its the argument with the health bill. They have a great Health System<\/a> and we dont. Canada has 40 Million People<\/a> and we have 350 Million People<\/a>. Its a lot easier to set up a Health System<\/a> for a country with 40 Million People<\/a>. I have some fears regarding this. They have 40 towers. We have 500 towers. Obviously can you assure me that if we go this route, that were not too large to fail . I also have a concern regarding the airlines. I think the airlines are getting so big that its very difficult to manage. And i raised that issue the other day when we had a hearing here. Can you assure me that my fears are wrong . That this big effort i am wrong about it . Ill start with commissioner or mr. Brown. I love flying in canada. And i love the country of canada. I dont dislike the country of canada. Exactly. But i dont think the comparison of our National Air Space<\/a> and Management System<\/a> to canada is anything other than an exercise in gleaning some observations but its not proper to directly compare. I mean, for sure in our system were 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. Its 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 im concerned the system we have been living in as done a masterful job inned 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 nextgen initiatives. I know it and fly it. Its not a theory. Mr. Poole . First of all, canadas system is the second largest in the world in terms of Flight Operations<\/a>. Its 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<\/a> 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 brandnew and got investment from their two main owners, the British Government<\/a> and the airline group. Navcanada 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<\/a> organizations for the other four countries and we were told that they consider part of their Borrowing Authority<\/a> to be leverageable or to be recognized by private lenders because ultimately, should something drastic go wrong, the government would step in behind them. Im not representing that that would be the case here. Thats your policy call to make. Im simply relaying what officials for other air Traffic Control<\/a> 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<\/a> system here in the United States<\/a>. Because there are people that would say, well, were ten times the size of that in canada. And so as you look at that larger size, lets 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. Were 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<\/a> said continually fail to manage programs properly. They take far longer than they were scheduled. Navcanada 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<\/a>. Let me make sure i understand that. Theyre improving their system for half of the cost . Yes, sir. Demonstrated fact. Would you agree with that . I saw you shaking your head yes. Dont ever play poker by the way, but go ahead. Wouldnt dream of it. No, and if i was shaking my head, it wasnt necessarily to agree or to assent. My office quite frankly hasnt examined that part of nav canadas operations. We dont know the degree to which their Capital Improvement<\/a> program might compare against ours scaled up. When will nextgen be completed . 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<\/a>s office say . Faas 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 bestcase scenario we continue to exceed an unlimited budget. We dont know what the total cost might be, nor do we know what the completion date will be. Its 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, im 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 . Im suggesting we have a system thats thats not what i asked. A great answer to a question i didnt ask. Are you suggesting we need more federal control . Im suggesting our control is proper. Lets talk about general certification, something you probably know and its 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 dont want it to be more stream lined. Thats not the same as reducing control. It is about regulation. At some point you have to transfer that. Let me tell you where im concerned. Weve got nextgen 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 nextgen that are pilfered over to maintain legacy Computer Systems<\/a> you should the faa. I have under Good Authority<\/a> that were doing that. As were 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 were 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<\/a> is. I get course corrected and its efficient that way. Yeah. What if we had stake holders who are making the same decisions youre making with parameters out there. Wouldnt 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<\/a> and product the chairman has said that cant happen. We have an air space that is available to everyone. Gentlemans time has expired. Mr. Brown, you can finish. The thing about this enterprise, one of the things im concerned with is its 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 its 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 im probably like most of americans and what we really want out of the air Traffic Control<\/a> 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 havent looked at all the others, sir but i would say its definitely safe. We are in the golden era of safety right now. Were in the golden era and mr. Rinaldi you mention wed are the Gold Standard<\/a> of air Traffic Control<\/a> 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 its joyful to fly under that system. I agree. And most pilots will tell you its one of the most amazing experiences you can have and its 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<\/a> system but were paying a price. Im going the get to that in a second. Were safe and weve 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 aint broke, dont 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 dont lead you to the conclusion that the air Traffic Control<\/a> system should be privatized. Correct . Not respectfully i dont believe that is my call to make. The congression and the administration are the policymakers, the decision makers. Im 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<\/a> system over to the free markets. Your website for the Reason Foundation<\/a> states that the Reason Foundation<\/a> is committed to advancing the values of individual freedom and choice, limited government and marketfriendly policies. So im 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<\/a> system can be performed can be run more effectively by a nongovernmental entity. And you also say that government is poorly suited to run the air Traffic Control<\/a> system. Yes. Despite the comments that weve heard from mr. Scofield and mr. Brown and mr. Rinaldi and the clear fact that we havent 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 dont have it now . It would keep we dont have the safest system now . If you wanted to have perfect safety isnt it a fact that we have the safest air Traffic Control<\/a> system in the world right now . We have a system that is operated and regulated by the same entity. Is it a good one . Isnt it a good one, though . The gentlemans 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<\/a> 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. Thats not the system the agreement was gentlemans time is expired. Thank you for answering the question. I recognize mr. Woodall for five minutes. Ill pick up where he left off with ms. Robin. I appreciate your written testimony because i think so often as perhaps your exasperation shows speak into the mike. We are after you have given that advice to every member of the panel you would have thought i would have internalized i cant pull the chair closer. I want you to helpny wi me w the language. Its mr. Webbers big head i cant get past. Can i ask thank you. Its just between me and ms. Robin here that were work on. Do i get equal time . Its a physical manifestation of your head. Its not an ego issue. Its a physical. Help me with the language. Ive been to see the nav canada operation and it does seem like t the successes theyve had we could have. Its not the chairmans idea or the president s idea this is something that policy wonks have been talking about for decades. Help me create this conversation in a language i sit on the Budget Committee<\/a> an i hear mr. Deas if y defazio say if we could fund the system better and get congress to work better, yeah, those are the issues we have been working on for three or four decades and we only finished on time four times in 40 years. Help me talk about this in a nonpartisan way. The faa does two things. It regulates all aspects of aviation and that is an inherently governmental activity. You cannot write a contract that makes it possible for the private sector to carry that out. It requires judgment calls that the private sector cant make. It also operates the air Traffic Control<\/a> system. There is nothing government that is not inherently governmental. That is operational. That is no different than when gsa goes to the private sector and has them build a building. Its 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 dont spin off the nongovernmental part. Thats illogical to me. Thats exactly what you want to do. Spin off the nongovernmental parts so that the government can focus on the regulatory function. Lets talk about that for a moment. I agree with mr. Brown, the american taxpayer and flying public has invested an amazing amount of time and treasure into building what is the busiest air space on the planet. So when we talk about changing that from a governmental function to a well i dont know anyone who talks about a private function but cooperative function, tell me what that looks like. Well so we in the Clinton Administration<\/a> proposed moving it to a Government Corporation<\/a>. Because that was the only model that existed. And its not and the problem with that model. It works very well in many parts of the world. But in this country, governmental Government Corporation<\/a>s are politicized. And they cannot function as businesses. And so nav canada has come up with a model that takes it out of government altogether and that is appropriate. It works in theory and more importantly, its worked in practice beautifully. The business folks that i talk with back home often prefer the devil they know to the devil they dont know. And i can only manual the strain it puts a private operator under to say were going to yank the pendulum back and forth. But it was the conclusion of the Clinton Administration<\/a> that the best way to avoid the political winds in this space was this spin off proposal . Yes, absolutely. This was something proposed early on. It came out of a Blue Ribbon Commission<\/a> that has looked at this issue and we poroposed it n 1995. I think mr. Brown was right when he talked about all of the amazing economic developments and successes that have been the product of our second to none air space system. I hope that we can follow this pattern to take that out and move this on. You are right. As i said earlier theres no way i want to mess up, screw up the Economic Impact<\/a> the Aviation Industry<\/a> across the board. With that, yield to mr. Carson for five minutes. Thank you, chairman. It seems the faa is in the process of implementing much of the nextgen infrastructure you are calling for. We have been told that 2020 deadlines will be met. As a pilot can you tell us about the Nextgen Technology<\/a> that is already online and how you are using it and do you believe we need to recognize the systems . Great question, i was just thinking about this a month or so ago. I took off from ohio population 20,000 heading to albany, georgia. With a manufacturer that is a Global Leader<\/a> and big exporter. I flew point to point because of gps navigation. I had en route weather around the way. I had precision to the numbers. These two towns in the grand scheme of our National Air Space<\/a> have been treated to their resources to build two Global Leader<\/a>s in their space and have the Airport Infrastructure<\/a> to thrive. I look at that as an example of how government in this case is working for economy because without that kind of infrastructure and the technology thats driving the flying to and from those places i dont think those businesses would be located in those towns and i think thats a victory for the people. Thank you, sir. Lastly, just a general question. Im concerned that as introduced this new panel does not include one of the largest users of u. S. Air space, the d. O. D. I want to hear how this will impact the close coordination that currently takes place and what impact it will be to National Security<\/a>. Ill answer that. And let me start by saying although i spent three years in the pentagon that air Traffic Control<\/a> is not part of my portfolio. But i worked very closely with the people in the air force who have been a liaison with the faa. I worked on issues of interference of Wind Turbines<\/a> and longrange radar. The department of defense has huge equities in the National Air Space<\/a> system. They manage 15 of the National Air Space<\/a> and have 15,000 aircraft. They depend heavily as a user on the air Traffic Control<\/a> system. And they support the spinoff of the air Traffic Control<\/a> system and there is a letter from secretary mattis to senator mccain stating that. It has to be done carefully so as to protect the arguments tra currently in place. This is not inconsistent with National Security<\/a>. Yes, sir. This is an issue that has come up in every one of the countries that has privatized. Australia has a joint project between the Australian Military<\/a> and the air service to modernize the software. That is being developed and used jointly, side by side civilian and military controllers in the uk working together. This is pretty much a routine function of this military and there is an annual conference on military air space that was co sponsored by the conference each year this is an issue as dorothy said that needs to be handled carefully to ensure all the procedures are incorporated. I thank the gentleman and appreciate the gentlemans question. I want to offer a letter from secretary of defense mattis. It is indicated his support for moving the service out of the faa. In a letter he wrote to senator mccain he offered this. With that. I thank the chairman for holding this hearing and the witnesses for their system. Starting with you, mr. Brown, knowing youre a private pilot and members of gamma and active in the aopa and so on and so forth and that you fly 400 hours a year which is four times the general aviation pilot you know the system. Do you believe that general aviation pilots have a right to access airports of any size of any not only do i believe that, i experience that on a daily basis. Talk into the microphone, please . Thank you. Should they be denied access to any airport . No. Not in principle. Can you talk about the dangerous that would pose to the aviation ecosystem that were all a part of if that were to happen . That is an existential thret to the system. And every pilot pays into the system, right . Yes. How. Through the fuel tax. And its more than adequate . Yes, and its not bureaucratic and theres no bureaucracy associated with it. Its not that we want to fly into International Airports<\/a> ever day but we have a right to the that because we paid into the system and sometimes your customers you need to access an airport like that. Correct. And so what are the dangers of a board made up of all members or some members of the ecosystem where the Board Governance<\/a> suggest yos could have control of a board with as little as 30 seats what danger does that propose to general aviation then . In terms of access . One concern i have is that on such a board you have centers of gravity that overwhelm minority voices of any sort and preclude the arrivals of new assets. Absolutely. Which makes the point that we have its good to have a Disinterested Party<\/a> in this. Or a referee or umpire to decide tuesd these issues like we have in the faa. If the members of this witness table who propose who agree with the chairmans proposal here would really want privatization if they would oppose a plan that would does that. Because right now, the proposal isnt the air act. Who knows what were going to see here when the language is produced doesnt do that. I used to be the secretary of state of indiana. We received 3. 8 billion dollars when we leased the indiana toll road. But we didnt do is give a monopoly away. We didnt take the toll road and give it to an Interested Party<\/a> or a board made up of interested parties. We put it out for bid. So if we really want to privatize the proposal, why didnt we propose Something Like<\/a> that. We department give the road to the truckers and say im sure you will take care of the cars too and wont limit access to the on and off ramps especially when you want to get steel to and from a mill in northwest indiana. Because it wouldnt work. It doesnt make sense just like this board made up of interested stake holders. Mr. Rinaldi, if i can paraphrase your testimony, it seem like a lot of it was focused on funding and sequester and Government Shutdown<\/a> and the fits and starts that go along with that and i agree with you. You also heard Ranking Member<\/a> defazio, 90 of faa funding is on its own. Its not from the general fund. There is a suggestion that one way to solve this and the problems you bring up in your testimony is to take it off the budget. Im not here to necessarily say thats the right answer or that i support it but isnt that an answer . There is certainly more than one answer to this problem. Absolutely. We could take care of all that simply by taking this off budget. 97 of the funding isnt coming from the general fund anyway. Yes. Thats a good answer. Chairman, my time has expired. I thank the gentleman. Where am i . Ms. Frankel. Ill just start off being a little snarky. You know, we put a businessman in charge of the country and all i can say is omg about that. And every agency with every agency would like to be exempted from sequestration and i have a solution for that which is to privatize those of us who are not doing our job. All right, so, enough for the humor. Listen, i happen i am not a mean person but in the issue of transparency, i want to thank you all and no it to impugn anyones integrity. But we have a list of organizations or people who are for the privatization and who are againsted. Some airlines are for, some are against. Consumer groups for and against. Can you tell me here, do any of you consult with any of these and get paid to consult with any organizations or discussing employment with them . Those of you in the Public Sector<\/a> included . Okay. Just wave your hand if its no. No. No. Okay, all right. Thanks. So im trying to simplify which is probably not a smart thing to do. But im trying to understand, its sounds to me there are a number of reasons those of you who are would support a change in the system one has to do with the consistency in the funding. Is that correct . Thats the i know the air Traffic Control<\/a>lers did really emphasize that. Then i think the other another issue was trying to move more efficiently towards a more modern safety technology. Is that one of them . And then i think one of the issues was not having having the regulators separated from the operators. Is there another issue there that im missing . There is another big issue. And that is the Organizational Culture<\/a> of faa, which gets into the procurement problems, chronically overbudget, late delivery of things. Not getting productivity out of new technology in the way that it should be done. Okay. Thats a big problem. Thank you. I dont know why that skipped my mind but thats the one i had my next question about. Which is, what kinds of things do you think this new organization could do that the government is not able to do . I mean, what will you be skipping and would there be what would be the potential unintended consequences . I would like those who are for this movement to give us your opinion on that. Ill start. I mean, one thing would be to be able to hire and pay the best talent from private industry as Program Managers<\/a> and as expert engineers and software people. There are good people in the faa but they are hamstrung in a system that has a lot of basically career lifers who are happy to be in a process thats very time consuming and that has numerous people who can say no at many points along the way, drags out the process and if you have people who are not performing well, its very difficult to get rid of Civil Servants<\/a>. Does anyone want to defend the honor of the Civil Servants<\/a> . I will be happy to. Go ahead. As i said in my Opening Statement<\/a> we have the best aviation professionals in the world working for the faa. Aside from the funding stream, one of the things we would also like to see fixed is something that Ranking Member<\/a> defazio also brings up is the procurement requirement process and the multiagency oversight which puts us into a bureaucratic laid enprocess of requirements and procurement and delays our process of implementing new technology. I would guess that that bureaucracy was probably there in part because of abuses and to try to avoid that. Every time we have a hearing theres more oversight that goes into it so it self fulfills itself of something that is not working right within government. And i have 15 seconds. The contract towers, what happens to them . Well, we represent 94 of those towers and the members that work there. Its important to keep service open to all facilities across the country, all airports and to continue to have a very diverse system whether it is a big city or rural america. Thank you. Mr. Chair, i yield back. I thank you. Im not familiar with that new tech the new words on the computers, omg, does that mean, oh, man, hes good . With that i yield to mr. Westerman. Thank you, mr. Chairman and thank you for your leadership on this important issue. Ive had the opportunity to visit some control towers and the first thing id like to say is that we have some amazing men and women working in our Traffic Control<\/a> towers doing an excellent job and we have an air Traffic Control<\/a> system that works. The proof is in the puddle. You can see it working every day. I am new to the committee but i have a unique background having been a professional engineer for 25 years, much of my work involved analyzing processes and technologies in helping my clients stay on the setticuttin edge. Ive seen organizations that embraced but failed to implement technology and they usually wept out of business. To be successful in business you are to embrace new technology and you have to implement it properly. Now atc is not going to go out of business regardless of the technology it embraces or implements because it is too critical to fail. And its been said in this meeting today if it aint broke, dont fix it. However, i believe this is isnt a question of a broken atc, an atc that doesnt work or an atc that refuses to embrace new technology this is a question of how to operate the safest and most efficient system in the world so our Airline Passengers<\/a> and general aviators get the maximum benefits. Im studying our existing system and visiting installations and learning as much as i can about the latest technology. I can confidently say even though Technology May<\/a> be embraced it is not been as successfully implemented as well in the u. S. As to other systems. Im from a rural district. I have one contract manned tower in my district. There is a lot of general aviation and air space manufacturing in my district. Mr. Brown mentioned airport like these in his testimony. I visited one in arkansas that has a lot of Aerospace Manufacturing<\/a> and the radar cant see it. They had a radio tower that was blown down in a tornado a few years ago and it hasnt been fixed. If you are trying to pull out you have to call up the air Traffic Control<\/a> on your cell phone and try to get clearance to take off. But its they still found a way to make it work. But the last thing i want heard is the rural airports are to Service Rural<\/a> america, i want to see it improved. And mr. Rinaldi, some of the opponents of reform claim that new Service Provider<\/a>s would be able to deny access to Rural Communities<\/a> and small general aviation airports. How do you respond to those claims . Thank you for the question. Air Traffic Control<\/a>lers have a very simple philosophy when it comes to providing service to all users. Its first come, first served. When a general aviation aircraft enters into our air space or if its a commercial airline its to expedite their flight as safely as possible. First i want to say i appreciate your testimony and in a number of hearings that have been held by the aviation subcommittee we have heard inflammatory rhetoric intended to scare small communities about the future of their commercial air service. I have two eas airports, one in my hometown, two in my district and numerous smaller ones. I have a vested interest in making sure this is not the case. Do you think a more innovative provider will provide more options to more communities such as the use of remote towers. I do. Yes. And i think thats critical. I dont understand this assumption that some are making that this entity, a corporatized entity would be a threat to small communities and rural airports. Air Traffic Control<\/a> is a network. The nature of networks is that the bigger they are, the lower the cost is. Its relatively inexpensive to add a node to their airport particularly if you can use a Technology Like<\/a> remote towers. This has been an argument the small communities argument has been made. It was made in opposition to Airline Deregulation<\/a> and in trucking deregulation. It is a part of the playbook of people who oppose change. All of those changes i would argue have been very, very good for our economy. Small communities, i do not see any reason they would be hurt by this. Its not in the airlines interest or any or certainly not in the controllers interest. Its not in governments interest. It is no t in the stake holders breast brea interest to ahave that happen. I have talked with the chairman and he has always continued to ask me to have an open mind on this and i have. Its going to be very important to see the text of the bill to have a better understanding of what exactly is in there. Ms. Norton had spoke earlier about concerns about noise around airports. And thats a major concern that i have. I have Midway Airport<\/a> in my district ohare not too far away. And as the patterns flying in and out of the airports have changed over the years, there have been a lot of constituents of mine who have 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 these issues may be. My concern, i have a great concern moving ahead what the rules are going to be in the future if we did have a atc moved under a corporation, the chairman says that neepa would still apply but i have concerns about what exactly is going to happen if the faa is the Corporation Going<\/a> to propose th and then the faa has to have to then have their say on that and improve them or not approve them and thats a concern that i have. Mr. Rinaldi, i dont 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 certification process would have stayed within the faa, so it would it would still be the ultimately the faa overseeing noise complaints and new procedures. Would they have the authority, then would they just be a back and forth with the corporation over it . The corporation proposed and the faa then have to approve or how would that work . Hypothetically, its hard to answer that question right now. You about but i will tell you while were moving forward with metroplex and pbn, the faa is going out and doing joint Community Meetings<\/a> along with the users and the stakeholders to explain what we are trying to accomplish in making the skies greener, safer, with less noise. But keep in mind as the Technology Makes<\/a> it to be more precise on approaches, there are certainly winners and losers when it comes to noise, thats a fact and a true fact. Obviously my concern is to make sure that my constituents, those who are going to be all around the country, those are going to be impacted by these changes are going to be able to have a say. And right now their say is through us here in congress to the faa and i want to make sure that that occurs. But i want to move on to another question before i run out of time. Im concerned that some of the estimates for the timeline for a new atc corporation are nearly a decade we heard earlier knife to seven years. And my concern is about air Traffic Control<\/a>ler hiring. Will this not will there be troubling lack of accountability and transpatiencesy as this occurs and make hiring and staffing difficult if not almost impossible do during this transition period, mr. Rinaldi . One of the things we would really have to see in the bill is a very robust transition period where we still have we would seek a stable, predictable funding stream so we could continue ton hire and accomplish the goals of the agency while its still under control and if it was going to a not for profit fairly charted company at the same time that it would be a robust transition period in enhancing the safety of the system at the same time continuing to hire, train, and modernize the system. The control of the academy for training air Traffic Control<\/a>lers, who would have that control zbli believe in the air act of 2016 that was left up to the transition on who would actually still control the faa academy in oklahoma city. That was not laid out in there . I dont believe it was. To be determined for further on. All right. Thank you very much. Its 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 thank the chairman, i yield back. Thank you the gentleman. With the that, recognize mr. Smucker. Thank you, mr. Chairman. Id like to pick up where my friend mr. Westerman left off to further clarify some of the issues that 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 wont be making decisions about that. And, in fact, i believe that some are perhaps incorrectly conflating airline Service Business<\/a> decisions and the provision of providing the atcs services. Mr. Rinaldi, you specifically addressed that by saying that you simply provide the services to whoever shows up in the airspace, essentially. But i guess id like to further clarify that. Mr. Poole, maybe ill ask you. Could you please clarify to me that the new entity thats being proposed will simply provide those atc services to any entity wishing to receive those services . Ill put it a slightly different way. Will this atc entity decide where airlines fly . Absolutely not. Airlines will decide where they want to fly and presumably the system will accommodate any desires that they have of where to fly. This of course includes air taxis, regionals as well as major carriers. Were not private tidesing the airspace. Wed only be private advertising or corporate ra advertising the provision of the air Traffic Service<\/a>s as well as 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, thats very, very clear cut. I appreciate the clarification. Mr. Poole, ill ask you another question. The district that i represent in pennsylvania includes three smaller airports, no Major International<\/a> or domestic airport in the district, but each of these small airports serve a county and are critically important to their economic drivers in the county and so theres concerns have been raised and im just want to ask you directly about any potential impact of this system on the smaller airports. You know are, i have one in particular in the Chester County<\/a> district that has an application in for a control tower. Right. And its just an example, but i guess i want to hear again, i want to be sure, do you think we will see under this program an improvement for small airports and, if so, how would that work. I do think there will an improvement because faa funding limit talgss we have this more torpium on new contract tower apruflds so thats been going on since fiscal 14. The only way that could be lifted today is if there were a significant budget increase for faa or they cut out some other funding for other things like next g nextgen and so forth that nobody would want to see. The best hope for small airports and expanding the reach of control towers is a betterfunded organization that is also one that adopts new technology that increases benefits and reduces costs so that the contract tower benefitcost ratio can be higher for small airports that might not qualify today with a conventional several hundredfoot tall structure but could easily afford a contract tower and get Better Service<\/a> from it. Thank you. One quick question, mr. Brown put asserted that nongovernmental air Service Provider<\/a> would somehow be outside of democrat 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 who were sitting right here in this room where you are and were getting grilled by folks up here. Congress oversees the entire aviation sector including regulating private business . So id jersey city like to here why you believe a regulated why that would be outside democratic oversight . Its my understanding this would be empowered as a business that can effectively decide what it invests in, how much it borrows, what technologies it picks, maybe what but still with congressional oversight . Well, are we going to have a committee for how they spend their money and ha they invest in and where they deploy papis and vassies and where they put up the next data com tower . Because if we are, why would we carve it out . Thank you. I yield back my time. I thank the gentleman. Thats what we have today, United States<\/a> congress its called, and its not functioning well and thats what were trying to get away from so it can proet operate more like you mr. Brown operate. You have an extremely successful business, but you decide that based on business decisions, not based on whether bill shuster wants a tower or doesnt want a tower. So with that yield to whos mr. Duncan. Im sorry, no, not mr. Duncan, i dont know who mr. Payne. Mr. Payne is recognized, im 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<\/a> system in just the last 20 years. Under the chairmans proposal to private ties atc last year, the federal government would have handed over atc assets worth billions of dollars to a private Corporation Free<\/a> of charge. In the if the atc corporation was to hit financial or operational zults and needed to be taken over by the government, its 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 . Thanks. As i mentioned earlier, i dont believe its my role as Inspector General<\/a> to express an opinion on purely policy call like that. However, to your point about valuation of assets specifically, our work has led our duty each year to audit the departments Financial Statements<\/a> to include faas Financial Statements<\/a>, has shown us that the net book value of faa assets that might reasonably be considered for transfer to a Nongovernmental Agency<\/a> at the end of the last fy amounted to 13. 7 billion. Ideally or probably a lesser figure than that would be actually transferred if the congress and the administration were to agree to take air Traffic Control<\/a> out of government, then but nonetheless, thats a policy decision for you to consider. A valuation of those assets in any convenient were wheth any event whether its with the request that the government, i they pay back the government its still going to be required because potential lenders and borrowers are going to see what the value of collateral is that theyre putting up their money against. Thank you. Mr. Brown. I think people are trying to solve problems here and i frankly respect the dialogue. Im not a status quo guy. I actually think there are real tounts improve the management of the faa and i have found very often in the certification side theyre willing to listen. But among the things im concerned about besides economy kwitdty in the system is whether the logic makes sense in the riskreward profile. This is a real question. Im asking it as a business guy. Im here because i make my living selling products into aviation. But the line jum im concerned about is if we ensure the workforce that the future is as they immediate today to be for the purposes of serving their interest and we underwrite the risk of this enterer prize, more surely than nick else i know that to be true when we were perhaps enjoined in litigation with this enterprise when its challenged on things that it does and when we give up our assets some 20 billion to do it and then power a monopoly, when i look at that enterprise, i want to to return to the people. It served us well for 50 years it will serve us well in the future. So i wrote in my testimony this is a question of principle for me, its not a question of challenging other members objectives or motivations, its an honest disagreement about the policy play here. Okay. Thank you. Mr. Poole. Well, in the hypothetical event of a bankruptcy, which i guess is what you were talking about as a possibility, and you have a liquidation in a bankruptcy in which case a takings clause thing i dont 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 government if there were no takers, if the government had to step back in well, what if there are takers . The the any effect of your scenario is we transfer 20 billion to a company who makes bad bets and they end up owned by the bank of new york. Thats a bad outcome. Those might be the credit providers. They might be the credit providers. Mr. Rinaldi, in your testimony you know, you talked about the concern for for your membership. Anytime anythings streamlined, if you think that you benefit and things are going to stay the same under that scenario, i got a bridge to sell you too. But could you answer, answer the question . Oh, im sorry. What was the question . What bridge do you want to sell me . Well, thats not thats not that question. The original question that i asked that i laid out. But my time has expired, i guess you werent listening. I was listening, i just i thank the gentleman. There are limits to all infrastructure, toelg technologically and human and because of that were take a fiveminuteechnologically and human and because of that were take a fiveminute the committee will come to order i now recognize the member of the full committee mr. Duncan for five minutes. Thank you, mr. Chairman and as some people here will recall mr. Poole and i i think others i chaired the aviation subcommittee for six dreerz e years from 1995 until 2001 and speaker gingrich asked me to holtd first hearings on the proposed air Traffic Control<\/a> corporation. Ms. Robin i think will remember that and at that point i think almost everybody maybe with the exception of mr. Poole was opposed to it and so forth. But the chairman, the chairman shuft ters done an amazing job and has brought some groups and people on board that were not in favor of this proposal at the time. But im sorry that i didnt get to hear mr. Rinaldi and ms. Robins testimonies because i had other meetings, but i do want to say to mr. Brown that i was impressed by your testimony and i can assure you that i think your people will tell you that general aviation has not had a stronger supporter than i have been and im sure the chairman will do Everything Possible<\/a> to make sure the general aviations concerns are heard loud and clear in any proposal that wednesday up with in this regard. But youve been with us several times before and you know that ive had concerns for a long time about the some of these costs and the delays and so forth. And so then i noticed in your testimony you say however, faye has not fully identified the total costs, the number of segments, i their capabilities or completion squed ulz for any of the six programs. In addition, faa has not determined when the transformational programs will start delivering benefits or how they will improve air traffic flow or productivity. These cost things concern me and you told me in response to questions that i asked at a 2014 hearing you stated, quote, we are probably looking years beyond 2025 perhaps another ten even and we are probably also looking at total expenditures in an order or magnitude two to three times that of the initial 40 billion estimate to achieve the original plan. Im wondering, do you stand by those statements that you made in 2014 or whats the whats the situation now . And then you also you heard mr. Brown basically say that everythings going pretty good. Thanks, mr. Duncan. As part of the introduction you mentioned your long service on the committee. I still wear with pride the label that you gave me at probably my very first appearance before the committee where you said youre the committees hired scep tick. So i appreciate that and my staff does too because that fits our role. Youve n and i have been aro for a long time. Yes we have. I do stand by those numbers and what i meant to convey by that was the uncertainty of the numbers at that pint. Numbers appear to have changed a little bit recently because faas estimates have come to 36 billion completion date thereabouts 2030 or so. But still the uncertainty remains. Because at least for the six transformational programs that have commonly taken the title of nextgen, faa segmenttation practices in managing those acquisitions have led have not led to any kind of clear understanding as to total costs or ultimate completion date. So were still very much in an uncertain environment with regard to those programs. Its clear whats happened over time, though, is that those programs have become part of a more general and rolling implementation of modernization efforts to be sure. Faa to its credit has worked much more closely with industry over the last couple years to get their priorities down, and faa has been working hard to execute on those. So i do want to be fair certainly to the when i say that. But, cost and completion date still much uncertain. All right. Ms. Ramon, you said that youre original proposal when you worked ton was dead on arrival. Is that what do you think is why do you think that was and where do you think we are now . Whats tell me what you think is different now. I think it was it was dead on arrival because it it frankly imposed financial burden on the user. At the time more of the funding of the air Traffic Control<\/a> system came from the general fund as opposed to ticket taxes. We, the Clinton Administration<\/a>, our highest priority was balancing the budget and so 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<\/a> it was much of what you you hear today. It was a an opposition to to something that was seen as not privatization but Something Like<\/a> that. I think this is a great debate. I think were making progress. Were arguing over the value of the assets that get transferred. I mean, you know, were there are proposals to create a Government Corporation<\/a>. Admittedly it would have the regulatory function as part of it, which is, i think, highly flawed, but think weve advanced the debate. Well my times gone by so quickly, just quickly id like to ask mr. Brown, theres 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 achation people in some of these other countries . I know general aviation is very small in many of those countries. Yeah. Have you visited or looked into that any . I have. And i think those countries made choices they thought were sensible for their taxpayers and their public interests and, frankly, for the scale and scope of their aviation industries, which are quite, quite small. And so, you know, my Reference Point<\/a> in many of those countries is that general aviation is already a minuscule part of the economy. People dont fly, they dont have the freedom to fly, they dont create pilots, they dont build airplanes. So in my mind theyre taking a function that isnt critical to their economy and theyre outsourcing it. In my mind, in our country what we do with our National Airspace<\/a> is in fact an economic engine and a critical one and i think it works pretty darn well and thats where the origin of my interest and my point of view come from. All right. Thank you very much purchase chairman. Thank the gentleman. Ms. Tight is is recognized for five mooinz minutes. Thank you mr. Chairman. Its interesting what ms. Robin said her bill was dead on arrival because Airlines Want<\/a>ed today but they didnt want to pay for it. Now that theyre getting it free seem to be all in didnt seem to be dead on arrival, i find that interesting. But the question i want to ask is to mr. Poole. We hear a lot about the assets, lets talk about the people who were involved. You, mr. Poole, and the Reason Foundation<\/a> and your Donor Network<\/a> have been talking for decades about privata advertising all aspects of government, not just of the faa. In fact in 2010 you wrote a piece for downsizing the government dog that was a product of the Cato Institute<\/a> and you talked about the need to privatetize back then. One of the major arguments that you made was the cost of running the system and in particularly you went into extensive detail about the history of air Traffic Control<\/a>lers and the cost of salary and benefits to those professionals who operate the system. You noted that twothirds of the faas operational expenses are due to what you called the high cost of labor. Youve gone on to reference the efficiency of canada where they have downsized system, shrunk the system i think was the term and cut down on the number of towers. So considering all that you have written on this issue, and now we have this bill before us, i want you to walk me through exactly how youre going to address the high cost of labor as you make this system more efficient. Well, thank you for letting me clarify. What weve seen in countries such as germany and canada and others that have corporate ra advertisinged their systems, is not down sooigds. In canada in particular the need was to increase the controller workforce this was low because of many, many years of underfunding by transport canada. The down sooidsing thsizing th place is in the middle management ranks. Theres so many layers and convoluted that it kp tracts a high cost out of the users whether theyre paying aviation user taxes or direct user fees. Thats where the need for looking at that cost is. Its in the middle management ranks of the bureau rack casey, not in the day to day controller workforce that is undersized for the task at handed it. We, as paul rinaldi has said, were at a low point of certified professional controllers today and thats partly because of the shut down the Training Academy<\/a> waut out of commission for nearly a year and the Selection Process<\/a> that has now been partly overturned thanks to congress. So we do have problems, but its not its not because its not controllers, its the bureaucracy. I wish that reassured me, but when you talk about efficiency and cutting costs and high costs of labor baeand benefits and controllers are part of that system, i dont know that i believe thats where youre going to stop is at socalled middle management. But id asked mr. Rinaldi hes sitting there he are represents these folks, its not just you a number of conservative Media Outlets<\/a> keep talking about high labor costs, high labor costs, lets get more computers lets have fewer people. So i would ask you mr. Ra nald decide what assurances do you have that once your members are under the contriefl private system thats dominated by representatives for Profit Companies<\/a> who are looking to run the system as keeply as possible because its about their bottom line. You heard they didnt want to pay for it before but theyre getting it free now, how do you know your members are going to be protected once this current contract is over . Thank you, maddom congressman. Great question. First of all we have nothing in front of us to actually compare to see exactly what type of workers protections would be in the new language. So anything i would say would be speculating. But i will tell you we are highly trained, highly skilled, highly efficient workforce and we keep hearing about canada, we keep hearing about the United States<\/a>. Well, we run roughly 10 10 times the a. Traffic they do in canada with only five times the amount of controllers perlt weer highly efficient, and i stand behind the work of the air Traffic Control<\/a>lers in this country and i put them gent against anybody else in the world because we are the best in the world. I totally agree with that and thats why i want to be sure they are protected under any kind of new system going forward. Me too, and im with you. I would just say that under i think mr. Rinaldi said this before, under the air act from last year we got support from the air Traffic Control<\/a>lers as well as if i could for the record, submit letters of support from whats the first one . Net jets pilots, southwest Pilots Association<\/a>, the allied Pilots Association<\/a> and that, so id like to submit these letters for the record without objection. So order. And with that i recognize mr. Mitchell for five minutes. Thank you, mr. Chair, and thank you for all the witnesses remaining through a long day. Mr. Skoeb bell, you note in your report that faa Reform Efforts<\/a> have not slowed the growth and improved the product. You talk about the fact that their budget debris grew by 95 , you also mr. Hunter referenced that the hope is i stress hope, the 36 billion would be the cost to get nextgen up and sometime around 2030 it may come to fruition. Im hoping to still be around in 2030. Let me ask you a question, mr. Brown. Am i wrong, that accurately portrays your analysis . Yes, it is correct. Mr. Brown, like you im a private business guy, im an aircraft owner, ive own several aircrafts. If you had a business that couldnt tell thank you was going to cost to put a set of of products, couldnt tell you when they were going to get it done but said eventually well get there were how likely is it that youd buy that business or keep it . That would not be in the category of strong indicatorts s for that are business and it would cause me toa squ a lot more questions. Let me go to the next question. We dauk about the value of the assets, theres been a lot of discussion about that. How do we pay for the, quote, assets, i do use that term loosely in the case of the faa, how do we pay for those as sthaets we already have . Mostly theyre funded by taxes on ticket sales, gas taxes from ga users, theres a small infusion as well from the general fund. So 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 equipment. About seven years, you fully dee appreciate them and the life of the equipment is what ten years . Can be longer but where are yeah. Not much longer especially not in major capital. Mr. Skoeb bell whats the average age of some of the equipment thats in the faa right now. It is aging and getting older by the minute, obviously. The onroute centers that manage High Altitude<\/a> traffic maybe 50 years on average, 25 years on average for terminal radar approach controls. Id like someone to explain to me rain i maybe in writing someway why were losing our mind about the assets when in fact the real world outside these halls the value of the assets is less than zero, in fact the question is how do you dispose of them if in fact you couldnt use those assets because thats what were talking about. Were talking about assets that have gone beyond the half life yet somehow we think were giving them away to somebody. In fact, some of these assets we want someone to take them away. Followup question also, if you can, mr. Poole, 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<\/a> before they divested, right . Yes, they did. And the study that was done by tle three universities about a decade ago i think it was five Year Comparison<\/a> of ten of those countries and nund safety didnt go down in any of them and it was either the same or better following. Mr. Rinaldi same question they all had safe systems as they made their transition . Yes. Any of your cohorts around the world say oh my god weve gone to a third party or private advertised system and the world is now threatened. Sleetly the opposite most of them would never go back. Im flown the system here and canada system and other systems, ive got some interesting routing we could talk about flying back to detroit through fort wayne was an interesting route. Theres a discussion about bifurcating the faa just because it was together when they created this thing somehow theres been discussioning that its a terrible thing to talk about making it more efficient separately. Like its a holy ground. Its costing us a ton of money, yet the argument is if we throw more money at it we hope it will get better. Hope is not a plan, its the last step before administration, were desperation. One more comment which interdiscussion about being controlled by the outside stakeholders. Big parts of my district are powered by Rural Electric<\/a> cooperatives, lots of stakeholders, lots of interest, and those people wouldnt give that up for the world because it actually worries first about the customers in service and not about the politics, about what you talked here about sequestration, all the other fes mes mess. It worries first are we delivering the promise we promised to deliver the thats my hope and a board that are has a fiduciary interest to differ the cost that we can manage. Thank you, sir, my tame i time is up. Im done. I thank the gentleman and mr. Weber is recognized for five minutes. Thank you, mr. Chairman. Mr. Skoe vel when you had your comments you said youd identified some longstanding management weaknesses. You can elaborate on those . Yes. Thanks for the opportunity. By manage menlt meant weaknesses im referring to knows in faas acquisition practices. We cited in our testimony overambitious planning, adsp and eram would be key examples of that. I cited in our testimony the need for stable requirements for acquisitions to be successfully executesed. Eram and swim programs would be examples of where faa had short comings in that area. Contract oversight generally, across the board as we have audited faas programs we have found areas that needed significant improvement all the way from Incentive Fees<\/a> to the requirement faas own requirement for independent government cost efforts in sole source contracting which some faa acquisitions werent following their own requirements. So you can see there have been some significant shortcomings along the line. Theyve affected not only the nextgens programs proper but others that are in support of areas of air Traffic Control<\/a> and nextgen. My first year on the committee i know you said had you received the label the committees biggest scep tick. Hired scep tick, i think. Hired skept tick. And i wasnt skeptical of the committee, i was skeptical of information had of proez posals of information with the idea of bringing data for the committees consideration. Okay, great. How long have you been the hired skeptic. Little over ten years now, sir. Ten years. So youve been doing this and watching this faa for ten years, is that fair . Yes, sir. You said there were some requirements for them to continue to evolve. So fix those problems you just laid out for us. What are those requirements . If they were to say in place, how does it evolve . If faa were to retain responsibility for air Traffic Control<\/a>, first, continue to consult extensively with stakeholders, faas faa has gone off the rails largely its because they havent done that. And would you think that the new process that chairman is submitting would continue to consult with stakeholders . Well, stakeholders would be in charge under a proposal as i understand how it may ultimately be. Well they would have a board thats been discussed back and forth, but they would be constant in that scenario theyd be in constant communication with the stakeholders, their businesses, the different parts of the group. Go ahead. Im sorry, i may have misunderstood your predicate. I thought you were asking if faa were to keep responsibility for air traffic well, no, it was but youre saying that they need to continue and im saying contrast that with what the recommendation here is, and that is that they would definitely be doing that, go to step two. They do. Focus on the acquisition system because i understand my belief at least is thats the essence of the Aviation Community<\/a> or users dissatisfaction right now with faa. Its not on the safety side as weve all recognized faa right now isnt what i called earlier the golden era of aviation safety through its own efforts, industrys efforts, congresss efforts, the efforts of my office. But where we where dissatisfaction is arising its in the air Traffic Control<\/a> modernization era. So focus on faas acquisition practices, the Acquisition Management<\/a> system which is the regulation that governs faas practices need to be updated, it needs to be revised, the Workforce Needs<\/a> to be properly certified and trained. All of those things that i talked about earlier about planning, requirement could be done in the new system that the chairman is proposing. Let me stop if you i may im im running out of time. Mr. Poole, standalone airports ive got a couple small ones. Well, mr. , nald did i you said you all represented 40 or something of those airports . 94. 94. Mr. Poole, back to you, what happens to those airports now . Well, those airports are owned by municipalities, usually. They get funding from the aip, grant program. None of that would change, aip would continue to be an faa function and do that the. Mean criteria in affecting those small airports is whether they have a tower or not. And if they have a tower and its obsolete and needs to be replaced, hows it going to get paid for and it can k it be afford. Thats where i think first of all the legislation can spell out that everybody is entitled to a tower that meetsz the benefitcost ratio and the funding cape financing capability and openness to Better Technology<\/a> the corporation would very likely adopt remote towers as a more costeffective way to be able to expand the scope of Tower Services<\/a> to small airports that may not qualify today but probably could have a better benefit cost ratio. I think theres a very Bright Future<\/a> for small airports. Thank you for elaborating. I yield back. Mr. La moth that is recognize for five minutes. Thank you mr. Chairman. Much decision on the reform of faa and air Traffic Control<\/a>lers and no doubt the controllers are doing very well with what they have to work with but when we see the potential here with improvement with reform in the previous gao report showed that the reforms were like were talking about would have really no negative impact on safety, many cases safety improved. And what we havent seen is that throwing more money at it, faa had not really improved anything but even in some cases a negative effect. Potential for savings, as weve seen with, you know, offspoken canada system shows that we can have a very positive effect on safety as well as saving money. And so what i wanted to ask mr. Poole and ms. Robin would be can we really expect that these safl savings that would be achieved could be passed down to the consumers on what they would expect for their costs . Thats a good question to ask and that depends really on is there a Competitive Airline<\/a> market. If theres a Competitive Airline<\/a> market then lower costs are more likely to be passed on in ticket prices, for example, than if theres not a competitive market. And i think theres concerns being raised about how competitive our Airline Market<\/a> has gotten to be in recent years and theres i mean, theres some things we dont have time to discuss here, Things Congress<\/a> could do to try to make the Airline Market<\/a> somewhat more competitive than it has been. Okay. Ms. Robin similar, okay. Ditto. And i think also in addition to passing savings on, i think you were trying to expand the system, allow allow more throughput and you need new technology do that. Were not at the cutting edge of that. You need new technology in order to allow the for an expansion of the system. For both of you, again, if we were to move in this direction of atc privatization, smaller airports, rural airports, you know, the threat of towers closing, what might be the expectations we would see for rural airports just in general . I know weve been touching ton here but lazy it going to mean for rural airports and their viability . Well, ill repeat what i said a few minutes ago. I think that a better funded and system able to do largescale capital financing, one of its priorities would be facility replacement and some degree of consolidation but also expanding the scope. Right now, as i say, we have a moratorium on contract tower, faa has a moratorium that is denying a couple dozen airports that are on a waiting list, some of them have already qualified in terms of benefitcost ratio, but theres just no funding available for faa to do that. A wellfunded system that is focused on serving its customers better and open to aggressively using new Technology Like<\/a> remote towers, i think offers the best future i can imagine for small airports in this country. Thank you for that. Im running out of time i want to jump to mr. Skoe vel for a second here on on talking about contract towers, okay. So they do they are pretty important at Smaller Service<\/a> airports and general aviation, et cetera in that airports that have up to it was up to 50 of civilian tharpts have military operations use contract tower airports. Now, its very important to have these operations which is around 250 of them in the country. Would you comment, please, mr. Skoe vel on the value of the contract toursz to air Traffic Safety<\/a> and efficiency in our nations system and the costeffectiveness to faa as well as to taxpayers . Yes. At this committees request we reviewed the faas federal Contract Tower Program<\/a> several times and weve concluded that generally they are as safe, they are as well respected and appreciated by users as faaoperated towers. And on average they save or avoid for faa 1. 5 million per year in costs versus faaoperated towers. Per tower . Per tower, correct. Significant, okay. We would cite federal contract towers as a missed opportunity for faa. We understand in recent years there have been funding difficulties, perhaps, but well before that faa had opportunities to pull more towers into the federal contract tower and took a bass. Its been a decade or longer since faa has moved any towers into the federal contract Contract Tower Program<\/a>. Perhaps we should move more then. Depends on funding. Always that. Thank you, mr. Chairman. I thank the gentleman. Mr. Perry is recognized for five minutes. Finally mr. Perry. Finally. Well i havent been here for half of the meeting. Ladies and gentlemen, thanks for your time. I had a lengthy question for mr. Skoe vel about contract towers but i think i missed afl of them and he was just asked one. But suffice it is to say the only thing i want to add in case it hasnt been added that its important to know the that 47 of all military operations at civilian airports are at contract tower airports, im a rotary wing guy so, you know, not much on not too much on the low altitude and route chart the sectionals probably more important. But that having been said, it seems to me based on at least the answer i got to hear from regarding my colleagues chemical weapon that you feel that they are efficient and costeffective to the faa and to the taxpayers. Is that a fair summation, mr. Skoe vel . Yes completely fair, thank you. And i no, i thats not necessarily the context of this hearing, but think the context is that well ill just use this. Between 96 and 2012 the faas budget increased by 95 , meanwhile productivity decreased substantially and were talking about personnel procurement and organizational reforms which, you know, doing the same thing over and over again, hiel i appreciate mr. Brown saying we can tweak this, my argument would be is that we have tried and tried to it seems not great effect, right . And i think im probably being kind, right . Not great effect. Let me ask you this, probably mr. Poole may be and mr. Rinaldi, im really interested in the uas propgation of the United States<\/a> and the utm and im wondering in the context of what were talking about, the proposal policy model that were talking about, if either one uh could describe what you feel your organization, especially you, mr. Rinaldi, would feel needs to be in place if thats currently missing for us to come to some kind of utm. Because weve put rifrmts on the faa to come up with something here and there are deadlines, by feel like were just way behind and i just want to make sure that theres not something were missing from yourview viewpoint. Thank you, sir. Safely integrating uav has no our airspace say Monumental Task<\/a> and its taken a lot of resources within the faa and certainly distracting us from working on nextgen as were working on bringing uavs and incorporating them into our system. So one. Things i would like to see is some type of userfeed base for these uavs so they can pay into the Aviation Trust Fund<\/a> right now and pay for the system like everyone else does pay for the system. Is there a model that you know of regarding some kind of a participation for maybe commercial users as opposed to incidental private im just curious, because its. Its a very important concept but its a great question and i think everybodys kind of vap scratching their head right now because theyre not using fuel and we base most, you know, on fuel or ticket tax. And they wouldnt have either or that so we have to come one a new concept. So it might be like milds flown or Something Like<\/a> that, right . Well, im really not sure how it would work out. User fee, okay. Thats an important part of the discussion. Im glad you brought it up. Mr. Poole, whats whats your input . Do you know what the Airlines Want<\/a> to see in integrating . I have no idea what the airlines think about this. Okay. I do know theres a lot of interesting i think theres a possible bifurcation between the very loet low altitude mostly hop byist of uass. Theres a lot of interest in some kind of nonfaa sort of private solution to this that Silicon Valley<\/a> foekds are talking about in cooperation with nasa. I think we need to separate that in terms of different being different from the controlled airspace in which our airliners and many private plainds planes zblie but there are going to be incursion has no controlled airspace whether its at air drone or thats a significant problem we need to deal with. There are incursions now in both controlled and noncontrolled airspace, which is part of the issue and i feel like that we need to get to it baugh anybody else have something to add . No, we do see a lot of incursions today and a lot of spottings that commercial airlines are seeing. And i think the sooner we can safely integrate them and come up with a process, the safer the system will be. So while i would agree with you it does divert some attention, resource, time, energy, what have you, we cant just ignore the fact. No, i would not ignore it. Thats foolish. Its an emerging technology, emerging user into the system, its a very important user. I think actually to a great extent it can be an enhancement. Some of the technologies that are emerging in the navigation arena itself could be used commercially. I was talking to the gentleman next to me i know my times expired, mr. Chairman, but as an aviator myself, you know, the skys unlimited are up know. Im limited on the ground when i pull out of the parking lot ive got to stay on the road over im going off road. And yet we have the same system since ive been flyingtor 20 or 30 years now i essentially got to take off and then go get on the highway instead of just going literally from point to point which i dont know what the savings is is estimated at going literally from point to point, but its got to be monumental over thousands and medical dollars of billions of flights, right, commercially or otherwise. Anyhow, mr. Chairman i yield. Thank you. I thank the gentleman. And with that mr. Sanford is recognized for five minutes. Mike. There we are. I thank the chairman. I just want to bore down just for one second, i guess beginning with you mr. Rinaldi. From an air Traffic Control<\/a> standpoint a blip say blip, right . Well, not necessarily. We work all airplanes safely and efficiently. There are some heavy aircraft that you need weight fur bu lens separation. So each blip, you know, for lack of a better term gets treated safely and efficiently, but there are different ways to work them. Fair enough. But the wing tip vert ta sies off a cub are going to be different than a wing vert texs off of a 747. Absolutely. But from the standpoint of management its essentially the same, right . Yes. So i think that one of the things that ive heard particularly from the Cargo Carrier<\/a> its not a fear that if you move, you know, are they going to be disproportionally impacted in that then weigh more from a Traffic Control<\/a> standpoint, they dont take more time, they dont really use more stuff, but are they going to be disproportionally impacted relative to other smaller and i just love i see you shaking your head up and down, i dont know whether that means yes or no, but id love to here some of you alls thoughts on that because thats one of the things that as we go through these deliberations weve got ferret out. Yes, maam. On the pricing side, most economists would say the current approach pricing based on the ticket tax is very inefficient because it isnt correlated with the costs that users impose on the system. And so you want to go to a costbased system. What the rest of the world used sds a weight and distance charge, and they use weight because they cant fully cover their costs, typically, with just a distance charge. Thats mar you want to charge marginal costs but you want to cover your full cost. And weight is a way of doing that. Its called ramsey prooiz pricesing and economic terms. And the cargo folks object to that. And i think theres some really important analysis to be done about just how big that weight component has to be. I think there is reason to think that the faa may overstate their fixed costs which is what requires to you have a weight component to the charge. There is a tendency for regulated utilities to overstate their fixed costs versus their marginal costs. So i think this is a really important issue and i dont think we should just blindly adopt the standard weight and distance charge. Yes, sir. Ive looked into this and in 2001 Reason Foundation<\/a> study we had a lot of dialogue with one of the major cargo care yoriers they persuaded us that a strict weight formula would cause a significant increase in the cost share that they would pay. And we came up with an idea that said, all right, look and let me interject. Its not they pay, we pay. Yeah. Yeah, but anyway. So what we came up with was she looked at the flight parnds by time of day, and it turned out that most of the cargo flights do not take place at the busy times of day or at the busiest hubz at those times of day. So if you put into the pricing formula a congestion factor, that, you could basically hold the Cargo Carrier<\/a>s share to about what it is today without having to discard the global standard of an overall waitdistance formula. Cato does permit congestion related factors going into airport and air traffic pricing. Hardly anybody does it except the uk, major airports, but that is consistent with iko charging principles and thats a way that should be definitely explored for the Cargo Airlines<\/a>. I think thats fascinating if you look at this notion of optimizing the use of our structure in this country i think this notion of going to premium pricing based on congestion or slood going to become a bigger, bigger issue whether its on surface transportation, air transportation or other. I think i have 25 seconds but it looked like had you a thought down there at the end but maybe you didnt. I have many thoughts, sir, but not on this particular question. Thank you. Fair enough. With that i yield back, mr. Chairman. Thank you the gentleman. Mr. Davis recognized for five minutes. I bet i can guess that thought. When is this going to be over. And then you got mebds like me that keep coming in and out. I apgz that were shuttling back and forth between two hearings today. This san important one, one that i believe from the responses weve heard it today and many of my colleagues, it centers on whats really this debate of whats the cost of doing nothing . I mean, its already cost the taxpayers billions of dollars to see the to put towards nextgen, and were not seeing the progress that we, as america, would the air system that we have, be upgraded to be even compete on the same level with some of our some of our allies. I cant help to compare it to work thats already been done and weve discussed this today, you have, whats been done in canada, whats been done in the United Kingdom<\/a>. Canadas 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 . Yes, status quo or doing nothing is unacceptable. September will be here before we know it. We will be looking at another possible Government Shutdown<\/a> and, as i said in my Opening Statement<\/a>, as we lead up to a shutdown, the faa turns their attention from nextagain or uav implementation to shutdown procedures. This is happening for the last ten years it happens a couple times a year and we lose this time and its four or five weeks leading up to it, five weeks on the back end of it and theyre not sure what sequesters going to bring us if we get a budget and get a bill passed what type of cuts were going to have into the Aviation System<\/a>. A lot of discussion about rural america, i will tell you and you remember, sir, that when the sequester hit in 2013 the faa looked at closed are over 238 air Traffic Control<\/a> towers. It was a big list. Most of them were in rural america. Mr. Poole, do you have any comments on this . I think most everything has been said. But the technology youre comparison with skand brilliant because they have things that we are only planning now, they have fully rolled out nationwide controller pilot data link when which were look algt maybe six or eight years before we have that in en route airspace. They have across the north atlantic very soon satellitebased positioning thanks to their investment in air on, this satellitebased Global Coverage<\/a> all the places that dont have radar, had is 70 of the earths service will now have radar like separation possible because nav canada and receiver other asps have invested in that and are subscribing to it and faa was unable to invest and cant figure out how to subscribe to it. So the idea that we are the Gold Standard<\/a> most modern in the world is no longer true and the more the status quo continues, the less thats going to be true. Were going to be falling farther and farther behind the state of the art. As we pooind twhiend hearing down i want to make sure that we reiterate a few points. This new atc entity is not going to decide where airlines or anyone can or cannot fly, correct. You can say it a little louder in the microphone . Thats correct they will not decide anything about where airlines fly. Thank you. And mr. Row bien, i want to be address some more information about the information ive seen about the motives of the board under the air act appropriate posal. Despite the fact that the bill clearly states that two directors will appointed by the secretary of transportation to act in the public interest, some have questioned the motives of the board. You can describe your understanding of the governance of the board and how it will actually operate. Mr. Mitchell referred to the cooperative electric coprittive in thinks direct and it is analogous to the ooperatives that we have in the utility industry, the agriculture insurance. And they work, right . Yes, they work beautifully. It is given that you have it is still air Traffic Control<\/a> provision is still a monopoly, i think technology will change that but for the time proximate cause it is still a monopoly so you need a design that protects against any kind of ma noly abuse. And the canadian model does that by having the stakeholders on the select the Board Members<\/a> and having the Board Members<\/a> are fiduciaries as the chairman emphasized in his introduction. They have a fiduciary responsibility, that has been critical to nav canadas success. And quote of the day, entities like this that are already operational work beautifully, so i appreciate that. And we, as policymakers. Keep going. Thank you. We as policymakers dont have a lot of time here. You know, we can sit and debate whats work and whats not and mr. Rinaldi mentioned the faas got to deal with not only nextgen but Uas Technology<\/a> where i once questioned an official about what canadas doing correctly. We dont have a lot of time to fix this. Todays the time to act, nows the time to act which is why this is so important. So thank you. Thank the gentleman but we dont have much time but we do have time nor for mr. Defazio to have five minutes and me to have five minutes and weve got 12 minutes so i will strictly enforce the fiveminute rule. Thank you mr. Chairman want to point out in the dod mem mope there is a sentence that recognize the risk recognizing dods responsibility. Like to put in the record an article from the National Observer<\/a> in canada headline inspectors say Major Canadian Airline<\/a> disaster likely and they talk about the major cutbacks in the safety of that which was retained by the government. And then i would move on ms. Row bien, do you remember executive order 13180 kbi president clinton . No, okay. Is that one that created thea, it oo . The one that says air Traffic Control<\/a> is an inherently governmental. Yes, the date is october 7th. Ms. Row bien, i dont have time. Thank you. So, mr. Skoe vel, hold that up, come on. So we just kind of said oh our assets are old and someone down there said theyre not worth anything. How olds that . I think thats 13, right . That is houston, valued at 62 million. Then of course we have property and long island, kind of valuable. Have you broken oit the assets in terms of property values, didnt in canada they valued the system and they had to pay for it, correct . They did. Okay. And the Inspector General<\/a> in canada Auditor General<\/a> said they paid, this is canada, little dinky canada they paid 1. 5 billion and were proposing that nothing would be paid here and theres no value and they said it was undervalued at 2. 6. How old was their system because youre saying our systems old and did he krep pid and it wasnt worth anything. Was theirs brand new spiff if i back then . No . So they paid for it but here we have a much larger investment were going to transfer for free and we have the problematic thing about takings. Aupd valued it it at 13. 7 billion, lets say how much of that would you deappreciate. Thats the infrastructure alone i dont believe of it voflds a property value. Okay. So its quite valuable. Now lets go to small airports. Almost everybody on that side is sense tich to ga, they represent rural districts and we heard that were, you know, they will not direct where people fly. Thats correct. But this board will decide where we invest. Heres are the statement of the ceo of jetblue. We also need to correct Infrastructure Improvements<\/a> into the regions of the country where theyll produce the most benefits like the northeast corridor. Airlines get four seats on that board, thats the opinion of jetblue. We heard the same thing from the former ceo of united and oh, by the way, theres no airport representative on the board whatsoever at least as the bill wads written last year. So were going to say were going to protect rural airports, were going to protect it. Now mr. Brown you talked about wes, theyre 441,000 watts did those come for free and do they have to be maintained, updated . Well, the faa, like night owls produced them one airport at a time until they arrived on my doorstep and i was amazed by them but they got paid for by the user fees and fuel taxes that fuel the system. Weve heard how much money has been wasted but weve been investing in things like that which rrnt valuable to the commercial industry except for jackson hole and other places does the commercial industry use those. Anybody can use those if they have the right equipment, the problem is most of the airlines dont have the right equipment. Thats interesting. So anybody know of another country in the world that is ready to turn on a groundbased adsb system in 2020 for all their all their air traffic, anybody whos so equipped sn anybody in the world doing that, ground based domestically not over the ocean. Australia its already in operation. So weve got one and were going to be there two. Weve heard a lot about this over the ocean stuff. You know, the you know, im not particularly concerned about the tiny fraction of over the ocean flights we control and wln they get free adsb because there arent that many fleenz worry about the congestion and flying close together whereas domestically we may get some benefit but it still begs the question of how many planes you can land at the same time at many of our airports which has do with airport scheduling. Revenues, apparently theres an assumption that we that congress will repeal the ticket tax and i mean right now our current taxes are yielding about 14 billion a year and, you know, the ato is 11. 1. So that assumes congress is going to repeal substantial taxes, i assume. Thats correct. And then the new board will determine how to pay for the ato. Okay i see a nodding ever the head yes. Thank you mr. Chairman. I thank the gentleman and let me start off first by saying that investment will not be directed fwhi new board. There will still be aip funds going out to these smaller airports around the country so thats not actually accurate. You know, one of the things that ms. Titus brought up which i think is very, very important and she was directing it to mr. Rinaldi was about the air Traffic Control<\/a>lers. Let me tell you one of my biggest concerns in this proposal that we make sure we move those highly trained, highly technical, highly skilled, Efficient Air<\/a> Traffic Control<\/a>lers to the new system. And if you dont do it in the right way, i third of them, i think im correct, a third of the certified controllers can retire tomorrow if theyre not happy. So for me thats something very important. Ive been criticized by conservative groups around this town because they just dont get it. You have to take the qualified workforce with you. So, mr. Rinaldi, i know we talked a little bit about the count going up at nav canada, the controller count count goes up. What are your thoughts orlt on not on the controller count by middle management. If you look at it was brought up earlier with nav canada when they were in government fe they had roughly 67, 6,800 employees of which 2000 were air Traffic Control<\/a>lers. Now that theyre a highfunctioning not for Profit Corporation<\/a> they have about 4,300 employees of which 2000 of them are roughly air Traffic Control<\/a>lers. So the controller workforce stayed the same or went up a little bit. It is the middle management that they attributed through retirement in a humane way and they just didnt backfill those positions. I call a lot of that between the middle management within the agency and the multilayers of contractors they have within the agency also thats one of the things thats already being, you know, private advertised out there with all these contractors within faa headquarters. I call that the clay. It actually, it stops good things from happening at the very top and its, you know, and things that are happening, trying to change at the operational level. So for those of us that arent gee ole gifts, nothing permanent naits eights down and nothing permeates up. Yeah. I understand what clay is then. And finally i want to make the point here that first of all there was someone was saying along here the restriction, the airspace would be restricted. We made it clear in air one but maybe not clear enough to make sure that this new entity will not be able to restrict airspace. Plain and simple were going to strengthen that language to make surety general Aviation Community<\/a> knows they are not going to be restricted by this flu entity, thats the faas having the Regulatory Oversight<\/a> of this if thats the case to do Something Like<\/a> that. Second, when we talked about nav canada in our system is ten times larger, no doubt about it, i believe because we are so big and so complex thats a reason to move to this system so that we can manage it much better. You know, were already to the scale the size to handle those grairt greater operations. Stichl six thousand technicians, five thousand managers, we are scaled to hand this will today pcht and the then i might add, again, this is something thats very troubling to me it should be troubling to anybody in the business world. We are nine to ten times larger depending on how you want to measure it to canada, we spend 25 times to 28 times more in cap x than they do. And as it was mentioned by mr. Davis, the former ceo of nav canada said he gets twice as Much Technology<\/a> at half the cost three times as fast. So, again, as a business owner, a former business owner, if were spending 25 to 28 times more on cap x and were getting very little for it, thats a real problem. Thats a real problem for the american taxpayer, thats a real problem for the system if the if we were doing it efficiently, my goodness, how often would could drive the cost down. And as i spoke to the folks ads at nav canada and everybody understands in say volume business. And if we go to the system, our volume is so tremendous it will dramatically drive down the cost and well have more money out there to do things to help more communities, to do things about the efficiency, the technology, the employees. So, again, this is something weve got an opportunity and i said to the airlines when i was here lot of last time when they did something very wrong. We have an opportunity here to do something very right, and i hope we seize this opportunity because im afraid its not going to come along again. Ms. Row bien i think im the first one that called you by the right name today, row bien. I know youve been engaged in this for a number of years you started in the Clinton Administration<\/a> and i appreciate all the value you bring here as well as mr. Poole, mr. Brown thank you so much for being here today your perspective is very valuable to us. I want to reiterate, im a ga gook guy, aim a rural guy theres nothing i want don to hurt those people. But i think we have something that can lep the United States<\/a> of america to continue for us to be the leader in aviation around the world. Is again thank you all for being here today, appreciate your time and i would ask you to consent to the record of todays hearing remain open till such time as the witnesses provide answers to any questions that may be smipted to them in riegt rand it is a open for 15 days and information to be included in the record of todays hearing without objection so order id like to thank the witnesses again and there are no other members, so were adjourned. 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