Transcripts For CSPAN3 Hearing Considers FAA And Air Traffic Control Reforms 20170525

The committee will come to order. I now recognize mr. Loviondo for a motion. Pursuant to rule 1 a 1 on transportation infrastructure, i move that the chairman be authorize today declare recess during todays hearing. Question on the motion, all those in favor signify with saying aye. The ayes have it and the motion is agreed to. I want to thank everybody for being here today. This is an important hearing were having here today talking about what 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 to make 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 syst system. This is especially true of our Aviation System. The fact is the fccs infrastructure is increasingly obsolete and its technology is still cemented in the last century. To just quote my colleague, my esteemed colleague from oregon in a hearing we had not too long ago, he said that the faa is the only agency of government worse at procurement than the pentagon. Congress has tried to reform it. It didnt stick. We got to try to Something Different to get it to be more agile, to give us 21st century equipment, software we need. Then theres the shape of the fcc bureaucracy. Congress back in 1986 gave the fcc license to reform practices to deal with the decisionmaking process but that didnt take either. He goes on to propose a 21st century make it selffunding, selfsufficient and not subject to appropriations for shutdowns or anything else that a Congress Might imagine. I think we can see by that statement and as we talk here today we agree there is a problem. There is a solution at hand, its just a form that were going to debate vigorously on what we think is the best outcome. But assau a result over these p 30 years, the shocking amount of taxpayer dollars that weve wasted over the last three and a half decades, over 50 billion. Thats why this is one of my highest priorities this year is a comprehensive fcc reform and reauthorization bill. So far this year weve held reauthorizations looking at air transportation, manufacturing, airports and new innovations. Today well focus on the need for air Traffic Control reform, divesting the High Tech Service 24 7 Service Business from government and shifting it to an independent, not for profit entity. Its appropriate we are holding this hearing during infrastructure week. No other single infrastructure reform has as much potential to improve travel for the average american flier or to ensure our hard earned leadership in aviation. Although our Aviation System is safe, the fcc structure in how air traffic is managed have been broken for decades. The decision we make in the reauthorization bill this year will either move us toward a 21st century Aviation System America Needs or do moom us to repeating the failures of the past. Everyone should be reminded of what happens if we choose the status quo. It means our system will be subject to more budget con trains, sequestration, and threats of Government Shutdowns. Sequestration isnt gone. In 2013, sequestration led to furloughs and reduced operations, controller hiring and training suffered, and fcc bureaucrats tried to shut down contract towers. Fiscal constraints continue in the federal budget and thats not going to change any time soon and it may get worse. We continue to rely on the unstable, dysfunctional annual appropriations cycle. We have had no standalone transportation appropriations bill since 2006, and over that time Period Congress has passed 42 continuing resolutions to keep government doors open. The fcc also relies on authorizing legislation and it took congress 23 shortterm extensions over five years before it passed previous longterm fcc authorization bill. Under these conditions, the fcc bureaucracy has been trying to undertake a high tech modernization of air Traffic Control systems for over three decades. Its not working. Its never going to work. Sadly, in todays digital age, our controllers still manage planes with paper strips which of course i have brought a few to remind people of that. If anybody hasnt been in a control tower, they ought to go into a control tower and see it. Some argue that the latest attempt to modernize next gen showing some signs of progress. We know any progress is incremental at best and only in locations where the fcc partnered with the private sector. Lets remember the name next gen was really just a rebranding of the faas failed efforts to modernize the system. Its just a marketing term, not an Actual Technology or innovation, but it sounds catchy so congress will fund it year after year. The bottom line is there should be far more progress by now. Congress has provided more than 7. 4 billion for next gen since 2004. According to the faas own calculations, the return on taxpayer 7. 4 billion invested has only been about 2 billion in benefits and weve still got a long way to go. According to the dot Inspector General in 2014, the projected initial cost for next gen was 40 billion but theyve said it could double or triple and be delayed another decade. Over the years the faa has described next gen as transformation of americas air Transportation Network and said it would forever redefine how we figure the system. In 2015 the National Research council confirmed what was already becoming painfully clear, according to the nrc, the original version of next gen is not what was being implemented. It is not broadly trance forational and is not fundamental change in the way the faa handles air traffic. Only in the federal government would such a dismal record be considered success. While the faa continues to fall behind, the rest of the world is moving on with new technologies without the United States involvement. Nothing less than americas leadership is at stake. In an industry weve pioneered and led since kitty hawk. Starting in the 1980s, since 1995 Congress Passed various reforms to allow the faa to run more like a business. Procurement reform in 1995 to develop a more flexible Acquisition Management system. Additional forms in 1995 exempt the faa from most federal personal rules and alaw them to implement more flexible rules for hiring, training and societsociet assigning personnel. Additional reforms in 1996 allow the faa to negotiate pay. Organizational reforms in 2000 to establish a coo position. Additional reforms to allow greater pay so the faa could recruit good candidates, particularly for a coo position. Additional reform in 2000 by the executive order to create the air traffic organization. Organization reforms in 2003 to establish the joint planning and Development Office to better coordinate next gen. Reforms in 2012 to establish the chief next gen officer. Property management reforms in 2012 to allow a Better Process for realignment and consolidation of facilities, all have failed to result in the faa being run more like a business. The faa has always performed like a massive bureaucracy and will continue to. It is the only dot agency that serves as both Transportation Service provider and safety regulator. Regulating itself is an inherit conflict of interest and separating the two functions is simply good government. Its time for reform thats truly transformational. Real change can be difficult. Weve learned that over the years. But the broader lesson over the last several decades is that the true risk lies in doing nothing. Last years bill will serve as a framework for new legislation, but we are open to change. We want to talk to people and get their ideas and thats what we hope here today. As we continue to move forward, our air traffic reform proposal will be based on the following principles. Create an independent, not for Profit Corporation to provide air Traffic Services. Fund the new Service Provider by fees assessed for air traffic service. Free the new Service Provider from governmental dysfunction, political interference and the uncertainty of the federal budget process. Create a government structure thats right sized and balanced and fiduciary responsibility. Thats a legal term. If youre on a board of directors in the United States and you have fiduciary responsibility, its not to who the board. Its to the organization. Thats the law, not some pie in the sky. People can be removed and prosecuted if theyre not doing their fiduciary responsibilities. Ensure connectivity, access to the air space and the continuity of air services for general aviation, small and Rural Communities, and airports that serve them. Let me for the record remind people, im from a rural district. I have one very small airport. I doubt i have more than a handful of people that work for the Airline Industry, but i have several hundred ga pilots. So if anybody thinks that i want to harm the ga or Rural Communities, they just 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 billion dollar industry. Why in the world would i want to harm an industry that produces so much good for this country . We want to ensure full access to air space and air services to support our Armed Services and their National Security mission. Free the air Traffic Control business from the faas bureaucratic procurement process and the appropriation cycle. End the federal governments decades long pattern of costly delayed failed management of modernization. Give the new Service Provider the ability to Access Financial markets, Leverage Private funding for multiyear Capital Projects needed to modernize the system. Allow the faa to focus on its Safety Mission and certification mission. Ensure continued oversight of the air Traffic Services by the faa, dot and congress, and of course lots of people are out there saying that thats not what were going to do. Let me be clear, the faa, the department of transportation and congress will still maintain vigorous oversight to the air space of this country. And ultimately allow all users of the system including Airline Passengers in the general public to realize the significant benefits of modern air Traffic Control systems including decreases in delays, flight times and congestion. Previous efforts to reform the faa and modernize the system teach us that the only real way to these benefits is to get the government out of the way. As president Ronald Reagan said, government is not the solution to the problem, government is the problem. And we see all over the world people turning to the private sector, whether its europe or 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 meetings with stakeholders including both supporters and opponents of the air act. Weve had numerous meetings with members of the house, the senate, the white house and other committees. These meetings have been extremely productive and give us new ideas to improve the legislation. As i said, i want to hear the same thing from 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 first hand and we will go again with more members and i would encourage any member that wishes to go on may 25th, well be heading up to canada and coming back on may 26. Again to go up there not so we can imitate their system but to learn from the lessons of their system, to learn to fix our own broken structure. Over 60 countries have followed this kind of reform and it has worked in each case. Opponents of reform either ignore the evidence or must believe we are less capable than the other 60 countries, and for me thats a bit outrageous. Were the United States of america. We can do this. We can do this better than anybody else so its time for us to take a look and to move forward. Air Traffic Control is not inherently a government function. Its a 24 7 technology service. For those who worry that the system is too complex, i would say this. The most complex thing in the air space is not the air Traffic Control system. Its the airplane. Its the people at boeing and airbus and cessna and the people that build these aircraft. Thats the most complicated thing in the system. The faa already oversees those highly sophisticated private sector, aircraft and maintenance at arms length. We dont build airplanes today, the government does and thats the most complex thing in the system. Overseeing air Traffic Control is not going to be more complicated than anything else that the faa already does. This transformational reform will fix our obsolete and dysfunctional air Traffic Control structure, move beyond the wasteful status quo and benefit all the users of the system. Ultimately reform will give the american flyer a safe, efficient Aviation System using 21est century technology, using more direct routes, 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 i will yield to the Ranking Members for Opening Statement. Thank you, mr. Chairman. Jim would have been proud. Thats the longest Opening Statement since former chairman jim overstar, but you only did it in one language. We could have had a translation. Thanks for the time, mr. Chairman. First off, i spent over an hour with dr. Dillingham from the gao who i would say is the foremost expert and the longest term critic of the faas procurement process and moving toward a 21st century system. Im not aware that any other member of the committee has spent time with him and he has not been invited to testify. He has a different story to tell today. He thinks it will be a mistake and im paraphrasi paraphrasing but we are now on the cusp of a 21st century system that will be the envy of the world, and he and other experts say a massive change now where you cleave the faa into parts, you leave the most vital thing to our manufacturers certifications subject to appropriations, sequestrations and shutdowns, you leave the most vital thing that is most 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 id also note that the airlines themselves have had outages 36 times, major outages 36 times since 2015. Im not aware that the national air Traffic Control system has had a major disruption, with the exception of deliberate sabotage by a contractor who knew how to get the system and the backup system. But the airlines on their own with no sabotage have managed to melt down their dispatch and their reservation systems 36 tim times, stranding millions of people, so they can do it better, right . Thats an interesting question. So i think that members of this Committee Want to be educated on this, should take and maybe we can invite them here and spend that hour with dr. Dillingham and hear the story of how things have changed and the progress were making and the potential for disruption at this point in time. In terms of funding, the faa is currently projected over the next decade to be 97 selffunded. Unfortunately, the way our colleagues around here and the budget process works, despite the fact theyre selffund, they can be sequestered or shut down. 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 cleave it in half, put vital functions over here, still subject to sequestration shutdown and take this one part and here, still subject to sequestration shutdown. How are though going to sell it . The airlines have told me time and time again they hate the ticket tax. They say thats our money. I say no its not your money. I buy a ticket, i pay the tax. The tax goes to the government its not your money. That affects the price of the ticket and competition and everything else. Its a horrible thing. If they do away with the 2ik9 tax, there goes 70 of rev hew. Cau congress will have no say over that. There will be a board and a construct which is well show here for the person running the slides, if you could put up come on, come on, come on, could put up this slide, please. And this is the new construct. Anything that affects competition will go through this process. The board makes a decision about a new approach, a new route, new fees, tall that goes through this process and then goes to the secretary. The secretary will have established a large new office of consultants within his or at this point her office who will advise the secretary of a limited period of time. If the secretary and the board disagree, they go to court. Thats a great way to deal with new approaches, funding, and a whole bunch of other things. Congress will have nothing to say about what people or the American People are charged for running this system. When the ticket tax goes away, what happens to the aip program . What happens to safety, what happens to certification. We had a guy in here who said his beggest problem is certification. He said people are good at the faa. There arent enough of them doing certification, they dont have enough money. Is this new enlithend boarding to to fund that also . You can put that down now. Weve heard other things that are, you know, interesting construct, which is we are way behind because we dont use adsb. I could have the first slide please . Can we get a slide . Ok. This is the oceanic airspace. Youll notice that the vast major of the planes are in oceanic control by uk and canada. So theyre using adsd. Makes sense. Were not currently. Airlines pay to have satellitebased nevada obligation, a fee in this lower part of the chart. There arent that many, because people do the loop to the north. So in fact, we have they have one aircraft in continental space. We have one aircraft in oceanic airspace for every 51 in the air over the United States of america. Go to the second slide. Oh, by the way, go to the second slide. Now, see all that yellow . Thats the u. S. That is going to be totally adsb satellite based in 2020 with an exception. The airlines have petitioned and been given permission from the faa for exceptions because many of their older planes do not have modern enough gps systems to use the adsb. They have requested a number of years before those planes would be able to use that system. Not the faa. The airlines themselves. Canada is going to continue to have a radarbased system because they dont have a lot of domestic traffic. We going to put, you know, 100 times that many planes under adsbs in 2020. Heres my fear. My fear there were disruptions in canada, there were disruptions in great britain, including the bankruptcy of the system and a bailout and they every system that has transit and all the other ones in the world have gone to governmentbased organizations or governmentcontrolled operations. And theres only two countries who have gone the other day and there have been studies. There will be a period of disruption, particularly when youre cleaving the organization in half, and particularly those who have to certify. Oh, theyre on furlough because the Stupid Congress did another shutdown or sequestration. Oh, but its up and running. You cant use those approaches because the people here that have to certify it cant work. Splitting this agency in half doesnt make sense to me. The chairman talked about the reforms. The faa head has not been invited to this haerk. Hes done great job. He said, well, they failed because congress failed to say that the trolls at omb and the secretary couldnt medaling. So the reforms didnt go forward because omb took control and the secretary messed with it. I know you find this amazing but thats the way it happened. These did not go forward. So simply, you can just say we are going to give authority to reform procurement. We are going to give authority to reform personnel to the head of the faa whose proposals will not be subject to omb because theyre now selffunding and will not be subject to medaling by the secretary of transportation and her staff. That would be a way to go. Forget about safety, certification, theyre afterthoughts in the government, not funded by any stable source. Ive invited a witness today, joe brown. Hes the president of hard sell propeller, his family has been involved in the Aviation Business since the Wright Brothers actually. Eats an interesting story but 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 piellot d to see things that he sees as a ga pilot in this country and things that are extraordinary for bga pilots. Why would the commercial Airlines Give a darn about those airports . That costs money. Thats not in their interest. They dont use them. They dont care. Well hear from him. I think his testimony will be more compelling than a couple of think tank people again and again and again. We havent heard from the faa, ms. Romine for the third time and mr. Poole for the umpteenth time. I think there are things we could agree upon but i do not believe that privatizing the ato is the answer. Thank you. Thank the gentleman. You almost equaled my Opening Statement, so youre too much short. This hearing is going to bent it has to be about knocking down things that just arent true. The what mr. Fozzy puts up on his chart, its not my proposal. I dont know whose proposal it is. Mate be mr. Defazidefazios pro. 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 at let me finish with that. [inaudible]. Well, were going to have a debate i think. The only person that can raise taxes is the United States congress. So thats patently false. The second thing at the top is the corporation decides to change safety procedures. That cant happen. They have to come pack to the regulator, to the faa. I dont know whose chart this is. Its not mine. As we move forward you might want to call that fake news . I dont want to go there. One other point, the gentleman said congress and the omb failed. Hes absolutely right. Hes making my case. We have to take this out of congress, out of the omb, its crazy. Im concerned that if they take it all out, will there be any oversight in his new idea of how to run it. Again, this chart, the chart that he put up there, thats not my chart. Ladies and gentlemen, i got to be very clear on that. Mr. Chairman if i could rebut for a moment. You certainly can. User fees, i consider to be takts, i consider the gt ticket tax to be a user fee but we can argue semantics over that. Secondly, im not proposing i am proposing to give the faa administer that authority free of omb and secretarial interference and also we would give them a bumt that is free from sequestration and shutdowns through their own funding mechanism. Congress would set the funding if it needs to be adjusted. Congress could intervene if they felt the reforms werent warranted unlike your privatized system. Thank you. I thank the gentleman. Well go to our witnesses. Id like to welcome again our fanl. I believe everybodys testified before us before on at least one occasion or maybe a few. First calvin skolam. Joseph w brown. I believe you testified in 2014. This is your second time leer. Mr. Robert poole whos been thinking deeply about this subject for many years. Mr. Paul ra that wouldy the president of the air Traffic Controllers story whos been before us and doer think robon who has been through the war zone of this many, many times. I look forward to hearing your testimony. I ask you now that our witnesses full statements be included in the record and without objection, so ordered. The committee would request that you limit your oral testimony to five minutes. With that, you may proceed. Chairman shuster, Ranking Members defazio, members of the committee, thank you for asking me to testimony. My testimony today will focus on oigs past and ongoing work on reforms as well as the could you move the mike a little closer to you . Yes, sir. Dont be afraid of it. My office does not make policy recommendations. I will talk about how other Aviation Systems have been formed. Over the last two decades faa has made several reforms in response to congress mandates. These include establishing new Employee Compensation systems as well as an Acquisition Management system. Faa has also undertaken multiple reorganizations to improve efficiency and reduce expenses. In addition, faa achieved more than 2 billion in cost savings over a 13year period by out servicing flight stations. Faas reforms have not wonchtd instead budgets have been increased with a 35 in the faas total budget adjusting for inflation. In addition, faas productivity initiatives for air Traffic Controller work force have not yielded improvements. Faas reforms have also fallen short in proving its ability to deliver key next again technologies. This is key to longstanding weaknesses such as overambitious plans, unreliable estimates, infeeffective froej management. Faa has made progress with its six programs such as installing the ground system for adsb. However, faa has not determined whether the programs will start delivering benefits or how they will control traffic flow or productivity. Their total cost and completion dates remain unnoechblt furthermore, weak rchss 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 set aside contracts. To its credit faa has worked with industry to identify and launch some of the highest priority next jen capabilities. A pbn allows more fuel efficient routes and reduces airport congestion. Faa fully deployed these procedures at the california meant pleks well ahead of schedule. Faa has deployed new technologies to enhance pilotcontroller communications and runway operations. Yet many risks remain to complete these and full benefits for users remain years ago. Key challenges are integrating complex on board system and controller technologies. As congress, the administration and stake holders consider faas structure, others nations may offer a helpful comparison. At the request of this committee we reviewed the Aviation Systems of canada, france, the United Kingdom and germany. All four have government controlled in air trachks control. Its been commercialized, their term, into Service Providers via various organizational structure. They finance through user fees. Long term bonds and other debt are instruments may be use. They roll them out incrementally as youing a variety of methods. Any discussion on next gen. The u. S. Runs the busiest and most complex system in the world with more flights than the other four countries kbiencombined. Regardless of what the future looks like, strong controls in oversight will be vital to maintain a safe, innovative transportation system. This concludes my statement. I look forward to answering questions. With that, mr. Brown, you may proceed. Chairman shuster Ranking Member defazio you can bring your mike closer. Get right up close to it so we can hear you better. Is this better . Better. Members of the committee, id like to thank you for invitesing me here today. My name is joe brown and i come as a businessman and a pilot. I represent a cup called hartsel in loewe. We do our business out of a 4,000foot runway which takes us to all our customers. Because our customers build airplanes. Theyre on airports. Our business and their business depends on the amazing infrastructure that the citizens of this country have put into the National Airspace. We depend other another thing which is did right to fly. We are very grateful for that and deeply invested. As a pilot four to 500 houshs a year, my office is the cockpit. When i fly, i find a high functioning system and ive seen it evolve over time right before my eyes. I find controllers in a do their job well. I find easy access. I can file a flight plan from my smart plan and get my flight plan back before arriving another tat the airport. Couple months ago i took off out of the Dallas Fort Worth metro area and got cleared 13 miles ahead to vermont. I have the vail of saved brought to you by adsb which is deployed giving me weather and separation q w queues. I can prick from 3,000 precision approaches brought to me called w. A. S. P. The bottom line is next gen is working for me and 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 focussing on the structure and the governance of our air traffic organization. I dont like that risk proposal. I don profile. As a businessman i think what well find is that we will raise more questions than we can answer, questions that dont have clear answers and kwoes this that will burn up pressures ti precious time trying to answer. What about new market entrants . How do they fit . That doesnt address whether the People Better served by the structure after we transfer so much National Wealth 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 vote. We say what are its strengths . Can they be leveraged . When thats true, we buy the company. We know if we elevate strengths and reduce weaknesses, we will succeed. There are significant weaknesses we can address. The conclusion ive drawn is we should not spend five to seven years distracted by change with the hope that at the end this restructuring journey will deliver a big payoff. I think we should stay on track with the technology plans that the next gen advisor committee. Theres more technology coming. Lets tuning and strengthen iin data com is in the field today at 55 towers in the country and will be delivering en route systems to aircraft by 2019. Next again is jen is Getting Better all the time. The way we give them america nichls for doing long term Capital Planning and investment. Finally lets work on that infrastructure. There are a number of ways that privatepublic partnerships could put these guys in better buildings in the next five to seven years, whoa could have them all in better buildings. I encourage us to take a different path that are fixing the fixable and elevating strengths. Thank you for the time. I look forward to questions. Mr. Poole. Good morning mr. Chairman Ranking Member defazio. As some of you know ive been researching this subject for close to four decades. Most recently ive been involved in two groups. Both have kkds that we have major fundamental funding and structural problems and that corporatization of the ato is the best solution. That was also the exclusion that the faa Advisory Council reached. My focus is primarily on the issue of governance. Business Round Table Group recommended a Nonprofit Organization in which customers and other stake holders govern. This is basically a user co on except for the edition of can you full mike a little closer to you . That thing moves, i think. Pull the whole box towards you. All right. Please. Its a user co on with did adoifgs other users. What was proposed in last years bill was intended to be a u. S. Adaptation of nav canadas nonProfit Corporation. The stake holder board from last year has been described as giving kroelt of the airspace to the major airlines. This, of course, has led to serious concerns from general aviation groups, people in small towns with small airports. Tlsh no hair holders. 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 could be outvoted by other members. This model is consistent with International Aviation law and with global best practices. The proposal did not originate with the airlines. Id like to set the record straight. The business Round Table Group began in 2011. We got a pretty cool, if not negative reception at that point. No one wanted to restart the battles that had raged over this yirk in previous decades. Everything changed in the spring of 2013 thanks to the sequester. Control of furloughs, closed the faa academy threatened closing of 199 contract towers. In response, the agencies requested new kansass with the brt working group. In may of 2013 all three groups in the Conference Room at the business round table believe that self funded and out of the federal budget was the best approach. After this happened, that fall governor engler and others briefed chairman shuster. Bnks rt including a former faa administration, chief operating office of the at oorvegs and several consultants. Our governing model was patterned after nav canadas. No board member at nav canada hold any position in any organization. Its a system that really works. Of their four Airline Seats elected by airlines, two are from major airlines, retired people. One is from an air tour company and one is from a Regional Airline serving the far north. The u. S. Is larger and has a much larger general Aviation Community. Ga should have more than one seat. P airports are a stake holder that should be electing a fword seat as well. I think in terms of the airplanes, region nal airlines and Cargo Airlines should be declared as stake holders. I have one example of a proposed 15member stake holder board. Having airports and Regional Airlines as stake holder is part of the answer but Congress Needs to deal with the fears about loss of control towers at small airports and worries that somehow the service might be dropped in rural areas. First of all congress could specify a reasonable cost test should be assured of getting tower services. Faa would be in charge of aviation safety and no changes in procedures or equipment could happen but they might be proposed by the corporation. Would have to pass muster with the faa. Could not be done unilaterally. Third, the funding today gives the air force the short end of the stick. So small airports are losing today in what they need because of faas ongoing budgets problems. Selffunded selffunded secondly, a corporation would very likely implement control Tower Technology that would increase the benefits of having a better tower because of surveillance, reduce the cost, more airports would be able to. Thank you. You may proceed. Good morning, thank you for the opportunity to testify. Microphone. In front of you today. The whole box. There you go. How about that . We currently run the largest, safest, most efficient, most complex air system in the world. It contributes 1. 5 trillion dollars. Its unique, unequaled and unrivaled by any country. This is due in large part to the work the men and women that i represent do every day. The members ensure over 900 million passengers arrive safely at their destination every year. That status is at risk. Unstable, unpredictable funding and status quo threatens it. We need a stable, reliable, predictable funding stream to allow for growth in the United States Aviation System. Although theyre calling for change we cannot support any proposal without fully reviewing any of its dlachlgts thats not only its not only that we oppose the status quo which is very much broken, we also oppose any system dhald put atc in a forprofit model. In order to consider any support of a proposal it must meet our four Core Principles of reform. Any new system must keep the safety the top priority. Second, any reform plus protect our members employment relationship. Pay, benefits, retirement system, Health Care System as well as work rules in our contract. Third, any reform system must have a stable stream adequate enough to support air Traffic Control services, growth, staffing, hiring, longterm projects. Also this plus provide a stable fund. Fourth, any reform must maintain a dynamic, diverse Aviation System that continues to provide services to all seg jmgts of the Aviation Community to all airports across america. I want cant stress how important it is to continue to the provide service to both small and large, new and old, t. Last year, naaka supported the air act of 2016. Whieg we do not believe there is only one solution to the problems we will carefully review all proposals using the same standard. Please dont take the position as a need for stable predictable funding as to mean the appropriates have not done their job. Theyve done their job well. The problem stems from lack of regular order weve been experiencing for over 10 years. This lack of regular order has led to stop and go funding, many threats of shut down. Were at a 28year low of certified controllers. Approximately 3,000 are eligible to retire at this time. In addition unstable funding has prevented problems. Naaca takes pride in partners with the fab in developing and implementing projects. We have successfully worked on many over the years. Unfortunately, all have been impacted by uncertainty of funding. If you look at fy 2018, the faa shifted its focus from next gen to shut down. We received a one week funding extension followed by a fivemonth funding bill. Five months is no way to plan for the future in aviation. Congress needs to pass an faa authorization bill that brows stable, reliable, predictable funding. Congress should exempt the employees from indiscriminate sequestering codes. That will reduce capacity and suspension of key next gen programs. I want to thank you for calling this hearing. We must all remain jij lent and focus on the hor izzon. Thank you. Thank you. With that, ms. Robine, you may proceed. Thank you, chairman shuster, Ranking Member defast owe, 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 democratity undersecretary of defense for installations and environment and then as the gsa public buildings commission. I spent eight years on president clintons White House Economic Team where during his second term i was the point person on iefgs and air Traffic Control among others. I was at brookings and an economic consultant. The first point i want to make is corporatization of the air Traffic Control system is not a radical idea nor is it a republican idea. The Clinton Administration tried unsuccessfully to do this in 1995 with its proposal to create a selfsupporting governments corporation, usats which would be run by a ceo and a board. Tetd only four countries had corporate tiesed. Now six other countries have done so. The second point is that the rational for usats applies no less today than in 1995. One, air Traffic Control is not an inherently governmental function. It is not inherently governmental. Keeping plaings safely separated is complex and safety critical but it is a purely operational process that follows well staeblgd rules. Like running an airplane or manufacturing a beauing 737, air Traffic Control can be formed p performed by a nongovernment entity. Two, precisely because of the operational nature of the air Traffic Control system, the federal government is poorly suited to running it. The consensus of countless Blue Ribbon Commissions and expert reports is that air Traffic Management is a 24 7 Technology Intensive service, business trapped in a regulatory agencies that is constrained by federal budget rules, burdened by a flawed funding mechanism and micromanaged by congress and the office of management and budget. Is it a ma no, maamly . Yes, at least for now. But the telephone industry was, also. My final rational for usatsz. The current arrangement is flawed on safety grounds. Echoing Safety Experts worldwide, the air Traffic Control regulatedor has been called for to be independent. Were one of the only industrial nations in which the agency same agency both regular lagts and operates the air Traffic Control system. In sum, 22 years after usats was dead on arrival in congress, the International Aviation community treats air Traffic Control as a commercial Service Business and most countries have spun it off as an autonomous selfsupporting entity both to give it the agility a business needs. The u. S. Has gone from failed innovator to laggard. Usats was the only model that existed in 1995. Nav canada this came along a short time later has shown a better approach that well discuss this morning. Had nav canada existed in 1995 i strongly suspected that it rather than new zealands model would have been the prototype for the 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 ideasology cal as one Committee Member characterized it last year. I believe in a robust federal role in many areas. I think the federal government gets far too little credit for its accomplishments. I also believe that the federal government has recognized where it is necessary and where it is not to achieve objectives. Sometime id like to tell you about privatized military Family Housing as the greatest quality of life program the Defense Department has ever implemented. Thats not ideology. Thats good government. Thank you. Thank you very much. Were going to start with questions. I would ask all members to stick to five minutes. If we need to go to a second ill be more than happy to indulge. First question i have, mr. Brown i really appreciate you being here. Weve sat down on a couple of occasions to talk privately about your concerns in the industry in general. Of all the witnesses i feel like im a kinded read sbirt you. I owned a business, and i know what youre doing every day. Getting up, meet the bills, make sure your operations are functioning in a world that you have to deal with an agency like the faa can be challenging. From a business would you allow your businesses to grow a budgets 95 over a ten or 15year period while at the same time the cost of Service Increases 75 and all the while youre losing customers . Would that be something that you would tolerate as a Business Owner . Of course not. Id be very concerned about that. Absolutely. And i would, too. I think youre absolutely on the mark. When you look at a business you look at the strengths, leverage, how can you make it strong every and the weaknesses. On that Business Model when youre in the Business World that are works. When youre dealing with the federal government, that weaknesses part, theres not a way we can change. Weve tried for 30 years to change it. The only way to do it, i believe, is separation. I dont want to speak for mr. Defazio but he believes spraegs but looks different than i do. I really appreciate you being here. The thing were really up against here is trying to change something thats not been able to become changed for 35 years. Thats the real challenge we have to address here. But thank you for being here. I would like to ask mr. Ra that wouldy. I brought the paper strips here. The dc area tracom for one day. I think we have the most modern towers we can throw up on the screen there. Those are paper strips that we stuff all day long in the country, as we move the controlling of an airplane from position to position we pass the strip from controller to controller. We have tried and were in the process one more time. This is another reason why an interruption in funding could be a problem. We are working right now with the agency and with lidos on a program that would move that to 100 electronic as other countries around the world are using electronic. It is an efficiency thing. If you look at our new towers in San Francisco is that francisco . Thats San Francisco right there on a foggy day, which happens a lot in San Francisco. And ground stops. The controller is actually just moving paper around that little work area because just to keep some type of order of how the airplanes going to come out. Do they put up the las vegas tower, too . Thats the first thats las vegas right there. These are both brandnew faa facilities. Theyre the most modern. Well, theyre the newest facilities. They were actually supposed to have an electronic flight strip program in them. The problem is that because of reduced funding we were never able to make it on time. Were using paper now, which is still very safe. Were just losing some efficiencies. But we would like to get to an electronic stripe program. The thing that tipped me off, thats a plastic container theyre putting them in. Not a wooden crate. Theyve advanced to plastics, so thats impressive. Can you talk about what nav canada does . The controller has a good line of sight. Heads not down in paper. Its definitely more efficient. Can i ask one further question. Would you say that the london airspace is the most or least complex airspace in the world . I would say that around london heathrow, is that what youre talking about . Yes. I would say its busy and complex. What system are they use something. Theyre using the nav canada program. I appreciate that. I field to mr. Defazio. Thank you plks. I dont think you got a chance to respond to mr. Shusters question. Would you like to expand on your answer there . Yes, i would. The way ive been thinking about this is as a businessman. I think the National Airspace is a fundamental economic driver in our country. Our country is nor aviation sent rick than any other country in the world. You can see that. The way i think about this whole what is the value of return on the level of investment that we make in our ato, what industry have we created in this country . What are the returns on that . When you have a question like that sent to somebody like me i immediate lid go to the larger and very significant economic value of we have the best avionics manufacturers in the world. That is generating an enormous public return in tax revenues and jobs. I think you have to put all the economic value in the bucket before you ask a question thats yes or no in my opinion. Thank you. Mr. Ronaldy im sure youre fam with the collision of a russian aircraft. What caused that . That was caused between lack of communication between ansps. And wasnt there one person on duty who had multiple tasks . It was a fatigue issue with the controllers all right. So little cutbacks and oh, and but they have kept safety oversight separate. Is that correct . Is that correct. From the corporation . That is correct. When is the last time we had an airtoair collision here due to a controller error . A very long time and i dont like to talk about it. So you must have said at least 20 times during your testimony and your answer funding, stability, sequestration, furloughs, talking about the new much more sophisticated electronic flight strips which would implement other aspects of the system and have more capability than the much more static model used by nav canada which was offered to us here. I think you said you werent saying i dont think it will work. You said were worried about delays and reduced funding. Is that correct . I have no doubt. Well be able to develop our own system. It comes from where were working collaboratively with the manufacturer along with the faa. It defends on a lot of unserntd in funding as we go on. Would you agree that that is a significant problem . I would. Fund is a significant problem as has been pointed out. I would also say there are other issues brought to bear. Thats fine. But and so lets see. If i think about it, funding, sequestration, shutdowns, that all has to do with congress, so if we had the faa with its current funding sources, 97 projected over the next 10 years, so just a few efficiencies would get us to a hundred percent self funded. Would that solve many of your zbleerns yes, as i said in my owning statement we dont believe theres one answer to this. We believe the status quo is unacceptable. We would look at anything that was proposed. Let me interrupt. Quickly, mr. Brown, when we had, you know, last hearing one of the many mr. Poole said if there was a problem and atcb became insolvent, customers would have to pay more and then the question of course bbc if it then fails who would be responsible. Who would be responsible if the atc failed until this country . Thats one of my risk calculus. The day they move out of the Public Sector into the private sector. All the financial risk accrues to the people regardless of where that monopoly. Too big to fail. Too big to sfal my concern. I think weve heard that before. Thank you. Thank the gentleman. With that, mr. Lovianda. For you, over three years ago, mr. Larson and i directed the faa to come up with four capabilities that could provide near term benefits given the constrained federal budget we work with. These priorities were supposed to be the low hanging fruit. The things the faa could get done and prove to the industry that they can deliver the benefits. I think im now hearing you say that for many to have priorities, full implementation of all capabilities and the realization of those benefits remain years away, so the question for you, mr. Scovil why are the easy things taking six to seven years to develop . Youre right. The four n. E. C. Problems. Perhaps unbenoent at the time, were not fully appreciated at the time that the there were risks to each of them. Whether were talking Service Operations or runway operations. Each of those presented problems. I would say that right now were at the point where the time frame of 2019 perhaps when data com and the en route environment will begin to be implemented through maybe 2021 will be what we in my office are calling a pivot point for the realization of benefits from these four nec priorities. With this pivot point, whats your assessment if we dont make this . I mean, what does this ripple out for how long or can you talk acts 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 the secretary as to where they are in different programs. Faa together with the h nac have an Implementation Program and a working group thats bird dogging it as closely as they possibly can. However, the problems outlined in my written statement are significant. They may yet derail the program to some extent. The choice at that point is to continue to press forward. So it may go on beyond 2020, 2021. But at thisminute we dont know. Congressman, would it be ok if i added something to that . Yes. One of the things that i dont think is getting fair discussion in the modernization effort that were in is that first you have to invent and deploy the technology which generally has been the faas purpose but then User Community has to equip and in many cases change the equipment to benefit fully. Thats where we are right now. We have adsb fully deployed on a nationwide basis as far as the ground structure. Likewise, that will be true of data com and other technologies. Where we are right now, if faa has done a lot of heavy lifting and the users have to equip. Thats why the change is going to flow into the system in the years to come. Id like to yield my time to mr. Shuster. I thank the gentleman. 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 part of these problems along with the bower ok si. Taking an agency out of government and going to failing and going bankrupt, if everybody kals, on 9 11 i we injektded money into the Airline Industry to prop them up. We had to have an Aviation Industry. Im not willing to say that agency is going to fall because i dont believe it is. Middle east of the money can be provided by the users. Canada did not require the federal government of kaunds to inject money. The british did. The british for profit and as mr. Ronaldiy said, i would oppose it. I think again using too big to fail, we faced that in dwun but there are models we can look at to make sure theyre set up in the proper form. I keep hearing agreement over and over again. Its the bureaucracy. Its omb. Its congress, the stops and starts that cause these problems. With that, i recognize mr. Larson. First off, id ask unanimous consent to enter into the record . Mr. Chairman . Yes. Thank you very much. So for mr. Rinaldi, youre a member of the faas advisor management counseling, is that correct . Yes, sir. Mac called for reforms that would not require splitting up the faa and you signed the letter along with other members of the mac. As i said in my Opening Statement 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 the letter. There are different and you argue there are different waying to achieve that goal. Absolutely. All right. Inspector, we heard in some comments today that the air Traffic Control system is safe but its broken iz fly on United Airlines and back again for my commute. Can this system be safe and broken . Or should i drive . It is safe, of course. And thats certainly be seems to me the fundamental argument going on, we have to go to privatization because the system is broken that actually controls the airspace. Its broken, i dont know how it can be safe and so it would support the privatization argument. However, if it cant be safe and broken, it seems to undermine the whole argument for prooifsization. Certainly it is safe and the record shows that. No commercial aviation fatal accidents in the last few years. As far as broken, i would take issue with that characterization. I would say certainly modernization has been lacking but its not broken. I wanted to sfloer a separate issue with you but its tight abuse were trying to get an authorization bill done and i think largely theres bipartisan support on a lot of issues, including with differences around the edges, uas, incorporation into the airspace, certification reforms. Seems to me all these are being held up by this debate on the to be or not to be question. Can you talk a little bit again, just briefly, about why certification is important, why some of these other issues are important that we move forward on but yet we ourselves are lagging on getting them done because we continue this debate on privatization . Im happy to do that. I would say that congress has been incredibly supportive of the idea of facilitating approved ways to market through certification. We have had great support and friends in Congress Come to our aid to try to make our United States Aviation Industry as strong as possible. Thats been matched with very good appropriation support as well. We tend to agree that 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. What that means to me is that we are market leaders in all our product areas in aviation, if we cant go to market, then somebody else ss gaining on our heels. At the end of the day im always concerned about extending fair competition. So for me there is something important about keeping the invitedal function of vertification up and running. I appreciate hearing that. I want to make sure folks did hear that. I thought that would be the answer. Its just that this main point is were not working on a privatization bill. Were working on an faa reauthorization bill as many moving parts, many of which we agree on, democrats b and republicans and yet its being those are being held up by this one debate. Seems to me we can move forward on the things we agree on moving forward. So i yield back. Thank you. Thank the gentleman. Now recognize the chairman yo g young. This is a very interesting hearing. You know my interest in my state, 80 of our communities are not connected by hiways. We have 700 air strips, more than any in the state of the union, by the way. My interest in general aviation and the chairman and i have discussed this fr before, as long as alaskas taking care of the need for aviation and not being run by the Large Airlines ill be interested in what were doing. I think mr. Brown, you did fly in alaska, did you not . For what, two years . I had a chance to spend a few weeks up there running around the back country. And dove any trouble with air Traffic Controllers . I did not. Thats good because i think theyre some of the best but i would like to ask, did canada its system file for that concerns me. I would suggest, mr. Chairman, my interest i think we may be addressing the one spot the best part of the faa is the air Traffic Controllers. But the faa itself, the management is not in good shape. I 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 weather is. Thats a regulation. So im interested in seeing what we can do about revamping the whole faa, but not the air Traffic Controller so much but the system they have is badly manage. Appreciate the gentleman saying that. And thats what were after and the gentleman knows, maybe i should say the gentleman is guilty because you have been here since 1973. Abraham lincoln and i flew airplanes. You know better than anybody else they have not worked. They failed every single time. Some in this room might say 25 years ago there were four or five layers of management at the faa. Today there are nine or ten. 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 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 go 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 said in their report, first of all they interviewed six of the different caa around the world and was unanimous stating the separation of caa from air Traffic Control was worth it. An increase in focus by the regulator and the ansp the focus on safety by the regulator and the ansp in improved efficiency. 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 and doing a lousy job of it. When i point my finger at the faa there are Three Fingers 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 that have been made in the United States have been made by democrats and theyre not calling for structural reform as we just have tone with the Affordable Health care act. I have a question mr. Poole, it is a question that is arising issue and one that i have requested a hearing on that has do with airplane noise. When i say a rising issue i mean all over the United States. In my own jurisdiction and i represent the people of the nations capital. But so much so across the nation that we formed quiet skies coalition, a Bipartisan Coalition to respond to issues that by the way next general is just left out there, on the ground, people are complaining. And of course as a result of those complaints, 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 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. Mr. Rinaldi you are one of the foremost experts on air Traffic Safety in the world. Would you support a proposal that jeopardized safety . Absolutely not. Thats our core principle. Would you support a proposal that jeopardized National Security . Absolutely not. Would you support a proposal that weak pd our ability to modernize the Aviation System. 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 wont the same people pay twice . 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 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 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 and we dont. Canada has 40 Million People and we have 350 Million People. Its a lot easier to set up a Health System for a country with 40 Million People. I have some fears regarding this. They have 40 towers. We have 500 towers. Obviously can you assure me that if we go this route, that 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 and Management System 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 in adjudicating our needs. But i applaud things they have done and what we have done in our country. She characterized our system as a laggert. That is just false. We have the technology in our system today that no other country can rival. We lead in the 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. 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 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 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 organizations for the other four countries and we were told that they consider part of their Borrowing Authority to be leverageable or to be recognized by private lenders because ultimately, should something drastic go wrong, the government would step in behind them. 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 organizations have told us about their systems. Those four countries were on the hook . Conceivably, they may be. The policy calls for their legislatures in the executive branch. Thank you, mr. Chairman. Thank you. Now recognize mr. Meadows for questions. Thank you, mr. Chairman. Mr. Poole let me follow up on what you were just talking about in terms of the canadian system versus the air Traffic Control system here in the United States. Because there are people that would say, well, 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 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. 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 program might compare against ours scaled up. When will nextgen be completed . We continue to callocate amount of money. This is not your first rodeo, nor mine. We continue to allocate unbelievable sums of money. And i hear at best ambiguous dates of when it will be completed. What does the Inspector Generals 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 o 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 you should the faa. I have under Good Authority 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 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 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 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 of air Traffic Control in the world. Did you not . We are, sir. With largest, safest, most efficient. And mr. Brown, you fly you put in 500 hours a year, minimum flight time, and you are strongly committed to the concept that our air space is safe and that the operations that make it safe are up to par and you are 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 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 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 system over to the free markets. Your website for the Reason Foundation states that the Reason Foundation is committed to advancing the values of individual freedom and choice, limited government and 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 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 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 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 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 help me with 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 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 an i hear mr. 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 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 proposed moving it to a government corporation. 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 corporations 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 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 that has looked at this issue and we proposed it in 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 the Aviation Industry 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 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 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 have been treated to their resources to build two Global Leaders in their space and have the Airport Infrastructure 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. Ill answer that. And let me start by saying although i spent three years in the pentagon that air Traffic Control 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 and longrange radar. The department of defense has huge equities in the National Air Space system. They manage 15 of the National Air Space and have 15,000 aircraft. They depend heavily as a user on the air Traffic Control system. And they support the spinoff of the air Traffic Control 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 arrangements currently in place. This is not inconsistent with National Security. 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 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 threat 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 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 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 in this. Or a referee or umpire to decide 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 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 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 and the fits and starts that go along with that and i agree with you. You also heard Ranking Member 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 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 Controllers 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 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 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. Does anyone want to defend the honor of the Civil Servants . I will be happy to. Go ahead. As i said in my Opening Statement 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 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 towers doing an excellent job and we have an air Traffic Control 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 cutting 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 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 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 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 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 america, i want to see it improved. And mr. Rinaldi, some of the opponents of reform claim that new Service Providers would be able to deny access to Rural Communities and small general aviation airports. How do you respond to those claims . Thank you for the question. Air Traffic Controllers 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 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 remote towers. This has been an argument the small communities argument has been made. It was made in opposition to Airline Deregulation 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 not in the stake holders interest to have that happen. Thank you. I think it is very important. 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 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 to propose the patterns and the faa has to 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. But i will tell you while were moving forward with metroplex and pbn, the faa is going out and doing joint Community Meetings along with the users and the stakeholders to explain what we are trying to accomplish in making the skies greener, safer, with less noise. But keep in mind as the Technology Makes it to be more precise on approaches, there are certainly winners and losers when it comes to noise, 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 Controller hiring. Will this not will there be troubling lack of accountability and transparency 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 Controllers, 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. The transition on who would actually still control the faa academy in oklahoma city. So that was not laid out in there i dont believe it was. Its it to be determined later on. Okay, thank you so much. Its something i look forward to seeing with the bill and the details and look forward to maybe having another hearing at that point. But thank you, chairman. I yield back. Thank you, chairman. Thank you, mr. Chairman. Id like to pick up where my friend mr. Westerman left off. Id like to further clarify some of the issues he raised. One is there seems to be some confusion in the debate about what we call the 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 decisions and the provision of providing the atcs services. And mr. Grenaldy you specifically addressed that by saying you simply provide the services who whoever shows up in the airspace essentially. But i guess id like to further clarify that. 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 these decide where the airlines fly . Absolutely not, congress. Airlines will decide where they want to fly and presumably the system will accommodate where they meant to fly. This includes air taxis, regionals, as well as air carriers. Were not privatizing the airspace. We would only be privatizing the division of the services, including new facilities and new technology. But all the ownership of the airspace remains with the federal government in the form of the faa. Thats very, very clearcut. Thank you. I appreciate the clar faction. And another question. The district that i represent in pennsylvania includes three smaller airports, no Major International or domestic airport in the district. But each of these smaller airports serve a county and are critically important to the theyre economic drivers in the county. And so theres concerns that have been raised, and i just want to ask you directly about any potential impact of this system on the smaller airports. You know i have one in particularly, the Chester County area of my district that has an application in for a control tower. Right. 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 inprovement for small airports . And if so i do think there will be an imp provement. For one thing the faa funding regulations we have is more thats big going on. The only thing that could be lift today is significant budget increase or they cut out other funding like next gem so forth, that no one would want to see. I think the best thing for expanding the reach of control towers is a better funded organization that also one that increases benefits that reduces cost, so the contact tower benefit ratio will be smaller that might not qualify for a 700 tall structure but could easily afford service for it. Thank you. One question, mr. Brown. You asserted that nongovernmental air Service Provider would somehow be outside democratic oversight. And i want to opponent out just a few weeks ago we had representatives from united, other airlines who were sitting right in this room. Congress oversees the entire sector. So could you explain why it would be outside of democratic oversight . It would be my understanding this could affect a business, how much it invests it, what it burrows, how Much Technology it picks. But still with congressional oversight. Well, are we going to have a committee on what they invest in, and where they put up the next data com tower . Because if we are, why would we carve it out . Thank you, yield back my time. Thank you, gentleman. Thats what we have today. United states grs its called, and its not functioning well. And thats what were trying to get away from. Again, you have an extremely successful business, bt you decide that based on business decisions, not based on whether he wants a tower or doesnt want a tower. So with that yield to mr. Dunkin im sorry. Mr. Pain is recognized, im sorry. Thank you, mr. Chairman. You know, listening to all this testimony and the different opinions, the american taxpayers, you know, have invested more than 50 billion in airTraffic Control system in just the last 20 years. Under the chairmans proposal to privatize atc last year the federal government would have handed over atc assets worth billions of dollars to a private Corporation Free of charge. If the atc corporation was to hit financial or operational difficulties and needed to be taken over by the government, 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 to express an opinion on purely policy call like that. However, to your point of evaluation assets, specifically, our work our duty each year to audit the departments financial statements, to include the faas fascial statements, has shown us the net book value of faa assets that might reasonably considered for transfer to a Nongovernmental Agency at the end of the 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 airTraffic Control out of government. But nonetheless thats a policy decision for you to consider. Evaluation of those assets in any event, whether its requested or required, its still going to be required because still poejts lenders and burrowers are going to want to see what the collateral is theyre putting their money up against. Mr. Brown. I think people are trying to solve problems here, and i frankly respect the dialogue. Im not a status quo guy. I think there are real opportunities to improve the management of the fksaa. And i have found on the certification side, theyre willing to listen. But another thing im concerned about other than the equity is whether logic makes sense in the risk profile. Im just asking it as a business guy. Im here because i make my money selling products in aviation. But the line up is the future is as they need it to be for the purpose of serving their interest, and we underright the risk of this enterprise more surely than anything else when its challenged on things that it does. And when we give up your assets, some 20 billion to do it and empower monopoly, when look at that enterprise i want to report to people unequivocally, it has served us well for 50 years, and it will serve us well in the future. Its not a question of challenging other members objects or motivations. Its an honest disagreement about the policy play here. Okay, thank you. Mr. Pool. Well, in the hypothetical event of a bankruptcy, which i guess is what you were talking about as a possibility, you have a liquidation in the 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 . That yo there is we transfer 20 billion to a company that makes bad bets and they end up being owned by the bank of new york. Thats a bad outcome. They might be credit providers. They might be credit providers. Mr. Renaldi, in your testimony you talked about the concern for your membership. Anytime anything stream lined or you think your benefits and things are going to stay the same under that scenario, ive got a bridge to sell you to. But could you answer the question . Oh, im sorry. What was the question . What bridge do you want to sell me . Well, thats not that question. The original question that i asked that i laid out, but my time has expired. I guess you werent listening. No, i was listening. Thank you, gentleman. There are limits to all infrastructure, technologically and human. And because of that were taking a five minute break. Committee will come to order and now recognize the vicechairman, mr. Dunkin for five minutes. Well, thank you mr. Chairman. As some people will recall, mr. Pool and others, i chaired the subcommittee for six years from 1995 to 2001. And speaker gingrich pasked me o hold the first hearing. And at that point i think everybody with the exception of mr. Pool was opposed to it and so forth. But the chairman has done an amazing job and brought some groups and people onboard that were not in favor of this proposal at the time. But im sorry i didnt get to hear mr. Renaldis testimony because i had other meetings. But i do want to say to mr. Brown i was impressed by your testimony. And i can assure you that i think youre people will tell you the aviation hasnt had a stronger supporter than ive been. And im sure the chairman will do everything to make sure the aviations concerns are heard loud and clear in the proposal we end up with that in that regard. Youve been with us several times before, and you know ive had concern for a long time about some of these costs and delays and so forth. So then i notice in your testimony you say, however, faa has not fully identified the total cost, the number of segments, capabilities for any of the six programmizech and this faa has not determined when theyll start delivering benefits and how they will improve air traffic flow or productivity development. These cost things concern me. And you told me in response to questions i asked at a 2014hering, you stated, quote, we are probably looking years beyond 2025, perhaps another ten even. And were probably looking at a total expen ditchers two to three times an thainitial 40 billion estimate to achieve the original plan. Im wondering do you standby those statements that you made in 2014 or whats the situation now . And then also you heard mr. Brown basically say that everythings going pretty good. Thanks, mr. Duncan. As part of your introduction you mentioned your long service on the committee. I still mention with pride when you said youre the committees skeptic. So i appreciate that and my staff does because that fits our rule. You and i have been around for a long time. Yes, we have. Thank you. I do standby those numbers. And what i meant to convey when i said that was the uncertainty of those numbers at that point. The numbers appeared to have changed a little bit recently because faas estimates have come to 36 billion, completion day thereabout 2030 or so. But still the uncertainty remains. Because at least for the six transformational programs that have commonly taken the title of next jen, in managing those acquisitions have not led to any kind of clear understanding as to total cost or ultimate completion date. So were still very much in an uncertain environment with regard to those programs. Its clear whats happened is those programs have become part of a more general and ruling implementation of modernization efforts to be sure. Faa to its credit has worked much more closer with industry in the last couple of 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 agency when i say that. But cost and completion date, still much uncertain. You said your original proposal when you worked on it was dead on arrival. Was that why do you think that was, and where do you think we are now . Tell me what you think is different now. I think it was dead on arrival because it frankly imposed additional financial burden on the users. At the time more of the funding of the airTraffic Control system came from a general fund as opposed to ticket taxes. We in the klepten administration, our highest priority was balancing the budget. And so our proposal entailed a bill for the users that was unacceptable. So i think for the Airline Industry, that was a problem. I think for House Democrats it was much of what you hear today. It was an opposition to something that was seen as not privatization but Something Like that. I think this a great debate. I think were making progress. Were arguing over the value of the assets that get transferred. I mean were there are proposals to create a government corporation. Admittedly it would have the regulatory regulation as part of it, but its highly flawed. But weve advanced the debate. Very quickly, id like to ask mr. Broup, they tell me theres some 60 countries that have done some kind of privatization. And we visited new zealand and other countries. But have you talked to some other countries . I knowaveivation is small in some of those countries. Have you visited or looked into that anyway . I have. And i think those countries made choices that i think were sensible for their taxpayers and frankly for the scale and scope of their aviation industries. People dont fly, dont have the freedom to fly, they dont create pilots, dont build airplanes. So in my mind theyre taking a function that isnt critical to their economy and outsourcing it. In my mind in our country what we do with your National Airspace is a critical one. And i think it works pretty well. And thats where my origin and point of view come from. Okay, thank you very much, mr. Chairman. All right, misstitis recognized for five minutes. Now that theyre getting it free, it seems to be all in. It doesnt seem to be dead on arrival. I find that interesting. But the question i want to ask is mr. Pool. We hear a lot about the assets. Lets talk about the people involved. You mr. Pool and your Donor Network have been talking for decades about privateatizing all aspects of government, not just the faa. In fact in 2010 you wrote a piece called down sizing the government dot org, and you talked about the need to privatize and commercialize air traffic system back then. One of the major arguments that you made was the cost of running the system. And in particular you went into extensive detail about the history of airTraffic Controllers and the cost of salary and benefits to those professionals who oprate the system. You noted that two thirds of the faas operational expenses are due to what you call the high cost of labor. Youve got onto reference the efficiency of canada, where they have down sized the system, shrunk the system i think was the term, and cut down on the number of towers. So considering all that you have written 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 corporatized their systems not down sizing the controller work force. In many cases in canada in particularly the need was to control the work force because of many years of under funding by canada. The down sizing that could take place is in the middle management ranks, the bureaucracy because theres so many layers and so convoluted that it extracts a high cost out of theusers. Whether theyre paying aviation user taxes or direct fees. Thats where the need for looking at that cost is. Its in the middle management ranks of the bureaucracy not in the day to day controller work force that is undersized in the task today. Were at a low point of satisfied professional cellars today, and thats partly because of the shout down. The Training Academy was ought out of commission for nearly a year and also the Selection Process that now has been partly overturned thanks to congress. So we do have problems, but its not controllers. Its the bureaucracy. I wish that reassured me. But when you talk about efficiency and cutting cost and high cost of labor and benefits and controllers are part of that system, i dont know that i believe that thats where youre going to stop is that socalled middle management. But ive asked mr. Renaldi, hes sitting right there next to you, he represents these folks. Its not just you. A number of these Media Outlets talk about high labor cost. So i would ask you, mr. Renaldi, what assurances do you have that once your members are under control of a private system that is dominated by representatives of for Profit Companies who are looking to run the system as cheaply as possible because its about their bottom line, you heard they didnt want to pay for it before but getting it free now, how do you know your members are going to be protected once this contract is over . Thank you, great question. First of all, we have nothing in front of us to compare what type of Worker Protections would be in the new language. So anything i can say would be speculating. But i will tell you were a highly trained, highly proficient work force. We run roughly ten times the amount of traffic they do in canada with only five times the amount of controllers. We are highly efficient. And i standby the work of the airTraffic Controllers in this country and put them before anybody else in the world because were the best in the world. I totally agree with that, and thats why i want to make sure theyre protected under any kind of new system going forward. Me, too. And im with you. I think with the air act last year, we got support for the airTraffic Controls, and if i could for the record submit letters of support from net jets pilots, southwest pilots association, the allied pilots association, and submit some of these letters without objection. And with that i recognize mr. Mitchell for five minutes. Thank you, mr. Chairman. And thank you for all the witnesses remaining through for the long day. You note in your report that faa Reform Efforts have not slowed the over all cost, growth or improved productivity. You talk about the budget grew by 95 . You also earlier mr. Hunter referenced the hope is i stress that the cost will be to get nex gen up. Im going to ask you a question, mr. Brown am i right it correctly portrays your analysis the . Correct. Im an aircraft owner. Ive owned several air crafts. If you had a business that couldnt tell you what it was going to cost to put up setup products, couldnt tell you when they were going to get it done but say eventually well get there, how likely is it youd buy that business or keep it . That would not be in the category of struck indicators for that business. Thank you. And it would cause me to ask a lot more questions. Well, let me go to the next question there. We talk about the value of the assets. Theres been a lot of discussion about that. Mr. Scoival, how do we pay for those assets 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. And mr. Brown, you have a lot of assets in your business and what depreciation schedule do you use on them . About seven years on capital equipment. And depreciationation is what . Ten years . Can be longer, yeah. Not much longer on switching capital. Whats some of the major capital in the faa right now . Its aging and getting older by the minute. The on Route Centers that manage high route traffic may be 55 years on average, 25 years on average. Id like someone to explain to me maybe in writing in some way why were losing your mind on some of those assets when some of the value of these assets is less than zero. In fact, how do you dedispose of them if you cant use those assets . Were talking about assets that have gone beyond the half life but given away to somebody. Follow up question also if you can, mr. Pool, the countries that have gone to some version of privatization third party other than government running their at system, 60 countries or so, they all had relatively safe airline or Flight Systems before they divested, right . Yes they did. And the study that was done by three universities about a decade ago looked at five Year Comparison and found that safety didnt go down in any of them. And it was either the same or better following the corporation. Mr. Renaldi, same question. They all made had that same as they made that transition . Yes. And the party is now threaten snd. Completely the opposite. Most of them would not go back to government structure. Ive flown the canada system and for better or worse flown the system here. Flying back to detroit through ft. Wane was strg. Somehow its a holy ground. Its not working well. Its costing us a ton of money if the argument is weve thrown more money at it, and we hope it will get better. We had a saying that company. Hope is a form of desperation. One more comment about being controlled by outside stakeholders. Lots of stakeholders, lots of interest, and those people wouldnt give that up for the world, because it actually worries first about the customers and service and not about the politics, about sequestration, first its about delivering the service we promised to deliver. Thats my hope for atc reform, and a board that has a few dishiary interest to deliver the cost we can manage. Thank you, sir, my time is up. I thank the gentleman. And next is mr. Weber is recognized for five minutes. Thank you, chairman. Mr. Sceival, when you had your comments you said youd identify some longstanding weaknesses. Can you elaborate on those the. Esyes, by management weaknesses, im talking about faa testimonies. I cited in our testimony the need for stable requirements, for acquisitions to be successfully executed. Aram and the swim programs would be champs of where the faa had shortcomings in that area. Contracts across the board, as we have audited faa programs we have found areas that needed significant improvement all the way to the faas own requirement for government and source contracting, which some faa acquisitions personnel werent even following their own requirements. So as you can see there have been some significant shortcomings along the line. Its not only affected next gen proper but other areas. My first year on the committee i know you said you had received the label hired skeptic. And if i may i wasnt skeptical of the committee. I was skeptical glad you clarified that. Of information of proposals, of information with the idea of bringing data for the committees consideration. Okay, great. How long have you been the hired skeptic . A little over ten years now, sir. Ten years. Okay, 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 evaefbl. So fix those problems you just laid out for us. What are those requirements . If they were to stay in place, how does it evolve in. If faa were to retain responsibility for airTraffic Control, first continue to consult extensively with stakeholders. Where faa has gone off the rails largely its because they havent done that. And you would think the new process the 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, theyll have a board thats discussed back and forth, but in that scenario theyd be in constant communication with the stakeholders, their business, the different parts go ahead. Im sorry, i may have misnoods. I thought you were asking if faa were to keep responsibility for air traffic. It was. But im saying contrast that with what the recommendation here is and they would definitely be doing that. Go to step two. Focus onthen the acquisition system, but i my belief is that thats the essence of the Aviation Community or users dissatisfaction right now with faa. Its not on the safety side. Weve all recognized right now its in the era of through the efforts of my office, congresss efforts, but where dissatisfaction is arising is in the airTraffic Control modernization era. So focus on faa acquisition practices, the Acquisition Management system, which is the regulation that governs the faas practices needs to be updated w updated revised. All those things i talked about earlier let me stop you because im running out of time. Mr. Pool let me do this first. Mr. Renaldi, you said that yall represented 40 of those airports. 94. Okay, mr. Renaldi, back to you. What happens to those airports now . They get funding from the aip. None of that would change. The aip would do that. The main criteria 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, how does it get paid for and can it be afforded . And thats where first of all legislation can spell out everyones entitled to a tower that meet the cost benefit ratio. And the finance capability and openness into Better Technology of the corporation would very likely adopt remote towers louis costeffective way to be able to expand the scope of Smaller Services to ones that may not expand today but could with a smaller cost ratio. Thank you. I yield back. Thank you, mr. Chairman. Much discussion on the reform faa and airTraffic Controllers. And no doubt the controllers are doing very well with what they have to work with. But when we see the potential here for imp provemerovement li Previous Report showed that reforms like were talking about would have really no negative impact on safety, in many cases safety improved. And what we havent seen is 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 the off spoken candidate system shows that we can have a very positive effect on safety as well as saving money. And so what i want to ask mr. Poole and ms. Robin, is do we really expect these saverings can be achieved well, thats a good question to ask, and that depends on if theres a Competitive Airline market. If theres a Competitive Airline market, then lower costs are more likely to be passed on in ticket pras prices, for example, than if theres not a competitive market. There are concerns being raised about how competitive our market has gotten to be in recent years. And there are things, we dont have time to discuss here, but Things Congress to could do to make the Airline Market more competitive in. I think also in anition to passing savings on, i think youre trying to expand the system, allow more through put, and you need new technology to do that. Were not at the cutting edge of that. You need new technology in order to allow for an expansion of the sls. For both of you, again, if we were to move in this direction of atc privatization, smaller airports, the threat of towers closing, what might be the expectations we might see for rural airports, just in general . I know weve been touching on it here, but whats it going mean for rural airports and their viability . Well, ill repeat what i said a few minutes ago. I really thing that a better funded and system able to do large scale capital financing, one of its priorities would be facility replacement and some degree of consolidation but also expanding the scope. Right now as i said we have a moratorium on contract tower, faa has moratorium that is designed of a couple of dozen airports on a waiting list. Theres just no funding available for faa to do that. A wellfunned system that is focused on serving its customers better and open to aggressively using new Technology Like remote towers offers the best future i can imagine for smaller airports in this country. Thank you for tat. I bet im running out of time. I want to jump to mr. Scovalfor a second on talking about contract towers. There are pretty important than smaller airports in aviation in that airports have up to 50 of civilian airports that 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 on the value of contract towers to air Traffic Safety and efficiency on our nations system and the costeffectiveness to faa swelds taxpayers . Yes. Okay. At this committees request we reviewed the faas federal Contract Tower Program several times. And weve concluded that generally they are as safe, they are as wellrespected and appreciated by users as faa operated towers. And on average they save or avoid for faa 1. 5 million per year in costs versus faa operated towers. Per tower . Per tower, correct. Significant, okay. We would cite federal contract towers as 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 pass. Its been a decade or all longer since faa has been moved any towers into the federal Contract Tower Program. Perhaps we should move more, then. Depends on funding. Okay, thank you, mr. Chairman. Thank you, mr. Perryman is recognized for five minutes. Finally. Ladies and gentlemen, thanks for your time. I had a lengthy question about contract tires. But suffice it to say the only thing i want to add in case it hasnt been added is its important to net that 70 of all military operations at civilian airports are at contract tower airports. Im a rotary wing guy, so not too much on the low altitude and route chart. The sectionles probably more important. But that having been said it seems like the answer i got to hear from at least regarding my colleagues question that you feel efficient and costeffective to the faa and to taxpayers. Is that a fair summation, mr. Scoval . Yes. And i know thats not the context of this hearing ill just use this. Between 1996 and 2012 the faa budget increased by 90 , but productivity decreased substantially. Were talking about procurement and organizational reforms. Doing the same thing over and over again, while i appreciate mr. Brown saying we can tweak this, my argument would be we have tried and tried to it seems, not great effect. And i think im being kind, not great effect. Let me ask you this, probably mr. Poole and mr. Renaldi, im really interested in the uas propagation of the United States and the utm, and im wondering in the context of what were talking about, the proposal policy model were talking about, if either one of you could describe what you feel. Your organization, especially you mr. Renaldi, you would feel that would need to be in place if currently missing for us to come to utm. There are deadlines, but i feel were just way behind. And i just want to make sure theres not something were missing from your viewpoint. Thank you, sir. Safely ent grating is a monumental task. Certainly zralkting as were incorporating uabs into our 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 i think its an important concept. Its a great question, and i think everybodys kind of scratching their head right now because theyre not using fuel. And we base most on fuel or ticket tax, and they dont have either of that. So we actually have to come up with a new conset. So it might be miles flown or Something Like that . Well, im not sure. Well, thats an important discussion. Im glad you brought it up. Mr. Poole, whats your input . Do you know what the Airlines Want to see in integrating . I dont know what the Airlines Want to see in this. I think theres a possible bifurcation between the very low altitude, mostly hobbyist us of uasss, wherethies a nonfaa private solution to this that Silicon Valley folks are talking about in cooperation with nasa. So i think we need to separate that as being different of which our airliners and many planes fly. But there are going to be controllers. Thats something we need to deal with that. There are incursions now, which is part of the issue. And i feel like we need to get to it. But anybody else have something to add . No, we do see incursions today and a lot of spottings. And i think the sooner we can safely ent great them and come up with a process, the safer the system would be. So it does divert some attention, resources, and what have you. You cant just ignore the fact. It would be very foolish. No some some of the technologies that are emerging especially in the navigation arena itself could be used greatly to enhance i know my time it is expiring, mr. Chairman. But as an aviator myself, the sky is limited. Ive got to stay on the road when parking, but im going offroad. Yet we have the same system, ive got 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 estimated from literally going point to point, but its got to be monumental over thousands of millions and billions of flights commercialary or otherwise. Anyway, mr. Chairman, i yield. Thank you. Thank you, gentleman. And with that mr. Hanferred is recognized for five minutes. Mic. Mic, there we are. Thank you, chairman. I just want to boil down to one second i guess i begin with you mr. Renaldi, from an airTraffic Control standpoint, a blip is a blip, right the. Not necessarily. We work all air planes safely and efficiently. There are some heavy aircraft that you need to wait for turbilation. So each blip gets treated safely and efficiently, but there are different ways to work them. Fair enough. But a wing tip vertsys off a wing tip cub is going to be different than a 747 but in the standpoint of management, its essentially the same, right . Yes. So i think one on the things ive had particularly from the car go carrier if you move, are they going to be disproportionately impacted is they way more, from an airTraffic Control standpoint they dont take more time, dont use more stuff, but are they going to be disproportionately impacted i see you shaking your head up and down and dont know if that means yes or no. But i think i want to hear yall. On the pricing side most would say the current approach based on the price of ticket tax would be inefficient because it isnt correlated with the task imposed on the system. What the rest of the world uses is a weight and distance charge. And they use weight because they cant fully cover their cost typically with just a distance charge. You want to charge marginal cost, but you want to cover your full cost. And weight is a way of doing that. Its called ramsy pricing in economic terms. And the cargo folks object to that. I think theres some important analsys to be done with that. I think the faa may overstate their fixed costs, which is what requires you to have a weight component to the charge. There is a tendency for regulated utilities to overstate their fixed costs versus their marginal costs. So i think this is a really important issue, and i dont think we should just blindly adopt the standard weight and distance charge. Yes, sir. Ive looked into this. In a 2001 Foundation Study we actually had a lot of dialogue with with one of the major Cargo Carriers. And they persuaded us that a strict weight distance formula would have a significant increase in the cost share they would pay. And we came up with an idea that said, look daes and let me interject. Its not they pay, we pay. So what we came up with is looked at the flight patterns by time and day it turned out most of the cargo flights dont take place at the busiest hubs at those times of day, so if you put into the pricing formula a congentian formula, then you can basically hold the Cargo Carriers share to what it is today, without having to discard the global standard of an overall weight distance formula. Hardly anybody does it except the u. K. Major airports, but that is consistent with iko charging practices. And i think thats a way it should be explore frd the Cargo Airlines. I think if you look at the notion of optimizing it in this country, i think going into conjegz and load is going to become a bigger and bigger issue. It looked like you had a thought down there at the end, but maybe you didnt. I have many thoughts, sir, but not on this particularly one. Fair enough. Thank you. With that i relingsish to you, mr. Chairman. I bet i can get that thought. When can this be over . And then youve got members like me that keep coming in and out. I apologize, settling back and forth between two Different Committee hearings today. But this is an important one. I believe from many of the responses wave heard today and many of my colleagues, it centers on really on this debate, on whats the cost of doing nothing . I mean its already cost the taxpayers billions of dollars to put towards next gen, and were not seeing the progress that we as america with the air system we have, be upgraded it beable to compete on the same level with some of our allies. I cant help to compare to work thats already been done, and we discussed this today, you have, whats been done in canada, whats been done in the United Kingdom. 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. Renaldi. What do you think would be the cost of us, of doing nothing . Well, status quo of doing nothing is unacceptable. September will be here before we know it. We will be looking at another possible Government Shutdown. And as i said in my Opening Statement as we lead up to a shutdown, the faa thurnz their attention from next gen or uab implementation to shutdown procedures. 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 sequester is going to bring us if we actually do get a budget or do get a bill passed, what type of cuts were going to have into the aviation smts. Lot of questions about rural america, when sequester hit in 2013, airTraffic Controller at 213 air towers. And it was an interesting list. Mr. Poole, do you have any comments on this . Almost everything has been said. But technology, comparison with canada is brill i want because they have things were only planning now. They have fully rolled out nation wideprivate data link, which were looking at maybe six or eight years before we have that in en route irspace. They have across the atlantic very soon satellitebased positioning thanks to their investment in arion, all the places that dont have radar will now have radarlike separation possible because naf canada and several afps are investing in that. The i. D. s that we are the Gold Standard, most maurn in the world is no longer true. And the more the status quo continues, the less thats going to be true. We are going to be falling fugter and further behind the stateoftheart. And as it winds down, i want to make sure we hit a few poibts. The ent itty is not going to decide where airlines can and cannot fly, correct . Can you say a little louder in the microphone . That is correct. They will not decide anything about where airlines fly. Thank you, and i want to address some more information ive seen about the motives of the board under the air act proposal. Despite the bill clearly states two directors will be stated to act in the public interest, some have questioned the motives of the modern. Can you describe your understanding of the governance of the board and how it will actually operate . Microphone. Mr. Mitchell referred to the cooperative in his district and it is analogous to the cooperatives we have. And they work, right . Yes, they work beautifully. Given you have airTraffic Control provision is still a monopoly, i think airTraffic Control will change that. But for the time its still a monomly, but you need one that protects against any kind of munam monopoly abuse. And the Board Members are few dishiaries as the chairman emphasized in his introduction, they have a few dishiary responsibility. That has been critical. And at the end of the day corporations like this work beautifully. So i appreciate that. And we as policy makers keep going. Thank you. We as policy makers dont have a lot of time here. We can sit and debate whats working and whats not, and mr. Renaldi mentioned the faa has not only got to deal with nex gen, we dont have a lot of time to fix this. Today is the time to act, now is the time to act. Thank you, gentleman. We dont have much time. But we do have enough time for mr. Renaldi to have minutes and me to have five minutes. Thank you, mr. Chairman. I just wanted to point out there is a recognized potential risk for dod responsibilities. Id like to put in the record an article for the National Observer in canada. Headlined Inspector General says headlined likely and they talk about the major cut backs which was retained in the safety of the government. And i would move on, ms. Robine do you remember executive 13 ao by clinton . Is that the one that created the ato . The one that says airTraffic Control is yes, the date is september 7th thank you. Ms. Robine, i dont have time. So we said all our assets are old and some said theyre not worth anything. How old is that . I think its 13. That is houston valued at 62 million. And then we have property at long island, kind of valuable. Have you broken out the assets in terms of Property Values . Didnt in canada they valued the system and they had to pay for it, correct the. They did. And the Inspector General in canada said this is canada, little dinky canada, paid 1. 5 billion, and were proposing nothing would have value. Was theres brand new, spiffy back then . No. Okay, so they paid for it but here we have a much larger investment were going to transfer for free and of course we have the whole problematic thing about takings. And you valued it at 3. 7 billion. Lets say how much of that would you depreciate . How much of that would depreciate it . Yes, its land value versus you dont know . Thats infrastructure alone. I dont believe it depreciationiates the property value. Okay, so its quite valuable. So lets go to small airports. Almost everybody on that side is sensitive to ga. Weve heard they will not direct where people fly. Thats correct. But this board will decide where we invest. Heres the statement of the ceo of jet blue. We also need to direct Infrastructure Improvements into the regions of the country that will produce the most benefits board, thats the opinion of jetblue. We heard the same thing from the former koechlt of united and oh by the way theres no airport representative on the board whatsoever as least as the bill was written last year. So were going to say were going to protect it. Now, mr. Brown, you talked there, 4,421, did those come for free and do they have to be maintained, updated . Well, the faa, like night owls produce them one afrpt at a time until they arrived on my doorstep and i was maized by them but they got paid for by the user fees and fuel tax used by the system. Weve heard how much money has been waste except for maybe jackson hole and a couple 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. Well thats interesting. So anybody 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 . Any other country in the world doing that grundbased domestically, not over the ocean. Strail australia its already in operation. So weve got one and were going it be there too. So 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 whether or not they get free adsb because there arent that many plays to worry about the congestion and flying closer together whereas domestically we may get some benefit from the system but it still begs the question of how many planes you can land at the same time at many of our airports which has to do with airport scheduling. Revenues, apparently theres an assumption that we that congress will repeal the ticket tax. 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 akum . Thats correct. And the new board will determine how to pay for the ato. Okay, i see a nodding of the head yes. Thank you, mayor chairman. I thank the gentleman and let me start off first by saying that splechbt will not be directed by this flu board. There will still be aip funds that being going out to these small and medium sized airports throughout the country so thats not actually accurate. You know, one of the things that ms. Titus brought up which i think is very important and she was directing it to mr. Rinaldi was about the air Traffic Controllers. Let me tell you one of my biggest concerns in this proposal is that we make sure we move those highlytrained, highly technical, highly skilled, Efficient Air Traffic Controllers to the new system. And if down the do it in the right way, 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. I can tell you what, ive been criticized by conservative groups around this town because they just dont gret it. You have to take the qualified workforce with you. So, mr. Rinaldi, i know we talked a little bit about the count going up at nav canada, the controller count goes up. What are your thoughts on the controller count but middle management . If you look it was brought up earlier with nav canada when they were in government they had roughly 67, 6,800 employees of which 2,000 were air Traffic Controllers. Now that theyre a highfunctioning not for Profit Corporation they have about 4,300 employees of which 2 thouf them are roughly air Traffic Controllers. So the controller workforce stayed the same or went up a little bit. It is the middle management that they attrited through retirement in a humane way and they just didnt backfill those positions. I call a lot of that, you know, twreen the middle management within the agency and the multilayers of contractors they have within the agency also thats one of the things its already being, you know, privatized outthe privatized out there with all these het quarters, i call that the kplai clay. It stops good things from happening at the very top and its and things that are happening trying to change at the operational zblefl and so for those of us that arent gee ole gifts, nothing permeates down and nothing permeates up, correct. Yes. I understand what clay is then. And then finally just want to make the point here that first of all there was someone was said along here that the airspace would be restricted. He with nad clear in air one but mieb 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 knows they are not going to be restricted by this newent entity. Thats the faa having the Regulatory Oversight of this if thats the case do Something Like that. Second, when we talked about nav canada and our system is ten times larger, no doubt about it, i believe because we are so big and so complex thats a reason to move to this system so that we can manage it much better. You know, were already to the scaled to the size to handle those, 3,000 facilities, 14,000 controllers, 6,000 technician, 5,000 managers, we are scaled to handle this today. And then i might add, again, this is something thats very troubling to me, it should be troubling to anybody thats in the Business World. If 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 was mentioned by mr. Davis, the former ceo of nav canada said he gets twice as Much Technology at half of the cost three times as fast. So, again, as a Business Owner, a former Business Owner, if were spending 25 to 28 times more in 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 we were doing it efficiently, my goodness, how often would could drive the cost down. A spoke to the folks in nav canada and i think everybody understands there are 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 do things to help more communities, do things about the efficiency, the technology, the employees spot, again, this is something weve got an opportunity and i said to the airlines when i was here last time. When they did something very wrong, we have an opportunity here do something very right, and i hope we seize this opportunity because im afraid its not going to come along again. Ms. Robb bien i think im the first one to call you the right name today, robyn, i know youve been engaged in this for a number of years, you started in the Clinton Administration 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 guy prosecutor a prurl guy, theres nothing i want to do to hurt those people that are my constituents but i think what we have at hand here is to help the United States of america to continue for us to be the leader in aviation around the worl. So thank you all for being here today and appreciate your time and i would ask consent of the record of ttds hearing remain open as such time that witnesses have time to answer any questions that are committed to them and open for 15 days for any witnesses of todays hearing without objection so order. Id like to thank the witnesses again and there are no other members so were adjourned. Thank you. [ indisstin it resulted in a naval victory for the u. S. Over japan just six months after the attack on pearl harbor. On june 2nd American History tv will be live all day from the mcarch thor vis sittors center in norfolk, virginia. Walt der bornman, nim mets ar haulsy, leahy and king, the fivestar add mirlz who won the war at sea, the book anthony actually, coauthor of shattered sword, the untold story of the battle at midway and timothy overcoauthor of never call me a hero a legendary dive bomber pilot remembers the batful midway. Watch the 75th Anniversary Special live from the mcauthors Visitors Center on june 2nd beginning the 9 30 a. M. Eastern on American History tv on cspan 3. Tonight on cspan 3 local Law Enforcement officials discuss efforts to combat criminal street gangs. Then a house hearing on immigrants who entered the u. S. Illegally by overstaying their travel visas. And the pentagon holds a series of news briefings on the annual budgets for the army, navy, air force and missile defense. Law enforcement officials from new york, massachusetts, and maryland talked about their efforts to combat the ms13 street gang at a Senate Hearing wednesday. Ms13 say multinational criminal organization operating in u. S. Cities and central america. Senator