Air Traffic Control Reform Newsletter

Air Traffic Control Reform Newsletter #14

Topics include: anti-outsourcing provisions in the FAA reauthorization bill; Sen. Lautenberg's untruths on overseas ATC corporations; and understanding the Administration's strong stance against anti-privatization amendments.

In this issue:

Senate Votes Against ATC Reform

Emboldened by the easy win of Rep. James Oberstar’s anti-ATC-outsourcing measure in the House several weeks ago and a wishy-washy veto threat letter signed by DOT Secretary Norm Mineta, Sen. Frank Lautenberg last week pushed hard, from the Senate floor, to amend that body’s FAA reauthorization bill. Rather than simply requiring air traffic separation and control functions to be performed only by the U.S. government, Lautenberg’s amendment also mandated continued government operation of flight service stations and ATC equipment maintenance.

The Senate debate last Thursday is amazing to read. Sen. John McCain put up the best defense of the merits of competition, pointing out that “this amendment does more than tie FAA’s hands with respect to air traffic control management. It would prevent a host of broader measures as well.” He introduced the text of a just-released Statement of Administration Policy, which was considerably stronger than Mineta’s previous letter. It called any restriction on “the conversion of any FAA facilities or functions from the Federal Government to the private sector” inappropriate and unnecessary. And then it added, “If such an amendment were included in the final legislation presented to the President, his senior advisors would recommend that he veto the bill.”

Unfortunately for the cause of reform, the final vote on the amendment was 56 to 41 in favor. Only one Democrat-Zell Miller-voted against it. To the delight of NATCA, ten Republicans supported the measure: Bond, Chafee, DeWine, Domenici, Fitzgerald, Inhofe, Murkowski, Specter, Talent, and Voinovich.

With both houses having now passed FAA reauthorization bills with somewhat different anti-outsourcing provisions, the fate of ATC reform now hinges on the conference committee-and on how vigorously the White House maintains its veto threat.

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Lautenberg’s Fantasies

For sheer chutzpah, you’ve got to hand it to Sen. Lautenberg. Despite the repeated refutation of many of the claims he started making about overseas ATC corporations early this year, he simply kept repeating the same untruths. And he did so again last week, in both his “Lautenberg Air Traffic Control Amendment” fact [sic] sheet and his comments on the floor.

Outright falsifications included the following:

  • The claim that near misses have increased by 50% in Great Britain since creation of the NATS public-private partnership. In fact, according to the UK Airprox board, near-misses declined to an all-time low following corporatization.
  • The claim that due to financial problems with Canada’s privatized system, “an assessment will be tacked onto every airline ticket.” In fact, there is no such assessment; airlines (not passengers) pay ATC user fees to Nav Canada, just like they pay for jet fuel to fuel suppliers.
  • The claim that [Canada’s] “system falls into higher costs all the time.” In fact, costs have come down significantly, and Canada’s ATC user fees are still about one-third less than the ticket tax they replaced.

Lautenberg also tried hard to mislead fellow Senators on his grandfathering of the existing Contract Tower program. “[M]y amendment does not affect the expansion of the contract tower program. . . . [It] can be expanded to any of the 4,000 airports that are eligible. My amendment only affects FAA towers.” But Sen. McCain could not let that one go unchallenged. As everybody knows, he pointed out, nobody is talking about somehow coming up with money to open towers at 4,000 tiny airports that lack them. The real interest in expanding the Contract Tower program these days is the 71 other FAA (VFR) towers that are similar in traffic and complexity to those in the Contract Tower program. The FAA could save about half the current cost of operating those towers if the program were expanded to them-which Lautenberg’s amendment would prohibit.

McCain and others also debunked Lautenberg’s appeal to patriotism about FAA controllers bringing all planes down safely on 9-11. So did the controllers of privatized Nav Canada, McCain pointed out. But apparently due to time constraints, McCain did not refute Sen. Hillary Clinton’s misleading claim that operational irregularities in Canada are twice as high as those in the United States. Not only are they defined and measured much more stringently in Canada, the rate there has been trending downward since privatization while FAA’s has been trending upward, as pointed out several times by the DOT Inspector General.

Unfortunately, mendacity ended up winning on June 12th.

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The Past as Prologue

NATCA’s attack on ATC reform has been championed in the House by Rep. James Oberstar and in the Senate by Sen. Lautenberg. But their past records on this issue are surprisingly different.

Those with long memories may recall that during the illegal strike by the previous controllers’ union, PATCO, Oberstar was the only member of Congress who actually walked the picket line with striking controllers. So it’s hardly surprising that he has become NATCA’s champion in the House.

What’s amazing is the turnaround in Sen. Lautenberg’s position. Think back nine years to the heady days of 1994 when Vice President Gore’s reinventing government shop (the National Performance Review) was in full swing. Bob Stone and Wayne Leiss, inspired by the success of Airways Corporation of New Zealand (the first corporatized ATC system), persuaded Gore that the best fix for ATC was to corporatize it, in an effort that eventually led to the legislative proposal for a U.S. Air Traffic Services Corp. (the USATS proposal). While Oberstar was immediately hostile to the idea, Sen. Frank Lautenberg took an entirely different tack. “The administration’s proposal to privatize the air traffic control system is consistent with the desire to bring more efficiency and reform to government and should be reviewed seriously,” Lautenberg told the Washington Post (Feb. 24, 1994).

Ironically, Lautenberg’s own amendment would forbid not just outsourcing. By requiring that only the U.S. government carry out ATC functions, it would prohibit even the creation of a government corporation like USATS. That’s not just my opinion. Former FAA Chief Counsel Ken Quinn told me, “Based on my preliminary review of other government corporations and case law, absent express congressional authorization that a future air traffic control corporation is a government entity, then it is likely that it will be viewed like Amtrak or Fannie Mae as public entities ‘other than the U.S. Government,’ and therefore prohibited by the legislation.”

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Reasons to Veto

Why, if the Administration honestly has no plans to contract out the operation of en-route centers or tracons, has it taken such a strong position against the anti-privatization amendments? For a number of very sound reasons.

First, as noted above, it’s likely that the language in these amendments would prohibit not just outsourcing of ATC functions but also any significant transformation of Air Traffic Services into a user-driven corporate entity. In NATCA’s February 2003 White Paper, it attacks non only the private, non-profit corporation model (Nav Canada) and government corporations (AirServices Australia) but even the strong form of a Performance-Based Organization (PBO) within the FAA as recommended by the Mineta Commission in 1997. NATCA wants to freeze the ATC status quo-but the Administration knows that’s an untenable position.

Second, the Administration is seriously considering outsourcing Flight Service Stations, whose technology is so backward and cost is so high that even Lautenberg ally AOPA supports the current A-76 competition for FSS (which the amendment would kill). And the Administration may well seek to expand the existing Contract Tower program to the remaining FAA VFR towers, given that the existing towers have a better safety record than comparable FAA towers and cost less than half as much to operate.

Third, even if there are no plans to outsource mainstream ATC functions, the FAA will be in a much stronger bargaining position with NATCA in the next contract negotiations if controllers do not have a legal monopoly on their jobs, no matter how resistant they are to needed productivity changes. Taking away the possibility of outsourcing greatly strengthens the union’s bargaining position-and weakens the FAA’s.

And finally, taking away management flexibility from the FAA runs counter to the entire thrust of top Administration priorities. This is the third year of the government-wide President’s Management Agenda, stressing greater accountability and cost-effectiveness in all agencies. Competitive sourcing is one of the key elements of that agenda. Management flexibility was also one of the Administration’s top priorities in creating the Department of Homeland Security, a battle the White House chose to fight, against tough odds, and won. To back down now would be to send an engraved invitation to the labor movement to re-open that and other battles.

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Notable and Quotable

Some thoughtful comments on the creation of Nav Canada, from one of its architects at Transport Canada:

“When we started the ATC commercialization process in Canada, we looked first at defining the public interest in ATC and then developed the role of government from a clean slate. Our basic premise was that if others can perform the service as well as or better than government, then we should divest that service. Because ATC would be a monopoly service for en-route, we put in place mechanisms to counter the comfort factor, such as transparency to the public and accountability to a stakeholder board. We opted for light economic regulation to avoid creating an army of government regulators and corporate lawyers to negotiate ex-ante approvals on fees and services. The design of the legislation, safety regulations, letters patent and agreements between the ATC corporation and several government departments, was meant to allow maximum commercial freedom to the new ATC organization to improve service and make efficiencies while ensuring the public interest was met (such as transportation efficiency, fairness and safety). The model we developed with the aviation industry is not perfect, but has been successful (despite claims otherwise).

The role of government evolves with the state of the industry concerned. It was apparent to the Canadian Parliament, and to public servants in several departments including the Treasury Board Secretariat (akin to the OMB), that government did not need to own or operate the civil ATC any longer to achieve its public policy goals. Bad facts make bad law. [In the U.S. debate] I hope someone gets the facts straight on how commercial ATCs are performing and on how the public interest is being improved or maintained.”

-Glen McDougall

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