The FAA track record to date for implementing ground-based automation systems is poor. As Cistone (2004) reported, RTCA SC-31 recommended NAS modernization in 1948; ‍however‍, 64-years later, it still has not been implemented. There have been problems and large delays associated with every automation system developed and several have been cancelled outright. In the 1980s and 1990s, the FAA embarked upon an Apollo-like effort called the Advanced Automation System (AAS) that was essentially the NextGen of the 1980s. However, much of that system development was delayed and cost overrun, was terminated. Many of the current NextGen efforts are also behind schedule and overrunning cost by considerable margins (GAO, 2012).

The fact that Congress micromanages the FAA and that their recent budget authorization has taken over seven years and 23 continuing resolutions to pass is further cause for alarm. How can an agency transform the air transportation system of the United States with a funding stream that is unstable?

An alternative for the future is to have the FAA lease automation equipment for NextGen air traffic management from industry. This would allow the FAA help define the requirements that they need for their mission, and allow industry to build, buy or otherwise furnish the equipment and services necessary to meet those requirements, including a tech refresh package. This is similar to the Lockheed Martin FSS, except the ATC employees would remain under the FAA ATC, or a privatized ATC company.

This paradigm is similar to that provided by ITT under the ADS-B program, where ITT provides a service for ADS-B information. In the ATC case, the company or companies would furnish all equipment, signals, communications and services required to perform ATC.

While the above paradigm might solve the procurement problems that the FAA faces, the act of privatization of the ATC entity of the FAA provokes considerable controversy. Former head of OMB, Peter Orszag (2011), stated that privatized air traffic control systems are successfully operative in Canada and 11 other countries, and if applied to the FAA, would result in a faster and more successful implementation of NextGen. Poole and Edwards (2010) summarize the long controversy of FAA ATC privatization, but suggest that it would involve first a shift of payments for aviation services from the current system of aviation taxes to user fees or direct payments for services; second, user fees would allow revenue to grow in proportion to cost, and would provide a stable stream of funding; third, solve the FAA’s management problems allowing FAA to hire competitively with industry and to obtain the skill set necessary for successful management of ATC; and finally, the new ATC unit would be overseen and regulated by the governmental role of the FAA, which as it stands today is somewhat in conflict as the FAA is a regulator and service provider.

Others argue that transferring many of the FAA’s problems from government organization to a private business organization might not be the path to success, as the problems remain in both places and are not solved by the transformation. Many businesses fail. The National Air Traffic Controllers Association (NATCA, 2011) addressed Orszag’s comparison to Canada by saying: “That’s ludicrous: the U.S. system handles half the world’s air traffic; U.S. federal controllers safely handle more than ten times as much traffic as the Canadian system.”


Barkowski (2010) offers a third choice: allow the ATC system to remain under the FAA control as an essential governmental function, but privatize the local commercial airports, which today are all owned by local government organizations. In this manner, Barkowski (2010) concludes:

  • To avoid this escalation of congestion, the socially efficient solution is for local governments to transfer these "high-density airports" to the private sector on the condition that private owners focus on eliminating congestion. The societal gains from eliminating congestion would outweigh any societal costs incurred from potential airport discrimination against airlines. As a result, airport privatization may be the proper catalyst for exploiting the full potential of NextGen. (p.2)