cure and protecting democracy and freedom and liberty all of those things. i thank you very much, and without objection i will also mention that all members will have five legislative days to submit to the chair additional written questions for the witness, which we'll forward and ask him to respond promptly as he could so that that answer is made part of the record as well. without objection, the hearing is adjourned, thank you.

coming up, the coast guard's number two official testifies at

his confirmation hearing to be the next transportation security administration administrator. if confirmed for the role he'd replace tsa chief john pistol who left the post at the end of last year. see the full hearing live at 10:00 eastern. sunday night at 8:00 eastern on "first ladyiesladies" looking into the personal lives of apneap anna harrison. she never step foot in the white house because her husband died after a month in office. tyler is lady when her husband, john tyler, assumes the presidency, but she passes a way ayear and a half later. the president remarries julia tyler, the first photographed first lady. this sunday night at 8:00 p.m. eastern on c-span's original

series "first ladies" influence and image examining the public and private lives of the women who filled the position of first lady and influence on the presidency from marsha washington to michelle obama on c-span3. as a compliment to the series c-span's new book, "first ladies: presidential his tonnians on the historic lives of first women," that's available through e-book or favorite book seller. now, the senate transportation committee held a hearing on renewing the federal aviation administration program focusing on the agency's efforts to modernize the air traffic control system. an faa administrator testifies as well as the heads of industry trade groups. from capital hill this is two hours.

this hearing will come to order, good morning. this morning, we conclude the series of planned hearing on reauthorization of the federal aviation administration with an examination of the traffic control system. let me begin by thanking the subcommittee chair ayote and

cantwell through taking us through several valuable hearing object way to this hearing. it's been a busy work period and great progress knead thanks to their efforts. atc system involving dedicated air traffic controllers guiding tens of thousands of flights safely across the country on a daily basis. we are all proud of the system safety record. at the same time increasing demand, the need to improve efficiency and changes in technology, all underscore the need toed modernize a system that's radar base and operated using concepts and procedures developed decades ago. efforts to modernize atc software and hardware made progress recently, but other programs have taken too much time and cost too much. we have stacks of reports from the dot's office of inspector general and accountability office detailing implementation delays and cost overruns plaguing the efforts for decades and stymied leaderships for

multiple administrations. the reasonable initiative in the area is the next generation air transportation system or nextgen. before this was begin a name the original goal was something called free flight. this was expected to resolve in the transformation of the system away from air traffic control to air traffic management. taking advantage of gps for knave gags and surveillance at the heart of the idea. faa would save money eliminating radars and save time money, and fuel by choosing direct routes. more than 15 years after the faa talked about free flight we still seem to be more than a decade away from anything resembleing it. in fact, a recent study by the national research counsel concluded that nextgen seems to be more about incremental programs and improvements rather than a transformational change. airlines and other operates in the system feel burdened with the expense and burden of implementing changes not yielding benefits to them for many years to come.

this led stake holders and policymakers to question whether the current structure is best suited for the task at hand. long standing difficulties with modernization are a reason to consider reform. the systems reliance on annual transportation appropriations and the vagaries of the political process makes long term management footprint difficult and probably more costly. and the faa will face challenges attracting and retaining the talent needed to drive major technology change when it must compete with cutting edge businesses in the private sector. to address the challenges, we have to carefully consider a way to better deliver services for the traveling public and air space users. i'm open to considering all ideas. faa has a great record as a safety regulator, something to continue if air traffic control services we removed. many countries around the world have had transitions with success, and i look forward to

hearing from the witnesses today what reform looks like and how reform can serve the needs of all air space users. to be sure, the matters we discuss today are just part of the larger effort on faa reauthorization to address a host of other important issues. i'm looking forward to working with ranking member nelson and other members of the committee to advance such legislation. lastly, i want to stress that our interests about atc modern modernization are not focused just on the leadership team at faa. as i mentioned before, it is clear that there are structural limitations that impeded success over the years. the question is whether we were to build a system from scratch today, would we necessarily conform to the old structures or strike a better path? i look forward to the discussion and turn to the colleague, senator nelson, ranking member for his opening remarks. >> thank you mr. chairman and,

senator thune joins me to acknowledge the families of those lost on colgen air flight 3407. your presence here is a reminder of how much is at stake with the safe operation of the aviation system so thank you for being here. obviously, we have the busiest, the most complex air space in the world. thanks to the hard work and dedication, faa employees, we have an agency that is providing the safest, most efficient air space in the world. yet, the negative impacts of the uncertainty of the funding and the sequesteration, have led to widespread concern about the funding of federal programs and

federal operations. if you take a meat cleaver approach instead of the scalpel approach, the sequester forces irresponsible budget decisions in our domestic and defense programs. now some of you will suggest that the answer is to privatize the faa and air traffic control. this senator feels like we ought to get budget certainty and repeal sequestering. if we do not the situation will worsen when additional budget cuttings return in 2016. the faa has faced unpredictability for so long. the last faa bill took four years and involved 23 extensions

and a partial faa shutdown. now, the good news is that we are working together to do everything possible to get this faa reauthorization going. in the past, because of that uncertainty, because of that sequester, the faa has had to furlough employees, implement a hiring freeze, temporarily close their academy and halt the work i've had the privilege of seeing on the programs. this has set the faa back in its progress to advance air traffic control modernization. so the conversation about moving air traffic control into private

not for profit entities has impact far beyond you witnesses here today. take, for example, the department of defense, they take responsibility in controlling air space with the faa, and they have for more than 65 years. today, the department of defense controls about 20% of our air space for civilians as well as the military. faa and dod coordinate activities to ensure our military can train war fighters test new concepts, equipment, and defend the nation. air defense, right here in the continental u.s.

no other country in the world has the defense assets of the u.s., and we have to ensure our defense interests are not harmed by removing the government from air traffic control, and i can tell you that the department of defense has visited me and they don't want any of this privatization. well, look at the airlines, even the airlines are not in agreement. let me quote from delta, quote, rather than wasting collective months of energy only to find ourselves with a less efficient, less responsive, more bureaucratic like, costlier, monopoly service provider, we should instead focus efforts on achieving real reform in the next authorization that brings about tangible benefits for operators and more importantly

for the traveling public. end of quote. that's delta. so since aviation is the backbone of our u.s. economy, we must prioritize air traffic control investments for the good of this country. >> thank you mr. chairman. >> thank you, senator nelson. we have a great panel today, led off by the administrator, he'll be followed by the honorable john, the president business round able, and, of course, former governor, the honorable byron dorgan former colleague of ours from the other dakota. and a former member of the committee, and the chairman and president and ceo of united airlines mr. paul renadli, president of the air traffic

association. a great panel. we look forward to hearing from all of you, and we'll start on my left, your right, with the administrator. please proceed. >> thank you, senator, ranking members members of the committee. thank you for inviting me to speak today about the reauthorization of the faa. the upcoming authorizations provides us with the opportunity to propel our system to the next level of safety and to foster the kinds of innovative climate that's long been the hallmark of our proud aviation heritage. this reauthorization provided a forum for many an industry and government to openly discuss possible changes in the government structure of the faa to help us create the aviation system that will sustain our nation's economic growth well into the future. we're open to have the discussion. we must all agree on the most important problems reauthorization should fix. in our view, the budget instability and lack of flexibility to execute

priorities. these challenges exist in the entire agency not just the air traffic control system and nextgen. we have to agree on finding ways to avoid unintended consequences. deploying these technologies depends on relationships within the agency. it's more than installing technology in the air traffic facilities and on aircraft, but involving close participation of the safety organization to ensure that the technology is safe and controllers and pilots know how to use it safely. we believe that any discussion about governance takes into account the issues so that we may best serve our nation and flying public. some say the faa has not delivered on modernization. i argue that the faa already made progress in modernizing the system through nextgen. we completed the installation of the powerful technology platform

with the air traffic control system. this system accommodates the applications of nextgen and allows controllers to handle expected increase in air traffic efficiently. we finished the ntsb network as well. on a parallel track through our collaboration with industry we identified key priorities in implementing next gen air traffic procedures. we have more satellite based procedures in the skies than traditional radar based procedures. we have created new nextgen roots in the busiest areas saving millions of dollars in fuel decreasing carbon emissions, and cutting down on delays in each city. in addition to the improvements we have set clear priorities in delivering more benefits in the next three years ranging from improved separation standards for heavy aircraft better coordination, and streamlined

departure clearances using data communications. we have yielded $1.6 billion in benefits to the traveling public. in the next 15 years, changes already made produce $11.5 billion in benefits. we recognize, however it's not enough to rely on projected benefits, that's why we go back to study benefits that certain improvements provided to users. for example, in atlanta we safely reduce edd standards to improve efficiency at the airport. this reduces the number of planes that can land. delta airlines is saving up to two minutes of taxi time per flight, and this saves them between 13 million and $18 million in operating costs annually. we're aware of the criticisms of the faa's implementation, and i would like to explain the approach. there are different theories how

to deploy technology in a complex operating environment. some take the position that you should start from a wide ranging vision and work back from there on developing a range of scenarios. others suggest that mapping out the entire picture and only proceeding when you are sure of the end game. others say to take a more pragmatic approach, and this is the path the faa has chosen based on close consultation with industry. this approach used by the office of management and budget matches investments with tangible benefits with airlines and passengers. we acknowledge it requires investment, but we're careful not to strand programs in the middle of implementation. when dealing with change in the system, there's no margin for error. the system has to transport $750 million passengers every year with the highest level of safety. any technology we implement has to be reliable and safe from the outset. to achieve the high standard, we have to remain nimble and have

flexibilities. our aviation system is a valuable asset for the american public. we should use the upcoming reauthorization to provide the faa with the tools necessary to meet the demands of the future and to minimize disruption to the progress already made with next nextgen and implementing new users into the system. i thank you for the opportunity to appear before the committee today, and i'm happy to take your questions. >> thank you, administrator. >> good morning. thank you for the opportunity to receive this morning. the business round table members include leaders companies and every member relies on air traffic transportation. as the 20th century drawing to a close, u.s. aviation set the

standard for the world's largest largest, safest technology advanced system. we have lost our position and future leadership is in douse. the u.s. air traffic system remains the world's largest safest but not the most advance ed this relies on the same technology ground based radar and voice radio transfer as it did in the 1960s. all the technology is still analog. like many other stake holders, we are concerned about the halting pace of the modernization represented by the next gen program. the national academy's report the committee has released this month clearly stated the problems. the original vision is not implemented today, they are not motivated to spend on equipment and a training, and a modern traffic system offers tremendous

benefits to the users of the air space. more efficient flight paths reduced fuel consumption and crew time, lower emissions, less noise pollution, leadership, and increased services to community airports. what's the obstacles? last year, my seat mate here, faa administrator, offered one explanation in a speech at the aeroclub of washington. i quote, there's no way the faa can implement nextgen, recapitalize the ageing infrastructure, and continue to provide current level of services without making serious tradeoffs. senator nelson referred to that in the opening comments. we agree that i believe on this critical point that the current funding system does not provide the needed resources. a deeper problem is the broken process itself, preventing the faa to pursue the step-by-step

improvement that is standard elsewhere, certainly in the business world. for example of what works, look at at&t and verizon. in the years the government has been talking about this, four generations of cell technology from flip phone to streaming videos have been adopted. the faa is trying to fund a doctor 20 -- $20 billion effort with unpredictable cash flow. others issue long term revenue bonds to finance modernization. bonding is something the faa can want do. states do it. private sector does it. the federal government does not. i convened a group to study the issue, including former faa transportation department officials and knowledgeable policy advisers. their copnclusion? this is too costly and inefficient. they identified elements of an

alternative system. separation of the air traffic control operate r from the regulator, to improved transparency and accountability and further increase safety. organizational structure that accounts for multiple objectives so safety and access are valued along with cost efficiency. governance of the air traffic control by a board appointed by stake holders. this structure allows those to be fully self-supporting without government financial support and completely free of the federal budgetary process. the capability to accelerate modernization, and wage and benefit structures protect employees, prevent career expectations, and preserve a collaborative culture. over the last two decades most other western countries restructured the way air traffic control is funded and governed determining it's a high-tech

service business part of critical infrastructure funded direct ly bi directly by users and customers use an entity independent from the rest of the frksz aa. that's a manageable process. tools and precedence exist for addressing the risks that come with this, and thorough planning is, of course, necessary. in the end i hope you as the senators responsible for the oversight of the faa, use the reauthorization process to put america on a trajectory to a modern system that's, again, the gold standard for the world. now is the time for decisive bipartisan action to restore america's global leadership. this is round table that looks forward to working with you to achieve important goals. thank you. >> thank you. >> mr. chairman thank you for the invitation, and i badgered

witnesses, and we'll see. for the past two years former transportation secretary have cochaired a project at the transportation institute looking at the subject of air traffic control and the structure of air traffic control. i was the chairman of the aviation panel the last time that we worked on reauthorizing the faa, and there was a headline from the moment where we succeeded, and it said after five years of debate, 23 short term extensions and a partial shutdown, congress approved the final version of the faa bill. my hope this time around is that your headline is shorter and conclusions bolder for this reason. aviation is one of the major arteries of the american economy. the fact is the issue of effective air traffic control is essential to the industry. i think we've come to an

intersection where we have to decide, can we retain our leadership and develop the new technology and the next generation air traffic control system? can we retain leadership with the current structure? i say we can want. the conclusion was after two years of work with stake holders from around the system, if we want to retain america's leadership with the most advanced technology with ground based radar to next generation satellite guidance, safer faster, and more efficient, if we want to retain that we're going to restructure the air traffic facts. no question we have an impressive record of aviation with more to do. i know that the families of the crash vick trimtims are in the room. get to know them. over the years, they played a very important role in

continuing those safety improvement issues with the faa. number two, the air traffic controllers do a terrific job every day, steering 30,000 flights, 2 million people as they fly across the country. number three, the people of the faa work hard on the issues including air traffic control and nextgen, but they necessarily work in the thick glue of the bureaucracy, and frankly, that is hard to do with these kinds of challenges. here's the key point. the key point is that in order to create a new modern air traffic control system you have to have stable funding. that's nearly impossible for the f sarks faa at this point. in a time of congressional spending constraint, they can't count on stable funding, and, in fact they can't count on level funding. look at the budget just passed and the facilities and equipment account. that's going to be 355 million dollars below that which was requested and the lowest in 15

years. that's thing thee account for the faa. as much as we wish it would, the budget picture will not change. they're going to be more spending restraint, see the impact of sequestering, the impact of layoffs, on and off again stutter start stop funding for continuing resolutions, and that's what the faa is confronted with. no one would or could build a major new technology project with those kinds of challenges. now, here's the headline from last week in the post, and i know it causes hard ache in the agency. is says quote, faa is not delivering what was promised in a $40 billion project, unquote. it refers to the modernization of the atc system. that what change is needed. in our work at the institute, the consensus of the stake holders was we need to restructure to a government corporation or a nonprofit

organization with bonding capability, stable funding, and the ability to plan and to control and finance the march to modernization. we've reached the tipping point that requires, in my judgment, action by congress. i'm not the typical spokesperson that comes to the table and suggests that be the case. i'm someone who normally would weigh in on the side of having the agencies do it. in this case there is not going to be stable funding to move this country towards the leadership necessary in the nextgen opportunity for air traffic control. now, let me -- i understand this is not easy. i understand it's a big lift. it's been discussed before, but it needs to be done now. other countries, a number of other countries have done this very successfully, and so can we. finally, mr. chairman, we know the history, december 17th 1903, the first flight. we learned to fly. then we flew to bonfires for guidance at night.

then we flew to light stamps pointing in the sky for guidance, then ground based radar, and for 50 to 60 years, we have not changed. now we need to change. we need to do it quickly and effectively, and in my judgment, the only way that's going to happen is if we create some different structure, and i suggest a government corporation or nonprofit organization to accomplish what we all want to accomplish for the country. one final point. i know the word privatization has been used. i did not use it. there are other structural approaches including, as i say, government corporations and nonprofit organizations that solve the problem for this country and allow and insist the government retain and be a stake holder in a new organization. mr. chairman, again, thank you for the invite. it's really a pleasure to be here and see all of you. >> thank you, senator, and nice to have you back, and i'll turn to you.

>> thank you, chairman, ranking member nelson, and members of the committee for the opportunity to be here. the reform of the air traffic control system is a critical issue for the users of the national air space, for our passengers, employees and for the many stake holders across the country that benefit from the healthy aviation system. aviation for america dedicated a tremendous amount of resources time, and attention developing a rigorous, fact-based study of air traffic control reform including a global survey of best practices for operation of error error navigation service providesers. the work points to one conclusion, the air traffic control system needs complete transformation to meet demands of the future and time of the transformation is now. we cannot continue with the status quo. today, all users of the atc system are beholding to a world war ii erea radar based system

that while world class and safety is inefficient and delay-ridden. for decades policymakers and stake holder unanimously recognize the these for modernization. a long string of reports from presidentially appointed aviation commissions, the department of transportation inspector general, accountability office, and independent experts have found the progress delivering capabilities has not met expectations. calling into serious question the agency's ability to deliver on its mission under the existing funding and governance structure. the problem is not the leadership or the work force of the faa. it's the funding and governance structure that we must fix. there are many countries around the world that have already successfully transformed their own air traffic control systems. a 4 a has done extensive benchmarking of the success of the models. our analysis suggests the following six basic principles for success of a transformed air

navigation service provider. number one the atc operations and safety regulation functions. two, a nonprofit corporation operating the atc system with independent multistake holder board of government free of decision making. three, an effective management team of the atc provider incentivized to pursue efficiencies without constraints imposed on government agencies. four, a fair self-funding user fee model based on the cost of atc services allowing access to capital markets and a steady predictable predictable, reliable stream of funding not subject to government budgetary constraints. five the ability to manage assets and capital investments in a way that allowings far greater speed to market for technology innovation, and, six, transparency in user fees so user and customers alike know what they are paying allowing

users full ability to recover costs. under a transformed atc system, the total of new user fees for airlines to pay for the new entity plus new fees fund the remaining faa do not exceed the burden on airlines and passengers today. with independent government oerms, and transformed atc system, the faa could turn its attention to safety regulation and oversight. a transformed atc system could continue to maintain safety as the utmost priority while creating efficiencies, delay reductions, and environmental benefits from reduced feel burn. the inefficiencies, delays and costs of the current atc system only grows over time so there's no better time to transform the system than now. we are capable of rising to the challenge as have many other countries before us. if we conduct the transformation

methodically and thoughtfully while giving proper consideration to transition issues and risk mitigation. the result of the transformation is a modernized service provider that better delivers the benefits that the users of the system, our employees, our passengers, and this great nation expect and deserve. thank you. >> thank you. >> thank you for the opportunity to testify today at this important hearing to discuss the future of the aviation system. we all have a stake in the national air space system. it's an economic engine for the country, contributes 1.5 billion to the gross product and provides 12 million american jobs. we invented aviation in the country, an american tradition, and over the last 100 years, we dreamed, innovated, implemented the unbelievable in aviation. currently, we run the largest,

safest, most efficient, most complex, most diverse system in the world. our system is incomparable and unrivalled by any other country. for example, the next largest air spagsce to the united states it canada, running 12 million operations a year. on average, the united states air space system runs over 132 million operations a year. the united states air space system and the faa's considered the gold standard in the world of aviation community. yet, the reality is that in order to keep the honor change is needsed. currently, there's many challenges in responding to the given problems of an unstable unpredictable funding stream including, but not limited to the the inability to finance long term projects and the inability to grow the system for new users community, and commercial space, inability to modernize our ageing infrastructure. currently, our 20 en route

centers throughout the country are over 50 years old with no plan of replacing them. we are struggling to maintain the proper resources and staffing facilities. our certified controllers are at an all time low. the upcoming reauthorization bill must address the lack of a predictable stable funding stream for our continue yougs hypercritical safety aviation. we understand that addressing the stop-and-go funding problems will lead to an examination of a potential structure change for the faa. we believe it's time for change. the current system is not dynamic enough to address needs of control operations in the future. any such change or reform must be carefully examined to prevent unintended consequences of negatively affecting the safety and efficiency of our national air space system. every stake holder in the national air space system should work together to make sure that the united states continues to be the global leader in

aviation. any reform must address the safety and efficiency of the national air space system. it must be mission driven. it must have a process that provides a stable, predictable funding system to adequately support air traffic control services, staffing hiring training, long term projects such as next gen, and any change has to allow for continued growth in the aviation system. any change must be dynamic. the aviation system must continue to provide all services to all segments of the aviation community. any change we make needs to be precision-like so we do not interrupt the day-to-day operation of the national air space system. our system is an american treasure. aviation is uniquely an american tradition. it cannot continue to be shortchanged. we are still currently recovering from a sequester cut of 2013. another round of cuts that are

set to take place this year will shrink our country's aviation footprint forever. we need to make appropriation changes to secure a stable funding stream for aviation establish a government structure for the air space system, a structure not laiden with bureaucratic lines of business or burdened or marred with bureaucratic processes. we need a dynamic structure that's nimble. we need a structure that allows us to grow aviation, not shrink it, grow facilities, equipment, procedures, technology in a realistic time frame. we have to have a competitive edge to insure future leadership in the country. i thank you for the opportunity to testify today and look forward to the questions and any questions the senators may have. thank you. >> thank you.

>> thank you. general aviation is an important american industry representing over $200 billion to the economy. this employs over a million workers. the united states fosters economic development in small towns and rural community. this helps companies of all sizes be efficient and productive. it helps with our humanitarian efforts whether it's responding to forest fires flooding or getting transplanted organs to treatment. nbaa is hop norred to be here today. we represent over 10,000 member companies, companies of all sizes. companies in all types of industry. we also represent hospitals, universities, nonfederal government profits. 85% of the members are small and mid sized companies. they generally are operate inging

out of small towns and markets and flying either from or two an airport with snow commercial service. business aviation is fundamental to the economy, small towns, and mid sized communities in the united states. typical of the membership is engineering from washington, a high-tech engineering community located in a community with very little commercial service, but it's able to compete effectively in the international market because it has access to business aviation. mr. chairman, every member of the committee has a company like that in a community like pullman. just as a matter of perspective, there are fewer than 500 communities in the united states with any type of scheduled airline service there are 5,000

communities in the united states that rely on business aviation for economic support. this reauthorization bill has a load to do with communities like pullman and companies like others. why do i say that? because the air space above our heads belongs to the american public. it does not belong to any one stake holder or any industry segment, and our nation's air transportation system serves and has to continue to serve all americans across this vast country of ours. the question on the table the fundamental question of reauthorization is who is going to ensure that our public air space serves the public's benefit? will it be the public's dually elected officials? will it be some combination of self-interested parties? for decades, suggestions have

been made to make congress wash its hands of the air traffic control system. give over to other parties taxing authority and the authority determines who can access airportings in air space. this is something pushed long before this was a concept, and long before sequestering. these interests have been wanting to sweep authority to determine who gets taxed what and who flies where and when. mr. chairman, the power to tax is power. who is the power to ensure nondiscriminatory access to airports and air space. congress should not advocate relegate delegate, or outsource its authority over taxes and

access. congressional research service said to do so may be uninstitutional. currently, the united states has, by all measures the largest, safest most efficient, most complex, and the most diverse air traffic system in the world. the business aviation community is not content with the status quo. no american should be. being the best today does not mean we're the best tomorrow. in fact, complacency is our enemy. that's why the business aviation community has been active and outspoken in the support for next gen. in fact, no industry segment has done more. our members have invested in technology, and we urge congress to do the same. serious problems do exist with

the program. to date, programs have been delayed. implementation has been slow. we still have a lot of work to do in terms of certifying technologies. it's time to focus like a laser on the problems. it's time for us to not be distracted by what we need to do. we need to use this faa reauthorization bill to make sure that we are making this program a really, to make sure we're improving the certifications and approval process, to make sure we protect our nation's system of airports, to make sure that we are certifying and implementing integrating in a safe way uavs. there's a lot of work to be done. nbaa and member companies look forward to working closely with you to do it. let's just never forget that the

public air space should serve the public's benefit. >> thank you mr. bowling. you were very first time. everyone was close to the five minute rule. even our former colleague managed to adhere closely to that. [ laughter ] i have a couple questions, a little off topic but i have to ask because over the weekend there were media reports indicating a security researcher claimed to have temporarily taken control of an engine on a passenger aircraft hacking into the inflight intertapement system. if true this would be a very disturbing incident. what's been the faa's response to the matter, and do you feel the faa's well equipped to analyze threats against the flight control systems on passenger aircraft? >> first, with respect to the specific incident we're cooperating with the investigation and what they are finding is they are working in that. as it relates to the larger

question of cyber this is something that is an ever evolve evolving threat and something we are looking carefully at and taking it very seriously, not just in the operation of our system, but manufacturer of aircraft. that means that we're working closely with the manufacturers to understand how the threat -- how the threat moriphs, evolves, and changes by work, as we always have by having layers of security and control over access of critical systems and aircraft. i think cyber is and comets to be a challenge in any technology based sector, and it is something that we have to work cooperatively across government and industry to ensure we stay ahead of it. >> that incident over the weekend is investigated, though? >> yes, sir. >> nothing to report about this at this point? >> that's correct. >> there's a recent report by the national academies noted it

required a significant effort for the faa to track develop, scene retain work force talent to deal with cyber challenges going forward. when you talk about, that that issue, the agency's efforts how do you deal with the limitations the government faces in competing against private sector employers in the fields? >> well, the factor we have to consider is do we offer a competitive job? do we offer a competitive compensation for that? for us that is a combination of insuring that we are casting the broadest possible net, but i think it's also important to point out that while we do operate within the government environment, is a significant portion of the applicant pool and work force generally interested in coming to work for the faa because of the belief in the mission and belief in public service. yes, it's a very competitive environment that's out there. we're never going to pay the top salaries that top technology

companies pay, and so our focus is on how can we ensure we have an orderly process for promoting people and sell the job itself? >> this committee of course, is very interested and concerned with the cyber security relating to atc and next gen, so we'll be in touch on the subject. i want to turn back to the subject at hand today and ask you, mr. renaldi, speaking of the funding of the status quo is not an acceptable situation. can you assess among the options that have been put forward, how some of those reform options provide for more stable funding for the atc system than the current government model? >> thank you, mr. chairman. we looked at -- we have been studying probably for the last 18 month the the other countries, and when they broke off the services from the

government endty, and some have done well, others are struggling. what we are looking at is to make sure we have a stable, predictable funding stream, and if we're going to change the structure, the one thing we know for sure we do not want is a system that is all profit just puts another barrier and hurdle in front of us to actually provide the safest, most efficient system in the world. >> there's been a lot of discussion about in the context of reform about what's happening to the north of us in canada as a model for comparison. there is reluctance to copying that, but what forms of the canadian air system do you find appealing? >> i think that -- and i just -- i was up there last week visiting in ottawa, looking at the technical center and what they do is have a true collaboration from the position out into developing their technology.

they have the air traffic controller and engineer and manufacturer working together from concept stage through training implementation and deployment within the facilities, and what that does is save time money, and they actually are developing probably the best equipment out there, selling that around the world, and they are doing it in a 30 month to 3 year time frame when we look longer down the road because of the procurement process in the country. >> this would be for the governor, senator -- in the context of an atc services provider, some of you referenced a preference one way or the other or suggested several models. can you speak to the differences between a federal corporation federally chartered nonprofit corporation, and what's the pros and cons of each approach? >> i can -- i'll start.

we convened a group of experts to look at this, and their consensus was a nonprofit corporation outside the government allowed for maximizing your shareholder participation and some of the benefits that was just spoke of, speeding it up and one of the things that also would happen is the ability to get that bonding authority, really talking about the capital project if you know a governor did this, you know, or senator peters back in michigan, you know we bonded the project, you'd do it in a fairly short profit and continuously improving. the nimbleness of the corporation in the entity that would seem to be -- we have not endorsed a specific approach but i would say that the people we've consulted with tend to rely on that, that, you know nonprofit corporation with the shareholder management, if you

will. we think that gets you the most bang for your buck, and it also, i think, over time, gets us back out on the innovation leading edge where we are not today. >> mr. chairman, we have submitted to you a very substantial research document that the institute myself, and the other folks that were involved have produced, and it describes a series of different approaches with strengths and weknesses of each and describes in te tail what other countries have done, but i think what gov the the governor indicated isth most important point, which is the stability of funding for a project of this type is essential, and i -- you know, i served in congress 30 years and there's a lot i don't know, but i know this. in a time of spending restraint, in a time of sequestering in a time of multiple resolutions,

and other things coming at us there's not going to be stable funding for this project in the future unless is comes through bonding capability and another type of organization. it's important to note that i don't support something that does not have the government as a stake holder. i support and believe that this project will not get done for the country the way we want to see it getting done to regain our leadership unless we decide to do it in a different structure. to do that then allows us a stable funding through bonding capability and so on with the input of all the key stake holders including the government. >> mr. chairman, airlines of america supports a nonprofit corporation for a number of reasons. first of all, user fee structure as the senator and governor mentioned would provide a stable stream of funding that could be bonded and so that could be rachal infrastructure investments made and insurance

of funding and state. secondly, this is governed by a board of directors comprised of stake holders. representatives from the department of defense, u.s. government, and generally aviation, commercial air carriers air cargo carriers, the natka and union representatives, so that the stake holders would be present and govern, but they would have duties, not employees of the government or employees of the airlines or employees of the unions, but duties to the air traffic control system. captions copyright national cable satellite corp. 2008 captioning performed by vitac