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ATC Reform: Should FAA Be the Safety Regulator of Its Own Operations?

Washington, DC, March 9, 2017 | Justin Harclerode (202) 225-9446 | comments
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ATC Reform: Should FAA Be the Safety Regulator of Its Own Operations?

By Rui Neiva 
March 9, 2017

The U.S. air traffic control (ATC) system is operated by the Federal Aviation Administration (FAA). The FAA also acts as the safety regulator of all parts of civil aviation, including the air traffic control services it provides. Over the last 30 years, repeated discussions have highlighted the need to create a better structure to deliver ATC, with many stakeholders pushing for ATC to be spun off from the FAA.

Ensuring the continuity of first-rate safety regulation is a key part of any ATC reform effort. If ATC responsibilities were removed from the FAA, as proposed bills in 19871995 and 2016 would have done, safety would become the FAA’s primary function, and as such it would regulate the new ATC provider at an arm’s length. This would put the FAA in line with the other modal agencies within the U.S. Department of Transportation (USDOT), and would mean ATC would be regulated just like other parts of the aviation industry such as the airlines and manufacturers.

It’s important to note that no other major agency within USDOT both operates and regulates a transportation service. For example, the Federal Railroad Administration regulates railways and issues grants, but does not manage train dispatching. The National Highway Traffic Safety Administration regulates the safety of motor vehicles, but does not set speed limits or control traffic lights. Separating ATC from safety regulation would have the benefit of removing any potential conflicts of interest that currently exist in aviation with the FAA both providing and regulating ATC.

Both national and international practices and guidelines highlight the problematic situation of having an entity both operating a service and regulating its safety. Below, we will explore this issue further by looking at both international experience with separation of ATC from its safety regulation, and with domestic examples inside and outside the aviation sector.

ICAO Recommendations. 

In nearly all countries across the world up until 1987, governments both provided ATC and regulated the service. Then in 1987, New Zealand, dealing with an economic crisis, decided to spin ATC off from the government, creating a government corporation to provide those services. Safety regulation remained in the direct control of the government.

Since that first experience with New Zealand, more than 60 countries have undergone this same type of reform, taking ATC outside of the direct control of the government, while keeping safety regulation in-house. Some countries (e.g. France), kept their ATC in the government but separated the service from safety regulation nonetheless, and housed the different functions in different governmental departments.

Many countries have since started separating their ATC providers from the direct control of the government. In response to this, the International Civil Aviation Organization (ICAO), the UN agency dedicated to regulating and advising international aviation, recommended a clear separation of authority and responsibility between the regulatory functions and service provision functions. In addition, the European Union, as part of its Single European Sky initiative, has also mandated structural separation for all of its 28 members.

At a 2008 conference about the issue promoted by ICAO, the Civil Air Navigation Services Organization (CANSO, the trade association for ATC providers, including the FAA), stated that “to be effective and maintain the confidence of the travelling public, the regulatory process must be independent and transparent, and seen to be so, performed by a function that is separate from the entity it regulates. Too close a relationship between the provider and the regulatory function can result in conflicts of interest and undermine confidence in the system…It is readily accepted that provision and regulation carried out by the same entity is inconsistent with principles of good governance.”

At the request of the FAA, the MITRE Corporation recently studied the matter of how civil aviation authorities (CAA) like the FAA have dealt with having ATC spun-off into a new entity. The report concluded that “the separation of the [ATC provider] from the CAA was reasonably successful” and that “MITRE did not discover any views that the system prior to separation was preferred”. An increased focus on safety, from both the CAA and the ATC provider, was found to be one benefit that the separation provided.

Examples in the United States. 

Potential conflicts of interest in how the U.S. government provides and regulates services can be seen throughout U.S. history, in aviation and elsewhere.

In 1935, a special Senate investigative subcommittee chaired by Royal S. Copeland (D-NY) was tasked with the investigation of air traffic safety after the crash of a TWA plane outside of Kansas City that killed Sen. Bronson Cutting (R-NM) in May of that year. The committee concluded that having a governmental agency (the Bureau of Air Commerce at the time, housed in the Department of Commerce) both operating ATC facilities and regulating their safety presented a conflict of interest. In response to this report, Congress passed the Civil Aeronautics Act in 1938, which created the Civil Aeronautics Authority, a new independent federal agency.

(Ed. Note: Two interesting bits of history here. After Sen. Cutting’s death in the plane crash, his seat was filled by Dennis Chavez (D), who would go on to chair the Public Works Committee as it wrote the Interstate Highway Act of 1956. And a 1973 FAA history makes it clear that Copeland had a personal grudge against the then-head of the Bureau of Air Commerce, Eugene Vidal, the father of author Gore Vidal.)

Much like the creation of the Air Traffic Organization (ATO) within the FAA 62 years later, this move attempted to create a sort of functional separation between safety regulation and provision of ATC, though this arrangement did not last. In 1940, this conflict of interest would be part of the rationale for another reorganization, this one implemented through a then-legal Reorganization Plan from the President. A new Civil Aeronautics Administration (put back into the Department of Commerce) was created to operate ATC, while safety regulation and accident investigation (and also economic regulation) were handed over to the Civil Aeronautics Board, an independent agency. With this reform, safety regulation become effectively separated into different entities, and would only be brought under the umbrella of the same agency in 1958 with the creation of the Federal Aviation Agency (the direct predecessor to the FAA).

Outside the aviation industry, conflict of interest concerns were also raised in the case of the Atomic Energy Commission (AEC). Until 1975, AEC performed research and development (R&D) for the nuclear industry, and also regulated the safety of the same industry. Elimination of this potential conflict of interest was one of the reasons why Congress in 1975 split those functions into two separate entities: the Nuclear Regulatory Commission for safety regulation and the Energy Research and Development Administration (merged into the Department of Energy in 1977.

Conclusion. 

There is only one known example, either domestic or international, of non-governmental entities operating as the safety regulator in aviation. The UK’s Civil Aviation Authority is legally a non-profit entity, not a governmental one. However, the MITRE report concluded that the legal structure has more to do with funding (i.e., being outside the national budget), but that “its governing structure more resembles [a] public organization”, with a board appointed by the government.

The British entity is accountable to both the Secretary of State for Transport and to Parliament. (This entity is completely separate from the air traffic provider, NATS.) Outside of the UK, there are no other examples, foreign or domestic, of safety regulators operating outside of the government nor is this recommended by anyone.

Regardless of the model chosen for ATC reform, safety regulation is a function that is inherently governmental and should remain under the control of the federal government. Attempts to privatize safety regulation would face clear constitutional hurdles in the U.S. (Ed. Note: The constitutional issues with potential ATC spinoff in the U.S. are less cut-and-dried – see this Congressional Research Service memo raising potential concerns and this memo from ATC reform advocates seeking to assuage those concerns.) Even ICAO urges that “regulatory and safety functions shall remain the responsibility of the State.”

While it might be true that having both provision and safety regulation of a given service housed together may bring some efficiencies, there is little evidence for this claim. At the same time, there is substantial international consensus on the potential for a conflict of interest when it comes to ATC. This potential conflict of interest has been apparent in the U.S. for decades, and internationally measures have been taken to attempt to solve it by removing ATC from safety regulation. A FAA-commissioned MITRE study suggests that not only did such separation in foreign countries not bring any harm, but in fact it proved quite successful in bringing a better culture of safety for everyone involved.

For more on the issue of ATC reform see the Eno Center’s most recent report on the issueTime for Reform: Delivering Modern Air Traffic Control, as well as our FAA Reform Reference Page.


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Tags: Aviation