FAA Privatization FAIL

The problem with Shuster's privatization bill is that it doesn't really privatize air traffic control.

John J. Bastiat · Sep. 18, 2017

We noted back in June the potential resurgence of support for privatizing the U.S. National Airspace System (NAS), to include privatizing all Federal Aviation Administration (FAA) air traffic control (ATC) services. The renewed interest followed President Donald Trump’s strong endorsement for NAS privatization, but as with all good-intentioned, road-to-hell ventures, the devil is in the details. That’s certainly the conclusion the American Conservative Union reached before heaping condemnation on the latest version of the idea, which has been backed from the beginning by its chief proponent, Rep. Bill Shuster (R-PA).

Addressing the congressman’s proposal, ACU Communication Director Ian Walter flatly stated Rep. Shuster should “withdraw the bill and start from scratch working with all stakeholders and Senate counterparts and agency officials to come up with a bill that achieves real privatization.” That sounds like a great idea — but isn’t this exactly what the current privatization bill does in the first place?

Well, no. First, the current plan lacks virtually any hint of private-sector involvement — let alone competition — and is instead a government-run effort. This is the exactly the bureaucracy against which the backlash toward privatization was formed. Second, the Department of Transportation (DOT) would be charged with populating the new enterprise with employees. Again, the point behind privatization is to cut through the decades of FAA and DOT red tape and entrenchment that have produced very little, relatively, for the money, and to provide efficient, cost-effective services to NAS stakeholders. Asking DOT to be engaged in such an effort is to invite a return to the unsatisfactory status quo. Third, the so-called “privatized” board would be comprised almost entirely of union representatives and airline industry lobbyists, rather than a cross-section of stakeholders reflecting the actual use of the nation’s airspace services.

In short, “privatization” as used in this privatization bill appears to be an Orwellian oxymoron. Further nailing down the coffin lid on this bill is an additional complication that has been standing hair up on the necks of conservative watchdogs: The rumor is Rep. Schuster has been trolling House catacombs for Dem votes, since support is substantially lacking among GOP House members. Fortunately, neither side favors the current construct and such votes are unlikely — hence, the initiative has yet to appear on the House agenda.

Despite the current bill’s fatal shortfalls, we still strongly support privatizing the U.S. National Airspace System. But that support extends only to the extent the NAS is truly privatized, meaning any privatization initiative must begin with a call for competitive private sector proposals and it must remain driven by free market forces throughout the vetting process. As for the current effort: Nice try. Try harder.

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