**DRAFT REGULATORY IMPACT ANALYSIS,**

**DRAFT REGULATORY FLEXIBILITY ANALYSIS,**

**INTERNATIONAL TRADE IMPACT ASSESSMENT, AND UNFUNDED**

**MANDATES ASSESSMENT**

**NOTICE OF PROPOSED RULEMAKING**

**AUTOMATIC DEPENDENT SURVEILLANCE -- BROADCAST (ADS-B) Out PERFORMANCE
REQUIREMENTS TO SUPPORT AIR TRAFFIC CONTROL SERVICE**

**(TITLE 14, CODE OF FEDERAL REGULATIONS, PART 91)**

**Office of Aviation Policy and Plans,**

**Operations Regulatory Analysis Branch**

**October 1, 2007**

**Table of Contents**

[Executive Summary 4](#executive-summary)

[1.0 Introduction 7](#introduction)

[2.1 Why are we doing this rulemaking?
8](#why-are-we-doing-this-rulemaking)

[2.2 The advantages of ADS-B over radar
9](#the-advantages-of-ads-b-over-radar)

[2.3 Joint Resource Council Analyses
9](#joint-resource-council-analyses)

[2.4 ADS-B Out rulemaking 14](#ads-b-out-rulemaking)

[2.5 Market Failure 15](#market-failure)

[2.6 General Assumptions for the Benefit and Government Cost Analysis
17](#general-assumptions-for-the-benefit-and-government-cost-analysis)

[2.7 Definition of scope 19](#definition-of-scope)

[3.0 Definition of Approach 20](#definition-of-approach)

[4.0 Scenarios Analyzed 20](#scenarios-analyzed)

[4.1 No Rule Baseline Scenario 20](#no-rule-baseline-scenario)

[4.1.1 Definition 20](#definition)

[4.1.2 Cost to Aircraft Operators of the Baseline Scenario
21](#cost-to-aircraft-operators-of-the-baseline-scenario)

[4.1.3 Cost to FAA of Continuing Full Radar Surveillance Under the
Baseline Scenario
21](#cost-to-faa-of-continuing-full-radar-surveillance-under-the-baseline-scenario)

[4.1.4 Benefits 23](#benefits)

[4.2 ADS-B Out -- The rulemaking 24](#ads-b-out-the-rulemaking)

[4.2.1 Definition 24](#definition-1)

[4.2.2 Requirements of the Rule 24](#requirements-of-the-rule)

[4.2.3 Industry Estimation of ADS-B Equipage Costs
25](#industry-estimation-of-ads-b-equipage-costs)

[4.2.4 Cost to the FAA to provide surveillance under the ADS-B Out
scenario
48](#cost-to-the-faa-to-provide-surveillance-under-the-ads-b-out-scenario)

[4.2.5 Proposed Backup Strategies 50](#proposed-backup-strategies)

[4.2.6 Benefits of ADS-B Out -- 51](#benefits-of-ads-b-out)

[Table D.2 Data Used to Calculate Ratios
57](#table-d.2-data-used-to-calculate-ratios)

[Table D.3 Cost Savings per vector maneuver
58](#table-d.3-cost-savings-per-vector-maneuver)

[Table D.4 Improved Conflict Probe Performance Benefits
59](#table-d.4-improved-conflict-probe-performance-benefits)

[Table D. 5 Discounted Conflict Probe Benefits
60](#table-d.-5-discounted-conflict-probe-benefits)

[4.2.6.4 Increased ability to allow Continuous Descent Approaches
63](#increased-ability-to-allow-continuous-descent-approaches)

[4.3 ADS-B In and Out -- Surveillance and Broadcast Services
66](#ads-b-in-and-out-surveillance-and-broadcast-services)

[4.3.1 Definition 66](#definition-2)

[4.3.2 Scenario Specific Assumptions 66](#scenario-specific-assumptions)

[4.3.3 Cost to Industry to Equip with ADS-B In
66](#cost-to-industry-to-equip-with-ads-b-in)

[4.3.4 FAA Surveillance and Broadcast Costs
67](#faa-surveillance-and-broadcast-costs)

[4.3.5 Benefits of ADS-B In 71](#benefits-of-ads-b-in)

[4.4 Multilateration Alternative Scenario
76](#multilateration-alternative-scenario)

[4.4.1 Definition 76](#definition-3)

[4.4.2 Cost to Industry 76](#cost-to-industry)

[4.4.3 Cost to FAA 76](#cost-to-faa)

[4.4.4 Benefits of Multilateration Surveillance
78](#benefits-of-multilateration-surveillance)

[5.0 Summary of Costs and Benefits 80](#summary-of-costs-and-benefits)

[5.1 Comparison of Costs and Benefits of the ADS-B Out Scenario (the
Rule) with the Baseline and Multilateration
80](#comparison-of-costs-and-benefits-of-the-ads-b-out-scenario-the-rule-with-the-baseline-and-multilateration)

[5.2 Comparison of Costs and Benefits of ADS-B In and Out with the
Baseline and Multilateration
87](#comparison-of-costs-and-benefits-of-ads-b-in-and-out-with-the-baseline-and-multilateration)

[6.0 Next Generation Air Transportation System Plans for ADS-B
Technology
94](#next-generation-air-transportation-system-plans-for-ads-b-technology)

[7.0 Initial Regulatory Flexibility Determination ADS-B
103](#initial-regulatory-flexibility-determination-ads-b)

[7.1 Introduction and Purpose of this Analysis
103](#introduction-and-purpose-of-this-analysis)

[7.2 Reasons Why the Rule is Being Proposed
104](#reasons-why-the-rule-is-being-proposed)

[7.3 Statement of the Legal Basis and Objectives
105](#statement-of-the-legal-basis-and-objectives)

[7.4 Projected Reporting, Record Keeping and Other Requirements
105](#projected-reporting-record-keeping-and-other-requirements)

[7.5 Overlapping, Duplicative, or Conflicting Federal Rules
106](#overlapping-duplicative-or-conflicting-federal-rules)

[7.6 Estimated Number of Small Firms Potentially Impacted
106](#estimated-number-of-small-firms-potentially-impacted)

[7.7 Cost and Affordability for Small Entities
108](#cost-and-affordability-for-small-entities)

[7.8 Business Closure Analysis 111](#business-closure-analysis)

[7.9 Competitive Analysis 111](#competitive-analysis)

[7.10 Disproportionality Analysis 112](#disproportionality-analysis)

[7.11 Analysis of Alternatives 113](#analysis-of-alternatives)

[8.0 Trade Impact Assessment 114](#trade-impact-assessment)

[9.0 Unfunded Mandates Assessment 114](#unfunded-mandates-assessment)

###  {#section .unnumbered}

# Executive Summary {#executive-summary .unnumbered}

The demand for air travel is growing in the U.S. and around the world.
The FAA's forecasts project a doubling in U.S. airline passenger traffic
by 2025. The forecasts also show strong growth for general aviation,
especially with the advent of very light jets.

The solution to managing the anticipated growth in the use of the NAS is
the Next Generation Air Transportation System, or NextGen, which will
assure the safe and efficient movement of people and goods as demand
increases. NextGen will use technology to allow precise navigation,
permit accurate real-time communication, and vastly improve situational
awareness.

ADS-B is the chosen new technology for surveillance in the NextGen
system. It is a key component in achieving many of the goals set forth
in the Next Generation Air Transportation System (NextGen) Integrated
Plan.

We review the following three alternatives for surveillance in this
analysis:

1.  Baseline radar -- maintain the current radar based surveillance
    system and replace radar facilities when they wear out;

2.  ADS-B -- Aircraft operators equip to meet performance requirements
    proposed by the rule and the FAA provides surveillance services
    based on downlinked aircraft information.

3.  [Multilateration -- The FAA would provide surveillance using
    multilateration.]{.underline}

The proposed rule requires aircraft to equip only with ADS-B Out when
flying in certain airspace. Operators may choose to more fully equip
with ADS-B In and Out, and so we also address these costs and benefits..

The estimated cost of the ADS-B Out requirement ranges from a low of
\$2.3 billion (\$1.6 billion at 7% present value) to a high of \$8.5
billion dollars (\$4.5 billion at 7% present value) [^1]. These costs
include costs to the government, as well as to the aviation industry and
other users of the airspace, to deploy ADS-B and are incremental to
maintaining surveillance via current technology (radar). The aviation
industry would begin incurring costs for avionics equipage in 2012 and
would incur total costs ranging from \$1.27 billion (\$670 million at 7%
present value) [^2] to \$7.46 billion (\$3.6 billion at 7% present
value) [^3] with an estimated midpoint of \$4.32 billion (\$2.12 billion
at 7% present value) [^4] from 2012 to 2035. The estimated compliance
cost of foreign operated affected airplanes operating in the United
States results in from about \$5.6 million to \$134 million, with a
midpoint around \$70 million. These estimated foreign operator costs are
not included in the total estimates for this proposed rule.

The estimated quantified potential benefits of the proposed rule are
about \$10 billion (\$2.7 billion at 7% present value) [^5] and
primarily result from fuel, operating cost and time savings from more
efficient flights.

The proposed rule would make it more likely that aircraft operators
would equip with ADS-B In equipment, which could result in estimated
additional benefits of \$3.9 billion (\$1.0 billion at 7% present
value). [^6] The additional cost of the ADS-B In ground segment is
estimated at \$533 million (\$283 million at 7% present value).[^7] We
did not estimate the cost for aircraft operators to equip with ADS-B In
because we concluded the requirements for ADS-B In are insufficient in
detail and do not yet support the development of a cost estimate. The
FAA will continue to study ADS-B In technology and intends to provide an
adoption cost estimate for the final rule. Benefits of both ADS-B In and
Out have been estimated at \$13.8 billion (\$3.7 billion at 7% present
value)[^8]. Estimated costs of ADS-B In and Out (excluding ADS-B In
avionics costs), relative to the radar baseline, range from \$2.8
billion (\$1.8 at 7% present value) [^9] to \$9.0 billion (\$4.8 at 7%
present value)[^10].

While we do not have estimates of ADS-B In avionics costs, we can derive
an upper bound for what that cost cannot exceed if the ADS-B In and Out
scenario is to be cost beneficial relative to radar for each of the two
possibilities described below.

Given that we have a range of costs (low to high) we considered two
possibilities: (1) low cost, and (2) high cost:

-   We concluded that ADS-B In and Out would be cost beneficial at a
    present value of 7% if the costs for the ADS-B Out avionics are low
    (\$670 million at 7% present value) and the avionics costs for ADS-B
    In do not exceed \$1.85 billion at 7% present value.

```{=html}
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```
-   We also concluded that ADS-B In and Out would be cost beneficial at
    a 3% present value if the costs for the ADS-B Out avionics are low
    (\$950 million at 3% present value) and the ADS-B In avionics costs
    do not exceed \$5.3 billion at 3% present value or if the costs for
    the ADS-B Out avionics are high (\$5.35 billion at 3% present value)
    and the ADS-B In avionics costs do not exceed \$870 million.

ADS-B is a critical component of the Next Generation Air Transportation
System Plan (NextGen) that is being developed to transform today's
radar-based aviation system to handle increased aviation demand. By
itself, ADS-B presents significant benefits, but as a component of the
NextGen system the benefits will substantially increase.

The FAA believes that this proposal would result in a significant
economic impact on a substantial number of small entities.

Foreign operators may incur additional costs to operate in U.S.
airspace, if their national rules, standards and, current level of
equipage are different than those required by this proposed rule. [^11]
Since these foreign operators are subject to this regulation, operate in
U.S. airspace using many US built aircraft, and likely are transporting
a significant number of U.S. citizens, the costs and benefits to foreign
operators attributable to this rulemaking should properly be considered
part of the impact of this rule. The FAA, however, is actively engaged
with the international community to ensure that the international and
U.S. ADS-B standards are as compatible as possible. In addition, by
2020, ICAO standards may change to harmonize with this proposed rule.
FAA will continue to study this issue to ensure any incremental impacts
to foreign carriers are reflected in the impact estimates for this
rulemaking.

This proposed rule would result in an unfunded mandate because it would
result in expenditures in excess of an inflation-adjusted value of
\$128.1 million.

#  Introduction 

Automatic Dependent Surveillance-Broadcast (ADS-B) is an advanced
surveillance technology that enables equipped aircraft to continually
broadcast their identification, current position, altitude, velocity,
and other information, which can be received by ADS-B ground stations
and by other aircraft appropriately equipped to receive this
information. The part of the ADS-B system that broadcasts various
aircraft information is called ADS-B Out. The part of the system that
provides aircraft with the ability to receive other aircrafts' ADS-B
information and other aeronautical information is called ADS-B In. ADS-B
technology allows air traffic controllers to see real-time displays of
air traffic and the precise location of each aircraft and equipped
ground vehicles, along with data that shows where they are moving.

The FAA is proposing a rule that would require most aircraft to be
installed with avionics equipment that meet ADS-B Out performance
standards. This rulemaking would apply to aircraft used to conduct
operations in Class A airspace, Class B airspace and Class C airspace
areas and all airspace within 30 NM of an airport listed in appendix D,
section 1, of part 91 from the surface upward to 10,000 feet mean sea
level (MSL). The rule would mandate a compliance date of 2020. The FAA
is planning to enter into a service contract with a vendor who will
provide ADS-B, Flight Information Services - Broadcast (FIS-B) and
Traffic Information Service Broadcast (TIS-B) ground infrastructure by
2013. If these services are not available by that time, the compliance
date will be extended. As ADS-B ground services become available, the
agency will decommission some secondary surveillance radar, but the
agency will continue to use approximately 50% of existing secondary
surveillance radar systems and 100% of existing primary radar systems as
backup in the event of an ADS-B surveillance disruption.[^12] The rule
would not mandate ADS-B In equipment, but the service contractor will
provide ground services to enable ADS-B In.

This analysis presents estimates of the costs and incremental (relative
to a radar alternative) benefits of the proposed rule (the ADS-B Out
scenario) as well as a second alternative - multilateration. It also
addresses the costs and benefits of ADS-B In and Out. The costs of a
baseline scenario assumes that we continue to use and replace radar
without further supplementing existing radar service and without
requiring ADS-B Out or providing services for ADS-B. We also look at the
costs of ADS-B In and Out and the incremental benefits of the ADS-B In,
and the cost of the alternative approach of using multilateration rather
than radar or ADS-B Out. These estimates are summarized in Section 5.0,
and the costs and benefits of the proposed rule relative to the baseline
are presented and discussed in that section.

#  {#section-1 .unnumbered}

# 2.1 Why are we doing this rulemaking?  {#why-are-we-doing-this-rulemaking .unnumbered}

The Agency is doing this rulemaking because the current national
airspace system (NAS) is not capable of meeting future demand.
Specifically, the current radar system is approaching its capacity
limits and will not meet future demand. ADS-B is a necessary component
of the Next Generation Air Transportation System (NextGen) that is being
designed to handle a tripling of aviation demand. The Next Generation
Air Transportation System Plan is the committed pathway to achieving the
necessary system transformation to accommodate future demand.

Analysis of capacity constraints indicate that growth of demand cannot
be satisfied using current technology and operational paradigms. The
demand scenarios in this analysis quickly outstrip current and
anticipated NAS capacities. Constraints will be felt as early as 2015.
Simulation models show that at higher levels of demand, system delays
quickly rise over the course of the day to untenable levels. It is not
possible to operate a scheduled air transportation system in such a
congested and unreliable environment nor are passengers likely to be
willing to make use of such a system if it were offered. Therefore,
fewer flights would occur under the constrained base case than under the
unconstrained case.

Although a fully integrated NextGen system will not accommodate all of
the demand in the unconstrained case, it moves us closer than the
current system. Modeling shows that without NextGen improvements, only
65% of a tripled demand scenario can be accommodated without a
significant increase in delays due to congestion. Preliminary modeling
shows that in the mid-term state of NextGen transformation, at least 70%
of this demand can be accommodated, and the NextGen end state will
accommodate at least 78% of all flights. This analysis should be
considered as preliminary as not all components of NextGen have been
defined nor modeled and it is based on typical good weather day
operations. Ultimate estimates of NextGen benefits are likely to be
higher as the depth and breadth of both the concepts and the modeling
continue to mature.

Additional NextGen capabilities focused on improved operations during
bad weather may achieve 10 to 20 minutes savings per flight, or as much
as \$1 billion savings from weather impacts on the NAS. These analyses
are further described below, in section 6.0, "The Next Generation System
Plans for ADS-B".

While ADS-B by itself will not solve the capacity constraints, it is a
necessary component to achieve many of the goals set forth in the
NextGen Integrated Plan. ADS-B technology, coupled with the Global
Positioning System (GPS), provides a highly accurate, timely,
all-weather, NAS-wide system of broadcasting geographical position,
altitude and thrust vector from properly equipped aircraft and/or
surface vehicles. Digital ADS-B position reports can be received by and
used throughout the aviation sector to enhance NAS operations, while
reducing overall operating costs. The enhanced surveillance capability
provided by ADS-B in turn enables many of the dramatic benefits of
NextGen.

The Agency believes that industry will not universally equip with ADS-B
Out unless required to do so; but once it is required to equip, a
significant portion of the industry will be motivated to incur the
incremental cost to voluntarily equip with ADS-B In and other NextGen
equipment because of the capacity, efficiency and safety benefits
associated with that additional equipment.

##  The advantages of ADS-B over radar 

According to operational evaluations [^13] ADS-B provides improved
accuracy over radar in almost every air traffic scenario.  ADS-B is
capable of achieving accuracy to within 10m, a capability exceeding any
existing radar.  ADS-B also provides more timely information updates
than conventional radar. Unlike radar, the accuracy and integrity of
ADS-B Out is uniform and consistent throughout the service areas.
Therefore, the ability of air traffic control to accurately identify and
locate aircraft that are further away from the air traffic control
facilities would be better than radar. ADS-B Out also provides more
information to air traffic controllers, such as aircraft dimensions and
aircraft heading, than the current system does, especially in non-radar
areas.

##  Joint Resource Council Analyses 

**Analyses presented to the Joint Resource Council**

The Joint Resource Council (JRC) is the corporate level investment
decision-making body for the FAA.[^14] The JRC sponsored several
analyses to address mission needs and shortfalls identified in the FAA's
NAS Requirements Specification (SR-1000) and Mission Need Statement for
Enhanced Surveillance Capability (MNS 326).

The JRC examined several alternative solutions to support future Air
Traffic Control (ATC) "core surveillance" and "cockpit-based"
capabilities that could meet the needs of the FAA and National Airspace
System users. In the Business Case Analysis Report (BCAR) for Future
Surveillance that the FAA issued for its initial baseline decision
(otherwise known as JRC Phase 2A), the JRC considered three
alternatives: ADS-B, radar replacement, and multilateration. [^15] Table
1 below shows costs and benefits as estimated by the BCAR for each of
these alternatives and as presented to the JRC on September 9, 2005. The
BCAR was used to justify the selection of ADS-B as the preferred
surveillance system of the future.

**Table 1 Costs and Benefits of The Three Alternatives as Presented to
the JRC Phase 2A in Billions of 2005 Year Dollars**

**Point Estimates**

![](media/image1.wmf){width="5.9944444444444445in" height="1.4in"}

^\[1\]^ Future Surveillance Initial Investment Decision, Presented to
Joint Resource Council, page 19 by Paul Fontaine, September 9, 2005

^\[2\]^ Exhibit 300 Attachment 2, Business Case Analysis Report for
Future Surveillance, Joint Resource Council, Phase 2a, page 24.

On September 9, 2005 the JRC approved an initial investment decision for
future surveillance. After considering the three alternatives, the team
identified the NAS Wide ADS-B implementation as the recommended
alternative.[^16] The costs and benefits in this BCAR that were
presented by the team are also in Table 1.

**[Differences Between this Analysis and the 2005 BCAR]{.underline}**

The FAA cost for ADS-B in the BCAR, \$2.26 billion, did not include
radar costs for continuing radar service until ADS-B was operational.
These continuing radar costs were estimated at the time as \$2.8 billion
(2005 dollars).[^17] The difference in radar costs between the cost of
continuing radar service until ADS-B is operational and the cost of
continuing to replace radar under a radar alternative were taken into
account in the JRC cost benefit analysis on the benefit side by being
considered a cost avoidance[^18] benefit of ADS-B. The assumption at the
time was that 100% of the secondary surveillance radar would be
decommissioned. The costs of the ADS-B alternative did not include
airborne radar service backup costs; these costs are now included in the
ADS-B scenario in this analysis.

This regulatory evaluation does not include the cost for users to
receive weather and traffic services under the radar and multilateration
alternatives. These costs were presented to the JRC-2A and included user
costs of \$4.56 billion (2005 dollars). These costs included the
avionics costs for general aviation aircraft operators (who are not
currently so equipped) to receive weather and traffic services and the
cost to subscribe to weather services. The rationale for including these
costs was to address the decision makers' request to have all
alternatives provide the same level of capability; by adding these user
costs to the radar and multilateration alternatives the capabilities of
these alternatives matched some of the capabilities of the broadcast
services (ADS-B In) alternative. However, most general aviation aircraft
operators are not currently subscribing to and equipping for such
services. We believe that they do not perceive the benefits of such
services to be worth the costs they would incur for such services in a
radar or multilateration environment.

On June 7, 2006 the Surveillance and Broadcast Services (SBS) Program,
presented the results of a second investment analysis[^19] to the
JRC-2B. That analysis refined the estimates of the costs and benefits
for ADS-B In and Out. According to the analysis,[^20] the ADS-B
Surveillance and Broadcast Services (ADS-B In and Out) would achieve
\$13.6 billion (\$3.6 billion at 7% present value) [^21] [^22] in
benefits for industry and government over the fiscal years 2007 through
2035. According to the analysis, the costs of the program to industry
and the FAA would be \$4.9 billion (\$2.9 billion at 7% present
value).[^23]

**Table 2 Costs and Benefits of Surveillance and Broadcast Services from
Analyses Prepared for June 2006 (2006 Billions of Dollars)**

![](media/image2.wmf){width="5.997222222222222in"
height="1.8173611111111112in"}

^\[1\]^ MCR Federal, September 12, 2006

^\[2\]^ MCR Federal, September 12, 2006

^\[3\]^ ADS-B Avionics Cost Basis of Estimate for Surveillance and
Broadcast Services JRC-2B Investment Decision, June 28, 2006, Draft, pg.
22.

^\[4\]^ Includes cost to equip Air Transport category aircraft to year
2020, and cost to equip General Aviation aircraft out to the year 2030.

^\[5\]^ADS-B Avionics Cost Basis of Estimate for Surveillance and
Broadcast Services JRC-2B Investment Decision, June 28, 2006, Draft, pg.
22.

^\[6\]^ Includes cost to equip Air Transport category aircraft to year
2020, and cost to equip General Aviation aircraft out to the year 2030.

^\[7\]^ Surveillance and Broadcast Services Final Investment Decision:
Segment 1, June 7, 2006 presentation to the JRC, page 11.

^\[8\]^ Surveillance and Broadcast Services Final Investment Decision:
Segment 1, June 7, 2006 presentation to the JRC, pg. 31.

The JRC approved the program's request to baseline the FY 2007 and FY
2008 at a cost of \$80.5 million and \$86.1 million per year
respectively.[^24]

The assumption for the JRC 2A in September of 2005 was that 100% of
secondary surveillance radar would eventually be replaced by ADS-B. For
the JRC 2B held in June of 2006 the assumption was that secondary
surveillance radar would be reduced by 33%. In February 2007 there was
another JRC 2B meeting, and at this time the decision was made to retain
50% of the secondary surveillance radar based on a backup study
completed in November 2006.

**Definition of Segments**

The FAA is proposing that ADS-B applications and supporting
infrastructure will be introduced in a phased deployment consisting of
the following four segments.[^25]^,^ [^26]

[Segment 1 FY 2007 -- 2011]{.underline}[^27]- During Segment 1, ADS-B,
TIS-B, and FIS-B services would be provided in limited areas that can
obtain benefits from early avionics equipage. Some aircraft will equip
with advanced avionics to support airborne situation awareness
applications. This segment would be designed to reduce risk by
validating services (ADS-B, TIS-B, and FIS-B) at targeted locations,
would establish test beds for the evaluation of future air-to-air
applications and would provide planning for Segment 2.[^28]

[Segment 2 FY 2009 -- 2014]{.underline} -- As the program transitions
into segment 2, the ground ADS-B service infrastructure would be
deployed on a NAS-wide scale and avionics equipage would continue.

[Segment 3 FY 2015 -- 2020]{.underline} -- During segment 3, all
aircraft would be equipped and the seven initial applications discussed
below would be available NAS-wide. Existing legacy surveillance
infrastructure removal would begin to eliminate unnecessary redundant
ADS-B radar coverage.

[Segment 4 FY 2021 -- 2025]{.underline} --Segment 4 would be longer term
and envisions the implementation of more complex aircraft/vehicle based
applications, the removal of TIS-B services as full avionics equipage is
realized, and the decommissioning of unneeded legacy surveillance assets
displaced by ADS-B coverage.

Segments 1, 2 and 3 will initially support the following 2 services and
5 applications:

> Services
>
> • ATC Surveillance
>
> • FIS-B and TIS-B
>
> Applications

-   Final approach runway occupancy awareness,

-   Enhanced visual acquisition,

-   Enhanced visual approach,

-   Airport surface situational awareness,

-   Conflict detection.

This rulemaking supports ATC surveillance in mandating ADS-B Out
equipment. In order to receive the remaining services (TIS-B and FIS-B)
and the five applications the aircraft would have to be equipped with
ADS-B In. Other aircraft will not need to be equipped with ADS-B Out
until 2020, when TIS-B will be discontinued, in order for those aircraft
operators who are equipped with ADS-B In to begin receiving benefits
from these services and applications.

Segments 1, 2 and 3 will initially support the following seven services
[^29]or applications:

1.  ATC Surveillance,

2.  Airport Surface Situation Awareness,

3.  Final Approach Runway Occupancy Awareness,

4.  Enhanced Visual Acquisition,

5.  Enhanced Visual Approach,

6.  Conflict Detection,

7.  Weather and NAS Status Situational Awareness.

This rulemaking supports the first application in mandating ADS-B Out
equipment. The remaining six applications would require that aircraft be
equipped to support ADS-B In. Equipping with ADS-B In will be voluntary.

## 2.4 ADS-B Out rulemaking  {#ads-b-out-rulemaking .unnumbered}

**Proposed Requirements**

ADS-B Out would provide for enhanced surveillance in areas where
secondary surveillance radar (SSR) capability currently exists. The FAA
believes that it is reasonable to require that aircraft meet the
performance necessary for ADS-B Out for operation in airspace that
currently requires transponders. The FAA is proposing to add a new
section to 14 CFR part 91 (§ 91.225). Proposed § 91.225 would require
that aircraft meet ADS-B Out performance requirements to operate in
Class A, Class B, and Class C Airspace Areas. In addition, this proposal
would require that aircraft meet ADS-B Out performance requirements to
operate in the Gulf of Mexico from the coastline of the United States
out to 12 nautical miles at and above 3,000 feet MSL. Similar to the
transponder requirements, ADS-B Out also would be required within 30
nautical miles of an airport listed in 14 CFR § 91.215, Appendix D, from
the surface upward to 10,000 feet MSL. This proposal would permit
aircraft not originally certificated with an engine-driven electrical
system or not subsequently certified with such a system installed (such
as a balloon or glider) to conduct operations without ADS-B Out under
ATC authorization in the airspace within 30 nautical miles of an airport
listed in Appendix D if the operations are conducted: (1) outside any
Class A, Class B, or Class C airspace area; and (2) below the altitude
of the ceiling of a Class B or Class C airspace area designated for an
airport or 10,000 feet MSL whichever is lower.

Generally, Class A airspace is that airspace from 18,000 feet MSL to and
including FL 600, including the airspace overlying the waters within 12
nautical miles (12NM) of the coastline of the United States. This
proposal would not require aircraft to meet the proposed ADS-B Out
performance standards for aircraft that operate in airspace beyond 12NM
from the U.S. coastline and do not enter U.S. domestic airspace.[^30]

Class B airspace is from the surface to 10,000 feet MSL surrounding the
nation's busiest airports in terms of airport operations or passenger
enplanements. Class B airspace areas generally are configured and appear
as an upside-down wedding cake. The configuration of each Class B
airspace area is individually tailored and consists of a surface area
and two or more layers, and is designed to contain all published
instrument procedures. An ATC clearance is required for all aircraft to
operate in the area, and all aircraft that are so cleared receive
separation services within the airspace. Under this proposal, ADS-B Out
would be required for aircraft operating in this airspace. In addition,
Appendix D, referenced previously, includes a list of airports for which
Class B airspace is centered. For these airports, ADS-B Out would be
required for operations within 30 NM of the airport from the surface up
to 10,000 feet MSL. This area can experience a high volume of aircraft
operations and complex transitions from the en route to the terminal
area around the nation's busiest airports. Consequently, ADS-B Out can
result in better ATC surveillance and situational awareness in these
areas.

Generally, Class C airspace is that airspace from the surface to 4,000
feet above the airport elevation (charted in MSL) surrounding those
airports that have an operational control tower, are serviced by a radar
approach control, and have a certain number of IFR operations or
passenger enplanements. Although the configuration of each Class C area
is individually tailored, the airspace usually consists of a surface
area with a 5 NM radius, an outer circle within a 10 NM radius that
extends from no lower than 1,200 feet up to 4,000 feet above the airport
elevation. Each person must establish two-way radio communications with
the ATC facility providing air traffic services prior to entering the
airspace and must maintain those communications while within the
airspace.

##  2.5 Market Failure {#market-failure .unnumbered}

Given the benefits that ADS-B equipage would generate for stakeholders,
it might initially appear that users of the system would have economic
incentives to equip with ADS-B even in the absence of a federal
requirement to do so. However, the necessary conditions that must be met
(all aircraft operators must equip their aircraft for ADS-B Out) in
order to achieve any of ADS-B's benefits actually create incentives for
users not to equip. It is to each operator's advantage to wait until
everyone else has equipped or at least until each user knows that all
other users will equip within a defined time horizon. Specifically,
stakeholder analysis of whether to equip voluntarily will not take into
account positive externalities that equipage would have on other
stakeholders. These externalities create a "last mover advantage"
because users who equip prior to other users will have to wait longer
and face greater uncertainty before seeing a return on their investment.
As a result, users would have incentives to delay ADS-B equipage, and
there is a significant risk that the aviation system would never achieve
the critical mass of ADS-B-equipped users that is needed to generate
benefits. The proposed mandate would correct this market failure.

The delay reduction and fuel savings generated for users by ADS-B (and
the "performance-based" NAS that it enables) depend highly on extensive
adoption among users. According to a recent study, "In order to
transition completely to an improved performance-based NAS, it is
necessary for 100% of aircraft in any given airspace to be capable of
the specified performance-based operations. If non-capable aircraft are
present, the resulting 'work around' procedures often negate much of the
benefits for the other capable aircraft."[^31] Another study supports
this assertion, stating that "without extensive equipage adoption among
airlines...ADS-B therefore offers little value except in cases where an
airline is a heavy user of an ADS-B equipped hub and can gain value from
reduced separation between its own aircraft and improved management of
surface traffic."[^32]

In other words, the financial analysis for an individual firm or
individual pilot is very different from the industry-wide analysis. An
individual will bear a full share of the equipage costs but will only
receive benefits if virtually all other users in the airspace in which
that firm operates also equip.

This introduces two factors with negative impacts on any individual
firm's analysis of ADS-B: delayed benefits and uncertainty. If some
other users in the relevant airspace have not yet committed to ADS-B,
any firm considering ADS-B will know that benefits will not be
instantaneous, as they cannot be fully realized until the other users
adopt the technology---assuming those users choose to adopt the
technology at all. In a financial environment where the aviation
industry requires extremely fast returns on capital investments,
individual stakeholders will likely heavily discount future returns both
for the time value of money and for the uncertainty over whether those
benefits will arise at all. Many stakeholders may only consider the very
limited known benefits that they will achieve, assuming no action by
other users; these benefits, as noted above, are unlikely to be
sufficient to justify the capital investment. The impact to the rest of
the industry from enabling others to achieve benefits would not be
considered in an individual firm's analysis.

Those who install ADS-B late in the adoption process will be, in
essence, free riders because they will receive the same benefits as
those who installed earlier in the process, but will have invested less
cost on a present value basis, since the time between investment and
payback would be significantly shorter. Furthermore, those who install
ADS-B early in the adoption process will not only have to bear the cost
of capital for that investment, but the cost of the equipment,
installation and maintenance may be higher due to manufacturers being in
the steep part of the learning curve.

An appropriately-structured government mandate, combined with government
investment in the necessary air traffic control infrastructure such as
ADS-B ground stations (another precondition for achieving user
benefits), can address this market failure by eliminating uncertainty
associated with user benefits. With a known mandate deadline, users can
make an undistorted evaluation of the optimal time to equip. The mandate
provides certainty that other preconditions necessary to achieve
benefits will be met even though they are out of an individual user's
control.

In summary, mandating ADS-B Out equipage to operate in designated
airspace is necessary because market failures would otherwise prevent
individual users from adopting the technology that would generate net
benefits for society. The issues these market failures generate include
an incomplete accounting of societal benefit, a potential time lag
between a firm's investment and benefits, and uncertainty about whether
those benefits will be achieved at all. Government action is required in
order to achieve the capacity, safety, and efficiency benefits of ADS-B.

The FAA currently believes it would be premature to mandate ADS-B In
equipage, because there are no standards in place to accommodate
air-to-air applications. Also, the initial set of applications discussed
in the regulatory evaluation would not require everyone to equip with
ADS-B In to achieve some of those benefits associated with ADS-B In. For
instance, operators can attain weather benefits from ADS-B In without
other pilots being equipped with ADS-B In. Some benefit can be achieved
in reducing aircraft-to-aircraft conflict if some aircraft have ADS-B
In, provided the other aircraft have ADS-B Out or the aircraft are
operating in a TIS-B[^33] service area, but to attain the full benefit
all aircraft in a conflict should be equipped. Further, there is a
certain large, as yet undefined, level of equipage that must be met in
order to realize larger capacity and efficiency benefits of ADS-B In. In
the future, the agency expects to move forward with reduced separation
standards and possibly allow some self-separation, and at that point
further rulemaking may be warranted.

## 2.6 General Assumptions for the Benefit and Government Cost Analysis  {#general-assumptions-for-the-benefit-and-government-cost-analysis .unnumbered}

The following general assumptions are used in the analysis. Scenario
specific assumptions are listed later under the scenario sections.

-   All costs and benefits are denominated in 2007 dollars.

-   The proposed rule would become a final rule in 2009, and would have
    a compliance date of 2020.

-   Present value rates are 3% and 7%.

-   Costs that are consistent across scenarios are not included. For
    instance, primary radar will be maintained across all scenarios and
    therefore the cost to continue primary radar is not included in any
    scenario.

-   Period of Analysis: 2007-2035.

-   The agency intends to provide ADS-B services where radar
    surveillance exists today (plus the Gulf of Mexico and areas in
    Alaska). We may in the future decide to implement ADS-B services in
    other areas. However, for the purpose of this regulatory evaluation,
    we assume ADS-B surveillance and broadcast service will only be
    provided in areas where we have radar today, plus the Gulf and
    Juneau.

-   There will be no ground infrastructure to support ADS-B broadcast
    services (ADS-B In) in the Gulf of Mexico.

```{=html}
<!-- -->
```
-   The FAA will not mandate ADS-B In, therefore any equipage with ADS-B
    In will be voluntary. The FAA does assume, however, considerable
    voluntary adoption of ADS-B In, because the ADS-B Out mandate lowers
    the marginal cost of the ADS-B In investment.

-   The ADS-B ground infrastructure and rules and procedures would be in
    place by 2013 to support the following applications and services:

> Services

-   ATC Surveillance,

-   FIS-B and TIS-B.

> Applications

-   Final approach runway occupancy awareness,

-   Enhanced visual acquisition,

-   Enhanced visual approach,

-   Airport surface situational awareness,

-   Conflict detection.

```{=html}
<!-- -->
```
-   For the purposes of the regulatory evaluation we assume that current
    radar separation standards will be maintained. However, the FAA is
    investigating whether and to what extent ADS-B may allow the FAA to
    reduce separation standards.

-   Once ADS-B Out is implemented in the Gulf of Mexico and assuming a 5
    mile separation standard is approved based on ADS-B Out data being
    available for separation purposes, the hourly capacity for sectors
    in the Houston CTA[^34]/FIR [^35]is estimated to increase from 56 to
    75 aircraft. While complete surveillance coverage across the Gulf of
    Mexico has the potential to provide much greater increases in air
    traffic capacity, this initial estimate takes into account current
    en route airspace constraints in Mexico as well as airport capacity
    limitations at some of Mexico's most popular destinations.

[]{.mark}

-   We assume that low altitude operations over the Gulf of Mexico would
    be equipped with ADS-B Out because of a Memorandum of Agreement
    (MOA)[^36]^,^ [^37] signed by the FAA and helicopter operators,
    among others, and not because of the rule. The FAA would install
    ground equipment under the MOA. The MOA is to be renewed every five
    years. We are assuming for the purpose of this analysis that the MOA
    would be renewed every five years. Therefore we do not include the
    costs and benefits of low altitude operations over the Gulf of
    Mexico as a cost of the rule.

[]{.mark}

-   We assume there will be no self-separation.

-   While there may be some improvements in air traffic controller
    productivity with ADS-B Out, we are unable to quantify any
    improvement at this point.

-   We assume that all NAS infrastructure costs other than surveillance,
    such as cost of runways, cost to add or extend runways and the cost
    of air traffic control facilities are the same across all the
    scenarios and we assume that all NAS personnel costs are the same
    across scenarios. Therefore we do not consider these costs in any of
    the scenarios.

## 2.7 Definition of scope  {#definition-of-scope .unnumbered}

The ADS-B Out scenario analysis [^38] includes costs incurred and
benefits attained due to the proposed rulemaking, as well as the costs
incurred by the government to deploy and maintain a surveillance system.
Costs and benefits that would occur without the rulemaking are not
included in the analysis. Costs that are incurred in anticipation of the
rulemaking are included, as are the benefits resulting from those
expenditures.

Costs and benefits that may be voluntarily incurred as a result of the
complete ADS-B In and Out program, such as fewer aircraft-to-aircraft
conflicts, are not included in the ADS-B Out scenario, but are addressed
later in this document.

#  {#section-2 .unnumbered}

#  3.0 Definition of Approach {#definition-of-approach .unnumbered}

In the following sections we address the following four scenarios:

-   A radar baseline scenario to represent current surveillance practice
    and a universe without the proposed rule,

-   ADS-B Out scenario to represent the proposed rule,

-   ADS-B In and Out scenario in which we assume that operators will
    voluntarily equip with ADS-B In to achieve the benefits of broadcast
    technology after ADS-B Out has been mandated, and

-   Multilateration as a surveillance alternative to ADS-B.

We present costs and benefits for each of the scenarios. We compare the
costs and benefits of the ADS-B Out scenario with those of the baseline
scenario to derive the costs and benefits of ADS-B Out adoption. We also
present the broader scenario of a fleet largely equipped with ADS-B In
and Out (which has been addressed by the JRC) because we believe that
after operators equip with ADS-B Out, they will equip with ADS-B In to
achieve more benefits. The multilateration scenario demonstrates an
alternative to the proposed rulemaking, as does the baseline scenario.

We also discuss NextGen, which is a broader restructuring of the
National Airspace System, that goes beyond ADS-B, because there are
additional benefits to NextGen which require ADS-B In and Out equipage.

#  {#section-3 .unnumbered}

# 4.0 Scenarios Analyzed {#scenarios-analyzed .unnumbered}

## 4.1 No Rule Baseline Scenario  {#no-rule-baseline-scenario .unnumbered}

### 4.1.1 Definition  {#definition .unnumbered}

The baseline scenario is the no-rule scenario. Under this scenario we
maintain the current radar based surveillance system, and replace radar
facilities once they wear out. This scenario assumes no expansion beyond
the current Operational Evolution Plan (OEP).

This section presents the cost of continuing full radar surveillance,
which we will compare to alternative scenarios. It assumes that all
other components of the air traffic system will be constant over the
scenarios and therefore these costs are not included. These components
include runways, air traffic facilities and personnel. Also, we assume
the cost of primary radars and precision runway monitoring systems will
be constant across all scenarios and therefore we will not include them.

### 4.1.2 Cost to Aircraft Operators of the Baseline Scenario {#cost-to-aircraft-operators-of-the-baseline-scenario .unnumbered}

There should be no direct cost to the operators because they are already
equipped to operate under the current radar based system.

### 4.1.3 Cost to FAA of Continuing Full Radar Surveillance Under the Baseline Scenario  {#cost-to-faa-of-continuing-full-radar-surveillance-under-the-baseline-scenario .unnumbered}

#### [Surveillance]{.underline} {#surveillance .unnumbered}

**Airborne Surveillance Radar**

With this scenario we include the cost of continuing to support all
classes of airborne secondary (beacon) radars (i.e. terminal and en
route), and surface surveillance radar and the cost of replacing these
radars at the end of their life cycles.[^39]

The specific secondary surveillance radar includes BI4, BI5, BI6 and
Mode S radar. The ASR-11 is a terminal air traffic control radar system
that replaces current analog systems with new digital technology. These
costs are also included. The ASR-11 system consists of two electronic
subsystems: a primary surveillance radar and a secondary surveillance
radar sometimes called the beacon.[^40] We assume that the agency will
purchase 66 ASR-11, which are primary/secondary surveillance radar.

**Surface Surveillance Radar**

Surface surveillance radar includes Airport Surface Detection Equipment
(ASDE-3 and ASDE-X/3X). ASDE-3 provides radar surveillance of aircraft
and airport surface vehicles at high activity airports.[^41] ASDE-3 is a
primary radar for surface surveillance and is combined with the Airport
Movement Area Safety System (AMASS ) software which provides conflict
alerts based on ASDE-3 surveillance data.

ASDE-X is a traffic management system that fuses information from radar,
multilateration and other sensors, for the airport surface that provides
seamless coverage and aircraft identification to air traffic
controllers. The system uses a combination of surface movement radar and
transponder multilateration sensors to display aircraft position labeled
with flight call signs on an ATC tower display.[^42] The costs of
ASDE-3, ASDE-X/3X and AMASS are included below.

The cost to sustain and replace airborne and surface radar, assuming
there will be no ADS-B Out would be \$3.0 billion (\$1.2 billion when
discounted by 7%) [^43] over the years 2007 to 2035. The aggregate costs
by year are presented in Table 3 below.

Table 3 Cost to Sustain and Replace Radar without ADS-B Out

2007 K \$

![](media/image3.wmf){width="5.995138888888889in"
height="5.732638888888889in"}

We assume the life cycle of the current ground-based surveillance
systems is 20 years from their initial service.[^44]

### 4.1.4 Benefits  {#benefits .unnumbered}

There is one benefit of the baseline scenario relative to the other
alternatives, and that is certainty. We know it works with today's
margin of safety.

## 4.2 ADS-B Out -- The rulemaking {#ads-b-out-the-rulemaking .unnumbered}

### 4.2.1 Definition  {#definition-1 .unnumbered}

Under this scenario, aircraft operators would equip to meet the
performance requirements proposed by the rule. The FAA would make
surveillance services available based on downlinked aircraft
information.

Costs presented in this section would be borne both by the FAA and by
the industry. The FAA would begin to incur program costs in 2007 to
install ground facilities in order to provide ADS-B services. Benefits
of the proposed rule could not be achieved without incurring these
costs. Industry would begin to incur costs in 2012.

### 4.2.2 Requirements of the Rule  {#requirements-of-the-rule .unnumbered}

The rule proposes that no person may operate an aircraft in the
following airspace unless that aircraft meets ADS-B Out performance
requirements laid out in the NPRM and discussed in Section 2.4 above,
unless otherwise authorized or directed by air traffic control (ATC).

-   Class A, Class B, and Class C airspace areas, and in the airspace at
    and above 10,000 ft MSL over the 48 contiguous United States and the
    District of Columbia.

-   U.S. airspace over the Gulf of Mexico, which is from the coastline
    of the United States out to 12 nautical miles at and above 3,000
    feet MSL.

-   Within 30 nautical miles of an airport listed in 14 CFR § 91.215,
    Appendix D, from the surface upward to 10,000 feet MSL.

However, this proposal would permit aircraft not originally certificated
with an engine-driven electrical system or not subsequently certified
with such a system installed (such as a balloon or glider) to conduct
operations without ADS-B Out in the airspace within 30 nautical miles of
an airport listed in Appendix D if the operations are conducted: (1)
outside any Class B, or Class C airspace area; and (2) below the
altitude of the ceiling of a Class B or Class C airspace area designated
for an airport or 10,000 feet MSL, whichever is lower.

While in the airspace specified, each person operating an aircraft
equipped with ADS-B Out must operate this equipment at all times in the
transmit mode, including when on the airport surface.

###  {#section-4 .unnumbered}

###  {#section-5 .unnumbered}

### [4.2.3 Industry Estimation of ADS-B Equipage Costs]{.underline} {#industry-estimation-of-ads-b-equipage-costs .unnumbered}

#  {#section-6 .unnumbered}

**[4.2.3.1 Introduction]{.underline}**

This section starts with defining a set of assumptions underlying the
estimated costs for equipping aircraft in the NAS. We then discuss the
derivation of the future affected aircraft fleet. Next, we explain the
methods used to estimate ADS-B Out equipage costs on turbojet, turboprop
and General Aviation (GA) aircraft. Lastly, we follow the ADS-B Out cost
discussion with an estimate of the cost savings from learning curve
efficiencies and additional maintenance and operating [^45]costs.

**[4.2.3.2 Equipage Cost Assumptions]{.underline}**

The ADS-B Out equipage cost evaluation for this proposed rule makes the
following assumptions:

1.  The base year is 2007.

2.  This proposed rule would become a final rule in 2009.

3.  The analysis period extends for 29 years from 2007 through 2035.

4.  This proposed rule would become fully effective in 2020.

5.  The ADS-B ground infrastructure would be in service and fully
    operational by 2013.[^46]

6.  Manufacturers would invest in equipping newly delivered aircraft
    after a federal commitment of two appropriation-funding cycles.

7.  Manufacturers of large category turbojet or regional turboprop would
    start equipping ADS-B Out avionics on new aircraft deliveries in
    2012[^47] because it would be cheaper to purchase new aircraft with
    the avionics installed than to retrofit in 2020.

8.  Large category turbojet and regional turboprop aircraft would start
    retrofitting active aircraft in 2013 in order to minimize costs
    associated with retrofitting the aircraft outside of its heavy
    maintenance cycle. All active large category turbojet and regional
    turboprop aircraft would be fully equipped with ADS-B Out by 2019.

9.  GA aircraft and Rotorcraft would start equipping new aircraft
    deliveries in 2012 and retrofitting active aircraft in 2013. All
    active GA and Rotorcraft aircraft would be fully equipped by 2019.

10. The average retirement age of a U.S. operated passenger large
    category turbojet or regional turboprop is 25 years.[^48]

11. The average retirement age of a U.S. operated cargo large category
    turbojet or regional turboprop aircraft is 32 years.[^49]

12. Large category turbojet or regional turboprop aircraft groups with a
    history of being converted from passenger to cargo service would
    undergo a cargo conversion. This conversion has an impact on the
    anticipated life of the aircraft.

13. All U.S. certificated large category turbojet or regional turboprop
    passenger and cargo aircraft would equip with ADS-B Out because they
    would operate in the airspace required by this proposal.

14. Active U.S. certificated GA aircraft and Rotorcraft currently
    equipped with transponder equipment[^50] would equip with ADS-B Out
    equipment because they would operate in the airspace required by
    this proposal. Operators of GA aircraft and Rotorcraft without ADS-B
    Out transponder equipment could request ATC deviations prior to
    operating in the airspace affected by this proposal on a
    case-by-case basis. The following table shows the current number of
    U.S. certificated GA aircraft and Rotorcraft with transponder
    equipment:

![](media/image4.wmf){width="3.06875in" height="1.4270833333333333in"}

15. Experimental, Sport and Other aircraft would not equip with ADS Out.
    Operators of these aircraft could request ATC deviations prior to
    operating in the airspace affected by this proposal.[^51]

16. Operators of large category turbojet aircraft would purchase a
    platform that would comply with this ADS-B Out rule and could be
    upgraded to support developments in future navigational sources. The
    net effect of this assumption is costs could be slightly overstated
    for certain equipment groups.

We would appreciate input from operators of large category turbojet,
regional turboprop and general aviation aircraft on when they intend to
start retrofitting their aircraft to comply with this rule that mandates
compliance in 2020. Further, if operators expect to make an early
equipment investment, please explain the expected benefits, such as
reduced delays. We solicit comments from manufacturers of large category
turbojet, regional turboprop and general aviation aircraft on when they
intend to start delivering new aircraft to comply with the rule if
enacted. We need clarification of the avionics currently installed on
new production airplanes and expected enhancements that would occur
without the rule. Lastly, we solicit comment regarding the remaining
assumptions.

**[4.2.3.3 Fleet Discussion]{.underline}**

This section discusses the methodology generating the future affected
fleet that would need to comply with the proposed rule. The section
begins with a discussion of the expected affected airplanes, and then
discusses in detail the derivation of the future affected fleet of large
category turbojet, regional turboprop, general aviation and
rotorcraft.[^52]

The most significant fleet increases in the 2012 through 2035 period are
those for large category and smaller turbojets. We project the
population of large category turbojets to nearly double. This near
doubling is exceeded by the anticipated 148 percent increase in the
number of smaller turbojets, largely attributed to very light jets.[^53]

[Large Category Turbojet Aircraft]{.underline}

The 2006 published FAA turbojet fleet annual unit forecast for 2005 to
2017 forms the basis for estimating the number of affected large
category turbojet aircraft. This forecast covers wide body, narrow body
and regional turbojet aircraft operated by US certificated carriers and
includes new deliveries and retirements. A bottom-up forecast was
developed for each aircraft group and then summed to arrive at an
aggregate.

To estimate the large category turbojet fleet after 2017, we use the FAA
long-term turbojet fleet annual unit forecast for 2018-2030. After 2017,
we retired passenger turbojets at 25 years and cargo turbojets at 32
years of operating life. We used a 25-year average life of a passenger
large category turbojet, based on the history of the average age of
retired US-operated airplanes.[^54] Similarly, we used a 32-year average
operating life of a cargo large category turbojet by analyzing the
history of the ages of retired US- operated airplanes. We assumed any
aircraft group with a history of being converted from passenger to cargo
service would undergo a cargo conversion, operate for a total of 32
years, and then retire. We assumed that aircraft close to their
retirement age would comply with this proposal and equip with ADS-B Out.
The net effect of this assumption is the costs could be slightly
overestimated because an operator could make the decision to retire the
aircraft earlier than intended, particularly in light of aging safety
initiatives aimed at aging aircraft that may also encourage early
retirement. We then backfilled the retired passenger and cargo turbojet
aircraft with new turbojet deliveries to match our long term forecast.

Finally, we estimated the turbojet fleet from 2031-2035 by extending the
average percent changes over the 2025-2030 period, to estimate the
number of active turbojet aircraft in 2031-2035.

[Regional Turboprop Aircraft]{.underline}

The 2006 published FAA turboprop fleet annual unit forecast for 2005 to
2017 forms the basis for estimating the number of affected regional
turboprop aircraft. This forecast categorizes regional turboprop
aircraft as greater than nine seats, operated by US certificated
carriers, and including new deliveries and retirements. A bottom-up
forecast was developed for each aircraft group by seat and then summed
to arrive at an aggregate.

The regional turboprop fleet after 2017 is the same as the FAA long-term
turboprop fleet forecast for 2018-2030. We estimated the regional
turboprop fleet from 2031-2035 by extending the average percent change
from the 2025-2030 period. Our new regional turboprop fleet forecast
exactly offsets the FAA forecast for retired turboprops.

[General Aviation Aircraft]{.underline}

The 2006 published FAA general aviation fleet annual unit forecast for
2005 to 2017 forms the basis for estimating the number of affected
general aviation aircraft. To estimate the affected fleet of general
aviation aircraft after 2018, we used the FAA long-term general aviation
fleet forecast for 2018-2030. These forecasts cover fixed wing,
rotorcraft, experimental, sport and other general aviation aircraft
operated by US certificated carriers and includes new deliveries and
retirements. We estimated the general aviation fleet from 2031-2035 by
extending the average percent change from the 2025-2030 period. Our
retirement forecast is the same as the FAA GA fleet forecast with
aircraft retirements of approximately 0.5-1.0% of the prior year fleet
depending upon the equipment type.

In summary, FAA projects that the number of fixed wing general aviation
aircraft will increase approximately 19%, the number of rotorcraft and
large category turbojet to double, and the number of regional turboprop
to decline about 5% from 2012 to 2035.

**[4.2.3.4 Equipment Specifications]{.underline}**

This section describes the proposed new standards for ADS-B Out airborne
avionics this proposal would require. The ADS-B Out system would consist
of a position source, transponder, altimetry sensors, flight crew
interfaces and other avionics. This equipment would require integration
to correctly transmit the ADS-B Out data.

In the United States, two different datalinks have been adopted for
ADS-B Out, 1090 MHz Extended Squitter (1090 ES) and the 978 MHz
Universal Access Transceiver (978 UAT). For the Global Navigation
Satellite System (GNSS) airborne equipment, two different GNSS own-ship
(i.e. self awareness relative to position) and position information
avionics systems are being considered for NAS operations. The first is
detailed in Technical Standard Order (TSO) C145a or TSO-146a equipment
using the Global Positioning System (GPS) augmented by Wide Area
Augmentation System (WAAS). The second is detailed in TSO-C129a airborne
supplemental navigation equipment using GPS.

Two ADS-B Out data links are being considered for the transmission of
ADS-B Out[^55]

-   TSO-C154a 978 MHz Universal Access Transceiver (UAT) and

-   1090 MHz extended squitter (ES) compliant with RTCA DO-260A Change
    1.

Table 4 outlines the minimum broadcast data element set for aircraft
equipage for ADS-B Out[^56] used in the cost estimates herein.

**[Table 4 Minimum Broadcast Data Element Set for Aircraft/Vehicle
Equipage]{.underline}**

![](media/image5.wmf){width="5.997222222222222in"
height="4.185416666666667in"}

We do not believe there are substantive differences in the data elements
proposed in Appendix H from the preamble and the Table 4 data elements
we sent to industry for this cost analysis. The Appendix H preamble data
elements differed by defining the Navigation Integrity Category (NIC) to
be greater than or equal to six, the Surveillance Integrity Level (SIL)
to be equal to two or three, the Navigation Accuracy Category for
Position (NACp) to be greater than or equal to nine and Navigation
Accuracy Category for Velocity (NACv) to be greater than or equal to
one. These values were not defined when we sent industry our cost
estimation request. Also, certain data elements we sent to industry,
such as Ground Speed and Track Angle, were redundant and consolidated
with other elements in the proposed Appendix H. The FAA requests comment
on whether these relatively small deviations between the preamble data
elements and the elements used to develop this cost estimate would have
an appreciable impact on equipage costs.

**[4.2.3.5 ADS-B Out Equipage Cost Estimate]{.underline}**

We contacted manufacturers, industry associations, and ADS-B equipage
providers to estimate ADS-B equipage costs. We requested estimates of
airborne installation costs, by aircraft model, for the output
parameters listed in the [Equipment Specifications]{.underline} section.
The manufacturers and industry associations we contacted were:

-   Airbus,

-   Aircraft Owners and Pilots Association,

-   Aviation Communication and Surveillance Systems,

-   Boeing,

-   Free Flight Systems,

-   Garmin,

-   General Aviation Manufacturers Association,

-   Honeywell,

-   National Business Aviation Association,

-   Raytheon, and

-   Rockwell.

Not every manufacturer or ADS-B equipage provider we contacted responded
to our request for ADS-B costs. For those that did respond, each used a
different methodology to develop their cost estimates. The differences
in methodologies could be partially responsible for the wide variance in
cost estimates.

For analytical purposes, we grouped aircraft types into classes with
similar avionics architecture. The aircraft equipment classes
potentially subject to the ADS-B Out performance requirements are:

-   [Large Category Turbojet Airplanes]{.underline}

    -   Classic -- B-707, B-727, B-737-100/200, B-747-100/200/300,
        A-300/310, DC-8, DC-9, DC-10, MD-80/81/82/83 and L-1011.

    -   Neo-Classic -- B-757-200/300, B-767/200/300,
        B-737-300/400/500/600, B-747-400, MD-11, MD-87/87/90 and
        A-319/320/321/340.

    -   Modern -- B-777, B-737-7000/800/900, B-717, B-767-400,
        A-318/330/380.

    -   New production aircraft.

-   [Regional Aircraft]{.underline}

    -   Jet -- BAE-146, RJ70 and RJ85, CRJ100/200/440/700, Do328JET,
        ERJ-135/130/145/170/175/190/195, and F28/50/70/100.

    -   Turboprop -- ATR42/72, Beech 99/1900, DHC-8, Do328, EMB-120,
        Jetstream J31/41/42, L-188, Metro Saab 340 and Shorts 330/360.

    -   New production aircraft.

-   [GA]{.underline}

    -   Single engine Piston - Airplanes with a maximum takeoff weight
        under 12,500 pounds.

    -   Multi engine Piston -- Piston powered airplanes with more than
        one engine.

    -   Turboprop -- Single and multi-engine turboprop airplanes.

    -   Turbojet - Single and multi-engine jet airplanes.

    -   Rotorcraft - Single and multi-engine helicopters.

    -   New production aircraft.

For each aircraft class listed above, we categorized the aircraft's
ADS-B equipage status into three distinct groups.

-   Not Equipped -- aircraft is not equipped for ADS-B Out functionality
    and requires major avionics component additions or equipment to make
    it capable of transmitting ADS-B Out information.

-   Latent -- aircraft that can be made capable of ADS-B Out operation
    by adding broadcast link capabilities or interfacing to existing
    Global Navigation Satellite System (GNSS) equipment.

-   Equipped -- aircraft that can be ADS-B Out capable with a software
    update.

Each transponder category has unique characteristics, operating
functions, and requirements. A transponder with Mode A functionality
requires the pilot to input a discrete code (4096). If the same
transponder is connected with an encoding device, then the transponder
also will report the aircraft altitude (Mode C). Most aircraft operated
in general aviation have Mode A/C transponders. Any aircraft required to
have TCAS II, or that voluntarily has TCAS II installed, must also be
equipped with a Mode S transponder. (This generally includes aircraft
operated under parts 121, 125, 129 and some aircraft operated under part
135.) Mode S transponders transmit both aircraft altitude and aircraft
identification information. Both Mode A/C transponders and Mode S
transponders require interrogation to send out information.

It is presently not possible to modify the Mode A, Mode C or Mode S
transponders to broadcast ADS-B Out. The Mode S transponder with
extended squitter (ES) is able to support ADS-B Out Broadcast Message
Elements. TSO-C166 1090 MHz ES is able to transmit certain ADS-B Out
Broadcast Messages, but is not capable of providing the necessary NIC,
NAC and SIL values to support ADS-B Out for purposes of surveillance.
These modified parameters (NIC, NAC, and SIL) provide a level of
accuracy and integrity with respect to the information transmitted in
the ADS-B Out message that would enable ATC to provide improved
surveillance and separation services based on the information it
receives from the aircraft. Therefore, equipment meeting TSO-C166 does
not meet the proposed requirements. TSO-C166a MHz ES is able to transmit
all of the ADS-B Out Broadcast Messages referenced in the NPRM,
including NIC, NAC and SIL. The FAA issued TSO-C166a after RTCA[^57]
issued its updates in December 2006.

TSO-C166 1090ES has been installed in several thousand Transport
Category airplanes worldwide. TSO-C166 has been superseded by TSO-C166a.
Although the FAA is proposing to mandate TSO-C166a performance
standards, European Aviation Safety Authority (EASA) and Australia
currently allow both transponder versions (TSO-C166 and TSO-C166a) to be
used for ADS-B Out for certain European and Australian airspace
operations.

We provide a low and high range of cost estimates associated with
various operational and technical issues. The dollar value ranges
consist of a wide variety of avionics within each aircraft group. The
aircraft architecture within each equipment group can vary, causing
different carriage, labor and wiring requirements for the installation
of ADS-B Out equipment. Volume discounting versus single line purchasing
also affects the dollar value ranges.

For the low end of the range, the estimate represents minimum
compliance, a minor software upgrade, an Original Equipment Manufacturer
(OEM) option change or a ground-based backup solution. The high end
estimate includes the airborne design that integrates both ADS-B Out
capability and provisions for future ADS-B and may also include a new or
upgraded position source, a new installation or upgraded transponder
system necessary to comply with the rule, or a system that would provide
a cost-effective option for manufacturers and operators to integrate
future GNSS [^58] upgrades. [^59] The midpoint estimate represents a
fleet where about half of the airplanes need only the low cost solutions
and the other half of the airplanes are outfitted with the more
expensive upgrades.

We did not include ADS-B Out operator training costs because we assumed
the costs to be minimal. We solicit comments regarding this assumption.

[Large Category and Regional Turbojet ADS-B Out Equipment and Fuel Burn
Costs]{.underline}

This section first covers the estimated ADS-B Out equipage cost plus the
cost of additional fuel burn to turbojets due to the added weight of
ADS-B Out equipment.

The manufacturers who responded with turbojet ADS-B Out equipage costs
provided us with costs estimates either by equipment type or for the
following equipage types:

-   Classic,

-   Neo-classic, and

-   Modern.

The manufacturers who provided costs by equipment groups either
estimated a total cost of ADS-B Out hardware, included the costs of
installation kits and installation, or provided detail breakdowns of the
various costs.

The ADS-B Out equipment costs for turbojet airplanes are
straightforward. Industry provided ADS-B Out unit costs by the equipment
class units discussed in the [Fleet Discussion]{.underline} section.

To satisfy the manufacturers' request to keep individual aircraft
pricing confidential, we calculated a low and high range for unit costs
by dividing the total low and high cost estimate by the number of
affected large category turbojet airplanes. This range includes cost for
all hardware and installation. The unit costs for large category
turbojet airplanes range from about \$3,862 to \$135,736. The dollar
value ranges consist of a wide variety of avionics within each aircraft
group. The avionic costs vary based on the state of an aircraft's
architecture, volume discounting, a minor software upgrade versus a
major transponder or position source replacement, or an operator's
decision to install avionics that take advantage of future GNSS
upgrades.[^60]

For 2012 through 2035 we estimated the newly delivered turbojet costs by
multiplying unit costs by the annual number of new aircraft deliveries.
Based on the

FAA turbojet forecast, the retrofitting of aircraft in the current
operating fleet as of 2013 was assumed to be uniformly distributed over
2013 through 2019. For each of the seven years, ADS-B Out retrofit costs
for turbojets were estimated by multiplying unit costs by one-seventh of
the active 2013 fleet. The new turbojet aircraft deliveries from
2012-2035 were assumed to have avionics component additions or equipment
to make them capable of transmitting ADS-B Out information. The
incremental costs we estimated for these new deliveries included either
minor additional avionic upgrades or a software update.

The total cost to equip active and newly delivered turbojets from 2012
through 2035 ranges from \$114 million to \$2.7 billion with a mid-point
average of nearly \$1.4 billion. The following table summarizes the
range estimate in constant dollars, and at three and seven percent
present value rate for large category and regional turbojets.

![](media/image6.wmf){width="5.270138888888889in"
height="1.3430555555555554in"}

The ADS-B Out equipage weight ranges from a low of five pounds to a high
of 10 pounds.[^61] The mid-point average assumes 7.5 pounds of added
weight per turbojet aircraft. We used these weights to calculate a cost
range for the average additional fuel burn for turbojet airplanes
operating during the analysis period.

We obtained the incremental fuel burn, per flight, per pound of
additional weight for turbojet aircraft from our published economic
values.[^62] We obtained the average annual cycles per turbojet aircraft
from BACK Aviation Solutions. The gallons of additional fuel burn equals
the incremental fuel burn per flight, per pound, multiplied by the
average annual cycles (flights) multiplied by the low, mid-point and
high added weight estimates. Lastly, we multiply this product by the jet
fuel forecast[^63] to obtain a range of the annual cost of the added
weight to the U.S. operated turbojet fleet.

A range of the estimated added fuel burn costs for the installation of
ADS-B Out in US operated large category and regional turbojets for
2007 - 2035 is shown in the following table.

![](media/image7.wmf){width="5.997222222222222in"
height="1.3270833333333334in"}

[Regional Turboprop Aircraft ADS-B Out Equipment Costs]{.underline}

This section explains how the regional turboprop aircraft ADS-B Out
equipment costs were estimated. We also explain why there is no fuel
burn expense.

The manufacturers who responded with regional turboprop equipage costs,
provided us with costs estimates for the following equipage types:

-   Saab 340,

-   ATR,

-   Generic Turboprop, and

-   New Production.

For these equipment groupings they provided the following detailed cost
estimates by equipment class:

-   Transponder and GPS Status,

-   GNSS Equipage Cost,

-   Datalink Equipage Cost,

-   Installation Cost,

-   Currently Installed Transponder upgrade cost,

-   Installation Kit Cost, or

-   Individual Component Cost.

The ADS-B Out equipment costs for regional turboprop airplanes are
straightforward. Industry provided ADS-B Out unit costs by airplane
equipment class units discussed in the [Fleet Discussion]{.underline}
section above. These costs by airplane included active and new
production aircraft. The active aircraft in 2013, from the FAA turboprop
forecast, were uniformly distributed over 2013 through 2019. For each of
the seven years, ADS-B Out costs for regional turbojets was estimated by
multiplying unit costs by one-seventh of the active 2013 fleet.

The manufacturers did not provide a weight for ADS-B Out equipage on
regional turboprops. We assumed the weight for an ADS-B Out transponder
on regional turboprop aircraft would be about the same as weight as
existing transponders and therefore the change would be negligible and
there would be no additional weight or fuel burn costs. We request
comments from industry on this assumption.

To satisfy the manufacturers' request to keep individual aircraft
pricing confidential, we calculated a low and high range for unit costs
by dividing the total low and high cost estimate by the number of
affected regional turboprop airplanes. This range includes cost for all
hardware and installation. The unit costs for regional turboprop
airplanes range from about \$12,906 to \$463,706. The dollar value
ranges consist of a wide variety of avionics within each aircraft group.
The avionic costs vary based on the state of an aircraft's architecture,
volume discounting, a minor software upgrade versus a major transponder
or position source replacement, or an operator's decision to install
avionics that take advantage of future GNSS upgrades.

The total cost to equip regional turboprop aircraft with ADS-B Out from
2012 through 2035 ranges from \$16 million to almost \$482 million with
a mid-point average of nearly \$250 million. The following table
summarizes the range estimate of constant dollars, three and seven
percent present value rate.

![](media/image8.wmf){width="5.270138888888889in"
height="1.3430555555555554in"}

[General Aviation Aircraft ADS-B Out Equipment Costs]{.underline}

This section explains how the general aviation aircraft ADS-B Out
equipment costs were estimated. We used general aviation industry
equipment cost estimates, the FAA fleet forecast, and an assumption
about the current fleet equipped with a transponder. We first discuss
the industry cost estimates and our adjustments to their fleet
estimates; most significantly, our helicopter estimates and the
Memorandum of Agreement (MOA) between the FAA and the helicopter
association and operators. Once the foundation for the general aviation
fleet is set, the ADS-B Out cost estimation is straightforward. We
estimate the costs by multiplying general aviation aircraft by unit
costs. We also explain why there is no fuel burn expense.

The manufacturers provided GA ADS-B Out equipage costs for the following
equipage types:

-   Single Engine Piston,

-   Multi Engine Piston,

-   Turbo Prop,

-   Turbo Jet,

-   Rotorcraft, and

-   Experimental.

For those equipment groups they provided costs for the following
categories:

-   Equipment Cost,

-   Fleet Size,

-   Installation Time,

-   Installation Hourly Cost,

-   Total Cost, and

-   Total Fleet Cost.

Instead of using the manufacturers' fleet count data, we used the
forecasted GA fleet developed in the [Fleet Discussion]{.underline}
section. As discussed earlier, we assumed experimental aircraft would
not equip with ADS-B Out.

There is currently a signed Memorandum of Agreement (MOA) between the
FAA, the helicopter association, and helicopter operators for operation
in the Gulf of Mexico. In this agreement, helicopter operators in the
Gulf of Mexico agree to equip with \"appropriate avionics and equipment
to take advantage of FAA enhancements to the communications, weather
reporting, and surveillance capabilities\". The MOA has not yet been
implemented, but with a compliance date of 2020 in the final rule, it is
likely the helicopter operators would equip to be in accordance with the
MOA before the required compliance date of this proposed rule. In this
analysis, we are assuming that 9% of the active and newly delivered
helicopter fleet would be operating in the Gulf of Mexico.[^64]
Therefore, we reason that this portion of the industry would equip
without the rule and the compliance costs for the Gulf of
Mexico-operated rotorcraft would equal zero.

The methodology to estimate ADS-B Out equipment costs for the GA fleet
is based on the 2005 FAA General Aviation and Air Taxi Survey,[^65] and
we calculated the percentage of U.S. certificated GA aircraft and
rotorcraft currently equipped with transponder equipment. We applied
this percentage to the GA fleet from the [Fleet Discussion]{.underline}
section above to determine the number of newly delivered and active GA
aircraft that would equip with ADS-B Out.

For 2012 through 2035 we estimated the newly delivered GA aircraft costs
by multiplying unit costs by the annual number of new GA aircraft
deliveries. The retrofitting of aircraft in the current operating fleet
as of 2013, from the FAA GA forecast, was assumed to be uniformly
distributed over 2013 through 2019. For each of the seven years, ADS-B
Out retrofit costs for active GA aircraft was estimated by multiplying
unit costs by one-seventh of the active 2013 fleet.

We assumed the weight for an ADS-B Out transponder, on a GA aircraft,
would be about the same as weight existing transponders and therefore
the change would be negligible and there would be no additional weight
or fuel burn costs. We request comments from industry on this
assumption.

To satisfy the manufacturers' request to keep individual aircraft
pricing confidential, we calculated a low and high range for unit costs
by dividing the total low and high cost estimate by the number of
affected general aviation airplanes. This range includes cost for all
hardware and installation. The unit costs for general aviation airplanes
range from about \$4,328 to \$17,283. The dollar value ranges consist of
a wide variety of avionics within each aircraft group. The avionic costs
vary based on the state of an aircraft's architecture, volume
discounting, a minor software upgrade versus a major transponder or
position source replacement, or an operator's decision to install
avionics that take advantage of future GNSS upgrades.

The total cost to equip GA aircraft from 2012 through 2035 ranges from
\$1.2 billion to about \$4.5 billion with a mid-point average of nearly
\$2.9 billion. The following table summarizes the range estimate of
constant dollars, three and seven percent present value rate.

![](media/image9.wmf){width="5.270138888888889in"
height="1.3631944444444444in"}

**[4.2.3.6 ADS-B In --Turbojet, Turboprop and GA Aircraft]{.underline}**

An example of an ADS-B In application is United Parcel Service (UPS) and
FAA working together to implement a system at Louisville, Kentucky (SDF)
airport that should increase airport capacity and efficiency while
significantly reducing vulnerability to runway incursion events, both in
terms of events and the damage sustained should an event occur. UPS and
FAA have developed a concept to create a system that would use ADS-B
surveillance at SDF, along with a Surface Management System and a
scheduling and sequencing system to meet the demands of the future.
ADS-B Out should be operational on all UPS aircraft by fall 2007. UPS is
also installing a CDTI display for certain proposed operational
application such as merging and spacing, Surface Area Moving Management,
and CDTI Assisted Visual Spacing capability in all of its B-757, B-767,
B-747-400, A-300, and MD-11 fleets.

We have attempted to estimate the avionics costs for ADS-B In, Cockpit
Display of Traffic Information (CDTI), Traffic Information Service
Broadcast (TIS-B) and Flight Information Service Broadcast (FIS-B) by
aircraft classification. At the time of this analysis, there were no FAA
specifications for ADS-B In. Every company we contacted expressed
concern on providing an accurate estimate for ADS-B In. Without
exception, industry was reluctant to provide us with costs because the
requirements for ADS-B In are insufficiently detailed. When pressed for
estimates, we received costs per airplane that varied as much as a
million dollars per airplane. We concluded the requirements for ADS-B In
are insufficient in detail and do not support developing a cost
estimate.

**[4.2.3.7 Learning Curve Efficiencies]{.underline}**

In 1939[^66], T.P. Wright recognized the repetition of the same
operation results in reduced efforts expended on that operation.[^67]
Direct labor man-hours necessary to complete a unit of production would
decrease by a constant percentage each time the production quantity is
doubled. Learning or cost improvement occur due to workers increases in
efficiency and implicit training. T.P. Wright found that an 80% learning
efficiency has been a common occurrence in aircraft production. This
section will estimate the learning efficiency[^68] cost savings for the
installation of ADS-B Out equipment in turbojet, turboprop and GA
aircrafts for an 80% learning efficiency.[^69]

We estimate the labor hour efficiencies for the installation of ADS-B
Out on the xth set of airplanes (Y~x~) as follows:

Y~x~ = a \* x^b^

Where Y~x~ = cumulative average time to install a number of units,

a = time to install the first unit by equipment group,

x = the sequential period of installation time,

b = index of learning ( b = log (learning curve) / log (2)),

learning curve = 80.

In order to estimate the learning efficiency savings for installing
ADS-B Out on newly delivered and active aircraft, we used the
industry-provided hours and hourly labor rates, per equipment group,
required to install ADS-B Out. The learning efficiencies begin in 2013
and extend to 2035, the end of the analysis period. The following table
shows the hours and hourly labor rates, per equipment group, required to
install ADS-B Out.

![](media/image10.wmf){width="5.997916666666667in"
height="0.9243055555555556in"}

Next we summed the new aircraft deliveries for 2012 with the new
deliveries and the one-seventh of the active fleet from 2013 to define
the first period of our sequential periods of installation time, x. Our
second period of installation time was defined as 2014, our third as
2015 and so on until 2035. The follow graph presents the 80% learning
curve for a 30 hour time to install the sequential units of newly
delivered and active aircraft.

![](media/image11.wmf){width="5.992361111111111in"
height="3.604861111111111in"}

For each sequential period, we multiplied the number of ADS-B Out
installations, by the labor cost, by the labor hours a \* x^b^. No
efficiencies occur in year one because the learning has not yet begun.
The majority of the learning efficiencies occur between 2014-2019,
because during this period the active fleet was retrofitted.

Lastly, these labor learning efficiencies were subtracted from the labor
costs we estimated in [ADS-B Out Equipage Cost Estimate]{.underline}
section.

The following table details the total ADS-B Out costs of this proposal,
including learning efficiencies for labor, for large category turbojet
aircraft in the 2007-2035 analysis interval. When we queried industry
for ADS-B costs associated with this proposed rule, the ADS-B out
hardware costs resulted in a wide range with installation labor costs
constant across all the cost ranges below.

![](media/image12.wmf){width="5.55in" height="1.3430555555555554in"}

The following table details the total ADS-B Out costs of this proposal,
including learning efficiencies for labor, for regional turboprop
aircraft in the 2007-2035 analysis interval.

![](media/image13.wmf){width="5.55in" height="1.3430555555555554in"}

The following table details the total ADS-B Out costs of this proposal,
including learning efficiencies for labor, for GA aircraft in the
2007-2035 analysis interval.

![](media/image14.wmf){width="5.270138888888889in"
height="1.3430555555555554in"}

**[4.2.3.8 ADS-B Out Maintenance Costs]{.underline}**

In this section we discuss our assumptions and cost estimates for the
maintenance and replacement intervals for the proposed ADS-B Out
equipment required by this proposal. For the maintenance interval we use
Mean Time To Repair (MTTR). For the replacement interval we use Mean
Time Between Failure (MTBF).

Industry provided us with MTTR and MTBF times, in hours, for most large
category turboprop and regional turboprop aircraft types. For other
aircraft types we assumed MTTR and MTBF would be the same as an
equivalent aircraft group and class. We used the individual original
purchase prices provided by industry for cost of replacement avionics
due to failure. For MTTR, we estimated the repair costs at three percent
of the purchase price. We also assumed these replacement and repairs
would occur at the aircraft scheduled maintenance checks and therefore
would not generate aircraft downtime costs.

We assumed nearly no incremental MTTR and MTBF costs for neo-classic and
modern turbojet aircraft that could be made capable of ADS-B Out
operation by adding data link capabilities, interfacing to existing
Global Navigation Satellite System (GNSS) equipment, or that may need
additional programming updates that could be upgraded at nearly no cost.
These neo-classic and modern turbojet airplanes currently have
transponders and position sources, so there is nearly no future
incremental replacement or maintenance costs with this proposal.

We obtained estimates for the annual average hours flown by aircraft
group from BACK Aviation Solutions. The following table shows the annual
average hours by aircraft group estimates we will use to estimate when
MTBF and MTTR would occur.

![](media/image15.wmf){width="4.129861111111111in"
height="2.328472222222222in"}

We then estimated the replacement and maintenance interval, in years,
for ADS-B Out equipment based on the average annual number of hours that
aircraft operate. The following table shows the intervals, in years, for
replacement and maintenance of ADS-B Out equipment.

![](media/image16.wmf){width="5.995833333333334in"
height="0.8395833333333333in"}

The following tables show the estimated maintenance and replacement
costs for ADS-B Out equipage in turbojet and turboprop aircraft during
the 2007-2035 analysis interval.

![](media/image17.wmf){width="4.1in" height="1.56875in"}

![](media/image18.wmf){width="3.5597222222222222in"
height="1.5881944444444445in"}

The manufacturers and vendors did not provide us with MTBF or MTTR
details for GA aircraft. However, based on Table 1.7 of the 2005 FAA
General Aviation and Air Taxi Survey, the following annual average hours
flown by aircraft group is calculated as:

![](media/image19.wmf){width="5.936805555555556in"
height="0.9131944444444444in"}

The reason we assumed GA aircraft would not incur a maintenance or
repair cost is these aircraft have low utilization rates relative to
commercial airplanes. Industry provided MTBF and MTTR hours for Large
Category and Regional Turbojet and Regional Turboprop aircraft in order
to estimate ADS-B Out intervals. We assumed the Large Category and
Regional Turbojet and Regional Turboprop aircraft MTBF and MTTR data
would apply to the GA aircraft. The hourly MTBF estimates ranged from
20,000 to 45,000 hours depending on aircraft group. Because GA aircraft
operate fewer hours than transport category aircraft, even at the bottom
end of the range, the minimum replacement of an ADS-B Out unit on a GA
aircraft would occur well beyond the analysis interval. Similarly, MTTR
ranges fell between 10,000 to 15,000 hours, which again would occur
outside of the analysis interval for a GA aircraft. Thus, for the GA
aircraft analyzed within the analysis interval, the MTBF and MTTR costs
would be minimal.

We request comments from industry on the estimated costs, maintenance
intervals MTBF replacement, and MTTR requirements for the ADS-B Out
transponder and position source units.

**[4.2.3.9 ADS-B Out Aircraft Equipage Cost Summary]{.underline}**

The following tables summarize the range estimate of constant dollars,
three and seven percent present value costs to industry over the
2007--2035 analysis interval. The low cost estimates represent the
minimal compliance cost outcome or a programming compliance change. The
high cost estimates means a transponder or position source replacement
or an operator's decision to install avionics that take advantage of
future GNSS upgrades. The mid-point estimate represents a fleet where
about half the airplanes are easily upgraded for future GNSS products
and the other half meet the minimum requirements of the proposed rule.

These cost estimates include ADS-B Out equipage, installation,
maintenance, additional fuel burn costs and learning curve savings.
Based on our MTTR and MTBF assumptions stated earlier, maintenance and
replacement costs for ADS-B Out for GA aircraft equals zero because the
maintenance and replacement times would occur beyond 2035. FAA
specifically requests comments on this assumption. The dollar value
ranges consist of a wide variety of avionics within each aircraft group.
The aircraft architecture within each equipment group can vary, causing
different carriage, labor and wiring requirements for the installation
of ADS-B Out equipment. Volume discounting versus single line purchasing
also affects the dollar value ranges. We believe the mid-point estimate
is the most likely outcome. In the following table, the maintenance
costs are included only in the mid-point for the total cost calculation.

![](media/image20.wmf){width="4.854861111111111in"
height="4.783333333333333in"}

4.2.3.10 Foreign Operators Estimated Compliance Cost

As in the United States, the problem of controlling the airspace using
radar technology is a global problem and worsening with time. This rule
would result in foreign firms needing to have compliant ADS-B technology
to land in the United States. Below, we provide a cost estimate, with
significant estimation problems, for foreign firms; not the least of
these problems is we do not provide a corresponding benefit estimate. We
request comment on these cost estimates and plan on using industries'
comments to update this analysis for the final rule.

At present there are multiple possible air traffic control solutions and
strategies followed by different countries. Just as there are advantages
to operators for waiting to install ADS-B technology, many countries may
wait and then adopt an existing mature technology. Without knowing the
technology, by international region, and timed phase-in, any estimate of
these incremental costs in 2020 is problematic.

In addition to the technology uncertainty, there is substantial
uncertainty about the number of foreign airplanes needing to install
ADS-B technology due to this rule. As a proxy, we examined the Official
Airlines Guide (OAG), which lists all worldwide scheduled passenger and
cargo flights. The OAG does not record nonscheduled flights (cargo and
charter) or general aviation flights. In addition the OAG does not
provide sufficient aircraft model detail. For example, the OAG lists
many variants of the Boeing 737, but in many cases Boeing 737 variants
are grouped into a generic Boeing 737 reporting code. Further, we do not
know how many similar airplanes in an international operator's fleet
would fly into the United States. For similar aircraft with sufficiently
high cost avionics operators may not outfit their entire fleet because
some aircraft may not be operated to the United States.

Despite these problems we have provided an estimate of this rule's
compliance cost to international operators. The estimate is based on the
September 19, 2007 OAG scheduled operations under the assumption that
each operation represents a single airplane which would need to be
equipped with ADS-B.

Our OAG query analyzed all passenger and cargo schedule flights from
foreign destinations entering into the United States by operator,
equipment type, country of origin and number of operations. From this
query, we deleted all flights operated by U.S. operators. Next, we
grouped aircraft types into classes with similar avionics architecture
as explained in Section [4.2.3.5 ADS-B Out Equipage Cost
Estimate]{.underline} of the regulatory evaluation. We applied the costs
estimated in that section for each aircraft group from the OAG query to
come up with a range of cost estimates presented in the following table.
These costs do not include learning efficiencies, additional fuel burn,
or any maintenance or replacement costs. In addition, these costs are
not incremental costs of upgrading transponder equipment already
installed on foreign aircraft, since we are unaware of the future ADS-B
out requirements each country will impose on their operators.

![](media/image21.png){width="5.905555555555556in"
height="3.113888888888889in"}

Using one day of scheduled operations into the United States as an
estimate of the number of foreign operated affected airplanes results in
cost ranges from about \$5.6 million to \$134 million, with a midpoint
around \$70 million. Using a single day estimate of scheduled operations
would understate the total fleet impact, but we are uncertain about how
much. We also need estimates for nonscheduled commercial and general
aviation flights, as these costs are not included in the above cost
estimate. These estimated foreign operator costs are not included in the
total estimates for this proposed rule.

### [Cost to the FAA to provide surveillance under the ADS-B Out scenario]{.underline}

#### 4.2.4.1 Surveillance Costs  {#surveillance-costs .unnumbered}

ADS-B Out implementation requires integration of four major components:
ground infrastructure (ground based transceivers), automation, data
[^70] and avionics.[^71]

The FAA has issued a request for proposal on a vendor contract to
provide ADS-B surveillance uplink and downlink services, TIS-B and FIS-B
services. The vendor would install and maintain the ground equipment
necessary to provide ADS-B uplink and downlink services to air traffic
control. The costs for ADS-B Out presented in this report are an
estimate of what the contractor would charge the FAA to provide these
services and also include the costs of, automation interfaces and
program office costs.

The costs of this ADS-B Out scenario also include some radar costs,
which would include the cost to sustain existing radar until ADS-B Out
is operational (sustain costs), the cost to operate backup radar (backup
costs), and the cost to decommission some radar as ADS-B becomes
operational (decommissioning costs). Under the radar baseline scenario,
the FAA would incur costs of \$2.959 billion over 29 years (\$1.2
billion discounted by 7%) [^72]as detailed in Table 3. Under the ADS-B
Out scenario, the FAA would incur total legacy surveillance costs of
\$1.98 billion (\$997 million discounted by 7%). [^73] In other words,
the FAA would spend \$978 million (\$228 million discounted by 7%) [^74]
less on radar under the ADS-B Out scenario, because it would cut back on
the number of radar. However, the FAA would incur almost \$2.0 billion
for the ADS-B Out surveillance services (\$1.1 billion discounted by
7%). [^75] Therefore, while the agency may be saving money on radar, it
would be spending more money on ADS-B services, so there would be no net
cost savings to the FAA from the ADS-B Out program. Total costs to the
FAA of the ADS-B Out scenario are higher than total costs of the radar
baseline scenario.

The cost of the ground segment under the ADS-B Out scenario (not
including Juneau, but including legacy surveillance costs) is estimated
to be \$3.97 billion (\$2.1 billion) [^76] over 29 years as presented in
Table 5. This includes total ADS-B Out ground costs of \$1.99 billion
(\$1.1 billion discounted by 7%),[^77] and total legacy surveillance
costs of \$1.98 billion (\$1.4 billion discounted by 7%)[^78] as
presented in Table 5.

Legacy surveillance costs include sustain costs of \$914 million (\$623
million discounted by 7%),[^79] [^80] backup surveillance costs of \$782
million (\$221 million discounted by 7%)[^81] [^82] decommissioning
costs of \$41 million (\$16 million discounted by 7%),[^83] [^84] and
costs to upgrade the remaining ASDE-3 surface of \$244 million (\$137
million discounted by 7%).[^85] [^86] The costs of the ADS-B Out
scenario are summarized below in Table 5. More details can be found in
the Appendix in Tables A.1 through A.4.

![](media/image22.wmf){width="6.170138888888889in"
height="3.8819444444444446in"}Table 5 ADS-B Out Scenario Total Ground
Costs: The Rulemaking (not including Low Altitude Operations in the Gulf
of Mexico, Capstone or Juneau) (2007 Thousands of Dollars)

The costs of this proposed rule would be borne by both industry and the
government. However, benefits would accrue to industry as well as to the
flying public, as will be discussed in the benefits section. Industry
would incur costs ranging from \$1.3 billion ((\$670 million discounted
by 7%) to \$7.5 billion (\$3.6 billion discounted by 7%). Benefits
accruing to industry and the flying public are estimated at \$9.95
billion (\$2.66 billion discounted by 7%).

### Proposed Backup Strategies 

Under the ADS-B Out proposal, FAA would no longer maintain the complete
Secondary Surveillance Radar network. The FAA, however, conducted an
analysis to recommend a backup strategy for mitigating the impact of a
loss of GPS on ADS-B Out surveillance and this study recommended the
retention of approximately one-half of the Secondary Surveillance Radar
network as the backup strategy for ADS-B Out. This proposed backup
strategy has an estimated present value life cycle cost of \$221 million
when discounted by 7% (\$442.0 million when discounted by 3%). The
recommendation was based on the estimated costs, performance criteria
and safety criteria. The recommended option had the lowest life cycle
cost and highest performance ranking of all the alternatives.

This analysis provides sufficient rationale to justify an approach for
subsequent acquisition and potential rulemaking. This effort has had
broad participation from the FAA, industry, users and stakeholders, to
ensure a collaborative effort and result.

ADS-B will be the primary means of surveillance in the future, using GPS
L1 as the positioning source. As with any service, there are inherent
vulnerabilities that require mitigation methods. The FAA analysis [^87]
focused on developing strategies to mitigate the loss of GPS L1
services. However, it also considered mitigation of other GPS
vulnerabilities. At a minimum, the backup strategy must support ATC
surveillance services in terminal and en route airspace. Capacity must
be maintained to at least the same level that would be experienced from
a radar outage in today's system. Safety of operations must also be
maintained. Finally, this strategy must be implemented and made
operational on or before the ADS-B Out rule compliance date. For more
information on other backup strategies analyzed by the FAA, see
"Surveillance/Positioning Backup Strategy Alternatives Analysis, Final
Report", which is in the docket established for this rulemaking.

**Background**

Initial work identified the need for a backup strategy for ADS-B in
September 2005. A focus team for an initial quick-look conducted further
work, completed in March 2006. Initial findings suggested that broader
participation in the development of a strategy was necessary. To address
this, a technical team was formed in May 2006, with direction from an
aviation community Steering Committee, organized in June 2006 under the
RTCA Air Traffic Management Advisory Committee (ATMAC). An investment
decision for the Surveillance Broadcast Services program (including
ADS-B) was scheduled for February 2007.

The team identified potential technologies and methods that could be
used as components of a backup strategy. After an initial assessment of
their capabilities, a narrowed set of potential technologies was
identified that met all or most of the minimum requirements. From this
narrowed set, the team developed candidate strategies, all of which use
primary radar to mitigate single-aircraft avionics failures.

A comparative safety assessment was also conducted to ensure that there
were no significant safety risks, and to identify any additional
discrimination among strategies. None of the safety risks evaluated were
significant. The details of this analysis can be found in the study:
Surveillance/Positioning Backup Strategy Alternatives Analysis, Final
Report, January 8, 2007, available in the docket for this rulemaking.

The Secondary Radar strategy was assessed as having the highest
performance ranking and lowest life cycle cost among the strategies
evaluated. The strategy with the next highest performance ranking had
much higher additional cost; the strategy with the next lowest cost had
additional cost and had the lowest performance ranking.

The technical team recommended that the FAA adopt the Secondary Radar
backup strategy. The team further recommended that the ADS-B backup
strategy be reassessed to reflect further ADS-B Out operational
experience and emerging requirements prior to the FAA's commitment to
radar investments beyond 2020.

### 4.2.6 Benefits of ADS-B Out --  {#benefits-of-ads-b-out .unnumbered}

The ADS-B Out capability would enable improved Surveillance Services
across the en route, terminal, and surface environments. ADS-B Out would
enable these improved services by providing a robust, highly accurate,
timely four-dimensional surveillance data link, based on the downlink of
the aircraft's Global Positioning System (GPS) parameters.

ADS-B Out is designed to improve the capacity and efficiency of the NAS,
maintain safety, and provide a flexible, expandable platform to
accommodate future air traffic growth.

The FAA is not engaging in this rulemaking simply to meet the level of
surveillance that exists in the current infrastructure, or to establish
a new surveillance system that would only enable separation performance
equivalent to that realized today. ADS-B performance is intended to go
beyond today's standards for accuracy and provide a platform for the
next generation air transportation system.

The following benefit estimates apply to both domestic operators and
foreign operators as they operate in U.S. controlled airspace. However,
we did not break out benefits between domestic and foreign operators.
Earlier we provided a cost estimate for foreign firms, but do not
provide a corresponding benefit estimate for those costs.

Quantifiable benefit areas and associated estimated benefits are
presented in Table 6 below. Derivations of these estimates are described
in the following sections.

**Table 6 Quantified ADS-B Out Benefits**

![](media/image23.wmf){width="6.970138888888889in"
height="2.161111111111111in"}

#### [4.2.6.1 High Altitude Operations Over the Gulf of Mexico]{.underline} {#high-altitude-operations-over-the-gulf-of-mexico .unnumbered}

**[Assumptions]{.underline}**

-   IOC for communications and weather over the Gulf of Mexico 9/2009

-   Capacity benefits phase in beginning in 2012 and by 2019 100% of the
    active fleet is equipped.

-   Delays in excess of 20 minutes will not be tolerated in our
    analysis.[^88]

-   We assume capacity benefits begin in 2014 and are phased in until
    2019.[^89]

**[Delay Savings Due to Increased Capacity over the Gulf of Mexico -
Benefits of Reduced Delay]{.underline}**

We estimated that the benefit of increased capacity for high altitude
operations that could be achieved with ADS-B Out over the Gulf of Mexico
measured in reduced delays would be \$1.8 billion (\$421 million at 7%
present value).[^90] We also estimated that ADS-B Out would accommodate
an additional 246,400 flights over the Gulf of Mexico during the period
from 2017 through 2035. We did not quantify the value of these flights
in dollars because we do not have sufficient information to do so.
Appendix B has details on the method we used to estimate these benefits.

ADS-B Out can potentially decrease delays over the Gulf of Mexico by
allowing air traffic controllers to separate traffic to radar standards
rather than oceanic standards. While the rule does not mandate ADS-B Out
performance requirements over the Gulf of Mexico beyond 12 miles from
the U.S. shore, all high altitude aircraft that fly into and out of the
U.S. over the Gulf of Mexico will have to be equipped to the standards
of the rule because these aircraft will be traversing airspace that
requires ADS-B performance. The FAA will provide ADS-B surveillance
capability under the vendor service contract.

Currently, controllers need to build a margin of safety into airspace
where there is no radar and in areas like the Gulf of Mexico separate
aircraft by 10 to 15 minutes, which is equivalent to 80 to 120 miles
lateral separation. ADS-B Out surveillance operating in these areas
could allow closer separation of aircraft because air traffic
controllers would be able to see the aircraft and could achieve
radar-like separation. This could lead to possibly fewer delays and
higher levels of traffic than would be the case without ADS-B Out.
Without ADS-B Out in areas where there is no radar, air traffic
controllers can't see aircraft and therefore must build in the margin of
safety.

**[Optimal Routing and More Direct Routing over the Gulf of Mexico --
Benefits of Decreased Flying Distance]{.underline}**

Provision of ATC surveillance above FL240 for non-radar regions over the
Gulf of Mexico could allow for optimal and more direct routing of
flights. We estimate that \$257 million (\$89 million at 7% present
value) [^91] might be achieved in time saved due to optimal routing and
more direct routing over the Gulf. Details of how these benefits were
estimated are in Appendix B.

Due to lack of surveillance and limited communication at high altitudes,
non-radar separation procedures restrict aircraft flying high altitude
operations over the Gulf to a limited number of routes or to a path
avoiding the non-radar region completely. The introduction of radar-like
separation attained by providing surveillance and improved
communications services in the Gulf of Mexico would permit the creation
of additional routes and/or the granting of more direct requests. This
would allow for more efficient routes, which would result in decreased
flying distance. Decreased flying distance can be translated into time
saved, which can be measured in aircraft direct operating costs and
passenger value of time.

####  {#section-7 .unnumbered}

####  {#section-8 .unnumbered}

####  {#section-9 .unnumbered}

####  {#section-10 .unnumbered}

#### 4.2.6.2 Improved En Route Conflict Probe Performance  {#improved-en-route-conflict-probe-performance .unnumbered}

The improved accuracy and update rate of ADS-B (Out) position and speed
information (over current information supplied by radar) will impact the
capabilities of controller automation. Another aspect of current and
future automation is a conflict detection capability. More accurate
surveillance information (position and speed) through ADS-B Out should
allow the controller to predict potential conflicts better either
manually because of a faster update rate and more accurate information
on the display, or through conflict detection automation.

A current automated conflict detection capability resides within the
User Request Evaluation Tool (URET) [^92]. The URET automation forecasts
flight paths up to 20 minutes into the future. One of the URET
applications then determines potential separation issues in en route
airspace. If a potential separation violation is predicted, the system
provides the strategic D-side controller with a conflict warning. The
D-side controller monitors the potential conflict and informs the
tactical R-side controller if necessary. The algorithms in the conflict
detection program are based on uncertainties in the current surveillance
information. The uncertainties result in additional buffers applied when
calculating potential conflicts. An increase in position and speed
accuracy from ADS-B will reduce the necessary buffer size leading to a
reduction in the number of predicted conflicts and the maneuver size
necessary to avoid a potential conflict. More specific details
concerning the current and future surveillance capabilities and URET
algorithms can be found in "ADS-B Benefits enabled from Improved En
Route Conflict Probe Performance," a 2007 study from Mitre. This study
can be found in the docket. The benefit estimate in this regulatory
evaluation uses the methodology described in the Mitre study, but not
the data. The estimate produced for this regulatory evaluation is based
on a more conservative estimate (based on subject matter expertise) of
the reduction in flight maneuvers that could be achieved due to ADS-B
Out technology.

Each en route controller operation (acceptance or handoff of an aircraft
in a sector) is recorded within the en route centers. The number of
operations is directly proportional to the amount of traffic. Based on a
physical argument, one would expect an increase in the probability of
potential conflicts proportional to the square of the traffic. The
simulated number of URET severe conflict warnings in 2006 was compared
to the square of the number of IFR handles in 2006 to produce a ratio of
severe conflict warnings to squared IFR handles for the current (radar)
and the future (ADS-B) surveillance environments. The simulation used
the URET potential conflict algorithm for the current system and a
modified version for the future. More specific details concerning the
simulations can be found in the Mitre report mentioned previously. The
ratios were used to estimate the future conflict warnings with and
without ADS-B in each year using FAA projections of IFR handles in
future years.

The future warning information was used to estimate the reduction in the
number of potential conflict warnings and the remaining number of
conflicts after ADS-B incorporation into the conflict probe. The ADS-B
benefit estimates the impact of a decrease in potential conflict
warnings (less needed maneuvers) and the impact of being able to make
somewhat smaller maneuvers for the remaining conflicts. The benefit from
prevented conflict warnings was calculated as a product of the number of
prevented warnings, the percent of warnings that are acted upon, and the
average cost of a prevented vector maneuver. The benefit of reduced
maneuver size for remaining maneuvers was calculated as a product of the
number of remaining conflict warnings, the percent of warnings that are
acted upon, the percent of maneuvers that are vector maneuvers, the
average baseline cost of a remaining vector maneuver, and the reduction
in maneuver cost because of reduced maneuver distance.

Subject matter experts in the ADS-B program office determined that
approximately 45 percent of severe URET alerts are acted upon in today's
system. After consideration of planned future advances in conflict
detection (such as incorporating conflict probe on the tactical
controller display), the subject matter experts estimated that the
percent of alerts would increase in the future by an additional 40
percent, resulting in 63 percent of future alerts being acted upon.

When maneuvering to prevent a conflict the controller can choose to
change altitude, speed, or lateral position depending on which is most
appropriate. Potential savings from increasing maneuver efficiency
primarily accrue during lateral maneuvers (i.e. vector maneuvers). The
program office study mentioned earlier used flight data to estimate that
nearly all the prevented maneuvers would be vector maneuvers and 65
percent of remaining maneuvers would be vector maneuvers.

An analysis performed for the Controller Pilot Datalink Program (CPDLC)
examined the vector (lateral) maneuver distance for a large set of
potential conflicts. The average conflict maneuver was found to be 3.5
nm. One would expect the maneuvers prevented by increased accuracy to be
smaller than this average. The average distance of the maneuvers below
the 15^th^ percentile (1.04 nm) was used for the mean distance of
possible prevented maneuvers, while the average of the maneuvers greater
than the 15^th^ percentile (4.01 nm) was assumed to be the remaining
baseline maneuver size. The change in buffer size due to increased
accuracy is approximately 1/8^th^, so it was assumed that maneuvers for
the remaining conflicts could be reduced by 1/8^th^ (0.13 nm).

The average cost associated with the prevented conflict maneuver (1.04
nm) or the reduction in cost for remaining conflict maneuver (0.13 nm)
was estimated using an average flight speed (356 nm/hour), the
percentage of user type [^93] among IFR flights and the average aircraft
direct operating cost (ADOC) and passenger value of time (PVT) per user
type.

The lifecycle benefit also depends on the percent of IFR aircraft that
are ADS-B Out equipped and the date of conflict probe ADS-B Out
information integration. ADS-B information will be integrated into NAS
automation by 2014 and the conflict probe is planned to be available to
the R-side controller by 2016. The conflict probe increased accuracy
benefit was assumed to begin in 2017, two years before maximum equipage
and continue through the lifecycle.

We took the average daily number of handles [^94] over five days in 2006
(138,446) and calculated the number of handle combinations (9.5 billion)
per day [^95]. For these five days measured alert count counts were
calculated [^96] for 8nm radar surveillance bounds and 7nm bounds (as
indicated in Table D.1 below). The average number of these measured
alert counts were 53,122 for 8nm separation and 45,155 for 7 nm
separation.

We then calculated a ratio of the estimated number of measured alert
counts (53,122) per day [^97] that would occur with 8nm separation [^98]
over the number of handle combinations per day to estimate the percent
of handle combinations that would result in potential conflicts
(5.54302E-06) under the radar baseline. Similarly we calculated a ratio
of the estimated number of measured alerts (45,155) per day [^99] that
would occur with 7nm separation [^100] over the number of handle
combinations per day to estimate the percent of handle combinations that
would result in potential conflicts (4.71171E-06) under the ADS-B Out
scenario. The data used in this calculation is presented in Table D.2.

**Table D.1** [^101]

![](media/image24.wmf){width="5.6305555555555555in"
height="1.9145833333333333in"}

#  {#section-11 .unnumbered}

# Table D.2 Data Used to Calculate Ratios {#table-d.2-data-used-to-calculate-ratios .unnumbered}

![](media/image25.wmf){width="6.770138888888889in" height="0.88125in"}

We then calculate annual number of potential conflicts under the radar
baseline scenario and under the ADS-B Out scenario. In the first column
of Table D.4 we present number of handles per day for each year; for
2006 this number is 113,100. This number does not include military
flights as does the number of handles/day presented in Table D.2. Using
the number of handles per day we calculated the handle combinations
[^102]; for 2006 this number is 6.40E+09. We then apply the ratio
presented in Table D.2 (5.54-06) for the baseline to the total number of
handle combinations to obtain an estimate of the number of potential
conflicts under the radar baseline (for 2006 this is 35,452). Similarly,
we estimate the number of potential conflicts under the ADS-B Out
scenario by multiplying the ratio presented in Table D.2 (4.71E-06) by
the handle combinations. The estimate of potential conflicts that would
occur with 7 nm separation for 2006 is 30,135 and this represents the
number of potential conflicts that would occur under the ADS-B Out
scenario. The difference between the potential conflicts under the
baseline and the potential conflicts under the ADS-B Out scenario is the
potential conflicts that could be avoided with the increased accuracy of
ADS-B Out; for 2006 this number is 5,317. Of these potentially prevented
conflicts we estimate that air traffic controllers would have only
chosen to maneuver 63.35% of them and all of these maneuvers would be
vector maneuvers. Therefore we estimate that in 2006, 3,368 vector
maneuvers could be avoided with ADS-B Out, if conflict alerts only occur
that violate 7nm separation rather than 8nm separation. The cost per
avoided vector maneuver is estimated to be \$13.10. The estimated
benefits per day that could be achieved because more accurate
surveillance would reduce the number of vector maneuvers are \$44,122 in
2006.

In addition to eliminating potential conflicts that occur between 7 nm
and 8 nm and therefore reducing the number of alerts and consequently
reducing the number of maneuvers, ADS-B could make some maneuvers of
aircraft that trigger an alert within the 7nm separation, more
efficient. Aircraft that have to be maneuvered, given the 7nm separation
that ADS-B would permit, would be maneuvered shorter distances than they
would under an 8nm separation. We estimated that 19,090 [^103] aircraft
would still have to be maneuvered. Of these aircraft 65%, or 12,409
would be subject to vector maneuvers per day. The change in buffer size
due to increased accuracy is approximately 1/8^th^, so it was assumed
that maneuvers for the remaining potential conflicts could be reduced by
1/8^th^. The estimated cost per remaining vector maneuver is \$50.49. We
multiplied remaining vector maneuvers (12,409) by \$50.49 and divided by
8 to represent the change in buffer size that is due to increased
accuracy. The estimated benefits per day that would result from more
efficient maneuvering of the remaining potential conflicts are \$78,315
in 2006.

# Table D.3 Cost Savings per vector maneuver {#table-d.3-cost-savings-per-vector-maneuver .unnumbered}

![](media/image26.wmf){width="3.7381944444444444in"
height="0.3770833333333333in"}

Total savings due to prevented maneuvers are added to total savings from
remaining maneuvers (\$122,437) in 2006. Conflict probe benefits begin
in 2017 when the fleet is 78% equipped. Full equipage is achieved in
2019 and 100% of the potential benefits can be claimed from that year
on. Annual data used in the calculations may be found in Table D.4 and
the discounted annual data is in Table D.5.

The estimated benefits are \$3.3 billion (\$840 million discounted by
7%). [^104] More details on the derivation of these benefits can be
found in the August 2007 Basis of Estimate, section 2.7.5. [^105]

# Table D.4 Improved Conflict Probe Performance Benefits {#table-d.4-improved-conflict-probe-performance-benefits .unnumbered}

![](media/image27.wmf){width="9.129861111111111in"
height="4.7034722222222225in"}

# Table D. 5 Discounted Conflict Probe Benefits {#table-d.-5-discounted-conflict-probe-benefits .unnumbered}

![](media/image28.wmf){width="5.590277777777778in"
height="6.061805555555556in"}

The estimated benefits are \$3.2 billion (\$840 million discounted by
7%). [^106] More details on the derivation of these benefits can be
found in the August 2007 Basis of Estimate, section 2.7.5. [^107]

#### 4.2.6.3 More accurate metering because of increased accuracy {#more-accurate-metering-because-of-increased-accuracy .unnumbered}

The improved accuracy and update rate of ADS-B position and speed
information (over the accuracy, update rate, and information supplied by
radar) will impact the capabilities of controller automation. One aspect
of current automation is a metering capability called the Traffic
Management Advisor (TMA). TMA is a decision support tool for en route
controllers that optimizes arrival flows into busy airports. The
controller display provides exact times for each aircraft to reach the
arrival fix so that runway throughput is optimized. Because predictions
of runway throughput and metering times are based on surveillance
inputs, the increased accuracy and update rate of ADS-B (over radar)
should allow better predictions, leading to an incremental increase in
runway throughput.

TMA was developed by NASA as part of the Center TRACON Automation System
(CTAS). Many NASA studies have examined the uncertainty in initial
position, aircraft speed, aircraft weight, and winds, and how these
uncertainties introduce errors into the CTAS calculations of meter fix
arrival times. The study, "CTAS Error Sensitivity, Fuel Efficiency, and
Throughput Benefits" (NASA 1996), compared the meter fix uncertainty of
the current system, TMA (with the addition of weather information from
the Integrated Terminal Weather System - ITWS) and a planned upgrade to
TMA called the En route Descent Advisor (EDA). Table 7 presents a
summary of the meter fix uncertainty information from the NASA paper. A
further study comparing EDA and TMA, "EDA July 2004 Simulation
Overview," (NASA 2004) presented similar results.

**Table 7. Meter Fix Uncertainty from NASA study**

![](media/image29.png){width="5.995833333333334in"
height="0.8104166666666667in"}

ADS-B surveillance information should further reduce the uncertainty in
initial position and speed, which would allow more accurate meter fix
delivery. The "En route Descent Advisor Performance Analysis Final
Report" (NASA, 2004) examined the CTAS input factors (e.g. position,
speed, wind , weight, etc.) closely to determine the contribution of
each to the meter fix uncertainty. They found that speed and initial
position uncertainty account for approximately 40 percent of the
remaining error. Table 8 repeats the information given in Table 7, but
also applies the additional 40 percent reduction that would occur with
no initial position and speed variance. Table 8 implies that if all
position and speed error could be eliminated the remaining variance
would be 13 seconds. If only half the variance could be eliminated the
remaining would be 17 seconds. It is assumed that the accuracy and
update rate of ADS-B in the en route airspace will be at least twice as
accurate as current en route radar requirements. The ADS-B signal will
also downlink speed information directly into the automation, as opposed
to the current method of estimating speed from multiple radar hits.

**Table 8. Meter Fix Uncertainty with increased accuracy**

![](media/image30.png){width="5.991666666666666in"
height="1.5652777777777778in"}

Table 8 also lists the meter fix uncertainty as a percentage of the
uncertainty in current operations. TMA reduces the meter fix uncertainty
by 66 percent (44 percent of the original); the addition of EDA should
bring the total uncertainty reduction to 83 percent (17 percent of
original). If the speed and position accuracy from surveillance
information were twice as accurate as current information, the final
reduction would amount to an 86 percent decrease in meter fix
uncertainty (14 percent of original).

To translate the analysis described above into an economic benefit, we
first examined the benefit of different arrival variance changes on
airport delay using an equilibrium queuing model. The inputs for the
model include current Future Airport Capacity Task (FACT 2) airport
capacities, current demand profiles at each airport, and future
projected operations (TAF). The model allows changes in the arrival
variance that should reflect the changes in uncertainty described in
Tables 7 and 8. The benefits of TMA, TMA plus EDA, and TMA plus EDA plus
ADS-B increased accuracy were tabulated. The ratio of the incremental
ADS-B increased accuracy benefits to the TMA benefits equaled
approximately 0.05. This leads us to believe that the increased accuracy
of ADS-B information should at least result in a 5 percent increase in
benefits beyond current TMA projections. In reality this estimate is
conservative, because it already assumes that the introduction of ADS-B
information will be incremental to EDA, a program that is still in the
planning stages but will most likely come to fruition before full ADS-B
equipage.

The TMA Program Office completed a future benefits analysis in February
of 2007 that was submitted and approved within the FAA. The report
presented yearly benefit results for 18 TMA airports through 2020. We
leveraged these TMA results to estimate the additional benefit due to
ADS-B. We first scaled the TMA results to reflect the current approved
ADOC and (PVT) values. The ratio described in the previous paragraph was
then applied to the TMA results in 2020 to estimate the additional
benefits due to increased surveillance information. The SBS benefits
were assumed to begin by 2020 and continue through the SBS lifecycle.
The 2020 benefit was extrapolated through 2035 using a linear scaling
based on the growth in yearly operations at each relevant airport from
the TAF.

The estimated benefits are \$1.7 billion (\$945 million discounted by
7%). [^108] More details on the derivation of these benefits can be
found in the August 2007 Basis of Estimate, section 2.7.4. [^109]

###  {#section-12 .unnumbered}

### 4.2.6.4 Increased ability to allow Continuous Descent Approaches {#increased-ability-to-allow-continuous-descent-approaches .unnumbered}

**Background**

In the Merging and Spacing (M&S) application, precise speed instructions
are sent from the ground to en route aircraft to properly sequence
aircraft approaching the terminal area. These exact speed instructions
should allow aircraft to arrive at extended terminal area merge points
at times that are much more precise than currently feasible.

As part of the Merging and Spacing application, the SBS program is
developing both a ground and cockpit tool that can be used to optimize
aircraft spacing to enable a fuel-saving procedure called Continuous
Descent Approach (CDA) during increased levels of approach and departure
activity than currently feasible. The prototype ground tool will be used
by UPS in their Airline Operations Center, where UPS will be allowed to
provide minor adjustments to aircraft speeds into Louisville, Kentucky
airport (SDF) at night when they constitute most of the demand. The
prototype tool is intended to set up an initial sequence and spacing
prior to a specified enroute merge fix. When this tool is mature it will
be incorporated into FAA traffic flow management automation to allow FAA
controllers to space aircraft from multiple carriers across multiple
dependent merge fixes into an airport using future surveillance data
(based on ADS-B Out). A follow-on tool, possibly using an expanded set
of data from ADS-B Out (aloft winds, pressure, aircraft specific
characteristics), combined with a cockpit based ADS-B In spacing tool
should allow CDAs at somewhat higher demands.

CDAs are Area Navigation (RNAV) / Required Navigation Performance (RNP)
terminal arrival procedures specifically designed to keep an aircraft at
idle or near idle power during the entire arrival until the Final
Approach Fix (FAF). These procedures result in increased savings in
fuel, and reduced noise and emissions. The CDA eliminates step-down
altitudes and the associated inefficient power adjustments. It is
critical for the success of CDAs that there is little or no vectoring
during the procedure to maintain the arrival stream. To accomplish this
requires the aircraft to be accurately metered via ADS-B Out enabled
spacing and sequencing tools prior to and during descent and approach.

**Different Regimes of CDAs**

The most important factor preventing many airlines from attempting more
fuel-saving CDAs is the inability to accurately set up multiple inbound
aircraft performing CDA without interference from other aircraft in the
terminal area. For multiple CDAs to occur over a relatively short time
period, the aircraft must be sequenced and spaced accurately to avoid
vectoring. Below a certain demand, CDAs can (and are) performed using
current onboard equipment and procedures (RNP). As demand increases it
becomes progressively more difficult for controllers to allow CDAs
because of interference with other traffic in the airspace above and
below and in the pattern. As demand approaches capacity, total airport
throughput prohibits CDAs at very high traffic density situations.

The following table displays different regimes of CDA as a function of
terminal airspace traffic density and the related ratio between demand
and capacity. The table also lists the enablers to allow CDAs within
each regime and the proposed benefits sharing. CDAs are currently
feasible with RNP procedures at low traffic density; consequently, the
low density benefits are a function of RNP. The proposed SBS ground
automation spacing tool using ADS-B Out information will expand the use
of CDAs to medium density terminal airspace. The SBS program proposes
attributing the resulting benefit equally between the RNP and SBS
program. A follow-on spacing tool needing ADS-B Out expanded message set
data, Datacom availability, and cooperation through an ADS-B In cockpit
spacing tool should further expand the regime of CDAs to high density
airspace.

CDA Regimes

+-----------------+-----------------+-----------------+-----------------+
| **Terminal      | **De            | **Enablers      | **Benefits      |
| Airspace        | mand/Capacity** | needed**        | Sharing**       |
| Traffic         |                 |                 |                 |
| Density**       |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| Low Density     | \<= 0.4         | RNP Procedures  | RNP only        |
+-----------------+-----------------+-----------------+-----------------+
| Medium Density  | \> 0.4 and \<=  | RNP Procedures, | RNP and SBS     |
|                 | 0.7             |                 | share equally   |
|                 |                 | SBS Ground      |                 |
|                 |                 | Automation      |                 |
|                 |                 | using ADS-B Out |                 |
|                 |                 | information     |                 |
+-----------------+-----------------+-----------------+-----------------+
| High Density    | \> 0.7 and \<=  | RNP Procedures, | RNP, SBS, and   |
|                 | 0.9             | Ground          | Datacom each    |
|                 |                 | Automation,     | have a share    |
|                 |                 | Expanded ADS-B  |                 |
|                 |                 | Out data, ADS-B |                 |
|                 |                 | In, Datacom     |                 |
+-----------------+-----------------+-----------------+-----------------+
| Very High       | \> 0.9          | Currently       | Currently       |
| Density (Near   |                 | Prohibited      | Prohibited      |
| Capacity)       |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+

To estimate a benefit, we calculated a regime of applicability using the
following assumptions:

-   CDAs can currently be accommodated at a runway if there is no more
    than one arrival every 5 minutes (12/hour). At San Diego Airport
    (SAN) (one runway) the maximum arrival capacity is 30 aircraft/hour.
    The ratio of demand/capacity is then 0.4. We used this ratio as the
    boundary between the regime of currently feasible CDAs and CDAs with
    spacing tool necessary. (At one runway airports especially the
    arrival rate is impacted by the number of departures waiting to go
    as well. This is one of the prime causal factors for vectoring and
    speed control.)

-   Many airports start to exhibit significant delays when demand
    reaches 70 percent of capacity. The SBS spacing tool would enable
    CDAs from demand/capacity 0.4 to 0.7; expanded ADS-B information
    into the spacing tool might allow CDAs from demand/capacity 0.7 to
    0.9.

-   Because of the tradeoff between airport throughput and flight
    efficiency, CDAs would be prohibited when demand/capacity greater
    than or equal to 0.9.

The estimated benefits are \$2.9 billion (\$867 million discounted by
7%). [^110] More details on the derivation of these benefits can be
found in the August 2007 Basis of Estimate, section 2.7.3. [^111]

**Reduced Carbon Dioxide Emissions**

Besides the cost savings made possible by this proposed rulemaking,
there will also be potential environmental benefits. ADS-B is an
enabling technology critical to the concept of operations for the Next
Generation Air Transportation System (NextGen) plan. Under the NextGen
operational concept there will be less fuel used on many flights because
of fewer potential conflicts needing resolution, more efficient en route
conflict resolution aircraft maneuvers, and more efficient taxi and
ground idle operations. Additionally, having more precise knowledge of
the position of an aircraft with ADS-B may assist the implementation of
such environmentally friendly flight procedures like continuous descent
arrivals (CDA) to be employed in higher density traffic times.

The FAA estimates that between 2017 and 2035 ADS-B technology would
allow more efficient handling of potential en route conflicts, which
will result in a total of 410 million gallons of fuel savings in the
national airspace system over that time period. This decrease in fuel
use would result in about 4 million metric tons less carbon dioxide
emissions. [^112] The increased use of continuous descent approaches
that ADS-B would allow would lead to about 10 billion pounds of total
fuel savings from 2017 through 2035. This would result in about 14
million tons less carbon dioxide emissions. Additionally, the FAA has
estimated a decline in fuel use on airline flights over the Gulf of
Mexico due to optimal routing because of this proposed rulemaking. This
savings in fuel use would result in an additional cumulative decrease of
300,000 metric tons of carbon dioxide emissions over the 2012 to 2035
time period. For more information the methodology behind these
estimates, see "ADS-B Benefits enabled from Improved En Route Conflict
Probe Performance," a 2007 study from Mitre. This study is posted in the
docket established for this rulemaking.

Reduced fuel consumption will also translate into fewer emissions such
as oxides of nitrogen, which potentially impact both local air quality
and climate, (as a greenhouse gas emission), as well as hydrocarbons and
carbon monoxide-both of which impact local air quality. Reduction in
local air quality impacts associated with increasing capacity is vital
in maintaining compliance with national ambient air quality standards.

The FAA solicits comments on the benefits that we have identified and
estimated and whether there are any potential benefits of ADS-B that we
have not identified.

##  ADS-B In and Out -- Surveillance and Broadcast Services

### 4.3.1 Definition  {#definition-2 .unnumbered}

Under this proposed rulemaking, the industry would be required to equip
for ADS-B Out in designated airspace. However, the agency does not
intend to mandate ADS-B In and any operator who equips with ADS-B In
would do so voluntarily. In order for an operator to equip voluntarily,
the operator must perceive benefits that exceed the costs of equipping.
Conversations with prospective ADS-B In manufacturers yielded little in
the way of cost estimates, probably because at the time of this analysis
there were no FAA specifications for ADS-B In. However, if one applies
the ratios of ADS-B In costs to ADS-B Out costs provided by the Mitre
Corporation,[^113] the costs of ADS-B In are high. It is not clear yet
that industry will voluntarily equip. We solicit comments from the
industry on what they expect avionics costs of equipping with ADS-B In
to be as well as whether the industry will voluntarily equip and the
benefits of ADS-B In equipage.

This rule does not mandate ADS-B In technology; however, one of the
reasons the agency is mandating ADS-B Out is to set the groundwork for
ADS-B In, which the agency believes can lead to significant net
benefits. These costs and benefits are discussed below.

###  Scenario Specific Assumptions

-   We assume that the FAA will not mandate ADS-B In

### 4.3.3 Cost to Industry to Equip with ADS-B In  {#cost-to-industry-to-equip-with-ads-b-in .unnumbered}

We also requested from industry, equipage costs for ADS-B In, Cockpit
Display of Traffic Information (CDTI), Traffic Information Service
Broadcast (TIS-B) and Flight Information Service Broadcast (FIS-B) by
aircraft classification. The technology of ADS-B In to provide pilots
with the ability to self separate their aircraft through take-off,
cruise and landing phases of flight is still very premature. Every
company we contacted expressed concern on providing an accurate estimate
for ADS-B In. Without exception, industry was reluctant to provide us
with costs because the program requirements for ADS-B In are not
sufficiently articulated. When pressed for estimates, we received costs
per airplane that varied by as much as a million dollars per airplane.
We concluded the requirements for ADS-B In are insufficient in detail
and do not support developing a cost estimate.

###  {#section-13 .unnumbered}

###  FAA Surveillance and Broadcast Costs

The FAA does not intend to mandate ADS-B In performance in this
rulemaking. However, it does plan to provide ADS-B In services to
support the following applications: enhanced visual acquisition,
enhanced visual approach, final approach runway occupancy awareness,
airport surface situational awareness, and conflict detection. The
agency will procure these services through a vendor services contract to
be released in 2007.

The total estimated cost of providing ADS-B broadcast and surveillance
(both ADS-B In and Out) services is \$4.5 billion (\$2.4 billion at 7%
present value) [^114] as displayed in Table 10. Costs include the cost
to provide ADS-B Out surveillance services (including radar costs) of
almost \$4.0 billion (\$2.1 billion at 7% present value) [^115]
displayed in Table 5, and ADS-B In broadcast services of \$533 million
(\$283 million at 7% present value) [^116] displayed in Table 8.
Included in these costs are the costs to develop services and
applications and to coordinate approvals/procedures for those
applications and services in areas where we have radar today, plus the
Gulf of Mexico.

[]{.mark}

##### Table 9 Cost to the FAA to Provide ADS-B In services  {#table-9-cost-to-the-faa-to-provide-ads-b-in-services .unnumbered}

(2007 Thousands of Dollars)

![](media/image31.wmf){width="5.740277777777778in"
height="6.404861111111111in"}

The cost of providing ADS-B Out infrastructure and services was
estimated in Section 4.2.5 as \$4.0 billion (\$2.9 at 7% present
value).[^117] The total estimated FAA cost to provide both ADS-B In and
Out broadcast and surveillance services to support these applications
include the following: ATC surveillance, enhanced visual acquisition,
enhanced visual approach, final approach runway occupancy awareness,
airport surface situational awareness, conflict detection. This cost is
estimated at \$4.5 billion in constant dollars (\$2.4 billion at 7%
present value).[^118] [^119] These results may be found in Table 10.

Table 10 Cost to the FAA for ADS-B Surveillance and Broadcast Services
(ADS-B In and Out)(2007 Thousands of Dollars)

![](media/image32.wmf){width="6.311805555555556in"
height="6.014583333333333in"}

#####   {#section-14 .unnumbered}

### 4.3.5 Benefits of ADS-B In {#benefits-of-ads-b-in .unnumbered}

The Air Traffic Organization issued a study,[^120] which we will refer
to as the BoE (Basis of Estimate), in June of 2006, in which it
identified and estimated benefits that could be achieved by ADS-B In
Surveillance and Broadcast services. These estimates were updated in
February 2007 and again in August 2007. This regulatory analysis uses
the estimates updated in August 2007. In this section we summarize the
benefits that the BoE analysis estimated could be achieved with ADS-B In
(the benefits of ADS-B Out were estimated in section 4.2).

As mentioned above, the FAA would procure FIS-B (weather) and the
following TIS-B applications: enhanced visual acquisition, enhanced
visual approach, and final approach runway occupancy awareness, airport
surface situational awareness, conflict detection by 2013. These
applications could yield certain benefits that would depend on the level
of performance.

Table 11 below summarizes the benefit areas and estimates. ADS-B In may
result in an additional estimated \$3.9 billion in benefits (\$1.0
billion discounted by 7%).[^121] Many of the benefits discussed below
can currently be obtained individually without ADS-B In, but due to
cost, many operators are not purchasing the hardware or services
necessary to achieve these benefits. Once ADS-B Out is required and
operators are equipped, the incremental cost to add ADS-B-In
capabilities and realize these additional benefits may change some
operators' investment case. Operators may then find it cost beneficial
to purchase ADS-B In capabilities.

However, if operators do not believe that the purchase of ADS-B In
capabilities would be cost beneficial, they will not purchase ADS-B In
and to the extent that happens the benefits in the following paragraphs
may be overestimated. On the other hand, the benefits quantified below
are based on current FAA commitments, and to that extent they may be
conservative.

There may be other potential benefits that may be achieved that we have
not quantified here because these potential benefits may involve a
change in FAA standards or regulations (such as a change in separation
standards) or because these benefits are as yet unknown. ADS-B is an
enabling technology. Once digital aircraft position and intent data
becomes widely available, additional applications and uses for the data
may be found. The situation is analogous to deploying the internet --
once the infrastructure investment has been made, creative new
applications may be invented and deployed at a relatively low
incremental cost.

**Table 11 Additional Benefits of ADS-B In (Millions of 2007 Dollars)**

![](media/image33.wmf){width="6.8902777777777775in"
height="3.0840277777777776in"}

The following paragraphs discuss the benefit areas that were identified
in the BoE. These benefit areas fall into the following categories:
flight safety, surface, and terminal and en route. Specific benefit
areas are grouped by these categories and discussed below.

**[Flight Safety]{.underline}**

[Fewer aircraft-to-aircraft conflicts]{.underline}

Through a cockpit display of traffic information (CDTI) the SBS program
would improve the pilot's ability to see (enhanced visual acquisition)
other traffic so that the pilot can more effectively apply the
see-and-avoid principle. [^122] Information gained from the CDTI will
help pilots better focus their visual search for other ADS-B aircraft
and better monitor movements of these other aircraft. This will result
in greater pilot situational awareness, greater scan effectiveness, and
the ability to plan for avoidance earlier in an encounter scenario. This
could lead to a reduction in mid-air collisions. ADS-B would also offer
incremental improvements to aircraft equipped with the Traffic Alert and
Collision Avoidance System (TCAS), TCAS-II [^123]and TCAS-I,[^124] but
these benefits were not included in the estimates. Therefore, all
aircraft with 10 or more seats were excluded from the analysis.

Mid-air collision reduction benefits were estimated by taking into
account the forecasted future accident costs, the assumed effectiveness
percentage, the dependent equipage rates [^125] and the TIS-B service
schedule. More details of the analysis can be found in the BoE. Total
benefits are estimated at \$720 million (\$208 million at 7% present
value).[^126]

[Fewer encounters with hazardous weather]{.underline}

The objective of Flight Information Service-Broadcast (FIS-B) is to
provide the pilot with improved access to weather information and
aeronautical data. This data will be provided directly to the cockpit,
in flight, enhancing pilot situational awareness. The user [^127]
community will have better access to standard weather products as well
as access to information previously unavailable.[^128] While the SBS
program is focused on providing elementary weather products in the near
future, it is envisioned that the program will evolve to provide pilots
with enhanced weather and aeronautical data in the out years. Pilots
will therefore be able to make better in-flight decisions, including
better strategies for avoiding hazardous weather. This has the potential
to reduce weather related accidents.

Weather accident reduction benefits were estimated by taking into
account forecast future accident costs, effectiveness measures, modified
independent equipage rates, and the FIS-B service schedule. Total
benefits are estimated at \$792 million (\$239 million at 7% present
value).[^129] Derivations of these benefits are explained further in the
BoE.

[More Efficient Weather Deviations]{.underline}

The efficiency of flight operations can also be increased with improved
access to weather information. FIS-B will provide the pilot with
improved access to weather information and aeronautical data. With
access to weather information, pilots can plan more efficient routes in
adverse weather. These benefits were estimated by taking into account
the frequency of unorganized weather, the average flight time reduction
per flight, projected traffic counts, modified independent equipage
rates, estimated FIS-B service schedule and airborne aircraft direct
operating costs and passenger value of time. Total benefits are
estimated at \$18.4 million (\$5.4 million when discounted by 7%).[^130]
More details are available in the BoE.

**[Surface Benefits]{.underline}**

[Increased Safety on the Surface]{.underline}

There are two tools by which system safety can be improved: CDTI and
Surface Moving Map (SMM). The CDTI will allow pilots to see other
equipped aircraft on the surface and in the immediate terminal area (on
approach). This added information should help the pilot in the see and
avoid procedure, particularly during low visibility weather conditions.
With information from the SMM, the pilot can follow his/her progress on
the airport surface using the cockpit display and correlate that
position by reference to outside visual cues. The CDTI would also
display other aircraft and surface vehicle traffic that meet ADS-B
performance requirements.

The surface accident reduction benefits were based on the forecasted
future accident costs by towered airport, which were estimated by
applying the methodology developed as part of an ASDE-X Investment
Analysis [^131]. In addition, dependent equipage rates were applied to
reflect the involvement of two aircraft in the accidents as discussed in
Section 2.4.2. Benefit estimates were developed separately for each of
the top 200 airports that will be included in the SMM database.
Effectiveness of ADS-B capabilities differed at ASDE and non-ASDE
airports.

Surface accident reduction benefits of \$300 million (\$72 million at 7%
present value) [^132] were estimated to result from increased safety on
the surface. More details on how the estimate was derived can be found
in the BoE.

**[Terminal and En Route Benefits]{.underline}**

[Continuing Visual Approaches in Marginal Conditions]{.underline}

A visual approach clearance is an air traffic control authorization for
an aircraft on an instrument flight rule flight (IFR) plan to proceed
visually to the airport. Before issuing the clearance the controller
must be sure the pilot has the airport and/or pertinent traffic in
sight, and will issue advisories to help the pilot find the airport or
traffic. When the pilot confirms that the required entity
(airport/runway or traffic) is in sight, the controller can issue the
visual approach clearance.

With an application called CDTI Assisted Visual Separation (CAVS), the
pilot should be able to correlate the target aircraft and trajectory
information to the actual traffic as seen out-the-window, so the
controller may clear the aircraft for a visual approach. Most airports
have established weather minima below which visual approaches can't be
conducted mainly due to limitations on the pilot's ability to see the
runway or traffic in such weather. With CDTI and ADS-B In, pilots will
be able to more reliably see relevant traffic in less-than-optimum
meteorological conditions. As a result, this equipment would increase
the pilot's capability of locating other aircraft during marginal
weather conditions while conducting a visual approach to land at an
airport.

Benefits attributed to extending the use of visual approaches to lower
weather conditions were estimated for the top 100 airports as \$804
million (\$200 million when discounted by 7%).[^133] More details can be
found on the methodology used to derive the estimate in the BoE.

[More Efficient Spacing During Approaches]{.underline}

One goal of the SBS program is to increase the precision and consistency
of inter-arrival spacing of aircraft on visual and instrument
approaches. ADS-B In and CDTI have the potential to allow the pilot to
more precisely manage spacing on the aircraft ahead during approach.
Consistently achieving inter-arrival spacing that is closer to the
optimum is an important step in reducing terminal area congestion.

Using CDTI for all approaches should reduce the uncertainties associated
with current methods, thereby reducing the excess spacing buffers that
must be maintained during approach operations. As a result, terminal
area inefficiencies would be reduced through more efficient approaches.

The benefit of more efficient spacing during approaches was estimated by
taking into account the average flight time savings per flight, aircraft
direct operating costs and passenger value of time, projected traffic
counts, the percentage of time visual approaches exist in the current
system, and order-dependent mixed equipage rates. Benefits were
estimated for the BoE, and these benefits were updated in February 2007.
Updated benefits were estimated to be \$1.2 billion (\$312 million at 7%
present value).[^134]^,^ [^135] More details on the methodology used to
derive the estimates can be found the BoE.

The FAA solicits comments on the benefits that we have identified and
estimated and whether there are any potential benefits of ADS-B In that
we have not identified.

## Multilateration Alternative Scenario 

### 4.4.1 Definition {#definition-3 .unnumbered}

Multilateration was one of the original technologies that the FAA looked
at when trying to identify alternative surveillance sources in the early
1990s. The agency established several test-beds for multilateration. The
incremental development of multilateration eventually led to the
certification and deployment of ASDE-X and 3X systems for surface
surveillance.

Multilateration functions by triangulating aircraft position based on
time difference of arrival of signals to multiple ground stations. For
multilateration surveillance, an aircraft must have at least 4 ground
stations receiving its transponder information. [^136] It can function
with both existing and future transponders such as Modes A/C, Mode S
short and future extended squitter transponders. Multilateration is
currently in use as a surface surveillance tool through the ASDE-X
program, and has been tested for use in supporting the Terminal and En
Route airspace domains. [^137]

###  4.4.2 Cost to Industry {#cost-to-industry .unnumbered}

There are no costs to industry related to surveillance with
multilateration because the current fleet is equipped with transponders,
which will function with multilateration surveillance.

General aviation operators who aren't currently equipped for weather and
traffic services in the cockpit could obtain these capabilities with
multilateration by installing equipment on the aircraft and by
subscribing to weather services. Accordingly, we did not include these
costs in this analysis for either the multilateration scenario or the
radar baseline scenario. We assume that those operators would not
willingly incur the costs of weather and traffic because for the most
part they have not done so to date.

###  Cost to FAA 

We estimate it would cost the FAA \$3.5 billion (\$2.1 billion when
discounted by 7%) [^138] to provide surveillance using multilateration
over the 29 years. This would include facilities and equipment and
operating and maintenance costs for multilateration ground facilities to
provide core surveillance and the cost to sustain radar facilities until
multilateration is operational. We do not include the cost of providing
broadcast services with multilateration.

#### Multilateration Surveillance Costs

Included in the estimates of multilateration surveillance costs are
costs of facilities and equipment, operations and maintenance costs,
radar sustain costs and radar decommissioning costs. Multilateration
does not require a separate backup system due to its built-in
redundancies. Multilateration surveillance costs are presented in Table
12 below.

Table 12 Cost to Provide Core Surveillance Using Multilateration in 2007
Thousands of Dollars

![](media/image34.wmf){width="7.5in" height="4.985416666666667in"}

### 4.4.4 Benefits of Multilateration Surveillance {#benefits-of-multilateration-surveillance .unnumbered}

Our research did not identify any other feasible benefits of
multilateration compared to radar. Multilateration may have the
potential to improve accuracy but it would not be practical to do so,
since it could require ground stations in locations where it may not be
feasible to build ground stations. It is possible that in some locations
multilateration could allow for tighter separation, but it might require
too many multilateration ground stations for multilateration to be cost
effective for reducing separation.

While multilateration could provide radar-like separation in some parts
of the Gulf of Mexico, it is not feasible to provide radar like services
throughout the entire area of the Gulf. This is due to limitations in
the number and location of platforms, which would house the ground
stations. We assume that multilateration surveillance would provide the
same functionality as radar, and we have estimated no benefits from
multilateration surveillance beyond those achieved by the current radar
system.

# 5.0 Summary of Costs and Benefits {#summary-of-costs-and-benefits .unnumbered}

### 5.1 Comparison of Costs and Benefits of the ADS-B Out Scenario (the Rule) with the Baseline and Multilateration {#comparison-of-costs-and-benefits-of-the-ads-b-out-scenario-the-rule-with-the-baseline-and-multilateration .unnumbered}

The costs and benefits of the ADS-B Out, multilateration, and the radar
baseline scenarios are summarized in Table 13 below with present value
displayed in Tables 14 and 15. Undiscounted estimated benefits of the
proposed rule \$9.95 billion, (or \$2.7 billion at 7% present value
[^139]) exceed the difference in costs between the radar baseline and
the proposed rule including the government's costs by \$4.6
billion.[^140] When discounted by 7% estimated costs (\$3.0 billion)
exceed estimated benefits (\$2.66 billion) by \$340 million. (Avionics
costs in these tables are presented at the midpoint between the high and
low costs. In later tables, we will present the avionics costs as a
range from low to high.) All of the benefits we have identified accrue
to the aviation industry, not the FAA. The midpoint of estimated user
costs to equip is \$4.32 billion (\$2.12 billion discounted by 7%)
[^141] and estimated benefits are \$9.95 billion (\$2.66 billion
discounted by 7%). [^142]

We do not expect discounted ADS-B Out alone to be cost beneficial,
although we believe it is cost justified. The bulk of the costs are
incurred from the effective date of the rule (2009) to the compliance
date (2020), while we assume most of the benefit from ATC efficiencies
occur after the compliance date. The reason we are mandating ADS-B Out
is that the FAA views ADS-B Out as a springboard to ADS-B In and NextGen
which could lead to further benefits down the road; some of the benefits
have yet to be identified and some have not yet been quantified. Also,
as explained in the market failure section, there is little incentive
for an operator to voluntarily equip with ADS-B Out. Once all the
aircraft within an airspace are equipped with ADS-B Out, operators who
also equip their aircraft with ADS-B In can begin to accrue some
benefits such as continuing visual approaches in marginal conditions or
reduced aircraft to aircraft conflicts. The FAA views ADS-B as a means
to accommodate the expected increase in demand for surveillance and
separation services with less delay than would be possible with the
current radar system. As mentioned in the preamble, "to accommodate the
projected level of traffic without adding delay, more comprehensive
surveillance in the NAS, including more radar sites in certain areas,
would be necessary." However, increasing the number of radars in the NAS
does not solve the inherent limitation of radar technology, and would
not enable the FAA to eventually reduce current separation standards.
Also, radar does not provide the capability to provide services on the
flight deck as ADS-B does.

Table 13 Summary of Costs and Benefits of Multilateration, Radar
Baseline and ADS-B Out Scenarios: Billions of 2007 Dollars

![](media/image35.wmf){width="5.99375in" height="4.690277777777778in"}

Table 14 Summary of Costs and Benefits of Multilateration, Radar
Baseline and ADS-B Out Scenarios: Billions of 2007 Dollars at 3% Present
Value

![](media/image36.wmf){width="6.559722222222222in"
height="4.594444444444444in"}

Table 15 Summary of Costs and Benefits of Multilateration, Radar
Baseline and ADS-B Out Scenarios: Billions of 2007 Dollars with a 7%
Present Value

![](media/image37.wmf){width="6.420138888888889in"
height="4.497222222222222in"}

Table 16 below summarizes the costs and benefits and shows the
difference between the ADS-B Out scenario and the radar baseline
scenario. Avionics costs are the bulk of the incremental difference,
because FAA surveillance costs for the ADS-B Out scenario are estimated
to be \$1.0 billion (\$890 million discounted by 7%) more than the radar
baseline. With avionics costs, which range from a low of \$1.27 billion
(\$670 million discounted by 7%) to a high of \$7.46 billion (\$3.6
billion discounted by 7%) over the time horizon of the analysis, the
total incremental cost of the ADS-B Out scenario ranges from \$2.3
billion (\$1.6 billion discounted by 7%) to \$8.5 billion (\$4.5 billion
discounted by 7%) more than the radar baseline scenario. We estimated
that \$9.95 billion (\$2.7 billion discounted by 7%) worth of quantified
benefits would result from the ADS-B Out scenario. These are entirely
incremental to the radar baseline. If costs are high, discounted costs
exceed discounted benefits.

Table 16 Summary of Costs and Benefits in Billions of 2007 Dollars

![](media/image38.wmf){width="6.899305555555555in"
height="3.754166666666667in"}

The same costs and benefits at a 3% and 7% present value are shown in
Tables 16 and 17 below. Net benefits exceed net costs by \$3.55 billion
if ADS-B Out avionics costs are low, but net costs exceed net benefits
if ADS-B Out avionics costs are high by \$840 million when results are
discounted by 3%. Net benefits exceed net costs by \$1.1 billion when
ADS-B Out avionics costs are low, but net costs exceed net benefits by
\$1.83 billion when ADS-B Out costs are high at a 7% present value.

As mentioned, the bulk of the ATC efficiency benefits from ADS-B Out are
expected to occur after the compliance date of the rule. However, the
FAA's deployment strategy for surveillance equipment has the potential
to allow benefits to be realized earlier than this conservative
estimate. For example, if FAA decided to roll out ADS-B surveillance
coverage regionally, aircraft operating primarily in the covered region
may choose to equip faster than the rule mandates. A higher density of
equipped aircraft in specific regions could permit increased use of
procedures that yield benefits. This would be true for both ADS-B Out
and also ADS-B In benefits to users.

We request comments from the aviation industry about FAA surveillance
deployment strategies that could permit acceleration of realized
benefits.

Table 17 Summary of Costs and Benefits in Billions of 2007 Dollars at a
3% Present Value

![](media/image39.wmf){width="7.108333333333333in"
height="3.8201388888888888in"}

**Table 18 Summary of Costs and Benefits in Billions of 2007 Dollars at
a 7% Present Value**

![](media/image40.wmf){width="7.061111111111111in"
height="3.9895833333333335in"}

### 5.2 Comparison of Costs and Benefits of ADS-B In and Out with the Baseline and Multilateration {#comparison-of-costs-and-benefits-of-ads-b-in-and-out-with-the-baseline-and-multilateration .unnumbered}

Table 19 shows the costs and benefits of the radar baseline,
multilateration and ADS-B In and Out (not including ADS-B In avionics
costs). We have not developed a cost estimate for equipping aircraft
with ADS-B In (in addition to ADS-B Out), because the performance
requirements for ADS-B In were insufficient in detail. Therefore, we
cannot indicate a high and a low total cost for ADS-B In and Out
including ADS-B In avionics. However, we have developed a range of low
to high costs for ADS-B In and Out which exclude the costs of ADS-B In
avionics.

Based on data from manufacturers we estimated a range of costs for ADS-B
Out avionics. These costs range from \$1.27 billion to \$7.46 billion.
Based on FAA data we estimated the FAA ground costs for ADS-B In and
ADS-B Out would be \$4.5 billion.

The low total cost of ADS-B In and Out is indicated as \$5.77 billion
[^143] plus some unknown costs for the ADS-B In avionics. The high total
cost of ADS-B In and Out is indicated as \$11.96 billion [^144] plus
some unknown for ADS-B In avionics costs.

The difference between the ADS-B In and Out low estimate and radar
baseline cost is indicated as \$2.81 billion[^145] plus the unknown
ADS-B In avionics cost. The difference between the ADS-B In and Out high
estimate and radar baseline cost is \$9.0 billion[^146] plus an unknown
avionics costs.

While we do not have estimates of ADS-B In avionics costs, we can derive
an upper bound for what that cost cannot exceed if the ADS-B In and Out
scenario is to be cost beneficial relative to radar for each of the two
estimates of ADS-B Out avionics (low and high).

For the low cost possibility, the total cost of equipping aircraft with
ADS-B In cannot exceed \$11.0 billion. In other words, if ADS-B In
avionics costs are less than \$11.0 billion given low costs (of ADS-B In
ground costs and ADS-B Out ground and avionics costs), then ADS-B In and
Out would be cost beneficial. If ADS-B In equipage costs exceed \$11.0
billion, the scenario relative to radar would not be cost beneficial.

For the high cost possibility, the cost of equipping aircraft with ADS-B
In cannot exceed \$4.82 billion in order for the cost of the scenario
not to exceed the benefits of the scenario. In other words, if ADS-B In
avionics costs are less than \$4.82 billion given high costs (of ADS-B
In ground costs and ADS-B Out ground and avionics costs), then ADS-B In
and Out would be cost beneficial. If ADS-B In equipage costs exceed
\$4.82 billion, the scenario relative to radar would not be cost
beneficial.

It is worth noting that the high end range of ADS-B avionics costs
includes costs associated with preparing to equip for ADS-B In. In other
words, we assumed that a high end operator (transport category or
business jet) who was forced by this proposed rule to acquire, at a
minimum, an ADS-B Out avionics package, would voluntarily pay more so
that operator could more efficiently capture the future benefits of
ADS-B In. Therefore, in the case where ADS-B Out costs are at the high
end of the range, it is more likely that costs to comply with ADS-B In
will be somewhat lower than in the case where ADS-B Out costs are at the
low end of the range.

Table 19 Comparison of ADS-B In and Out with Multilateration and Radar
Baseline Billions of 2007 Dollars

![](media/image41.wmf){width="7.03125in" height="5.178472222222222in"}

Table 20 shows the costs and benefits of the radar baseline,
multilateration and ADS-B In and Out (not including ADS-B In avionics
costs), at a 3% present value.

The present value low total cost of ADS-B In and Out is indicated as
\$4.26 billion[^147] plus some unknown costs for ADS-B In avionics. The
present value high total cost of ADS-B In and Out is indicated as \$8.66
billion[^148] plus some unknown for ADS-B In avionics costs.

The difference between the present value ADS-B In and Out low estimate
and the present value radar baseline cost is indicated as \$2.32 [^149]
billion plus the unknown ADS-B In avionics cost. The difference between
the present value ADS-B In and Out high estimate and the present value
radar baseline cost is \$6.72 [^150] billion plus an unknown. The
unknown is the additional cost for operators to equip with ADS-B In, in
addition to ADS-B Out.

For the present value low cost possibility, the cost of equipping
aircraft with ADS-B In cannot exceed \$5.27 billion in order for the
cost of the scenario not to exceed the benefits of the scenario. For the
present value high cost possibility, the cost of equipping aircraft with
ADS-B In cannot exceed \$870 million in order for the cost of the
scenario not to exceed the benefits of the scenario.

Table 20 Comparison of ADS-B In and Out with Multilateration and Radar
Baseline at a 3% Present Value in Billions of 2007 Dollars

![](media/image42.wmf){width="6.85625in" height="5.672916666666667in"}

Table 21 shows the costs and benefits of the radar baseline,
multilateration and ADS-B In and Out (not including ADS-B In avionics
costs) at a 7% present value.

The present value low total cost of ADS-B In and Out is indicated as
\$3.0 billion [^151] plus some unknown costs for ADS-B In avionics. The
present value high total cost of ADS-B In and Out is indicated as \$6.0
billion [^152] plus some unknown for ADS-B In avionics.

The difference between the present value ADS-B In and Out low estimate
and the present value radar baseline cost is indicated as \$1.8 billion
[^153] plus the unknown ADS-B In avionics cost. The difference between
the present value ADS-B In and Out high estimate and the present value
radar baseline cost is \$4.8 billion [^154] plus an unknown. The unknown
is the additional cost for operators to equip with ADS-B In, in addition
to ADS-B Out.

For the present value low cost possibility, the cost of equipping
aircraft with ADS-B In cannot exceed \$3.03 billion in order for the
cost of the scenario not to exceed the benefits of the scenario. These
results are presented in Table 21 below.

Table 21 Comparison of ADS-B In and Out with Multilateration and Radar
Baseline at a 7% Present Value in Billions of 2007 Dollars

![](media/image43.wmf){width="7.163888888888889in"
height="5.580555555555556in"}

#  {#section-15 .unnumbered}

# 6.0 Next Generation Air Transportation System Plans for ADS-B Technology {#next-generation-air-transportation-system-plans-for-ads-b-technology .unnumbered}

ADS-B Out alone would not achieve all of the goals of NextGen, but it is
the foundation technology that is necessary for NextGen transformation.
This section describes the NextGen program and summarizes the analyses
that have motivated this proposed ADS-B Out rule.

**6.1 Next Gen Overview**

FAA's long-range forecast estimates enplanements to more than double by
2030 and air traffic control operations to increase by two-thirds.
However, the NAS does not have enough capacity to accommodate this
increase in demand. Many aviation industry observers and participants as
well as the general flying public and various government officials
viewed the disruptive operations of the summer of 2000 as a harbinger of
things to come.

In 2003 the 108^th^ Congress charged the FAA with establishing a Joint
Planning and Development Office (JPDO). The JPDO released its Integrated
Plan for NextGen in 2004 and subsequently has been developing the
details of its enterprise architecture and associated operational
improvement roadmaps for the air traffic system of 2025 and beyond. The
NextGen plan utilizes ADS-B capabilities to build upon for a host of air
traffic management functions starting with surveillance, but also
extending into navigation, air traffic management functions of spacing,
separation, airport surface management, improved capacity, improved
security, and reduced environmental impacts.

**6.2 Current System Constraints Analysis**

The performance benefits of the NextGen capabilities are measured on a
relative basis compared with the estimated performance of a future
"baseline" NAS that does not consider the NextGen capabilities. This
future baseline system, even with the planned improvements fully
implemented and operational, will not provide enough capacity to
accommodate the levels and types of demand anticipated for future years.

Without sufficient system capacity, future flight schedules would incur
untenable delays if all demanded flights were actually flown. We believe
that capacity constraints would lead to shortages of air traffic
services causing some of the demand to be left unsatisfied. To estimate
the feasible throughput, we analytically removed flights from the future
flight schedule after a specified airport delay tolerance or sector
capacity is reached.

below summarizes the results of the constraints analysis in terms of
both capacity and environmental constraints.

![](media/image44.wmf){width="3.7576388888888888in"
height="3.3409722222222222in"}

Figure 1 Summary of Capacity and Environmental Constraints Analysis

Assuming that today's airport capacity is augmented only by the new
runways identified in the OEP, and no airspace capacity improvements,
the portion of demand that cannot be satisfied ranges from 18% enroute
to 35% at airports. In addition, the unsatisfied demand for the Airport
Constrained and the Airport/Airspace Constrained cases overlap to
considerable extent. Taken together, constraints caused by congestion in
airspace and airports accounts for 35% of the trimmed flights. The
airport constraints seem to be more binding than airspace constraints.
However, significant sector constraints might remain that would prevent
the system from satisfying all the unconstrained demand. For example, en
route capacity constraints often propagate backwards to the airports as
traffic flow management initiatives delay flights at the departure
airport. Therefore, to satisfy a large increase in demand, such as a
tripling of demand, both types of constraints must be resolved. When
environmental constraints such as noise and emissions are also factored
into the analysis, an additional 13% of the flights must be trimmed. In
total almost half of the flights are trimmed to meet all constraints --
airspace, airport, fuel, and noise constraints. In the following
paragraphs, we show how NextGen addresses these constraints and the
significant role that ADS-B plays in achieving the NextGen benefits.

3.  **Assessment of NextGen Mid-Term and End-State Capacity Benefits**

The assumed capacity improvements were modeled in NAS-wide simulations
in order to assess the efficacy of the proposed operational improvements
under projected future demand growth levels. The results of these
simulations expressed investment outcomes as operational changes, and in
turn provided estimates of the net system performance due to those
changes. Simulations were done for each of the NextGen segments under
consideration: Segment 3 (mid-term) and Segment 7 (end state). For a
greater detailed explanation of this analysis see the JPDO Analysis in
the docket.

![](media/image45.wmf){width="5.993055555555555in"
height="1.7180555555555554in"}

Figure 2 Summary of NextGen Segment 3 and Segment 7 Assessment

Figure 2 shows the number of flights ***[per day]{.underline}*** that
can and cannot be accommodated in the NAS at feasible levels of delay
for a tripling of demand along with capacities for the baseline (OEP),
NextGen Segment 3 (which represents a mid-term state) and NextGen
Segment 7 (which represents the end state). Results show that in the
mid-term, the NextGen capabilities enable the NAS to accommodate
approximately 7000 additional flights per day compared with the baseline
case. For the end-state, the Segment 7 NextGen capabilities enable an
approximately 17,000 additional flights per day to operate in the NAS.
Said another way, the NextGen capabilities reduce the number of flights
that cannot be accommodated from 35% in the baseline case, to 30% in
Segment 3 and 22% in Segment 7. This represents a significant increase
in the future capacity of the NAS beyond currently planned improvements.

Of the capacity shortfall described in Figure 2, significant benefits
can be captured as a result of the NextGen portfolio. Those benefits are
specific to locations such as large and small airports, enroute
environments, weather conditions, and type of aircraft. The maximum
potential benefits described in Figure 2 can be captured by improving
component performance due to NextGen investments, an aggregate estimate
of the specific impacts of these investments for these specific subsets
of operations are described in Figure 3.

+-------------+-------------+-------------+-------------+-------------+
| **Phase of  | **Flight    | **Flight    | **Total     | **Portion   |
| Flight**    | Situation** | Time        | Dollar      | of Savings  |
|             |             | Reduction** | Savings per | Due To      |
|             |             |             | Year**      | Fuel**      |
+-------------+-------------+-------------+-------------+-------------+
| S           | Small       | 30 seconds  | \$328       | \$79        |
| urface-Taxi | Airports    |             | million     | million     |
| out and     |             | 2 minutes   |             |             |
| Taxi-in     | Large       |             | \$1.3       | \$315       |
|             | Airports    |             | billion     | million     |
+-------------+-------------+-------------+-------------+-------------+
| Terminal    | Small       | 10 minutes  | \$6.5       | \$1.6       |
| area,       | Airports,   |             | billion     | billion     |
| including   | Good        | 30 minutes  |             |             |
| departure,  | Weather     |             | \$19.7      | \$4.7       |
| landing     |             |             | billion     | billion     |
|             | Large       |             |             |             |
|             | Airports,   |             |             |             |
|             | Bad Weather |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| Enroute     | Good        | 10 minutes  | \$6.5       | \$1.6       |
| (cruise     | Weather     |             | billion     | billion     |
| phase)      |             | 20 minutes  |             |             |
|             | Severe      |             | \$13.1      | \$3.1       |
|             | Weather     |             | billion     | billion     |
+-------------+-------------+-------------+-------------+-------------+

Figure 3 Benefits of End-State NextGen

The delay savings from the separate phases of flight are not additive.
This analysis assumes all flights accrue the benefits. Benefits across
flight phases are not additive due to overlapping assumptions and
correlation.

4.  **Additional NextGen Benefits Assessments**

The above modeling and simulation results for the overall NAS and the
effectiveness of NextGen in making additional capacity available to
accommodate growing user demand involve somewhat aggregated treatments
of NextGen changes to the en route and terminal environments. This is
largely a reflection of the bundled nature of NextGen changes to the
baseline NAS in terms of operational impacts. The principal benefit
metric used in these system-wide simulation exercises is additional
capacity enabled, which allows the future NAS to accommodate growing
demand for air transportation services. However, there are additional
benefits of NextGen from addressing NAS delays during bad weather,
improving information such as that envisioned in both the NextGen and
FAA SWIM program to better manage Special Use Airspace (SUA), and
providing probabilistic traffic flow management methods to better manage
airspace and traffic flows during bad weather.

**Analysis of NextGen Benefits in Addressing NAS Delays in Bad Weather**

An analysis of NextGen benefits in bad weather focused on three actual
days of NAS operations: February 19^th^ 2004 (excellent weather, visual
conditions, throughout most of the continental US), May 10^th^ 2004
(some weather, a "medium" value of total flight delay), and July 27^th^
2004 (severe weather, the highest total delay observed during 2004).

The delay performance for the three weather days is shown in Figure 2.
These results suggest that NextGen decreases the average flight delay by
a factor of seven for the VMC results, a factor of 14 in a moderate
weather, and by a factor of about 4.5 in a poor weather day.

  ----------------------------------------------------- ------------------------------------------ -----------------------------------------------------
  ![](media/image46.wmf){width="2.0416666666666665in"   ![](media/image47.wmf){width="2.03125in"   ![](media/image48.wmf){width="2.0416666666666665in"
  height="1.7291666666666667in"}                        height="1.7395833333333333in"}             height="1.8020833333333333in"}

  ----------------------------------------------------- ------------------------------------------ -----------------------------------------------------

Figure 4. Average flight delay for the different weather days and NAS
configurations.

The Air Transport Association estimates that each minute of delay costs
approximately \$50/minute/flight (passenger value of time is not
included in that figure). As the demand set contains approximately
87,000 flights, at \$50/minute/flight, the daily delay savings is
approximately \$282 million/day in moderate weather, and \$239
million/day in severe weather, according to these results (see the above
cited JPDO Analysis in the docket for a greater detailed explanation as
to how these results were obtained).

**Analysis of the Benefits of Improved Information for SUA Management**

SWIM benefits were estimated for Special Use Airspace (SUA) resulting
from better information about SUA status provided to flight dispatchers
during the pre-flight planning phase. The existence of a SUA along a
planned route causes the dispatcher to choose a slightly longer route
than they would normally choose if the SUA did not exist. If the
dispatchers are told that a SUA is "cold" (i.e. not being used by the
military, so that it is open for civilian use), then they could plan a
shorter route than if they are told that the SUA is "hot" (i.e. in use
by the military, so that it is closed for civilian use). The excess
nautical miles were converted to time by dividing by the average speed
of the aircraft in cruise. This excess time was converted to dollars and
the result was annualized. The total cost of imperfect SUA information
is approximately \$45 million per year (see the above cited JPDO
Analysis in the docket for a greater detailed explanation as to how
these results were obtained).

**Analysis of the Benefits of Probabilistic Traffic Flow Management
during bad Weather**

The traffic flow management (TFM) concept uses an advanced,
trajectory-based probabilistic decision making approach. The TFM
initiatives are derived from detailed traffic and NAS analysis and this
approach supports more efficient use of airport capacity. Delay
reductions of 10-20 minutes per flight are expected to be typical. These
delay reductions could result in potential savings on the order of \$1
billion annually (see the above cited JPDO Analysis in the docket for a
greater detailed explanation as to how these results were obtained).

5.  **The Importance of ADS-B to Achieving the NextGen**[^155]

The NextGen investments are an inter-dependent group of improvements
that address the constraints described in section 6.2. The analysis
demonstrated the significant interdependency of performance between
airport surface, terminal area airspace and enroute airspace in
improving overall NAS capacity. Likewise, NextGen benefits are similarly
interdependent; investment in only one component, to the exclusion of
others, yields significantly less benefit than does investment in
interdependent capabilities.

Automatic Dependent Surveillance Broadcast (ADS-B) is a fundamental
building block of the NextGen air transportation system. ADS-B
technology, in conjunction with the Global Positioning System (GPS),
provides a highly accurate, timely (once per second), all weather,
NAS-wide system of broadcasting geographical position, altitude and
thrust vector from properly equipped aircraft and/or surface vehicles.
Aviation applications employ ADS-B data-link technology to provide
distinct aircraft or vehicle-specific identification, and operational
data in the air-to-air, air-to-ground, ground-to-air, and/or
ground-to-ground mode in all NAS domains (Terminal, Surface, En Route
and Oceanic). These digital ADS-B position reports can be received by
and used throughout the aviation community to enhance NAS operations,
while reducing overall operating costs. The enhanced surveillance
capability provided by ADS-B in turn enables many of the dramatic
benefits of NextGen. This dependency relationship, for the Surface and
Terminal & En Route domains is shown at a high level in Figures 5 and 6,
respectively.

![](media/image49.wmf){width="5.9840277777777775in"
height="4.125694444444444in"}

Figure 5 ADS-B Surface Benefits Flow to NextGen Capabilities

![](media/image50.wmf){width="5.990277777777778in"
height="4.602083333333334in"}

Figure 6 ADS-B Terminal & En Route Benefits Flow to NextGen Capabilities

Figures 5 and 6 show how basic ADS-B capabilities lead to direct impacts
in terms of NAS operations. The direct impacts, in turn, translate to
outcomes that can be observed which then can be aggregated to overall
benefits. These benefits are the building blocks to achieving many of
the NextGen key capabilities.

The high-level NextGen capabilities are composed of numerous operational
improvements (OIs). Each OI indicates a particular step towards
achieving one or more of the JPDO key capabilities (e.g.,
trajectory-based operations) and thus achieving one or more of the JPDO
national goals (e.g., capacity). The traceability of the benefits of
ADS-B to many of the JPDO OIs is another way to highlight the integral
nature of ADS-B to achieving the NextGen. This traceability is shown in
Figure 7.

![](media/image51.wmf){width="6.749305555555556in"
height="5.872916666666667in"}

Figure 7 ADS-B Enables a Wide Range of NextGen Operational Improvements

Figure 7 shows the pervasive impact of ADS-B across a variety of NextGen
OIs and across several domains. Whatever the benefits of ADS-B as a
stand alone investment are, ADS-B is vital to the success of NextGen.

# Initial Regulatory Flexibility Determination ADS-B

##  Introduction and Purpose of this Analysis

The Regulatory Flexibility Act of 1980 (Public Law 96-354) (RFA)
establishes "as a principle of regulatory issuance that agencies shall
endeavor, consistent with the objectives of the rule and of applicable
statutes, to fit regulatory and informational requirements to the scale
of the businesses, organizations, and governmental jurisdictions subject
to regulation. To achieve this principle, agencies are required to
solicit and consider flexible regulatory proposals and to explain the
rationale for their actions to assure that such proposals are given
serious consideration." The RFA covers a wide-range of small entities,
including small businesses, not-for-profit organizations, and small
governmental jurisdictions.

Agencies must perform a review to determine whether a rule will have a
significant economic impact on a substantial number of small entities.
If the agency determines that it will, the agency must prepare a
regulatory flexibility analysis as described in the RFA.

However, if an agency determines that a proposed or final rule is not
expected to have a significant economic impact on a substantial number
of small entities, section 605(b) of the 1980 RFA provides that the head
of the agency may so certify and a regulatory flexibility analysis is
not required. The certification must include a statement providing the
factual basis for this determination, and the reasoning should be clear.

The FAA believes that this proposal would result in a significant
economic impact on a substantial number of small entities. The purpose
of this analysis is to provide the reasoning underlying the FAA
determination.

Under Section 603(b) of the RFA, the analysis must address:

-   Description of reasons the agency is considering the action,

-   Statement of the legal basis and objectives for the proposed rule,

-   Description of the record keeping and other compliance requirements
    of the proposed rule,

-   All federal rules that may duplicate, overlap, or conflict with the
    proposed rule,

-   Description and an estimated number of small entities to which the
    proposed rule will apply,

-   Analysis of small firms' ability to afford the proposed rule,

-   Estimation of the potential for business closures,

-   Conduct a competitive analysis,

-   Conduct a disproportionality analysis, and

-   Describe the alternatives considered.

##  {#section-16 .unnumbered}

##  {#section-17 .unnumbered}

## 7.2 Reasons Why the Rule is Being Proposed {#reasons-why-the-rule-is-being-proposed .unnumbered}

Public Law 108-176, referred to as "The Century of Aviation
Reauthorization Act," was enacted December 12, 2003 (Pub. L. 108-176).
This law set forth requirements and objectives for transforming the air
transportation system to progress further into the 21^st^ Century.
Section 709 of this statute requires the Secretary of Transportation to
establish in the FAA a joint planning and development office (JPDO) to
manage work related to the Next Generation Air Transportation System
(NextGen). Among its statutorily defined responsibilities, the JPDO
coordinates the development and utilization of new technologies to
ensure that when available, they may be used to the fullest potential in
aircraft and in the air traffic control system.

The FAA, the National Aeronautics and Space Administration (NASA) and
the Departments of Commerce, Defense, and Homeland Security have
launched an effort to align their resources to develop and further the
NextGen. The goals of NextGen, as stated in section 709, are addressed
by this proposal and include:

\(1\) improve the level of safety, security, efficiency, quality, and
affordability of the NAS and aviation services;

\(2\) take advantage of data from emerging ground-based and space-based
communications, navigation, and surveillance technologies;

\(3\) be scalable to accommodate and encourage substantial growth in
domestic and international transportation and anticipating and
accommodating continuing technology upgrades and advances; and

\(4\) accommodate a wide range of aircraft operations, including
airlines, air taxis, helicopters, general aviation, and unmanned aerial
vehicles.

The JPDO was also charged to create and carry out an integrated plan for
NextGen. The NextGen Integrated Plan[^156], transmitted to Congress on
December 12, 2004, ensures that the NextGen system meets the air
transportation safety, security, mobility, efficiency and capacity needs
beyond those currently included in the FAA's Operational Evolution Plan
(OEP). As described in the NextGen Integrated Plan, the current approach
to air transportation, i.e., ground based radars tracking congested
flyways and passing information among the control centers for the
duration of the flights, is becoming operationally obsolete. The current
system is increasingly inefficient and large increases in air traffic
will only result in mounting delays or limitations in service for many
areas.

This growth will result in more air traffic than the present system can
handle. The current method of handling traffic flow will not be able to
adapt to the highest volume and density of it in the future. It is not
only the number of flights but also the nature of the new growth that is
problematic, as the future of aviation will be much more diverse than it
is today. For example, a shift of 2 percent of today's commercial
passengers to micro-jets that seat 4-6 passengers would result in triple
the number of flights in order to carry the same number of passengers.
Furthermore, the challenges grow as other non-conventional aircraft,
such as unmanned aircraft, are developed for special operations, e.g.
forest fire fighting.

The FAA believes that ADS-B technology is a key component in achieving
many of the goals set forth in the plan. This proposed rule embraces a
new approach to surveillance that can lead to greater and more efficient
utilization of airspace. The NextGen Integrated Plan articulates several
large transformation strategies in its roadmap to successfully creating
the Next Generation System. This proposal is a major step toward
strategically "establishing an agile air traffic system that
accommodates future requirements and readily responds to shifts in
demand from all users." ADS-B technology would assist in the transition
to a system with less dependence on ground infrastructure and
facilities, and provide for more efficient use of airspace.

## 7.3 Statement of the Legal Basis and Objectives {#statement-of-the-legal-basis-and-objectives .unnumbered}

The FAA's authority to issue rules regarding aviation safety is found in
Title 49 of the United States Code. Subtitle I, Section 106 describes
the authority of the FAA Administrator. Subtitle VII, Aviation Programs,
describes in more detail the scope of the agency's authority.

This rulemaking is promulgated under the authority described in Subtitle
VII, Part A, Subpart I, Section 40103, Sovereignty and use of airspace,
and Subpart III, section 44701, General requirements. Under section
40103, the FAA is charged with prescribing regulations on the flight of
aircraft, including regulations on safe altitudes, navigating,
protecting, and identifying aircraft, and the safe and efficient use of
the navigable airspace. Under section 44701, the FAA is charged with
promoting safe flight of civil aircraft in air commerce by prescribing
regulations for practices, methods, and procedures the Administrator
finds necessary for safety in air commerce.

This proposal is within the scope of sections 40103 and 44701 since it
proposes aircraft performance requirements that would meet advanced
surveillance needs to accommodate the projected increase in operations
within the National Airspace System (NAS). As more aircraft operate
within the U.S. airspace, improved surveillance performance is necessary
to continue to balance the growth in air transportation with the
agency's mandate for a safe and efficient air transportation system.

## 7.4 Projected Reporting, Record Keeping and Other Requirements {#projected-reporting-record-keeping-and-other-requirements .unnumbered}

We expect no more than minimal new reporting and record-keeping
compliance requirements to result from this proposed rule. Costs for the
initial installation of new equipment and associated labor constitute a
burden under the Paperwork Reduction Act and are accounted for in this
document.

## 7.5 Overlapping, Duplicative, or Conflicting Federal Rules {#overlapping-duplicative-or-conflicting-federal-rules .unnumbered}

We are unaware that the proposed rule will overlap, duplicate or
conflict with existing Federal Rules.

## 7.6 Estimated Number of Small Firms Potentially Impacted {#estimated-number-of-small-firms-potentially-impacted .unnumbered}

Under the RFA, the FAA must determine whether a proposed rule
significantly affects a substantial number of small entities. This
determination is typically based on small entity size and cost
thresholds that vary depending on the affected industry.

Using the size standards from the Small Business Administration for Air
Transportation and Aircraft Manufacturing, we defined companies as small
entities if they have fewer than 1,500 employees[^157].

We considered the economic impact on small-business part 91, 121, and
135 operators. Many of the General Aviation (GA) aircraft are operating
in part 91 are not for hire or flown for profit so we will not include
these operators in our small business impact analysis.

This proposed rule would become final in 2009 and fully effective in
2020. Although the FAA forecasts traffic and air carrier fleets to 2030,
our forecasts do not have the granularity to determine if an operator
will still be in business or will still remain a small business entity.
Therefore we will use current U.S. operator's fleet and employment in
order to determine the number of operators this proposal would affect.

We obtained a list of part 91, 121 and 135 U.S. operators from the FAA
Flight Standards Service[^158]. Using information provided by the U.S.
Department of Transportation Form 41 filings, World Aviation Directory
and ReferenceUSA, operators that are subsidiary businesses of larger
businesses and businesses with more than 1,500 employees were eliminated
from the list of small entities. In many cases the employment and annual
revenue data was not public and we did not include these companies in
our analysis. For the remaining businesses, we obtained company revenue
and employment from the above three sources.

The methodology discussed above resulted in the following list of 34
U.S. part 91, 121 and 135 operators, with less than 1,500 employees, who
operate 341 airplanes. Due to the sparse amount of publicly available
data on internal company financial statistics for small entities, it is
not feasible to estimate the total population of small entities affected
by this proposed rule. These 34 U.S. small entity operators are a
representative sample to assess the cost impact of the total population
of small businesses, who operate aircraft affected by this proposed
rulemaking.

## ![](media/image52.wmf){width="2.729861111111111in" height="4.831944444444445in"}7.7 Cost and Affordability for Small Entities {#cost-and-affordability-for-small-entities .unnumbered}

To assess the cost impact to small business part 91, 121 and 135
operators, we contacted manufacturers, industry associations, and ADS-B
equipage providers to estimate ADS-B equipage costs. We requested
estimates of airborne installation costs, by aircraft model, for the
output parameters listed in the [Equipment Specifications]{.underline}
section of the Regulatory Evaluation.

This proposed rule would become final in 2009 and fully effective in
2020. Although the FAA forecast traffic and air carrier fleets to 2030,
our forecasts do not have the granularity to determine if an operator
will still be in business or will still remain a small business entity.
Therefore we will use current U.S. operator's revenues and apply the
industry-provided costs in order to determine if this proposal would
have a significant impact on a substantial number of small entity
operators.

To satisfy the manufacturer's request to keep individual aircraft
pricing confidential, we calculated a low, baseline, and high range of
costs by equipment class. The baseline estimate equals the average of
the low and high industry estimates. The dollar value ranges consist of
a wide variety of avionics within each aircraft group. The aircraft
architecture within each equipment group can vary, causing different
carriage, labor and wiring requirements for the installation of ADS-B.
Volume discounting versus single line purchasing also affects the dollar
value ranges. On the low end, the dollar value may represent a software
upgrade or OEM option change. On the high end, the dollar value may
represent a new installation of upgraded transponder systems necessary
to assure accuracy, reliability and safety. We used the estimated
baseline dollar value cost by equipment class in determining the impact
to small business entities.

We estimated each operator's total compliance cost by multiplying the
baseline dollar value cost, by equipment class, by the number of
aircraft each small business operator currently has in its fleet. We
summed these costs by equipment class and group. We then measured the
economic impact on small entities by dividing the estimated baseline
dollar value compliance cost for their fleet by the small entity's
annual revenue. Each equipment group operated by a small entity may have
to comply with different requirements in the proposed rule depending on
the state of the aircraft's avionics. In the [ADS-B Out Equipage Cost
Estimate]{.underline} section of the Regulatory Evaluation we detail our
methodology to estimate operators' total compliance cost by equipment
group.

As shown in the following table, the ADS-B cost is estimated to be
greater than two percent of annual revenues for 12 small entity
operators and greater than one percent of annual revenues for 19 small
entity operators.

[]{.mark}

[]{.mark}

![](media/image53.wmf){width="5.716666666666667in" height="7.61875in"}

Thus, from this sample population, the FAA determined that a substantial
number of small entities would be significantly affected by the proposed
rule. Every small entity who operates an aircraft in the airspace
defined by this proposal would be required to install ADS-B out equipage
and therefore would be affected by this rulemaking.

##  Business Closure Analysis

For commercial operators, the ratio of present-value costs to annual
revenue shows that 7 of 34 small business air operator firms analyzed
would have rations in excess of five percent. Since many of the other
commercial small business air operator firms do not make their annual
revenue publicly available, it is difficult to assess the financial
impact of this proposed rule on their business. To fully assess whether
this proposed rule could force a small entity into bankruptcy requires
more financial information than is publicly available.

The FAA seeks comment, with supportive justification, to determine the
degree of hardship, and feasible alternative methods of compliance, the
proposed rule will have on these small entities.

## 7.9 Competitive Analysis {#competitive-analysis .unnumbered}

The aviation industry is an extremely competitive industry with slim
profit margins. The number of operators who entered the industry and
have stopped operations because of mergers, acquisitions, or bankruptcy
litters the history of the aviation industry.

The FAA analyzed five years of operating profits for the affected
small-entity operators listed above. We were able to determine the
operating profit for 18 of the 34 small business entities. The FAA
discovered that 33% of these 18 affected operator's average operating
profit is negative. Only four of the 18 affected operators had average
annual operating profit that exceeded \$10,000,000. These results are
shown in the following table.

![](media/image54.wmf){width="5.995138888888889in" height="2.93125in"}

In this competitive industry, cost increases imposed by this proposed
regulation would be hard to recover by raising prices, especially by
those operators showing an average five-year negative operating profit.
Further, large operators may be able to negotiate better pricing from
outside firms for inspections and repairs, so small operators may need
to raise their prices more than large operators. These factors make it
difficult for the small operators to recover their compliance costs by
raising prices. If small operators cannot recover all the additional
costs imposed by this regulation, market shares could shift to the large
operators.

Small operators successfully compete in the aviation industry by
providing unique services and controlling costs. To the extent the
affected small entities operate in niche markets enhances small entity's
ability to pass on costs. Currently small operators are much more
profitable than the established major scheduled carriers. This proposed
rule would offset some of the advantages of older aircraft lower capital
cost.

Overall, in terms of competition, this rulemaking reduces small
operators ability to compete. We request comments from industry on the
results of the competitive analysis.

## 7.10 Disproportionality Analysis {#disproportionality-analysis .unnumbered}

The disproportionately higher impact of the proposed rule on the fleets
of small operators result in disproportionately higher costs to small
operators. Due to the potential of fleet discounts, large operators may
be able to negotiate better pricing from outside sources for
inspections, installation, and ADS-B hardware purchases.

Based on the percent of potentially affected current airplanes over the
analysis period, small U.S. business operators may bear a
disproportionate impact from the proposed rule.

Comments received and final rule changes on regulatory flexibility
issues will be addressed in the statement of considerations for the
final rule.

## 7.11 Analysis of Alternatives {#analysis-of-alternatives .unnumbered}

##### Alternative One  {#alternative-one .unnumbered}

The status quo alternative has compliance costs to continue the
operation and commissioning of radar sites. The FAA rejected this status
quo alternative because the ground based radars tracking congested
flyways and passing information among the control centers for the
duration of the flights is becoming operationally obsolete. The current
system is not efficient enough to accommodate the estimated increases in
air traffic, which would result in mounting delays or limitations in
service for many areas.

##### Alternative Two {#alternative-two .unnumbered}

This alternative would employ a technology called multilateration.
Multilateration is a separate type of secondary surveillance system that
is not radar and has limited deployment in the U.S. At a minimum,
multilateration requires upwards of four ground stations to deliver the
same volume of coverage and integrity of information as ADS-B, due to
the need to \"triangulate\" the aircraft\'s position. Multilateration is
a process wherein an aircraft position is determined using the
difference in time of arrival of a signal from an aircraft at a series
of receivers on the ground. Multilateration meets the need for accurate
surveillance and is less costly than ADS-B (but more costly than radar),
but cannot achieve the same level of benefits that ADS-B can.
Multilateration would provide the same benefits as radar, but at a
higher cost.

[]{.mark}

##### Alternative Three {#alternative-three .unnumbered}

This alternative would provide relief by having the FAA provide an
exemption to small air carriers from all requirements of this rule. This
alternative would mean that the small air carriers would rely on the
status quo ground based radars tracking their flights and passing
information among the control centers for the duration of the flights.
This alternative would require compliance costs to continue for the
commissioning of radar sites. Air traffic controller workload and
training costs would increase having to employ two systems in tracking
aircraft. Small entities may request ATC deviations prior to operating
in the airspace affected by this proposal. It would also be contrary to
our policy for one level of safety in part 121 operations to exclude
certain operators simply because they are small entities. Thus, this
alternative is not considered to be acceptable.

####### Alternative Four {#alternative-four .unnumbered}

This alternative is the proposed ADS-B rule. ADS-B does not employ
different classes of receiving equipment or provide different
information based on its location. Therefore, controllers will not have
to account for transitions between surveillance solutions as an aircraft
moves closer or farther away from an airport. In order to meet future
demand for air travel without significant delays or denial of service,
ADS-B was found to be the most cost effective solution to maintain a
viable air transportation system. ADS-B provides a wider range of
services to aircraft users and could enable applications unavailable to
multilateration or radar.

# Trade Impact Assessment

The Trade Agreements Act of 1979 (Public Law 96-39) prohibits Federal
agencies from establishing any standards or engaging in related
activities that create unnecessary obstacles to the foreign commerce of
the United States. Legitimate domestic objectives, such as safety, are
not considered unnecessary obstacles. The statute also requires
consideration of international standards and, where appropriate, that
they be the basis for U.S. standards.

ICAO is developing a set of standards that are influenced by, and
similar to, the U.S. RTCA developed standards. Initial discussions with
the international community lead us to conclude that U.S. aircraft
operating in foreign airspace would not have to add any equipment or
incur any costs in addition to what they would incur to operate in
domestic airspace under this proposed rulemaking. Foreign operators may
incur additional costs to operate in U.S. airspace, if their national
rules, standards and, current level of equipage are different than those
required by this proposed rule. The FAA is actively engaged with the
international community to ensure that the international and US. ADS-B
standards are as compatible as possible. For a fuller discussion of what
other countries are planning with regards to ADS-B, see Section VII of
the preamble. By 2020 ICAO standards may change to harmonize with this
proposed rule and foreign operators will not have to incur additional
costs.

#  {#section-18 .unnumbered}

# 9.0 Unfunded Mandates Assessment {#unfunded-mandates-assessment .unnumbered}

Title II of the Unfunded Mandates Reform Act of 1995 (Public Law 104-4)
requires each Federal agency to prepare a written statement assessing
the effects of any Federal mandate in a proposed or final agency rule
that may result in an expenditure of \$100 million or more (adjusted
annually for inflation with the base year 1995) in any one year by
State, local, and tribal governments, in the aggregate, or by the
private sector; such a mandate is deemed to be a "significant regulatory
action." The FAA currently uses an inflation-adjusted value of \$128.1
million in lieu of \$100 million. This proposed rule is not expected to
impose significant costs on small governmental jurisdictions such as
state, local, or tribal governments but the FAA calls for comment on
whether this expectation is correct. However, this proposed rule would
result in an unfunded mandate because it would result in expenditures in
excess of an inflation-adjusted value of \$128.1 million. We have
considered three alternatives to this rulemaking, which are discussed in
section 4.0 and in the regulatory flexibility analysis in section 7.

[^1]: Costs at 3% present value range from \$1.9 billion to \$6.3
    billion.

[^2]: \$950 million at 3% present value.

[^3]: \$5.35 billion at 3% present value.

[^4]: \$3.13 billion at 3% present value.

[^5]: \$5.48 billion at 3% present value.

[^6]: \$2.1 billion at 3% present value.

[^7]: \$392 million when discounted by 3%.

[^8]: \$7.6 billion at 3% present value.

[^9]: \$2.3 billion at 3% present value.

[^10]: \$6.7 billion at 3% present value.

[^11]: U.S. based operators may likewise incur additional requirements
    if U.S. standards do not satisfy other government requirements. As
    of this writing, it appears U.S. standards are more stringent and
    therefore this situation will not occur.

[^12]: After exploring various back-up alternatives, the FAA currently
    believes

    maintaining a smaller set of secondary radar systems provides the

    greatest level of certainty. This is because we have long-standing

    experience with secondary surveillance radar systems and they are

    already in place. However, we may change our back-up strategy if we

    determine that other technologies are equally or more reliable, or

    provide other benefits over secondary surveillance radar systems.

[^13]: Surveillance and Broadcast Services Systems Engineering
    Separation Standards Working Group, Final Report on Operational
    Evaluation of 5 NM ADS-B to Radar Separation Services in Alaska,
    November 30, 2006.

[^14]: http://www.faa.gov/acm/acm10/reports/TwoYears/chap4.htm

[^15]: Exhibit 300 Attachment 2, Business Case Analysis Report for
    Future Surveillance, JRC Phase 2A,

[^16]: http://app.faa.gov/jrc/decisions_minutes/JRC05/JR50909f.pdf

[^17]: Surveillance Radar Cost Model Ground Rules and Assumptions in
    Support of ADS-B JRC 2A (September 2005), February 7, 2006, page 15
    (Draft).

[^18]: The analysis treats the difference between the cost of radar
    under a radar reference case (\$3.96 billion) and the cost of radar
    under the ADS-B alternative (\$2.8 billion) as a \$1.1 billion cost
    avoidance benefit of ADS-B.

[^19]: Surveillance and Broadcast Services Final Investment Decision:
    Segment 1, June 7, 2006 presentation to the JRC.

[^20]: Cost estimates presented to the JRC 2B were presented as risk
    adjusted present value or risk adjusted then year dollars. In table
    2 costs that were developed for the BCAR analysis are presented as
    point estimates in constant dollars.

[^21]: Surveillance and Broadcast Services Final Investment Decision:
    Segment 1, June 7, 2006 presentation to the JRC, pgs 11 and 31.

[^22]: \$3.6 billion present value.

[^23]: \$2.9 billion present value.

[^24]: JRC Record of Decision, June 7, 2006.

[^25]: Exhibit 300, Attachment 1, Final Program Requirements for
    Surveillance and Broadcast Services, Version 1.0, pg. 10, May 9,
    2006.

[^26]: ATO En Route Services, Surveillance and Broadcast Services
    Benefits Basis of Estimate, June 2006, FAA Air Traffic Organization.

[^27]: Segment dates are from briefing to JRC on June 7, 2006, pg. 8.

[^28]: JRC Record of Decision, June 7, 2006.

[^29]: ATO En Route Services, Surveillance and Broadcast Services
    Benefits Basis of Estimate, June 2006, pgs. 3-5.

[^30]: There are numerous Offshore Airspace Areas that are designated as
    Class A airspace and the boundaries of those airspace areas extend
    beyond 12 NM from the coastline of the U.S. and into international
    waters. Under agreement with ICAO, the U.S. provides ATC services in
    these areas and may designate the airspace accordingly in order to
    indicate to pilots the type of ATC services that may be provided.

[^31]: Hollinger, Kent V. and Marc Narkus-Kramer, "Expediting an
    Improved Performance Based NAS: The Rationale for Accelerating
    Avionics Equipment," Center for Advanced Aviation System
    Development, The MITRE Corporation, McLean, VA, December 2005.
    [www.mitre.org/work/tech_papers/tech_papers_05/05_1122/05_1122.pdf](http://www.mitre.org/work/tech_papers/tech_papers_05/05_1122/05_1122.pdf)

[^32]: Marais, Karen and Annalisa L. Weigel, "Encouraging and Ensuring
    Successful Technology Transition in Civil Aviation," Department of
    Aeronautics and Astronautics, Massachusetts Institute of Technology,
    Cambridge, MA, March 2006.
    <http://esd.mit.edu/wps/esd-wp-2006-07.pdf>

[^33]: TIS-B will rebroadcast radar hits of proximate aircraft to ADS-B
    In aircraft.

[^34]: Control Area: A control area is airspace wholly contained beyond
    the 12 mile limit whereby an ICAO state has been designated as the
    ATS authority for the control of air traffic

[^35]: Flight Information Region: FIR's designate regions for
    informational service\'s only, not ATC control.

[^36]: Memorandum of Agreement between Federal Aviation Administration,
    and Helicopter Association International, Platform/Helicopter
    companies, Platform Owners and Helicopter Operators to Enhance
    Communication, Weather and Surveillance Capabilities Gulf of Mexico.

[^37]: In the MOA, the platform/helicopter companies agreed to equip
    with "appropriate avionics and equipment to take advantage of FAA
    enhancements to the communications, weather reporting, and
    surveillance capabilities outlined in this Agreement."

[^38]: Scenarios are addressed in Section 3.0 Definition of Approach.

[^39]: Exhibit 300 Attachment 2, Business Case Analysis Report for
    Future Surveillance, JRC Phase 2A, pg. 35.

[^40]: http://esc.hanscom.af.mil/esc-ga/Products/DASR.htm

[^41]: http://www.faa.gov/ats/atb/sectors/surveillance/430/asde.html

[^42]: http://www.sensis.com/docs/128/

[^43]: \$1.9 billion at 3% present value.

[^44]: Exhibit 300 Attachment, Business Case Analysis Report for Future
    Surveillance, JRC Phase 2A, pg. 5.

    pg. 8

[^45]: Such as a weight penalty

[^46]: http://www.faa.gov/news/speeches/news_story.cfm?newsId=7649

[^47]: 2012 is dependent on the appropriate funds being available from
    assumption 6.

[^48]: Appendix 1.

[^49]: Appendix 2.

[^50]: 2005 FAA General Aviation and Air Taxi Survey.

[^51]: ibid.

[^52]: Appendix 3 contains the FAA U.S. Fleet Forecast.

[^53]: Appendix 4.

[^54]: The analysis begins with calculating historical retirement ages
    from individual US operated airplanes by serial number. The time-in
    service is totaled across all individual airplanes. The average
    retirement age is calculated from the total in service time in U.S.
    service divided by the number of airplanes.

[^55]: <http://www.airweb.faa.gov/Regulatory_and_Guidance_Library/rgTSO.nsf/0/574436908E9C4B5886256FB3004E0DF4?OpenDocument>

    <http://www.airweb.faa.gov/Regulatory_and_Guidance_Library/rgtso.nsf/0/3039F623D71C99F186257261006959E9?OpenDocument>

[^56]: In addition, the applicant must conduct an aircraft system safety
    assessment (SSA) to comply with 14 CFR parts 23, 25, 27 and 29 or
    develop the ADS-B Out broadcast data elements to at least a major
    failure classification for misleading information with RTCA DO-178B
    Level "C" software.

[^57]: **RTCA, Incorporated** is a not-for-profit corporation formed to
    advance the art and science of aviation and aviation electronic
    systems for the benefit of the public. The organization functions as
    a Federal Advisory Committee and develops consensus-based
    recommendations on contemporary aviation issues. The organization's
    recommendations are often used as the basis for government and
    private sector decisions as well as the foundation for many TSOs.

[^58]: Future upgrades of GNSS might include greater availability or
    accuracy of the signals. These types of upgrades may enable
    additional applications, improved use of existing applications (such
    as increased efficiency or availability of ADS-B enabled operations)
    or a reduction in aircraft separation; but what those applications
    are would be difficult to ascertain at this point. Generically
    speaking, an incremental improvement in the performance of the
    position source could allow us to incrementally improve our air
    traffic control procedures and thereby improve efficiency and
    capacity.

[^59]: Even though this scenario is designed to look at ADS-B Out
    adoption in isolation, in practice the availability of equipment
    offering only ADS-B Out technology may be limited. Therefore, in
    practice the cost of adopting ADS-B Out may include the voluntary or
    unavoidable purchase of some functionality not strictly required by
    the ADS-B Out regulation.

[^60]: The result of these different methodologies was a wide range of
    cost estimates. For the Final rule we need OEM help to narrow the
    cost estimate ranges.

[^61]: The manufacturer mentioned the worst case could be up to 200
    additional pounds of weight for a minimally equipped, analog
    aircraft attempting to be fully compliant with future navigation and
    surveillance upgrades. It is highly unlikely that anyone will choose
    to invest the money to upgrade their aircraft to that level of
    capability when it is likely to be retired before an operator could
    recover the investment.

[^62]: "[Economic Values for FAA Investment and Regulatory Decisions, A
    Guide]{.underline}", December 31, 2004.

[^63]: FAA Aerospace Forecast Table 18. "U.S. MAINLINE AIR CARRIER
    FORECAST ASSUMPTIONS". Values past 2020 were forecasted by ATO.

[^64]: Based on conversations with the Helicopter Association
    International (HAI) and FAA.

[^65]: http://www.faa.gov/data_statistics/aviation_data_statistics/general_aviation/

[^66]: The learning curve effect states that the more times a task has
    been performed, the less time will be required on each subsequent
    iteration. This relationship was first quantified in 1936 at
    Wright-Patterson Air Force Base in the United States. In the late
    1960s Bruce Henderson of the Boston Consulting Group (BCG) began to
    emphasize the implications of the experience curve for strategy and
    in 1972 published "Perspectives on Experience". This book explains
    the experience curve effect, which is an observation that the costs
    of virtually every class of products decline by a constant and
    predictable percentage over time, as a function of experience.
    Recently, in 1991, Charles J. Teplitz published the "The Learning
    Curve Deskbook" which provides a basic understanding of the
    underlying theory of learning curves, as well as ready access to
    commonly used learning curve models, formulas, and tables.

[^67]: "[American Methods of Aircraft Production]{.underline}", T.P.
    Wright, 1939.

[^68]: The rate of learning may be higher than the 80% presented in this
    regulatory evaluation. If so, the learning efficiencies may be under
    estimated.

[^69]: 80% learning has been a common occurrence for over 65 years since
    T.P Wright recognized the concept in 1939.

[^70]: Integration of data is part of the ADS-B In ground costs.

[^71]: Exhibit 300 Attachment 2 Business Case Analysis Report for Future
    Surveillance JRC Phase 2a, pg. 12.

[^72]: \$1.9 billion at 3% present value.

[^73]: \$1.4 billion at 3% present value.

[^74]: \$522 million less at 3% present value.

[^75]: \$1.5 billion at 3% present value.

[^76]: \$2.9 billion at 3% present value.

[^77]: \$1.5 billion at 3% present value.

[^78]: \$997 million at 3%.

[^79]: \$764 million at 3% present value.

[^80]: See Table A.1 of Appendix A

[^81]: \$442 million at 3% present value.

[^82]: See Table A.2 of Appendix A

[^83]: \$27 million at 3% present value.

[^84]: See Table A.3 of Appendix A

[^85]: \$186 million at 3% present value.

[^86]: See Table A.4 in Appendix A

[^87]: Surveillance/Positioning Backup Strategy Alternatives Analysis,
    Final Report, January 8, 2007.

[^88]: "approximately 20 minutes represents the highest level of average
    delay realized in actual practice even at highly congested airports,
    FAA Airport Benefit Cost Analysis Guidance, page 16, FAA Airport
    Benefit Cost Analysis
    http://www.faa.gov/regulations_policies/policy_guidance/benefit_cost/media/faabca.pdf

[^89]: Although we assume that the surveillance services would be
    available by 2013, we prefer to be conservative and assume these
    services are available at the end of 2013, so we don't start
    capacity benefits until 2014.

[^90]: \$946 million at 3% present value.

[^91]: \$158 million at 3% present value.

[^92]: The current tool is advisory in nature and is not currently on
    the tactical controller display. Future FAA plans call for
    incorporating the conflict detection algorithms onto the tactical
    display and modifying it to provide appropriate information to the
    tactical controller.

[^93]: Such as air carrier, air taxi and commuter, and general aviation.

[^94]: The number of handles is the average number of en-route IFR
    operations in the continental United States over five days in 2006
    including military. These five days were roughly 90% percentile
    busiest days in the NAS in 2006.

[^95]: Handle combinations is the number of handles times the number of
    handles less one divided by 2; i.e. the handle combination is
    n\*(n-1)/2, where n is number of handles obtained from the OPSNET
    data available at http://www.apo.data.faa.gov

[^96]: To estimate the reduced maneuver rate attributable to the ADS-B,
    a URET-like conflict probe was run on recorded CONUS-wide en route
    track and flight plans as generated by the Enhanced Traffic
    Management System (ETMS). This conflict probe is based on the
    Collaborative Routing Coordination Tools (CRCT), which has been
    developed to utilize ETMS data; the prediction accuracy of this tool
    (for sector loading) has been assessed in Lindsay (2003). Runs were
    made with the 8 nm (5 + 2\*1.5 nm buffer) radar surveillance bounds
    and 7 nm (5 + 2\*1.0 nm buffer) ADS-B bounds as determined above.
    These runs used a 10 minute lookahead so that conflicts were
    generally detected prior to controller action to resolve them. As
    with URET, each alert occurred in en route airspace, and would have
    been notified to an en route controller.

[^97]: This is the average number of conflict alerts that occurred over
    the five days in 2006, as shown in Table D.1.

[^98]: These are number of conflicts alerts that would occur at 8nm
    separation (or radar separation).

[^99]: This is the average number of conflict alerts that occurred over
    the five days in 2006, as shown in Table D.1.

[^100]: These are number of conflicts alerts that would occur at 8nm
    separation (or radar separation).

[^101]: ADS-B Benefits Enabled from Improved En Route Conflict Probe
    Performance, August 27, 2007, Mitre

    Corporation.

[^102]: Handle combos is the number of handles times the number of
    handles less one divided by 2; i.e. the handle combo is n\*(n-1)/2,
    where n is number of handles.

[^103]: This would be the number of conflict alerts estimated with 7nm
    separation (30,135) times 63.35% or the estimated percent of
    conflict alerts that controllers act on.

[^104]: \$1.8 billion at 3% present value.

[^105]: ATO En Route Services Surveillance and Broadcast Services Basis
    of Estimate, August 2007.

[^106]: \$1.8 billion at 3% present value.

[^107]: ATO En Route Services Surveillance and Broadcast Services Basis
    of Estimate, August 2007.

[^108]: \$441 million at 3% present value.

[^109]: ATO En Route Services Surveillance and Broadcast Services Basis
    of Estimate, August 2007.

[^110]: \$1.7 billion when discounted by 3%.

[^111]: ATO En Route Services Surveillance and Broadcast Services Basis
    of Estimate, August 2007.

[^112]: For more information on the methodology used to calculate this
    estimate, see "ADS-B Benefits Enabled from Improved en Route
    Conflict Probe Performance" dated August 27, 2007, in the docket
    established for this rulemaking. The specific data in this
    regulatory evaluation however, is more conservative than the data in
    the report just mentioned.

[^113]: MITRE Technical Report \# MTR 05W000082

[^114]: \$3.3 billion at 3% present value.

[^115]: \$2.9 billion at 3% present value.

[^116]: \$392 million at 3% present value.

[^117]: \$2.9 billion at 3% present value.

[^118]: \$3.3 billion at 3% present value.

[^119]: This includes \$4.0 billion for ADS-B Out, and \$533 million for
    ADS-B In.

[^120]: ATO En route Services Surveillance and Broadcast Services
    Benefits Basis of Estimate June 2006.

[^121]: With a 3% present value the estimated benefit would be \$2.1
    billion.

[^122]: See-and-avoid is when the pilot visually searches out the window
    for other aircraft, and alters flight path to avoid them if
    necessary.

[^123]: TCAS-II, which is required on all aircraft with more than 30
    seats, includes both traffic advisory and conflict resolution
    capabilities.

[^124]: TCAS-I is required on commuter aircraft of 10-30 seats provides
    conflict detection.

[^125]: For benefits that involve two aircraft, such as reducing the
    number of midair collisions, the likelihood of realizing benefits is
    dependent on both aircraft. This benefit requires not only that an
    aircraft have the capability to see other aircraft (CDTI) but that
    the conflicting aircraft is equipped with the avionics necessary to
    be seen (either ADS-B Out or a Transponder). The dependent CDTI
    equipage scenario is estimated by multiplying the independent CDTI
    equipage rate for a given user group by the rate for all other user
    groups including itself to create a matrix of values that define the
    probabilities for the possible pairings of aircraft.

[^126]: \$411 million at 3% present value.

[^127]: FIS-B will only be available to UAT data link equipped GA and
    Air Taxi aircraft. Larger aircraft with 1090 data link usually have
    weather radar and assistance from airline dispatchers, and are not
    considered in the analysis.

[^128]: Weather services such as XM weather, Anywhere WX and Siruis are
    commercially available today and do not need ADS-B In. Not all
    pilots have chosen to purchase these products. And so one might
    question whether operators would purchase ADS-B In to receive
    weather products. However, we expect that FIS-B will provide more
    functions than the current products on the market do and we assume
    that it would be cost beneficial for operators to purchase ADS-In to
    receive weather and other services available with ADS-B In.

[^129]: \$460 million at 3% present value.

[^130]: \$10.6 million at 3% present value.

[^131]: Exhibit 300, Attachment 2, Business Case Analysis Report for
    Airport Surface Detection Equipment, Model X (ASDE-X).

[^132]: \$159 million at 3% present value.

[^133]: \$392 million at 3% 7% present value.

[^134]: This application is at the conceptual stage. However, data on
    operations at Louisville, where UPS is testing Automatic Dependent
    Surveillance - Broadcast (ADS-B) technology on all 107 of their 757
    and 767 aircraft, do not support the expectation that ADS-B equipped
    aircraft would achieve more efficient inter-arrival spacing. Some
    statistical measures show slight improvement in 2004
    (post-implementation) over 2003 (pre-implementation) but no
    improvement when compared to 2002. All measures worsen in 2005 and
    2006. (Independent Evaluation Report: ADS-B, July 7, 2006.)

[^135]: \$670 million at 3% present value.

[^136]: Exhibit 300 Attachment 2 Business Case Analysis Report for
    Future Surveillance, JRC Phase 2a, pg. 6.

[^137]: Exhibit 300 Attachment 2 Business Case Analysis Report for
    Future Surveillance, JRC Phase 2a, pg. 10

[^138]: \$2.7 billion at 3% present value.

[^139]: \$5.5 billion at 3% present value.

[^140]: The fifth column shows the costs and benefits of the proposed
    rule, i.e. ADS-B Out incremental costs and benefits. User costs are
    a midpoint between high and low user costs.

[^141]: \$3.13 billion at 3% present value.

[^142]: 5.48 billion at 3% present value.

[^143]: This is the low avionics cost plus the ground costs (\$1.27
    billion + \$4.5 billion = \$5.77 billion)

[^144]: This is the high avionics cost plus the ground costs (\$7.46
    billion +\$4.5 Billion = \$11.96 billion)

[^145]: This is the low cost of avionics plus the ground costs less the
    radar baseline costs (\$1.27 billion + \$4.5 billion - \$2.96
    billion = \$2.81 billion).

[^146]: This is the high cost of avionics plus the ground costs less the
    radar baseline costs (\$7.46 billion + \$4.5 billion - 2.96 billion
    = \$9.0 billion).

[^147]: This is the low avionics cost plus the ground costs (\$.95
    billion + \$3.31 billion = \$4.26 billion)

[^148]: This is the high avionics cost plus the ground costs (\$5.35
    billion +\$3.31 Billion = \$8.66 billion)

[^149]: This is the low cost of avionics plus the ground costs less the
    radar baseline costs (\$.95 billion + \$3.31 billion - \$1.94
    billion = \$2.32 billion)

[^150]: This is the high cost of avionics plus the ground costs less the
    radar baseline costs (\$5.35 billion + \$3.31 billion - \$1.94
    billion = \$6.72 billion).

[^151]: This is the low avionics cost plus the ground costs (\$.67
    billion + \$2.4 billion = \$3.0 billion)

[^152]: This is the high avionics cost plus the ground costs (\$3.6
    billion +\$2.4 Billion = \$6.0 billion)

[^153]: This is the low cost of avionics plus the ground costs less the
    radar baseline costs (\$.67 billion + \$2.4 billion - \$1.22 billion
    = \$1.8 billion)

[^154]: This is the high cost of avionics plus the ground costs less the
    radar baseline costs (\$3.6 billion + \$2.4 billion - \$1.22 billion
    = \$4.8 billion).

[^155]: In addition to original JPDO analysis, this section adapts and
    builds upon material in "NAS-Wide\
    ADS-B Benefits Basis of Estimate," August 2005, FAA.

[^156]: A copy of the Plan has been placed in the docket for this
    rulemaking.

[^157]: 13 CFR Part 121.201, Size Standards Used to Define Small
    Business Concerns, Sector 48-49 Transportation, Subsector 481 Air
    Transportation

[^158]: AFS-260