Report to the Committee on Commerce, 

Science, and Transportation 

U.S. Senate 

United States Government Accountability Office

GAO

July 2004 MARITIME SECURITY

Partnering Could 

Reduce Federal Costs 

and Facilitate 

Implementation of 

Automatic Vessel 

Identification System 

GAO-04-868 
www.gao.gov/cgi-bin/getrpt?GAO-04-868.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Margaret 

Wrightson at (415) 904-2000 or 

WrightsonM@gao.gov. 

Highlights of GAO-04-868, a report to the 

Committee on Commerce, Science, and 

Transportation, U.S. Senate 

July 2004

MARITIME SECURITY

Partnering Could Reduce Federal Costs 

and Facilitate Implementation of 

Automatic Vessel Identification System 

Because the Coast Guard is in the early stages of progress toward 

nationwide AIS development, the total cost and completion time are 

uncertain. The Coast Guard has taken advantage of opportunities to bring 

AIS into service quickly in 10 areas where vessel-monitoring technology 

already exists, and it is simultaneously defining and planning for full 

nationwide coverage. The Coast Guard has only preliminary cost estimates 

for a nationwide system, because geographic and other factors will affect 

installation at different locations. The Coast Guard estimates that planning 

and testing will be completed, and a request for proposals from potential 

contractors issued, between December 2004 and February 2005. 

The Coast Guard faces both challenges and potential opportunities in its 

development of a nationwide AIS. Nationwide development depends in part 

on how FCC resolves a continuing dispute between federal agencies and 

MariTEL over issues including who should have access to the internationally 

designated AIS frequencies and for what uses. To help protect its licensed 

rights to certain frequencies, MariTEL generally seeks either sole control 

over the international standard AIS frequencies or shared control with ships 

and the federal government. The federal government seeks a resolution that 

will reserve the internationally designated frequencies for AIS use by 

government and nongovernment entities. FCC expects to respond in summer 

2004. This response—and whether it leads to any additional actions on the 

part of the interested parties—could affect the overall cost and pace of 

nationwide AIS development. Depending on FCC’s response, one factor that 

offers an opportunity to reduce federal costs is that some local port entities 

are willing to assume the expense and responsibility for AIS construction if 

they can use AIS data, along with the Coast Guard, for their own purposes. 

AIS Sends Detailed Vessel Information via Radio Signals (arrows) from Ship to Ship and 

Ship to Shore 

Source: CorelDraw, Adobe Illustrator, and U.S. Coast Guard.

As part of international efforts to 

ensure maritime safety and 

security—and to carry out its 

mandates under the Maritime 

Transportation Security Act of 

2002—the U.S. Coast Guard is 

developing an automatic 

identification system (AIS) that 

should enable it to monitor ships 

traveling to and through U.S. 

waters. For AIS to operate 

nationwide, ships need equipment 

to transmit and receive AIS signals, 

and the Coast Guard needs shore 

stations and designated radio 

frequencies to keep track of the 

ships’ identities and movements. 

Yet unresolved frequency issues 

between the Coast Guard and a 

private company, MariTEL, have 

come before the Federal 

Communications Commission 

(FCC). 

GAO reviewed federal agencies’ 

progress in developing AIS 

nationwide and identified certain 

challenges and opportunities in 

completing the work. 

To help reduce federal costs and 

speed development of AIS 

nationwide, GAO recommends 

that, depending on the FCC’s 

response, the Coast Guard seek 

and take advantage of 

opportunities to partner with local 

private and public organizations 

willing to develop AIS facilities on 

shore at their own expense. 
Page i GAO-04-868 Maritime Security 

Letter 1

Results in Brief 2

Background 4

The Coast Guard Has Taken Advantage of Opportunities for Quick 

AIS Installation, but Much Work Remains 9

Challenge and Opportunity Could Affect Nationwide AIS 

Development 13

Conclusions 19

Recommendation for Executive Action 19

Agency Comments 19

Appendix I GAO Contacts and Staff Acknowledgments 21 

GAO Contacts 21

Staff Acknowledgments 21

Figures 

Figure 1: Staffed VTS Control Room, Houston, Texas 5

Figure 2: The 10 U.S. VTS Areas and Number of Ports within Each 7

Figure 3: Information That Can Be Transmitted from Ship to Ship 

and Ship to Shore by Automatic Identification System 

Technology 11

Contents 
Page ii GAO-04-868 Maritime Security 

Abbreviations 

AIS automatic identification system 

FCC Federal Communications Commission 

IMO International Maritime Organization 

MOA memorandum of agreement 

MTSA Maritime Transportation Security Act of 2002 

NTIA National Telecommunications and Information Administration 

UHF ultrahigh frequency 

VHF very high frequency 

VTC vessel traffic center 

VTS vessel traffic service 

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Page 1 GAO-04-868 Maritime Security 

July 23, 2004 

The Honorable John McCain 

Chairman 

The Honorable Ernest Hollings 

Ranking Minority Member 

Committee on Commerce, Science, 

 and Transportation 

United States Senate 

To abide by international navigation safety agreements and federal law, 

promote safe navigation, and help secure America’s ports and waterways 

from terrorism, the U.S. Coast Guard is developing an automatic 

identification system (AIS) for monitoring vessels as they approach and 

travel in U.S. waters. This system, which uses radio signals sent from ship 

to ship and from ship to shore on designated frequencies, is required by 

the Maritime Transportation Security Act (MTSA) of 20021

 and by the 

International Maritime Organization (IMO).2

 For AIS to operate as the 

Coast Guard and international bodies intend, vessels need to install 

equipment that can send and receive AIS signals, stations on shore need to 

be built and staffed to monitor signals from vessels, and designated radio 

frequencies must be available for signal transmission. While the Coast 

Guard’s stated goal is to extend AIS coverage throughout U.S. waters, AIS 

coverage in the United States is currently limited primarily to 10 areas 

where, to aid safety and navigation, ship traffic is already monitored by 

vessel traffic service (VTS) systems. These areas, where vessels are 

monitored by radar and other means from a central location, do not 

include many of the nation’s major ports—for example Boston, Baltimore, 

or Charleston—and encompass only a fraction of the nation’s 12,375 miles 

of coastline and 25,000 miles of river or inland shoreline. In addition, the 

Federal Communications Commission (FCC)—the federal agency 

responsible for regulating interstate and international communications by 

 1

Pub. L. No. 107-295, 116 Stat. 2064, 2082-2084 (2002). 

2

IMO, an agency of the United Nations to which the United States belongs, is the 

international body responsible for improving maritime safety, including combating acts of 

violence or crime at sea. In December 2002, IMO adopted amendments to the International 

Convention for Safety of Life at Sea, 1974, to which the United States is also a party, 

requiring certain ships to carry AIS equipment to enhance maritime security. 

United States Government Accountability Office

Washington, DC 20548 
Page 2 GAO-04-868 Maritime Security 

radio, television, wire, satellite and cable—in 1998 auctioned the licenses 

to certain maritime radio frequencies, including the two frequencies 

designated by the International Telecommunication Union3

 for worldwide 

AIS communications, to a private company, MariTEL, Inc., for a 10-year 

term. Since then, the Coast Guard and MariTEL have negotiated over use 

of those frequencies and other issues. 

In September 2003, we identified a number of challenges to the Coast 

Guard’s development of AIS.4

 Given the system’s importance to homeland 

security, this report discusses (1) the progress being made by the Coast 

Guard and other federal agencies in developing an automatic identification 

system that covers U.S. navigable waters and (2) challenges and 

opportunities that these agencies may encounter in completing their work. 

To accomplish these objectives, we examined documents from federal and 

local government agencies and private companies, interviewed a wide 

range of officials, and visited locations where AIS is being implemented. 

We met with Coast Guard officials, including those responsible for 

administering the procurement of AIS equipment, defining the 

requirements for a nationwide system, and setting technical standards. We 

also met with or interviewed other federal officials, including FCC staff 

responsible for licensing the radio frequencies for AIS transmissions and 

St. Lawrence Seaway Development Corporation staff who help operate an 

integrated AIS in North America. We visited 3 of the 10 locations where the 

Coast Guard is currently installing AIS equipment.5

 We also attended a 

Coast Guard public meeting and an industry conference on AIS issues. We 

performed our work from October 2003 through June 2004 in accordance 

with generally accepted government auditing standards. 

Because the Coast Guard is early in its progress toward developing a 

nationwide AIS, the system’s total cost and full development schedule are 

 3

The International Telecommunication Union is an international organization within the 

United Nations system in which governments and the private sector work together to 

coordinate the operation of telecommunication networks and services and to advance the 

development of communications technology. 

4

See U.S. General Accounting Office, Maritime Security: Progress Made in Implementing 

Maritime Transportation Security Act, but Concerns Remain, GAO-03-1155T

(Washington, D.C.: Sept. 9, 2003). 

5

We visited VTS facilities at New Orleans, Louisiana; New York, New York; and Seattle, 

Washington. 

Results in Brief 
Page 3 GAO-04-868 Maritime Security 

uncertain. The Coast Guard is taking a two-track approach to creating a 

nationwide system: first, installing AIS equipment in the 10 areas where 

vessel-monitoring systems already exist and, second, taking steps to 

expand the system to additional locations. As of June 2004, the Coast 

Guard was using a portion of the funds appropriated to it for acquisition, 

construction, and improvements toward completing the installation of AIS 

equipment in VTS areas and toward planning and testing of shore 

equipment to be installed outside VTS areas. The Coast Guard intends to 

use a portion of the appropriated funds to pay for its initial installations 

beyond the current 10 VTS areas as well. The President’s budget request 

for fiscal year 2005 included $4 million for AIS. As of May 2004, the Coast 

Guard’s cost estimates for a nationwide system were preliminary, because 

geographic and other factors will affect installation of equipment at 

different locations. Nevertheless, the difference between current funding 

and the estimated total cost leaves a substantial amount still to be 

financed. The Coast Guard also estimates that planning and equipment 

testing will be completed between December 2004 and February 2005. The 

Coast Guard’s planning process, which includes review of public 

comments about the scope and structure of the system, will determine, 

among other decisions, which navigable waterways need AIS coverage, 

what equipment must be installed for those waterways, and what financing 

options should be pursued. 

The Coast Guard faces both challenges and opportunities in moving ahead 

with developing AIS nationwide. Development will depend in part on the 

specifics of an FCC response, expected in summer 2004, to address 

various unresolved AIS issues between several federal agencies and the 

private company MariTEL, including who should have access to the 

international designated AIS frequencies and for what maritime 

communications. After the Coast Guard and MariTEL failed to reach 

agreement on these issues in May 2003, MariTEL sought ways to help 

protect its licensed rights to certain frequencies. In general, the company 

seeks either sole control over the internationally designated AIS 

frequencies or shared control with the Coast Guard. The federal 

government is advocating an alternative proposal, under which FCC would 

allocate the internationally designated AIS frequencies exclusively to AIS 

for both government and nongovernment use. FCC’s actions to address 

this situation—and whether it leads other parties to initiate any challenges 

or appeals of FCC’s actions—could affect the overall cost and pace of 

nationwide AIS development. Depending on how FCC addresses the issues 

at hand and on whether FCC’s actions are challenged or appealed, one 

important factor that could offer an opportunity to reduce the federal 

government’s costs is whether certain local port entities that would benefit 
Page 4 GAO-04-868 Maritime Security 

from access to AIS ship data would be willing to assume some or all of the 

expense and responsibility for AIS equipment installation. Port entities in 

Los Angeles–Long Beach, California; Tampa, Florida; and Portland, 

Oregon, have already demonstrated or expressed such willingness. 

To help reduce federal costs and speed the development of AIS 

nationwide, we recommend that, depending on the outcome of the 

expected FCC response, the Commandant of the Coast Guard seek and 

take advantage of opportunities to partner with port entities willing to 

develop AIS systems at their own expense. 

AIS technology, which has been under development worldwide since the 

early 1990s to improve navigation safety, helps prevent collisions by 

enabling ships to electronically “see” and track the movements of similarly 

equipped ships and to receive pertinent navigational information from 

shore. Like other wireless technologies, AIS uses a portion of the radio 

frequency spectrum to carry information. In the United States, specific 

frequencies within the radio spectrum are allocated primarily by two 

agencies: FCC—an independent agency that regulates spectrum use for 

nonfederal users, including commercial, private, and state and local 

government users—and the National Telecommunications and 

Information Administration (NTIA), an agency within the Department of 

Commerce that regulates spectrum for federal government users. These 

agencies (1) decide how various frequencies are used and (2) assign the 

frequencies to specific users. FCC makes these assignments by issuing 

licenses to nongovernmental parties; NTIA does so by assigning specific 

frequencies to federal agencies that have radio communication needs. 

AIS is designed to improve upon information available through vesselmonitoring systems already in use. Existing VTS systems apply radar, 

closed-circuit television, radios, and other devices to monitor and manage 

vessel traffic from a central onshore location, much as an air traffic 

control tower does (see fig. 1). An AIS unit consists of a global navigation 

satellite system; computer hardware and software; three radio receivers; 

and one radio transmitter-receiver, or transceiver. The unit gathers vessel 

information—including the vessel’s name, identification number, 

dimensions, position, course and speed,6

 destination, and cargo—from 

 6

AIS measures “speed over ground,” or the speed a vessel is traveling relative to a fixed 

position. 

Background 
Page 5 GAO-04-868 Maritime Security 

shipboard instruments or from manual input and transmits it to receiving 

AIS stations installed on other ships or on shore. Radio frequencies, or 

channels, carry the information. AIS also requires considerable 

infrastructure on shore—including antennas and base stations equipped 

with electric power, transceivers, computers, and displays—to monitor 

vessel activity and transmit information or instructions back to vessels. In 

the United States, such infrastructure now exists only in areas where VTS 

systems operate. 

Figure 1: Staffed VTS Control Room, Houston, Texas 

MTSA and Coast Guard regulations require that certain vessels on U.S. 

navigable waterways7

 install AIS equipment between January 1, 2003, and 

 7

The St. Lawrence Seaway Development Corporation and its Canadian partner, the St. 

Lawrence Seaway Management Corporation, also require use of AIS by certain vessels in 

Seaway waters. This joint U.S.-Canadian system operates on channels 87B and 88B under 

assignments from NTIA and Industry Canada. See St. Lawrence Seaway Development 

Corporation regulations at 33 C.F.R. § 401.20. 

Source: U.S. Coast Guard.
Page 6 GAO-04-868 Maritime Security 

December 31, 2004.8 Coast Guard regulations implementing the law 

provide that vessels include (1) commercial vessels 65 feet long or more 

on international voyages, including all tankers regardless of tonnage; 

(2) passenger vessels of 150 tons or more; and (3) commercial vessels on 

strictly domestic U.S. voyages in the 10 VTS areas, which encompass 

approximately 10 percent of the U.S. ports recognized by the Department 

of Transportation’s Maritime Administration (see fig. 2). Currently 

excluded from Coast Guard regulations are fishing vessels and passenger 

vessels certified to carry 150 or fewer passengers. Regardless of itinerary, 

any private vessels not in commercial service, such as a pleasure craft, less 

than 300 gross tons are not required by Coast Guard regulations to carry 

AIS equipment. 

 8

See 33 C.F.R. 164.46 for which vessels need to carry AIS equipment. 
Page 7 GAO-04-868 Maritime Security 

Figure 2: The 10 U.S. VTS Areas and Number of Ports within Each 

Note: Number of U.S. Maritime Administration–recognized ports within each VTS area in 

parentheses. 

Conflict over the frequencies used for transmitting AIS signals in the 

United States has been developing for several years. In 1998, to promote 

flexibility in the use of maritime radio frequencies and to encourage 

development of competitive new services, FCC created and auctioned 

licenses to the remaining unassigned U.S. radio frequencies in the very 

Source: GAO and the U.S. Coast Guard Navigation Center.

Prince William Sound (2)

Los Angeles−Long Beach (6)

San Francisco (7)

Puget Sound (9)

Houston−Galveston (3)

Port Arthur (4)

Berwick Bay (0)

Lower Mississippi River (4)

New York (1)

St. Marys River (1)
Page 8 GAO-04-868 Maritime Security 

high frequency (VHF) band reserved for maritime public correspondence 

communications.9

 For approximately $7 million, MariTEL won the bid for 

these licenses. The announcements for the auction stated that potential 

bidders should be aware of international agreements and other issues that 

might affect the ability to use the licenses on the two specific 

internationally designated AIS frequencies, known as channels 87B and 

88B. Issues that could affect the licenses were not explicitly laid out in the 

announcements, but potential bidders were directed to a prior FCC 

document and specific federal regulations for assistance in evaluating the 

degree to which such issues may affect spectrum availability. Different 

interpretations of issues such as these may have contributed to the 

conflict that continues to exist between MariTEL and the Coast Guard. 

This conflict extends to the use of both frequencies. FCC regulations 

required the winning bidder to negotiate with the Coast Guard for the use 

of frequencies for AIS but did not specify any particular frequency. In 

March 2001, in response to FCC’s auction requirements, MariTEL and the 

Coast Guard signed a memorandum of agreement (MOA) that allowed the 

use of channel 87B for AIS in U.S. waters. MariTEL terminated the MOA in 

May 2003, however, after disagreements arose over interpretations of the 

MOA’s provisions, including technical properties of the frequencies that 

the Coast Guard could use for AIS. After termination of the MOA, MariTEL 

asserted that the Coast Guard had no authority to use channel 87B for AIS, 

but the Coast Guard maintains that an FCC announcement still gives it that 

authority.10 With respect to channel 88B, MariTEL asserts, in general, that 

it obtained through the FCC auction the exclusive rights to channel 88B in 

certain areas within approximately 75 miles of the U.S.-Canadian border, 

and it has petitioned FCC for a declaratory ruling to that effect. The Coast 

Guard, NTIA, and the Department of Transportation disagree and assert, in 

general, that channel 88B has already been allocated on a primary basis to 

the federal government. 

 9

Maritime public correspondence services are provided by companies to subscribing 

customers for ship-to-ship and ship-to-shore communications. Such communications do 

not include a company’s internal communications. 

10MariTEL has filed a $267 million damage claim with the Coast Guard for misappropriation 

of MariTEL’s licensed frequencies. 
Page 9 GAO-04-868 Maritime Security 

The total cost and time frame for the development of a nationwide AIS 

remain uncertain. As of June 2004, the Coast Guard’s efforts to install AIS 

equipment nationwide had followed two tracks: first, installing AIS quickly 

in the 10 VTS areas and, second, launching a widespread planning effort 

for the rest of the nation’s navigable waters. Having taken advantage of 

existing facilities, electronic systems, and plans for AIS development to 

enhance safety in the 10 VTS areas, the Coast Guard plans to complete AIS 

implementation in those areas by December 2004. At the same time, the 

Coast Guard has begun to plan for U.S. waters outside the VTS areas, 

defining the goals, technical requirements, and waterways and vessels to 

be covered under a nationwide AIS. The Coast Guard expects planning for 

the technical requirements to be completed between December 2004 and 

February 2005. The Coast Guard also estimates that the nationwide system 

could cost between $62 million and $165 million.11 According to the Coast 

Guard, the cost estimate is preliminary, because geographic and other 

factors are expected to significantly affect the cost of installation at 

different locations, and the impacts are yet to be determined. 

The first effort in the Coast Guard’s two-track AIS development has 

involved installing, testing, and operating AIS equipment in the 10 VTS 

areas. To enable monitoring of vessels carrying AIS, the Coast Guard 

accelerated onshore AIS installation under way in its navigation safety 

program. A combination of existing facilities, equipment, plans, and 

funding has allowed rapid establishment of AIS in the VTS areas. Since 

much of the AIS infrastructure for conventional safety monitoring (e.g., to 

avert collisions) is the same for security monitoring (e.g., to avert acts of 

terrorism), bringing AIS into service involved primarily adapting and 

modifying existing systems to accommodate their additional security 

purpose. AIS facilities are completely operational at Berwick Bay, 

Louisiana; Los Angeles–Long Beach, California;12 Prince William Sound, 

Alaska; and St. Marys River, Michigan. AIS is being tested along the lower 

Mississippi River in Louisiana, and it is partially operational at HoustonGalveston, Texas, and New York, New York. The facilities at Port Arthur, 

Texas; Puget Sound, Washington; and San Francisco, California, are under 

construction. The Coast Guard expects AIS installations at the VTS areas 

 11These sums represent the present values of expected acquisition costs. Unless otherwise 

noted, all cost figures cited are present values. 

12AIS in Los Angeles–Long Beach is fully functional, but it has not yet not been issued a 

license to transmit by FCC. 

The Coast Guard Has 

Taken Advantage of 

Opportunities for 

Quick AIS 

Installation, but Much 

Work Remains 

First AIS Installations 

Have Taken Place 

Primarily in 10 VTS Areas 
Page 10 GAO-04-868 Maritime Security 

to be completed by December 2004.13 To enhance safety and efficiency at 

the ports of Los Angeles and Long Beach, the Marine Exchange of 

Southern California, a nonprofit corporation formed to provide vessel 

arrival and departure information to the local maritime industry, took the 

initiative to install and pay for AIS on its own. The total cost to the Coast 

Guard for the installation of AIS equipment at the other 9 VTS areas comes 

to approximately $20.5 million. 

Bringing AIS into service in the 10 VTS areas should improve vesselmonitoring capability at these locations. Before AIS, VTS facilities relied 

on such means as radar, closed-circuit television, ship-to-shore voice 

communications via radio, and people with binoculars. Signals and other 

information from the monitoring equipment went to a central vessel traffic 

center (VTC), where the information was collated and where staff tracked 

ships’ movements. With AIS, for a vessel equipped with a properly 

operating AIS transceiver, VTC staff have access to so-called static 

information, which rarely changes, such as dimensions, vessel name, and 

identification number; dynamic information, which changes continuously, 

such as course and speed; and voyage-specific information such as cargo 

type, destination, and estimated time of arrival (see fig. 3). This detail 

allows VTC staff to immediately identify any transmitting ship, particularly 

if it is on a collision course with another ship or if it is headed toward a 

hazardous or restricted area. In some VTS areas, AIS also extends 

monitoring coverage over a wider radius than originally covered by VTS. 

On the lower Mississippi River, for example, AIS will cover more than 240 

miles along the river—from its mouth to Baton Rouge, Louisiana—rather 

than the 8 miles around New Orleans covered by the original VTS system. 

In New York, AIS equipment will allow vessels to be monitored farther out 

to sea than possible with radar monitoring. 

 13The Department of Homeland Security’s Science and Technology Directorate, working 

with the Coast Guard, built upon an existing AIS test facility in Miami to create a security 

demonstration project covering South Florida from Key West to Fort Lauderdale. The 

project, named Hawkeye, features coastal radar, visual and infrared cameras, and a ship-toshore AIS in a surveillance system aimed at stopping smugglers and terrorists from 

entering South Florida ports. 
Page 11 GAO-04-868 Maritime Security 

Figure 3: Information That Can Be Transmitted from Ship to Ship and Ship to Shore by Automatic Identification System 

Technology 

From installing AIS shore facilities in the VTS areas, the Coast Guard has 

learned that the two primary drivers of installation cost are port geography 

and vessel traffic. Specifically, because AIS radio signals transmit in 

straight lines, installation can be complicated by the amount of water to be 

covered, as well as by terrain features such as islands, bays, and 

peninsulas. In addition, secondary features at a site have an impact, 

including availability of electrical power, previous presence or absence of 

communications links,14 availability of antenna towers, and costs to lease 

 14Communications links might include telephone lines, television cabling, or fiber-optic 

cable. 

Source: CorelDraw, Adobe Illustrator, and U.S. Coast Guard.

Identification number

Call sign and name

Length and beam

Vessel type

Present position

Course and speed

Vessels's draft

Cargo type

Destination

Estimated arrival time
Page 12 GAO-04-868 Maritime Security 

or buy land for antenna towers. For example, after completing site surveys 

of the area, the Coast Guard estimated that installing AIS in Puget Sound—

an arm of the Pacific Ocean extending into Washington State that features 

many bays and islands and is surrounded by mountains—would likely cost 

$6.6 million. In contrast, the AIS installation at Berwick Bay, Louisiana, 

one of the first AIS installations completed by the Coast Guard, generally 

monitors a roughly 5-mile radius around a short stretch of the Atchafalaya 

River and surrounding waterways; this installation cost approximately $1 

million. On the basis of its experience installing AIS in the VTS areas, the 

Coast Guard estimates that installing AIS equipment nationwide could cost 

between $62 million and $165 million—a preliminary estimate that one 

Coast Guard official responsible for reviewing such programs 

characterizes as “ballpark.” 

At the same time the Coast Guard is completing installation of AIS 

equipment in the 10 VTS areas, it is also planning for nationwide AIS 

installation, in waters where most of the needed infrastructure is not now 

available. This planning consists of two primary components: 

• The Coast Guard will soon be defining the technical requirements of the 

system needed to meet both the safety and security missions of AIS, 

including how elaborate it will be. For example, will the system need to 

involve satellites to receive AIS signals beyond the range of stations on 

land,15 or will an installation that can receive signals only along the shore 

be adequate? The Coast Guard will also investigate whether AIS can share 

shore infrastructure, such as antenna towers, with systems in place or 

under development, such as its search-and-rescue communications system 

called Rescue 21.16 As of June 2004, the Coast Guard estimated it will be 

able to complete this planning sometime between December 2004 and 

February 2005. 

• The Coast Guard is also determining the extent of AIS coverage needed in 

its overall AIS strategy, including a reexamination of which vessels should 

carry AIS in U.S. waters outside of VTS areas. This process includes 

selecting which waterways will be covered (e.g., deciding whether 

 15The Coast Guard has awarded a contract to test the validity of satellite reception of AIS 

signals from as far as 2,000 miles of the U.S. coastline. 

16Rescue 21, now under development, is a system using enhanced VHF and ultrahigh 

frequency (UHF) radios and direction-finding equipment to speed rescue response to 

vessels in distress. 

Long-Range Planning for 

Nationwide AIS 

Installation Now Under 

Way 
Page 13 GAO-04-868 Maritime Security 

relatively small rivers and lakes will be covered); setting priorities for 

which waterways will be covered first (e.g., deciding whether large ports 

will receive coverage before open coastline); and identifying which 

additional vessels will be required to carry and operate AIS equipment 

(e.g., whether noncommercial, pleasure craft will still be outside AIS 

requirements). The Coast Guard has held public meetings and requested 

public comment on these issues and expects to complete its review of 

these comments by July 2004.17

Even after these planning efforts are completed, the Coast Guard will not 

be able to install AIS equipment outside VTS areas immediately. The 

factors that shape the cost of an AIS installation also shape the equipment 

requirements. For example, the more obstructions, such as mountains or 

tall buildings, that could block AIS signals, the more antennas will be 

required. At every location where the Coast Guard decides to install AIS 

equipment, it will have to evaluate the presence or absence of such design 

factors. Site surveys that detail local terrain and the volume and variety of 

vessel traffic will have to be carried out before the Coast Guard can 

determine a location’s precise equipment needs. 

As of June 2004, the continuing dispute between MariTEL and the Coast 

Guard over various frequency issues was in the hands of FCC, which 

expected to respond in summer 2004. At issue are competing views over 

the use of the internationally designated AIS frequencies. The 

commission’s response could involve any number of actions or conditions 

regarding the internationally designated AIS frequencies, especially on 

access to frequencies needed to carry AIS information. FCC’s specific 

findings could lead to varied technical, cost, and legal implications for AIS 

installation and operation, including potential delay. Depending on how 

FCC responds, and any subsequent actions by the interested parties, one 

factor that offers an opportunity to lower the federal government’s costs is 

the demonstrated or expressed willingness of certain local port entities to 

shoulder the expense and responsibility for AIS installation if they, along 

with the Coast Guard, can use AIS data for their own purposes. 

 17The Coast Guard issued a temporary interim rule on July 1, 2003, outlining its MTSA 

implementation plans and setting forth initial AIS requirements, which apply primarily to 

commercial vessels on international voyages and traveling in U.S. VTS areas. It also sought 

public comment on how best to extend and implement AIS requirements on the remaining 

U.S. navigable waters for vessels not on international voyages. See 68 Fed. Reg. 39,353 

(2003). 

Challenge and 

Opportunity Could 

Affect Nationwide AIS 

Development 
Page 14 GAO-04-868 Maritime Security 

Since 2003, there have been a number of petitions, proposals, and other 

actions put before FCC on who may and should use channels 87B and 88B 

and for what purposes. In October 2003, for example, MariTEL petitioned 

FCC seeking a ruling that would prohibit transmission on channels 87B 

and 88B by entities other than those authorized by MariTEL. In this 

petition MariTEL asserts, among other things, that the termination of the 

memorandum of agreement ended the Coast Guard’s right to use channels 

for which MariTEL holds licensing rights. The company further contends 

that transmissions by entities other than those authorized by MariTEL 

would interfere with its other maritime frequency licenses and prevent its 

benefiting from the investment it made at the auction. On behalf of the 

Coast Guard and the Department of Transportation, NTIA also petitioned 

FCC in October 2003, opposing MariTEL’s petition and proposing instead 

that FCC allocate channels 87B and 88B exclusively to AIS for government 

and nongovernment use. The government’s position was that navigation 

safety and homeland security would be compromised if the United States 

and the maritime industry did not have unrestricted access to the 

frequencies designated by the International Telecommunication Union for 

AIS use worldwide. 

Then in February 2004, citing a desire to protect its licensed rights and to 

reach a quick “resolution to the AIS frequency controversy,” MariTEL 

submitted a proposal to FCC, “to share its licensed rights to channels 87B 

and 88B for use by ship stations and by the USCG at no cost.” In this 

proposal, MariTEL generally agreed with NTIA’s proposal to use channels 

87B and 88B only for AIS, but unlike NTIA, it sought to limit access to the 

signals to ships, MariTEL, the Coast Guard, and the St. Lawrence Seaway 

Development Corporation. In other words, under this proposal, unless 

authorized by MariTEL, the Coast Guard and the St. Lawrence Seaway 

Development Corporation would be the only entities allowed to use AIS 

information received by a shore station. In effect, under this proposal, the 

transmission and receipt of AIS signals by other entities, such as marine 

exchanges, port authorities, or state and local government agencies, would 

require MariTEL’s consent. 

FCC has been gathering public comment from groups representing vessel 

pilots, port authorities, ship and barge operators, and others on these 

competing proposals, and a response is expected in summer 2004. The 

implications of this response for nationwide AIS development will depend 

on just how the commission resolves the competing proposals. 

Competing Proposals to Be 

Decided by FCC 
Page 15 GAO-04-868 Maritime Security 

If FCC allocates the internationally designated frequencies exclusively to 

AIS use but limits access to ships, MariTEL, the Coast Guard, and the St. 

Lawrence Seaway Development Corporation, other organizations will no 

longer be able to use the signals and would therefore have no incentive to 

pay for installing AIS infrastructure. Such loss of incentive would likely 

mean the loss of federal cost-sharing opportunities, potentially closing off 

a possible long-term cost-reduction strategy in the development of AIS 

nationwide. For example, an official of the Merchants Exchange of 

Portland told us that the exchange would not be willing to pay for AIS 

facilities unless access to AIS data is unrestricted. In addition, according 

to an AIS consultant, enforcing a ban on parties other than MariTEL and 

the federal government to receive AIS signals at shore stations, as 

MariTEL has requested, could prove impossible, because an AIS receiver 

that is only receiving signals cannot be detected by an enforcement 

authority. 

For its part, MariTEL maintains that it should be able to protect its 

investors and to profit from the licenses it won and that AIS can be 

operated as required by FCC’s preauction rules. The company also 

maintains that even if FCC grants MariTEL’s proposal for shared access to 

the internationally designated AIS frequencies, technical issues could still 

harm the company’s ability to use other frequencies for which it holds 

licenses. In its February 2004 proposal, MariTEL contends that FCC rules 

now permit an AIS transmission technology that causes interference with 

maritime communications on channels adjacent to 87B and 88B. The 

company’s proposal asserts that such interference impairs non-AIS shoreto-ship communications, with significant impact to MariTEL’s ability to 

use its licensed spectrum, including its construction of a wide-area radio 

system for maritime services. 

The Coast Guard argues that transmitting AIS signals on frequencies other 

than those internationally designated could compromise navigation safety 

and homeland security and complicate nationwide AIS development 

already under way using channels 87B and 88B. The Coast Guard cites 

examples such as the following: 

• A ship traveling near or in U.S. waters may have to decide between 

broadcasting and receiving signals on the international frequencies—to 

“see” foreign vessels operating under international frequency 

requirements—and United States–specific frequencies—to “see” domestic 

vessels operating under U.S. frequency requirements. The inability of 

vessels to broadcast and monitor the U.S frequencies and the 

Challenges Posed by FCC’s 

Decision Will Depend on 

Its Specifics 
Page 16 GAO-04-868 Maritime Security 

internationally designated AIS frequencies simultaneously heightens the 

risk of collisions. 

• Until a fully automated frequency management system has been 

established nationwide, the use of frequencies other than channels 87B 

and 88B would require transmitting foreign ships to manually change 

frequencies when approaching U.S. shores. According to the Coast Guard, 

such so-called manual channel switching is cumbersome and vulnerable to 

human errors and, if a ship’s crew fails to change to the U.S. channel when 

necessary, could leave the ship “invisible” to ships in the same waters 

broadcasting on the U.S. frequency. 

• Any U.S. channel management plans that become necessary would, the 

Coast Guard believes, impair existing operations in the border regions 

with Canada and Mexico, as well as AIS communications with 

international vessels operating within or near U.S. waters. For example, 

the St. Lawrence Seaway AIS system, jointly operated by the United States 

and Canada, is viewed by the Coast Guard as a complement to its 

nationwide AIS. The Seaway system, however, operates on channels 87B 

and 88B, and any U.S.-specific frequencies would reduce the efficiency of 

this international shipping thoroughfare. 

• Transmissions on channels 87B and 88B from vessels operating outside 

U.S. jurisdiction would interfere with the effective use of channels 87B and 

88B within the United States. According to the Coast Guard, such 

interference would encumber four frequencies in U.S. coastal areas 

instead of just the two internationally designated frequencies. 

Finally, any additional actions by the interested parties stemming from 

specifics of FCC’s response could slow or otherwise affect nationwide AIS 

development. 

An opportunity that may help the Coast Guard speed AIS installation at 

lower cost to the federal government is potential partnerships between the 

Coast Guard and local port entities. For projects like AIS whose costs and 

benefits extend 3 or more years, the Office of Management and Budget 

instructs federal agencies, including the Coast Guard, to consider 

alternative means of achieving program objectives, such as different 

methods of providing services and different degrees of federal 

Depending on FCC’s 

Response, Local Needs for 

AIS Data Create a Possible 

Cost-Sharing Opportunity 
Page 17 GAO-04-868 Maritime Security 

involvement.18 Similarly, in 1996 a congressional conference committee 

report directed the Coast Guard to review user fee options and publicprivate partnerships for its VTS program.19 In carrying out these directives, 

the Coast Guard learned of potential partnership opportunities. 

The initiative for the actual partnerships has come mainly from the local 

port entities following their interactions with the Coast Guard on 

navigation safety issues. As a part of the VTS program, the Coast Guard 

has been performing a series of safety assessments at U.S. ports to help 

determine if additional VTS areas are warranted. In a number of cases, 

when the Coast Guard determined that a federal VTS was not warranted, 

local entities approached the Coast Guard for assistance in setting up their 

own vessel-monitoring system. Coast Guard assistance has ranged from 

full partnerships on vessel traffic management systems, to memorandums 

of understanding regarding uses of local vessel-monitoring systems, to 

advice and counsel on possible local efforts. 

The offers from port entities have come at a number of locations and 

reflect a realization that vessel monitoring can provide a range of benefits. 

Entities have explored partnership with the Coast Guard at ports including 

Baltimore, Maryland; Charleston, South Carolina; Corpus Christi, Texas; 

Delaware Bay, Delaware, Pennsylvania, and New Jersey; Hampton Roads, 

Virginia; Los Angeles–Long Beach, California; Portland, Oregon; San 

Diego, California; and Tampa, Florida. Given the level of interest, these 

partnerships offer an alternative to exclusive federal involvement in 

nationwide AIS development. Entities at some of the listed locations have 

used, or want to use, AIS data about incoming vessels to improve port 

efficiency, for example, by helping schedule tugs or dock workers; to 

improve safety by mitigating risks uncovered during the Coast Guard’s 

safety assessments; and to increase their own security by monitoring 

vessels as they approach the port. Some of these entities have installed 

AIS or similar systems and have offered to share their information with the 

Coast Guard. Such work relieves the Coast Guard from having to carry out 

its own installation of AIS shore stations in certain locations, thus 

accelerating and facilitating nationwide AIS implementation. 

 18Office of Management and Budget, Guidelines and Discount Rates for Benefit-Cost 

Analysis of Federal Programs, Circular A-94, revised October 29, 1992. 

19H.R. Conf. Rep. No. 104-785 at 29 (1996). 
Page 18 GAO-04-868 Maritime Security 

As of June 2004, some of the port entities that either used AIS or planned 

to do so included the following: 

• The Marine Exchange of Southern California, which provides vessel 

information at the ports of Los Angeles and Long Beach, California, to 

support port safety and the efficient movement of commerce. As a part of 

that support, the marine exchange financed, with port pilots, and built the 

VTS system at Los Angeles–Long Beach and purchased and installed AIS 

equipment to that system. The Marine Exchange and the Coast Guard 

share information received on the AIS equipment. The Coast Guard 

estimated that the cost of installation at Los Angeles–Long Beach was 

comparable to the Coast Guard’s installation at San Francisco, which the 

Coast Guard estimates at $2.2 million. 

• The Tampa (Florida) Port Authority, which currently operates a vessel 

traffic advisory service. In 1997 the authority installed an earlier version of 

AIS that did not meet current international or Coast Guard standards but 

was designed to help the harbor pilots and vessel masters as they 

navigated in the Tampa Bay channels. The port authority recently 

requested a grant from the state of Florida to upgrade its AIS equipment to 

international and Coast Guard standards so as to improve security at the 

port of Tampa. The port authority has expressed willingness to share AIS 

information with the Coast Guard when its system becomes operational. 

• Merchants Exchange of Portland, Oregon, which has expressed a desire to 

build an AIS system around Portland and the Columbia River as a means 

of supplying information on vessel movements to interested port entities. 

The goal is again to improve the efficiency of port operations. According 

to an exchange official, Merchant Exchange would be willing to share AIS 

information with the Coast Guard but would not build the facility until the 

conflict over AIS transmission frequencies is settled. 

In all three cases, the local port entity has already paid, or is willing to pay, 

for AIS installation, but the port entities’ ability to use AIS information 

depends on the coming FCC response. Although the local entities are 

building systems for their own purposes, all are sharing, or are planning to 

share, AIS information with the Coast Guard when the systems are 

complete. For example, the initiative taken by the Marine Exchange of 

Southern California alone likely saved the federal government $2.2 million 

for AIS installation. The more local port organizations that are willing to 

pay for the purchase and installation of AIS facilities, the more the Coast 

Guard can save on nationwide AIS installation. If the FCC response does 

not allow these entities to make unrestricted use of AIS information, they 

are likely to be less willing to invest in such facilities. 
Page 19 GAO-04-868 Maritime Security 

The development of AIS nationwide is an important step in the overall 

effort to increase port safety and security. The Coast Guard has made an 

expeditious start with its installations at VTS areas and its continued 

planning for additional coverage, but before the system can be fully 

implemented, the Coast Guard faces a number of challenges. It must make 

some key decisions to determine AIS’s technical requirements, waterway 

coverage, and vessels to be equipped with AIS. The dispute with MariTEL 

must be resolved, and the Coast Guard must obtain financing for 

installation nationwide. Pending the outcome of FCC’s response, financing 

is one area where the Coast Guard may find help in meeting its challenges. 

Although the Coast Guard did not actively pursue cost-sharing options 

under the VTS program, by actively doing so now, it could potentially 

accomplish its nationwide AIS installation goals more quickly and reduce 

installation costs to the federal government. 

To help reduce federal costs and speed development of AIS nationwide, 

we recommend that, depending on the outcome of the expected FCC 

response, the Secretary of Homeland Security direct the Commandant of 

the Coast Guard to seek and take advantage of opportunities to partner 

with organizations willing to develop AIS systems at their own expense. 

We provided a draft of this report to the Department of Homeland 

Security, the Coast Guard, and FCC for their review and comment. The 

Coast Guard and FCC generally agreed with the facts presented in the 

report and offered technical comments that were incorporated into the 

report where applicable. While agreeing with our recommendation, the 

Coast Guard also said that developing partnerships would face challenges 

such as ensuring that locally built systems meet all Coast Guard 

requirements, dealing with reluctant partners, or developing partnerships 

that maximize savings to the federal government. Given our assumption 

that the Coast Guard would not sacrifice AIS capability or standards in 

developing partnerships, we agree that developing partnerships will not 

necessarily be easy. We continue to believe, however, that doing so with 

willing local entities is in the public interest, and we continue to be 

encouraged in this regard by the level of interest in partnering with the 

Coast Guard that we found in the VTS program. 

Conclusions 

Recommendation for 

Executive Action 

Agency Comments 
Page 20 GAO-04-868 Maritime Security 

As arranged with your office, unless you publicly announce its contents 

earlier, we plan no further distribution of this report until 15 days after its 

issue date. At that time, we will send copies of this report to the 

Department of Homeland Security and the Federal Communications 

Commission. We will also make copies available to others upon request. In 

addition, this report will also be available at no charge at GAO’s Web site 

at http://www.gao.gov. 

If you or your staffs have any questions about this report, please contact 

me at (415) 904-2200 or at wrightsonm@gao.gov or Steve Calvo, Assistant 

Director, (206) 287-4800 or at calvos@gao.gov. Key contributors to this 

report are listed in appendix I. 

Margaret T. Wrightson 

Director, Homeland Security 

and Justice Issues 
Appendix I: GAO Contacts and Staff 

Acknowledgments 

Page 21 GAO-04-868 Maritime Security 

Margaret Wrightson (415) 904-2200 

Steven Calvo (206) 287-4800 

In addition to those named above, Jonathan Bachman, Chuck Bausell, 

Ellen W. Chu, Mathew Coco, Geoffrey Hamilton, Anne Laffoon, and Jeffrey 

Larson made key contributions to this report. 

Appendix I: GAO Contacts and Staff 

Acknowledgments 

GAO Contacts 

Staff 

Acknowledgments 

(440332) 
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