Maritime Security: Partnering Could Reduce Federal Costs and Facilitate Implementation of Automatic Vessel Identification System
Published: 2004-07-23T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: 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.
section_title: What GAO Found
paragraphs: 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.

section_title: Letter
paragraphs: 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 2002 and by the  International Maritime Organization (IMO). 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  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 Union 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. 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. 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.
subsections: section_title: Background
paragraphs: 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 vessel- monitoring 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, destination, and cargo—from  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.
MTSA and Coast Guard regulations require that certain vessels on U.S.  navigable waterways install AIS equipment between January 1, 2003, and  December 31, 2004. 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.
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  high frequency (VHF) band reserved for maritime public correspondence  communications. 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. 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.
section_title: The Coast Guard Has Taken Advantage of Opportunities for Quick AIS Installation, but Much Work Remains
paragraphs: 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. 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.
subsections: section_title: First AIS Installations Have Taken Place Primarily in 10 VTS Areas
paragraphs: 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; 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 Houston- Galveston, 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  to be completed by December 2004. 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 vessel- monitoring 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.
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, availability of antenna towers, and costs to lease  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.”
section_title: Long-Range Planning for Nationwide AIS Installation Now Under Way
paragraphs: 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, 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. 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  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.
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.
section_title: Challenge and Opportunity Could Affect Nationwide AIS Development
paragraphs: 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.
subsections: section_title: Competing Proposals to Be Decided by FCC
paragraphs: 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.
section_title: Challenges Posed by FCC’s Decision Will Depend on Its Specifics
paragraphs: 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 shore- to-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  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.
section_title: Depending on FCC’s Response, Local Needs for AIS Data Create a Possible Cost-Sharing Opportunity
paragraphs: 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  involvement. Similarly, in 1996 a congressional conference committee  report directed the Coast Guard to review user fee options and public- private partnerships for its VTS program. 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.
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.
section_title: Conclusions
paragraphs: 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.
section_title: Recommendation for Executive Action
paragraphs: 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.
section_title: Agency Comments
paragraphs: 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.
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.
section_title: Appendix I: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Staff Acknowledgments
paragraphs: 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.