The many proposals and bills on this subject put forth over the years have distinguished two main alternatives to continued operation of the air traffic control system by a federal agency:
corporatization , which, in this context, generally refers to establishing air traffic services as a wholly owned government corporation or quasi-governmental entity; and privatization , which would entail creating some form of private ownership and control of an air traffic services corporation. While a proposed privatized model was offered as part of the FAA reauthorization bill considered by the House Transportation and Infrastructure Committee in the 114 th Congress (see H.R. 4441 ), Congress included no such proposals in reauthorizing FAA through the end of FY2017 ( P.L. 114-190 ). The United States Air Traffic Service Corporation Act (1995)

In January 1994, the Clinton Administration released its "Initiative to Promote a Strong Competitive Aviation Industry," largely adopting the work of the airline industry commission and the National Performance Review, including the recommendation to create a government corporation to carry out FAA's air traffic functions. This sentiment, however, largely shifted to general support of the FAA-managed system after labor gained collective bargaining rights following personnel reforms made in the 1990s. None of the ANSPs in other countries are comparable to FAA in terms of their size or complexity. Statistical analysis provided by CANSO offers a means to compare ANSPs in terms of productivity and cost-effectiveness. The study attributed service quality and performance improvements to technological modernization. Considerations for Further Debate

The prospect of reforming FAA air traffic services into a government corporation or private entity raises many unique challenges to be considered in crafting and debating enabling legislation. Corporate Framework and Governance

The organizational structure and managerial and financial oversight of a new air traffic services entity could take one of many forms. A P3 approach could be regarded as a hybrid between a government-owned corporation and a completely private entity, with both the federal government and aviation industry stakeholders sharing in financial and organizational oversight. Any property conveyed to the corporation that is located at an FAA technical facility would have been required to be reverted to federal government ownership and placed under the control the Secretary of Transportation if either the corporation determined that it no longer needed the property to carry out air traffic services or the Secretary determined that the reversion was necessary to protect the interests of the United States. Corporate Financing and FAA Funding

Historically, proposals to corporatize or privatize air traffic services in the United States have been intertwined with debate over the implementation of user fees for air traffic services. The legislation did not provide any explicit tax-preferred treatment to debt issued by the proposed corporation. These various elements could be combined to create safety regulations and policies for an independent air traffic services entity, whether it be a government corporation, a private corporation, or a public-private partnership.
Over the past 40 years, Congress has intermittently considered proposals to establish a government corporation or private entity to carry out air traffic functions currently provided by the Federal Aviation Administration (FAA). While the issue had been relatively dormant since a proposal offered by the Clinton Administration in the 1990s failed to gain the support of Congress, interest reemerged following budget sequester-related funding cuts to FAA in FY2013. In the 114th Congress, the House Transportation and Infrastructure Committee ordered H.R. 4441, an FAA reauthorization bill that proposed to establish a government-chartered air traffic services corporation, to be reported. However, the bill was never reported in the House, and the FAA extension act passed by Congress in July 2016 (P.L. 114-190) did not make any organizational reforms regarding air traffic services. Authorizations under that extension expire at the end of FY2017, and debate over air traffic services reform has arisen once more.
Many other countries have established government corporations, quasi-governmental entities, or private firms to perform air traffic services. While none of these air traffic service organizations are comparable to FAA in terms of their size or complexity, they represent a broad array of organizational models including a large number of wholly government-owned corporations, a public-private partnership model in the United Kingdom, a government-controlled joint stock company in Switzerland, and a fully private nonprofit entity controlled by aviation industry stakeholders in Canada.
Direct comparisons among these models have been limited. There does not appear to be conclusive evidence that any of these models is either superior or inferior to others or to existing government-run air traffic services, including FAA, with respect to productivity, cost-effectiveness, service quality, and safety and security. Certain corporate and private air traffic service providers have improved cost-effectiveness and performance as a result of access to financial markets to fund large-scale acquisition projects, and of faster implementation of technologies. In this regard, the tax status of a potential air traffic entity's debt could become a significant issue in the United States, as a privatized or a government-owned corporation could end up paying more to borrow in the financial market than the federal government does.
The prospect of reforming FAA air traffic services raises many unique challenges for congressional consideration, including
the framework and governance of a future air traffic services corporation; its organizational structure and elements; corporate financing and FAA funding mechanisms; measures to ensure a smooth transition; labor provisions to address legal rights of labor organizations while minimizing potential system disruptions; safety regulation and oversight of the corporation; measures to address corporate liability; and safeguards to assure equitable treatment to the wide array of system users.