AeroNav Gets to 'Splain Itself
....This week — on Tuesday — the FAA's AeroNav charting division will try to untangle the PR mess it has made of possible plans to charge vendors for access to digital charting products. We've reported and blogged on this previously.
We've since learned a bit more, albeit with no help from the FAA. First, here's the section of the U.S. code that describes AeroNav's required business plan. While I'm sending you afield, take a look at this excellent webinar by Seattle Avionics' Steve Podradchik. It summarizes everything nicely. As for the code, I'd point you at paragraph 2 in section F and paragraph C in section G.
To summarize, AeroNav is required to recover costs for producing and distributing navigation charts and the management of databases to support that work. But it is specifically prohibited from charging for the underlying flight data used to produce those procedures and charts. (The raw data comes from the procedures branch, among other sources.) This, evidently, is already paid for by the taxpayer-funded FAA general budget.
So what's changing here? AeroNav has always charged for paper charts and sometime around 2003 or so, it made available digital charts—the d-TPP—on DVD, which it also charged for. You could—and still can—buy the entire U.S. coverage for under $10 for one cycle. When the iPad and other tablets arrived, the app writers simply got the digital data, adapted it to their apps and finally, we had a good digital chart viewer.
You can see where this rolls. If an app company spends $200 a year for the DVDs, divide that by even a thousand users and the unit cost is 20 cents—basically free. And when AeroNav offered downloadable versions of the d-TPP, the product was absolutely free. So all of sudden, what AeroNav was able to charge several hundred dollars for in paper charts has evaporated, eviscerated by a digital revolution no one saw coming, except for maybe Steve Jobs. Against paper chart sales in freefall, AeroNav still has its overhead to maintain, but it's basically been gutting its own paper sales by giving away—at cost or free—the digital equivalent. This trend will accelerate. What appears to be happening is that AeroNav wants to reverse the bleeding by assessing charges for digital data beginning next April.
But here's where things get murky. If AeroNav has to recover its costs—and the code clearly says it does—what's in that cost recovery? If I pay $5.95 for an approach plate booklet, what overhead does AeroNav charge against that break-even price? Are they double dipping here and charging a portion for what they can't legally bill the public for? And if they now want to charge application writers for digital chart data that these businesses enhance and sell, what overhead goes into that charge? Are they just supporting the large cartography staff necessary to turn raw data into finished charts or are they covering other expenses?
Frankly, I doubt there's anything nefarious going on here. AeroNav digital prices have been so low that's it hard to see how they even break even. Their paper products are competitive with Jeppesen, but not necessarily much cheaper. Heretofore, AeroNav has been one of the better divisions in the FAA to deal with—at least for us—and I think they genuinely want a solution that works for everyone.
Where it ran off the rails, however, is that they announced these changes out of the blue and have steadfastly refused to answer any substantive follow-up questions on the topic. The FAA press office simply hasn't returned phone calls or e-mails. (We've sent several of each.) And they've declined to grant our request to attend this week's meeting. It's closed to the press and public. We also recently learned that AeroNav tried to execute non-disclosure agreements with some vendors, a few of which have declined. I suspect the NDAs were signed by some vendors.
Why is a taxpayer-funded government agency trying to operate in the dark like this? It makes no sense. How did we get to the point that we accept that agencies can close such proceedings? Sooner or later, someone in the Congressional GA caucus will get wind of this, if that hasn't happened already, and what should have been a simple, collegial solution will become a political circus.
This week's meeting will have to address a number of issues. First, AeroNav will have to explain itself. Clearly, with paper chart sales declining, it has a revenue problem. How's it going to support its cartography operation with declining sales? A for-profit publisher would just cut costs and probably staff, but can AeroNav do the same work with less? Or will it simply divide its projected shortfall among all the data buyers and send them a big invoice? Or will there be tiered pricing? Or some other plan? Will it jack up the price of paper charts to meet overhead costs?
Understandably, AeroNav needs to hear from vendors and interested companies to figure this out. But what's missing from that process is a public advocate without a vested interest. And that's why the meetings should be open to the press and public. (Our FOIA request for the budget is in the mail.)
The FAA said all along that it would maintain a web site where charts could be viewed, but we don't know if they'll be printable or downloadable en mass, free or pay-per-view or what. AeroNav may not know, either. There's nothing stopping AeroNav from offering its own app and competing directly with the private sector, charging its break-even prices. To me, the best outcome would be an in-the-open tiered pricing structure (no NDAs) that makes it possible for the likes of ForeFlight, Seattle Avionics, WingX or any of dozens of other vendors to compete, because that's where the innovation will come from.
If the vendors have to pay a nominal fee for digital data and pass it on to their subscribers, so be it. We've always paid for charts, whether from Jeppesen or NOS or now AeroNav. But before I get all warm and fuzzy about that idea, I at least want to know how this agency is spending the money we send them. I think they're on the hook to explain that with no further stonewalling.