TSA To Set RT Fee - Business Travel News

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TSA To Set RT Fee

September 25, 2006 - 12:00 AM ET

By Jay Boehmer

The Registered Traveler program in recent weeks took a step forward only to trip on a U.S. Transportation Security Administration calculation estimating higher-than-expected costs for the program. Registered Traveler proponents received good news when TSA gave the go-ahead for online enrollments for programs operated at airports in Cincinnati, San Jose, Indianapolis and New York, with plans for lanes to be rolled out and operational by November. However, TSA's latest calculations suggested $100 more in fees on top of the projected $80 to $100 charged by private industry vendors.

(NEWS UPDATE, Sept. 25: The Transportation Security Administration today outlined recalibrated costs that bring the fee down to $30. See story.)

At press time, TSA had yet to set the final fee, expected to be outlined shortly. "They're going to dramatically lower the fee," said a source following a meeting last week between TSA and industry stakeholders.

TSA earlier this month estimated a cost to the government of about $30 per enrollee for a background check and $70 per enrollee to supplement the cost to pay TSA screeners working the lanes at airports. Sources said TSA would come down from its estimates, perhaps eliminating the $70 fee and assessing screening costs per individual airport.

"Several months ago, when TSA published its business model," said Voluntary Credentialing Industry Coalition managing director Chad Wolf, "it indicated the fee would be between $5 and $30. When it came out to be $100, it took us a bit by surprise."

Last week, TSA reevaluated this fee, with input from vendors. As a result, said Wolf, "I think what you'll see is a much lower fee. We think it should go away completely. It may be reduced to a smaller number, but the fee at the end of the day will be closer to $30."

Private industry providers agreed to the background check fee, but said the additional $70 screening cost, as officially estimated at press time, could stifle enrollment in the nascent program that promises to speed prescreened travelers through security lanes. "They are estimates at this point, and we need to flesh that out," a TSA spokesperson last week said, "but what's important is we don't want the traveling public at large—the taxpayers—to support a program that will only benefit a smaller subset of folks."

TSA this month said, "In order to simplify the process and to clearly articulate TSA's costs, these estimates are now being characterized as a per-applicant cost."

None of the Registered Traveler program providers, including Unisys, Verified Identity Pass and a consortium of companies including Saflink, Johnson Controls and Microsoft, called the FLO Alliance, dispute the roughly $30 the government charges for background checks, and providers plan to pass those fees on to applicants. It is the $70 airport-screening fee, however, that came under fire from providers and proponents of the program. Providers met with TSA last week to talk the fee down, arguing that unless there is additional burden on TSA security screeners or if another lane needs to be opened to handle the traffic, the fee is unnecessary.

"That $70 fee that TSA says you'll have to pay for screeners is the big issue," said Larry Zmuda, head of Registered Traveler efforts at Unysis. "Everybody agrees that the TSA should be able to recoup their Registered Traveler costs, but these travelers already paid $2.50 for the TSA screeners, so if you're already paying for them, there shouldn't be a reason to double-bill them," Zmuda added, noting the $2.50 charge air travelers pay for TSA screening that is added to the cost of an airline ticket.

"They're looking at the model and seeing if the $70 is the real number or if it's something less than that," according to Zmuda. "All the service providers are hoping it will be something less than that."

Saflink senior director of the Registered Traveler program Luke Thomas agreed. "There's just a public perception of where pricing will be. The first group of pilot programs were free. The program in Orlando—the first privatized one—was set at about $80 and there are no TSA fees or anything included," Thomas said. "TSA has been clear, and most people expected an uplift to maybe $100 to $120. If it jumps to $200, that's a huge difference and it will have a negative impact. There will be a lot of pushback and it will struggle to get off the ground."

Steven Brill, founder and CEO of Verified Identity Pass, which is the only company operating a program and with firm plans to launch others, said the company is holding firmly to its cost of entry, despite the hoopla over TSA estimates. "We'll pass on the one we've always said we'll pass on, which is the vetting fee," Brill said. "We're telling members today that if you sign up, we're charging you $79 plus the $27 vetting charge, and we're sticking to that promise."

Furthermore, Brill asserted its Clear program likely would not be subject to requiring extra screeners and should avoid the extra cost altogether. "We have always said that our business model includes paying for any extra screeners that we use if we use an extra lane," Brill said. "We don't anticipating doing that very much, and we haven't had to do it at all in Orlando. The only time you would do it is if you have a certain number of members but you don't have enough to justify using your own lane. Let's say there are 10 lanes at the airport. If you don't have 10 percent of the traffic and you wanted your members to have their own lane, you'd have to get permission to have an 11th lane and that would only work if there's room and we'd pay TSA the staffing costs to do that. That will be a rare occasion."

National Business Travel Association executive director Bill Connors last week said the proposal could limit Registered Traveler participation.

"Clearly, as you escalate the price, you're eliminating certain people from participation," according to Connors. "We don't want to see this being some sort of elitist thing just for the rich. The only way this program works effectively is if a lot of people join the RT line, and reduce the size of the regular line. "

In a letter sent this month to Department of Homeland Security secretary Michael Chertoff, Connors said the $70 fee is "unwarranted and greatly imperils the future of the Registered Traveler program."

Meanwhile, Verified Identity Pass is in the process of taking online enrollments ahead of its launch at four airports, for which TSA this month gave the go-ahead to being the enrollment process. Verified, which has forged contracts to operate its Clear program at the airports in Cincinnati, Indianapolis, San Jose and at New York JFK's terminal 7, expects to begin onsite enrollment shortly and by November launch the lanes at the airports.
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