GNSS - Cost Allocation


Introduction
 
The World-wide CNS/ATM Systems Implementation Conference (Rio de Janeiro, 1998) called on ICAO to address the issue of cost allocation amongst all users of Global Navigation Satellite System (GNSS), including its allocation between civil aviation and other user categories. Since then, a Secretariat study on the matter has been considered by various forums.
 
Provisional Policy Guidance
 
In February 2007, the following five conclusions of the study were accepted by the Council as “provisional” policy guidance on the allocation of the incremental costs of more advanced GNSS services:
  • basic GNSS services will be provided free of charge as a common good to a multiple number of user categories, while more advanced GNSS services (including augmentation services) requiring a higher quality of service and hence higher costs will have to be paid for by all their users in most cases;
     
  • the incremental costs for more advanced GNSS services should be allocated amongst all the users who can actually derive benefits from them. Such cost allocation should take place at the regional level and take into account the requirements of different user categories, where the service level can be adjusted to satisfy different requirements;
     
  • before any costs are recovered from civil aviation, cost allocation amongst all users should be discussed and agreed upon through transparent negotiations and consultations between a GNSS service provider and representatives of civil aviation as well as other user categories;
     
  • any cost allocation and resultant cost recovery should be consistent with ICAO’s policies on air navigation services charges in order to ensure that civil aviation is requested to pay only its fair share of the relevant costs according to sound accounting principles and that international civil aviation is not discriminated against compared to other modes of international transport and other user groups; and
     
  • once the civil aviation’s share has been determined, the allocation among participating States (or air navigation services providers (ANSPs)) and on the different phases of flights should be performed according to existing ICAO policy and guidance. ANSPs could then recover the costs from the users within their existing charging systems.
This provisional guidance, which could serve as a tool for the civil aviation community to ensure an equitable treatment of all users, was disseminated by State Letter (Ref.: EC 2/84-07/41 dated 29 June 2007) to Contracting States for their use in discussions and negotiations with all interested parties.
 
Further Work
 
ICAO continues to monitor developments and to collect relevant information to make an inventory of GNSS applications. The organization will also further coordinate technical, legal and economic aspects associated with GNSS cost allocation. Once a consensus has been reached on the definition of basic services and liabilities of GNSS service providers, this provisional guidance is to be redrafted with appropriate wording for inclusion in ICAO’s Policies on Charges for Airports and Air Navigation Services (Doc 9082).