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RENEE MONTAGNE, host:

A long awaited first step towards relieving growing congestion in the skies: The federal government today awards a billion dollar contract to begin modernizing the nation's air traffic control system. This summer has been the worst on record for flight delays, and the government expects air traffic to double in the next 20 years.

NPR's Kathleen Schalch reports.

KATHLEEN SCHALCH: The Federal Aviation Administration says the current air traffic control system is reaching the end of its useful life. FAA administrator Marion Blakey says pilots have to follow a rigid flight path marked by radio beacons.

Ms. MARION BLAKEY (Administrator, Federal Aviation Administration): Those waypoints were established when they flew the mail. At night, they put bonfires out in farmers' fields and they would fly from one spot to another to be able to get where they were going.

SCHALCH: Air traffic controllers track planes using radar technology developed more than a half century ago.

(Soundbite of movie)

Unidentified Man: RA stands for radio, D for direction, A for and, and R for range.

(Soundbite of music)

SCHALCH: This educational film from the 1950's explains how radar tracks objects in the sky by bouncing radio waves off them.

(Soundbite of movie)

Unidentified Man: The radar seems mysterious because we can't actually see the waves.

SCHALCH: While airplanes are still tracked by radar, almost everybody else has moved on to using GPS or global positioning system. GPS receivers are in cars and boats, and FAA administrator Blakey says they're even in kids' sneakers.

She says switching to a new satellite-based navigation system will make it possible to pinpoint the location of planes, reroute them more directly, and fly them closer together safely.

Ms. BLAKEY: That is the optimal, because particularly in congested airspace, you need to be able to get more out of the real state that's in the air.

SCHALCH: The FAA has been testing the new system in Alaska, where it's cut accidents in half.

(Soundbite of airplane engine)

SCHALCH: The system is also being tested here in Frederick, Maryland, just north of Washington, D.C.

Mr. RANDY KENAGY (Technology Expert, Aircraft Owners and Pilot's Association): We'll go ahead and put on our headphones and we'll taxi out to the runway for takeoff.

SCHALCH: Randy Kenagy is a pilot and technology expert for the Aircraft Owners and Pilots Association. He's flying a small plane equipped with all the new technology: an advanced GPS navigation system, modems to transmit data on the plane's exact coordinates, altitude and speed, and a big screen showing a multi-colored, moving map.

There's a little picture of an airplane crossing a runway.

Mr. KENAGY: That's right. And it's our airplane. It shows us right where we're at at all times. On the same exact screen we can look at the weather information.

SCHALCH: The display also shows Kenagy the terrain he's flying over and other airplanes flying nearby. Those planes are still being tracked by radar.

Wow, it looks like a cluster of little blue...

Mr. KENAGY: Pac-men.

SCHALCH: ...Pac-men.

Mr. KENAGY: That's what we call them - the little Pac-man symbol. All those are airplanes that are being picked up by the radar.

SCHALCH: So you're seeing exactly what an air traffic controller would see in terms of knowing where all these airplanes are.

Mr. KENAGY: Yeah. You're pretty much seeing the exact same thing.

SCHALCH: The FAA contract being announced today is for hundreds of refrigerator-sized ground-based receivers. They're meant to replace radar and they'll allow planes to broadcast their GPS data to air traffic controllers and directly to one another. Industry groups agree that the new system is needed, but they're squabbling over who should pay for it. Retooling the system could cost $40 billion and take more than a decade.

Kathleen Schalch, NPR News, Washington.

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