Clear, which lets screened travelers skip long security lines, epitomizes the pitfalls of developing technology for Homeland Security agencies
Editor's note: This is the second in a series of three stories on the challenges and opportunities faced by the Homeland Security Dept. as it develops technology aimed at keeping the U.S. safe.
For Steven Brill, impatience was the mother of invention. Half a decade ago, as a journalist and entrepreneur who wrote a book about the U.S. response to the Sept. 11, 2001 terror attacks, he shuttled frequently between New York and Washington, D.C. During long waits in airport security lines, Brill pondered a faster alternative and later wrote a Newsweek column contemplating the creation of a system that would give expedited passage to people who undergo extra up-front screening.
Lengthy airport lines are nothing compared with the delays Brill has endured as he has made the idea a reality.
Brill went on to found a company, Verified Identity Pass, that developed a system called Clear (www.flyclear.com) that is based on the ideas outlined in his magazine column. Registered users pay about $100 a year and go through a government-approved screening to prove they're not a security threat; in exchange, they're given express-lane access in airport security.
Dealing With Uncertainty
Clear operates through a program called Registered Traveler run by the Transportation Security Administration. It's the sort of alliance President George W. Bush envisioned in 2002 when he announced the creation of the Homeland Security Dept., which oversees TSA. "The [private sector's] creative genius will develop the information systems, vaccines, detection devices, and other technologies and innovations that will secure our homeland," Bush said then.
But making those partnerships work has proven a tall order. Unlike many tech companies that win government contracts, Brill's company didn't seek Homeland Security Dept. money. He built up a cadre of investors including General Electric's (GE) investing arm to put up the tens of millions of dollars needed to start operating in 11 airports. What he does need from Transportation Security is permission—for nearly everything. For smaller companies such as Brill's, the bureaucracy involved in making even the simplest decision can cause delay that hampers innovation and hurts the bottom line. "The worst thing in business is when something isn't predictable, where there's uncertainty," Brill says.
Some of the biggest uncertainties surrounding Clear include how far it can expand and whether it can live up to its potential in shortening wait times. The project has at times gotten bogged down in governmental red tape and has lacked TSA support, Brill and others say. TSA has let Registered Traveler "happen grudgingly, behind schedule, and only then because…Congress and…entrepreneurs have pushed it," according to Brill's written testimony for a July Congressional hearing.
Innovation Stalled in Testing
Brill has since changed his tune, saying the government has picked up the pace in some areas, such as testing new technology for use in fast-pass lanes. But the turnabout was a long time in the making, underscoring both the pitfalls and possibilities facing small businesses that venture to pair with Homeland Security.
Nowhere is that dichotomy plainer than in Clear's attempt to add new features, namely a shoe scanner that would let passengers keep shoes on while going through security. Testing took well over a year; critics say that was too long. During the July hearing, Washington, D.C. Rep. Eleanor Holmes Norton directed her frustration at TSA Administrator Kip Hawley. "I don't see anything in this testimony to give this committee or the people who are throwing money into innovation any hope," said Norton, a Democrat.
TSA says it supports innovation but won't cut corners to bring new features to the fore. "We are all for looking at new technology," says TSA spokeswoman Sterling Payne. "Once the shoe scanner works, we're all for it." The TSA declined to make Hawley available for comment, but the official outlined his stance in Congressional testimony. While programs like Clear provide an in-depth traveler profile using biometric traits such as fingerprints, they may fail to weed out would-be malefactors who have never committed a crime. "All we have is the biometric of the individual who is not on the watch list."
So while Clear clients subject themselves to a heightened scrutiny at the outset, they still face the same security hoops as everyone else—albeit in a shorter line. That's good enough for Jack Vonich, a sales manager at Server Technology. On a recent Friday afternoon, he sailed in minutes through security at San Francisco International airport. "I travel twice a week through airports," Vonich says. "It saves me at least 20 minutes on each side."
Brill says it has cost more than $22 million to start Clear in the 11 airports, from New York's JFK to San Jose, Calif. The company doesn't disclose detailed financials, but its 85,000 registered users generate annual sales of $6.1 million, excluding TSA-mandated fees. Brill says he still has $20 million in the bank and is in no danger of failing.
Brill aims to provide the service to 3 million people in 30 airports, but that may prove a lofty goal. TSA still considers Registered Traveler a pilot, and spokeswoman Payne says the agency will let only 20 airports sign up.
Obvious Business Opportunity?
Compared with other companies working with TSA and other Homeland Security agencies, Brill's Verified Identity Pass has fared well. Five other companies have been approved for Registered Traveler. Only two—Unisys (UIS) and Vigilant Solutions—have gotten a program up and running. "It's very expensive, you have to go through the hoops of TSA approval of your operating model, [and DHS must determine whether] your systems increase security," says Susan Bari, president of Fly Fast , an approved Registered Traveler provider. "It takes a couple of years and millions of dollars."
On Oct. 9, FLO Corporation said it would acquire the Registered Traveler business from Unisys in a deal scheduled to close by the end of December.
Some companies gave up on their Homeland Security dreams altogether. In the months after September 11, wooed by the same government call to action that inspired Brill, Silicon Valley entrepreneur Michael Howse aimed to tackle the problem of emergency responder networks that don't work together. Howse, with some venture capital firms, purchased a unit of research consultancy SRI International that had long worked on technology. "It seemed like a glaringly obvious business opportunity," says Howse, the son of a fire chief.
Police Dogs Get the Cash
The fruit of that effort, PacketHop, got off to a promising start. It won funding from the Homeland Security arm focused on research and development and began winning customers. PacketHop briefly was a media darling as the technology performed well in large-scale, mock disaster exercises.
Then things soured. After cutting the check, the Homeland Security Dept. didn't require municipal governments to buy PacketHop's technology—and the little company didn't have the resources or the pull to convince local politicos to buy its complex technology over easier sells. In one case, a local police department opted for bullet-proof vests for its police dogs rather than PacketHop's solution.
"A lot of people had all the best intentions," Howse says. "But at the end of the day it was a highly fragmented process. DHS needed to provide not only the money, but the education and the mandate to make it happen." In 2005, the venture capitalists sold Packethop back to SRI, and Howse won't be looking for work with the government again. "From a Silicon Valley perspective, it just doesn't work," he says. The Homeland Security Dept. didn't respond to a request for comment on PacketHop.
Working on the Three-Ounce Limit
For his part, Brill is sanguine about his prospects, and plans to expand to Denver International and beyond. "I think they've now improved the process," he says of the testing labs, though TSA says Clear's scanner needs work. "We think the shoe scanner will be approved." Next up: His firm is considering equipment that would let passengers carry liquids in containers larger than three ounces and pass through security lines without removing laptops from bags.
So if Brill's idea was born out of a lack of patience, getting it to market has required a surfeit of it—a luxury some companies hoping to ally with Homeland Security can't afford.