The FAA’s ambitious ATC modernization effort known as the Next Generation Air Transportation System (NextGen) faces an unsettled 2012 and beyond after a number of setbacks in 2011.

The top leadership of NextGen–and the FAA itself–is in flux. Michael Huerta, confirmed as FAA deputy administrator in June 2010, has served as the agency’s lead on what is now a billion-dollar-plus annual expenditure in developing NextGen. With the abrupt resignation of Administrator Randy Babbitt in December after a drunken driving arrest, Huerta assumed responsibility for the entire FAA as acting Administrator. He may well stay in that capacity through the November presidential election to prevent a nomination battle in Congress over a new Administrator.

Within the FAA, the Air Traffic Organization (ATO), which oversees the nation’s ATC system, is primarily responsible for implementing NextGen programs. ATO saw the abrupt resignation in April of its chief operating officer, Henry “Hank” Krakowski, following a series of incidents in which controllers were found sleeping on duty. David Grizzle, formerly FAA chief counsel, replaced him.

Both Krakowski and Huerta served on the RTCA NextGen Advisory Committee, a high-level group representing aviation stakeholders from industry and government. Huerta is the designated federal official.

The FAA’s budget instability continued through 2011. Partially shut down for two weeks in July and August because of a political stalemate in Congress, the agency at year-end was operating on its 22nd funding extension and hadn’t experienced a stable, multiyear budget since 2007. The latest extension is due to expire January 31.

NextGen includes six “transformational” programs–automatic dependent surveillance-broadcast (ADS-B), data communications (DataComm), System Wide Information Management (Swim), NextGen Network Enabled Weather, National Airspace System Voice Switch and Collaborative Air Traffic Management Technologies. It also depends on supporting efforts, including the $2.1 billion En Route Automation Modernization (Eram) program to replace computers at 20 FAA air route traffic control centers.

However, the Department of Transportation inspector general advised Congress in October that the costs, benefits and schedules of ADS-B, DataComm and Swim remain uncertain. And Eram has encountered significant software problems; it is expected to be completed four years late, in 2014, at an additional cost of $330 million.

Nevertheless, the FAA is forging ahead with core NextGen programs. The agency issued a request for offers for DataComm services last July and was evaluating industry proposals submitted in October. It says a contract award is on track for this year. FAA and prime contractor ITT Exelis have been rolling out the ground infrastructure for ADS-B, a nationwide network of 794 radio stations, since late 2007. The system is slated for on-time completion in 2013.

Fifteen months after FAA chartered it, the aviation rulemaking committee (ARC) tasked with developing a strategy for deploying ADS-B in, the capability to receive ADS-B traffic data on cockpit displays, submitted its recommendations to the agency in September. Emblematic of the one step forward, one step sideways progress of NextGen, the ARC said it does not support equipping aircraft for ADS-B in at this time because the investment in displays and onboard computing cannot be justified.

“As a general proposition, it was clear to us on the committee as we did our work, sometime in the May-June time frame, that the compelling business case for [an ADS-B in] mandate was not there,” said Steve Brown of NBAA, the ARC co-chairman with Thomas Hendricks of Airlines for America. “While it’s a very promising set of applications that are likely to have benefits in the future, there were many things that needed to be done to really be sure that our belief of its benefits was actually true.”