Tuesday, June 23, 2009

End of the Lane for Clear: The TSA Won

From the Web site today of Verified Identity Pass, the company behind the Clear airport lanes:

"Clear Lanes Are No Longer Available.

At 11:00 p.m. PST on June 22, 2009, Clear will cease operations. Clear’s parent company, Verified Identity Pass, Inc. has been unable to negotiate an agreement with its senior creditor to continue operations."


I have followed Clear with interest since it started up at Orlando International Airport in 2005 and gradually began expanding to other airports in the years afterward. By the time it ceased operations, it had those blue-hued lanes in about 20 airports.

Here's my take on why Clear finally failed, after hanging on for long past the time when I thought it could stay in business. It can be summed up in three letters: T-S-A.

1. Clear's main premise -- that its "cleared" members could breeze through special security lanes without having to remove shoes and coats -- collapsed when the TSA, under its former director Kip Hawley, flatly refused to approve key Clear technology, primarily a GE-designed "shoe-scanner" that would have allowed shoes to remain on feet. Hawley told me repeatedly that the machine failed TSA tests. But it was also abundantly clear that Hawley wanted no part of private-enterprise technology, privately operated, as a component of airport security -- despite pressure from Congress that the badly conceived "registered traveler" or "trusted traveler" program was to be a joint federal-private enterprise venture in security. Furthermore, in Congressional hearings on the botched "trusted traveler" program that Clear was an emblem of, Steven Brill, the media entrepreneur who founded the Clear company, simply pissed off Hawley with several unnecessarily harsh statements about the TSA. That was a serious mistake. Hawley never trusted Brill.

2. The TSA torpedoed another Clear premise, that its members -- who were issued biometric ID cards encoded with their fingerprints and an iris scan -- would get a special wave-through at TSA checkpoints. Stubbornly, and in my opinion strangely, the TSA insisted that Clear members produce the same standard ID (drivers license, etc.) as everyone else, biometric card be damned. I questioned the TSA on that because a biometric ID card, scanned through a reader, is almost infallible proof of identity, but Hawley was dug in against it, though he never admitted so. The final hurdle for the Clear ID cards was last year, when the TSA said it might consider accepting them as ID if Clear put the holder's photo on them, which meant recalling existing cards (and hauling in members for new photos).

3. TSA vastly improved checkpoint efficiency under Hawley's three-plus-year tenure, which ended in January. In most airports, long waits at security were no longer an issue. (In areas where airport waits could sometimes be unexpectedly long, like Orlando when hordes of tourists suddenly descended, Clear had strong membership). The Clear card's value was unclear -- except as a kind of "head of the line" pass that put you closer to the actual checkpoint, once you cleared Clear's superfluous separate privately run checkpoint.

4. Clear claimed it had more than 250,000 members, but renewal rates were falling as companies cut back and amid questions about the card's real value. It was charging $199 a year for a card, though there were corporate discounts. Nevertheless, Clear was a very expensive proposition to operate. Obviously, it finally ran out of dough, having been bled to death by a federal agency that -- from the very beginning -- wanted no part of Clear and had no trust in the security of a badly conceived "trusted traveler" program that Congress tried to ram down its throat.

5. Just in case the message was not clear to Clear, the TSA pointedly backed out of its very slight relationship with the program last year. From the beginning, Clear members had to be supposedly "cleared" with a "security check" by the TSA before their membership could be approved and their cars issued. That "security check" was nothing more than a simple TSA check of a prospective member's name against the terrorist watch lists. Last year, Hawley removed the TSA from that step, saying that the agency would no longer provide Clear with any kind of federal sanction whatsoever as a security program.

Incidentally, I am astonished at the amount of money that Verified Identity Pass must have burned through on Clear, including on the GE technology that never got approved, and on payroll. In airport after airport, I would marvel at the mostly unused Clear booths, staffed all day by three or four Clear employees at the checkpoints, and one or two other employees at other Clear enrollment booths in the terminals.

The TSA won.


No comments: