The FAA has awarded an initial contract to purchase ADS-B ground-based equipment, and set a bunch of dates for implementation of the system, but what is this new air traffic control technology, and what will it mean for airplane owners and pilots? A place to start is with the letters that make up the abbreviation, ADS-B, and what they stand for. The letters are the initials of automatic dependent surveillance-broadcast. Sounds obscure, but the concept is actually easy to understand, though the full FAA implementation will be anything but simple.
The automatic in ADS means that avionics equipment onboard each airplane will perform all tasks with no input from either pilots or controllers. Dependent means that each airplane depends on the other to supply necessary, accurate position information. Surveillance is the function of keeping track of the position of airplanes in the system. And the broadcast-following a dash-means that information will be broadcast to all, not just selected nearby airplanes. The "B" follows a dash because broadcasting wasn't part of the early ADS concept.
ADS became possible when the GPS navigation system was devised. For the first time GPS provided a common global grid for all airplanes to fix, and report, their position automatically. The original ADS concept was that each airplane automatically sends its GPS-derived position to all other airplanes within range. The dependent airplanes all respond with their positions, and pilots see a display of all traffic around them.
The great part of ADS is that each airplane not only sends the others its position, but also altitude and velocity, and even flight plan information. With this data all airplanes in range can use their avionics computers to not only calculate the relative position of other aircraft, but also plot where those airplanes will be in the next several seconds. With this knowledge the ADS can show the pilot the location and track of all nearby airplanes, and can also predict conflicts and advise how to resolve them.
ADS was a leading contender for a traffic warning system, what came to be called TCAS, because it offers excellent accuracy and reliability. But ADS was shelved in favor of TCAS because of the "D," for dependent. ADS is dependent on all airplanes having compatible equipment to automatically send their position and velocity information. TCAS, instead, relies only on airplanes being equipped with transponders. A TCAS measures range to nearby airplanes by timing the round-trip signal from an interrogation of the transponder and then calculates bearing using an ADF-type of antenna. As soon as you install a TCAS, or the less sophisticated TAS, you have traffic information about any transponder-equipped airplane that is nearby.
So it is the "D" in ADS that is the rub. All airplanes in any block of airspace need to have cooperating equipment or the system has blind spots and can't see those that don't. An ADS system is great for confined or remote airspace where it is possible to quickly equip the limited number of airplanes that use that airspace. For example, parts of Alaska are so remote that an ADS system can be installed in all airplanes that fly IFR there and everybody can then see everybody else. Or in a place like Australia where only small parts of the continent are served by conventional air traffic control radar, installing ADS on all airplanes is a much cheaper and quicker solution than covering the enormous empty spaces with ATC radar.
The initial ADS thinking was to keep the information in the cockpit and supply it to pilots who could avoid traffic when necessary, or use the data to separate themselves from other airplanes just like we do in VFR conditions. That's how UPS, the big package hauler, uses ADS to smooth traffic flow into its Louisville hub late at night. The entire UPS fleet of big jets is equipped with ADS equipment and the crews can see their colleagues and space themselves into the runway because there is virtually no other traffic in the area late at night.
But for ADS to work on a wide scale there needs to be regulation demanding that all airplanes in the airspace be equipped, and that's where the FAA came in, and where the system added the "broadcast" capability. In fact, the FAA has bet the farm on ADS-B and insists that it will be the sole means of air traffic control and separation sometime after 2020 when its "NextGen" ATC system is in place.

