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Why there are no independent ski schools/instruction (long)

post #1 of 17
Thread Starter 
The question of why we don't find independent ski schools, with respect to the issue of increasing competition, was raised in the thread about quality of instruction. Out of curiosity, I poked around some and found at least part of the answer. However, as I am a bit far afield of the quality of instruction issue, it seemed appropriate to put it under a new subject.

Ott and Bob B. mentioned that independent ski schools do not exist in the U.S. because the resorts do not permit them. It was also suggested that a well-funded legal challenge might change things. It seemed odd to me that there were no prohibitions on lift-tickets, so I didn't see the justification for pulling the tickets.

Interestingly, it turns out that it is not a legal issue, but a policy issue of the U.S. Forest Service and the issue (as to those ski resorts whose operations are, in part, on federal lands) was litigated back in the 70's. I was unaware of the law in this area, but pretty much any commercial use of forest service land must be done through the use of a special use permit. Operation of any kind of commercial work activity or service without such a permit is a violation of federal law, subject to a $500 fine and six months in jail. The permitting of ski areas is addressed in Title 16, Section 497b of the United States Code. There are some publications (law review artcles and an American Bar Association publication) on the general topic of ski area permitting, and there are certainly more cases than what I saw, but two pretty much answered the question.

It is Forest Service policy to issue a single permit to include all ski area operaions, including ancillary activities, to a single entity. Although other issues come out in a more detailed review, it is this policy that is the lynchpin. Apparently, it was not always this way. According to the Utah Ski Archives, Earl Miller held the ski school permit at Snowbasin separately from the lift permit until 1987. It was one of two areas in Utah set up this way and, according to the archives, all Utah resorts now hold the ski school permits for their areas. It would appear that the consolidation of permits occurred at this time and may have been related to the National Forest Ski Area Permit Act of 1986 which, among other things, required the reissuance of all permits and allowed for extended permits of 40 years to allow for long term financing of ski areas - it is possible, although I really don’t know, that Miller was forced into retirement by a non-renewal.

Anyway, in the 70's an Aspen ski instructor named Jack Heath challenged the ski industry and the Forest Service on anti-trust grounds. A federal court in Colorado ruled that Heath had no right to bring an antitrust claim because he held no use permit. (For those of you following at home, the cite is Heath v. Aspen Skiing Corp., 325 F. Supp. 223 (D. Colo. 1971). The reasoning was somewhat circular - he had no right to challenge because he couldn't even provide the service (ski lessons) without a use permit, but he couldn't get a use permit because of the USFS policy to issue only one permit for all area operations. However, the issue of applying for and obtaining a permit was not before the court.

In addition, Aspen argued that it had an obligation not to permit the instructor to operate independently because its contracts with the USFS obligated it to turn over a portion of receipts to the USFS. It didn't say how much, but that may figure into the equation of who gets how much of the pie. [I did find the answer, see below] That obligation may also provide the justification for pulling tickets - at least from the instructor.

Heath also charged that the USFS should not be granting exclusive licenses for ski area operations. This argument was dismissed by the court in the face of the USFS justification that exclusive licenses were necessary to encourage resort development. Finally, the court was skeptical of any antitrust case, because the relevant market for competition to provide ski instruction was much wider than a single mountain or county, possibly encompassing the whole country.

The issue was raised again, several years later, in a suit where an instructor and his prospective students sued the USFS for refusing to issue them a special use permit. Don Lemos was the instructor. The case was ultimately reviewed by a federal appellate court in Sabin v. Berglund, 585 F.2d 955. (10th Cir. 1978).

The court did not take as strong a position on the antitrust issue, but did not find sufficient reason to overturn the USFS “single permittee policy” that was the basis for the denial. Ultimately, the court stated that this was really a legislative and regulatory policy issue - not a court issue. The court may have left a small window of opportunity open in saying: “However, the appellants have shown little to rebut the conclusion that the present system is not stifling certain techniques or leads to lack of price competition.” However, it is not clear that such a showing would lead to any type of reversal.

The USFS policy reasoning was summarized as follows:
<BLOCKQUOTE>quote:</font><HR>The emphasis is also on the necessity for a "total service" ski package to be made available to the public. The documents also point out that the ski areas are to provide a number of services which are not revenue-producing. To this the ski schools contribute a portion of their gross income based on financial reports. The documents say that it would be unfair and would tend to discourage investment in the "total service" rendered by the ski areas if independent instructors were permitted to take advantage of the services provided at the expense of the permittees. The independents would be using the facilities of the area permit holder, but would not be contributing to the cost of the free service.

The documents reflect also that in the area of ski instruction, the Forest Service's priority consideration is providing "regularly scheduled and continuously available ski instruction," concentrating on widely recognized and consistent methods of teaching, whereby skiers can progress while attending various areas throughout the season. The documents also reflect the Department's view that there is a necessity for coordinating the ski instruction so as to prevent traffic problems on the slopes and so as to insure consistently available instruction for all levels of ski knowledge. Another point made is that Forest Service supervision would be more difficult (complex) with independent instructors and a lack of centralized supervision.<HR></BLOCKQUOTE>

It would appear then, that the issue is truly a policy one. Given the fact that all ski area permits were supposed to be reissued around 1990 in accordance with the National Forest Ski Area Permit Act of 1986, and presumably for 40 years with exclusive use provisions, the issue may now be moot. This information does not apply to privately owned ski area lands or to land owned or administered by state or other federal agencies (although I would imagine similar laws address these situations). I don’t know if anyone else will find this interesting, but I did and I figured I’d share.


"I often wonder whether we do not rest our hopes too much upon constitutions, upon laws and upon courts. These are false hopes; believe me, these are false hopes. Liberty lies in the hearts of men and women; when it dies there, no constitution, no law, no court can save it . . ."
- Learned Hand

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[This message has been edited by raubin (edited February 18, 2001).]</FONT><FONT size="1">

[This message has been edited by raubin (edited February 18, 2001).]</FONT>
post #2 of 17
Raubin, I appreciate your sharing your research with us. I now understand the "why" of it. It seems, if I understand it right, that the high price of lessons are there in part to underwrite some non-revenue producing services...and I thought only hospitals do that when they charge $40 for a band aid.

post #3 of 17
Thank you so much, raubin. I was preparing to launch into a tirade without knowing all the facts, as I consider to be my perogative.
BTW, I wonder what the ski resorts consider "non-revenue producing services". Probably ski patrol, avalanche control, etc. Most other businesses would call that "customer service". And don't the $6.00 beers and $8.00 burgers subsidize those services enough? I guess I am just irritated that I cannot afford really good instruction, and that the instructors recieve so little of the revenue. Okay, I can afford it, but I don't like the idea of paying that much for something that may not work.
post #4 of 17
post #5 of 17
So, once again, problems arise as Americans are excessively taxed, with precious little choice as to how these taxes are allocated.
Everyone suffers. Guests are overcharged, instructors are underpaid, so that their salaries can underwrite the maintenance of public lands, which, quite rightfully, should be paid for by the citizens tax money. So mediocrity reigns, due to lack of significant financial renumeration.
In the meantime, the parasites have a feast and a field day.

Be Braver in your body, or your luck will leave you. DH Lawrence
post #6 of 17
Thread Starter 
Ott, I think you have correctly identified the primary justification for the "single permittee" policy. However, it is unclear to me that it still holds true today. As MilesB mentions, there are many other revenue generating resort operations that also create a significant cash flow. Also, you have to imagine that your lift ticket money is going to something.

That said, I have no idea of what the revenue characteristics of a major resort look like or of what kind of fees are paid to the government.

It seems that a large part of the justification for the "single permittee" policy was geared towards enticement of creation and improvement of ski areas. This was also a large part of the basis for the ski area act mentioned above - create a 40-year lease - longer than the then-existing duration of leases - in order to entice financiers to participate.

I would be curious to get a good look at how the whole scheme operates.

post #7 of 17
Thread Starter 

Even if the policy were to allow multiple permits for ski instruction, there would still be permitting fees paid to the government. So I don't know that the fees are the problem in that respect.

I think it is also a little premature to call this excessive taxation without some information as to what the fees are that are paid to the government. [I did find the answer, see my post below] I'm not sure what you mean by choice over allocation.

Furthermore, it has become an increasing trend to place the cost of certain activities or services on those who use them. Although this has been brought to an extreme in some cases (paying for fire department services when your house burns), I think most people generally find it fair under the concept that they would otherwise have to pay more in taxes for services that a limited group of people use.

Finally, the fees are paid by companies that are profiting from the use of public land - true, they are eventually passed on to the consumer but so are the charges to oil companies for running pipelines across Alaska or mining coal in Wyoming. If somebody wanted to shoot a movie in your home, you'd probably ask them to pay a fee to you - and if you went to see the movie, you'd be paying it back. The federal lands are yours too and the government manages (some would say mismanages) it in your trust, and mine too. In that respect, I can't blame them for charging a fee to those who profit from it by using it as a classroom.

As for the "hidden tax" of permitting an intra-mountain monopoly, one man's tax is another's benefit. The Forest Service obviously believes that the "single permittee" policy benefits the public by encouraging the building and investment in ski areasand in other ways, as opposed to raising the prices and restraining trade in ski instruction.

Ultimately, increased intra-mountain competition is only one of the ways to improve the quality of instruction and cannot be blamed for all of its ills. The other thread lists a number of other possibilities for convincing ski areas to pay their instructors more and raise the bar, but that really wasn't my point here.


"I often wonder whether we do not rest our hopes too much upon constitutions, upon laws and upon courts. These are false hopes; believe me, these are false hopes. Liberty lies in the hearts of men and women; when it dies there, no constitution, no law, no court can save it . . ."

- Learned Hand<FONT size="1">

[This message has been edited by raubin (edited February 18, 2001).]</FONT>
post #8 of 17
Yes, re reading my own post, I realize I was in fact, unclear. By excessive taxation, I was referring to what gets taken out of our paychecks, and what we give the government on April 15th. It is these funds that I feel are perhaps unfairly allocated. Maybe its wishful thinking on my part, but being one who gets penalized by the government for the sins of being both married and self-employed, it would be somewhat of a consulation to know that a more significant portion of that "penalty" would go to supporting our national forests, instead of other useless government programs which I will not discuss.
Please don't get me wrong. I agree with all your arguments regarding permit fees, but as you said, we do not exactly how much these fees are. If they are so phenomonal that they make it impossile for mountain employees to make a decent living, we then have a problem that will continue to self perpetuate itself.
And not just in the areas of ski instruction. In New England, we already have the problem of local teenagers not wanting to take jobs as "lifties" given that the pay is so low.
Being taxed for the services that you use, can be a good idea, but since we have not converted to that system, it would be unfair to hit people with a double whammy!

One more point: Even though Bormio has 4 competing ski schools, since they teach on the same hill {and since I understand some Italian}, I was able to observe that all 4 were using retro, ineffective technique. So although competition can enhance quality, IMHO, this is not always the case.

As a society, we just don't seem to value excellence and accomplishment. I experience this all the time, when I become highly animated and enthusiastic about a superb lesson, meal, film , book, etc. My friends, family, co-workers think I'm simply being "Cute". And I often find myself questioned about the time, money,energy and effort I put into a career I've been in for 27 years. Until our values change, so that we reward people for being accomplished, as opposed to parasitical, mediocrisy wil reign supreme.

Be Braver in your body, or your luck will leave you. DH Lawrence
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[This message has been edited by Lisamarie (edited February 18, 2001).]</FONT>
post #9 of 17
Thread Starter 
Fair enough. I don't know how much is budgeted for the USFS and the Department of Agriculture but there certainly are a lot of pork barrel projects out there that eat up available funds.

However, individual taxation for services that people use is fairly prevalent at federal, state and local levels - we've just become accustomed to it. Many national parks now charge user fees for access. Use a state boat ramp? Pay a fee. Get married at the Cape Cod National Seashore, it'll cost ya just to be there. Never mind the fees charged by the towns for parking privileges. Metered parking in the cities - that's a fee. Toll roads - like the Mass. Turnpike or Dallas North Tollway - those are forms of use-specific taxation, too. Then there are the indirect taxes we pay for renting cars or hotel rooms when we ski. Of course, fees like these also help to spread cost burdens on people who don't pay taxes, too. And, when you generate some of your own revenue, it is easier to take care of certain maintenance items instead of having to scrap it out for general budget dollars with other agencies.

I don't disagree with your distate for the way much of our income tax money is spent, but we certainly do pay a lot of taxes for services we use. When it goes too far, all the government becomes is a coordinating body and costs are not spread among the public at all - which kind of defeats the whole purpose. But I diverge.

It is unfortunate that the ski industry, like others, pays less to those who would work for less for the love of nature or the mountain or the sport - but that's the free market, I guess.

It is also unfortunate that a job well done (be it teaching, food service, writing, medical services, etc.) is so rare that it does cause surprise for us, and also that it elicits no reaction (or worse) from others. These, however, are much larger issues that I'll leave for another time and topic. I applaud your enthusiasm and animation.

post #10 of 17
Raubin, my next question may need the participation of someone like Bob Barnes, et al.

Bob coached for the Mahre brothers performance center in Keystone and as I understand it they are not part of the Keystone Ski School, per se.

There are others, Like Harald Harb, Bill Kidd, etc. ...how they fit under the single permitee rule I don't know.

Probably they could be cosidered sub-contractors?

post #11 of 17
Thread Starter 
Okay, more poking around. I found some information courtesy of Vail Resorts' SEC filings. Interesting stuff and it led me back to the answer about how much in fees is paid to the forest service. The answer was one screen ahead of my earlier research, so I just missed it before.

Apparently the law was recently amended or added to designate the amount of fees. It is set on a progressive scale ranging from 1.5 to 4% of adjusted gross revenue from activities ocurring on government land. (Important because many base shops and lodges are located on private property.) The number includes a ratable portion of lift ticket and ski school sales plus all other revenue activities on government land. Basically, for a $100 lesson at a resort with AGR exceeding $50 million, about four dollars would go to the government as a fee. So I don't think it's the government keeping money from the hands of instructors. The relevant statute is Title 16, section 497c of the US Code.

By the way, at Vail's resorts, the 10Q did not break down operating expense allocations or fees paid to the USFS, but single-year lift revenues were $138 million with ski school revenues of about $38 million. Total revenues were $475 million. Also, no crying for some of the resorts on low-snow years. Vail has a "reduced skier days insurance policy" for which it has made a claim of almost $14 million for last year - I wonder if any of that money would go to instructors who saw reduced pay as a result of reduced skier days.

Ott, good question and I am also curious about this - there might be some kind of agreement directly with the resort to run the revenue through it - you'd think there would have to be.

raubin<FONT size="1">

[This message has been edited by raubin (edited February 18, 2001).]</FONT>
post #12 of 17
Bob, I guess that Club Med at Copper must have a similar arrangement to allow their instructors on the hill. Or don't they count since they only deal with their own guests?
post #13 of 17
FYI...I know of 2 independent ski schools (that instruct at resorts as well as bc):

1. Rob and Eric DesLauriers' program ( www.allmountainskipros.com/ )

2. NASTC ( www.skinastc.com/ )
post #14 of 17
AC, I suspect those are training centers like the Mahres have at Keystone and would not teach rank beginners with 6-10 standing on the hill learning the wedge.

post #15 of 17

Around the Mid-Atlantic, there is a PSIA member ski school called "The Washington Ski Club" (I THINK). They have even been in a Warren Miller movie when Warren came to Whitetail (about 4 years ago??). WSC (Wash Ski Club) has agreements with the local montains, and maybe some other non-local places that they take trips to, where they teach on mountains that they, otherwise, have no affiliation with. These are non on public lands, and no monetary transactions take place on the hill. The ski school students buy a package that includes lifts, lessons, maybe transportation, etc, from WSC before they show up at the hill.
post #16 of 17
John, that still is different than considering that we all own the USFS managed mountains and as many of as who can succeed at setting up and running a ski school should be allowed to do so, not very likely.

post #17 of 17
Thread Starter 
Bob, thanks for the compliment, I appreciate it. As for someday getting a use permit, Mr. Heath didn’t make things any easier for those who would try to follow in his footsteps. One of the Forest Service’s stated concerns was that it would be difficult to monitor the bookkeeping and other activities of individuals to make sure that the public was getting its share of the fees. Heath played into this argument when he claimed that his calendar, which he used for “bookkeeping” purposes was destroyed.

<BLOCKQUOTE>quote:</font><HR>Plaintiff also testified that his books of account consisted of some notations made on a calendar; but, unfortunately, the calendar has been destroyed. This would present some slight problems to the Forest Service should it wish to conduct an audit of plaintiff's books. Permittees agree to such audits as a condition of the permit, and such audits are authorized by the use permits.

. . .

Moreover, it is the policy of the Forest Service that the Government realize a percentage of all income derived from permit areas, and to allow anyone and everyone to teach for hire would create a situation the Forest Service could not police. Heath's bookkeeping methods are the perfect example of the chaos which would result if the Forest Service tried to audit his ski school income. Neither plaintiff nor anyone else has either a constitutional or statutory right to derive income from an unlicensed use of the public's property.<HR></BLOCKQUOTE>

The truth of the matter is that the guy had been an instructor at Aspen Highlands who scheduled his own lessons and conducted his own marketing. He has a 60/40 split with AH in his favor. However, the Court certainly thought that he was pocketing money - for the 1969-70 season he only reported $1,500 in receipts to AH, despite teaching every day. They probably realized what was going on and weren’t too happy about it, terminated the relationship and this lawsuit followed. His actions and attitude - I am an important instructor and important people want to take classes with me - probably worked against him in a number of respects.

It also sounds like, from what some have written, that Heath's relationship with AH (and the other resorts he taught at) is rarely, if at all, seen in the industry today and that the 60/40 split is not the norm either. Does anyone know if this was the norm back then? I wonder if the system was abused back then and led to a more restrictive and less balanced situation today.

Who knows what would happen now if someone sought a special use permit, but it certainly doesn’t help that this guy gave credence to a long-standing policy of the Forest Service that individuals are too difficult to police as permittees.

raubin<FONT size="1">

[This message has been edited by raubin (edited February 20, 2001).]</FONT>
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