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The Global Positioning System (GPS) is a free service that is owned and operated by the U.S. Government and is always available.

When we buy a GPS device, we don't pay a monthly fee or pay a tax for GPS support. We only pay the price of the device.

I don't understand how it's possible. How does the U.S. make money?

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The U.S. gov't doesn't make money. It borrows money, mostly from China. Garmin manufactures in Taiwan, which is not formally recognized as a country by the U.S. gov't. You can be arrested for using GPS in China. Would be interested in hearing what threat Chinese spacejunk poses for GPS. –  Kirk Kuykendall Dec 4 '11 at 18:59
    
so it isn't free it has been paid by US tax payers. But can be seen to be a free service after the system is in place. –  Mapperz Dec 5 '11 at 15:00
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4 Answers 4

up vote 16 down vote accepted

GPS was built with military uses in mind during the Cold War. In 1983, Korean Air flight 007 was shot down by Soviet interceptors over Kamchatka when it went off-course. All passengers and crew aboard the civilian flight, including a sitting US congressman, were killed. Amid the ensuing controversy, President Reagan announced that GPS would be made available for free for civilian use to avoid such preventable disasters in the future. So in essence, it took the political momentum from a national tragedy for it to become freely available.

See http://en.wikipedia.org/wiki/Korean_Air_Lines_Flight_007

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A good intro into why GPS was opened up for general use. –  Mapperz Dec 5 '11 at 14:58
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The Russians are also building and expanding on the GLONASS system, a competitor to the U.S. driven GPS systems. This has interesting sub-plots, such as if they decided to do anything maliscuous they could JAM U.S. GPS leaving thier own systems available for use.

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Yeah, but their competing system is also available for public use, so expect devices to use both in the future. The Garmin GLO uses both for additional precision (more satellites in the sky). –  nicksan Dec 24 '13 at 1:41
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Apparently there is a competing GPS service being started in Europe:

http://en.wikipedia.org/wiki/Galileo_%28satellite_navigation%29

As Wikipedia says, the low-precision will be free, high-precision will cost, so that's how it will be paid for.

This BBC article includes an audio interview explaining the benefits.

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GPS is a public service made free to access so that the country can collectively improve its knowledge of the technology. As in the case of the internet, this presents an opportunity for the more industrious among us to diversify its application at a faster rate. And when someone succeeds in finding a new and useful purpose for GPS, money is circulated. In the case of the GPS device, the U.S. receives money throughout the production chain: income tax from workers (if assembled in America), sales tax, taxes on transport/shipping operations, business licenses, and likely more.

http://www.america.gov/st/washfile-english/2006/February/20060203125928lcnirellep0.5061609.html

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It was also not free initially. It was originally for the military, but President Clinton (I believe) decided to open it up for public usage, for the reasons @esin just gave. –  nmpeterson Dec 4 '11 at 4:56
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@nmpeterson: Clinton administration removed selective availability of the GPS signal making it more precise for civilian users. –  radek Dec 4 '11 at 13:40
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@nmpeterson Surprisingly it was Reagan, not Clinton who allowed it to be used for non-military purposes. –  djq Dec 12 '11 at 23:17
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Thanks for the clarifications, radek and celenius. My memory on the topic was admittedly a bit foggy :) –  nmpeterson Dec 13 '11 at 2:51
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