One of the previous stories on this subject had a good summary on why it failed. I will quote it here since I haven't seen the original poster around this time.
http://politics.slashdot.org/comments.pl?sid=1586102&cid=31519434
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by Degrees (220395)
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60 Minutes did a story on this system a few months ago. As best I recollect:
1) The initial plan was vague. If you don't have an actual plan, then you won't ever have to call call the project done. This is good for Boeing, bad for the people paying the bills.
2) They finally decided that the plan would be that computers and cameras should surveil the area between towers, and, alert the people running the dispatch center of suspicious activity. "Suspicious activity" = people in the area. No person would be walking in these areas unless they were trying to cross the border illegally.
3) Boeing designed and delivered the initial system. THEN sat down the dispatch people at the consoles. Who promptly said it sucked and was worthless. You heard that right: Boeing did NOT bother to bring in the users who would use the system during the design phase. Also, it was here that the 'discovery' was made that the optics and cameras were WAY more expensive than Boeing originally said (because a web-cam is one thing, and camera that can resolve a clear picture at two miles is another). Of course, better optics means (a lot) more data (which the networks couldn't handle), larger storage requirements for the DVR, etc.
4) Re-work time.
5) Finally the trial tests. Oops. The heat seeking portion doesn't work in the heat of a desert. The radar kept triggering on wind-blown bushes and the occasional Rocket J. Squirrel. The radar didn't work for people sized targets in the rain. If you are a group of bad guys and see that that the camera is swiveling toward you, freeze for a bit (drop to your hands and knees and pretend to be the authorized Bullwinkle J. Moose). The camera will move on. The electronics equipment couldn't handle the heat. The electronics equipment couldn't handle the dust. The dust clogged gear was on the wrong end of very tall / difficult to climb towers.
6) In-truck computers. The Border Patrol was supposed to chase down people being guided by laptops hooked back to base. Except it is essentially impossible to drive around in the (extremely bumpy) desert AND work a computer at the same time.
Did I mention that a single World-War One style trench subverts the whole thing?
Nine towers and 28 miles in, the problems seem insurmountable. Boeing keeps saying they could deliver a system that works though. Just throw gobs more billion at it.... It's a 2,000 mile border.