HIGH-TECH HIGHWAYS:

INTELLIGENT TRANSPORTATION

SYSTEMS AND POLICY

OCTOBER 1995

The Congress of the United States

Congressional Budget Office
NOTES

Rounded numbers in text, tables, and figures throughout this study may produce sums that

do not correspond to the totals shown.

Unless otherwise indicated, all years referred to in this study are fiscal years.
T

Preface

he Intermodal Surface Transportation Efficiency Act of 1991 established the Intelligent Vehicle Highway Systems program for improving transit and highway travel

through research, development, testing, and evaluation of advanced computer and

communications technologies. Now known as Intelligent Transportation Systems (ITS),

the program is authorized through 1997. In response to a request from the Chairman and

Ranking Minority Member of the Senate Committee on Environment and Public Works,

this study provides a midcourse review of the program and presents options that the Congress may wish to consider in reauthorizing it. In keeping with the Congressional Budget

Office's (CBO's) mandate to provide nonpartisan analysis, this study makes no recommendations.

Elizabeth Pinkston of CBO's Natural Resources and Commerce Division wrote the

report under the supervision of Jan Paul Acton and Elliot Schwartz. The author wishes to

thank Mark Booth, Peter Fontaine, John Patterson, and Rachel Schmidt of CBO for their

useful comments and criticism. She also appreciates the thorough reviews by Kevin

Dopart, John Fischer, Damian Kulash, Paul Rothberg, and Richard Theroux. She gratefully acknowledges the assistance of many members of the staff of the Department of

Transportation who provided data, reports, and valuable insights about the ITS program.

Sherwood D. Kohn edited the manuscript. Chris Spoor provided editorial assistance.

Tina Holliday and John McCarty typed numerous drafts of the study. Kathryn Quattrone

prepared the report for publication.

June E. O'Neill

Director

October 1995

Contents

SUMMARY vii

ONE INTRODUCTION 1

The ITS Program 2

Legislative Authority 2

Participants in ITS Development 3

Funding 4

TWO EVALUATING THE ITS PROGRAM 9

The Rationale for Government Involvement 9

Evaluating the ITS Program 13

Issues to Address in Evaluating the Program 15

THREE APPLICATIONS OF INTELLIGENT

TRANSPORTATION SYSTEMS 19

Travel and Transportation Management 19

Travel Demand Management 27

Public Transportation Operations 30

Electronic Payment 32

Commercial Vehicle Operations 34

Emergency Management 36

Advanced Vehicle Control and Safety Systems 37

Priority Corridors 38

FOUR OPTIONS FOR REFORM 41

Eliminating the Program 41

Limiting the Scope of the ITS Program 42

Strengthening the ITS Program 43

Conclusion 44
vi HIGH-TECH HIGHWAYS: INTELLIGENT TRANSPORTATION SYSTEMS October 1995

TABLES

S-1. Funding for Intelligent Transportation Systems viii

1. Funding and Obligations for the Intelligent

Transportation Systems Program 5

2. Spending Obligations for the Intelligent Transportation 

Systems Program by Type, 1991-1995 6

3. Funding for Intelligent Transportation Systems

Projects by Type of Application 8

4. Major Intelligent Transportation Systems Projects 20

FIGURES

1. Spending Obligations for the Intelligent Transportation 

Systems Program by Category 7
O

Summary

ver the past four decades, the nation has responded to traffic congestion and other

transportation problems by constructing new

highways, widening existing roads, and building and

improving rail transit systems. Adding new capacity

to the nation's surface transportation network is becoming increasingly costly, however, leading transportation officials to seek high-technology substitutes

for steel and concrete.

In 1991, the Congress authorized a program exploring the use of advanced computer, communications, and sensor technologies to improve travel on

highways and mass transit. Originally established

under the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) as the Intelligent Vehicle Highway Systems program, the effort has come to

be known as Intelligent Transportation Systems (ITS)

to reflect a broader set of concerns. The Department

of Transportation manages the program.

In establishing the ITS program, the Congress

enunciated a set of diverse objectives--including reducing congestion, making travel safer, increasing

productivity, and safeguarding the environment--to

be achieved through advanced technologies. To meet

those goals, the Department of Transportation is

sponsoring several hundred projects to research, develop, test, and deploy new technologies. The projects are mostly small in scale, with average funding

of about $1 million, and grouped into several major

clusters:

o Travel and transportation management is aimed

at keeping highway traffic flowing smoothly. It

uses such measures as removing accidents and

broken-down vehicles from roadways, controlling traffic signals, and providing information

enroute to travelers about roads and services.

o Travel demand management aims to reduce

travel by single-occupancy vehicles. It provides

pretrip information about traffic conditions and

the availability of transit services and ridesharing

opportunities.

o Public transportation operations would provide

enroute information to transit users, enable transit officials to keep track of the locations of their

vehicles and monitor ridership demands, and enhance the safety of transit operations.

o Electronic payment would facilitate travel by

allowing travelers to pay for parking, transit

fares, and tolls through "smart cards." 

o Commercial vehicle operations would facilitate

interstate trucking by substituting electronic

clearance for paperwork that is now required to

comply with state requirements, weighing trucks

at highway speeds instead of requiring them to

stop at weigh stations, monitoring operations to

enhance safety and improve efficiency, and providing for immediate notification of authorities

in case of accidents, especially if hazardous materials are involved.

o Emergency management would enable quick notification of authorities and prompt response in

emergencies.
viii HIGH-TECH HIGHWAYS: INTELLIGENT TRANSPORTATION SYSTEMS AND POLICY October 1995

o Advanced vehicle control and safety systems

would employ such devices as collision avoidance warnings, automatic braking controls, and

automated highway systems on which vehicles

could move without being actively operated by a

driver.

In addition to those applications, the ITS program includes several other efforts:

o Corridor programs, which would integrate various applications of technology within heavily

traveled transportation corridors.

o Development of a systems architecture, which

provides a blueprint of the way the various pieces

of intelligent transportation technologies will fit

together over the next five, 10, and 20 years, and

beyond.

o Deployment planning and support, which involves resolving various legal and institutional

issues as well as integrating new technologies

into transportation systems.

Funding

Spending authority for the ITS program grew from

$20 million in 1991 to $227.5 million in 1995. For

the 1991-1995 period, the Congress has voted $827.6

million, and by the end of fiscal year 1994 the

Department of Transportation had obligated $544

million for the program (see Summary Table 1).

The ITS budget constitutes less than 1 percent of

total federal spending on highways and mass transit.

That small percentage belies its strategic importance,

however, because decisions made today about research, testing, and deployment of ITS systems could

have profound implications for the way people travel

to and from work, school, and other activities over

the next several decades. ITS research may enable

highway and transit authorities to provide better service at lower cost, possibly reducing the need for

public subsidies.

Summary Table 1.

Funding for Intelligent Transportation Systems

(In millions of dollars)

Fiscal Funds Funds

Year Provided Obligated

1991 20.0 19.9

1992 233.8 89.9

1993 143.0 150.9

1994 203.3 283.3

1995 227.5 283.6a 

Total 827.6 827.6

SOURCE: Federal Highway Administration.

a. Estimated.

Although the Congress had provided some funding for ITS research before 1991, the program gained

greater visibility and support when it was formally

authorized as part of ISTEA, which reauthorized the

federal highway and mass transportation programs.

The Appropriate Role 

of Government

The primary rationale for the ITS program is the government's role in providing transportation services.

Highways and mass transit are generally provided by

government, not by the private sector. Although

there are some private roads and transit services, they

are not common in the United States. Public support

of transportation research and development (R&D)

can directly improve the government's ability to provide highways and mass transit service.

Apart from its role in financing highways and

transit, the government has a potential role to play in

sponsoring research and development in general.

Government sponsorship of R&D is usually justified

on the grounds of market failure. If research produces spillover benefits, the private sector may not

conduct enough because it cannot realize sufficient
SUMMARY ix

benefits to make research worthwhile. The government can disseminate research findings without having to recoup their costs in the marketplace.

State and local governments may underinvest in

research and development for the same reason that

private firms may hold back. State and local governments may not be able to reap enough benefits to

cover their costs, but if the knowledge gained is

shared with other jurisdictions, the total benefits may

exceed the costs. In such cases, when the benefits

nationwide exceed the costs (and provide a competitive rate of return), federal support may be justified.

Underinvestment in research is a form of market

failure, but market failure alone is not sufficient justification for government involvement. In dynamic

economies, some amount of market failure is normal.

In considering government involvement to "correct"

a market failure, one must weigh the potential for

governmental failure as well. Even though the market may not produce the optimal amount of research,

there is no presumption that the government can

identify and conduct a "better" quantity and quality

of research.

The benefits of some applications of ITS would

increase substantially if the technologies were compatible among jurisdictions. Travelers tend to cross

boundary lines and would prefer to encounter compatible technologies so that they would need to learn

only one system and purchase one type of equipment,

especially in such applications as electronic toll collection. Systems that would allow trucks equipped

with electronic tags containing registration and other

important information to travel an interstate corridor

without stopping to show paper proof of compliance

with state requirements could vastly improve productivity. The federal government could facilitate interstate agreements on compatible technologies and procedures, although the existence of interjurisdictional

coalitions and compacts may make federal involvement unnecessary.

To be successful, ITS projects must appeal to the

needs and pocketbooks of users. State and local governments will make the key decisions about the adoption of most applications. Projects must pass benefitcost tests in terms of both capital investment and operation and maintenance costs over a useful life. For

some types of applications, especially commercial

vehicle operations, the private sector can make--and

indeed has made--investments on its own, without

government participation. But such investments typically are limited to situations in which a company

can recoup its investment internally. For investments

that have substantial spillover benefits to other highway users, government funding would probably be

required.

Evaluation

As the federal ITS program enters its fifth year, many

observers are asking to see results. Although the program's managers can point to a number of individual

projects that appear successful, little systematic evaluation has been completed. In the early days of the

program, attention to evaluation was limited. That

situation is changing. The program's managers recognize that they must be able to show both results

and a clear justification of their role in order to receive continued funding. Several major efforts are

under way to strengthen the evaluation process.

Evaluating ITS projects entails making judgments about a number of factors, such as the degree

to which a new technology will be adopted, how it

will be used, the behavioral responses of consumers,

and the value of such benefits as time saved by alleviating congestion. Evaluation requires weighing

whether a new product appeals to users and whether

it solves problems more efficiently than existing solutions. Work is under way to develop models that

would identify the wide range of potential consequences of ITS activities. Such models will help sort

out which parts of ITS further which objectives, and

how, and will suggest where meeting those objections will produce trade-offs and mutual benefits. 

Criteria for evaluating the ITS program and its

component projects include the following:

o Is there a rationale for government involvement,

or can the private sector undertake the research,

testing, or deployment? Are there external benefits or costs that cause the market to fail? Do the
x HIGH-TECH HIGHWAYS: INTELLIGENT TRANSPORTATION SYSTEMS AND POLICY October 1995

costs of market failure outweigh the risks of governmental failure? 

o What is the federal interest in the program or

project? Are there nationwide benefits? Could

and would state and local agencies take responsibility?

o How will the effort contribute to the state of

knowledge about the benefits and cost of prospective technological applications? How will it

advance the ultimate goals of mobility, efficiency, safety, and environmental quality?

o How does the project fit in with other projects?

Will it help fill gaps in knowledge about technologies or behavioral responses? Is this the best

way of gaining that information?

o Is the project designed in a way that helps evaluation?

The ultimate measure of the ITS program's success will be the adoption of its products and technologies by state and local governments and other transportation providers and users.

Options

The need to constrain federal spending in general

affects the ITS program in particular. Assuming that

budgets will be tighter in the future, this study suggests three alternatives for reform of the program:

eliminating it as a separate program, narrowing its

focus, or strengthening it through managerial improvements. Those options would produce somewhat different results in terms of the types of applications emphasized and the nature of federal government involvement.

Eliminating the Program

Eliminating the ITS program as a separate programmatic and budgetary entity would not necessarily

mean ending federal support for intelligent transportation technologies; it would only require such efforts

to compete more directly for federal funding with

other transportation projects. Under this option, the

Federal Highway Administration (FHWA), Federal

Transit Administration (FTA), and National Highway

Traffic Safety Administration (NHTSA) could continue to sponsor ITS projects under their existing research and operational testing programs. State and

local governments could also use federal funds for

research, testing, and deployment of intelligent systems.

Underlying this option is the premise that the ITS

program has largely succeeded in its goals of bringing together parties that have a stake in intelligent

transportation and highlighting the benefits of applying advanced technologies to solve transportation

problems. The federal government has provided seed

money for a variety of projects and has called the

attention of state and local officials to smart systems

so that those executives can make informed investment decisions about whether to apply new transportation technologies in their communities.

Scaling Back and Refocusing

Another option is to scale back the ITS program and

focus on areas where federal intervention would facilitate interstate commerce. Electronic clearance of

commercial vehicle operators and electronic payment

of tolls would be most likely to meet this criterion.

Other project areas could be considered on the basis

of the strength of federal interest and the need for

federal involvement.

Strengthening Control

A third option is to retain the ITS program in its current form but to improve the process of setting priorities and selecting projects. Funding is divided among

several hundred projects, including some that appear

to duplicate others and some that have not been designed to produce clear-cut results. The program

could be strengthened by judging projects on the basis of their potential contribution to knowledge. Researchers could be required to show what they would

learn, what gaps in knowledge the project would fill,

and what transportation problems it would help
SUMMARY xi

solve, as well as the likely success of doing so. Peer

review of proposals and results could strengthen the

evaluation process.

Conclusion

As with most new programs, ITS has had problems

of start-up and rapid growth. But the establishment

of the Intelligent Transportation Systems Joint Program Office within the Department of Transportation

has helped bring together a disparate set of projects

run by FHWA, FTA, and NHTSA and is providing

greater oversight to the process of selecting, overseeing, and evaluating projects. The next two years will

be crucial in demonstrating what the program can

produce. At this juncture, the jury is still out on the

question of whether it is a sound investment of federal dollars. Unless the program can demonstrate

that it is helping to meet the overall transportation

objectives of mobility, productivity, safety, and environmental quality without increasing costs, it will

have difficulty competing with other programs for

limited budgetary resources.

In considering legislation to succeed ISTEA, the

Congress will debate the future federal role in setting

policies and providing financing for highways and

mass transit systems. The three options offer ways of

modifying the ITS program within the context of the

existing federal framework. The criteria presented

for federal involvement--a national interest transcending state lines and the existence of spillover

benefits and costs--can also be applied more generally to highway and transit programs. If the Congress should decide to scale back or significantly alter the federal role in surface transportation, the role

in funding intelligent transportation systems could be

modified accordingly.

T

Chapter One

Introduction

he Intelligent Transportation Systems (ITS)

program is a research, development, testing,

evaluation, and deployment program to improve travel on mass transit and highways by using

advanced computer, communications, and sensor

technologies. The program is several years into its 1

first authorization period, making a midcourse review desirable. 

The ITS program consists of several hundred

projects designed to apply new technologies to solve

such transportation problems as traffic congestion,

safety, and adverse environmental effects. Some projects address problems through the supply side, attempting to assist highway and transit agencies in

reducing costs or making better use of the resources

they control. Other projects work through the demand side, attempting to satisfy the needs of users.

But the diversity of users, the multiplicity of suppliers, and the variety of objectives complicate efforts

to establish comprehensive measures for evaluating

the program.

In choosing the most promising research efforts,

the federal government must consider which projects

most deserve federal dollars. Important criteria include the size of public benefits in relation to costs

and whether another level of government or the private sector might pursue the project.

The ultimate beneficiaries are highway and transit users: commuters, tourists, trucking companies,

and so on. Those commercial and individual users

will make the final decisions about installing and using equipment in their vehicles and homes to help

plan their travel--what mode to take, when to go, and

what route to follow. And those decisions are affected by the types of investments undertaken by

state and local governments that own and operate

highways and transit systems.

The value of government investments in intelligent transportation systems will depend in large measure on how travelers greet those systems; do they

welcome, merely accept, reject, or resist them?

Therefore, government research and development

(R&D) efforts must include not only whether technologies work but also behavioral responses and how

those responses translate into safer, faster, cheaper,

more reliable travel.

 For several decades, the federal government has

played a significant role in funding the construction

of major highways and mass transit systems and providing assistance in operating and maintaining those

systems. If it continues to provide such assistance, it

has a stake in reducing the costs of those systems.

The federal government also plays a role in facilitating the flow of commerce between states. One

way is by promoting compatibility of technologies

across state lines. That approach could be useful in

electronically collecting tolls and clearing trucks that

would otherwise have to stop at state checkpoints to

1. The program was originally known as the Intelligent Vehicle Highway Systems (IVHS) program.
2 HIGH-TECH HIGHWAYS: INTELLIGENT TRANSPORTATION SYSTEMS AND POLICY October 1995

demonstrate compliance with registration requirements, weight limits, and other regulations.

Although federal funding is not the sole support

for transportation research and development, the federal government's policies are likely to have farreaching implications for the future of transportation.

During the next few years, the success of the ITS

program can be measured by the willingness of transportation users and providers to adopt technologies it

has sponsored. They will do so if they see that those

innovations reduce costs or improve service.

The ITS Program

To meet the diverse goals established by the Congress--mobility, safety, productivity, environmental

quality, and improved technology--the ITS program

has started work on a variety of applications. Those

applications can be grouped into several major categories:

o Travel and transportation management, aimed at

keeping highway traffic flowing smoothly, using

such measures as clearing accident scenes and

removing broken-down vehicles from roadways,

controlling traffic signals, and providing information to travelers about routes and services.

o Travel demand management, to reduce travel by

single-occupancy vehicles by providing information in advance about traffic conditions and the

availability of transit services and ridesharing

opportunities.

o Public transportation operations, to give transit

users information enroute, enable transit officials

to keep track of the locations of their vehicles

and monitor ridership demands, and enhance the

safety of transit operations.

o Electronic payment, to facilitate travel by allowing travelers to pay for parking, transit fares, and

tolls with "smart cards." 

o Commercial vehicle operations, to facilitate interstate trucking by substituting electronic clearance for paperwork now needed to comply with

state requirements, weighing trucks at highway

speeds instead of requiring them to stop at weigh

stations, monitoring functions to enhance safety

and improve efficiency, and providing for immediate notification of authorities in case of traffic

accidents, especially if hazardous materials are

involved.

o Emergency management, to provide for quick

notification of authorities and prompt response in

emergencies.

o Advanced vehicle control and safety systems,

such as collision avoidance warnings or automatic braking controls and automated highway

systems, on which vehicles could move without

drivers.

In addition to those applications, the ITS program includes several other efforts:

o Corridor programs, to integrate various applications of technology within heavily traveled transportation corridors.

o Development of a systems architecture, to provide a blueprint of the way in which the various

intelligent transportation technologies will fit together during the next 20 years and beyond.

o Deployment planning and support, to resolve

legal and institutional issues as well as to integrate new technologies into the nation’s transportation systems.

Legislative Authority

The Congress authorized the Intelligent Vehicle

Highway Systems (IVHS) program in the Intelligent

Vehicle-Highway Systems Act of 1991, which was

included as title VI, part B of the Intermodal Surface

Transportation Efficiency Act of 1991 (ISTEA).2

The act set forth eight goals for the program:

2. ISTEA, section 6051 et seq. As noted above, the program has become commonly known as Intelligent Transportation Systems.
CHAPTER ONE INTRODUCTION 3

o Enhance the capacity, efficiency, and safety of

the federal-aid highway system and serve as an

alternative to expanding the physical capacity of

the highway system;

o Enhance efforts to attain air quality goals established in the Clean Air Act;

o Improve safety on the highways;

o Develop and promote an IVHS industry in the

United States;

o Reduce the societal, economic, and environmental costs of traffic congestion;

o Enhance U.S. competitiveness and productivity

by improving the free flow of commerce and establish a significant U.S. presence in an emerging

field of technology;

o Develop a technology base for IVHS, using the

capabilities of national laboratories; and

o Help transfer transportation technology from the

national laboratories to the private sector.3

Some of the eight objectives are complementary

but others compete with each other. Deploying more

resources to advance some goals may require spending less for others. The Congress gave the Department of Transportation (DOT) substantial latitude in

meeting the objectives, although it also earmarked

funding for some projects and directed the department to meet certain deadlines.

Participants in ITS 

Development

The federal government's primary role in developing

the ITS program is to set priorities, provide funding,

act as a coordinator, and serve as a catalyst; it will

perform relatively little in-house research and development, operational testing, or deployment. In fact,

it aims to promote development of ITS by other levels of government and the private sector. The participation of state and local governments is crucial to the

ultimate success of the ITS program because they

own and operate most of the transportation infrastructure in the United States. Historically, the federal government has provided funding for transportation to lower levels of government, usually with

strings attached. In addition, it conducts or sponsors

research and shares the results with other levels of

government.

To be successful, ITS projects must address the

economic and transportation needs of people who

would use their services. State and local governments will make the key decisions about adopting

most applications. Projects must be economically

justifiable in terms of capital investment and operation and maintenance costs over their useful life. For

some types of applications, especially commercial

vehicle operations, the private sector can make--and

indeed has made--investments on its own, without

governmental participation. But such investments

typically are limited to those for which the company

can recoup the investment internally--that is, from

which it can reap enough benefits to make the investment worthwhile. For investments that have substantial spillover benefits to other highway users, government funding would help expand R&D to levels that

are more beneficial to society.

Many ITS activities are partnerships between

government and private parties, and some involve

more than one level of government. Among the private entities involved are motor vehicle manufacturers, companies with expertise in communications and

electronics, truckers, university research centers, and

organizations representing motorists and users of

public transit. Many consultants are also involved.

In the public sector, federal, state and local highway

and transit officials are the key players. 

DOT's ITS Joint Program Office

In 1994, the Department of Transportation established the ITS Joint Program Office to coordinate

efforts by the Federal Highway Administration

(FHWA), the Federal Transit Administration (FTA), 3. ISTEA, section 6052(b)(1) through 6052(b)(8).
4 HIGH-TECH HIGHWAYS: INTELLIGENT TRANSPORTATION SYSTEMS AND POLICY October 1995

and the National Highway Traffic Safety Administration. The Federal Highway Administration continues

to play a dominant role, reflecting the amount of

funding for roadway projects that are traditionally in

its purview. But the establishment of the joint office

underscores DOT's broader transportation interests,

which include transit and safety in addition to highways. It also reflects the growing size of the ITS

program and demands for greater program integration and coordination.

ITS America

One unique participant is the Intelligent Transportation Society of America (ITS America), which was

established in 1991 as a federal advisory committee

on the ITS program. It draws members from all 4

parts of the surface transportation community: state

and local governments, motor vehicle manufacturers,

commercial vehicle operators, railroads, telecommunications and computer technology companies, universities and other research organizations, consulting

firms, and public interest groups.

ITS America offers advice formally and informally to the Department of Transportation. It sponsors workshops, conferences, and symposiums that

bring together researchers, producers, and users of

ITS services. These meetings provide the opportunity to exchange ideas about what works and what

does not, what is useful and what is not, and which

needs remain unfulfilled. ITS America has produced

a number of reports, including a strategic plan for

ITS, recommendations for federal spending on ITS,

proceedings of its conferences, and reviews of the

program.

Funding

The Congress has provided $827.6 million for the

ITS program for the 1991-1995 period. Beginning 5

with $20 million in 1991, the spending authority of

the program has grown to $227.5 million in 1995.

Compared with total federal spending on highways of about $20 billion annually, the ITS budget is

quite small--roughly 1 percent. But its size belies its

strategic importance because decisions made today

about research, testing, and deployment of ITS systems could have profound implications for highway

travel over the next several decades. Likewise, the

approximately $60 million spent through 1994 on

projects with public transit applications is small compared with FTA's total budget of around $5 billion a

year. But if ITS research results in the ability of transit systems to cut costs or increase ridership, it could

reduce the size of public subsidies.

In the 1980s, before the inception of the formal

ITS program, FHWA began as part of its research

program to fund a number of projects involving the

use of computer, communications, and sensor technologies in transportation. Those activities formed

the nucleus of the early ITS program.

In its conference report on the 1989 appropriation

act for transportation, the Congress recognized the

emerging research program and directed DOT to report comprehensively on intelligent vehicle highway

systems. ITS first appeared as a line item in the conference report accompanying transportation appropriations for 1991, when it was allocated $20 million

within FHWA's research budget. That funding

comes under the general operating expenses (GOE)

account in FHWA, which receives annual appropriations. The highway bills that the Congress periodically enacts, including ISTEA, include spending authority that can be used without further Congressional action--that is, without the need for appropriations. In most years, however, the appropriation bill

for transportation includes obligation ceilings. Those

4. ITS America changed its name from the Intelligent Vehicle-Highway Society of America (IVHS America) effective September 13,

1994, to reflect a broader mission. DOT designated IVHS America

as a federal advisory committee under section 6053(e) of ISTEA.

5. Before 1991, the Congress appropriated funds for IVHS activities,

but they were small and are difficult to track because they were part

of FHWA's general research funding.
CHAPTER ONE INTRODUCTION 5

limitations effectively reduce the amount of spending

authority, previously granted in a highway bill, that

can be used in any one year. 

The ITS program gained greater visibility and

support when it was formally authorized as part of

the Intermodal Surface Transportation Efficiency Act

of 1991, which reauthorized the federal highway and

mass transportation programs. ISTEA provides funding in the form of contract authority, which is available without requiring annual appropriations (although it is still subject to the limitation on obligations established in appropriation legislation). The

Congress has continued to designate portions of

FHWA's general operating expense funds for ITS,

however, so spending authority comes from both

sources: GOE appropriations and contract authority.

Through appropriations and ISTEA, the Congress

has provided $827.6 million for the ITS program for

the 1991-1995 period. By the end of fiscal year

1994, the Department of Transportation had obligated $544 million for the program (see Table 1).

In ISTEA, the Congress authorized funding for

ITS of $94 million in 1992 and $113 million for each

successive year through 1997, for a total of $659 million over the six-year period. The Congress appropriated $280.1 million for ITS to FHWA's general

operating expenses account for the 1991-1994 period

and $114.5 million for 1995. Thus, of the total of

$827.6 million provided from 1991 through 1995,

47.7 percent is from GOE, and 52.3 percent is from

contract authority in the federal-aid highways program.

Earmarked Funding

The Congress has designated specific projects to be

funded under both GOE appropriations and ISTEA.

Since 1992, about $396.5 million (49.1 percent of the

Table 1.

Funding and Obligations for the Intelligent Transportation 

Systems Program (In millions of dollars)

Total Total

Through Through

1991 1992 1993 1994 1994 1995 1995 a a

Funding

General Operating Expenses 20.0 139.8 30.0 90.3 280.1 114.5 394.6

ISTEA Contract Authority 0 94.0 113.0 113.0 320.0 113.0 433.0

Total 20.0 233.8 143.0 203.3 600.1 227.5 827.6

Obligations

General Operating Expenses 19.9 72.4 38.7 127.9 258.9 135.7 394.6

ISTEA Contract Authority 0 17.5 112.2 155.3 285.1 147.9 433.0

Total 19.9 89.9 150.9 283.3 544.0 283.6 827.6

SOURCE: Federal Highway Administration.

NOTE: ISTEA = Intermodal Surface Transportation Efficiency Act of 1991.

a. Estimated.
6 HIGH-TECH HIGHWAYS: INTELLIGENT TRANSPORTATION SYSTEMS AND POLICY October 1995

Table 2.

Spending Obligations for the Intelligent Transportation Systems Program by Type, 1991-1995 

(In millions of dollars)

Share Share

Total Through Total Through

Through 1994 Through 1995

1991 1992 1993 1994 1994 (Percent) 1995 1995 (Percent)

Research and Development 7.9 19.9 34.2 39.6 101.6 18.7 36.6 138.2 16.7

Operational Tests 10.4 3.9 28.9 60.1 103.3 19.0 53.7 157.1 19.0

Commercial Vehicle Operations 0 0 0 13.9 13.9 2.6 11.6 25.5 3.1

Automated Highway Systems 0 0 14.0 0.1 14.1 2.6 13.0 27.1 3.3

Advanced Technology 0 0 0 12.8 12.8 2.4 15.0 27.8 3.4

Corridors 0 57.6 41.4 128.4 227.4 41.8 117.6 345.0 41.7

Deployment Support 0 5.1 7.0 4.7 16.8 3.1 9.3 26.1 3.2

Program Support 1.6 3.4 19.6 14.3 38.9 7.1 13.5 52.4 6.3

Systems Architecture 0 0 5.8 9.4 15.2 2.8 13.2 28.4 3.4

Total 19.9 89.9 150.9 283.3 544.0 100.0 283.6 827.6 100.0

SOURCE: Federal Highway Administration.

total provided) has been earmarked. About $128 million (34.2 percent) of GOE funding has been ear

marked, as has about $268.5 million (62 percent) of

ISTEA funding.

All of the ISTEA and most of the GOE earmarked funding has been designated for transportation corridors. In the 1992 appropriation conference

report, the Congress distributed $119.8 million for

"congested corridors." Of that, $109 million was earmarked for specific projects, and $10.8 million was

left unallocated.

ISTEA authorized $71 million in 1992 and $86

million a year for the 1993-1997 period for the corridors program. The act required the Secretary of

Transportation to designate transportation corridors

in which application of ITS would have particular

benefit, and it set forth criteria for allocating not less

than 50 percent of corridor funding for three to 10

"priority corridors." DOT has designated four priority corridors: the Northeast, Houston, Midwest

(Gary-Chicago-Milwaukee), and Southern California.

The factors to be considered in designating priority corridors were traffic density; nonattainment of

ozone goals under the Clean Air Act; a variety of

types of transportation facilities (such as highways,

bridges, tunnels, and toll and nontoll facilities); inability to expand significantly the capacity of existing surface transportation facilities; a significant mix

of passenger, transit, and commercial motor carrier

traffic; complexity of traffic patterns; and potential

contribution to carrying out DOT's strategic plan for

IVHS.

Funding by Type of Activity

Conference reports accompanying appropriation bills

have designated funding by type of activity (see

Table 2). The three largest categories--corridors 6

(41.8 percent), operational tests (19 percent), and

6. DOT's categories and amounts differ slightly from those designated

in conference reports because DOT has been given the authority to

make some shifts in funds within the program.
1991 1992 1993 1994

0

50

100

150

200

250

300

350

Corridors Operational Tests

Research and Development Other

Millions of Dollars

CHAPTER ONE INTRODUCTION 7

Figure 1.

Spending Obligations for the Intelligent

Transportation Systems Program by Category

SOURCE: Federal Highway Administration.

research and development (18.7 percent)--account for

about 80 percent of spending through 1994. Such 7

breakouts are useful to show generally where the

money is going, but the categories are difficult to

compare because some refer to a type of activity,

such as R&D and operational testing, but others refer

to applications, such as commercial vehicle operations and automated highway systems. A large part

of the spending on corridors could be ascribed to operational testing, as could much of the funding for

commercial vehicle operations.

The composition of ITS funding has fluctuated as

its size has grown (see Figure 1). Since 1992, the

largest component each year has been the corridors

program. Obligations for corridors dipped from

$57.6 million in 1992 to $41.4 million in 1993 but

surged to $128.4 million in 1994. By comparison,

funding for operational tests declined from 1991 to

1992 but has exploded since then. Research and development has grown more steadily, rising from $7.9

million in 1991 to $39.6 million in 1994.

Program support, the largest of the smaller areas

of the ITS program, received a 7.1 percent share of

total funding from 1991 to 1994. The others probably should be included in one of the larger categories

for purposes of analysis, but available data do not

facilitate the task. Most--but not all--spending for

commercial vehicle operations (CVO) has gone for

operational testing. The Senate's 1995 appropriation

report recommended that no CVO funds should go

for operational tests; operational testing of CVO applications would have to compete for funding within

the operational tests category. The House-Senate

conferees allowed CVO funding for one major operational test but agreed that for 1996 and beyond such

funding must come from operational tests.

Funding for deployment support has fluctuated.

Spending is expected to jump from $4.7 million in

1994 to $9.3 million in 1995. Deployment support

may prove to be a key ingredient in the successful

application of ITS technologies because it focuses on

understanding institutional and legal obstacles.

Systems architecture became a separate line item

in 1993, when program officials recognized the importance of establishing an integrated program structure with compatible technologies. DOT funded this

area at $5.8 million in 1993 and $9.4 million in 1994.

Advanced technology applications became a separate item within ITS under the GOE appropriations

for 1994. Of the $15 million appropriated for 1994

and 1995, DOT obligated $12.8 million in 1994 and

expects to obligate $15 million in 1995.

Funding by Type of Application

ITS spending can also be characterized by area of

application (see Table 3). These data are more subjective than those presented in the previous section

because they are based on judgments about what objectives the various projects may promote. Many

projects have more than one objective or application

area. For this analysis, funding for projects with

multiple purposes was counted as spending for each

major purpose. For example, a project intended to

enhance public transportation in rural areas was categorized as having both transit and rural applications.

7. The categories combine congested and priority corridors.
8 HIGH-TECH HIGHWAYS: INTELLIGENT TRANSPORTATION SYSTEMS AND POLICY October 1995

Table 3.

Funding for Intelligent Transportation Systems

Projects by Type of Application

Federal Funds Percentage

Obligated of Total

Through 1994 Federal

(In millions Funding of

Application of dollars) Projectsa

Travel and Traffic 

Management 304.6 65.3

Safety 60.2 12.9

Public Transit 59.9 12.8

Commercial Vehicle 

Operations 25.6 5.5

Rural 12.1 2.6

Environment 5.6 1.2

SOURCE: Congressional Budget Office calculations based on

data from Department of Transportation, Federal

Highway Administration, Intelligent Transportation

Systems Projects (January 1995).

a. Excludes program oversight and administration costs. Federal

funding for projects through 1994 totaled $466.8 million. But

the entries in the table do not add up to that total because

some projects are counted twice and others are excluded.

See the text for explanation.

Conversely, many projects have a clear primary

application, even though they also have indirect objectives. For example, many travel management projects are also intended to improve safety. For this

analysis, however, if safety did not appear as a primary motivator of these projects, they were not

counted as having safety applications. Thus, the assignment of categories was subjective, but it still provides a rough picture of how ITS funding was allocated by application.

Although funding for some projects was counted

more than once--making the percentages add up to

more than 100--some projects were not included at

all. Projects involving systems architecture, legal

and institutional factors, and other matters that do not

correspond directly to areas of specific application

were omitted from the analysis.

The largest application area was travel and traffic

management, which received $304.6 million (65.3

percent of federal funding for ITS projects through

1994). Other areas lagged far behind. Projects with

safety as a major motivation received $60.2 million

(12.9 percent of federal funding), and projects with

public transit applications received $59.9 million

(12.8 percent). Projects affecting operations of commercial vehicles got $25.6 million in federal funding

(5.5 percent). Rural applications received $12.1 million (2.6 percent), and the environment trailed at $5.6

million (1.2 percent).
C

Chapter Two

Evaluating the ITS Program

omputer, communications, and sensor technologies offer many opportunities to improve

highway and mass transit services. Decisions made over the next few years will affect the

shape and performance of the nation's transportation

system far into the 21st century. Those decisions

will be made by federal, state, and local governments

and by private firms and consumers. A review of the

issues suggests that the roles the federal government

could play most effectively are those that improve

transportation services and reduce their costs, stimulate research and development, and encourage agreements about technological standards and institutional

cooperation that facilitate interstate commerce.

In reviewing any governmental program, it is

useful to consider several questions. First, what is

the rationale for governmental involvement? Is this

an activity the government--and, in particular, the

federal government--should be engaged in? Why?

What are the benefits to the public? Second, is the

program meeting its objectives? Are taxpayers getting their money's worth? 

The Rationale for Government

Involvement

Economists generally cite two principal rationales for

governmental involvement in providing goods and

services: market failure and the distribution of

wealth. Markets may not function effectively when 1

one person's use of a good or service does not interfere with that of another person (referred to as "nonrival consumption"), or when excluding users who

are not willing to pay is impossible or impractical

(called "nonexcludability"). Both situations give 2

rise to spillovers, or "externalities," in which people

who do not pay for the good benefit from it, or people who do not produce the good or impose the cost

pay for it. Spillover benefits may lead to too little of

the good being produced, and spillover costs may

lead to too much. If spillovers result in a serious

misallocation of resources, action by the government--such as producing or regulating a good or

service--may help correct the market failure. 

The Role of Government in 

Transportation Services

The primary rationale for the Intelligent Transportation Systems program is the government's role in furnishing transportation services. The government, not

the private sector, generally provides highways and

mass transit. Although some private roads and transit services exist, they are not common in the United

1. See Richard A. Musgrave and Peggy B. Musgrave, Public Finance

in Theory and Practice, 4th ed. (New York: McGraw-Hill, 1984);

and John F. Due and Ann F. Friedlaender, Government Finance:

Economics of the Public Sector, 7th ed. (Homewood, Ill.: Richard

D. Irwin, Inc., 1981).

2. Musgrave and Musgrave, Public Finance, pp. 48-50.
10 HIGH-TECH HIGHWAYS: INTELLIGENT TRANSPORTATION SYSTEMS AND POLICY October 1995

States. In the case of highways, it generally has not

been feasible to exclude users who do not pay. Some

of the earliest roads in this country were turnpikes.

As the nation developed and more roads were built,

however, it became more difficult to limit access

only to those willing to pay a toll. Electronic toll

collection--an element of ITS--could make it feasible

to charge highway users and thereby could make private investment in roads more attractive.

Government involvement in mass transit is justified in two ways. One is that because highway users

in urban areas do not pay the full costs of travel--including those of congestion and pollution--transit

users should be subsidized as a way of redressing the

imbalance. The other is based on a belief that people

with low incomes are more likely to ride mass transit

and that transit subsidies therefore help redistribute

income from rich to poor. Both arguments have

weak components. Instead of subsidizing highway

and transit users, a more direct approach would be to

charge for congestion and pollution. ITS technolo- 3

gies could advance this approach through electronic

toll collection. As for redistributing income, most

economists would agree that transit subsidies are a

costly way of assisting poor people because they also

aid high-income passengers. In fact, in cities like

Washington and San Francisco, where rail transit

systems serve many relatively high-income users,

subways are subsidized by lower-income people who

cannot or do not use transit. In addition, in those

areas, rail service used by suburban commuters may

take funds away from bus service used by inner-city

residents.

Government support of research and development in transportation can directly improve the government's ability to provide highways and mass transit service. Decisions to conduct in-house research to

improve quality or lower cost can be likened to a private firm's decisions to do product or process research.

In addition to government providers of transportation services, potential direct beneficiaries of ITS

research include users of highways and mass transit.

Indirect beneficiaries include shippers and consumers

of goods transported on highways, who benefit from

efficiencies of commercial vehicle operations, and

taxpayers, who may find that their transportation tax

dollars go farther than before. Government support

of efforts that yield benefits in excess of costs (taking

into account the value of alternative uses of capital)

can be viewed as an appropriate function--especially

in cases in which private enterprise has little incentive to risk its own capital because it cannot recoup

its costs.

The Role of Government in Research

and Development

In addition to funding highways and transit services,

the government has played a role in sponsoring research and development. Government sponsorship 4

of R&D is usually justified either on the grounds of

market failure or in direct support of a specific government mission. From a social viewpoint, the private sector may not conduct enough research because

it cannot reap enough benefit to make doing so

worthwhile. The government can disseminate research findings without having to recoup the costs in

the marketplace; the investment can be justified so

long as the social benefits outweigh the costs (properly discounted and including the value of alternative

uses of capital in the private sector).5

Many firms in the private sector engage heavily

in research and development, suggesting that they

have strong incentives to do so. In sorting out who

has incentives to do what types of research, economists have traditionally viewed R&D as a continuum

--from basic research (pure science to gain knowledge for its own sake) through applied research (research with specific applications) to development of

products and processes. Operational testing and support for deployment may also be added to the end of

the process.

3. See Congressional Budget Office, Paying for Highways, Airways,

and Waterways: How Can Users Be Charged? (May 1992).

4. For an overview of the rationale for federal support of research and

development, see Congressional Budget Office, How Federal

Spending for Infrastructure and Other Public Investments Affects

the Economy (July 1991), ch. 4.

5. David C. Mowery and Nathan Rosenberg, Technology and the Pursuit of Economic Growth (New York: Cambridge University Press,

1989).
CHAPTER TWO EVALUATING THE ITS PROGRAM 11

The private sector generally has less incentive to

invest in basic research because that is where spillover benefits are generally the greatest and a private

firm has the least ability to enjoy the full fruits of its

labors. The more the outcome of research can be

patented, copyrighted, or otherwise protected, the

more likely the firm can benefit and the less government involvement can be justified.

Underinvestment in research is a form of market

failure, but market failure alone is not sufficient justification for government involvement. In dynamic

economies, some amount of market failure is normal.

When considering government involvement to "correct" a market failure, one must weigh the potential

for government failure as well. Even though the

market may not produce an optimal amount of research, one cannot presume that the government can

identify and conduct "better" research.

The ITS program covers a range of activities

from basic research to operational testing and support

for deployment, and much of the spending goes to

activities at the testing and deployment end of the

spectrum. Thus, there are concerns about balance in

the ITS program. In considering appropriations for

1995, Congressional conferees addressed the issue in

terms of the commercial vehicle operations part of

the program. Although providing funding for one

major operational test for 1995, the conferees stated

that 

the funds requested for the commercial vehicle operations component of the IVHS [Intelligent Vehicle Highway System] program

should be reserved for higher-risk research

and development activities that may not yet

be ready for larger-scale deployment. Therefore, the conferees agree that funds for operational tests of this nature should be requested under the operational tests component of the program for fiscal year 1996 and

beyond.6

Although government spending on operational

testing and deployment would be difficult to justify

for commercial applications, the issue is trickier

when the applications are goods and services provided by the government. This consideration brings

the analysis back to the first point: that government

spending on ITS can be rationalized more readily

because it supports a government activity. Transportation is a service traditionally provided by the government, and R&D that results in lower costs or improved service can benefit taxpayers and consumers.

The Federal Role in Relation to That 

of State and Local Governments

Why should the federal government fund research on

$smart# vehicles, highways, and transit when those

activities are typically run at the state or local level

of government? For the same reason that private

firms may underinvest in research and development,

state and local governments may also underinvest.

They may not be able to reap enough benefits to

cover the costs. But if the knowledge gained is

shared with other jurisdictions, the total benefits may

exceed costs. In such cases, where the benefits nationwide exceed the costs (and provide a competitive

rate of return), federal support can be justified.

In addition to spillover benefits from research,

similar benefits are possible as a result of deploying

intelligent transportation systems. Decisions made

by transportation officials in one jurisdiction affect

the traffic in neighboring jurisdictions. Moreover,

travelers tend to cross boundary lines and would prefer to encounter compatible technologies so that they

would need to learn only one system and purchase

one type of equipment, especially in such applications as electronic toll collection and traveler information systems. Whether the federal government is

needed to facilitate compatibility is another matter,

however, since many interjurisdictional coalitions

and compacts already exist.

Because the federal government transfers large

sums of money to state and local governments for

highways and transit, it has an interest in promoting

technologies that reduce the need for funds. State

and local governments also have incentives to make

6. U.S. House of Representatives, Making Appropriations for the

Department of Transportation and Related Agencies, for the Fiscal

Year Ending September 30, 1995, and for Other Purposes, conference report to accompany H.R. 4556, Report 103-752 (September

30, 1994), p. 49.
12 HIGH-TECH HIGHWAYS: INTELLIGENT TRANSPORTATION SYSTEMS AND POLICY October 1995

their transportation dollars go farther, but the federal

government may have an advantage based on economies of scale. It is probably more economical to

sponsor research at the federal level into problems

common to many states than try to run 50 state-level

or thousands of local-level programs. Problems that

are unique to individual states or regions may more

appropriately be solved locally, although the federal

government could play a role in advancing and coordinating projects that cross state lines. Whether the

current system of federal financing of highways and

transit is the most efficient or sensible is beyond the

scope of this study.

The Role of the Private Sector

In ITS research, the private sector enters the picture

in two ways. Firms in the communications, electronics, computer, motor vehicle, and related industries

are suppliers of ITS goods and services. The motor

vehicle industry is also a user of ITS, along with

commercial vehicle operators, transit operators, and

other highway users. But what is the government's

role in relation to the private sector?

Different ITS products have different relationships in the public and private sectors. Some aspects

of ITS focus on smart highways, and others focus on

smart vehicles. In most cases, returns on investments

for making vehicles smarter can be obtained privately. For example, cruise control, collision warning and avoidance, and vision enhancement systems

are features that are installed on vehicles, and automakers can decide whether to do so or not on the

basis of whether they anticipate enough consumer

demand for those products to warrant the investment.

The features do not rely on any particular highway

infrastructure, so decisions about them can be made

without government involvement. 

Other vehicle-based features, such as navigation,

electronic toll collection, and clearance systems for

commercial vehicles, require compatibility between

vehicle and highway infrastructure. For more futuristic applications of ITS, such as automated highway

and advanced vehicle control systems, the automobile industry has an interest in ensuring that the machines it produces are compatible with highway designs and that vehicles manufactured by one company are compatible with those produced by others.

In those instances, the private and public sectors

complement each other. Investment decisions are

interdependent. The government may have to take

the lead in announcing its planned investments and

specifying the technologies it intends to adopt so that

the private sector can make investment decisions

with less risk and uncertainty.

Finally, some elements of ITS are linked entirely

to infrastructure. Electronic signs, adaptive control

systems (such as traffic signals and ramp meters),

and other sensing devices can be installed and operated by highway agencies without any private investment. Decisions about those systems lie with government. In considering the merits of such investments, however, governments should consider the

availability of substitutes provided by either the public or the private sector. For example, drivers could

learn of congestion ahead either by listening to radio

stations that carry traffic reports or by viewing

variable-message signs managed by officials at traffic control centers using information from sensors in

the roadway.

In evaluating the ITS program, it is useful to

keep such distinctions in mind. Government involvement is most justifiable in those elements of ITS that

are based on infrastructure and in those that require

compatibility between infrastructure and vehicle.

The federal government is encouraging partnerships between the public and private sectors in developing intelligent transportation systems. Such partnerships can improve the coordination between public and private entities so as to avoid duplication of

effort and ensure compatibility of technologies. In

addition, given tight budgets, government officials

hope that their funding will leverage more funds

from private sources. The principal reason for caution about public/private partnerships is their potential to create government-sponsored monopolies that

keep other private firms from competing--and possibly offering better services at lower prices.
CHAPTER TWO EVALUATING THE ITS PROGRAM 13

Evaluating the ITS Program

As the federal ITS program enters its fifth year, many

observers are asking to see results. Although the program's managers can point to a number of individual

projects that appear successful, little systematic evaluation has been completed. In the early days of the

program, attention to evaluation was limited. That

situation is changing. The program's managers recognize that they must be able to show results and a

clear justification of their role in order to receive

continued funding. Several major efforts are under

way to strengthen the evaluation process. For the

most part, those efforts are focused on measurable

results. 

The Office of Management and Budget

The President's Office of Management and Budget

(OMB) has selected the ITS program as a pilot project in its performance measurement program, an initiative to carry out the Government Performance and

Results Act of 1993. The ITS Joint Program Office

is working with OMB to develop measurements of

the program's performance. The intent is to specify

the ultimate goal of each program element, list intermediate outcomes that reflect progress in attaining

the goal, and identify measurable indicators of

achievement. Those goals and indicators will be tied

to the development of proposals for the program's

budget.

OMB is developing and refining this initiative as

part of the budget process for fiscal year 1997. It

intends full-scale implementation in the fall of 1997.7

Although the initiative is in its infancy, it is useful in

highlighting the links between budgetary resources

and results.

Audit by the Inspector General

The Office of Inspector General (OIG) of the Department of Transportation has evaluated the ITS program's systems for selecting, carrying out, overseeing, and evaluating projects. The OIG concluded 8

that the ITS program needed to improve management

and oversight controls.

The OIG found weaknesses in the process of selecting projects, stemming in part from the different

ways that the separate administrations within DOT

operate. The Federal Highway, Federal Transit, and

National Highway Traffic Safety Administrations

have different procedures for selecting ITS projects,

and in some cases those procedures were not followed. The OIG expressed concern that some projects duplicated others, potentially wasting program

resources. In response, the ITS Joint Program Of- 9

fice is developing ways of identifying how each new

project will contribute to the overall objectives of the

program.10

The OIG found that the program office was not

effectively monitoring and controlling project costs

and schedules. In a review of 12 continuing projects,

the OIG found that five had already exceeded original estimates of their costs and nine were behind

schedule. The OIG also found that evaluation plans 11

were not submitted in a timely manner for any of the

six projects within the sample that required such

plans. In response, the program office has engaged 12

a contractor to provide technical assistance with evaluations of operational tests. The program office 13

also hired a contractor to review costs and schedules

of all active projects and to develop a system to track

them.14

The contractor's review of costs and schedules

found significant differences in the program office's

7. Budget of the United States Government, Fiscal Year 1996, pp.

137-138.

8. Department of Transportation, Office of Inspector General, Audit

Report: Intelligent Transportation Systems Program Delivery Process, Federal Highway Administration, AS-FH-5-017 (May 4,

1995).

9. Ibid., p. 7.

10. Ibid., p. 21.

11. Ibid., pp. 8-9.

12. Ibid., p. 11.

13. Ibid., p. 24.

14. Ibid., pp. 22-24.
14 HIGH-TECH HIGHWAYS: INTELLIGENT TRANSPORTATION SYSTEMS AND POLICY October 1995

potential for control. Most research and development

projects are overseen by contracting officer technical

representatives at DOT who have substantial control

over them. Operational tests afford considerably less

opportunity for federal control because they are typically carried out in partnership with government

agencies at the state and local level and with private

entities. Institutional and procedural barriers associated with such partnerships make federal oversight

more difficult.

Evaluations of Operational Tests

The FHWA has contracted with the consulting firm

of Booz-Allen & Hamilton to provide support in

evaluating operational test projects. The contract,

which will last up to five years, should help FHWA

and the state highway departments design projects

with evaluation criteria in mind. Those criteria

should lead to improvements in evaluation--including

greater confidence in the results--over the current

situation, in which evaluations have often been

tacked on almost as an afterthought rather than being

incorporated into the design of the test. Nevertheless, coordinating among all the partners in operational tests--state and local agencies and privatesector firms--presents a substantial challenge to designers and evaluators alike.

Development of a Systems Architecture

Another avenue of pursuit for program evaluation is

the effort to develop a systems architecture. The systems architecture is a blueprint showing how the various pieces of intelligent transportation technology fit

together to form a general framework. It is the grand

conceptual design of an intelligent transportation system in 5, 10, and 20 years and beyond. Part of the

process of developing an architecture is evaluating

the benefits and costs of alternative design scenarios.

Four teams competed in the first phase of developing a systems architecture. As part of that effort,

the teams simulated the way technologies would be

applied in a model city called "Urbansville," which

resembled Detroit in terms of demographics, transportation facilities, and other characteristics. Although the teams estimated benefits and costs under

the Urbansville scenario, they did not tie together the

benefit and cost estimates in an easily comparable

fashion. Moreover, they made many speculative assumptions in their simulations. The results, therefore, do not shed much light on the benefits and costs

of intelligent transportation systems.

One of the difficulties facing simulators is the

uncertainty about the kinds of intelligent products

and services the public values. The simulators had to

make assumptions about which technologies state

and local officials, as well as private companies and

individuals, would adopt. They also had to use

FHWA's models and assumptions about traffic and

other variables. Unfortunately, FHWA's models did

not produce enough congestion to allow certain ITS

technologies to demonstrate their effectiveness in

relieving the problem. Such difficulties add another

layer of uncertainty to the process of interpreting the

results of the simulations.

Reports of the Volpe Center

DOT's research arm, the Volpe National Transportation Systems Center, has issued several reports summarizing analyses of intelligent transportation systems. They catalogue efforts to evaluate projects 15

and indicate gaps in knowledge. The researchers at

Volpe did not verify or evaluate the studies; their

contribution was to provide an inventory of research

efforts.

Many of the analyses summarized by Volpe researchers examined only benefits, not costs. Often

the analyses gave the results of relatively small tests,

raising questions about whether the results could be

generalized on a large scale. In many cases, the project being evaluated had not run long enough to ascertain long-term effects, such as changes in travel

patterns; only initial impacts were measured.

15. Department of Transportation, Volpe National Transportation Systems Center, Analysis of IVHS Benefits/Costs Studies (September

1993), Quick Overview of Recent Studies and Modeling Results

(January 1995), and Intelligent Transportation System Benefit Inventory (June 1995).
CHAPTER TWO EVALUATING THE ITS PROGRAM 15

National ITS Program Plan

In March 1995, the program office and ITS America

(the federal advisory committee established to advise

the ITS program) jointly issued the National ITS Program Plan, which contains a chapter outlining issues

related to program assessment. The report dis- 16

cusses methods for assessing the program, identifies

parameters for evaluation, and describes a number of

efforts under way. If those efforts proceed as

planned, they will provide over the next few years a

substantial amount of information about which types

of projects produce the greatest benefits. Combined

with the Office of Management and Budget’s initiative to measure performance and link budgets to results, those efforts could help guide decisions about

deploying intelligent transportation systems.

Issues to Address in 

Evaluating the Program

One issue that recurs in reviewing evaluations is the

question of what exactly is being evaluated. In research and operational testing, the chief concern

tends to be whether the technology works: does it

produce the anticipated physical results? How reliable is it? Does it function effectively most of the

time? Evaluations of the ITS program must go further if they are to be useful to policymakers in making decisions about funding priorities. Thus, it is

desirable to estimate the value of the benefit provided, such as the value of time saved by alleviating

congestion. Such estimating requires projecting the

degree to which a new technology will be adopted,

how it will be used, and the behavioral responses of

consumers. Does the technology offer a new capability that cannot currently be offered or produced? If

so, is the product something that users need or desire? Or does it do more efficiently something that is

already being done?

Those questions are not always easy to answer.

There are many different users of transportation systems, and a given user may have different needs at

different times. People commuting to work by automobile typically want to know about traffic congestion. More specifically, they want to know whether

there is any unusual congestion on their standard

route, in which case they might alter their route, time

of departure, or mode of travel. Those commuters

already know which routes are typically congested at

their time of travel, and they are familiar enough with

their area to know of alternative routes. Most of all,

they need up-to-the-minute information about the

location of incidents and extent of backups; other

information such as route guidance or information

about traveler services is far less important.

When they take a vacation trip, however, those

same travelers have entirely different needs. Route

navigation and information about services for travelers and tourist attractions become important. If they

are traveling to or through a metropolitan area, they

may want information about congestion--including

information about the predictable kind that results

from inadequate roads as well as the unpredictable

kind that results from traffic accidents.

If consumers place a higher value on their workrelated time than on their leisure time, they will probably value systems that reduce commuting time more

highly than systems that reduce travel time during a

vacation.

Vacation and business travelers often rent cars in

unfamiliar surroundings. Those travelers generally

want information about routes and services. Business travelers may also need information about congestion. Rental car companies could respond to those

demands by equipping their vehicles with intelligent

systems. Consumers might not think it worthwhile to

equip their own vehicles with systems to provide

traveler information because most of the time they

drive their vehicles in familiar territory and do not

need it. But rental car companies could find such

equipment a competitive marketing tool to attract

more customers. This activity could be done without

government involvement.

Commercial users of highways may have quite

different needs. At the local level, taxi and deliverytruck drivers could most productively use information that would help them save time, such as live in16. Gary W. Euler and H. Douglas Robertson, eds., National ITS Program Plan, vol. I (ITS Joint Program Office and ITS America,

March 1995), ch. 8.
16 HIGH-TECH HIGHWAYS: INTELLIGENT TRANSPORTATION SYSTEMS AND POLICY October 1995

formation about traffic incidents. They typically

need this information at off-peak times as well as

rush hours. Because commercial users are expected

to be familiar with their region's roads, they generally

should not need navigation or traveler-service information. Private delivery companies, however, might

find it advantageous to install computer systems that

map out the most efficient routes for picking up and

delivering packages within a metropolitan region.

Some companies already employ such systems,

which suggests that private enterprise has the incentive to adopt this new technology without government involvement.

Long-distance trucking companies have a variety

of needs that could be satisfied through intelligent

computer and communications technologies. Many

ITS applications in commercial vehicle operations

that do not require government involvement are well

developed. The evaluation of CVO projects should

entail considering whether private firms have incentives to apply technologies on their own or whether

government involvement is desirable.

Determining Users’ Needs

In assessing ITS projects, therefore, one needs to

think about the nature of demand for various applications of technologies, recognizing that different sets

of users have different needs and that different needs

may be met by different providers.

Assessing users' demands entails estimating what

users are willing and able to pay for new products.

Although an innovation may be a technological success, it may not be a commercial success. In air

transportation, for example, the supersonic transport

aircraft has been successful in reducing travel time

across the Atlantic but financially has not been able

to break even. Most passengers have not been willing or able to pay the extra cost to save a few hours.

Similar considerations apply in evaluating ITS technologies; many offer benefits, but whether users are

willing to pay for the benefits is an open question.

ITS technologies will have to compete with a variety

of existing alternatives--cellular telephones, traffic

reports broadcast on commercial radio and television

stations, road maps and atlases, tourist services offered by groups such as the American Automobile

Association, and so on.

Many ITS technologies appear to offer more and

better services to travelers than do existing systems.

Weighing those additional benefits against the additional costs of ITS systems can help guide decisions

about which technologies offer the greatest net benefits to society.

Keeping track of direct and indirect benefits of

ITS systems is complicated. Nevertheless, there are

some indications of strengths and weaknesses of alternative approaches to meeting the various objectives. Work is under way to develop models that

would identify the wide range of potential consequences of ITS activities. Those models will help

sort out which parts of ITS further which objectives

and how. They will also suggest where the trade-offs

and mutual benefits lie in trying to meet the various

objectives.

Setting Criteria for Evaluating 

the ITS Program

The issues discussed in this chapter suggest a number

of criteria for evaluating the ITS program and its

component projects:

o Is there a rationale for government involvement,

or can the private sector undertake the research,

testing, or deployment? Are there external benefits or costs that cause the market to fail? Do the

costs of market failure outweigh the risks of governmental failure? 

o What is the federal interest in the program or

project? Are there nationwide benefits? Could

and would state and local agencies take responsibility?

o How will the effort contribute to the state of

knowledge about the benefits and costs of prospective technological applications? How will it

advance the ultimate goals of mobility, efficiency, safety, and environmental quality?
CHAPTER TWO EVALUATING THE ITS PROGRAM 17

o How does a project fit in with other projects?

Will it help fill the gaps in knowledge about

technologies or behavioral responses? Is a given

approach the best way of gaining that information?

o Is the project designed in a way that facilitates

evaluation?

The answers to those questions can help guide the

Congress in deciding on the future of the ITS program.

There is a distinction between evaluating individual ITS projects or clusters of projects and evaluating

the program as a whole. The nature of a research

program is that the outcomes of experiments are unknown. Some will succeed, and some will fail. A

certain amount of failure is not only acceptable but

also, in retrospect, desirable because success in all

projects suggests that other promising opportunities

might not have been explored. Therefore, evaluations of the program and its projects may require

somewhat different criteria.

The objectives of the ITS program include enhancing mobility, improving efficiency, increasing

safety, and protecting environmental quality. Some

types of ITS projects may promote several objectives. For example, an effort that enhances safety

will result in fewer accidents. Reducing accidents on

busy highways decreases the resulting traffic tie-ups.

That outcome in turn may improve productivity by

cutting time lost to congestion, and it may abate pollution associated with stop-and-go traffic around an

accident scene.

Public transit projects may wind up benefiting

not only transit providers and users but also motorists, taxpayers, and other citizens. For example,

"smart bus" projects may result in more efficient

transit operations, thereby reducing the need for public subsidies and offering passengers safer and more

reliable service. Improved service may induce some

motorists to switch to transit, resulting in less congestion for the remaining motorists. Such a result

could have beneficial consequences for productivity

and air quality.

Projects must compete for resources, however,

within the constraints of the program’s budget.

Policymakers will have to decide on a balance among

projects of different types that will best satisfy the

multiple objectives of the program. Trade-offs must

be made--between vehicle and infrastructure, highway and transit, urban and rural, commercial and private vehicles, and other applications.

T

Chapter Three

Applications of Intelligent

Transportation Systems

he Intelligent Transportation Systems program seeks ways of applying advanced technologies to meet a variety of transportation

objectives. ITS has started several hundred projects

to explore the effectiveness of various technical applications in advancing those objectives. The program office has classified the projects according to

their principal applications: travel and transportation

management, travel demand management, public

transportation operations, electronic payment, commercial vehicle operations, emergency management,

advanced vehicle control and safety systems, and

priority corridors. (For a list of the ITS projects that

received the most federal funding through 1994, see

Table 4.) 

Travel and Transportation

Management

One of the major transportation problems that gives

impetus to ITS is traffic congestion, which is a growing problem in the nation's urban areas. The Department of Transportation estimates that congestion

costs the country about $100 billion a year in lost

productivity. Combined with an increase in the 1

number of cars on the road--which derives from increases in population, numbers of households, and

numbers of workers--is an increasing difficulty in

expanding existing highway capacity. In many urban

areas, land for building new highways or widening

existing highways is available only at a very high

cost. Citizens often value vacant land more highly

for its use as a park, wetland, or open area than as

another roadway. Concern about air pollution constrains additions to highway capacity that will result

in more cars on the road emitting more pollutants

into the air. 

Many ITS projects have as their primary goal

enhancing highway capacity--enabling more vehicles

to use existing highway lanes without pouring more

concrete. The Federal Highway Administration estimates that equipping one mile of freeway with electronic traffic surveillance costs about $1 million, but

constructing one mile of urban freeway costs about

$40 million. Thus, using advanced technologies to 2

accommodate more vehicles on existing highways

can save a lot of money.

Projects in the travel and transportation management category account for about half of ITS funding.

Two major subcategories are traffic management and

traveler information systems.

1. Gary W. Euler and H. Douglas Robertson, eds., National ITS Program Plan, vol. I (ITS Joint Program Office and ITS America,

March 1995), p. 1.

2. Department of Transportation, ITS Joint Program Office, briefing

chart (May 1995).
20 HIGH-TECH HIGHWAYS: INTELLIGENT TRANSPORTATION SYSTEMS AND POLICY October 1995

Table 4.

Major Intelligent Transportation Systems Projects (In millions of dollars)

Federal Funds Federal

Estimated Anticipated Obligated Share of

Total Total Federal Through Total Cost

Projects and Participants Project Cost Funding 1994 (In percent)

Travel and Transportation Management

FAST-TRAC (Oakland County, Michigan)

FHWA, Michigan DOT, County of

Oakland, University of Michigan,

Road Commission for Oakland

County, several automobile

companies 70.0 55.5 40.5 79.3

Electronic Toll and Traffic Management

(New Jersey)

FHWA, NJDOT, N.J. Highway Authority,

South Jersey Transportation Authority 40.0 32.0 32.0 80.0

Detroit, Michigan, Areawide Development

of ATMS/ATIS

FHWA, Michigan DOT 33.0 28.5 28.5 86.4

ADVANCE (Northwest suburbs of 

Chicago, Illinois)

DOT, Motorola Inc., Illinois Universities

Transportation Research Consortium,

American Automobile Association, and 

FHWA 52.0 35.0 21.0 67.3

TRANSCOM Congestion Management

Program (Metro New York City area)

FHWA, New York Department of 

Transportation, New Jersey Department

of Transportation, TRANSCOM, and To be To be To be

other member agencies determined determined 15.1 determined

New York Thruway Electronic Toll

Collection and Traffic Management

Partners to be determined 40.0 11.6 11.6 29.1

Southern State Parkway

(Long Island, New York) To be To be To be

New York State DOT, FHWA determined determined 6.3 determined

Integrated Corridor Management

(New Jersey/Philadelphia, Pennsylvania)

FHWA, New Jersey DOT 6.0 6.0 6.0 100.0

(Continued)
CHAPTER THREE APPLICATIONS OF INTELLIGENT TRANSPORTATION SYSTEMS 21

Table 4.

Continued

Federal Funds Federal

Estimated Anticipated Obligated Share of

Total Total Federal Through Total Cost

Projects and Participants Project Cost Funding 1994 (In percent)

Travel and Transportation Management

(Continued)

New Jersey Signal Computerization

FHWA, New Jersey 

Department of Transportation 10.2 6.0 6.0 58.8

$Capital#--Washington, D.C., Area

Operational Test

FHWA, Virginia Department of 

Transportation, Maryland State

Highway Administration,

Engineering Research Associates,

Bell Atlantic Mobile, and Farradyne

Systems Inc. 7.2 5.5 5.5 76.9

Human Factors in Advanced Traveler

Information Systems and

Commercial Vehicle Operations

Design Evolution (National)

FHWA, Battelle Human Affairs

Research Center 5.3 5.3 5.3 100.0

Human Factors in Advanced Traffic

Management Systems

FHWA, Georgia Tech Research Institute,

Georgia Institute of Technology 4.8 4.8 4.8 100.0

Traffic Surveillance and Detection

Technology Development

Jet Propulsion Laboratory 4.0 4.0 4.0 100.0

Travel Demand Management and Public Transportation Operations

Denver Smart Vehicle

FTA, Regional Transportation 

District Denver 10.5 8.4 8.3 80.2

Suburban Mobility Authority for Regional

Transportation (SMART) Project

(Detroit, Michigan)

FHWA, SMART 11.6 9.5 4.5 81.7

(Continued)
22 HIGH-TECH HIGHWAYS: INTELLIGENT TRANSPORTATION SYSTEMS AND POLICY October 1995

Table 4.

Continued

Federal Funds Federal

Estimated Anticipated Obligated Share of

Total Total Federal Through Total Cost

Projects and Participants Project Cost Funding 1994 (In percent)

Travel Demand Management and Public Transportation Operations

(Continued)

Seattle Wide-Area Information for

Travelers (SWIFT)

FHWA, Washington State Department

of Transportation, Seiko Communications

System, IBM Corporation, Delco, Etak

Metro Traffic, King County (Washington) 

Metro Transit, University of Washington 7.2 4.4 4.4 61.1

Commercial Vehicle Operations

HELP/Crescent (British Columbia, Washington State,

Oregon, California, Arizona, New Mexico, Texas)

Arizona DOT, California DOT (Caltrans),

Colorado DOT, Idaho DOT, Iowa DOT,

Minnesota DOT, Nevada DOT,

New Mexico SHTD, Oregon DOT,

Pennsylvania DOT, Texas SDHPT, 

Utah DOT, Virginia DOT, Washington 

State DOT, motor carrier industry, 

Transport Canada, FHWA 22.0 5.9 5.9 26.6

Advantage I-75 (I-75 in Florida, Georgia, 

Tennessee, Kentucky, Ohio, Michigan, and 

Ontario, Canada)

FHWA, Florida, Georgia

Tennessee, Kentucky, Ohio, Michigan,

Ontario, motor carrier industry 11.0 7.7 4.0 70.3

Advanced Vehicle Control and Safety Systems

Automated Highway Systems--

Precursor System Analyses (Nationwide)

FHWA, Battelle, BDM International, Calspan, 

Delco, Honeywell, Martin Marietta, Northrop

Grumman, PATH, Raytheon, Rockwell 

International, SAIC, TASC, TRW Inc., 

University of California at Davis 14.1 14.1 14.1 100.0

(Continued)
CHAPTER THREE APPLICATIONS OF INTELLIGENT TRANSPORTATION SYSTEMS 23

Table 4.

Continued

Federal Funds Federal

Estimated Anticipated Obligated Share of

Total Total Federal Through Total Cost

Projects and Participants Project Cost Funding 1994 (In percent)

Advanced Vehicle Control and Safety Systems

(Continued)

National Automated Highway Systems Consortium

(Nationwide)

FHWA, General Motors, Delco Electronics, 

Hughes Aircraft, Caltrans, Bechtel,

Parsons-Brinkerhoff, Martin Marietta, 

PATH, and Carnegie Mellon University

Robotic Institute 210.0 160.0 12.0 76.2

Human Factors Design of Automated 

Highway Systems

FHWA, Honeywell 5.1 5.1 5.1 100.0

Other

System Architecture Development

(Nationwide)

FHWA, Hughes Aircraft, Loral/IBM, 

Rockwell International, Westinghouse Electric 20.0 20.0 10.4 100.0

ITS Research Centers of Excellence

(Michigan, Texas, Virginia)

FHWA, University of Michigan,

Texas A&M University, and

Virginia Polytechnic Institute 18.4 15.4 6.1 83.7

System Architecture Manager (National)

FHWA, National Aeronautics and Space

Administration, Jet Propulsion 

Laboratory 6.3 6.3 5.7 100.0

ITS IDEA Program (Nationwide)

FHWA, NHTSA, Transportation 

Research Board 5.5 5.5 5.5 100.0

SOURCE: Department of Transportation, Federal Highway Administration, Intelligent Transportation Systems Projects (January 1995).

NOTES: FHWA = Federal Highway Administration; DOT = Department of Transportation; ATMS = Advanced Traffic Management Systems;

ATIS = Advanced Traveler Information Systems; FTA = Federal Transit Administration; SHTD = State Highway and Transportation

Department; SDHPT = State Department of Highways and Public Transportation; PATH = Program for Advanced Transit and

Highway; SAIC = Science Applications International Corporation; TASC = The Analytic Sciences Corporation; NHTSA = National

Highway Traffic Safety Administration.
24 HIGH-TECH HIGHWAYS: INTELLIGENT TRANSPORTATION SYSTEMS AND POLICY October 1995

Traffic Management

Central features of traffic management include monitoring the flow, identifying and interpreting disruptions, and attempting to change traffic patterns. To

keep track of traffic, electronic sensors embedded in

roadways or cameras allowing visual monitoring are

often employed. Communicating information about

traffic flow can be automated in varying degrees.

Trained personnel watching video monitors at traffic

management centers can interpret problems taking

place at remote highway sites and respond. For example, if staff personnel see an accident or breakdown, they can alert emergency response teams and

provide information to motorists through electronic

signs, radio, or other means. More highly automated

systems, however, can detect slowing in the flow of

traffic and can automatically alter signs and traffic

control signals at freeway entry ramps to divert or

smooth the stream of vehicles.

The TRANSCOM and TRANSMIT Projects. New

York City's metropolitan area suffers traffic congestion at virtually every hour of the day and night.

Large numbers of vehicles clog the roads leading to

the relatively few bridges and tunnels crossing the

Hudson River, and any event such as an accident or

disabled vehicle that closes highway lanes can have

an enormous effect on traffic, not only on the road

where it occurs but also on feeder and substitute

highways. A consortium of 15 transportation and

public safety agencies in New Jersey, New York, and

Connecticut--the Transportation Operations Coordinating Committee, known as TRANSCOM--has been

formed to improve response to traffic incidents. (An

incident is an accident, vehicle breakdown, or other

event that impedes the flow of traffic.)

The TRANSCOM Operations Information Center

receives and disseminates information about major

incidents so that member agencies can alert drivers

who are still some distance away from the problem

and divert them to alternative routes while they still

have that option. Variable-message signs and high- 3

way advisory radio are used to alert drivers.

TRANSCOM is conducting an operational test

known as TRANSMIT (for TRANSCOM's System

for Managing Incidents and Traffic). TRANSMIT

will equip vehicles with electronic tags that can serve

as traffic probes and can be used for electronic toll

collection. Computers tracking the tags can detect 4

when the actual travel time between tag readers is

greater than predicted and thus locate traffic incidents. The faster an incident is detected and cleared

from the roadway, the less congestion will result.

In addition to helping manage traffic congestion

in general, the TRANSCOM project will aid public

transit through its Alternate Bus Routing System

(ABRS). It will provide real-time information to

some 400 New Jersey Transit buses by means of

roadside cameras and a vehicle-to-roadside communications network that will enable drivers to choose

between the Garden State Parkway and Route 9 approaches to the New Jersey Turnpike at Interchange

11 in Woodbridge. 5

The federal government obligated $15.1 million

for TRANSCOM through fiscal year 1994. The total

project cost and federal contribution have yet to be

determined. For TRANSMIT, the federal government has obligated $2 million; for ABRS, $500,000.6

The ADVANCE Project. The ADVANCE (an acronym for Advanced Driver and Vehicle Advisory

Navigation Concept) project, based in the northwestern suburbs of Chicago, will use vehicles as probes to

transmit real-time information about traffic to a traffic information center. The center will then process

the information and send the vehicles instructions on

modifying their routes in order to avoid congestion.

Initially the plan was to use 3,000 vehicles as probes,

but the number has been scaled back to 75. That will

allow the technology, but not the benefits to traffic

management, to be tested. The estimated cost of the

project as initially planned was $52 million, and the

3. Testimony of Matthew Edelman, General Manager, TRANSCOM,

in U.S. House of Representatives, Intelligent Vehicle-Highway

Systems, hearings before the Subcommittee on Investigations and

Oversight of the Committee on Public Works and Transportation,

Committee Print 103-66 (June 29 and July 21, 1994), pp. 97-98.

4. Ibid., p. 99.

5. Ibid., p. 101.

6. Department of Transportation, Federal Highway Administration,

Intelligent Transportation Systems Projects (January 1995), pp. 94,

96, and 138.
CHAPTER THREE APPLICATIONS OF INTELLIGENT TRANSPORTATION SYSTEMS 25

federal government was to provide $35 million.7

Through the end of fiscal year 1994, the federal government had obligated $21 million for ADVANCE.8

The Role of Government in 

Traffic Management

Government has traditionally handled traffic management. If advanced technologies can help the government provide better service at lower costs, the

rationale for government involvement in developing

them is clear. The federal government can play an

especially important role in traffic management projects that cross state lines, such as the TRANSCOM

project. 

To be successful, ITS technologies must be attractive to local and state transportation agencies.

Local and state governments own and maintain the

roadways, even roads built primarily with funding

from the federal government. But the greater the coordination required among transportation agencies

for an ITS application, the more difficult it is to

adopt and carry out.

The general manager of TRANSCOM has noted

that the success of coordination among high-tech systems depends on success in coordinating and cooperating on ordinary low-tech matters:

It took a number of years to establish the

kind of trust and credibility necessary, for

example, to get a construction manager to be

willing to modify a project schedule in the

name of supporting another agency. However, through the effective working relationships developed through these low tech activities, we actually created an organizational

infrastructure which could then be applied to

multi-agency implementation of ITS systems.9

One of the major challenges for ITS projects that

involve multiple jurisdictions is to find the right mix

among facilitating, promoting, and making sure that

equipment is universally compatible on the one hand,

and recognizing local concerns and unique circumstances on the other. Many ITS technologies are well

developed; the problem is not the lack of technological know-how but rather the difficulty of getting multiple public agencies to agree on compatible standards.

The federal government may be able to facilitate

adoption of traffic management technologies by providing a forum where local officials can come together, discuss their concerns, and compare alternative ways of dealing with traffic problems that cross

jurisdictional lines. The federal government may be

in the best position to serve as a clearinghouse of information about how technologies have worked in

other areas, and how governmental bodies in other

areas have resolved differences among themselves in

order to cooperate on uniform technologies. Attempting to impose federal standards can be counterproductive, however, if the imposition leads to less

efficient results than those that are tailored to individual situations.

Nevertheless, the federal government has a constitutional role in ensuring the free flow of interstate

commerce and helping to resolve conflicts among

jurisdictions that substantially affect interstate transportation. If there are spillover effects that one jurisdiction may not take into account in carrying out its

policies, the state or federal government might appropriately step in. For example, an advanced traffic

management system might yield benefits not only to

the jurisdiction that adopts it but also to neighboring

jurisdictions. Such a project might fail a benefit-cost

test when only one jurisdiction's benefits are considered, even though the total benefits (including spillovers in other jurisdictions) exceed the costs. In

principle, such an investment should be undertaken

(assuming that the cost estimates include the opportunity cost of capital). The federal (or state) government could facilitate such an investment, perhaps by

finding a mechanism for compensation.

In summary, when evaluating the appropriate

role of government in traffic management projects, it

is useful to take into consideration the extent to

which the projects help transportation agencies man7. Department of Transportation, ITS Projects, p. 57.

8. Ibid.

9. Testimony of Matthew Edelman in Intelligent Vehicle-Highway

Systems, pp. 98-99.
26 HIGH-TECH HIGHWAYS: INTELLIGENT TRANSPORTATION SYSTEMS AND POLICY October 1995

age resources, such as crowded highways, more efficiently; the effects of time wasted in congested traffic; and the spillover benefits and costs among jurisdictions.

Traveler Information Systems

Providing information to travelers can help them

avoid congested roads and keep them from adding to

congestion. Several ITS projects are testing ways of

providing useful information in a timely and understandable fashion about routes, traffic congestion,

transit availability, and so on. Sophisticated traveler

information systems are closely tied to traffic management systems, which collect, integrate, and provide information to travelers and even use information collected from vehicles equipped with transponders that can indicate their speed and alert traffic

managers to roadway congestion.

TravTek. One of the earliest ITS projects, TravTek,

involved advanced traveler information systems. In

this project, begun in 1990, General Motors equipped

100 rental cars in Orlando with on-board navigation

systems to help tourists find their way around the

area. The systems provided not only route directions

but also information about traffic congestion, which

was sent by digital data radio to the vehicles from a

traffic management center. On-board computers advised motorists by video display or voice guidance

about the best routes to take.

Participating in this project were the Federal

Highway Administration, the Florida Department of

Transportation, the City of Orlando, General Motors,

and the American Automobile Association. Operational testing has been completed and the results are

being analyzed. The estimated total project cost is

$12 million, of which the federal government contributed $2.7 million.10

FAST-TRAC. Oakland County, Michigan, has

launched a large-scale program called FAST-TRAC

(for Faster and Safer Travel through Traffic Routing

and Advanced Controls). The program combines

advanced traffic management and traveler information technologies in an attempt to provide real-time

information that will enable drivers to adapt instantly

to changes in traffic conditions. The project will use

video technology to detect traffic conditions. Vehicles will be equipped with route navigation systems

to feed drivers information on how to modify their

routes to avoid delays. The project is expected to

cost $70 million, with the federal government paying

$55.5 million. 11

TransCal. Although the focus of travel and transportation management is on urban areas, reflecting

the motivation to reduce congestion, the Federal

Highway Administration has selected a few projects

with rural applications. TransCal is an operational

test project along the mostly rural stretch of Interstate

80 and U.S. 50 between San Francisco and Lake

Tahoe and Reno. It will provide information to suitably equipped travelers about road conditions, traffic,

weather, and services along the route, using telephones, digital communication devices, in-vehicle

navigation and display systems, and interactive kiosks. The project will also include a satellite-based

system for emergency assistance on the highway (a

"Mayday" system).

In addition to testing the use of land-line and cellular telephone and wireless FM subcarrier networks

to transport information to travelers, TransCal will

test a system's ability to integrate information about

congestion and traffic incidents from multiple regions and to provide coordinated responses to assist

drivers and transit passengers. The estimated project

cost is $7.2 million, with the federal government paying $3.2 million.12

The Role of Government in Providing

Information to Travelers

Government can contribute effectively to providing

information to travelers because it can take advantage of economies of scale in collecting and disseminating information. The federal government's Global

Positioning System (GPS) is a key element in naviga10. Department of Transportation, ITS Projects, p. 100.

11. Ibid., p. 67.

12. Ibid., p. 92.
CHAPTER THREE APPLICATIONS OF INTELLIGENT TRANSPORTATION SYSTEMS 27

tion systems for travelers. But the private sector has

also played a substantial role in providing information, including real-time bulletins about traffic congestion.

Traffic information broadcast on commercial

radio often seems superior to government-operated

traffic advisory radio. Travelers complain that government advisories, which are usually broadcast at

the ends of the AM radio spectrum, are faint or garbled. Government-provided radio reports and

variable-message signs sometimes seem out of touch

with existing traffic conditions. It is not clear

whether the primary problem is with collecting the

information about traffic conditions, analyzing it, or

disseminating it. Variable-message signs are limited

by space constraints--usually only three or four short

lines that motorists must be able to read and comprehend while traveling on busy roads at highway

speeds. Similarly, announcements about delays in

rail transit systems sometimes lack credibility, especially if passengers' observations about train arrivals

differ from the information conveyed in the announcement. Intelligent technologies can improve

the quality and timeliness of information but will be

beneficial only if users are able to receive and interpret the information in an accurate and understandable way.

Many information systems for travelers do not

require a link with traffic management systems; they

could consist, for example, of just a computer in the

vehicle containing detailed maps and programmed

information linked to the GPS. The driver could

state (via keyboard or voice) a desired destination

and receive detailed instructions via monitor or voice

telling where to turn and when. The computer could

also provide such information as the location of rest

stops, service stations, restaurants, and motels. 

For many traveler-information projects, federal

support appears to be predicated more on the basis of

a perceived market failure in the supply of research

and development than on the desire to achieve

greater efficiency in the supply of publicly provided

services. But there is no strong indication that the

market would fail: private developers of these technologies should be able to sell their products to consumers and reap the rewards. For example, the success of TravTek suggests that rental car companies

and automobile makers have incentives to adopt onboard navigation systems.

Travel Demand Management

Managing the demand for travel is another approach

to reducing congestion and pollution. About 10 ITS

projects are primarily focused on managing travel

demand. Those projects are intended to reduce the

number of vehicles on the road, especially at rush

hour, by making transit and carpooling more attractive to commuters. They provide up-to-the-minute,

reliable information about the availability of transit

and make possible instant matching of riders and

drivers to allow use of high-occupancy-vehicle

(HOV) lanes. They also include information about

conditions that affect travel times. Unlike the

enroute information systems for travelers, management programs focus on pretrip information that

could lead travelers to alter their choice of mode,

destination, or time of trip, depending on what they

learn about conditions and the availability of alternatives. In addition to providing pretrip information,

ITS applications in managing travel demand include

multipurpose "smart cards" that can be used for bus

and rail fares, parking fees, telephone calls, and toll

roads. 

Informing Travelers

Between 1980 and 1990, the number of commuters

driving to work alone rose from 62.2 million (64.4

percent of commuters) to 84.2 million (73.2 percent).

Over the same period, the number of workers carpooling dropped from 19.1 million to 15.4 million,

and the number using public transit fell from 6.2 million to 6.1 million. Several projects seek to reverse 13

those trends by providing travelers with better information about the availability of transit and carpools.

13. Department of Transportation, Federal Highway Administration,

Office of Highway Information Management, New Perspectives in

Commuting (July 1992), p. 8.
28 HIGH-TECH HIGHWAYS: INTELLIGENT TRANSPORTATION SYSTEMS AND POLICY October 1995

Houston Smart Commuter. The Houston Smart

Commuter project aims at increasing the use of

buses, carpools, and vanpools by giving commuters

easy access to timely and accurate information about

commuting conditions and the availability of alternatives to driving. 

For suburb-to-downtown commuting, the project

will attempt to lure commuters out of single-occupancy vehicles and onto buses. Workers who live in

the area of the Kuykendahl park-and-ride lot along

I-45 North and travel to major downtown businesses

will be offered traffic and transit information at home

and work. The technologies under consideration for

providing this information are touch-tone and cellular

telephones, cable television, videotex (television

monitors), and pocket receivers.

For suburb-to-suburb commuting, the Houston

Smart Commuter project will try to match drivers

and riders electronically to form instant carpools for

commuters living along the western end of the Katy

Freeway Corridor (I-10 West) and working in the

Post Oak/Galleria area, a suburban office center.14

The federal government is paying half of the total

project cost of $5 million.15

California Projects. Several "Smart Traveler" projects are under way in California. In the Los Angeles

area, the California Smart Traveler project will equip

travelers with smart cards for parking and transit services and provide real-time information about transit

arrival and travel times. The Los Angeles Smart 16

Traveler project features kiosks using videotex and

audiotex to provide information about transit, paratransit, and ridesharing options. The kiosks are lo- 17

cated at shopping malls and public buildings throughout the Los Angeles area. The Sacramento Rideshare

project will give drivers and prospective riders realtime ridesharing information. The project will seek

ways of designing incentives for drivers to provide

rides. Altogether, these projects will cost about $7.4

million, with the federal government paying $3.2

million.18

Seattle Smart Traveler. This project seeks to reduce single-occupancy-vehicle commuting by providing information about alternative means of transportation and by helping to form instant carpools immediately before a trip. It will use cellular phones

and information kiosks to provide up-to-the-minute

information that will help match drivers and riders.

In the first phase of the test, a study found that 42

percent of "drive-alone" commuters would consider

instant ridesharing. The second phase of the test 19

examined whether travelers would use a computerbased commuter information center in a downtown

office building that offered interactive communications and information on ridesharing, traffic congestion, and bus operations. The third phase, which will

make use of an FM communications system and a

pager to provide information about traffic, public

transit, and ridesharing opportunities, has been selected for a wider-scale test called Seattle Wide-Area

Information for Travelers (SWIFT).

Phases I and II of the Seattle Smart Traveler project are estimated to cost $545,000, with the federal

government paying $244,000. SWIFT is estimated 20

to cost $7.2 million, of which the federal government

will contribute $4.4 million.21

TravLink. The TravLink project in the Minneapolis/St. Paul metropolitan area is a smart intermodal

system integrating public transit with other ITS applications, especially traffic management. Trav- 22

Link will integrate automatic vehicle location and

advanced information systems for travelers along the

Interstate 394 corridor. It will distribute up-to-the14. Department of Transportation, Federal Transit Administration, Office of Technical Assistance and Safety, Advanced Public Transportation Systems, Technical Assistance Brief 6 (June 1994).

15. Department of Transportation, ITS Projects, p. 116.

16. Department of Transportation, Federal Transit Administration, Advanced Public Transportation Systems Project Summaries (August

1995), p. 2.

17. Ibid., p. 4.

18. Department of Transportation, ITS Projects, pp. 117, 120, and 163.

19. Department of Transportation, Advanced Public Transportation

Systems Project Summaries, p. 1. 

20. Department of Transportation, ITS Projects, p. 122.

21. Ibid., p. 123.

22. Department of Transportation, Federal Transit Administration, Office of Technical Assistance and Safety, Advanced Public Transportation Systems, Technical Assistance Brief 3 (January 1994).
CHAPTER THREE APPLICATIONS OF INTELLIGENT TRANSPORTATION SYSTEMS 29

minute information to commuters to help them decide whether to drive, carpool, or take the bus to

work. The test will attempt to determine the kind of

information most useful to commuters. Types of information devices include interactive kiosks, personal computers with modems, display monitors at

transit transfer stations, and electronic signs at parkand-ride lots.

Eighty buses will be outfitted with automatic vehicle location (AVL) equipment, which will enable

dispatchers to track them and detect when they are

running behind schedule. Dispatchers will be able to

send instructions to the drivers to help them get back

on schedule. The federal government is contributing

$3.6 million of the total estimated project cost of

$5.8 million.23

Efforts to Manage Travel Demand

Matching drivers and riders is not a new activity;

transportation agencies and large companies have

offered or supported ridesharing services for many

years. The newer ITS projects are more ambitious,

however; they attempt to form instant carpools on a

real-time basis. How drivers and riders will respond

to instant carpooling remains to be seen. It may be

more attractive for long commutes, when the time to

form the carpool is a smaller fraction of total travel

(or travel plus setup) time than for short trips. If

travel times are less than half an hour, as little as 10

minutes to form an "instant" carpool and pick up a

rider would increase travel time by one-third. By

comparison, a study of the Seattle Smart Traveler

project reported average trip times of 26.2 minutes

for single-occupancy-vehicle drivers and 30.6 minutes for carpoolers. Nationwide, the average com- 24

muting time for all modes was 19.7 minutes in

1990. It is likely that the greater the baseline com- 25

muting time, the higher the payoff from instant

ridesharing. The benefit would also be greater if the

carpool could save time between the last pickup and

first dropoff by using HOV lanes.

Instant carpools may work best when public

transportation is readily available as a backup. For

example, in northern Virginia, queues (popularly

known as "slug lines") of commuters seeking rides

form at commuter parking lots near entrances to

HOV lanes on Interstate 95/395. Metrobuses also

stop there, serving as a backup if no ride materializes. These instant carpools do not require the use of

high-tech equipment, and they probably save time in

forming carpools and starting the commute. Comparing the advantages and disadvantages of this lowtech option with high-tech carpool formation could

indicate whether additional ITS funds could be used

productively in such ridesharing research.

Ridesharing may have unintended consequences

that should be considered in evaluating the activity.

Getting more riders into carpools will probably reduce congestion (at least in the short run), but it may

divert potential transit passengers. That is, are carpoolers drawn from the ranks of single-occupant vehicles (SOVs) or those of transit users? If transit ridership declines, additional subsidies may be required

to maintain existing levels of service, and if the decline is sharp, transit service might need to be reduced, dropped, or tailored to meet the remaining

demands.

Ridesharing may have another unintended consequence because carpools generally are not as free to

alter their travel patterns as are SOV commuters. A

study of the Seattle project found that SOV commuters were more likely than carpoolers to adjust their

travel patterns on the basis of real-time traffic information. That finding may imply that one of the 26

trade-offs involved in convincing more people to

carpool (and therefore reducing the number of cars

on the road) is that drivers who are already on the

road have less flexibility in avoiding traffic tie-ups.

That is, carpooling may reduce regular congestion

caused by volume at the expense of creating even

more congestion when traffic incidents do occur.

23. Department of Transportation, ITS Projects, p. 124.

24. Department of Transportation, Federal Transit Administration, Office of Technical Assistance and Safety, Bellevue Smart Traveler

and Cellular Telecommunications, DOT-T-93-36 (May 1993), p.

25.

25. Department of Transportation, Federal Highway Administration,

Office of Highway Information Management, 1990 Nationwide

Personal Transportation Survey, Summary of Travel Trends,

FHWA-PL-92-027 (March 1992), p. 24. 26. Department of Transportation, Bellevue Smart Traveler, p. 1.
30 HIGH-TECH HIGHWAYS: INTELLIGENT TRANSPORTATION SYSTEMS AND POLICY October 1995

That effect may be smaller for instant carpools, however, than for established ones.

Environment is another factor to consider in evaluating carpooling options. Because a disproportionate amount of automobile emissions occurs within

the first few minutes of driving, carpools in which

members drive to central staging areas produce more

pollution than carpools that pick up riders at their

homes. 

Finally, personal safety and comfort must be considered. Although there have been no reports of violence resulting from instant carpools formed by the

Virginia slug lines, there always is a risk when picking up strangers or getting into a car with them. It 27

is not clear whether or by how much the risk is diminished when instant carpools are formed electronically. That probably depends in part on whether specific security-enhancing measures are taken, such as

requiring that all participants be registered or that

they be sponsored by employers. As for comfort,

electronic matching could take into account the preferences of drivers and riders on such matters as

smoking, radio station or other audio entertainment,

type of vehicle, and so on.

The results of the smart-traveler projects that aim

to attract more passengers to transit will be most useful if they provide information about what kinds of

services encourage travelers to get out of their automobiles and onto mass transit buses or trains. Transit

use has declined as automobile ownership and use

have increased. The movement of jobs from central

business districts to lower-density suburban industrial and business parks has favored automobile use

over transit for commuting. To attract more riders,

then, transit systems will have to overcome the obstacles of low density, slower travel compared with automobiles, flexible work schedules, and the need of

commuters to combine work trips with other trips

(taking children to day care, shopping, and so on).

Those factors should be considered in assessing the

potential effectiveness of ITS technologies in attracting more commuters to transit.

Under some circumstances, smart technologies

might be able to expand the passenger base. For example, they might make public transit more attractive

for unconventional travelers--such as children who

need to get to and from activities after school and

elderly people who no longer drive. In addition to

not driving, children and elderly people may have

greater flexibility in their schedules than commuters

and may be able to tolerate longer trip times. Smart

technologies could enable transit vehicles to tailor

service to meet locational and security needs. If ITS

technologies can make such forms of transit more

efficient, they could help transit agencies comply

with provisions of the Americans with Disabilities

Act.

Some advanced technologies have been available

for many years but have not been widely adopted.

For example, transit systems have long had the ability to monitor vehicles and count passengers. When

considering new technologies, then, it is desirable to

understand why earlier technologies have not been

adopted (are they too costly, burdensome, ineffective,

cumbersome?) so that new systems do not repeat

mistakes.

Another question that arises is why transit officials have not used lower-technology methods of providing information to passengers and taking other

actions designed to encourage transit use. For example, in some areas it is difficult to obtain information

about transit service. Bus stops often lack information about routes, timetables, frequency of service,

and time of service (that is, rush hours, weekdays

only, and so on). Perhaps those measures are more

costly for transit officials to apply and maintain than

computerized information and telecommunications

systems, but they may be less costly and more accessible to prospective transit passengers and thereby

encourage greater use.

Public Transportation 

Operations

ITS projects in the area of public transportation operations (PTO) help transit managers use resources

more efficiently. Those efforts have strong links to

27. Recently, a commuter on the I-95/I-395 corridor was chagrined to

learn (after the fact) that he had picked up an escaped convict that

morning. His commute to the Pentagon had been uneventful.
CHAPTER THREE APPLICATIONS OF INTELLIGENT TRANSPORTATION SYSTEMS 31

the demand management projects that are targeted at

travelers. Together they attempt to make transit

more attractive to commuters. Several ITS projects

in the category of travel and transportation management also have public transit applications. For example, the TRANSCOM project will help New Jersey

Transit officials direct their buses to alternative

routes when traffic is heavy on the primary route.

Such projects typically make use of AVL technology,

using the Global Positioning System. 

Smart Vehicles

Many PTO projects involve making vehicles

"smarter" by equipping them with communications

devices. Information about the location of their vehicles and traffic conditions can help public transit systems provide better service and keep costs under control. Smart-vehicle projects are under way in Baltimore, Dallas, Denver, Milwaukee, and Santa Clara

and Orange counties, California.

Denver Smart Vehicle. Denver Smart Vehicle is the

largest of the smart bus projects. In conjunction with

the Federal Transit Administration, the Regional

Transportation District Denver has installed communications and AVL equipment on its fleet of 788

buses and 28 supervisor vehicles. Navigation satel- 28

lites of the GPS determine the location of each bus,

and that information is transmitted to a central dispatch center. Dispatchers can reroute buses to keep

them on schedule. Buses also have silent alarms that

the driver can activate in case of an emergency, alerting dispatchers to summon assistance. The anticipated federal share of this $10.5 million project is

$8.4 million.29

Baltimore Smart Vehicle. Like the Denver project,

the Baltimore Smart Vehicle project is outfitting

buses with AVL equipment to enable a central dispatcher to reroute them. Buses will also be equipped

to count passengers, an activity that will help the

Mass Transit Administration analyze its ridership and

perhaps respond better to the needs of passengers.

The communications system is to become operational

on a limited number of vehicles in December 1995.30

Future plans include providing information to passengers using interactive systems in homes and offices. The federal government has obligated $2 million of the $2.5 million cost of the research and development phase of the project and anticipates paying

$6.4 million of the estimated $8 million in deployment cost.31

Suburban and Rural Transit

Public transportation faces severe challenges in suburban and rural areas where low population densities

make it difficult to design routes that would serve

enough travelers to pay the cost. Intelligent systems

offer a potential solution if they can identify when

and where the demand for transportation service exists and find ways to tailor service efficiently. Such

service is most likely to be paratransit, using vans or

automobiles instead of expensive buses and operating

over variable rather than fixed routes.

Suburban Mobility Authority for Regional Transportation (SMART) Project. SMART, a public

transportation agency in the Detroit area, is working

with the Federal Highway Administration on a paratransit project that would use a dispatch system employing automated reservations and scheduling and

an AVL system to track the fleet of vehicles. That 32

project, which will interact with FAST-TRAC and

other ITS initiatives in the Detroit area, will cost

$11.6 million, with a federal share of $9.5 million.

Through fiscal year 1994, the federal government

had obligated $4.5 million.33

Rogue Valley Mobility Management. The Rogue

Valley Mobility Management project, based in

Medford, Oregon, has both urban and rural applications. Initially, the program will focus on transportation for elderly and disabled people who cannot use

28. Department of Transportation, Advanced Public Transportation

Systems Project Summaries, p. 10.

29. Department of Transportation, ITS Projects, p. 146.

30. Department of Transportation, Advanced Public Transportation

Systems Project Summaries, p. 8.

31. Department of Transportation, ITS Projects, p. 140.

32. Ibid., p. 151.

33. Ibid.
32 HIGH-TECH HIGHWAYS: INTELLIGENT TRANSPORTATION SYSTEMS AND POLICY October 1995

fixed-route transit service. A second phase of the

program may extend service to people with low incomes in the Medford area. The project has a wide

variety of participants: the Federal Transit Administration, the Oregon Department of Transportation, the

local metropolitan planning organization, human service agencies, and transportation providers, including

taxicab companies. The total cost is estimated to be

$935,000, of which the federal government will provide $460,000.34

The Role of Government in Intelligent

Public Transportation Operations

Since the 1960s, public transit systems have typically

been operated by governmental entities, often municipal or regional transportation authorities. In recent

years, the federal government has provided about $4

billion annually in grants to transit systems, but subsidies are diminishing. If applying intelligent tech- 35

nologies to transit can reduce operating costs or increase revenues by attracting more passengers, the

result could lessen demands for subsidies from the

federal government.

Deciding whether to adopt smart transit technologies involves comparing the expected costs with the

expected benefits. Evaluating projects that aim to

reduce costs may be somewhat easier than evaluating

projects intended to increase the number of passengers or passenger revenues because the former tend

to require mostly financial information, whereas the

latter depend on hard-to-model behavioral responses.

The public transportation projects should provide

useful data about cost savings and, along with the

travel demand management projects, shed light on

whether passenger revenues are likely to increase.

Even with smart technologies, public transit operations are likely to need subsidies from local, state, or

federal sources. If the Congress decides to eliminate

or limit the role of the federal government in providing transit subsidies, the rationale for federal support

of intelligent transit systems will be weakened.

Electronic Payment

Electronic payment of tolls and fares is another important element of intelligent transportation systems

and is included in several transportation and traffic

management projects. The Federal Transit Administration also has several projects under way to encourage the use of smart cards in public transit systems.

There are several ways of collecting tolls electronically. The process requires vehicles to carry

some kind of tag that can be read electronically. In

early systems, the tags were "read-only," meaning

that a roadside monitor could read a tag and debit an

account but could not "write" information on the tag.

Because that kind of system requires that users have

an account, critics have expressed concerns that toll

collection agencies can monitor the comings and

goings of individuals, thus invading their privacy.

More advanced systems have "read-write" capabilities, which allow for greater anonymity. In those

systems, the motorist can purchase a tag good for a

certain amount in tolls. Roadside monitors can then

send signals debiting the amount of the toll from the

tag. When the value remaining on the tag drops below some predetermined level, the driver is notified

and can replenish the account.

Collecting tolls electronically can reduce congestion at toll barriers by making it unnecessary for tagequipped vehicles to stop, and it can help in levying

tolls that vary by time of day in order to charge peakperiod users more and thus reduce their numbers. 

Electronic Toll Collection Predating

the ITS Program

In the United States, at least 10 agencies have installed electronic toll collection systems. Systems 36

are currently operating in Texas, Louisiana, California, and Oklahoma. Kansas, Massachusetts, New

34. Ibid., p. 150.

35. As this study went to press, the Congress had not passed transportation appropriations for 1996, but both the Senate and House bills

had reduced transit subsidies from their 1995 levels.

36. Testimony of Allan V. Johnson on behalf of the International

Bridge, Tunnel & Turnpike Association, in U.S. House of Representatives, Intelligent Vehicle-Highway Systems, hearings before

the Subcommittee on Investigations and Oversight of the Committee on Public Works and Transportation, Committee Print 103-66

(June 29 and July 21, 1994), p. 134.
CHAPTER THREE APPLICATIONS OF INTELLIGENT TRANSPORTATION SYSTEMS 33

York, New Jersey, and Pennsylvania are moving toward such systems.37

The Oklahoma Turnpike was an early user. Its

Pikepass system enables participating motorists to

travel past toll collection facilities at highway speeds,

while nonparticipants must pull off the main roadway

and stop at a toll plaza. The 222,000 participating

motorists account for about 35 percent of all transactions. 38

The Texas Turnpike Authority is another pioneer

in electronic toll collection; it has operated such a

system on the Dallas North Tollway since 1989. The

authority has issued more than 71,000 tags and processes more than 31 million transactions annually,

reportedly with virtually no error. About 40 percent 39

of peak-hour motorists use the electronic system,

which roughly doubles the toll-processing capacity at

rush hour.40

E-ZPass

The proliferation of technologies and tags is a potential problem for electronic toll collection. From the

standpoint of convenience to motorists, the ideal solution is to use a common tag that works at toll plazas throughout the country. That approach would

require the various toll authorities to work together,

not only in adopting a single technology but also in

settling accounts among jurisdictions. 

Seven transportation agencies in New York, New

Jersey, and Pennsylvania are cooperating in an effort

to develop an electronic toll collection system that

would be compatible throughout their jurisdictions.

The "E-ZPass" agencies include the New Jersey

Highway Authority, New Jersey Turnpike Authority,

New York State Thruway Authority, South Jersey

Transportation Authority, Pennsylvania Turnpike

Commission, Port Authority of New York and New

Jersey, and Metropolitan Transportation Authority

Bridges and Tunnels. The International Bridge, Tunnel & Turnpike Association estimates that those

agencies' tollways account for nearly 40 percent of

all toll transactions and 67 percent of all toll revenue

in the United States. Eventually, toll agency offi- 41

cials expect E-ZPass transactions to number more

than 1 million daily in several hundred toll plaza

lanes. Nearly 50,000 vehicles are already equipped 42

with E-ZPass transponders for use at two of the New

York State Thruway Authority's toll plazas. 43

The Role of Government 

in Electronic Toll Collection

The experience with electronic toll collection indicates some of the institutional obstacles to adopting

new technologies. The fact that the Oklahoma Turnpike is a self-contained system and does not need to

coordinate with other states undoubtedly helped in its

early adoption of electronic toll collection. If the

turnpike authority had needed to coordinate with

other toll authorities, implementation could easily

have been delayed by the approval process. Achieving agreement among numerous agencies--as contemplated in the E-ZPass plan--may take time. Officials will have to work out mechanisms for accounting for and distributing the proceeds of tolls used on

the individual toll roads. That process involves answering such questions as who will set up, maintain,

and pay for the administrative functions and how

each agency will ensure that it gets its fair share of

the toll revenues.

37. Testimony of Michael Zimmerman on behalf of the E-ZPass Interagency Group Policy Committee, in U.S. House of Representatives,

Intelligent Vehicle-Highway Systems, hearings before the Subcommittee on Investigations and Oversight of the Committee on Public

Works and Transportation, Committee Print 103-66 (June 29 and

July 21, 1994), pp. 164-165.

38. Testimony of Allan V. Johnson in Intelligent Vehicle-Highway

Systems, p. 134.

39. Ibid., p. 134.

40. Youngbin Yim, "Consumer Responses to Advanced Automotive

Electronics: User Survey on Electronic Toll Collection Systems,"

Transportation Research Record, no. 1359 (Transportation Research Board, National Research Council, Washington, D.C.,

1992), p. 3.

41. Testimony of Allan V. Johnson in Intelligent Vehicle-Highway

Systems, p. 136.

42. Ibid.

43. Testimony of Matthew Edelman in Intelligent Vehicle-Highway

Systems, p. 103.
34 HIGH-TECH HIGHWAYS: INTELLIGENT TRANSPORTATION SYSTEMS AND POLICY October 1995

Notwithstanding, adoption of a unified system

that would enable users of several toll facilities--such

as the turnpikes, bridges, and tunnels in the New

York-New Jersey-Connecticut region--to buy a single

tag that would automatically pay tolls on all the facilities would be especially beneficial to users. They

would not only avoid lengthy lines at each toll plaza

but would be spared the need to buy and install several different electronic tags. Electronic toll collection has been popular among tollway users in Oklahoma and elsewhere. The public appears willing to

accept this mechanism for paying tolls because of the

benefits of speed and convenience, despite drawbacks. Some of those, such as concerns about invasion of privacy, can be easily solved. Toll roads using electronic collection methods are also equipped

to collect cash tolls. Cash can be used by people who

want to protect their privacy as well as by infrequent

users who find buying electronic tags inconvenient or

inefficient.

The federal government can encourage interstate

cooperation in electronic toll collection. It can provide a forum for bringing state agencies together to

work out agreements that ease electronic toll collection. The federal government has an interest in compatible systems across state lines that will aid interstate commerce.

Commercial Vehicle 

Operations

The ITS projects with the greatest potential effects on

productivity--or at least those in which productivity

effects are most directly identifiable--are ones that

have applications in the area of commercial vehicle

operations. Trucking companies began to adopt

communications and computer technologies to aid

their operations long before the ITS program was

instituted. Their early efforts were aimed at improving the productivity of their fleets and drivers and at

providing better service to shippers. They have used

the Global Positioning System to monitor the location and speed of vehicles and the number and length

of stops. Carriers have found the ability to tell shippers exactly where their shipments are and when they

will arrive to be an effective marketing tool. In addition, commercial vehicle operators have used advanced technologies to monitor drivers' hours on

duty, keep track of tax payments, and comply with

paperwork requirements and other federal and state

regulations.

The technologies that commercial vehicle operators have adopted--such as vehicle locators and electronic billing--clearly meet the market test of improving profitability. The ITS program expands on those

efforts by exploring additional applications of computer, communications, and sensor technologies that

would broaden benefits for the public as well as for

commercial vehicle operators and shippers. Those

applications include substituting electronic filing for

paperwork that is required to show compliance with

federal and state laws, weighing trucks in motion so

that they do not have to stop at weigh stations, keeping track of roadside safety inspections, monitoring

emissions, and notifying authorities of incidents involving trucks carrying hazardous materials.

The HELP/Crescent Project

One of the first major CVO efforts of intelligent

transportation systems, begun in 1991, was the

Heavy Vehicle Electronic License Plate (HELP)/

Crescent project. It covers a crescent from British

Columbia to Texas that runs south along Interstate 5

through Washington, Oregon, and California, then

east along Interstate 10 through Arizona, New Mexico, and Texas, and then branches onto Interstate 20

in Texas. The project involved the motor carrier industry, federal highway officials, and officials from

state and provincial transportation agencies.

The goal of HELP/Crescent is a system in which

a truck can drive through participating jurisdictions

without having to stop at weigh stations or ports of

entry. The system involves gathering the information

needed to comply with all laws and regulations--size

and weight, certification of safety inspections, payment of state fuel and other taxes and fees, registration certificates, and so on--and recording it on a

smart card in the vehicle and entering it into a database on a central computer. As the truck traverses its

route, the card can be read electronically and

matched with information in the computer. Any
CHAPTER THREE APPLICATIONS OF INTELLIGENT TRANSPORTATION SYSTEMS 35

discrepancies--for example, if data from a checkpoint

where vehicles are weighed in motion differed from

the stated weight--could cause a truck to be stopped

and checked.

During the test period, which ended in 1994, approximately 2,000 trucks were equipped with transponders to communicate with vehicle identification,

vehicle classification, and weigh-in-motion equipment installed along the crescent. The test results are

now being evaluated, and many of the participants

are optimistic about the feasibility and desirability of

the CVO applications being tested. Indeed, the project has been hailed as such a success that it has been

spun off to a new private organization, HELP, Inc.

The cost of the HELP/Crescent project is estimated to be $22 million, of which the federal government contributed $5.9 million. 44

Advantage I-75

Advantage I-75 is another large CVO project, which

is estimated to cost nearly $11 million, including a

federal share of $7.7 million. Advantage I-75 runs 45

along the Interstate 75 corridor from Ontario to Florida through Michigan, Ohio, Kentucky, Tennessee,

and Georgia. Like HELP/Crescent, it contemplates

electronic clearance of transponder-equipped vehicles to minimize the need for stopping in transit. Begun in 1991, the project is expected to continue into

1997. Equipment that will link electronically all

weigh stations along I-75 is being installed. One

study has concluded that if all weigh-station stops on

I-75 could be eliminated, savings would total $260

million a year. 46

Factors Affecting Adoption of

Advanced Technologies

Using advanced technologies to ensure compliance

with state regulations could substantially benefit

commercial vehicle operators. Requiring fewer stops

could reduce travel time, increase productivity, save

fuel, and reduce emissions.

Commercial vehicle operators have been skeptical, however, that ITS would be a net benefit. One of

the foremost concerns appears to be that advanced

technologies for weighing vehicles in motion and

identifying vehicles electronically could ease imposing highway user fees based on the weight of the vehicle and distance driven. Weight-distance charges

are popular among policy analysts and some highway

officials who note that damage to pavement depends

on the weight of trucks--or, more precisely, the

weight supported by each axle. Thus, charging ve- 47

hicles according to their weight and the distance they

travel could promote efficient use of highways by

causing truckers to recognize the damage they inflict

and inducing them to spread their cargo over more

axles. A few states have imposed charges or taxes

associated with weight and distance. Most notably,

Oregon has levied a weight-mile tax for many years.

But the availability of advanced technologies enhances the feasibility of such charges because it

makes them easier to administer, monitor, and enforce.

How favorably state highway officials would

view such technologies is not clear. On the positive

side, advanced technologies could help them monitor

trucking operations, collect fees and taxes, and enforce weight restrictions and other laws. Such technologies also could make working conditions safer

for people staffing roadside monitoring stations. But

achieving those savings might require state highway

officials to relinquish some degree of control and

autonomy. They might have to alter some of their

business practices--such as reporting forms and requirements, and auditing and inspection schedules--

44. Department of Transportation, ITS Projects, p. 142.

45. Ibid., p. 178.

46. Study by the Center for Urban Transportation Research at the University of South Florida, reported in the testimony of Don C. Kelly,

Secretary of Transportation, Commonwealth of Kentucky, and

Chairman of the Advantage I-75 Policy Committee, in U.S. House

of Representatives, Intelligent Vehicle-Highway Systems, hearings

before the Subcommittee on Investigations and Oversight of the

Committee on Public Works and Transportation, Committee Print

103-66 (June 29 and July 21, 1994), p. 262.

47. See Department of Transportation, Federal Highway Administration, Highway Revenue Analysis Branch, The Feasibility of a National Weight-Distance Tax, report of the Secretary of Transportation to the U.S. Congress pursuant to section 933 of the Deficit

Reduction Act of 1984 (December 1988).
36 HIGH-TECH HIGHWAYS: INTELLIGENT TRANSPORTATION SYSTEMS AND POLICY October 1995

to attain compatibility with neighboring states. Decisions about whether to participate in multistate programs involving advanced technologies will entail

weighing both political and economic factors.

The amount of risk involved also contributes to

the decision process of state highway officials. They

may be reluctant to tinker with something that appears to be working perfectly well. Adopting computerized monitoring of commercial vehicle operations might be more efficient than paper-based systems, but the risk, familiar to many who deal with

computer networks, is that they can crash. To provide for such a system failure, state highway departments might have to maintain costly backup systems,

which could diminish the savings achieved by computerization.

As for effects on the general public, systems that

enhance the productivity of commercial vehicle operations are likely to result in lower shipping costs,

since the trucking industry is highly competitive.

That decrease could reduce the cost of consumer

goods, nearly all of which are carried by truck at least

some of the way from plant or port to retail outlet. 

Under certain conditions, electronic monitoring

could enhance safety. If new technologies enable

highway officials to identify unsafe vehicles--such as

vehicles with defective brakes--accidents could be

prevented. In addition, fewer stops at weigh stations

would generate fewer opportunities for collisions

between slow-moving trucks pulling out of weigh

stations and fast-moving automobiles. If stopping at

weigh stations provides a rest for truck drivers, however, eliminating the need to stop could diminish

safety, although officials have other ways of enforcing the rules concerning rest breaks. Eliminating the

deceleration and acceleration associated with stopping at weigh stations would also reduce emissions.

In evaluating ITS projects affecting commercial

vehicle operations, all of these considerations--effects on trucking productivity, costs and benefits to

state and local governments, and effects on safety

and the environment--should be weighed.

Emergency Management

Advanced communications technologies can be employed to assist in alerting authorities of the need for

police, fire, and rescue services and to reduce the

time it takes them to respond. Two operational tests

are under way.

In north-central Colorado, the Colorado State

Patrol is working with communications firms to evaluate using the GPS to locate vehicles and cellular

phones to assist travelers. The Colorado Mayday

project will help evaluate both the technology and the

organizational structure for providing timely assistance in emergencies. The total estimated project

cost is $3.8 million, of which the federal government's share is $2.4 million.48

In northwest Washington, the Federal Highway

Administration is working with the Washington State

Department of Transportation, the Washington State

Patrol, the University of Washington, and several

communications and consulting firms to develop a

regional system of emergency notification and response. The primary objective of the Puget Sound

Help Me (PUSHME) Mayday System is to assess the

operational, institutional, and technology requirements for such a system. The federal government

has obligated $1.4 million of the total $2.5 million

project cost.49

Traditionally, state and local governments have

had primary responsibility for emergency management. Justification for federal involvement through

the ITS program would rest on the concept that research and development is a public good; that is, that

the knowledge gained from research in one jurisdiction can be used in others, but since no single jurisdiction can obtain all the benefits, none may want to

undertake the costs unless it receives financial assistance from an external source.

48. Department of Transportation, ITS Projects, p. 202.

49. Ibid., p. 203.
CHAPTER THREE APPLICATIONS OF INTELLIGENT TRANSPORTATION SYSTEMS 37

Advanced Vehicle Control 

and Safety Systems

Many of the ITS projects described above have

safety as one objective, although it is not generally

the principal objective. Accident prevention is a way

of reducing congestion related to traffic incidents,

making safety at least auxiliary to the traffic management objective, and emergency management is integrally related to safety. But safety is the central

focus of two other ITS efforts: automated highway

systems (AHS) and advanced vehicle control systems.

Automated Highway Systems

Section 6054(b) of the Intermodal Surface Transportation Efficiency Act of 1991 required the Secretary

of Transportation to 

develop an automated highway and vehicle

prototype from which future fully automated

intelligent vehicle-highway systems can be

developed. Such development shall include

research in human factors to ensure the success of the man-machine relationship. The

goal of this program is to have the first fully

automated roadway or an automated test

track in operation by 1997.50

In the long term, automated highways are envisioned

as roads on which drivers do not have to operate their

vehicles. Vehicles would be automatically guided

along such roads and kept a safe distance apart.

The Department of Transportation has started

several AHS projects. The largest consists of a consortium of several companies, transportation agencies, and a university, led by General Motors. The

total cost of this project is estimated to be $210 million, with the federal government paying $160 million. The long-term goal of the project is to im- 51

prove the safety and efficiency of the nation's surface

transportation network through an automated highway system.

Other AHS projects address special concerns that

must be resolved in the early planning stages of an

automated highway system. For example, the $5.1

million project called Human Factors Design of Automated Highway Systems studies how drivers will

handle such tasks as entering and exiting the AHS,

how they will react to manual driving after automated operation, and how they will react to different

spacing between vehicles on the automated highway. Another project, Precursor Systems Analyses, 52

is intended to support the systems development stage

of AHS. It involves 15 prime contractors, with federal funding of $14.1 million.53

Advanced Vehicle Control Systems

In addition to work on automated highway systems,

DOT has funded several projects for research into the

closely related matter of advanced vehicle control

systems. Advanced vehicle controls include such

measures as sensing systems that sound an alarm or

take control of the vehicle if the sensors detect an

imminent accident. For example, sensors can detect

whether a vehicle is moving too rapidly in relation to

the vehicle in front of it and can tell drivers to slow

down or automatically apply the brakes. Sensors can

detect whether another vehicle is in an adjoining

lane, perhaps in the driver's blind spot, and can sound

a warning against changing lanes.

The Role of Government in Vehicle

Control and Safety Systems

Although automated highways will require vehicles

that have advanced controls, such vehicles could operate independently of automated highways. Over

the past quarter century, manufacturers have incorporated increasing numbers of safety-related features in

vehicles. Some of those features have been required

50. Section 6054(b) of the Intermodal Surface Transportation Efficiency Act of 1991, 23 U.S.C. 307, 105 Stat. 291.

51. Department of Transportation, ITS Projects, p. 231.

52. Ibid., pp. 226-227.

53. Ibid., pp. 212-213.
38 HIGH-TECH HIGHWAYS: INTELLIGENT TRANSPORTATION SYSTEMS AND POLICY October 1995

by federal government regulation, and others have

come in response to customers' demands. Many

types of advanced vehicle controls could most likely

be adopted without government involvement; the

market can respond to consumers' preferences. 

But some government involvement could probably be rationalized. Owners of vehicles equipped

with safety features are not the only ones who benefit

from them; all drivers gain from their use. For example, a vehicle equipped with a lateral collision warning system may help drivers in adjacent lanes. In

addition, if it is cheaper to mass-produce vehicles

with advanced controls, some government involvement may increase the demand for them and thus

save buyers enough money to make the government's

cost worthwhile.

One unintended consequence of advanced controls could be that drivers whose vehicles have such

control devices might drive less carefully than they

would without them. Some economists have suggested that drivers may in effect seek a given level of

safety and "compensate" for improved safety features

in vehicles by driving faster or more recklessly. If 54

that fear is real, the effect diminishes the net benefits

from advanced vehicle control systems.

If advanced vehicle controls are evolutionary,

automated highway systems could produce a revolutionary change in the relationship between vehicle

operators and the operators and maintainers of roadways. Government operation of an automated highway system in which vehicles were owned and controlled by individuals would require fundamental

changes in the relationship between them. Liability

issues present a major concern. A highway system

failure could have catastrophic results. To guarantee

that an automated highway worked safely, managers

would have to ensure that vehicles operating on it

were safe and in good repair. A system that automatically applied brakes, for example, would be effective

only if all vehicles' brakes were in good working condition. A flat tire or other breakdown could cause

massive disruption in an automated highway system.

Priority Corridors

In the legislation authorizing the ITS program, the

Congress established a special category for applications of technology to transportation corridors. Section 6056 of ISTEA required the Secretary of Transportation to designate transportation corridors in

which application of ITS would be particularly beneficial, and it set forth criteria for allocating not less

than 50 percent of corridor funding for three to ten

"priority corridors." 

The factors to be considered in designating priority corridors were traffic density; nonattainment of

ozone goals under the Clean Air Act; a variety of

types of transportation facilities (such as highways,

bridges, tunnels, and toll and nontoll facilities); inability to expand the capacity of existing surface

transportation facilities substantially; a significant

mix of passenger, transit, and commercial motor carrier traffic; complexity of traffic patterns; and potential contribution to carrying out DOT's strategic plan

for intelligent vehicle and highway systems.

In addition, in the conference reports to appropriation bills following passage of ISTEA, the Congress

has designated funding from the federal-aid highway

(ISTEA) account for specific corridors.

In March 1993, DOT designated four priority

corridors: the Northeast (I-95 northeast from Maryland to Connecticut), Midwest (I-80/I-90/I-94, from

Gary through Chicago to Milwaukee), Houston (I-10

and I-45), and Southern California (I-5/I-10, Los Angeles to San Diego). Those corridors encompass 55

metropolitan areas that have grown so large that they

have blended together. Traffic congestion is common not only during rush hours between a central

city and its suburbs but also along entire urbanized

corridors linking central cities and their suburbs.

Traffic spills over from one jurisdiction to the next,

making coordination among transportation agencies

desirable.

54. Sam Peltzman, "The Effects of Automobile Safety Regulation,"

Journal of Political Economy, vol. 83, no. 4 (August 1975), p. 717.

55. Department of Transportation, ITS Projects, p. 391.
CHAPTER THREE APPLICATIONS OF INTELLIGENT TRANSPORTATION SYSTEMS 39

SMART Corridor (Los Angeles)

The Southern California corridor includes parts of

Ventura, Los Angeles, San Bernardino, Riverside,

San Diego, and Orange counties. Within the corridor

are several ITS projects, including the "SMART Corridor." The SMART Corridor, a joint project of the

Los Angeles County Transportation Commission, the

City of Los Angeles, and the Federal Highway Administration, runs along 12.3 miles of the Santa

Monica Freeway in Los Angeles. The system will

use highway advisory radio and changeable message

signs to advise motorists of traffic conditions and

alternative routes. It will also improve emergency

response. Those actions are expected to relieve congestion, enhance safety, reduce fuel consumption,

and improve air quality. DOT expects the project to

be fully operational in the summer of 1995.56

The Role of Government in

Priority Corridors

The priority corridor programs generally encompass

a number of ITS projects. Some are relatively limited in scope and can be undertaken by a small number of jurisdictions. But the projects that probably

warrant the greatest emphasis by the federal government are those that have the greatest amount of jurisdictional overlap, and which a single jurisdiction is

least likely to carry out. They are also the most complex in terms of gaining cooperation among jurisdictions. Thus, they probably make the strongest case

for federal assistance. Of course, such projects

should still be examined to make sure they meet

benefit-cost criteria.

56. Ibid., p. 109.

T

Chapter Four

Options for Reform

he Intelligent Transportation Systems program is about midway through its first authorization period. Critics are pressing it to

show results. In addition, the need to constrain federal spending has made the program a candidate for

budget cuts or elimination. There are three options

for reform: eliminating ITS as a separate program,

retaining it as a program with a narrow focus, or

strengthening the existing program.

All of the options are based on the assumption

that budgets will be tighter in the future. ITS projects will have to compete with many others for

fewer federal dollars. The options would produce

somewhat different results based on the types of applications emphasized and the nature of the federal

government's involvement. 

The options are predicated on the existing role of

the federal government in financing highways and

transit systems. If the Congress reexamines and radically changes that role, fundamentally different options arise. If, for example, the federal government

halted subsidies for mass transit, the justification for

federal support of transit research and development

would fade (although a small role might remain,

based on the reasoning that research and development is a public good). Such policy changes lie beyond the scope of this study.

Eliminating the Program

The option of eliminating the ITS program as a separate programmatic and budgetary entity would not

necessarily mean ending federal support for intelligent transportation technologies; it would merely

require such efforts to compete more directly for federal funding with other transportation projects. Under this option, the Federal Highway, Federal Transit,

and National Highway Traffic Safety Administrations could continue to sponsor ITS projects under

their existing research and operational testing programs. State and local governments could also use

federal funds for research, testing, and deployment of

intelligent systems. State and local governments

have incentives to continue seeking technological

solutions to traffic and travel problems, and the private sector would most likely continue to do research

in areas where it could reap enough benefits to make

those efforts worthwhile. 

Underlying this option is the premise that the ITS

program has largely succeeded in its original mission. It has brought together parties with a stake in

intelligent transportation: state and local governments; universities and other research centers; automobile, electronics, communications, and other firms
42 HIGH-TECH HIGHWAYS: INTELLIGENT TRANSPORTATION SYSTEMS AND POLICY October 1995

that supply technologies; and commercial vehicle

operators and other users of the highway system.

The Department of Transportation and ITS America,

the federal advisory committee on intelligent transportation systems, have provided leadership in stimulating new ideas and developing ways of using new

technologies to improve travel by highway and mass

transit. The federal government has provided seed

money for a variety of projects and has brought smart

systems to the attention of state and local officials

who can make informed investment decisions about

whether to use the new transportation technologies in

their communities.

The efforts to develop a systems architecture

have stimulated new ways of thinking about solving

transportation problems. Those efforts have also

identified potential stumbling blocks to success, such

as incompatible technologies. And they have

brought together various private standard-setting

organizations to work out procedures for deciding on

and adopting compatible systems.

Having supported research and testing that demonstrate ways of improving transportation through

advanced computer, communications, and sensor

technologies, the ITS program has accomplished

much of its initial purpose. According to that line of

reasoning, the rationale for the program as a separate

entity has diminished--although additional R&D may

still be desirable.

Terminating the program as a separate entity--

either when its initial authorization expires in 1997 or

earlier, as part of a deficit reduction plan--has disadvantages as well as merits. Many projects are still

under way and may need additional federal funding

or technical assistance to accomplish their objectives.

Without a central program office to disseminate the

results of research and operational tests, state and

local transportation officials may find it more difficult to learn about them and to get assistance in applying them in their jurisdictions. To some extent,

this problem is mitigated by the existence of other

organizations and forums for sharing research results,

such as the Transportation Research Board, the National Cooperative Highway Research Program, and

the American Association of State Highway and

Transportation Officials. ITS America could also

serve a useful role as the central clearinghouse for

coordinating research efforts. Still, without the focus

of a federal ITS program, the impetus for additional

research and development of smart transportation

systems might diminish.

Limiting the Scope

of the ITS Program

Another option is to scale back the ITS program and

focus on areas where federal intervention is desirable

because it will facilitate interstate commerce. Two

major areas of application are most likely to meet the

criterion of facilitating interstate commerce: electronic clearance of commercial vehicle operators and

electronic payment of tolls. Other project areas

could be considered on the basis of the strength of

the federal interest and the need for involvement by

the federal government.

ITS efforts in the areas of travel and transportation management, travel demand management, public

transportation operations, and emergency management are less likely to meet the criteria of this option.

Projects in those areas could continue to seek federal

funding support from existing programs authorized

by the Intermodal Surface Transportation Efficiency

Act of 1991 or through annual appropriations, but

they would no longer enjoy special treatment under a

separate program. They would have to compete on

an equal basis with other funding proposals. Most of

the promising ITS projects would be able to do so.

The main exception would probably be traveler information systems that are vehicle-based, such as route

guidance and navigation. But the success of TravTek

suggests that those projects would be attractive to the

private sector. Automobile manufacturers and rental

car companies, in particular, would continue to pursue traveler information systems because they have

discovered that consumers are willing and able to pay

for them.

This option would also drop most of the projects

concerned with advanced vehicle control and safety

systems because vehicle-based projects could be left

to the private sector. Although the automated highway system is based on infrastructure and is therefore

a stronger candidate for governmental support than a
CHAPTER FOUR OPTIONS FOR REFORM 43

system based on vehicles, it might not meet the criterion of interstate interest and would be more likely to

fail a benefit-cost test.

Efforts in the commercial vehicle and electronic

payment areas would not have to be conducted as a

separate ITS program. The Federal Highway Administration’s Office of Motor Carriers has taken the lead

on projects developing electronic clearance of commercial vehicles, and it will probably continue to

lead in assisting states in cooperating with one another. Because trucking companies believe that electronic clearance will save them time and money,

they, too, will be a force for continuing work in this

area. Since trucking companies have adopted various

smart technologies on their own, continued efforts in

this area seem likely. In addition, FHWA has other

initiatives, including the Motor Carrier Safety Assistance Program, that could augment ITS efforts.

Efforts toward electronic payment of tolls might

abate. The principal beneficiaries of electronic toll

collection, in contrast to those who benefit from electronic clearance of commercial vehicles, are individual motorists who are not organized enough to lobby

against long lines at toll facilities. Although organizations such as the American Automobile Association might be expected to express the interests of

members, they might not wish to improve electronic

toll collection. First, AAA has traditionally opposed

tolls and probably would not want to make them

more attractive as a means of financing highways and

bridges. Second, the benefits from interstate cooperation in electronic toll collection are primarily limited to the Northeastern states, where both tolls and

interstate travel are common. 

Strengthening

the ITS Program

A third option is to retain the Intelligent Transportation Systems program in its general form but to

continue managers’ efforts to improve it. The process of selecting projects could be strengthened by

imposing stricter criteria and procedures.

One area for improvement is in setting priorities

for the program. The strategy so far has been essentially to let a thousand flowers bloom. Several hundred projects share in the funding, making support

for the average venture about $1 million a year. Of

course, the size of projects varies widely.

The largest share of ITS funding--41.8 percent

through 1994--has been used for the corridors programs as specified by the Congress. Those programs

are aimed primarily at alleviating traffic congestion;

their secondary objectives are improving safety and

emergency response. Their focus is on the application of technologies to solve such problems, not on

basic research.

The rest of the funding is divided among about

200 projects. A review of each one is beyond the

scope of this study, but the broad picture that

emerges from the summary descriptions is something

of a patchwork quilt. That state of affairs is not necessarily undesirable, especially in the early stages of

a research program. By sponsoring a diverse set of

projects, the program can reduce the risk of prematurely closing off a promising line of research. Once

funding is cut off from a research effort, an entire set

of opportunities may be lost. Thus, it is not unreasonable to sponsor a diverse set of projects early in a

research program, recognizing that some will be

more successful than others but that even unsuccessful attempts will contribute to the state of knowledge

because they provide lessons about what to avoid in

future research.

At some point, however, a research program

should become more focused. It might be strengthened by judging projects on the basis of more demanding criteria. Proposals can be scrutinized for

their potential contribution to the state of knowledge.

Researchers can be required to show what they would

learn, what gaps in knowledge the project would fill,

and what transportation problems it would help

solve, as well as the likely success of doing so. Peer

review of proposals and results can strengthen the

evaluation process.

The costs of projects should be weighed against

their benefits. The benefit-cost approach is some-
44 HIGH-TECH HIGHWAYS: INTELLIGENT TRANSPORTATION SYSTEMS AND POLICY October 1995

what complicated in a program like ITS, in which

benefits may be separated into two broad categories--

namely, those associated with the knowledge gained

from the research, and those that help the users and

providers of transportation services. The latter occur

in the multitude of ITS projects that use the real

world for a laboratory--the projects that aim to reduce congestion, transit waiting time, and costs of

managing highway and transit systems; enhance mobility; and so on.

One note of concern in the ITS program is that

many projects appear to have essentially the same

objective and approach. Although some similarities

may be useful in helping researchers identify specific

factors that are vital to the success or failure of a

given technological application, too much duplication is wasteful and risks turning a research program

into a pork barrel. Additional funding would be

more productive if it was designed to fill in gaps in

knowledge.

Several other factors should enter into consideration of new projects. Projects having the greatest

potential public benefits in relation to costs might be

better projects for the federal government to sponsor

because they are generally less attractive to private

entities. Similarly, those that might benefit many

jurisdictions may be better targets than those that address unique local problems. Private firms would be

less likely to undertake riskier projects. To get a

sense of the value of potential projects to state and

local officials, selection criteria could include the

extent to which those officials were willing to provide matching funds. Participation by the private

sector could also be weighed.

Among the objectives set forth by the Congress,

the one that seems to have received the least attention

is the environment. Although some of the travel

management projects could benefit the environment,

how they might do so is not entirely clear because

short-term reductions in traffic and congestion could

lead to greater numbers of vehicles on the road, resulting in even greater pollution.

Conclusion

Establishing the ITS Joint Program Office has alleviated many of the organizational problems that are

common to start-up and rapid growth. The office has

helped bring together a disparate set of projects run

by FHWA, FTA, and NHTSA and is providing

greater oversight in the process of selecting, supervising, and evaluating projects. Future projects will

probably be subjected to greater scrutiny than were

earlier ones. The next two years will be crucial in

demonstrating what the program can produce. At

this juncture, the jury is still out on the question of

whether the program is a sound investment of federal

dollars. Some projects appear to be yielding useful

results; others are floundering. Unless the program

can demonstrate that it is producing useful knowledge and communicating that knowledge effectively

to those who make decisions about using new transportation technologies, it will have difficulty competing with other programs for limited budgetary

resources.

The ITS program is authorized through fiscal

year 1997 under the Intermodal Surface Transportation Efficiency Act. When it considers legislation to

succeed ISTEA, the Congress will debate the future

federal role in setting policies and providing financing for highways and mass transit systems. The three

options set forth in this chapter offer ways of reforming the ITS program within the context of the existing federal framework. The criteria presented for

federal involvement--a national interest transcending

state lines and spillover costs or benefits--can also be

applied more generally to highway and transit programs. If the Congress should decide to scale back

or significantly alter the federal role in surface transportation, the role in funding intelligent transportation systems could be modified accordingly.