"Traffic.con"

THE SMART ROAD SCAM

11/17/08

Jerry Werner and Peter Samuel
National Center for Policy Analysis
Copyright 2008

So-called "intelligent transportation systems" (ITS) combine information and communications technologies with vehicles and public infrastructure in order to manage congestion, traffic routing, travel times and fuel consumption. These programs have finally become mainstreamed; however, the results are not always pretty, say Jerry Werner and Peter Samuel, of TOLLROADnews. Take for example the Transportation Technology Innovation and Demonstration program.

Critics say the program has been used to steer taxpayer money to a private company -- "Traffic.com" -- chosen not by competitive bids but in behind-closed-doors political deals.

They allege that the program maintains Traffic.com's monopoly control over traffic data and that federal grants are improperly used to "sell" the private monopoly's offerings to states and municipalities. And they accuse the U.S. Department of Transportation (DOT) of evading legislative provisions intended to open the program to competition, say Werner and Samuel.

In fact, an analysis of the agreements between state and local agencies, DOT and Traffic.com show how lopsided they are in favoring Traffic.com. Some of the revelations include:

• Changing the normal "local agency cash match" requirement to a new "non-Federal match."
• Preventing the local public-sector partner from providing valuable traveler information to the public.
• Traffic.com's huge conflict of interest in marketing transportation data.
• Revenue "sharing" that goes right back into Traffic.com's coffers.

Soon, the widespread availability of accurate and comprehensive real-time traffic information will be vitally important to our nation's mobility. This is particularly true as we are increasingly unable to "build our way out of congestion" because of shortfalls in the Highway Trust Fund. Even though, DOT sees the building of new, privately financed toll roads as the primary solution, our nation's ability to better utilize and leverage our existing roadway infrastructure must play a much larger part in the solution, say Werner and Samuel.

Source: Jerry Werner and Peter Samuel, "The 'Smart Road' Scam," Regulation, Fall 2008.

For text:

http://www.cato.org/pubs/regulation/regv31n3/v31n3-noted.pdf

For more on Regulatory Issues:

http://www.ncpa.org/sub/dpd/index.php?Article_Category=38

© 2008 National Center for Policy Analysis: www.ncpa.org

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