Joyce Wenger

1
Business Perspectives Government Funding Booz
Allens Assessment
Joyce Wenger Detroit, MI April 2009
The Connected Vehicle Trade Associations First
International Summit on the State of the
Connected Vehicle
2
Issues good and bad

• IntelliDrive is not being pushed by major safety
  advocacy groups
• IntelliDrive is perceived by many as a technology
  research project
• IntelliDrive is not perceived as necessary by
  some for improved mobiloity, or as the only
  solution for reducing congestion
• No sustainable financing mechanism is in place
  for transportation at any level of government
• It may be difficult to elevate the IntelliDrive
  discussion within the industry because of
• Current economic turmoil
• Financial condition of the auto industry
• Current congressional focus on near term vehicle
  safety and environmental regulations
• Roles of federal, state, and local governments
  and private sector are in state of policy and
  political flux
• Previously federal government played active role
  in building the interstate system, but more
  recently has had limited funding discretion and
  has played a more activist regulatory role
• but policy experts at USDOT, GAO, and the
  Policy and Revenue Commission have called for a
  more focused federal role with more discretion
  over activities that are in national interest
• Private equity may offer opportunities for PPPs
  for system financing and operation

3
Issues good

• USDOTs conversion of VII architecture into an
  open platform concept will encourage further
  testing and facilitate deployment of aftermarket
  devices, new technologies, and applications using
  emerging communications technologies
• OmniAir, a coalition of public and private
  entities in tolling industry, is encouraging
  advancement of 5.9GHz technologies for the
  tolling industry
• New York State and I-95 Corridor Coalition have
  just begun a pilot project with Volvo to explore
  IntelliDrive in the commercial vehicle industry
• ITS America has recently recommended to Congress
  that the next authorization bill should provide
  250M per year for ITS research programs,
  including completion of IntelliDrive technical
  and policy research
• CVTAs efforts to support organizations
  interested in vehicle communications the .car
  initiative is an example
• ITS Caucus recommendations that Harry Voccola
  mentioned yesterday
• Joel Szabats comment yesterday recognizing that
  the connected vehicle relates to key DOT issues
  of livable communities, congestion reduction, and
  alternative financing mechanisms

4
First Scenario Aggressive, Nationwide Deployment
led by the Federal Government Big Bang

• Advantages
• Federal government is in the unique position to
  organize RSE investments, establish a regulatory
  framework over private sector suppliers and auto
  industry, and exercise leverage over state and
  local governments who control most of the
  infrastructure
• This may be the kind of initiative that only
  succeeds if there is national consensus in
  response to a national need, as with the
  interstate system. IntelliDrive could similarly
  be linked to some national need like a VMT fee.
• Federal investment could alleviate the chicken
  and egg problem between RSE and OBE
• Without a nationwide effort there is some risk
  that FCC will reallocate the 5.9GHz band
• Disadvantages
• USDOT had not led a nationwide surface
  transportation initiative of this complexity, and
  doing so may require substantial re-working of
  the current institutional, policy, and political
  framework
• Perspective of too much federal control by some
  state and local transportation agencies, and by
  the public (regarding privacy) may make political
  consensus difficult
• Could be conflicts of funding for infrastructure
  versus V2V systems
• IntelliDrive could be overcome by technologies if
  this scenario develops too slowly

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Last Scenario A V2V Emphasis

• Advantages
• Less complex
• Market forces driving innovation instead of
  government reduces risks
• In spite of OEM financial situation, improving
  vehicles is what OEMs do
• This approach covers a significant number of
  safety benefits
• This approach does not preclude infrastructure
  investments
• Disadvantages
• Significant V2I benefits will not be realized
• OEM financial situation could slow the pace

6
Middle Scenario Major Metropolitan Deployments

• Participation of 3-4 major metropolitan areas
• 1B/year federal fund for a partnership of
  federal government, state DOTs, MPOs, transit
  agencies, and OEMs to equip 75 of infrastructure
  within 3 years and achieve high vehicle
  penetration within 5-8 years
• Sustainable operating model required
• Could include revenue generation components such
  as congestion charging
• Grants and incentives could be provided to
  participating OEMs and for OBU-equipped auto
  purchases
• Includes competitively awarded operating contract
  for long-term concession agreement with
  performance compensation
• States responsible for system procurements
• Federal government prescribes standards and
  requirements, but not specific technology

7
Middle Scenario Major Metropolitan Deployments

• Advantages
• Avoids complexities of nationwide rollout and
  supports safety and mobility in high profile,
  high benefit regions. Would be a bridge to full
  deployment.
• Probability of success higher since participants
  would be those most interested in implementation
• Competition will encourage innovation
• Allows political leaders at federal and state
  levels to see benefits before making decision for
  national program
• Allows USDOT to test different operating and
  institutional approaches
• Less politically controversial
• Disadvantages
• Without nationwide approach and with less than
  100 vehicle penetration many benefits will be
  lost
• Rural constituencies might be opposed to a
  metropolitan focus
• Potential costs for OEMs to make vehicles for a
  specific region
• People moving into or out of area could
  complicate results

8
What do we need to do to make the connected
vehicle happen and achieve deployment?
How do we as an industry, or as CVTA members

• More clearly articulate benefits and costs?
• Enable a better understanding of institutional
  issues and business models?
• Provide education to public officials and policy
  makers?
• Generate visibility of the connected vehicle?
• Find alternative funding with other
  beneficiaries, such as with Department of Health
  and Human Services?
• Develop technical consensus and confidence to
  increase support and speed discussions of
  budgeting, policy, and regulatory approaches?

Will the middle scenario accomplish these and
lead to deployment?