How to Get Our Dumb Infrastructure Ready for Smart Cars (and More)

A new Mercatus study suggests that policy-induced competition can be a model for vehicle-to-infrastructure development

Many are understandably fascinated by the promise of driverless cars. Much attention is paid to smart car software, and experts were long fond of debating whether such applications were even technically possible. As more driverless car ventures put out fully autonomous test pilot vehicles on real roads, the debate over whether cars can theoretically drive themselves is resolving.

But all this time, fewer thought to ask: can our roads stand up to the challenge?

While heady debates about the feasibility of “strong artificial intelligence” command public attention, behind the scenes, a group of policymakers have been anticipating the need to update our infrastructure to accommodate the next wave of transportation innovation.

In fact, autonomous vehicles are not the only technology that needs to interface with existing infrastructure. “Smart cities” technologies that link physical features to the internet through sensors, 5G, and Wi-Fi can improve traffic flows, waste management, and safety on the road.

A new study from the Mercatus Center by director of the May Innovation Research Center at Texas A&M University Korok Ray and Mercatus senior research fellow Brent Skorup, called “Smart Cities, Dumb Infrastructure: Policy-Induced Competition in Vehicle-to-Infrastructure Systems,” discusses how state and local policymakers can best prepare for the new world of smart infrastructure.

The authors conclude that lawmakers on all levels of government should not seek a top-down mandate for how this system should operate; rather, they should embrace a model of “policy-induced competition” as best suited to retrofit an appropriately smart infrastructure system for our new world of smart cars.

What is “Intelligent Transportation”?

Driverless cars don’t just happen in a vacuum. In order to safely navigate through the physical realm, autonomous vehicles are equipped with a host of sensors and transmitters to discern the world around them and broadcast information about where they are going.

When vehicles are equipped to communicate with other vehicles, this is called “vehicle-to-vehicle” (V2V) technologies. When they communicate with the infrastructure around them—traffic signs, 5G antennae, or transponders affixed to utility poles—it is called “vehicle-to-infrastructure technology” (V2I). These both form parts of what transportation experts call “intelligent transportation systems” (ITS) or “vehicle-to-anything” (V2X) systems, which can include other smart city and internet of things devices.

Federal lawmakers have actually anticipated the development of such technologies for several decades. The authors discuss how the Department of Transportation (USDOT) created a dedicated ITS office way back in 1991. This venture initially mostly aimed to fund top-down technology standards—most notably in the case of Dedicated Short Range Communications (DSRC) technologies—that presumably would be used across the country.

Thankfully, USDOT eventually retreated from this regulation-heavy approach, but its funding-first mission has remained. Still, DOT’s new preference for a “tech-neutral” and hands-off approach to ITS technologies is attractive because it lessens the risk for waste or lock-in to an inferior standard.

How “Street Furniture” Cushions ITS

One interesting dimension of ITS technologies is that the infrastructure needed for one realm of application can be fortuitously used by an entirely different sector.

Consider 5G. By now, most Americans know that cell phone carriers are building a new wireless network that will power super-fast speeds. Many may already have seen a small 5G antenna in their city, and policymakers are eager to find ways to speed up the deployment of the many antennae necessary for the network to operate. Ray and Skorup point out that policies that affect which light posts can hoist, say, a 5G antenna can easily also apply to automated vehicle and smart city technologies.

This kind of “street furniture”—the light poles, utility poles, and public rights of way already in use by municipalities, as well as the new infrastructure that will be built to support smart technologies—will become all the more important for ITS systems as they start developing in earnest. The challenge for state and local policymakers will be how to balance the varying demands on existing and new street furniture against each other while promoting competition and development.

What Policymakers Can Do to Help

The federal government already recognizes that private enterprise will play a large role in spearheading ITS applications. The Federal Highway Administration (FHWA) envisions that the private sector will work with municipalities to build out ITS street furniture and other infrastructure needs through public-private partnerships (P3s).

There are many ways P3s can be structured. For example, a municipality can contract out to a private entity to build or maintain street furniture that the relevant government then oversees and regulates. FHWA recommends that private entities monetize such arrangements strictly through the use of advertising, but there is no legal reason that a municipality could not allow a contractor to charge user fees, for instance.

Policymakers who wish to help kickstart the coming wave of ITS innovation would be wise to employ P3s as a tool for infrastructure management. Ray and Skorup suggest one particular approach that could cut down on the risk for anti-competitive outcomes or corruption. Called “policy-induced competition,” this P3 model would keep device competition front and center when structuring private contracts.

Under policy-induced competition, firms that are awarded a government contract must build interoperability in to their infrastructure from the start. This means that cell service company that is allowed to build or maintain a utility pole for 5G, for instance, could not structure it so that another automotive service company could not also use that pole for autonomous vehicle sensors.

The authors write that V2I P3 contracts should be structured so that this kind of “basic infrastructure” is made accessible to a broad range of ITS uses. However, it should be noted that interoperability mandates for more complex technologies have often failed because of the complexity involved. For this reason, the authors do not encourage interoperability mandates at the network or device level.

State and local policymakers would do well to encourage a model of policy-induced competition for infrastructure buildouts to facilitate new “smart” technologies. There are a few federal barriers to overcome, as well: for instance, the authors discuss how a federal regulation prohibiting states from collecting tolls on any federally-aided highway cuts off a significant source of revenue that could fund this new infrastructure.

Still, there is much good that proactive local leaders can do. By disallowing “dumb infrastructure” operators from cutting off alternative uses of street furniture, state and local policymakers’ embrace of policy-induced competition can help make our physical realm smart enough to handle the transportation technologies of tomorrow.

Photo by Justin Sullivan