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High-Tech Highways: Intelligent Transportation Systems and Policy
October 1995
Section 3 of 6 		PDF
Chapter One 
Introduction

The 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.(1) The program is several years into its 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 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 far-reaching 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:

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

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: 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), 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.(4) It draws members from all 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.(5) Beginning 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 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 total provided) has been earmarked. About $128 million (34.2 percent) of GOE funding has been earmarked, as has about $268.5 million (62 percent) of ISTEA funding.


Table 1.
Funding and Obligations for the Intelligent Transportation Systems Program (In millions of dollars)
 
1991
1992
1993
1994
Total
Through
1994
1995a
Total 
Through 
1995a
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. 

Table 2.
Spending Obligations for the Intelligent Transportation Systems Program by Type, 1991-1995
(In millions of dollars)

1991 1992 1993 1994 Total 
Through 
1994		 Share 
Through 
1994 
(Percent)		 1995 Total 
Through 
1995		 Share 
Through 
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. 


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).(6) The three largest categories--corridors (41.8 percent), operational tests (19 percent), and research and development (18.7 percent)--account for about 80 percent of spending through 1994.(7) Such 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.

Figure 1.
Spending Obligations for the Intelligent Transportation Systems Program by Category
SOURCE: Federal Highway Administration.

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. 



Table 3.
Funding for Intelligent Transportation Systems Projects by Type of Application
 
Application
Federal Funds Obligated
Through 1994
(In millions of dollars)
Percentage of Total 
Federal Funding of 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). 


1. The program was originally known as the Intelligent Vehicle Highway Systems (IVHS) program.
2. ISTEA, section 6051 et seq. As noted above, the program has become commonly known as Intelligent Transportation Systems.
3. ISTEA, section 6052(b)(1) through 6052(b)(8).
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.
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.
7. The categories combine congested and priority corridors.

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