Implications of Telecommunications Technology InvestmentJamie Montague FischerMessner Project UpdateAugust 2009

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OverviewIntroduction to the Information EconomyBrief History of Telecommunications Technology Locational Considerations and System EfficiencyRelationship with TransportationTeleworking and Social ConnectivityIntelligent Transportation SystemsSummary*

The Information EconomyTelecommunications has been seen as the foundation for post-industrial economies.Shift from manufacturing to service focusShift from financial to knowledge capital as fundamental resourceSOURCES: Goddard, J., and Gillespie, A. (1986) Advanced Telecommunications and Regional Economic Developmnet The Geographical Journal., 152(3)Anttalainen, T. (2003) Introduction to telecommunications network engineering: 2nd Edition. Figure 1: The Telecommunications Industry (From Anttalainen, 2003)*

Telecom Technology TimelineSOURCE: Anttalainen, T. (2003) Introduction to telecommunications network engineering: 2nd Edition. Figure 2: Development of Telecommunications Systems and Services (From Anttalainen, 2003)*

Technical EfficiencyBasic telecom services: plain old telephone service (POTS) Advanced services: broadband services such as digital subscriber line (DSL), cable modem, fiber, wireless, satellite, and broadband over powerline (BPL).Infrastructure Types: Wireline System: Transmission through copper wire or fiber optic cable. Consists of customer services equipment, transmission facilities, and switches. Land-based Wireless: Transmits voice and data using radio waves, to mobile or stationary receivers. Consists of transmitters, receivers, repeaters, plus switches and points of interconnection to the wireline network. Satellite: Communications satellites can be used to provide different types of services such as radio, telephone, data, television, and imaging. Capable of providing services over wide geographic areas, and often used in underserved or remote areas.Cable: Distributes signals, via coaxial or fiber optic cable, or satellite. Cable operators may use poles, a microwave link, or underground cable.*SOURCE: FCC (2006) Lands of Opportunity: Bringing Telecommunications Services to Rural Communities. Consumer and Governmental Affairs Bureau.

System Efficiency (1)SOURCE: FCC (2009)High-Speed Servoces fpr Omtermet Access: Status as of June 30, 2008. Industry Analysis and Technology Division, Wireline Competition Bureau. Figures 3 & 4: Zip codes with high-speed internet providers as of June 30, 2008 (From FCC 2009)*

System Efficiency (2)FCC Lands of Opportunity: Building Rural Connectivity Outreach Program To enable the social and economic development of rural regions by fostering Distance learning, E-commerceE-governmentTelemedicine Through broadband telecommunications services*SOURCE: FCC (2006) Lands of Opportunity: Bringing Telecommunications Services to Rural Communities. Consumer and Governmental Affairs Bureau.Figures 5: Target areas for the FCC Lands of Opportunity Program

Integration with other SectorsTransportationTeleworkingSocial networking, online commerce, etc.Intelligent Transportation Systems (ITS)*

Teleworking (1)Five motivations to telework:WorkFamilyLeisure/ independenceCommutingIdeology (pro-environment)SOURCE: Mokhtarian, P. (1998) A Synthetic Approach to Estimating the Impacts of Telecommuting on Travel Urban Studies, 35(2)*Figures 5 & 6: Percentages of drivers who can telecommute (From Mokhtarian 1998)

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Teleworking (2)0.5 - 1% net reduction in VMT due to telecommuting.Workplace EffectsIncreased productivity of teleworkers (+)Decreased absenteeism of teleworkers (+)Decreased productivity of non-teleworkers (-)SOURCES: Butler, S., Aasheim, C. and Williams, S. (2007) Does Telecommuting Improve Productivity?: Seeking Solid evidence of demonstrable productivity gains. Communications of the ACM, 50(4)

Mokhtarian, P. (1998) A Synthetic Approach to Estimating the Impacts of Telecommuting on Travel Urban Studies, 35(2)

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Other Human-element Transportation ImpactsTelecomunications infrastructure can induce travel demand through:Social NetworkingIncreased awareness of activities of interestExpanding network of personal and business relationshipsStimulation of economic growth, which stimulates travelReduced disutility of travel by making travel time more productive

SOURCE: Mokhtarian, P. (1998) A Synthetic Approach to Estimating the Impacts of Telecommuting on Travel Urban Studies, 35(2)*

Intelligent Transportation Systems (1)SOURCE: Row, S. (2009) Future of the ITS Program Presentation to the ITS America 2009 Annual Meeting, Plenary Session: A New Era in Transportation A Federal Perspective. Research and Innovative Technology Administration, USDOT. Tuesday June 2, 2009.

*Traditional ITS Technologies:Ramp MeteringTransit InformationElectronic Payment and CredentialingTransportation Management Centers

Figure 8: Ramp metering diagram (From New Zealand Transit Agency)Figure 7: Los Angeles Metro Rapid Real-Time Arrival Sign (From USDOT)

Intelligent Transportation Systems (2)*SOURCE: http://www.its.dot.gov/intellidrive/intellidrive_overview.htmFigure 9: Intellidrive systems (formerly Vehicle Infrastructure Integration (VII)) consist of Vehicle to Vehicle (V2V), Vehicle to Infrastructure(V2I), and Vehicle to Device (V2D) Wireless communications.

Vision for 2009 ITS Strategic Plan

A national, multimodal surface transportation system that features a connected transportation environment among vehicles, the infrastructure, and portable devices to serve the public good by leveraging technology to maximize safety, mobility, and environmental performance.SOURCE: Row, S. (2009) Future of the ITS Program Presentation to the ITS America 2009 Annual Meeting, Plenary Session: A New Era in Transportation A Federal Perspective. Research and Innovative Technology Administration, USDOT. Tuesday June 2, 2009.*Intelligent Transportation Systems (3)

SAFETYGoal: Transformative safety through vehicle and infrastructure connectivityITS STRATEGIC INITIATIVES (1)Outcome: Significant reduction in crashes, injuries, fatalities and associated economic costs *The safety benefits of a project are expressed in terms of expected reductions in injuries and fatalities on the transportation network resulting from the project in question. These reductions are converted into monetary terms using standardized values.

Estimated 1.9% reduction in total annual vehicle crashes by 2050.Figure 10: Prevented crashes as ITS is deployed

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Estimated Total Crashes AvoidedAs Share of Forecast Annual Light Vehicle Crashes

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20124360

201320550

201456880.1

2015121550.2

2016177110.3

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2018296020.6

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2021483290.9

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2026742251.4

2027778631.5

2028808761.6

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2039930791.8

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2042936871.8

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2047940831.8

2048941501.9

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MOBILITYGoal (1): Capture complete, real-time information on all roads and all modes to support transformational system performance.Goal (2): Achieve transformational transportation management and system performance through vehicle and infrastructure connectivity.Goal (3): Realize next generation electronic payment systems that support transformational system performanceITS STRATEGIC INITIATIVES (2)Outcome: Significant improvements in mobility that result in more sustainable and livable communities *Mobility benefits refer to the improved ability of travelers to reach destinations and to reduce the required amount of travel time, for example by reducing congestion delays. Time savings and delay reductions, measured in hours, are converted to dollar terms using standardized values. These values are typically pegged to average wage levels, since wages represent the marketplace trade-off between time and money.

Estimated 1.7 million hours of delay reduction per year due to signal timing.

SOURCE: Row, S. (2009) Future of the ITS Program Presentation to the ITS America 2009 Annual Meeting, Plenary Session: A New Era in Transportation A Federal Perspective. Research and Innovative Technology Administration, USDOT. Tuesday June 2, 2009.ENVIRONMENTGoal: Enable environmental management through vehicle and infrastructure connectivity ITS STRATEGIC INITIATIVES (3)Outcome: Reduced transportation impact on the environment and improved livability *Environmental benefits stem from reduced vehicle emissions and other pollutants, for example from reductions in vehicle idling time. Again, changes in quantities (e.g. tons of carbon monoxide) are converted into monetary terms using standardized values.

Estimated 1.1 million gallons of gasoline saved, and 9,600 tons of CO2 emissions avoided per year due to signal timing.

ITS BCA (1) COST SummaryInitial infrastructure installation is estimated to cost $5 Billion, spent over a 5 year period.Installation of VII equipment and systems on all sold vehicles will cost over $1 Billion per year at full deployment.Total present value of all implementation costs estimated at $27.3 Billion, includingInitial infrastructure installmentOn-board vehicle equipmentOperations and maintenance costs*SOURCE: DOT/RITA (2008) Vehicle-Infrastruction Integration (VII) Initiative Benefit-Cost Analysis: Version 2.3 (Draft)

Present value sum of benefits from eight of the applications of VII estimated at $44.2 Billion. Benefits from other applications cannot yet be calculated and are presently excluded.About 95% of benefits result from reduced crashes, with other 5% from improved mobility and other positive private and societal impacts. Net Benefits: $16.9BBenefit Cost Ratio: 1.6 to 1*SOURCE: DOT/RITA (2008) Vehicle-Infrastruction Integration (VII) Initiative Benefit-Cost Analysis: Version 2.3 (Draft) ITS BCA (2) Benefit Summary

ITS Deployment Timelines (1)SOURCE: DOT/RITA (2008) Vehicle-Infrastruction Integration (VII) Initiative Benefit-Cost Analysis: Version 2.3 (Draft) Figure 11: Trajectory of VII equipped light vehicle fleet over time

Public-Private Partnership (1)SOURCE: FHWA (2005) Public-Private Agreements/Arrangements Associated with VII ImplementationInfrastructure development is primarily managed by the public sector, but vehicle stock is manufactured in the private sector.Public-private partnership is required to accommodate timely, national deployment, and it has the potential to maximize both public and private benefits.

Public Private Partnership (2)Figure 12: New service relationships required by VII implementationSOURCE: FHWA (2005) Public-Private Agreements/Arrangements Associated with VII Implementation

Questions?*

***Like railroads, as Ive already analyzed, it was feared that high-speed telecommunications networks could become oligolopolies which decrease rather than increase equity, and would discourage competition and efficiency.

Telecommunications technology has been seen as the foundation for post-industrial economies.Shift from manufacturing to service focusedShift from financial capital to knowledge capital as the fundamental resourceInclude FCC initiatives for medical and edu, with libraries,etc.

Investment opportunities: land-based wireless for rural communitiesInvestors (public or private) can improve access for underserved regionsBecause of relatively low population density, topographical barriers, and greater geographical distances,broadband service may be more difficult to obtain in some rural areas. In attempting to address thesechallenges, some rural communities have found it helpful to develop a strategic plan for broadbanddeployment that includes creating a comprehensive business proposal to broadband providers. Such aplan, for example, could demonstrate to broadband providers that deployment is a sound businessdecision that would benefit both the providers and the community. This strategic planning process mayinclude, but is not limited to, the following elements and strategies: Educating the community about the potential benefits ofbroadband service. Creating partnerships among community organizationsand institutions that might benefit from broadbanddeployment. Systematic assessment and prioritization of thecommunitys needs for broadband service. Aggregating (consolidating) demand within thecommunity to make service profitable for broadbandproviders. Participants may include, but are not limitedto, individual consumers, businesses, educationalinstitutions, health care facilities, and governmentagencies. Identifying an anchor tenant with adequate demand tospur infrastructure investment in broadband.in a variety of ways. These resources, services,and products include, but are not limited to: Education, Culture, and EntertainmentBroadband can overcome geographical and financial barriers to provide access to a wide rangeof educational, cultural, and recreational opportunities and resources. Telehealth and TelemedicineBroadband can facilitate provision of medical care to unserved and underserved populationsthrough remote diagnosis, treatment, monitoring, and consultations with specialists. Economic Development/E-CommerceBroadband can promote economic development and revitalization through electronic commerce(e-commerce) by: Creating new jobs and attracting new industries. Providing access to regional, national, and worldwide markets. Electronic Government (E-Government)Electronic government can help streamline peoples interaction with government agencies, andprovide information about government policies, procedures, benefits, and programs. Public Safety and Homeland SecurityBroadband can help protect the public by facilitating and promoting public safety information andprocedures, including, but not limited to: Early warning/public alert systems and disaster preparation programs. Remote security monitoring and real time security background checks. Backup systems for public safety communications networks. Innovative ApplicationsBroadband provides easier access to newer telecommunications technologies such as VoiceOver Internet Protocol (VoIP), which allows voice communication using theInternet.ITS: Chat with DuanePeople who can telecommute may not want to when either motivation is not present or motivation is outweighed by other constraints, e.g. risk aversion, interpersonal interaction needs, or the perceived benefit of the commute.Approximately 16% of the workforce can telecommute.About 46% of those who can, want to. (1996)About 76% of those who want to, will. 6% of the workforce will teleworkAbout 24% of the time, or 2-3 days per week. 1.3% is teleworking

Only 76% of telecommuting actually eliminates a commute vehicle-trip

Rideshare (see Messners realtimerides.org)

*Vehicle-to-vehicle (V2V). When a vehicle breaks suddenly, it can transmit a notice to vehicles behind that enable those vehicles to warn drivers to stop, or automatically apply brakes if a crash is imminent.

Vehicle-to-infrastructure (V2I). A vehicle in an accident could transmit incident datatime of incident, type of crash, severity through a roadside infrastructure device to system operators who then broadcast regional warnings. Simultaneously, incident data could be transmitted directly to emergency dispatchers for emergency response.

Vehicle-to-others (V2D). A car turning right may be able to send an alert to a bicyclists cell phone or device on the bike and avoid a potential collision.

*Vehicle emissions reduced or avoided as a result of VII applications are monetized according to standardized value ranges set by OMB and the Environmental Protection Agency. Current emissions of nitrogen oxides (NOx) by light vehicle are estimated at 8.25 million short tons, with potential reductions in emissions valued in a range from $1,500 to $9,500 per ton. Particulate matter (PM) emissions are assumed to be 220,000 short tons, with valuations ranging between $10,000 and $108,000 per ton. Valuation of hydrocarbons is estimated at $650 to $2,900 per ton. Valuation of sulfur dioxide is estimated at $2,260 to $15,100 per ton. The volume of carbon monoxide emissions is assumed at 511.2 million short tons and volumes of volatile organic compounds (VOC) at 4.87 million short tons. (These values are presented for reference but have not yet been incorporated into the BCA.) OMB has not yet established values for avoided emissions of carbon dioxide, the principal greenhouse gas. A value of $2 per metric ton of carbon5 is used in this report, reflecting the lower end of current prices in cap and trade futures markets for carbon emissions and offsets.

This BCA takes a societal view, counting all costs and benefits regardless of to whom they accrue. As such, it does not address questions of financial viability or business model. A project with substantial net societal benefits may, for example, nonetheless be structured in such a way as to be financially unworkable for one or more partners.

Neither is it an assessment of cost-effectiveness. That is, its results indicate whether a project has net benefits, not whether it is the most effective means to achieve a certain objective or result compared to other approaches or technologies. The analysis attempts to capture only the incremental effects of VII compared to a plausible baseline scenario. For example, analysis of the Ramp Metering application considers not the total mobility benefits from metering, but rather the additional benefits that VII provides compared to current (and projected future) conditions.