FCC manages electronics frequency spectrum as a public good.  As a basic part of its operation, the FCC auctions off this spectrum for a range of services to private industry.  This FCC Spectrum Allocation strategy is foundational to many private industries such as media and communication. With the guaranteed access to spectrum and enforcement from a government regulator, private industry can confidently invest in infrastructure which provides value added services. These services are then subsequently bought by consumers, and the whole system becomes economically viable.  Over time, FCC has become quite sophisticated in models to allocate spectrum including concepts of shared access and tradeoffs between latency and bandwidth. 

As discussed in our article on micro-tolling, from an economic point of view, civil infrastructure operates largely with the assumption that the consumer of transportation has zero cost access. With no market cost model, there is no way to match demand and supply, nor any method to build market-based optimization. This leads to inefficiencies in the system demonstrated by points of shortages (congestion) and oversupply (empty streets at 3 a.m.). Without this market based model, it is very difficult to build a viable model of investment capital for transportation systems. As we discussed in our article, “Did The FCC Expose A Fundamental Flaw In The Public Transportation Sector’s Ability To Absorb Disruptive Technology?,”  the result is the predictable troubles to build the investment structure required for protocols such as DSRC which help to enable autonomous vehicles. 

This leads to a rather obvious question:    

What if the public sector could auction off “transportation bandwidth?”    

Ok… what does this actually mean, what might be the benefits (private and public) ?  Let’s consider these questions.

What does this actually mean ?

Isn’t this just turning a road into a toll road ?   Well, yes and no. Remember, we are going to auction off bandwidth. This means we can auction off road segments or use of road over a time period.  As an example, one lane of a highway from midnight to 6 a.m. can be auctioned to a private entity for the development of value added services.

The technology to implement this is actually reasonably available.  A simple mechanism would combine dynamic signage (telling folks about when the road is available) with more sophisticated license recognition technology for enforcement.  The investment for building this infrastructure would likely be borne by the private entity. A much more complex mechanism might separate the road segments with physical barriers.  A natural and non-disruptive evolution from existing congestion based pricing and tolling technology could make this model technically viable.  

Why is this useful for a private entity ?

Predictable access to transportation bandwidth is likely to be interesting for a number of business models. One imagines commercial trucking corridors where the access to the transportation network can be used to reduce costs or increase services.  In addition, from a technology point-of-view, gaining access to “dynamic dedicated lanes,” significantly eases the technology risk. Today, any AV technology must have a very high degree of sophistication to be viable. However, with dedicated lanes, a larger range of technology solutions become viable. 

“With dedicated roadways, one can effectively build the concept of an automobile(or truck) which acts like a train on the road surface with much simpler, more reliable, and more cost effective technologies than current AV solutions,” said Surya Kiran Satyavolu, Founder of Sirab Technologies. Sirab technologies offers such a solution. 

As transportation experts point out, humans are highly unpredictable beings who “occasionally” break the traffic laws. In the extreme case, the only way to prevent intrusion of people on dedicated lanes are physical barriers.  However, it should be noted that even if the lanes are not physically separated, the “legal” separation shifts the liability argument in an interesting manner. In any culture with reasonable adherence to the law, the actual risk for AV related accidents with humans should go down significantly.

Why is this useful for public entities ?

As discussed in “Does The Government Consulting Paradigm Create Incentives Against Innovation ?,”  it is exceedingly difficult for government entities and the associated transportation consulting ecosystem to invest in breakout technologies.  Similar to the FCC, this method allows the DOT(s) the use of public goods to enable private entities to make much deeper investments. Further, the monies from the auctions provide desperately needed funds for conventional civil repair, and the pricing for the road segments provides clear indications of prioritization for this repair.

Of course, the elephant in the room is one of “access” for the general public. Today, the public gets  access to the transportation system for free and has this expectation. However, this is not too dissimilar from the free access which has been the expectation for the internet. In both cases, there is a dynamic tradeoff which must be managed between free access and the power of the market system to enable higher level investments from the private sector.  

Note: A deeper examination of the insurance frameworks for AV exists in a Society of Automotive Engineers (SAE) report which can be found at SAE EDGE Research Reports .



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