CEI General Counsel Sam Kazman about to take a spin in Google's self-driving car. (Photo by Marc Scribner)

CEI General Counsel Sam Kazman about to take a spin in Google’s self-driving car. (Photo by Marc Scribner)

For the past several years, I’ve been writing about highly automated vehicles — widely referred to as driverless cars — and the huge potential they have in reducing injuries and deaths (over 30,000 Americans die on the roads every year), improving mobility for the disabled and elderly, reducing the drudgery of commuting, and helping the environment… provided policy makers don’t mess it up with onerous laws and regulations (see here, here, here, here, here, here, here, and here).

Recently, I appeared on Fox Business Network’s libertarian news-talk program The Independents to discuss automated vehicle developments, both technological and political. You can watch it here:

Today, CEI released a white paper I’ve authored, “Self-Driving Regulation: Pro-Market Policies Key to Automated Vehicle Innovation,” that goes into much more detail in arguing for regulatory restraint in order to allow the eventual consumer roll out to occur as timely and as cost-effectively as possible. In it, I provide a brief historical overview of automated vehicle development, explain current developments in the legislative and safety regulatory spaces, and offer a number of recommendations to policy makers.

So, why should you care about automated vehicle regulation? The short answer: bad regulation has the potential to kill. One of the biggest risks is getting the rules wrong and unnecessarily delaying consumer availability and/or increasing the prices faced by consumers. If automated vehicles are indeed safer than current manually driven vehicles, any delay or price increase means consumers will be stuck driving more dangerous vehicles. The stage is set for a classic “Death by Regulation” event: well-meaning lawmakers and bureaucrats deny safer products to consumers out of an overabundance of caution, translating to increased injuries and deaths. That is why it is so important for regulators not to mess it up.

Even if you aren’t sympathetic to free markets and libertarianism, I suspect there the first two-thirds will be of interest. Read the full thing here.

Post image for Ryan FY 2015 Budget Calls for Transportation Funding Rationalization

House Budget Committee Chairman Paul Ryan, R-Wisc., released his FY 2015 budget today. In just three pages, he calls for surprisingly sensible reforms to federal transportation programs. Unlike the Obama and Camp budgets — which I earlier criticized for continuing trust fund bailouts and merely kicking the can down the road — Ryan makes an attempt to fix the Highway Trust Fund’s revenue/outlay imbalance by refocusing transportation funding on core programs, while allowing states more flexibility to experiment with self-funding and -financing mechanisms.

As Ryan notes:

The budget recommends sensible reforms to avert the bankruptcy of the Highway Trust Fund by aligning spending from the Trust Fund with incoming revenues collected. The budget also includes a provision to ensure any future general-fund transfers will be fully offset, while at the same time providing flexibility for a surface-transportation reauthorization that does not increase the deficit. The budget includes a reserve fund to provide for the adjustment of budget levels for consideration of surface-transportation legislation, as long as that legislation is deficit neutral.

In addition, Ryan recommends the following positive transportation policy changes:

  • Eliminate Amtrak’s billion-dollar-plus annual subsidy;
  • Reduce the Transportation Security Administration’s outlays; and
  • Eliminate the Essential Air Service.

With highway bill reauthorization around the corner, it is great to see some real positive reforms being put on the table. Many free market transportation advocates would certainly like to see more, but we need to start somewhere, and Ryan’s budget appears to be that starting point.

Have a listen here.

CEI Fellow Marc Scribner talks about his new paper, “Bait and Reciprocal Switch: Forced Access Regulation Threatens the Rail Renaissance.”

CEI General Counsel Sam Kazman about to take a spin in the Google car. (Photo by Marc Scribner)

CEI General Counsel Sam Kazman about to take a spin in a Google self-driving car in May 2012. (Photo by Marc Scribner)

As we prepare for another Human Achievement Hour (this Saturday, March 29, 8:30 pm – 9:30 pm), we at CEI are examining some of the latest, greatest innovations that will make the future even freer and more prosperous. One massively transformative technology currently in development is the autonomous vehicle, known more widely as “driverless” or “self-driving” cars. Google’s prototype has been covered extensively by the media, traditional automotive companies such as Bosch and Volkswagen are working hard on their prototypes, and new estimates put the potential societal benefits of autonomous vehicles at $3 trillion per year.

As I’ve noted in the past, we should be “thrilled that a technology that can greatly improve traffic safety, offer disabled people an unprecedented level of personal mobility and fundamentally change the way we travel is so close.” Soon, if you imbibe too much on a night on the town, your car or a rideshare provider’s car will be able to take you home. And thanks to reduced congestion due to optimized driving behavior, we will also enjoy improved local air quality. Whatever your political leanings, you should be excited about our driverless future — unless you’re reflexively and ideologically anti-technology.

In the last 10 years, the technology has progressed a great deal — to the point where it is quite possible that first generation highly automated vehicles will be available to consumers before the decade closes. To understand how we got to the stage of the Google self-driving car, it is instructive to see how far we’ve come. What follows is a brief history of autonomous vehicles that covers the technologies’ developments up until about 10 years ago.

Personal mobility has traditionally required active human monitoring and direction, from walking to riding horseback to bicycling. The physical and cognitive demands of travel have long been recognized, as has the capacity for and costs of human error in transportation. In the late fifteenth century, Leonardo da Vinci sketched out a design for a self-propelled cart with programmable steering, which was later compiled in the Atlantic Codex.

Engineering interest in vehicle automation stretches back to the 1920s, when auto ownership first became within reach of middle-class households. Inventor Francis P. Houdina demonstrated a radio-controlled car on the streets of Manhattan in 1925. Houdina’s invention was never treated as anything more than a novelty – although his company’s prominence led to a physical altercation with famed escape artist Harry Houdini, who thought Houdina was capitalizing on their similar names, which resulted in a disorderly conduct charge against Houdini – but the challenge of developing automated vehicles became recognized in research communities.

At the 1939-1940 New York World’s Fair, General Motors’ interactive Futurama exhibit predicted high-speed automated roadways in 20 years. While GM’s prediction of a driverless world proved premature, its prediction of individual automobile ownership becoming widespread rather than a luxury for the wealthy and upper-middle class — which sounded incredibly bizarre during the Great Depression – proved accurate.

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Post image for Obama FY 2015 Budget: Aviation Funding Recommendation Not Great, But a Step in the Right Direction

President Obama released his Fy 2015 budget today. Like his past budgets, as I noted in a previous post discussing the highway and transit budget, continuing congressional gridlock means this package will almost certainly go nowhere. I’ll leave more sophisticated and comprehensive commentary to the budget analysts, but I will highlight one additional transportation provision: airport funding. Exactly like the FY 2014 budget from the White House, the FY 2015 budget calls for cutting Airport Improvement Program funding to $2.9 billion and increasing the cap on the Passenger Facility Charge (PFC) from $4.50 to $8.

AIP currently provides major airport infrastructure grants. These funds come from a variety of taxes and segment fees. However, while user-based to an extent, AIP funding is complex and less transparent, features that are generally undesirable in user fee frameworks — in addition to relying on some non-user revenue (see page 20 of the AIP Handbook for a breakdown of revenue sources). AIP funds are also not segregated by facility, leading to wasteful grants to low-value airports.

In contrast, the PFC is a direct and transparent user charge. The money collected from passengers goes directly to the facility. Ideally, as the president suggests, AIP should be phased out with PFCs picking up the slack. Unfortunately, the federal government currently caps PFCs at $4.50 per enplanement. The president’s proposed PFC increase to $8 is better than nothing, but it still fails to restore the PFC purchasing power to the level when it was last raised to $4.50 in 2000. As the American Association of Airport Executives notes, the PFC should at a minimum be raised to $8.50 in order to restore its previous buying power.

Rather than endless fights over the “appropriate” PFC level, Congress should eliminate the PFC cap all together. Federal policies force airports to be heavily reliant on airlines for funding. The effect of these policies is that airports have little leverage in negotiations with airlines over gate access, the result being a proliferation of long-term exclusive- and preferential-use gate leases. The impact on competitiveness and air fares is large. Exclusive- and preferential-use gate leases (as opposed to common use open entry) result in gate under-utilization by allowing incumbent airlines to essentially prohibit most new entry from outside carriers. It is estimated that air fares are more than $5 billion higher annually (in 2013 dollars) because of artificial barriers to airport access.

Hopefully, the president and Congress will move ahead with reforming the PFC system. Ideally, this would mean eliminating the cap, but restoring the PFC purchasing power to 2000 levels should be a bare minimum no-brainer.

Post image for Bad Highway Policy Is a Bipartisan Affair

Two major pieces of surface transportation policy news dropped this week. President Obama is readying the release of his budget, which will contain over $300 billion in transportation funding. Across the aisle, Rep. David Camp, R-Mich., the powerful chairman of the House Committee on Ways and Means, released a sweeping proposal to overhaul the U.S. tax code, which includes a component that would direct $120 billion in tax savings into the Highway Trust Fund.

The president’s latest budget is far from surprising, as it differs very little from his previous surface transportation proposals. Of the combined highways and transit spending ($278 billion), he proposes to allocate 25 percent ($72 billion) to mass transit — a mode that makes up about 5 percent of trips.

Thankfully, neither proposal has any chance of being enacted, at least as standalone comprehensive packages. Unfortunately, most of Congress’s “business” is recycling and repackaging previous proposals, which means some aspects might well find their ways rolled into future legislation. With the current highway bill, MAP-21, expiring at the end of September 2014, Congress will begin the reauthorization process in the coming months. It is likely that some of these bad ideas will pop up again.

First, the president’s budget. He wants a $302 billion, four-year transportation bill. Half of that would supposedly come from tax reform, amounting to a massive bailout of the Highway Trust Fund. This is par for the course for President Obama, who has long advocated eliminating the Highway Trust Fund in favor of a slush fund that would enable additional gimmicky projects such as high-speed rail and urban streetcars.

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I’ve written about the importance of charging road users for their road use for some time. Moving toward a truly user-pays system will require significant reform. For U.S. highways, federal and state fuel taxes provide the bulk of the funding. While the idea behind levying an excise tax on gasoline to fund roads was rooted in user-pays, political developments and new technology necessitate the move away from user taxes and toward more direct, and distance-based, user fees.

Recently, road usage charges became an issue in the Virginia gubernatorial race, with some Republican activists trying and failing to paint the Libertarian candidate as a big-government tool for broadly suggesting that the state investigate the viability of replacing fuel and sales tax road funding with a user charge. Oregon has become the first state in the nation to introduce a user charge pilot program and many others are investigating similar programs. High-tech user charges such as all-electronic tolling and GPS-based charging systems are increasingly being seen as the next logical move for road revenue collection.

On March 12, the Mileage-Based User Fee Alliance (MBUFA) will hold a day-long conference featuring leading practitioners, such as former AASHTO COO and current MBUFA chairman Jack Basso, and politicians, such as Rep. Tom Petri (R-Wisc.), Chairman of the Highways and Transit Subcommittee of the U.S. House Transportation and Infrastructure Committee. The conference will be held in downtown Washington, D.C. Anyone interested in learning about the latest road charging developments — both technological and political — should consider attending this conference. Registration details can be found here.

Have a listen here.

CEI Fellow Marc Scribner opposes a bill that would ban in-flight cell phone usage on airplanes. He believes that decision should be left to airlines, who have the technology to disable phones’ voice communications allowing data usage for texting, emailing, and Web browsing.

Post image for House Committee to Markup Bill Banning In-Flight Cell Phone Calls

Tomorrow morning (Tuesday, February 11), the House Transportation and Infrastructure Committee will markup the Prohibiting In-Flight Voice Communications on Mobile Wireless Devices Act (H.R. 3676). The bill would bar travelers from making cell phone calls on commercial flights—a response to the Federal Communications Commission’s recent proposal to relax its longstanding ban on in-flight cell phone use.

H.R. 3676 purports to solve a problem that doesn’t exist by depriving consumers of travel choices, as I explained recently in an op-ed in USA Today. To be sure, I sympathize with travelers who fear being stuck next to a chattering bore for a long flight. However, the FCC’s deregulatory steps wouldn’t require any airline to offer voice calls in-flight; rather, the new rules would merely permit airlines to experiment with in-flight calling if they so choose.

The bill’s sponsors concede that some in-flight phone calls are acceptable, exempting Airfone-style in-seat phone calls from the ban. If voice calls on commercial flights are so bad, why continue to allow some passengers to make them on some planes?

Supporters of the bill have fretted about the prospect of passengers loudly yakking away on long in-flight cell phone calls. Yet the technology that enables in-flight cell phone calls usually charges roaming rates for voice calls, discouraging passengers from spending hours on the phone.

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Post image for USDOT Calls for Connected Vehicle Mandate; Security and Privacy Concerns Remain

The U.S. Department of Transportation (DOT) announced today it would chart a regulatory path that would require all new automobiles to be equipped with vehicle-to-vehicle (V2V) communications systems sometime in the next several years. This follows a National Transportation Safety Board recommendation that connected vehicle technology be mandated on all new vehicles.

V2V and vehicle-to-infrastructure (V2I) safety systems could provide large safety benefits in the future. Unfortunately, DOT has jumped the gun, requiring systems while large challenges remain, particularly issues related to data privacy and security.

A November 2013 report from the Government Accountability Office (GAO) provides a good description of what DOT is attempting to do:

DOT and the automobile industry have been conducting research on new types of technologies to prevent crashes—called vehicle-to-vehicle (V2V) technologies—in recent years. These technologies facilitate the sharing of data, such as vehicle speed and location, among vehicles to warn drivers of potential collisions. Based on the data shared, V2V technologies are capable of warning drivers of imminent collisions, including some that sensor-based crash avoidance technologies would be unable to detect. DOT’s efforts related to these technologies are being led by NHTSA and the Intelligent Transportation Systems (ITS) Joint Program Office within DOT’s Research and Innovative Technology Administration (RITA). According to NHTSA, if V2V technologies are widely deployed, they have the potential to address 76 percent of multi-vehicle crashes involving at least one light vehicle by providing warnings to drivers.

Sounds good, right? But there are big challenges to V2V deployment, of which GAO identifies five:

1) finalizing the technical framework and management framework of a V2V communication security system, which will be unique in its size and structure; 2) ensuring that the possible sharing with other wireless users of the radio-frequency spectrum used by V2V communications will not adversely affect V2V technology’s performance; 3) ensuring that drivers respond appropriately to warnings of potential collisions; 4) addressing the uncertainty related to potential liability issues posed by V2V technologies; and 5) addressing any concerns the public may have, including those related to privacy.

Requiring that cars “talk to each other” before critical issues related to security (how are hackers prevented from manipulating V2V warnings and how are the security systems financed and operated?) and privacy (who owns the V2V data collected and who may obtain it, and under what conditions may they obtain it?) strikes me as premature. The automakers and senior lawmakers, such as Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., are similarly concerned.

The private sector, in partnership with government researchers, has been methodically developing V2V and V2I technologies. We should allow them to continue this process without the imposition of regulatory mandates, however good the intentions. Once the technologies have been sufficiently improved, we should allow the market to determine V2V deployment. Not only will this maintain consumer and producer choice, but it will reduce the very real safety risks associated with prematurely deploying potentially flawed technologies.

Even if you believe a V2V government mandate is an appropriate public policy position, you should recognize that this call from DOT is premature. Lawmakers should call on the DOT to continue its partnership with the private sector in the development of nonbinding V2V standards, rather than moving forward with strict regulatory requirements.