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Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations (2020)

Chapter: Chapter 3: Connected Vehicle Investment Decision Process and Options

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Suggested Citation:"Chapter 3: Connected Vehicle Investment Decision Process and Options." National Academies of Sciences, Engineering, and Medicine. 2020. Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations. Washington, DC: The National Academies Press. doi: 10.17226/25946.
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Suggested Citation:"Chapter 3: Connected Vehicle Investment Decision Process and Options." National Academies of Sciences, Engineering, and Medicine. 2020. Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations. Washington, DC: The National Academies Press. doi: 10.17226/25946.
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51 CHAPTER 3: CONNECTED VEHICLE INVESTMENT DECISION PROCESS AND OPTIONS The technical, institutional, and business risks associated with CV infrastructure investments are substantial and, in many instances, are outside DOT control. Uncertainty about which V2I wireless radio technology will be adopted by the vehicle manufacturers and equipment providers will have a major impact on the timing of the market penetration of private vehicles that come with integrated, OEM-installed OBUs. The potential benefits, especially those accrued from safety-critical applications, will not be realized without sufficient rates of penetration of suitably equipped vehicles. Given this situation, therefore, it is reasonable if DOTs choose a wait and see approach until the technology debate settles and then reevaluate the need for CV infrastructure investments. However, despite the known uncertainties and a lack of CVs on roadways today, some DOTs have decided to make investments now, taking a cautious investment approach but exhibiting clear interest in certain V2I applications that meet current agency objectives (see Table 9 in chapter 2 for examples). Examining 30 of the most advanced and extensive CV infrastructure investment pilot programs, test beds, and projects across the country reveals strong interest in applications that target signalized intersections; use DOT-provisioned network data (signal phase and timing, weather, work zones, and traffic volumes of non-CVs) to deliver benefits; and focus predominantly on mobility-related benefits accruing to DOT fleets. DOTs are capitalizing on near term opportunities, including those that are based on readily available technology (e.g., DSRC and 3G/4G LTE) that support V2I applications to learn and build organizational capacities to ensure rapid ramp-up as the market conditions dictate. The actions of these DOTs establish the basis for business case arguments that support making investment decisions, in limited number of settings that pose the lowest financial risk in the near term while preparing for a future where CVs are ubiquitous. This chapter outlines the decision- making rationale and investment pathways DOTs can take to prioritize these investments. Preparation of the business case to support those decisions is discussed in chapter 4. CONNECTED VEHICLE INFRASTRUCTURE INVESTMENT PRIORITIZATION Agencies that may choose a cautious approach to investments have a few different pathways to prioritize investments as discussed below. These pathways are not mutually exclusive and can be considered in combination when developing investment options. • Identify and invest in V2I applications with high opportunity costs where the risks of maintaining the status quo over the planning period might be higher than the risks of investments. For example, DOTs could prioritize, as early deployment targets, V2I mobility-related applications with low dependence on market penetration of suitably equipped private vehicles. In this case, DOTs could prioritize V2I mobility-related applications (singly or in bundles) involving public fleet vehicles (e.g., bus transit, emergency response, and winter maintenance) using DSRC technology on select facilities with known safety or congestion problems. These investments, while offering some

52 Day 1 benefits (i.e., benefits realizable as soon as a project is operational), could be planned to allow easier introduction of safety-critical applications later that can fully leverage the low-latency capabilities of this technology as market conditions allow. Given the risk of technology obsolescence related to the use of DSRC in the event C- V2X becomes the industry standard, agencies must plan the investments to limit financial impacts and be prepared to adopt new technologies at the lowest possible cost. Initial CV investments in this category could target arterial roadways and V2I mobility applications that are time-critical. They could focus on benefits to some aspect of DOT operations, e.g., transit buses, maintenance vehicles, or emergency response vehicles that can be equipped with readily available wireless communications technology, e.g., DSRC. Systems should be engineered to add safety-critical applications as the market situation permits at the lowest cost. An example of such a chronological sequence for signalized arterials in an urban area is as follows: SPaT, TSP/EVP/Snowplow Priority, FSP (partnering with freight interests that would equip their vehicles), PSCW, PED-SIG, and RLVW. • Where a DOT may not wish to commit to a high-speed, low-latency radio communications technology option today, it may choose to invest in mandatory CV infrastructure components to enable future CV and AV applications that will benefit from networked information such as: o Upgrading backhaul communications infrastructure including fiber installation, where necessary. o Preparing CV back office systems and data hubs for future V2I deployment. o Installing roadside ITS cabinets, signal controller hardware, and other ITS sensors (e.g., traffic or pedestrian detectors). o Developing application software. o Investing in personnel training. Such investments in technology agnostic or and mandatory CV infrastructure components are termed “no regrets” investments and are useful in helping agencies prepare for a future where CVs and AVs may become a routine part of the traffic stream and will strengthen their capacity to enhance existing DOT functions such as TSMO strategies and asset management. “NO REGRETS” INVESTMENTS Information from the literature and applied expert judgment indicate that the cost of RSUs are on the order of 15% for a V2I application deployment beyond the pilot stage. Other technology-agnostic and mandatory CV infrastructure cost share estimates are: – Backhaul communications (IPv6 upgrade): 10% – CV Back Office: 15% – Signal controllers, cabinets, and other ITS equipment: 20% – Application software: 25% – Training: 1% Other (non-technical) costs include program management. Some V2I applications have additional costs, such as OBUs for public fleets. See Section 2.4.2 for further details.

53 • Make CV infrastructure investments to enhance V2I applications that are not safety- or time-critical but can leverage current wireless communications technologies such as 4G LTE and satellite communications. For example, OVW, RSZW, and Road Weather Motorist Alert and Warning can be implemented with current wireless communication technologies and ITS devices. TSP, EVP, and FSP can also be implemented without low- latency and higher reliability direct peer-to-peer communications afforded by DSRC or C-V2X. Regardless of which technology option is chosen, an options analysis that fully considers the overall transportation goals for a given roadway or roadway network needs to be performed to fully understand the potential returns from a given investment. SHORTLISTING CONNECTED VEHICLE INFRASTRUCTURE INVESTMENTS TO SUPPORT APPLICATIONS The process to identify necessary infrastructure investments follows the same general steps that a TSMO analysis—a growing practice in state DOTs—would follow. In addition, the process should look for “piggybacking” opportunities to stage and introduce V2I applications as market conditions mature along the investment analysis period to allow initial investments in fixed costs (e.g., signal infrastructure or backhaul communications network infrastructure) to be leveraged over time to accrue significant benefits. This process could be applied at a corridor, municipality/city/metro region, district, or statewide level. The process steps include: 1. Identifying the problems to be solved in relation to the goals and objectives of the agency for specific roadway location and types—urban freeway (including inter-urban and suburban), rural freeway, urban/suburban arterial, or a general roadway in any location. 2. Shortlisting V2I applications that may help the agency meet its objectives. Table 13 organizes the V2I applications that have been piloted or deployed by state DOTs by the strategic goal areas they address and relevant roadway locations to which they apply. Table 13 is intended to be an illustrative table. DOTs can construct a similar table to help deployment leads at their agencies to quickly identify the relationship between a relevant deployment-ready application and a DOT strategic goal area to help with the shortlisting exercise. 3. Sequencing the applications following the cautious investment approach to CV investments articulated in the previous section. For example, if TSP is chosen as a priority application for initial consideration and CV infrastructure investments are being planned to enable this application, DOTs can consider how the initial capital investments can support future V2I safety applications such as RLVW. Sequencing should also consider the scalability and leveraging of the initial investment and how the CV investment may scale over time. For example, investments can start modestly and grow over time based on initial successes, resource availability and changing market conditions. Similarly, DOTs can consider the benefits the CV infrastructure base would provide for implementing advanced TSMO strategies or ITS applications currently performed using conventional cellular communications methods. These considerations can be organized into a sequencing approach to V2I applications as illustrated in Table 14

54 through Table 17. The tables array applications by roadway location and type over various time periods. 4. Identifying CV infrastructure investments required to enable the V2I application or “application bundles” identified in the sequenced approach in step 3. Once an application or group of applications is selected, the CV infrastructure components required for deployment can be identified using Table 5 and any other ITS-related infrastructure that may be required. From this analysis, the DOT can identify CV investment needs in terms of the types of hardware and software that support the application(s), the network infrastructure and type required to support the application(s), and the support infrastructure that must be in place at TMCs and other units of the DOT to deploy the application(s). Table 13. V2I Applications, DOT Goal Area, and the Roadway Types for Deployment V2I Application Typical DOT Goal Areas Roadway Type Mobility Safety Enviro. Urban Freeway Rural Freeway Arterial Roadway (any location) ATIS P X X X X CSW P X X Eco-Approach and Departure at Signalized Intersections P X Eco-Traffic Signal Timing P P X Emergency Vehicle Preemption (EVP) P X X FSP (also eco) P P X X Intermittent Bus Lanes (IBL) P X X Incident Scene Work Zone Alerts for Drivers and Workers P S X X X X Intelligent Traffic Signal System (I-SIG) P X X In-vehicle Signage P X X X X Mobile Accessible Pedestrian Signal System (PED-SIG) P X X Pedestrian in Signalized Crosswalk Warning P X Queue Warning (Q- WARN) P S X X X

55 Table 13. V2I Applications, DOT Goal Area, and the Roadway Types for Deployment V2I Application Typical DOT Goal Areas Roadway Type Mobility Safety Enviro. Urban Freeway Rural Freeway Arterial Roadway (any location) Railroad Crossing Violation Warning (RCVW) P X RLVW P X X Reduced Speed Zone Warning (RSZW) S P X X X X Road Weather Motorist Alert and Warning P X X X X Speed Harmonization (SPD-HARM) P X Snowplow Priority P S X X Spot Weather Impact Warning (SWIW) P X X X X TSP (also eco) P P X X Vehicle Data for Traffic Operations P X X X X P = Primary Benefit; S = Secondary Benefit

56 Table 14. Example V2I Applications Sequencing to Identify CV Investment Priorities for Urban Freeways Planning Period V2I Application Notes 0 to 5 Years CSW Provides Day 1 benefit to equipped vehicles. Infrastructure investment can be as simple as a roadside unit, power, and a mounting location (i.e., pole). CSW would provide active warnings above and beyond static signage. Dedicated backhaul is not critical for primary function because initial management functions can be performed via cellular connection. Dedicated backhaul can be added in the future (6+ years) if needed for real-time, continuous traffic monitoring, possibly combined with cameras. Reduced Speed Zone Warning Incident Scene Work Zone Alerts for Drivers and Workers Provides Day 1 benefit for equipped vehicles but requires changes to protocols used by first responders or construction / maintenance crews to ensure that timely and accurate updates are broadcast. Incident Scene is likely to be a truly mobile device associated with first responder vehicles, whereas work zone equipment can be deployed both in a mobile context for striping crews and other short-term work and installed on portable message signs / dynamic message signs. Upfront costs: For this roadway type, it is important to decide on architecture—local versus centralized or hub (e.g., TMC)—to handle and process data for time- or safety-critical applications. For example, the need to strengthen communications infrastructure for backhaul (e.g., using optical fiber) is critical for centralized architectures serving the Incident Scene Work Zone Alerts application. 6 to 10 Years Queue Warning Allows for transition from traditional infrastructure-based point sensors to CV-based sensors as adoption increases. Requires a level of penetration to be useful in CV-only context. Would leverage infrastructure-based equipment to relay real-time information to approach vehicles. 10+ Years Speed Harmonization Requires a higher percentage of CV-equipped vehicles to be effective without continued use of infrastructure-based dynamic message signs. INFLO Combination of SPD-HARM, Q-WARN, and CACC. INFLO was conceptualized for the urban freeway environment, with ubiquitous infrastructure coverage.

57 Table 15. Example V2I Applications Sequencing CV Investment Priorities for Rural Freeways and V2I Planning Time Period V2I Application Notes 0 to 10 Years CSW Provides Day 1 benefit to equipped vehicles. Infrastructure investment can be as simple as a roadside unit, power, and a mounting location (i.e., pole). CSW would provide active warnings above and beyond static signage. Dedicated backhaul is not critical for primary function because initial management functions can be performed via cellular connection. Dedicated backhaul can be added in the future (6+ years) if needed for real-time, continuous traffic monitoring, possibly combined with cameras. Red Light Violation Warning Provides Day 1 safety benefits to equipped vehicles. Allows for transition from “flashing light ahead” type indication to RLVW for these rural intersections. Initial management functions can be performed via cellular connection, and dedicated backhaul can be added in future (6+ years) for real-time, continuous traffic monitoring, possibly combined with cameras, if needed. Reduced Speed Zone Warning Provides Day 1 benefit to equipped vehicles. Infrastructure investment can be as simple as a roadside unit, power, and a mounting location (i.e., pole). RSZW would provide active warnings above and beyond static signage. Dedicated backhaul is not critical for primary function because initial management functions can be performed via cellular connection. Dedicated backhaul can be added in future (6+ years) if real-time, continuous traffic monitoring, possibly combined with cameras, is needed. Incident Scene Work Zone Alerts for Drivers and Workers Provides Day 1 benefit for equipped vehicles but requires changes to protocols used by first responders or construction / maintenance crews to ensure that timely and accurate updates are broadcast by the VWI. Incident Scene is likely to be a truly mobile device associated with first responder vehicles (see R.E.S.C.U.M.E. CV research), whereas work zone equipment can be deployed both in a mobile context for stripping crews and other short-term work, and installed on portable message signs / dynamic message signs. Upfront costs: For this roadway type, it is important to decide on architecture—local versus centralized or hub (e.g., TMC)—to handle and process data for time- or safety-critical applications. For example, the need to strengthen communications infrastructure for backhaul (e.g., using optical fiber) is critical for centralized architectures serving the Incident Scene Work Zone Alerts application. 10+ Years Queue Warning Assumes limited infrastructure-based CV, and as such, depends on a high penetration of equipped vehicles. Faster CV adoption could reduce the timeline to effective deployment. In this environment, vehicles use a relay mechanism to enable exchange of this warning from vehicle to vehicle. Eco-Traffic Signal Timing Effective use requires a high penetration of equipped vehicles and vehicle- responsive speed control.

58 Table 16. Example V2I Applications Sequencing CV Investment Priorities for Urban/Suburban Arterials Planning Time Period V2I Application Notes 0 to 5 Years Pedestrian in Signalized Crosswalk Warning Reliable detection of vulnerable road users, or market of CV- equipped devices that are carried by pedestrians are still not mainstream. High priority need but not ready yet in terms of technology. Any investment in CV infrastructure at intersections will be able to be leveraged for this in the future. Red Light Violation Warning Provides Day 1 safety benefit to equipped vehicles. Initial management functions can be performed via cellular connection, although this is not the preferred method. Dedicated backhaul can be added for real-time, continuous traffic monitoring, combined with cameras, if needed. Reduced Speed Zone Warning Provides Day 1 benefit to equipped vehicles. Infrastructure investment can be as simple as a roadside unit, power, and mounting location (i.e., pole). RSZW would provide active warnings above and beyond static signage. Dedicated backhaul is not critical for primary function because initial management functions can be performed via cellular connection. Dedicated backhaul can be added in future (6+ years) if real-time, continuous traffic monitoring, possibly combined with cameras, is needed. Incident Scene Work Zone Alerts for Drivers and Workers Provides Day 1 benefit for equipped vehicles but requires changes to protocols used by first responders or construction /maintenance crews to ensure that timely and accurate updates are broadcast by the VWI. Incident Scene is likely to be a truly mobile device associated with first responder vehicles, whereas, work zone equipment can be deployed both in a mobile context for stripping crews and other short-term work, and installed on portable message signs / dynamic message signs. Emergency Vehicle Preemption Emergency vehicle preemption provides the best example of a Day 1 benefit to the deploying agency with added cost savings enabled by installing multi-use CV technology versus proprietary systems typically associated with signal preempt and priority. Cost of CV versus proprietary is similar. Freight Signal Priority A good example of Day 1 benefit to deploying agency with added cost savings enabled by installing multi-use CV technology versus proprietary systems typically associated with signal preempt and priority. Cost of CV versus proprietary technology is similar. This is private sector benefit however, so its use may require additional policy considerations not currently necessary. Transit Signal Priority A good example of Day 1 benefit to deploying agency with added cost savings enabled by installing multi-use CV technology versus proprietary systems typically associated with signal preempt and priority. Cost of CV versus proprietary is similar.

59 Table 16. Example V2I Applications Sequencing CV Investment Priorities for Urban/Suburban Arterials Planning Time Period V2I Application Notes Upfront costs: For this roadway type, it is important to decide on architecture— local versus centralized or hub (e.g., TMC)—and strengthen communications infrastructure for backhaul (e.g., using optical fiber). In addition, it is vital to upgrade signal controllers to enable various time- and safety-critical V2I applications. 6 to 10 Years Queue Warning Allows for transition from traditional infrastructure-based point sensors to CV-based sensors as adoption increases. Requires level of penetration of suitably equipped vehicles to be useful in CV-only context. Would leverage infrastructure-based equipment to relay real- time information to approaching vehicles. 10+ Years MMITSS Combines multiple V2I applications into an integrated package allowing a more managed approach. Elements of MMITSS for emergency, transit, and freight are all priority applications. Intelligent Traffic Signal Systems and Pedestrian applications complete this suite. Intelligent Traffic Signal Systems Assumes large percentage of equipped vehicles and significant policy change to allow private vehicles to affect signal timing on recurring demand-basis.

60 Table 17. Example V2I Applications Sequencing CV Investment Priorities for Urban/Suburban Arterials Planning Time Period V2I Application Notes 0 to 5 Years Railroad Crossing Violation Warning Provides Day 1 safety benefit to equipped vehicles. Initial management functions can be performed via cellular connection although not preferred. Dedicated backhaul can be added for real-time, continuous traffic monitoring, possibly combined with cameras. Requires agreements with railroads. Red Light Violation Warning Provides Day 1 safety benefit to equipped vehicles. Initial management functions can be performed via cellular connection although not preferred. Dedicated backhaul can be added for real-time, continuous traffic monitoring, say combined with cameras. Reduced Speed Zone Warning Provides Day 1 benefit to equipped vehicles. Infrastructure investment can be as simple as roadside unit, power and mounting location (i.e. pole). These would provide active warning above and beyond static signage. Dedicated backhaul not critical for primary function. Initial management functions can be performed via cellular connection. Dedicated backhaul can be added in future (6+ years) if need for real- time, continuous traffic monitoring, possibly combined with cameras, is needed. Incident Scene Work Zone Alerts for Drivers and Workers Provides Day 1 benefit for equipped vehicles but will require changes to protocols used by first responders or construction /maintenance crews to ensure that timely and accurate updates are broadcast by the VWI. Incident Scene is likely to be a truly mobile device associated with first responder vehicle, whereas, work zone equipment can be deployed both in mobile context for stripping crews, and other short-term work, as well as be installed on portable message signs / dynamic message signs. Upfront costs: For this roadway type, it is important to decide on architecture – local versus centralized or hub (e.g., TMC)—and strengthen communications infrastructure for backhaul (e.g., using optical fiber). Emergency Vehicle Preemption Good example of Day 1 benefit to deploying agency with added cost savings enabled by installing multi-use CV technology versus proprietary systems typically associated with signal preempt and priority. Cost of CV versus proprietary is similar. List longer term given the lower likelihood of need for lower-volume roads. 6 to 10 Years Freight Signal Priority Good example of Day 1 benefit to deploying agency with added cost savings enabled by installing multi-use CV technology versus proprietary systems typically associated with signal preempt and priority. Cost of CV vs. proprietary is similar. This is private sector benefit however, so its use may require additional policy considerations not currently necessary may be required. Also, given lower volumes / need, considered lower priority. 10+ Years Transit Signal Priority Best example of Day 1 benefit to deploying agency with added cost savings enabled by installing multi-use CV technology versus proprietary

61 Table 17. Example V2I Applications Sequencing CV Investment Priorities for Urban/Suburban Arterials Planning Time Period V2I Application Notes systems typically associated with signal preempt and priority. Cost of CV versus proprietary is similar. Intelligent Traffic Signal Systems Assumes large percentage of equipped vehicles and significant policy change to allow private vehicles to affect signal timing on recurring demand-basis. IDENTIFYING THE SCALE OF INVESTMENTS NEEDED TO DEPLOY THE CONNECTED VEHICLE INVESTMENTS AND THE BUSINESS CASES TO BE MADE After identifying the applications of interest and roadway type and extents for deployment, DOTs would need to quantify the scale and cost of investment. The scale of investment can be estimated on an application-by-application basis by identifying and costing the CV components that must be provided or upgraded. Table 11 provides examples of such quantification for several V2I applications from Parikh et al. (2019). This table can be used as a basis for identifying rough order of magnitude costs for each V2I application of interest. However, although rough order of magnitude costs are sufficient to assess if a CV investment opportunity crosses a monetary threshold to warrant a more detailed business case analysis, the business case itself (described in chapter 4) will require a more detailed CV component-based cost estimate as part of an economic analysis that more closely examines costs, benefits, and risks. CHAPTER SUMMARY This chapter began by acknowledging that the uncertainty surrounding the V2I radio communications technology and the timing of the availability of compatible, suitably equipped CVs poses a financial risk to DOTs considering investments in CV infrastructure. In this uncertain environment, it is reasonable for DOTs to adopt a wait and see approach when considering CV infrastructure investments. However, even in this uncertain environment, and judging by the activities of some DOTs, there appear to be plausible business cases to be made for V2I investments in the next 5 to 10 years. Examining 30 of the most advanced and extensive CV pilot programs or projects that have used public funds to deploy CV infrastructure, it is clear that DOTs are taking a cautious investment approach but exhibiting clear interest in certain V2I applications that meet current agency objectives. There is a strong interest in applications that target signalized intersections; use DOT- provisioned network data (signal phase and timing, weather, work zones, and traffic volumes of non-CVs) to deliver benefits; and focus predominantly on mobility-related benefits accruing to DOT fleets. When taken in combination, this set of applications, their infrastructure needs, and

62 their targeted benefit areas become the backdrop for the business cases to be made in advancing the cautious investment approach. There is a pathway for DOTs to proceed forward when implementing CV investments. Today’s activities show that there is a logical sequencing of V2I applications when DOTs choose to follow the cautious approach to investment. Sequencing should progressively build on prior investments, starting with applications that can provide benefits and learning opportunities today while laying a foundation for others that may depend on greater market penetration and other developmental factors in the future. Sequencing investments should also consider the scalability and leverage of the initial investment and include prioritization for components of the deployment that might be considered “no regrets” investments (e.g., signal controllers and backhaul) because they are outside the influence of market, regulatory, or technology uncertainties. A strategy can start modestly (e.g., localized projects involving key arterial corridors) and grow as results suggest further investment is warranted and resources are available. The same infrastructure base could also provide the benefits of advanced TSMO strategies or ITS applications otherwise performed using conventional cellular communications methods. However, because these investments can potentially be expensive, justification must usually be sound to help support the decision-making process. This chapter suggested a methodology to prioritize applications and sequence deployments in a manner that result in no regrets investments and/or bring Day 1 benefits. Those investments with significant financial impacts to the agency will be candidates for a quantitative business case analysis to justify them.

Next: Chapter 4: Methods and Data to Develop, Evaluate, and Present the Business Case »
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State Departments of Transportation (DOTs) and other government agencies recognize the value of connected vehicle (CV) technologies in helping achieve the strategic objectives of saving lives and relieving congestion. Several agencies are currently planning and preparing for a future where CV technologies could become a part of their routine business operations. A core consideration in any such planning effort is an assessment of the need for and the nature of public CV infrastructure investments to support applications based on CV technologies.

The TRB National Cooperative Highway Research Program's NCHRP Web-Only Document 289: Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations presents methods to identify the most plausible CV infrastructure investments, shows how to build effective business case arguments, and details specific business model options during project procurement and delivery.

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