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Suggested Citation:"Table of Contents." 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:"Table of Contents." 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:"Table of Contents." 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:"Table of Contents." 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:"Table of Contents." 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:"Table of Contents." 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:"Table of Contents." 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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i TABLE OF CONTENTS 1 INTRODUCTION ........................................................................................................................1 1.1 ROLE OF V2I COMMUNICATIONS IN ENABLING CV APPLICATIONS AND RELATIONSHIP TO AUTOMATED VEHICLES OPERATION ..................................................................................................................... 1 1.2 MOTIVATIONS FOR PUBLIC INVESTMENTS IN CV INFRASTRUCTURE ......................................................... 2 1.3 ISSUES INFLUENCING PUBLIC INVESTMENTS IN CV INFRASTRUCTURE ....................................................... 2 1.4 CV INFRASTRUCTURE INVESTMENT DECISION OPTIONS IN AN UNCERTAIN ENVIRONMENT .......................... 4 1.5 PURPOSE AND SCOPE OF THE GUIDE .................................................................................................. 4 1.6 GUIDE ORGANIZATION .................................................................................................................... 5 2 SELECTING CANDIDATES FOR CV INFRASTRUCTURE INVESTMENT BUSINESS CASE ANALYSES ......6 2.1 V2I APPLICATIONS THAT MAY REQUIRE CV INFRASTRUCTURE INVESTMENTS ........................................... 6 2.2 V2I APPLICATION DEPLOYMENT READINESS ..................................................................................... 10 2.2.1 Assessing Readiness by CV Infrastructure Component .............................................. 10 2.2.2 Assessing Readiness of V2I Applications based on DOT Pilot and Test Bed Activities and Plans .................................................................................................................... 17 2.3 DEVELOP A SHORTLIST OF CV INFRASTRUCTURE INVESTMENTS TO SUPPORT APPLICATIONS ...................... 22 2.4 IDENTIFY THE SCALE OF INVESTMENT NEEDED AND ROUGH ORDER OF MAGNITUDE COSTS ...................... 23 2.5 IDENTIFY INVESTMENTS FOR WHICH BUSINESS CASE ANALYSIS IS NEEDED ............................................. 30 2.6 WHO DEVELOPS THE BUSINESS CASE ANALYSIS ................................................................................. 31 3 BUSINESS CASE METHODOLOGIES ........................................................................................... 32 3.1 INTRODUCTION ............................................................................................................................ 32 3.2 CREATING AN EFFECTIVE BUSINESS CASE FOR CV TECHNOLOGY INVESTMENTS ....................................... 32 3.2.1 Framing the Problem Statement ................................................................................ 32 3.2.2 Investment Options .................................................................................................... 35 3.2.3 The Strategic Case ...................................................................................................... 36 3.2.4 The Economic Case ..................................................................................................... 38 3.2.5 The Financial Case ...................................................................................................... 44 3.2.6 The Deployment Case ................................................................................................ 47 3.3 BUSINESS CASE SUMMARY............................................................................................................. 52 4 IMPLEMENTATION PLANNING FOR CV INFRASTRUCTURE PROJECTS ......................................... 54 4.1 INTRODUCTION ............................................................................................................................ 54 4.2 BUSINESS MODEL FOCUS AREAS SPECIFIC TO CV INVESTMENTS ........................................................... 54 4.3 CV INVESTMENT RESOURCE NEEDS AND RISKS .................................................................................. 54 4.4 CV INVESTMENT DELIVERY............................................................................................................. 56 4.5 BUSINESS MODEL OPTIONS ........................................................................................................... 57 4.5.1 Traditional Model of Public Sector Systems Ownership and Development Using Purchased Commercial Capabilities ........................................................................... 57 4.5.2 Public-Private Partnership Model .............................................................................. 58 4.5.3 CV as a Service Procurement Model .......................................................................... 59 4.6 FUTURE OUTLOOK FOR BUSINESS MODELS ....................................................................................... 59 5 GLOSSARY .............................................................................................................................. 61

ii 6 REFERENCES AND BIBLIOGRAPHY ............................................................................................ 63 CV INFRASTRUCTURE COST COMPONENTS BASED ON EXPERT JUDGMENT ................ 68 BENEFIT-COST ANALYSIS TOOL ................................................................................. 70 CV INFRASTRUCTURE COMPONENT UNITS COSTS ..................................................... 87

iii LIST OF TABLES Table 2-1. V2I Applications Requiring CV Infrastructure Investment .......................................................... 7 Table 2-2. CV Infrastructure Components, Their Readiness Assessment and Impact on CV Infrastructure Investment Decision-making ............................................................................. 12 Table 2-3. Existing V2I Applications – Deployed or Deploying .................................................................. 17 Table 2-4. Select Active V2I Application Deployments .............................................................................. 20 Table 2-5. Example State DOT CV Strategic and Program Plan Statements Supporting Investment ........ 21 Table 2-6. V2I Applications, DOT Goal Area, and the Roadway Types for Deployment ............................ 24 Table 2-7. Example V2I Applications Sequencing to Identify CV Investment Priorities for Urban Freeways ................................................................................................................................... 25 Table 2-8. Example V2I Applications Sequencing CV Investment Priorities for Rural Freeways and V2I ............................................................................................................................................. 26 Table 2-9. Example V2I Applications Sequencing CV Investment Priorities for Urban/Suburban Arterials ..................................................................................................................................... 27 Table 2-10. Example V2I Applications Sequencing CV Investment Priorities for Urban/Suburban Arterials ..................................................................................................................................... 29 Table 2-11. ROM Costs for Various V2I Investments .................................................................................. 30 Table 3-1. Steps for Defining the Problem Statement ............................................................................... 34 Table 3-2. Steps for Defining the Problem Statement ............................................................................... 35 Table 3-3. Key Considerations for Developing the Strategic Case ............................................................. 36 Table 3-4. Example Goals, Objectives, and Performance Measures from Long range Transportation Plans that are Relevant for CV Investment Analysis ........................................ 37 Table 3-5. Key Considerations for Developing the Economic Case ........................................................... 38 Table 3-6. V2I Applications Analyzed in the BCA Tool ............................................................................... 42 Table 3-7. Key Considerations for Developing the Financial Case ............................................................. 44 Table 3-8. Key Considerations for Developing the Deployment Case ....................................................... 47 LIST OF FIGURES Figure 2-1. Connected Vehicle Deployment Environment ......................................................................... 11 Figure 2-2. Existing V2I Applications Deployed or Deploying, by Number ................................................. 18 Figure 3-1. The Business Case Structure (Metrolinx 2018) ......................................................................... 33

iv LIST OF ACRONYMS AND ABBREVIATIONS AASHTO American Association of State Highway and Transportation Officials ASD After Market Safety Device ATIS Advanced Traveler Information System AV Automated Vehicle CACC Cooperative Adaptive Cruise Control CAT Cooperative Automated Transportation CAV Connected Automated Vehicles CSW Curve Speed Warning CV Connected Vehicle C-V2X Cellular Vehicle-to-Everything CVRIA Connected Vehicle Reference Implementation Architecture DMA Dynamic Mobility Applications DOT Department of Transportation DSRC Dedicated Short-Range Communications Eco-App/Dep Eco-Approach and Departure at Signalized Intersections Eco-TS timing Eco-Traffic Signal Timing EVP Emergency Vehicle Preemption FCC Federal Communications Commission FDOT Florida Department of Transportation FRAME Florida's Regional Advanced Mobility Elements FSP Freight Signal Priority FHWA Federal Highway Administration INC-ZONE Incident Scene Work Zone Alerts for Drivers and Workers ITS Intelligent Transportation Systems ITS JPO US Department of Transportation Intelligent Transportation Systems Joint Program Office MDOT Michigan Department of Transportation MPR (CV) Market Penetration Rate NCHRP National Cooperative Highway Research Program NHTSA National Highway Transportation Safety Administration O&M Operation and Maintenance OBU On-board Unit OEM Original Equipment Manufacturer P3 Public-Private Partnerships PED-SIG Mobile Accessible Pedestrian Signal System Q-WARN Queue Warning RCVW Railroad Crossing Violation Warning RLVW Red Light Violation Warning ROI Return on Investment ROW Right-of-way RSU Roadside Unit RSZW Reduced Speed Zone Warning

v RW alert Road Weather Alert SCMS Security Credential Management System SPaT Signal Phase and Timing SWIW Spot Weather Information Warning THEA Tampa Hillsborough Expressway Authority TMC Traffic Management Center TSMO Transportation Systems Management and Operations TSP Transit Signal Priority UDOT Utah Department of Transportation USDOT US Department of Transportation V2I Vehicle-To-Infrastructure V2V Vehicle-To-Vehicle V2X Vehicle-To-Everything VDTO Vehicle Data for Traffic Operations

vi GUIDANCE TO DEVELOP BUSINESS CASES AND EXPLORE BUSINESS MODELS FOR CONNECTED VEHICLE INFRASTRUCTURE TO SUPPORT AUTOMATED VEHICLE OPERATIONS State Departments of Transportation (DOTs) are actively preparing for a future with connected vehicles (CVs) and automated vehicles (AVs). State DOTs and other agencies at the local, metropolitan, and multi-state levels of government (collectively referred to in this report as DOTs) see an opportunity to collaborate with vehicle manufacturers and fleet operators to address safety and mobility challenges on our nation’s roadways. In the US alone, there are currently 123 planned or operational CV deployment locations across 30 states, which includes 57 operational projects with 15,506 devices and covering 6,182 infrastructure components. Additionally, it includes 66 planned projects with 3,371 devices and 1,916 infrastructure components. V2I applications can help DOTs achieve their objectives. An established and substantial set of CV vehicle-to-infrastructure (V2I) applications can help meet specific DOT objectives to improve safety, reduce congestion, and achieve other goals outside of using conventional means. Agencies also recognize the importance that CV infrastructure can play toward helping future AVs benefit from multiple layers of on-board and off-board data to ensure safe and efficient operations. Enabling these V2I applications requires data collected from CVs (and AVs) and then communicated through technologies installed along the roadside - often combining it with other DOT-provided information on the status, condition, and performance of its network. Both the CV infrastructure in terms of roadside units (RSUs) and data are uniquely provided by DOTs, and therefore, it is in their interest (the value proposition) to consider investing in these technologies. However, there are challenges and risks associated with deployment right now—technical, institutional, and business risks that in many instances are outside DOT control. Therefore, it may be reasonable to wait and see what may change. There are plausible business cases to be made for V2I investments in the next 5 to 10 years. 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. Examining 30 of the most advanced and extensive CV infrastructure investment pilot programs, test beds, and projects across the country reveals 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. There is a pathway for DOTs to proceed forward when implementing CV investments. Today’s activities show that there is 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

vii 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 Transportation Systems Management and Operations (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. DOTs can use a business case analysis to support their decision to make CV investments. Decisions to make significant investments in CV infrastructure can be justified by evidence and analysis that establish the rationale for investment at the time investments are being considered. This evidence-based analysis is termed a business case. This guide outlines the necessary methods, tools, and data to make the business case for CV infrastructure investment. It proposes the following four-part model: • A Strategic Case establishing why the investment should be made by demonstrating how the investment would solve a problem and achieve a DOT’s strategic goals and objectives. • An Economic Case documenting the investment’s overall value to society by using a standard benefit-cost analysis approach. The guide includes a benefit-cost analysis spreadsheet tool to perform deterministic analysis for five popular V2I applications and serve as a model for evaluating additional applications. • A Financial Case laying out the financial implications for the DOT and funding arrangements. • An Implementation Case presenting the risks and requirements to be met to deliver and operate the investment, including a procurement strategy. The guide provides step-by-step instructions to build each of the business case components and illustrates each with a progressively constructed hypothetical example of a V2I deployment scenario. Implementation Plans can then articulate ways to deliver a proposed CV deployment project to DOT customers at an appropriate cost. The guide postulates three business model options DOTs could consider for implementing the recommendations of a positive business case. These options include the traditional model (public sector development, funding, and ownership -delivered as a standalone or a part of a construction project); public-private partnerships centered around data sharing; and other data or resource sharing agreements, such as fiber optic broadband communications, and “all-in services” where the private sector supplies “all-in” services (physical assets, cloud data, analytics) for a fee. There are identifiable approaches to navigating CV infrastructure investment decision-making. Given the compelling opportunity to substantially advance their objectives through V2I applications, DOTs must determine how best to deal with the ambiguity that questions of costs (both investment and opportunity costs) and uncertainty raise to avoid making a “wrong” choice or risk falling behind. The intent of this guide is to help DOTs make decisions that they can justify if the future turns out differently from the way they forecast.

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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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