Smart Cities, Dumb Infrastructure: Policy-Induced Competition in Vehicle-to-Infrastructure Systems

The coinciding development of 5G wireless technology, autonomous vehicles, and smart city applications is creating commercial demand for vehicle-to-infrastructure (V2I) systems. In theory, roadside V2I systems and sensors could provide real-time services, such as supplementary mapping information to autonomous vehicles, traffic detection, and congestion pricing. Although federal funding of V2I systems has ramped up in recent years, federal regulators have largely retreated from their top-down design of V2I services and devices. These trends — undirected government funding and private construction of V2I applications and devices — leave state and local transportation officials with powerful discretion over the construction and design of V2I systems. We describe and anticipate the tradeoffs that lawmakers, regulators, and state authorities will face as they budget for and fund V2I roadside networks. We find that public-private partnerships likely will have greater prominence in the construction of roadside V2I networks. Finally, we apply the “policy-induced competition model” to inform when public intervention into V2I funding and design is effective. We propose regulator adoption of an open access model for long-lasting roadside assets. This “dumb infrastructure” model promotes competition and innovation in V2I while minimizing use of regulator resources and public funding of networks.