TCS Daily

Dial-Up Interstate

By Ted Balaker - June 29, 2006 12:00 AM

When it comes to internet connections we are quick to appreciate the importance of speed. Whether we're shopping, job hunting, or doing just about anything else, we recognize that our opportunities expand when broadband connections let us zip around this global network quickly. We'd never want to return to dial-up now, but that's what we're doing with another network -- our roadway system.

Fifty years ago today President Eisenhower signed legislation that created the Interstate Highway System. Many years prior a young Ike endured a long lesson on the importance of mobility when he participated in coast-to-coast military convoy. Much of the trip was a struggle, as the group slogged through muddy roads and faced down bridgeless rivers. The convoy inched across America at an average speed of 6 mph, needing 62 days to reach the West coast.

The interstate system sped up travel and connected previously isolated pockets of America to the rest of the nation. Traffic congestion, already a growing problem, was beaten back significantly and new opportunities abounded. Businesses enjoyed larger consumer markets and bigger labor pools. Customers welcomed the greater variety and lower prices that expanded competition offered.

It was something akin to the evolution of the internet. In the days when we called the it "cyberspace," users enthused about the network's potential but wailed in frustration as their screeching dial-up modems struggled to load even graphics-free sites. But broadband was just around the corner, and when speed and connectivity improved, opportunity exploded.

Though they developed along parallel routes for some time, the transportation and online networks are now headed in opposite directions. Online performance continues to improve, but on the road conditions are sliding backward. Just as server capacity must grow to ensure fast and efficient virtual travel, so must physical capacity grow to keep up with growing demand for travel across physical space. But capacity hasn't expanded much. The interstate system was mostly complete by 1980 and since then driving has nearly doubled but our roadway system has grown by only about 4 percent. Our leaders have even avoided relatively cheap fixes, like optimizing traffic signals.

Traffic congestion was once a minor irritant, but it's been allowed to fester for decades, and now more people are complaining. According to recent surveys, congestion is residents' biggest gripe in places like Austin, Atlanta, Portland, Minneapolis-St. Paul, San Diego, and San Francisco. Another recent survey asked Silicon Valley CEOs about their business-related gripes. In the span of a single year, congestion moved from the number nine spot to number two.

The Texas Transportation Institute estimates that each year, congestion drains more than $63 billion from the U.S. economy from wasted time and gas. The U.S. Department of Transportation sees an even bigger drain, pegging congestion costs from freight bottlenecks and delayed deliveries at $200 billion per year. Yet it can be tough to pinpoint the true cost of congestion because a complete analysis would have to account for factors that are hard to quantify -- from gridlock-induced stress to opportunities lost.

Since customers and employees have limits on how long they will travel, consumer markets and labor pools shrink when congestion grows. Likewise, employees often settle for less interesting and lower paying jobs because simply getting to work (or even an interview) is such a chore. Alternatively, researchers often find that improved mobility helps the poor climb up the economic ladder, and what's true for individuals is also true for entire cities.

A study published by the Transportation Research Board examined the economies of Philadelphia and Chicago and considered the impact of a 10 percent increase in travel speeds. The researchers estimate that each year this improvement would save Philadelphia businesses $440 million and Chicago businesses $1.3 billion. Certainly predicting the future is tricky business, but a French-Korean research team also discovered a mobility-prosperity link when they looked at the real-world effects of mobility on 22 French cities. In France a 10 percent increase in average speeds was associated with a 15 percent expansion of the labor market and a 3 percent increase in productivity.

Sadly, all but a few state and local governments have surrendered and aren't even attempting to cut congestion. How times have changed. Eisenhower and earlier champions of the interstate system like Harry Truman and Franklin Roosevelt weren't cowed by congestion. They knew it was possible to improve mobility, and if we could resuscitate that optimism we could beat congestion back with a market-based approach that would avoid the missteps of the 1956 legislation.

The interstate program tackled a key issue, but in the process it shoved an important player, the entrepreneur, to the sidelines. Today Americans expect roads to be governments' domain, but that's not always the case elsewhere. For example, France's tolled motorway system (the equivalent of our interstate system) is investor owned, but in America nearly all aspects of transportation policy suffer because they have been separated from the market.

Where and when roads get built is usually determined by arcane funding formulas that often weigh congressional tenure more than actual need. But investors rarely fund bridges to nowhere; instead they figure out where projects make sense by responding to consumer demand.

The interstate program's reliance on user taxes (mainly fuel taxes) has also made motorists skeptical of a central characteristic of private roads -- tolls. And this aversion to market-based traffic management has much to do with our current congestion woes. If motorists paid each time they used a road (instead of all at once at the pump) they would think twice before piling onto roads at rush-hour. New technology that wasn't available in the 50s has made tolling more sophisticated, and on Southern California's 91 Express Lanes, it's actually abolished gridlock.

Special toll lanes run parallel to regular highway lanes and motorists can avoid congestion by paying a toll that goes up and down with the flow of traffic. This method, called variable pricing, ensures that traffic always scoots along at 65 mph. Since tolls are collected electronically there's no need to stop at tollbooths and this arrangement can even bring speedy transportation to the transit dependent poor.

Certainly much more can be done. We could legalize competition in transit services (PDF), clear accidents faster, and embrace telecommuting. It is possible to enjoy "broadband" speeds on our transportation network, but if the political dawdling goes on, we'll continue to be dragged back toward dial-up conditions.

Ted Balaker is the Jacobs Fellow at Reason Foundation and coauthor (with Samuel Staley) of The Road More Traveled: Why the Congestion Crisis Matters More Than You Think, and What We Can Do About It, to be published this fall by Rowman & Littlefield.



Interesting questions about toll roads...
To me, the most interesting questions about toll roads are:

(1) Is private financing viable? If not, why not? Answers from the top of my head include: land and right-of-way acquisition, state laws and bureaucracies for constructing roads, existing demand for a route, future demand for a route, etc.

(2) Does having a toll road (public or private) as main entry and exit for a community have effects on growth of a community? A good case study would be Rancho Santa Margarita, Portola Hills, and Foothill Ranch in Orange County, all of which are on the 241 (state tollway) and miles away by surface street from a freeway.

(3) Does payment system commonality have observable network effects? Can you look at utilization of toll roads and bridges before something like FasTrak and compare to utilization after it's available?

(4) How much of backups on toll roads (they do exist) are accounted for by manual toll collection and interfacing with free roads?

Great topic Mr. Balaker!

manual toll collection
could be a thing of the past. Automated systems exist that can collect tolls even when cars are travelling at normal highway speeds.

Enough money exists to dramatically increase our roadway capacity. We just have to stop wasting so much of our highway funds on mass transit and bike paths, that are only used by a tiny fraction of the population.

The knowledge worker as commuter
I found your article interesting as I did with your article " Giving the Gift of Flexibility" in Dec 2005. What I feel is missing is an understanding that as a growing number of Americans perform knowledge based jobs, we have lacked the focus on examining broadband solutions that go beyond the 'coffee table' mentality of yesterday's 'telework' experiences. Beating on a nail by holding the head of the hammer only makes us tired and frustrated. There are certain organizational and social dymanics that encourage knowledge workers to enter the crowded highways early in the morning and trek home late at night. The issues are not so much management resistance or lack of technologies, it is the lack of changing the model from the 30 year old - 'I work from home --- days per month' to finding a more workable model in todays information economy. I believe it is a lack of vision more so than a lack of need or desire. Maybe $5.00/gal gasoline or perhaps the loss of another major metropolitan city will stimulate our creativity. One thing is relatively certain, we will eventually move towards a more methodical and effective distributed workforce. Our choice is to move more aggressively in that direction now or wait for the next calamity.

responding to boscoh, mark, and mshear
MarktheGreat is right. Private financing is very viable. We just need the right legal framework to allow it. See this article by my colleague Bob Poole:

And yes plenty of congestion on old-style toll roads comes from queues at tollbooths. But as I point out there’s no longer a need to use booths any more.

mshear, point well taken. I agree that some serious rethinking needs to be done regarding how to make the most of the technology we have and will soon have.

Road problem could be fixed...
If we just took half the money spent on this useless war in Iraq....

....this nation's priorties have been highjacked by the Jewish neo-cons and the "Israel Lobby"...that is why we are spending hundreds of billions in Iraq....and that is one of the reasons we have so many other problems in this nation that the elites are deliberately not fixing...including our failing infrastructure.

iHeretic is, as usual, self refuting.

Wow, this site attracts all kinds!
If we just took half the money spent on this useless war in Iraq....

....this nation's priorties have been highjacked by the Jewish neo-cons and the "Israel Lobby"...that is why we are spending hundreds of billions in Iraq....and that is one of the reasons we have so many other problems in this nation that the elites are deliberately not fixing...including our failing infrastructure.

Nice anti-Semitic blast. Jews make a convenient scapegoat huh? And those who aren't Jewish that support the war, we were "tricked" by those crafty Jewish Neocons, huh?

But to the point you're trying to make. It's bogus. Even if we spent all the tax money ever collected on roads, there will still be problems of traffic, because the places people need to get to and from for jobs and shopping and living and schooling and playing change quite a bit with time. What Mr. Balaker is addressing is using the price system to address this problem with some efficiency. For many routes, capacity isn't a problem for 21 hours of the day. It's a problem when everyone ties to use them at the same time. Tolls (especially variable pricing) give the decisions to drive particular routes at particular time explicit costs. Just as having to pay $6 for a Deluxe Cheeseburger might keep some people from eating 10 of them, charging $8 to use 15 miles of road during peak usage might keep some people off the road until a lighter traffic time.

Toll road use
Mostly a good article, until the proposal[s] for improvement.

"If motorists paid each time they used a road (instead of all at once at the pump) they would think twice before piling onto roads at rush-hour."

Do they have much of a choice as to when they travel? I suppose one could work nine-to-five and drive in at 5AM out at 8PM... Telecommute? I like it, but then I was always an office worker: less than 700 of us supporting 190,000 "service industry" workers - kinda hard to unload hamburger patties from a truck while sitting at home.

And then there is the Mass Pike running West from Boston. A lot of people use it despite it being a toll road because it is clean and traffic moves well even in rush hours - but then, the alternative is Route 9, a road that was great in the thirties...

Too, those gas taxes and "road use" taxes generally are not ear-marked for maintaining/building roads. Mind you, doing so might not help with construction costs over a million per mile, and maintenance not much less.

And like most taxes, gas taxes are already regressive: does anyone believe that Bill Gates drives over 20 million more miles per year than I do? Would he do so on toll roads?

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