It has become evident that the methods of cooperation between public and private organizations in the delivery of Advanced Traveler Information Systems (ATIS) is at least as important in determining success as the technology applied. These relationships have been coined ATIS Business Models. In 1997-1999, ITS America and U.S. DOT conducted an extensive review of ATIS Business Models and published a report that illustrated various business models and the factors that would lead a region or state to consider one model over others.

Although not nearly as exhaustive, this report updates the collective understanding on ATIS business models by gathering and examining current examples of public/private ventures and arrangements used to provide traveler information services.

This study was supported a group of volunteers from ITS America's ATIS Committee. These volunteers assisted us in identifying literature to review, professionals and sites to interview and questions to ask in interviews. The authors are grateful for their contributions.

The study used a two-pronged approach to gather data for business models assessment: literature review and interviews of active participants in ATIS.

2.1       Literature Review

Many sources of documentation, ranging from evaluations and scholarly studies to news articles and brokerage analyses, provided useful input into the study. Most of this information aided in understanding the general trends of the ATIS industry as a whole, and thus indirectly have affected the evolution of ATIS business models.

Literature examined included:

• Metropolitan Model Deployment Evaluation Reports, 1999.
• Closing the Data Gap: Guidelines for Quality Advanced Traveler Information System (ATIS) Data as well as preparatory materials and proceedings from the February 2000 workshop on this subject (ITS America), 2000.
• U.S. DOT ITS Deployment Tracking Data, 1999-2001.
• On-Time Reliability Impacts of ATIS: Washington, DC Case Study (Wunderlich et al), 2001.
• Environmental Scan of ATIS (Schuman), 2001.
• The Future Role of Government in ATIS (Crosby, Stein et al), 2000.
• Wireless Carrier filings to the FCC regarding enhanced 911, 1999-2001.
• UBS Paine Webber Traffic Data Market Study, 2001.
• Sharing Data for Traveler Information: Practices and Policies of Public Agencies, 2001.

In the following section, major findings from the literature review will be highlighted.

2.2       Interviews

While the literature review can set the backdrop for business models, the literature does not generally document the specific "deals" that make possible the provision of traveler information. These deals are generally codified in contracts, policy statements and handshake agreements. To gain current understanding of the issues surrounding ATIS business models, it is necessary to talk in depth with the main participants, both in the public and private sectors.

In this study, interviews were sought with public sector officials in over 25 metropolitan areas and with more than five private sector information service providers. The initial inquiries resulted in 10 documented summaries of metropolitan business models and multiple interviews of information service providers. These interviews were conducted in July, August and September 2001. While it would be desirable to have conducted all interviews, the authors and our sponsor from U.S. DOT determined that conclusions could be drawn from the pool of interviews conducted.

The metropolitan summaries are provided as Appendix A. A summary of private sector interviews is located in Appendix B.

When looked at holistically, the documents reviewed portray a largely consistent picture of the state of the ATIS industry/market. Rather than rehashing the details of each document, the important findings are provided in this section, organized by general themes:

• Self-sustaining national ATIS ISP model has yet to be demonstrated in the U.S. The only business known to be profitable from an operating revenue standpoint in the information service provider market is Westwood One, and their profitability is mainly attributed to their broadcast operations, not their "ATIS" activities. As in 1997, that does not mean that a profitable ISP model is not possible, it just has yet to be achieved.
• The economic slowdown is having a tangible effect on industry growth. In the late 1990s, several firms either entered or were close to entering the ISP or ATIS marketplace, backed by sizeable venture or corporate investments. Only one significant new market entrant remains - Mobility Technologies.
• Lack of quality data is still most important issue. Multiple sources indicate that the lack of ubiquitous, high quality data is a major factor in the lack of progress in the ATIS market. With only an estimated 22% of freeway miles in metropolitan areas under electronic surveillance (as an example), businesses that aim to aggregate, bundle and "productize" traveler information just do not have enough content to work with.
• The environment for "monetizing" traveler information is as weak - or weaker - than it was when the original business models review efforts occurred in 1997-1999. With consumers resisting spending for new information services and a relatively soft advertising market, the environment for generating revenue from traveler information is as challenging as ever. ISPs will need to be innovative and creative to develop new revenue streams. In the past few years, the focus has been more on generating revenues through broadcast partners, which has the macroscopic effect of reallocating the "pie", but not increasing it.

• The data gap exists and is not being filled rapidly. As stated earlier, the lack of quality data is a principal issue in the generation of sustainable, quality "advanced" traveler information services.
• E-911 based systems are evolving slower than hoped so to look at this type of data collection as a savior may be premature. With many carriers delaying their E911 implementations well past the October 2001 deadline, it is increasingly unclear when such systems will be implemented, what approaches for location determination these systems will use, and whether the technologies selected are amenable for traffic flow calculations.
• A greater emphasis on travel time data collection is needed. As discussed below, travel time reliability is a key benefit - if not the key benefit - of ATIS to a user. However, in most cases information provided through ATIS is anecdotal in nature, identifying what has happened and where it is, but not providing a quantitative assessment of the impact. Without being able to calculate the impact on travel time of an incident or event, the traveler - or a product or service that could make such a calculation on the traveler's behalf - is unable to determine the best course of action.

• The model of aggregating data at a national level for data dissemination has been clearly demonstrated. Many service providers are seeking traffic/travel data from major metropolitan markets nationwide to incorporate as one of many services they offer through their particular delivery chain. Examples include OnStar in the telematics market, Yahoo and MapQuest in the internet portal market and AT&T Wireless/TellMe in the audio portal market. This trend is very positive for the ATIS industry and the traveling public, as information is becoming available nationally via well recognized brands.

• Viable markets for ATIS include broadcast, fee-for-service and national wholesaling. Radio and TV broadcast of traffic/travel information predates ATIS, but such services are being improved via access to more CCTV cameras, automated incident reporting feeds and traffic and weather monitoring data. The value of this new data in increasing the quality of these reports cannot be underestimated. Providing contracted ATIS dissemination services to government agencies such as web sites and telephone systems under a "fee for service" model are growing in popularity. This model clearly defines risk/reward for both the public and private sectors and is the "cleanest" method of engaging the private sector, though of course it requires sufficient public sector funding availability to achieve. As described earlier, providing a national data feed to an aggregator of many types of content can generate substantial revenue, though it is not clear yet if the revenue generated can wholly support a national data collection and fusion infrastructure.
• Fee-based direct to consumer services have yet to prove viable. TrafficStation planned to develop a business national in scope that largely revolved around direct to consumer business model was unable to build such a business and is now out of business. The literature does not identify a single instance as of yet in which fee-based consumer ATIS services have been sustained.
• Advertising-driven services have yet to prove viable as a primary revenue source for ATIS. Though clearly advertising has proven capable of supporting the broadcast model for traveler information, it has yet to demonstrate significant potential to support other methods of ATIS dissemination such as web sites and e-mail alerts, telephone services, text messaging and in-vehicle information.

• Consumers like and will use ATIS information. Many studies exist that illustrate the desire of the traveling public to have quality traveler information services. It has also been demonstrated that an important factor in usage and overall satisfaction of consumers is quality of service. Timeliness, accuracy and reliability are all required. Of course, as stated earlier, consumers are generally unwilling to pay directly for such services, so these services will either need be provided by the public sector and/or be "monetized" in some fashion that does not create an obvious fee to the user (e.g., the Weather Channel is not free to cable subscribers, rather its costs are built into the monthly cable bill).
• Travel time reliability is principal benefit of ATIS to users. Groundbreaking work by Mitretek Systems has identified the likely principal benefit of ATIS to travelers: the increased reliability in trip travel times and the corresponding decrease in "slack time" that must be allocated to a given journey. Reduced uncertainty, while it may not increase the efficiency of a single trip, will of the course of months and years greatly increase the efficiency of travel.

When reading the detailed summaries in Appendices A and B, two main findings result:

The most successful implementations are those with significant public sector support.

• The Seattle Washington ATIS service (which in fact covers the entire state), has complete coverage provided by the public sector. Even if the data is manually entered or recorded, the dispersal of responsibilities to the various regional traffic centers allows for sufficient updates to keep the system current and well used. In fact, the IVR system receives over 1 million calls annually on a combined local/toll-free phone number system.



• The system in Houston Texas, does not expend significant funds providing information directly to the public. Instead, they take their traffic management data and video, and “sell” the information as products to the private sector for re-packaging. TxDOT even sells space on their operations floor to private companies and still maintains a level of control over the data through usage agreements. While currently, it only costs an ISP a modest $12,500 annually for data and video feeds as well as a location on the floor, it does provide a mechanism to separate serious firms from pretenders.



• Boston, arguably the first direct dissemination ATIS service, is fully funded by the public sector. Though services are offered through a private company, everything from the staffing to the telephone lines and data connections are paid (at a 70% level) by MassHighway. The only truly successful public-private partnership does have it's drawbacks; those being that SmartRoute Systems owns the brand name, most of the physical equipment that has been installed for data gathering and all of the software and equipment for data fusion and dissemination. In fact, were MassHighway to decide to award the ATIS contract to a new company, this new ISP would be starting nearly from the beginning for everything from finding a new telephone number, making agreements with the wireless carriers, setting up CCTV cameras and connections (SmartRoutes has 36 of its own cameras and connections to monitor 32 from MassHighway and MassPort), not to mention the creation of a space to function as an operations center (the lease for the facility in Cambridge is in SmartRoutes' name as well).



• The Gary-Chicago-Milwaukee corridor's system is over 40 years old and was built around a traffic management system that happens to be able to provide information to the private sector as well. No formal agreements are in place yet the free availability of the information allows for wide dissemination of travel times and video.

On the whole, these systems show one significant commonality: each has the public sector supporting or implementing the data gathering systems. In most cases this also includes data fusion, as the systems that gather information also merge the data into usable streams for distribution to private companies or in some cases, directly to the public.

On the other side of the table, certain business models have proven un-successful.

• The Exclusive Franchise model used in Detroit is one that will not be repeated. MDOT officials have stated that the model failed due to poor performance by the contractor, SmartRoute Systems. SmartRoutes has stated that the failure was due to a misinterpretation of the market and therefore, lack of sales.



• This misinterpretation of the market may also have been a factor in the demise of Trafficstation Inc., a company built on the belief that wholesale and retail sales of personalized services could create self-supporting ATIS services that would not require continued public sector funding.



• Also on the downside, is Partners in Motion in Washington, DC. This model is also a public-private partnership, built around limited funding (3 years) and a contract that requires continued operation (5 years) of a self-sustaining business. The revenue for this continued operation is not present, however the ISP (again, SmartRoute Systems), is continuing with its obligation to operate the systems, albeit with some modifications (i.e. the operations center has moved to Maryland and is now co-located with Metro Networks operations facility).

In summary, it appears that we can infer a number of items from the literature review and the interviews:

• Public funding or facilities, especially with regard to data collection, is essential to a successful ATIS implementation. Any initiative that increases the availability of quality data should be a national priority.
• The public sector may have the opportunity to sell its own wares, as long as the data being sold is of sufficient quality and is on a level that the private sector cannot gather similar data on their own. However, the value of such data is likely to be relatively low at present and for the foreseeable future. Any region looking to obtain private sector revenue substantial enough to support its ITS investments is setting itself up for failure.
• Revenue generation from ATIS services, both wholesale and to the individual, has not proven successfully that this revenue can wholly support an ATIS service. There may be new models and new ventures determined to prove this model viable, but they are unproven at this time.
• If there are specific traveler information services public agencies in a region or state wish to provide to their traveling public, they should be prepared to underwrite most or all of the cost. While it may be possible to have such services provided for free as part of a partnership model, the experiences indicate that as often as not, these services do not evolve to the level of quality and use desired by the public sector unless they are either operated in-house or contracted on a "fee for service" basis.

Finally, the authors of this report recommend that ITS America's ATIS Committee develop a process for regularly revisiting ATIS business models on a regular basis. In particular, it would be highly beneficial to the community if every region known to have an ATIS model is documented an updated on a regular basis. As described earlier, 25 areas were identified as targets for updates, but only 10 could be completed as part of this study.