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Press Release -- September 10th, 2014
Source: Verizon

Verizon CEO Lowell McAdam: Keynote Speech at Intelligent Transportation Systems Conference (ITS) World Congress

Lowell McAdam
Intelligent Transportation Systems Conference (ITS) World Congress
September 9, 2014

Introduction by Dana Christensen, Deputy Laboratory Director, Science and Technology at National Renewable Energy Laboratory


Thank you, Dana, and good morning, everyone. Speaking as a guy who spent the better part of his youth rebuilding old cars in his father’s garage, I’ve always had a special place in my heart for Detroit and everything it stands for in the American culture.

It’s especially exciting to be here at this moment in history, as technology reinvents the transportation industry — with huge implications for Detroit, for the economy and for society as a whole.

In the communications business, we know something about reinvention. I would say in fact that…

Convergence — The First Wave

… we’ve been doing it for decades.

If this were 1995 instead of 2015, I’d be telling you that, very soon, your computer would speak, your television would listen and your telephone would show you pictures and videos.

I’d be predicting that mobile phones the size of shoeboxes would one day be so small and affordable that everybody would have one.

I’d be talking about an era in which entertainment, news, publishing and music would all converge in a giant stream of ones and zeroes, to be transported over something we could call the Information Superhighway.

Well, it’s 2014 and all of this and a lot more has come true. The lines between communications, computing and content have come tumbling down, and all these industries have been reinvented around the amazing possibilities of mobile and broadband technology.

Convergence — The Next Wave

Now, we’re in the middle of a new kind of convergence, this time between the digital world and the physical environment. You can see the disruptive effects of this everywhere you look.

All of a sudden, Google is a car company.

Cars are computers on wheels.

Wearable devices can count your steps, your calories, the number of hours you sleep and the quality of that sleep.

Your cell phone can turn on your lights, start your air conditioner, control your security system and let you watch your kids from miles away.

And that “information superhighway” we’ve been talking about all these years isn’t just a metaphor, as roads, bridges, railroads and the supply chain begin to integrate with the communications network.

The Connected Car

Today, the car is the biggest, coolest mobile device we own. Like the smart phone, the smart car is rapidly becoming a platform for innovation and a focus of attention for the best technology minds in the industry.

But the connected car is just the beginning.

The Connected Environment

Before long, the car will be one more node in a seamless digital ecosystem that will unite the home, the office, the highway system and the energy grid. By 2017, there will be three times more networked devices than there are people in the world, giving us new ways to interact with and control our environment. The Internet of Things is reinventing industries, creating new business models, and remaking our infrastructure.

The potential for improving customers’ lives is tremendous.

And yet …

The Challenge

Americans still waste $120 billion a year sitting in traffic.

Thirty percent of the congestion in cities is caused by people looking for a parking space.

We still get in our cars and burn a gallon of fossil fuel to drive to a service center for an emissions test.

33,000 Americans still lose their lives in traffic accidents every year.

We still have 200 million cars in the U.S. alone with no connectivity whatsoever.

By 2040, more than two-thirds of the world’s population will live in urban areas, which will further tax our aging infrastructure.

Despite all that, we have yet to make a real commitment to rebuilding this country’s 20th century transportation system for these 21st century challenges.

The good news is, the building blocks for creating a greener, smarter and more efficient society are in place.

Now it’s time to shift into a higher gear.

Today, I’d like to talk about what Verizon is doing — on our own and with our customers and partners — to leverage this next wave of technology convergence and accelerate the benefits that will come from an intelligent transportation model for the 21st century.

Toward a 21st Century Infrastructure — Networks

It all starts with the foundation of an intelligent transportation ecosystem: the communications network itself.

Verizon and the rest of our industry have invested more than a trillion dollars over the past 20 years to deploy the pervasive, reliable and secure networks required to support a massively connected environment:

  • We’ve connected homes and businesses with fiber-optics,
  • Built the global Internet backbone to transport massive amounts of digital cargo,
  • And we’ve upgraded our wireless networks with 4G LTE technology to deliver the truly mobile broadband experiences that have launched the machine-to-machine or “Internet of Things” revolution.

Toward a 21st Century Infrastructure — Platforms

We’ve also invested in platforms and enabling technologies that are vital to the functioning of intelligent systems:

  • We operate extensive cloud networks that can store, share and safeguard digital information,
  • We’re a leader in cybersecurity to keep data private and safe from security breaches.
  • We have a growing expertise in big data analytics — led by the former head scientist for NASA — to turn the data collected by the Internet of Things into intelligence that leads to smarter, more efficient systems.
  • And of course, we have Verizon Telematics — formerly Hughes Telematics — which is focused on delivering connectivity to the transportation marketplace.

The Internet of Things

Together, these intelligent technologies have created a platform for spreading innovation at speeds we could only imagine a few short years ago — in particular, by allowing us to network anything that has an electronic chip in it.

The number of these connected devices is growing at a compound rate of 27 percent a year.

G.E. estimates that connected technologies have the potential to reduce the global transportation industry’s demand for fuel by 14 percent.

In fact, they say that if Internet technologies reduced demand for fuel by just one percent, it would save the railroads $27 billion, the airlines $30 billion and the power industry $66 billion over the next 15 years.

As the networking company Ericsson says, “The ‘Next Big Thing’ is actually a trillion small things” — armies of tiny machines working in the background to transform how we bank, how we shop, how we run our factories and manage our cities.

Autonomous Cars

They’re also transforming how we drive.

Experts say the number of cars connected to the Internet will grow from 23 million today to 152 million worldwide. Increasingly, they’re an extension of our digital lives, seamlessly integrated with your wearables, your home automation system and your other mobile devices.

This pervasive connectivity also makes possible the autonomous car, which at least six major manufacturers say they will introduce in some form by 2020. Autonomous cars will constantly interact with other vehicles and the transportation infrastructure itself — creating a dynamic system that can regulate traffic, save fuel, and create safer highways.

Calling them the “next giant leap in automotive safety,” the Department of Transportation says autonomous vehicles could prevent or mitigate 80 percent of all unimpaired vehicle crashes.

Researchers say that automating even 10 percent of cars and trucks on the road would eliminate 1,000 traffic deaths every year.

All in all, the safety and productivity benefits from autonomous vehicles are estimated at $1.3 trillion.

It’s likely that, in the not-so-distant future, every new car will be equipped with this vehicle-to-vehicle technology. But we have to do more than provide the technology. We have to create solutions that make people’s lives better and address the big challenges we face as a society.

At Verizon, we believe that big challenges deserve powerful answers, and we’re delivering solutions that are helping to make transportation systems safer, smarter and greener.

For example …


State Farm Insurance is using our telematics solution to reward good driving habits with better insurance rates. They connect a plug-in device in your car to the Verizon cloud to provide feedback on how fast you accelerate, how safely you turn, and how hard you brake. The safer you drive, the lower your rates.

Car companies like Mercedes-Benz and VW are also using Verizon Telematics to make driving safer and highways less congested by detecting accidents, alerting first responders, picking the best route and updating software. Just Sunday here at ITS, GM’s Mary Barra announced that Cadillac would begin offering advanced intelligent and connected vehicle technologies on 2017 models. And going forward we’ll be able to reduce carbon emissions by testing your car’s emissions without a trip to a service station.


Telematics can also reduce the costs and the carbon footprint of large commercial and government fleets. At Verizon, we offer a solution called Networkfleet, which allows fleet operators to track fuel consumption, map out efficient routes and monitor the condition of their vehicles:

  • We’re actually using Networkfleet in 29,000 of our own vehicles to better manage these assets worth hundreds of millions of dollars. We think we can save between two and five million dollars in fuel costs just by reducing the idling time of our vehicles.
  • On Monday we announced that the California Department of Transportation will be using Networkfleet in nearly 7,500 vehicles throughout the state.
  • In Virginia, 3,000 contract vehicles for the Department of Transportation use Networkfleet to mobilize snow removal during weather emergencies, clearing the roads for drivers.
  • And here at the convention, ITSA is using our technology to let you know where those all-important shuttle buses are at any given time.

You can get a look at these and other telematics solutions in our booth in the Cobo Center.

Verizon Auto Share

As we’ve seen with apps like Uber and Lyft, car-sharing is becoming a big part of the solution to urban mobility, especially with the millennial generation. Yesterday, we announced Verizon’s entry into the sharing economy with a new service called Verizon Auto Share, which we’ll be marketing to rental agencies, car dealers and municipalities by the end of the year. With Auto Share you’ll be able to use an app on your smartphone to scan a QR-code on a car, validate your identity, pay for your rental and unlock the car — anywhere at any time, all within minutes, without stepping foot in a rental agency. We think this has lots of potential uses for making urban life more convenient.

Smart Parking

Another solution for urban mobility is smart parking systems, which have been shown to reduce the time spent cruising for parking spaces by more than 20 percent. We work with our extensive partner network to offer smart parking solutions in places like Indianapolis, Washington DC, New Brunswick and Ellicott City, Maryland. These systems use sensors connected to a wireless gateway to help drivers find parking spaces, pay for them with their wireless phones and reduce the wasteful circling that clogs city streets and frustrates drivers.

Smart Public Spaces

We’re also starting to embed connections into the public infrastructure itself, creating smarter, greener public spaces and architecture. We’ve partnered with a company called Big Belly Solar to put solar-powered trash compacters in cities around the country, with wireless connections that tell the city when the trash needs to be collected. In Boston, we teamed up with local entrepreneurs from the MIT Media Lab to install solar-powered “smart benches,” which charge your phone and monitor environmental conditions.

Envision Charlotte

On a bigger scale, we work with a partnership in Charlotte, North Carolina, called Envision Charlotte. We’ve connected more than 60 buildings in the commercial center to kiosks that display how much energy is being consumed. By sharing that information and enlisting the community in its conservation efforts, Charlotte has reduced its power usage by 8.4 percent and saved more than $10 million, in just two years — putting them well down the path toward their goal of being the greenest city in America.

Moving the Industry Forward

These solutions are just a glimpse of what’s to come as the convergence of the digital and physical worlds takes hold. They give us a tantalizing look at how a smart, connected infrastructure will improve our quality of life. As we build more and more intelligence into our roads, rails and freight systems, we’ll see an enormous return on our investment in the form of a faster growing economy. One study finds that a 10 percent increase in infrastructure investment could actually boost GDP by 2 percent.

We can’t afford to leave an opportunity like that on the table. But to achieve that kind of impact, we need to amp up our efforts dramatically and deliver these powerful solutions on a much wider scale.

So what’s the path forward?

Connecting All Cars

Job One in achieving this potential is bringing connectivity to every car.

Of the more than 250 M vehicles on American roads today, only seven percent are connected to the communications network. So how do we bring these unconnected vehicles into the intelligent transportation ecosystem?

At Verizon, we think the technology exists to leverage our nationwide wireless network to connect the vast majority of these vehicles to a wide range of intelligent services. We are committed to delivering an off-the-shelf solution that will bring the benefits of telematics to everyone next year.

Smart Cities at Waltham

The next thing we have to do is galvanize innovation to take advantage of this extraordinary new platform.

At Verizon, we saw how important this part of the equation was when we launched 4G LTE in 2010. We knew that for LTE to reach its full potential we’d need to take an active role in developing the ecosystem of devices and applications that would ride on the network. So we created two Innovation Centers — one in Waltham, MA and one in San Francisco — to incubate new technologies and bring them to market. These innovation centers have helped us build a strong partner ecosystem and drive a broad portfolio of solutions.

Much of that innovation is focused on intelligent transportation and infrastructure. At our Waltham Center, we created a Smart Cities test bed to showcase the new connected solutions we have in the pipeline, such as:

  • Command centers that allow city planners to monitor traffic and manage resources in emergencies,
  • Smart street lights that dim or brighten according to traffic and weather,
  • And environmental solutions that manage energy and water for maximum efficiency.

Powerful Answers Award

We also launched a multi-million-dollar global competition called the Powerful Answers Awards to recognize entrepreneurs for creating connected solutions that address the biggest challenges facing society.

We announced our first Powerful Answers winners in January, with solutions in the areas of health care, education and energy.

Now we’re in Year 2 of the Powerful Answers challenge, and we’ve added a new category: transportation. We’re just in the middle of the process, but we’re really excited by the response we’ve gotten so far. We received almost 4,000 entries — double what we saw last year — from 78 different countries, and have gotten a lot of terrific ideas for urban solutions, logistics and smart driving applications.

Judging is under way and we will announce this year’s winners in January. We look forward to partnering with the winning entrepreneurs and helping to smooth the path to market for these new transportation solutions.

University of Michigan Partnership

Looking down the road, we need to move beyond individual projects to think in a holistic way about integrating all these smart systems — connected cars, roads, buildings, power grids and communications — into a comprehensive intelligent ecosystem.

Fortunately, the epicenter of this important work is right here in Michigan.

That’s because the world’s largest test-bed for studying smart transportation solutions is being built in Ann Arbor, at the University of Michigan’s Transportation Research Institute.

On Friday, the University announced that Verizon is one of 13 leading technology and automotive companies in the Leadership Circle for the next phase of this groundbreaking research project — the Mobility Transformation Center. The goal of this public-private partnership is to lead a revolution in mobility by addressing the challenges inherent in the shift to connected and automated vehicles.

We are very excited to join so many of our partners and customers in this venture, where we’ll have the chance to test next-generation technologies in a real-world environment. Together, we can take innovation in this space to a higher gear and find the business models that will speed the delivery of new technologies to market.


In a recent town hall, Transportation Secretary Anthony Foxx called the challenge of reinventing America’s infrastructure a “generational issue,” last tackled in a major way by President Eisenhower in the 1950’s.

Now, it’s our turn to solve this issue for the 21st century.

Our infrastructure transports $468 billion worth of commerce — every single day. Yet the United States ranks just 28th in terms of infrastructure investment.

So we have some decisions to make about how to invest in our future. And if there’s anything we’ve learned over the last 20 years in the communications business, it’s that investing in last century’s infrastructure may be cheaper in the short run but it’s way more costly in the long run.

We can leverage the convergence of the digital and physical worlds to create a smart transportation system for the 21st century — but only if we pay attention to what we learned in the first wave of the digital revolution.

We need to fight for spectrum policies and tax laws that promote capital investment in the communications technologies on which intelligent transportation systems depend.

We need to continually reinvent our business models around the Internet mantra of innovation and open standards.

We need to work with partners from every segment of the industry to solve the issues that matter most to consumers, like safety, security and privacy.

Most of all, we need to put the customer in the center of the equation and create the great, integrated experiences that improve people’s lives and make our societies function better.

Our reward for doing this right will be new markets, new customers, and an explosion of innovation that will fuel our growth and spread prosperity around the globe.

At Verizon, we look forward to being part of this great industry and working with all of you to solve these big challenges, for America and for the world.

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