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V2V Mandate Nixed: DOT Ends Second Most Costly U.S. Regulatory Proposal

Today, the Associated Press reports that the U.S. Department of Transportation (DOT) will not promulgate a costly new regulation, setting the stage for withdrawal of its notice of proposed rulemaking (NPRM) mandating vehicle-to-vehicle communications (V2V) devices be installed on all new automobiles. The Competitive Enterprise Institute (CEI) applauds this important decision. The V2V NPRM was published on January 12, 2017, just a week prior to inauguration, in a clear attempt to ram through this costly proposal at the last minute.

The magnitude of this decision cannot be overstated. As noted by the American Action Forum:

At $108 billion in long-term regulatory costs, if finalized, it would rank as the second most expensive regulation in more than a decade, according to AAF’s Reg Rodeo. Only the 2017 to 2025 CAFE standards, at $156 billion in total costs, would top the V2V rulemaking. On an annual basis ($5 billion), it would rank seventh on regulations finalized since 2005, but it would be the highest non-EPA measure.

This rule would have imposed large public infrastructure costs, in addition to the substantial costs on every American who purchased a new automobile. CEI had been leading the opposition to this questionable and costly rulemaking endeavor since 2014, when we urged in comments in response to DOT’s advance notice of proposed rulemaking that the rulemaking proceeding should be discontinued. In the interim years, CEI organized opposition to the V2V mandate from free-market groups and academic researchers.

In response to the Obama administration’s January 2017 midnight rulemaking proposal, CEI submitted comments arguing that the proposed rule was deficient on cost, safety, cybersecurity, and legal grounds, and urged immediate withdrawal. We also drafted and coordinated a coalition letter to Secretary of Transportation Elaine Chao in April asking her to suspend the rulemaking.

After the comment period closed, CEI aggressively continued its efforts against this dangerous proposal. In May, we published a widely circulated short article summarizing our formal April agency comments in opposition to the V2V mandate. In July, CEI also hosted a panel discussion with experts that highlighted the flaws of the V2V NPRM on safety, legal, cybersecurity, and privacy grounds (video of that event is available here).

In August 2017, there was early evidence that DOT was taking our concerns seriously and was in the process of reversing course. After an eight-month, department-wide regulatory review, DOT resumed the publication of its monthly significant rulemakings report. The August significant rulemakings report changed the status of the V2V proposed rule to “Undetermined.” The White House’s Office of Management and Budget, Office of Information and Regulatory Affairs also reclassified the V2V NPRM as a “Long-Term Action,” which means no agency action was to be expected for 12 months, a rare occurrence once a NPRM has been issued by a regulatory agency and one suggestive of future withdrawal.

In October 2017, DOT Acting General Counsel James Owens testified before Congress indicating that “[a]n additional five rules are currently in the process of being withdrawn” by DOT. That same day, DOT released its draft FY 2018-2022 strategic plan, which eliminated all references to vehicle-to-vehicle communications and vehicle-to-infrastructure communications that were included in the previous FY 2014-2018 strategic plan.

CEI is pleased that DOT has yielded to reason in nixing its costly proposal. Rather than focusing on obsolete technology and picking winners and losers, DOT has indicated it plans to focus on more promising safety technologies like automated driving systems and to let market participants, rather than federal bureaucrats, develop superior automotive safety technologies going forward.

CEI will continue its effective advocacy against costly government regulations, many of which never make the evening news, yet impose substantial burdens on American consumers and entrepreneurs. While economic liberty is often in retreat, we take solace in cases such as the V2V mandate where freedom and common sense ultimately prevail over the federal regulatory Leviathan.