Contents - AL-Tax

128 9 Sale of Assets with Embedded Intellectual PropertyIn contrast to many foreign markets, toll collection functions are highly decentralizedin the United States, with individual tolling authorities bearing both theresponsibility for, and the costs of, toll collection and enforcement programs forspecific bridges, tunnels, highways, etc. For example, in the New York area, theLincoln Tunnel and the Triborough Bridge are each operated by a separate tollauthority. The E-Z Pass Interagency Group is made up of the New York StateThruway Authority, the Port Authority of New York and New Jersey, the New JerseyHighway Authority, the Pennsylvania Turnpike Commission and the South JerseyTransportation Authority. The Bay Area Toll Authority oversees the operation ofthe region’s seven state-owned bridges, while other tolling authorities in California,such as Transportation Corridor Agencies and the Orange County TransportationAuthority, have responsibility for specific infrastructure assets outside of the Bayarea.USS markets and promotes ETC systems in the United States, procures infrastructure,equipment and software exclusively from FP, and enters into contractswith U.S. tolling authorities to provide electronic toll collection on an outsourcedbasis. In some cases, USS retains ownership of the equipment and infrastructure. Onother important contracts, USS resells the equipment and infrastructure outright, butretains an obligation to perform engineering and maintenance, along with ongoingprogram implementation services.In implementing and administering ETC programs, USS is called upon toperform construction, maintenance and operations. In the first phase after beingawarded a contract, USS obtains “as-built” drawings of toll plazas and, whererelevant, intersections, showing the placement of existing utilities, right-of-wayrestrictions and other details. For the most part, the Company outsources constructionwork to independent contractors. The latter are responsible for boring underthe street, performing all electrical work, placing sensors and other equipment inthe road or on pole mounts, etc.Along with its construction and installation functions, USS is responsible formaintaining its installed base of equipment and infrastructure in good workingorder. More particularly, it is responsible for carrying out proactive maintenance oninstalled equipment on a scheduled basis, and responding promptly to complaints.Proactive maintenance encompasses regular physical checks of the equipment. Forexample, with respect to cameras, USS ensures that the lenses and housing units areclean, verifies that voltage levels, grounding and basic connections remain intact,conducts diagnostics, and reviews test images to ensure that violators’ license plateimages are sufficiently sharp. Installed cameras are subject to extensive vibration,and gradually shift over time. Moreover, light, precipitation and temperature levelsvary by time of year, and there is a degree of system degradation as a result of theconstant movement and auto-focusing of the camera systems. Analogous maintenanceissues arise vis-a-vis other elements of installed ETC systems.USS’ Operations Group is responsible for ensuring that non-violators’ accountsare debited in the appropriate amounts, in accordance with usage records anddata, notifying non-violators when additional funds must be deposited in theiraccounts, reviewing evidence of infractions, determining whether a violation hasin fact occurred, enhancing photos, operating help desks for both violators and