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[Letterhead of Covington & Burling]

November 4,
2005

VIA EDGAR AND OVERNIGHT DELIVERY

Securities
and Exchange Commission

100 F Street, N.E.

Washington D.C. 20549

Attn: Michele Anderson, Legal Branch Chief

Re:

Traffic.com, Inc.

Amendment No. 3 to Registration Statement on Form S-1

File No. 333-127973

Dear
Ladies and Gentlemen:

        On
behalf of Traffic.com, Inc. (the "Company"), we are responding to the Staff's letter dated October 27, 2005, relating to the Company's Registration Statement on
Form S-1. The Company is filing pre-effective Amendment No. 3 to the Registration Statement with this response letter. All page numbers in our responses refer to
Amendment No. 3. Further, for the Staff's convenience we have repeated the Staff's comments below before each of our responses.

Prospectus Summary, page 1

Our Company, page 1

1.We note your response to prior comment 9. As stated in your response letter, please characterize your statement that you "are a leading provider.. ." as your
belief and briefly disclose the standard or measure that you are using as the basis for your belief.

        The
Company has revised the disclosure as requested on pages 1, 25 and 48.

2.We note your response to prior comment 11, however, please address in the third paragraph to what extent you have generated revenue, or expect to generate
revenue from these sources, so that investors can assess the importance of these revenue sources to your business.

        The
Company has added the requested disclosure on page 1.

Our Strategy, page 2

3.Because as you state in your response to prior comment 16 that you are "exploring opportunities to expand into other countries" and given your disclosure on
page 54 regarding your geographic expansion plans, we believe that you should state in this section that you currently do not have any international operations and you are not yet able to determine
when you may begin any international operations.

        The
Company has added the requested disclosure on page 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations, page 25

4.Please clarify in this section and in your other disclosure regarding the Santa Fe Technologies litigation, when you will be required to post a bond. Also,
disclose how you intend to fund the bond during the appeal. Please keep us informed about the progress of the litigation and appeal and update your disclosure accordingly.

        The
Company has added the requested disclosure on pages 40, 61-62 and F-31. The Company is providing additional information to the Staff in response to this
comment under separate cover on a confidential basis.

Sources of Revenue and Cost of Revenue, page 27

Traffic Data Services, page 28

5.We note your response to comment 33 and your statement that "company begins to recognize revenue under these contracts when it
begins to provide traffic flow data to the Federal and local departments of transportation." You further state that the "company believes that it has met the requirements
to begin recognizing revenue at this time, given that it has met the minimum requirements of the contracts to provide traffic flow data and the acceptance criteria in the
contracts have been satisfied and all other services subsequently performed are perfunctory, consistent with SAB 104." In this regard:

•Tell us what are the minimum requirements of the contracts to recognize revenue.

•Tell us what are the federal and local departments of transportation's remedies against you if they are unsatisfied with the data you
provide.

•Provide us with a legal opinion regarding your satisfaction of acceptance criteria.

        The
traffic information generated by the Company is used to achieve each of the goals under its second Federal Highway Administration ("FHWA") task order. These goals include:
(1) aid the public sector partner in carrying out system management activities; (2) support the provision of free basic traveler information to the public for personal use;
(3) provide opportunities for commercialization of traffic data services; and (4) provide to the U.S. DOT data and system performance measure reports.

        The
"minimum requirements" under each of the contracts are determined during the initial phases of the project, after a contract has been signed. The contracts require that the Company
provide data, consisting of sensor flow data and traditional traffic data, to the local department of transportation, and generally make no reference to a minimum number of sensor sites to be
installed. The Company and the local departments of transportation work together during the planning phase of the project to determine the sensor deployment, including the number of sensor sites and
the overall installment plan. The amount and location of sensors are determined so that the local departments of transportation will receive relevant data and the Company will be able to meet the
needs of its commercial customers. The local department of transportation is required to review the milestone documents prior to acceptance and payment by the FHWA. Should the Company fail to fulfill
the requirements of the installation outlined in the installment plan, the local department of transportation can delay the payment of the federal funding or require the Company to remove the sensors
at its cost.

        Through
December 31, 2004, the Company recognized revenue upon installation of the majority of its sensor network in the applicable deployment area, but prior to official
government sign-off or acceptance, which was considered perfunctory given the Company's
established history of sensor deployment. It should be noted that final installation of a small number of digital sensors in Boston took place subsequent to the commencement of revenue recognition in
2004 as these roadway sites were under construction throughout 2004. As such, all of the "minimum requirements" determined at the onset of the contract had been completed, including the transmission
of data to the local department of transportation. The approval activities that occurred subsequent to completion of the sensor network were effectively paperwork to ensure the Company received
"Agency Signoff". As noted in its response to Comment 33 of the Staff's September 30, 2005 letter, in its deployment of every one of its sensor networks deployed to date, the Company has
attained system acceptance on the first attempt.

        In
2005, given its history with the U.S. DOT contract, the Company began to recognize revenue at the point at which the Company can begin providing significant and useful traffic
information to its customers for the applicable deployment area, which is before full completion of its sensor network in

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a
given deployment area, as it concluded that the nominal effort in installing the remaining sensors is perfunctory.

        The
Company believes that it is appropriate to begin recognizing revenue before 100% deployment based on its established history of deployment of its sensor network and for the following
reasons:

•Before
100% deployment, the Company will have already satisfied the following milestones on its U.S. DOT contract: negotiation and execution of an agreement with the local
agency, sensor map development and mobilization, network planning, software development and system design.

•All
4 of the goals of the FHWA under the Company's task order are addressed before full deployment of its sensors in a given area.

•Additionally,
because each sensor begins to transmit data to TIMS as soon as it is installed and deployed, the Company receives sufficient traffic information to be able to
provide significant and useful services to its customers well before 100% of its sensors have been deployed. The Company's contracts with its data service customers, such as Navteq and Motorola,
provide that these customers have the ability to "turn on" the data feed from TIMS for a given metropolitan whenever they choose. The Company has been successful in commercializing the data before 50%
or less of its sensors have been deployed. Further, the Company generally provides traffic data to its radio and television customers well before 100% completion.

        The
Company's U.S. DOT contract contains data specifications and performance measures. The U.S. DOT may terminate the contract with respect to a deployment area if the Company were to
fail to meet the data specifications and performance measures within the first 10 years after system acceptance in that deployment area and before January 1, 2012, subject to notice and
a 90-day cure period. The data specifications and performance measures were established in the original U.S. DOT task order and do not change during this measurement period. Upon
termination of the contract with respect to a deployment area, the Company would have to give the applicable local public agency the right to buy all system hardware including, among other things,
sensor poles, solar panels and any components from system upgrades, at fair market value. All databases and project software developed with public agency funds would have to be made available to the
applicable local public agency for its own internal use on a non-exclusive basis at no additional cost. Software developed by the Company with its own funds is not required to be made
available. In addition, the Company would be required to pay the federal government liquidated damages based upon the number of years until the default occurred.

        To
date, the Company has never experienced significant data flow interruptions that would hinder its ability to provide traffic flow data to these governmental agencies, except in the
case of Tampa Bay where sensors were disabled during recent hurricanes. As stipulated in the contracts, in the event of an interruption of traffic flow data, the Company would have three months to
cure this interruption prior to violating its contract terms. In reviewing these contract termination provisions, the Company concluded that the likelihood of defaulting on the data specifications and
performance measures within the first 10 years after system acceptance was extremely remote. As such, the Company does not have a reserve pertaining to any of these contract termination
clauses.

        Upon
satisfaction of the formal contract acceptance criteria, which requires the Company to demonstrate that the system is fully functional and meets certain functional requirements as
specified in the FHWA task order for a metropolitan area, the Company receives a signed "Agency Signoff" certificate from the relevant state or local government agency. This certificate provides the
Company with definitive documentation that the acceptance criteria have been satisfied. In lieu of a legal opinion, the Company is able to demonstrate that it has Agency Signoffs as evidence for 6
cities and is in the process of obtaining acceptance in 5 additional cities. Based on the factors described above, the Company recognizes revenue prior to receipt of these Agency Signoffs.

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6.We note on page 29 that you own and are responsible for constructing, operating and maintaining your sensor networks and that you have engaged a third party
contractor for the installation of the sensors used in your network. As part of this arrangement, the contractor acquires and assembles the component parts of the sensors, installs the sensors on a
site (typically a pole) and calibrates the sensors. It is unclear to us whether you lease the site or the poles where you install the sensors. In this regard, tell us how you evaluated the guidance in
SFAS 143 in determining whether you have a legal retirement obligation associated to sensors or any other equipment installed.

        Subsequent
to the installation of the sensor networks by third party contactors, the Company owns and is responsible for maintaining the digital sensor network including the poles and
component parts of the sensor network. The Company's contract with its general contractor includes a warranty provision that requires the general contractor to assume various maintenance and
replacement costs for the first two years. The land on which the sensor networks are located is the property of the federal, state and local governmental agencies. Upon termination of the Company's
federal, state and local agreements, the applicable governmental agency generally would have the right, among other remedies, to require the Company to remove the traffic sensor devices at the
Company's cost. However, because the Company provides the ongoing data services to the government agency at no cost to the agency and because the agency would have to incur cost to assume the ongoing
operating and maintenance costs, the Company believes that the government agency will maintain the status quo.

        The
Company has not established an asset retirement obligation associated with the cost of removing its digital sensor sites as the Company has no reason, at this time, to believe that
the relevant governmental agencies will ask that these sensors be removed. On a quarterly basis, the Company performs a review of its asset retirement obligations, if any, in accordance with
SFAS 143, and would establish asset retirement obligation in a period if the Company believed it was probable that an asset retirement obligation occurred.

Liquidity and Capital Resources, page 38

7.We note your response to comment 36 and that you record deferred revenue before cash has been collected based on the achievement of contracted milestones. In
this regard:

•Tell us, why you believe you can recognize an asset based on FASB Concept 6.

•Citing historical experience for the last two years, tell us the likelihood that revenue will eventually be recognized on this deferred
revenue.

•Tell us the time period between the time you generate an invoice and the period of collection.

        The
Company's governmental subcontract and task orders contain milestones that dictate payment terms. The Company's ability to invoice the federal and local governmental agencies is
directly linked to the achievement of the contracted milestones and has no correlation to its revenue recognition process. When milestones are completed and approved by the applicable governmental
agency, it pays the invoice that was submitted with the milestone. Consistent with Paragraph 26 of FASB Concept No. 6, the Company believes that the receivable recorded by the Company
upon completion of its contractual milestones is an asset to the Company because (a) the receivable embodies a probable future benefit that involves a capacity to contribute directly to future
net cash inflows, (b) the Company has obtained the benefit and control over others' access to the receivable, and (c) the completion of the contractual milestone, subject to final
documentation, has already occurred.

        In
all instances where deferred revenue has been recorded, we have recognized revenue at the completion of the minimum contract terms.

        Under
the terms of the Company's governmental contracts, payment on outstanding invoices is due in full upon approval of the invoice. During the last two years, the average collection
period has been

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approximately
70 days. This time period includes the initial payment made by the governmental agency to the contractor, General Dynamics, and General Dynamics' subsequent payment to the
Company. Therefore, two review and procurement processes are completed within this time period. The Company has had a 100% success rate in collection of accounts receivable under its federal and state
government contracts over the past two years.

Critical Accounting Policies and Estimates, page 41

Stock-Based Compensation, page 42

8.We note your response to comment 39. However you have not disclosed the following:

•The reason management chose not to obtain