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  1330 AVENUE OF THE AMERICAS

  NEW YORK

  NEW YORK NY 10019

  WASHINGTON

  TEL 212.841.1000

  SAN FRANCISCO

  FAX 212.841.1010

  LONDON

  www.cov.com

  BRUSSELS

December 8,
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. 4 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 oral comments received from the Staff on December 1,
2005, relating to the Company’s Registration Statement on Form S-1.  For the Staff’s convenience we have repeated
the Staff’s oral comments below before each of our responses.

1.                                      We
note that the Company does not account for barter transactions in which it receives
advertising inventory from radio and television stations in exchange for traffic
data services in its statement of operations. Please revise the Company’s statement
of operations to account for these transactions or explain the Company’s
accounting position to us.

As described in the
Company’s Registration Statement, a primary aspect of the Company’s business
model is the generation of revenue by selling advertising it receives in exchange
for the provision of its traffic data services to radio and television
stations. After consideration of the SEC’s comment and the relevant accounting
literature, the Company continues to believe that the most representationally faithful
accounting presentation of its business model is to recognize revenue upon the
airing of advertising that it sells.

Background

The
Company receives advertising spots from all of its TV station customers in
return for providing traffic data services.
In addition, the Company currently receives advertising spots from 376
radio stations. For 109 of these radio station customers (which represent
approximately 70% of the Company’s total advertising revenues), the Company receives
advertising spots in exchange for traffic data services and, typically, in
addition, the Company’s payment of cash

compensation and/or the
provision of production services.  For
the balance of 267 radio stations, no traffic data services are provided, and
instead, the Company contracts to purchase advertising spots for cash.  When purchasing these advertising spots for
cash, the Company will typically pay one price for a number of different
advertising spots that will air at a variety of times.

In
addition to contracted advertising spots, the Company also buys advertising
time from radio and TV stations on the spot market in order to fulfill a
specific requirement from an advertiser.
The Company refers to these purchases as “cash buys”. Cash buys are made
in response to the fufillment of customer orders when the Company does not have
advertising spots available in specific markets/cities, usually in cities where
the Company does not offer traffic data services and normally as part of a
larger order.  Cash buys are typically made
at a premium, resulting in a low profit margin (approximately 15%).

The
Company’s advertising customers purchase a number of advertising spots from the
Company in advance for a bundled price.
This price typically covers advertising spots on a number of radio and
TV stations, and more frequently now can include Internet advertising.  The advertising spots purchased for the
bundled price can air in a variety of markets, during a variety of times over a
long period.  Further, the advertising
time purchased includes spots that the Company has received in exchange for
traffic data services and spots that the Company has purchased for cash either
on a contractual basis for the 267 radio station customers described above or
as a “cash buy”.

The
contract between the Company and the advertiser is generally very simple and
consists of a one or two-page form which details the timing of advertisements
to run and the station on which the advertisement should run. All orders are
cancelable by the advertiser up to 4 weeks prior to an advertisement running
and, contractually, are not cancelable thereafter.  However, this contractual commitment is often
not upheld by the Company, and orders are sometimes allowed to be canceled
within the 4 week period.  Given the
flexibility of the advertiser to cancel orders, the Company retains significant
risk in connection with its acquisition of advertising time, and there is no
guarantee that a particular value will be achieved.  This risk is particularly apparent with the
Company’s “cash buys”; while the Company will purchase advertisements on the
spot market at the request of an advertiser, there is no guarantee that the
advertiser will not later cancel its order.

Upon
the completion of commitments from advertisers, the committed advertisements are
submitted to the relevant radio or TV stations and are aired at the stipulated
times.  If there is a problem with the
airing, the station runs the advertisement at a different time, attempting to
ensure that it is placed at the same time of day.  This is known as a “make-good”.  Once aired, the station provides an affidavit
to the Company (normally in approximately 30 days) and the Company attaches
this affidavit to an invoice and, in turn, bills the advertiser.

Radio
and TV advertising spots are normally 10-second spots, unlike standard radio
and TV spots which are 60-second or 30-second spots.  The 10-second spots are generally placed
before or after the traffic report, or, in some cases, before or after the news
or weather.  This positioning is seen as
the most beneficial time to advertise since it is outside of a large commercial
spot-set.  The Company believes that 10-second
advertising spots are relatively unique to providers of traffic and weather
content.

When
the Company negotiates a price with advertising agencies, the agencies
determine the approximate cost they should expect to pay for a 60-second radio spot
or a 30-second TV spot with reference to the station’s rating points (obtained
from Arbitron for radio or Nielsen for TV) and the market cost-per-point
(obtained from a number of companies which survey ad agencies to determine
average costs paid per rating point in any given market).  There is no similar industry-accepted method
attributable to 10-second spots.

When
contracting with an advertiser, there also is a negotiation as to where the
spots will be aired and at what time.  In
addition, many advertisers book advertising spots for months ahead and
sometimes on a full-year basis.  It is
normal that the Company may have orders received for approximately 40% of its
ultimate annual revenue by the end of January in any given year.

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One of
the purposes of the contract between the Company and the radio or TV station is
to align the airing of the advertising spots with the delivery of the traffic
reports.  Advertising spots are provided
on an hour-by-hour, day-by-day, week-by-week basis, as are traffic
reports.  In fact, the appendices to each
contract with our radio and TV station customers provide these requirements in
a very detailed form.  The “schedule” of
advertising spots is effectively delivered and used at a 10-second moment in
time, immediately before or after the traffic report that is provided in return
for it.  If the Company were not to deliver
a particular traffic report, advertising spots could be cancelled.

Accounting Standards

As a general principle,
the Company believes that Paragraph 83 of FASB Concepts Statement (“CON”) 5 is
applicable to the Company’s accounting treatment of its traffic data services exchange
transactions. Paragraph 83 of CON 5 states that revenues are generally measured
by the exchange values of the assets (goods or services) or liabilities
involved, and recognition involves consideration of two factors: (a) when
revenue is realized or realizable and (b) when revenue is earned.  The Company believes that revenue from the
acquisition of advertising spots is not properly realized and earned until the
airing of the advertisement that is sold by the Company.  Further, Paragraph 78 of CON 6 defines
revenues as inflows or other enhancements of assets of an entity or settlements
of its liabilities (or a combination of both) from delivering or producing
goods, rendering services, or other activities that constitute the entity's
ongoing major or central operations.  The
Company believes its current accounting is the most fair reflection of its
central operations and that there are not two revenue streams generated from
this central activity.

The Company does not believe
that FAS 63, Financial Reporting by Broadcasters,
is applicable as the Company is not a broadcaster or licensee.   Additionally, the Company agrees with the
SEC Staff that the provisions of EITF 99-17, Accounting
for Advertising Barter Transactions, are not relevant in its support
of its accounting policy since that literature only applies in barter
transactions of advertising for advertising, although the Company does believe
the principles outlined in that literature are consistent with the conclusion
outlined herein.

The
Company also believes that under APB 29 it has an appropriate position not to
record the non-monetary transaction.  Paragraph
18 of APB 29, Accounting for Nonmonetary Transactions,
states “the cost of a nonmonetary asset acquired in exchange for another
nonmonetary asset is the fair value of the asset surrendered to obtain it, and
a gain or loss should be recognized on the exchange.  The fair value of the asset received should
be used to measure the cost if it is more clearly evident than the fair value
of the asset surrendered.”

For
the reasons set forth below, the Company believes that the fair value of the
advertising space received in traffic data exchange transactions is not determinable
within reasonable limits as set forth in APB 29, Paragraph 20:

•                  As stated above, the Company’s
advertising customers purchase advertising for a bundled price, covering a
number of radio and TV stations (and more frequently now, this bundle can
include Internet advertising), markets and times. In addition, the advertising
purchased by the Company’s customers includes advertising time that the Company
receives in exchange for its traffic data services, cash and/or production
services and advertising time that the Company purchases for cash (pursuant to
contractual arrangements and on the spot market).  There is also the possibility that the
Company will not be able to make a sale to an advertising customer for a
particular day or time of day, and therefore, will have to substantially reduce
the price charged for advertising spots or offer the spot as a sales incentive
to a customer for no cash.  Therefore,
there is a wide range of values that could be assigned to any particular
advertising time the Company

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receives
in exchange for its traffic data services; one time slot could be very
profitable and another could have a low profit or no profit at all.

•                  Similar to the bundled nature of the
arrangements with advertisers, the Company provides to its broadcasters a
combination of cash, services and traffic data for advertising space in cities
where it provides traffic data.  As noted
above, all of the Company’s television broadcasters contract for traffic flow
data and services, without any payment of cash, while radio broadcasters may
contract for cash, or a combination of cash, traffic flow data and
services.  The Company cannot separate
the cash, traffic flow data and services values in its arrangements.  When the Company does pay only cash for advertising
spots, it does so pursuant to contractual arrangements whereby the Company pays
an upfront bundled price for a variety of different advertising times (which in
turn have different values). This makes it difficult to assign a particular
value to a given advertising spot. The Company also purchases “cash buys”, but
the Company will typically pay a premium over normal rates for this advertising
time, which is not indicative of the value of advertising spots purchased under
contracts with stations.

•                  The Company also believes the time
slots it purchases (generally 10-seconds) are unique to limited segments of
broadcast advertising.  There is no
active market for purchases for cash of similar 10-second spots.  Therefore, the Company believes that advertisements
are not subject to a reasonable determination of fair value based on industry
indicators.

•                  The Company also does not have a
basis for determining the fair value of the asset surrendered as there are no
similar transactions for which radio and television stations pay cash to the
Company.

Accordingly,
the Company believes that there are significant uncertainties in determining
the fair value of traffic services supplied.  Paragraphs 25 and 26 of APB 29 address the
challenge of assigning fair value in cases where major uncertainties exist
about the estimated realizable values under a variety of methods (cash
transaction of the same or similar assets, quoted market prices, independent
appraisals, etc.).  Therefore, the
Company believes that Paragraph 20 of APB 29 applies to the Company’s traffic
data exchange transactions, given that the value of the advertising spots
received cannot be determined within reasonable limits.

The
Company’s accounting closely mirrors the actual cash realized in the revenue
cycle. The Company believes that grossing up its revenues for the non-monetary
exchange would not be meaningful to the reader and reflective of the revenue
transaction cycle that culminates in cash.

The
Company has never attempted to value advertising spots received in exchange for
traffic data services and believes that any attempt to do so retroactively
would produce marginally reliable and relevant information.  The Company also does not believe the cost to
develop and maintain such a system and to audit the data it produces would be
justified by the benefit of such information to the users of our financial
statements.

The
Company would also like to point out that its accounting treatment appears to
be consistent with Westwood One (which is the largest public company in the
Company’s industry that provides content to broadcasters in exchange for
advertising time).

2.                                      We
note the disclosure on page 29 of the Registration Statement regarding the
Company’s morning news program on a Viacom-owned television station. Please provide
us with more specific details regarding the Company’s accounting

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treatment
of this morning news program. Specifically address the termination aspect of
the contract and the accounting treatment of the advertising inventory.Please also
provide us with an estimate of the materiality of revenue derived from the
morning news program for future periods.

On April 18,
2005, the Company entered into an agreement with Viacom Television and Stations
Group (“Viacom”) to produce and manage a morning show in both the Philadelphia
and San Francisco areas.  The
Philadelphia show has aired since May of 2005 and runs from 5am until 9am,
Monday through Friday.

Under
this agreement, the Company provides for the staffing of announcers, producers
and technical staff, half of the cost of which is chargeable to Viacom, with
the other half being paid by the Company.
In addition, the agreement provides that the Company will establish and
equip a studio for this purpose.  The
agreement is for an initial term of 5 years, with option years for Viacom to
extend, but either party may terminate the agreement for convenience 27 months
from its effective date. As consideration for access to the Company’s products and
services, Viacom paid the Company an initial license fee for