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December 28, 2005

VIA EDGAR AND FACSIMILE

Securities and Exchange Commission

100 F Street, N.E.

Washington D.C. 20549

Attn: Inessa Berenbaum, Staff Accountant

Re:                               Traffic.com, Inc.

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 an oral comment 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 comment below before our response.

Oral comment received
from the Staff on December 1, 2005

1.                                       We note your response to
Comment 3 of the Staff’s November 16, 2005 letter. In particular, we note that
in establishing its asset retirement obligation for its sensor network, the
Company used a 60% probability that it will never be required to remove the
sensor network. Please further explain this accounting treatment to us taking
into consideration SFAS 143. 1.

The Company has
considered the guidance of Paragraph A17 of SFAS 143 and concluded that its
obligation for removal of its sensor networks is a conditional obligation.  Under the Company’s contracts with the
federal and local governments, upon expiration or an earlier termination of the
contracts, the governments have the right to elect to take one of two
options:  to require the Company to
remove the sensors or to allow the Company to leave them in their current
locations.  There are several scenarios
that could result from the government agencies allowing the Company’s sensors
to remain in their current locations:  (i)
the Company can continue to use the equipment and provide traffic data to the
government, (ii) for equipment purchased with public funds, the government can
exercise its right to obtain the equipment at no cost, (iii) for other
equipment, the government can exercise its right of first refusal to purchase
the equipment at fair value, (iv) the government may permit the Company to
leave the

equipment in place but elect not to receive any data from the Company, or
(v) the Company can remove the equipment and either dispose of it or use it for
other purposes.  Given these
uncertainties, the Company believes this is a type of conditional obligation referred
to in Paragraph A17 of SFAS 143.  This
paragraph notes that the uncertainty relating to whether the company will be
compelled to perform the asset retirement activities does not defer the
recognition of the retirement obligation but does allow that uncertainty to be
factored into the measurement of the fair value.

The Company has also
considered Paragraph A23 of SFAS 143 which states that “in situations where the
conditional aspect has only 2 outcomes and there is no information about which
outcome is more probable, a 50% likelihood for each outcome shall be used until
additional information is available.”
The Company believes that there are only two outcomes whereby they are either
required to remove the sensor network equipment or not.  The Company does not have information to
support which outcome it may believe is more probable and therefore concludes
that the guidance in this paragraph is applicable.

The Company also believes
this conclusion is consistent with the conclusions reached by the FASB in FIN
47, Accounting for Conditional Asset Retirement Obligations, which is effective
for the Company for its fiscal year ended December 31, 2005.

The Company notes that
paragraph 3 of FIN 47 defines a conditional asset retirement obligation, as
that term is used in paragraph A23 of SFAS 143, as referring to “a legal
obligation in which the timing and (or) method of settlement are conditional on
a future event that may or may not be within the control of the entity.”  It further notes that such an obligation to
perform the asset retirement activity is unconditional and shall be recognized
in accordance with the provisions of SFAS 143.

Measurement of such an
obligation is addressed by paragraph 5.a. of FIN 47.  Footnote 5 to this paragraph states that when
a legal obligation specifying a settlement date and method of settlement
exists, but it is uncertain that the obligation will be enforced, there are
only two possible outcomes — either performance will be required or it will
not.  In the absence of better
information, the footnote states that a 50% probability should be assigned to
each possible outcome in accordance with paragraph A23 of SFAS 143.

During the quarter ended
September 30, 2005, the Company recorded a $0.3 million liability and related
asset for its asset retirement obligation for its sensor networks.  The Company has re-determined its calculation
of the asset retirement obligation using a 50% probability of asset removal and
using an effective date of January 1, 2012, the date on which the U.S. DOT
subcontract expires.  In accordance with
paragraph 13 of SFAS 143, the Company will adjust this probability, and the
related recorded asset retirement obligation and liability, in the future as
additional information becomes available.

2

Based on this
methodology, the Company has determined that its asset retirement obligation
liability should have been increased by $0.2 million as of September 30, 2005,
$0.4 million as of December 31, 2004, and $0.2 million as of December 31, 2003.

In order to evaluate the
impact of the correction, the Company followed the authoritative guidance
provided by Accounting Principles Board Opinion No. 20 “Accounting Changes”
(APB No. 20) as it relates to the quantitative evaluation of the impact of the
adjustment and also the considerations of Staff Accounting Bulletin No. 99 “Materiality”
(SAB 99).  The Company also further
considered FSAS No. 154, Accounting Changes and
Error Corrections, which is effective in 2006 for the Company.

In accordance with
paragraph 13 of APB No. 20, the Company has concluded that its modification of
the asset retirement obligation policy is deemed to be the correction of an
error.  Generally, the correction of an
error in financial statements is reported as a prior period adjustment unless
its impact is not material to the financial statements.  Because, as set forth below, the Company has
determined that the impact of this correction on prior periods is immaterial,
no prior period adjustment or restatement is necessary in connection with the
Company’s change in its asset retirement obligation policy.  Instead, the Company will record this
adjustment to reflect its asset retirement obligation consistent with the above
methodology in the fourth quarter of 2005.

•                  The impact on the Company’s statement of operations would have increased the
Company’s net loss attributable to common stockholders by approximately $20,000 for the nine months
ended September 30, 2005, increased the Company’s net loss attributable
to common stockholders by approximately $35,000 for the year ended December 31, 2004, and
decreased the net income attributable to common stockholders by $13,000 for the
year ended December 31, 2003, which represented 0.1%, 0.2%, and 0.1% of net
income (loss) attributable to common stockholders, for each respective
period.  The result of these errors would
have increased the net loss attributable to common stockholders by $0.01 for
basic and diluted earnings per share and $0.01 for pro forma earnings per share
for the nine months ended September 30, 2005; increased the net loss
attributable to common stockholders by $0.01 for basic and diluted earnings per
share and $0.01 for pro forma earnings per share for the year ended December
31, 2004; and would have decreased the net income attributable to common
stockholders by $0.01 for basic earnings per share for the year ended December
31, 2003 with no impact on diluted earnings per share.

•                  The Company’s asset retirement obligation liability should have been
increased by $0.2 million as of September 30, 2005, $0.4 million as of December
31, 2004, and $0.2 million as of December 31, 2003, which represented 0.3%, 0.6%
and 0.4% of total liabilities, respectively.

•                  The estimated understatement of fixed assets, net, would have been $0.2
million as of September 30, 2005, $0.3 million as of December 31, 2004, and
$0.2 million as of December 31, 2003, which represents 0.8%, 2.1%, and 1.7% of
fixed assets, net, respectively.

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•                  The impact of the errors would not have exceeded 0.3% of net income
(loss) attributable to common stockholders in any given quarter or impact basic
net income (loss) attributable to common stockholders more than $0.01 per
share.  Diluted net income (loss) attributable
to common stockholders per share would not have been impacted in any quarter.

•                  The Company has concluded that the impact of recording this adjustment
in the fourth quarter of 2005 will be less than 2.0% of its expected fourth
quarter net loss.

•                  The impact of this adjustment in 2005 would not have impacted the
Company’s compliance with its debt covenants and will not impact compliance in
the fourth quarter.

                Accordingly, the
Company believes the impact of the correction to be immaterial to all prior
periods and to the 4th quarter of 2005.  If prior years were adjusted for the change,
key operating amounts, specifically, revenues, operating expenses, net income,
assets, liabilities or stockholders’ equity would not be significantly
affected.

                The Company also
considered whether any qualitative factors affect the Company’s assessment of
materiality and did not note any factors that would have changed the Company’s
determination.  Given the results of its
materiality analysis, the Company has determined that it is acceptable to
reflect the cumulative impact of the correction of the Company’s asset
retirement obligation calculation in the financial statements for the three and
twelve month periods ended December 31, 2005 with appropriate disclosure of the
nature and extent of such correction.

*   *
*   *

The Company would very much
appreciate the Staff’s prompt review of this response.  Should you have any follow-up questions,
please call me at (212) 841-1256.

  Sincerely,

  /s/ Ellen B. Corenswet

  Ellen B. Corenswet, Esq.

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