In proposing that roads in Fairfax be rationed on the basis of license tag numbers, Ronald Fraser repeats the conventional wisdom that traffic congestion is an "insoluble problem" because new roads beget more traffic and more congestion {"Ration the Roads in Fairfax," Close to Home, Feb. 14}. But this problem is only "insoluble" because the use of the road is assumed to be free. If motorists were charged for the use of congested roads, they could decide themselves whether to pay extra or to use the alternatives listed by Fraser -- "flextime, van pools, fringe parking, bus service, etc."

That motorists are prepared to pay for convenient roads is evident from the success of the Dulles Toll Road (the toll lanes alongside the Dulles Airport Access Road). This has proved to be so popular that long lines form daily at the toll gates as motorists wait to pay the toll. However, the technical capability now exists to collect road tolls without stopping traffic. Next month, automatic toll collection is to be introduced by the Texas Turnpike Authority on the 14.5-mile-long Dallas North Tollway. Users of that road will be given the option of attaching to their vehicles electronic identification devices (that will enable toll bills to be paid off the tollway, by monthly check, like water or telephone bills. According to Rep. Frank Wolf, similar systems are being considered by the Virginia Department of Transportation for installation on the Dulles Toll Road.

Toll roads, especially when equipped with devices that enable the charges to be paid without interference with traffic flow, have another important advantage: they enable roads to be provided by the private sector, on a for-profit basis. Indeed, only last week The Post reported that agreement had been reached between the Virginia roads authorities and private developers on a proposal to build a 17-mile extension of the Dulles Toll Road to Leesburg. The Virginia legislature is considering the plan.

These developments have profound implications for travel and urban development. While the followers of Ronald Fraser are busy rationing road space, urban and suburban development may well gravitate to areas in which the private sector is allowed to invest not only in buildings and utilities but also in roads.

And why not? People in this country are still allowed to buy automobiles, fuel and tires, water, electricity. Is there not a case for allowing them to buy or rent road space? The pricing and investment principles are essentially the same. While there could be political problems in requiring people to pay for facilities that they are used to getting free, these problems would be much less acute in the case of new roads, as nobody would become worse off by using them. In fact, those who do not use them could also benefit if traffic were to move from the old roads without tolls to the new one with tolls. -- Gabriel Roth

As Ronald Fraser rightly points out, building new highways has a dynamic, demand-generating effect that soon results in renewed clogging of the highways. However, the model to follow in rationing the use of the existing highways is not regulation -- as the local water authority has done -- but the old-fashioned price mechanism.

Economists have advocated the use of peak and off-peak pricing as the most efficient way of rationing a scarce public resource such as highways. In general, a pricing solution would give market incentives for reducing the number of cars on the road during peak hours. It would also allow those who need or want to drive each day to do so; Fraser's plan cannot accommodate these individuals.

There are a variety of mechanisms for providing such market incentives. Metro already has used peak and off-peak pricing, and coupled with a toll system such as on the Dulles Toll Road, further incentives for car-pooling and flexible working hours would be encouraged. Alternatively, a variant of William E. Simon's white market coupon-rationing system for gasoline could be devised for the use of automobiles. -- Larry Schwartz