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To make transportation safer, more efficient, and less harmful to the environment, traffic telematics services are currently being intensely investigated and developed. Such services require dependable wireless vehicle-to-infrastructure and vehicle-to-vehicle communications providing robust connectivity at moderate data rates. The development of such dependable vehicular communication systems and standards requires accurate models of the propagation channel in all relevant environments and scenarios. Key characteristics of vehicular channels are shadowing by other vehicles, high Doppler shifts, and inherent nonstationarity. All have major impact on the data packet transmission reliability and latency. This paper provides an overview of the existing vehicular channel measurements in a variety of important environments, and the observed channel characteristics (such as delay spreads and Doppler spreads) therein. We briefly discuss the available vehicular channel models and their respective merits and deficiencies. Finally, we discuss the implications for wireless system design with a strong focus on IEEE 802.11p. On the road towards a dependable vehicular network, room for improvements in coverage, reliability, scalability, and delay are highlighted, calling for evolutionary improvements in the IEEE 802.11p standard. Multiple antennas at the onboard units and roadside units are recommended to exploit spatial diversity for increased diversity and reliability. Evolutionary improvements in the physical (PHY) and medium access control (MAC) layers are required to yield dependable systems. Extensive references are provided.