U.S. National Strategy for the IoT: will light-touch regulation be the preferred approach?

[caption id="" align="alignnone" width="300"]Federal Trade Commission building The Federal Trade Commission building in Washington in March 2012. (Gary Cameron/Reuters). Source:[/caption]


As the year goes by, new developments are starting to emerge in the realm of the IoT here in D.C. After the February hearing on IoT held by the Senate Committee on Commerce, Science, and Transportation a bipartisan group of Senators cosponsored a resolution to expresses, among other things, the need for the U.S. to adopt a “national strategy for the Internet of Things to promote economic growth and consumer empowerment.” And then, just couple of weeks later, this resolution was unanimously approved. This approval happened on the same day the House Energy and Commerce Committee’s Subcommittee on Commerce, Manufacturing, and Trade hosted an IoT showcase followed by a hearing on “The Internet of Things: Exploring the Next Technology Frontier.” But, the Federal Trade Commission did not want to be left behind and the day after these events, it announced the formation of the Office of Technology Research and Investigation (OTRI), which will be replacing the FTC’s current Mobile Technology Unit. The FTC described the OTRI as “the next generation in consumer protection,” which will oversee a broader array of consumer protection issues including “privacy, data security, connected cars, smart homes, algorithmic transparency, emerging payment methods, big data, and the IoT.”


It is clear the IoT is making a big impression not only on industry, but also on policymakers and regulators. For instance, at the bipartisan IoT showcase, policymakers witnessed the IoT’s transformative impact on U.S. industry. Meanwhile at the hearing following the showcase, policymakers and witnesses had an in-depth conversation about the “many benefits and great potential” of the IoT for the U.S. economy, while questioning what role government should play. In fact, this hearing showed a positive tone across party lines towards adopting a “light-touch” approach, and in more general terms to adopting a national strategy for the IoT.


Subcommittee Chairman Michael C. Burgess’s (R-TX) opening statement highlighted “the immeasurable scope and potential of the IoT to touch everything, everyone, and every sector of the economy.” He also cautioned “while consumers are benefitting from these technologies, attention must also be given to appropriate consumer protections for privacy and security,” but recognized the importance of balancing these concerns by using innovative and creative public policy. Witnesses for this hearing included, Daniel Castro, Vice President at the Information and Innovation Foundation, Brian Van Harligen, Chief Technology Officer at Belkin International, Rose Schooler, Vice President at Intel Corporation, and Brad Morehead, CEO Live Watch Security, LLC.


Representatives asked witnesses about what the proper role of Congress should be, if any, in regulating the IoT ecosystem. Castro noted Congress’s priority at the moment should be on federal data breach notification legislation and, in the long-term, the implementation of a national strategy for the IoT. Belkin agreed with this statement by adding that data breach management should be consistent and clear. He and Morehead called for support in the area of spectrum management for both unlicensed and licensed spectrum for emergency first responders. Schooler advocated for continuing with an open dialogue among industry, government and consumers groups. She also highlighted the importance of security and interoperability, strong public-private partnerships as well as the need for a national IoT strategy, where open standards, open-source and interoperability should be the norm. Witnesses agreed they would like Congress to foster a light-touch regulatory approach that would stimulate innovation.


Congressman Marsha Blackburn (R-TN) asked witnesses their opinion about what the role of Congress should be in protecting consumers from the big data collection coming from the IoT. Castro said “Congress should really look at how consumers are hurt or nor hurt by uses of data;” he asked to allow data collection and data sharing.


Representative Tony Cardenas (D-CA) asked how the IoT could affect jobs and manufacturing in the U.S. Schooler noted that “smart manufacturing” will be the future trend, representing an “excellent opportunity” for the IoT. She explained how Intel’s experience can be used as a test case, since they have deployed a smart manufacturing pilot in one of their facilities, which has allowed them “to see how data analytics applied to factory equipment and sensors can bring operation efficiencies and cost reductions to manufacturing processes.” In contrast, Representative Markwayne Mullin, (R-Okla), noted that the public may still be afraid of the idea of technology. Mullin noted “there is this group of people who says it’s going to eliminate jobs…” He added, “People automatically fear things they don't understand,” and asked witnesses how to combat these fears. Education is an important piece to confronting public fears, panelists agreed. Castro added “better economic lessons” will help to demystify the mistaken myth that technology will kill jobs, but instead, it will improve productivity, minimize safety issues, make jobs safer, which translates into a quality of life improvement.


Representatives also asked witnesses what the U.S. could learn from the rest of the world regarding leading IoT strategies. Schooler noted “that nations such as Germany, Brazil and China have already adopted IoT national plans, which also would help the U.S. to accelerate IoT leanings and deployment.” She also pointed out that “in Europe they are looking at the opportunity return on investment in adopting these technologies much more aggressively than in the U.S.”


While one can observe a “momentum” around the IoT discussions, many stakeholder agree these opportunities need to be consolidated in a system in which light-touch regulation is the norm. Both the Senate resolution and the discussion during last week’s hearing concluded that the implementation of a national strategy to incentivize the development and deployment of IoT is necessary. And, as Chairman Burgess pointed out in his opening remarks, “too much potential for economic progress and consumer welfare is at stake to act without a full appreciation for what this market can offer.” The eyes of those who are following this debate are on the U.S. government’s actions and whether or not its moves will allow the U.S to retain its leadership in the technology space. In the meantime, we will be paying close attention to future developments.