Government & IoT: End user, Regulator or Infrastructure provider?

Imagine Pandora sitting and staring at her box. In a few moments, she will open its bronze lid and release fear, death, and plague into the world . . . but right now she is wracked with uncertainty. What’s inside? The box might contain untold riches to help her new kingdom—but Zeus warned her never to open it. Should she open it and risk punishment, or leave it shut and possibly leave valuable resources untapped? In multiple ways, the story of technological regulation and change is Pandora’s story—technology can be understood only through the lens of uncertainty and risk. Technological change by its very nature causes uncertainty: How could this new technology be used? How might it improve people’s lives? How may it harm those same lives? With the Internet of Things (IoT) at the peak of its hype cycle, these questions are swirling more than ever.(https://dupress.deloitte.com/dup-us-en/focus/internet-of-things/regulating-iot-technology-role-of-government.html) The bewildering mix of uses, roles, and industries, agencies’ interactions with IoT technology can be grouped into three categories:

 

Government as an end user

A report from the Center defines IoT as a set of physical objects embedded with sensors or actuators and connected to a network. That is extremely broad because in the real world you can connect and ‘sensorize’ almost anything. There are several factors such as a lack of skills in using the data generated by IoT; insufficient funding to modernize IT infrastructure to enable IoT projects; and procurement policies that make it difficult for governments to quickly and easily adopt the technology are responsible for holding back IoT projects at the federal and state level. That being said, there are tons of interesting projects that use connected devices to increase efficiency, lower costs and even save lives. From wildlife conservation in Florida, to flood control in Texas to earthquake alerts in California, IoT is making connections everywhere in the public sector.

The city of Los Angeles and the California Institute of Technology (Caltech) developed a project called “Quake Alert,” which uses sensors to detect the nearly constant tremors in the area. Today, that data is used to visually depict a quake in progress. To take it to the next level, the city is developing a system of sending alerts to citizens’ smartphones to give them 15 to 30 seconds to take cover. The application could save not only lives but also millions of dollars in damage if, for example, alerts went directly to manufacturing equipment, which could shut itself down to avoid ruining the product(1). Los Angeles is also using sensors to monitor environmental factors, including the health of trees. In its Internet of Trees project, the city is combining data from Google Street View with a machine-learning algorithm developed by Caltech to inventory its urban forest of some 700,000 trees scattered over 469 square miles. That has saved the city approximately $3 million, which is what it would have cost to deploy an army of people with clipboards to visually inspect each tree. Now, it is in the process of replacing 200,000 trees (removed when road repairs are made) with new ones that contain sensors to monitor moisture, air quality and the health of the tree itself(1).

 

Government as an infrastructure provider:

At least as far back as the Industrial Revolution, there has been a clear role for governments to coordinate, if not directly provide, the basic infrastructure needed for economic development. When infrastructure meant highways, bridges, canals, and airways, the government’s role was rather clear: In situations where private industry could not or would not act, the public sector would provide the physical roads, ramps, and rails over which the traffic of commerce could move. Same with power lines and gas connections, and with telephone lines and submarine communications cables: The government has an interest in linking citizens, even in rural areas that companies might find unprofitable to service(2). But when it comes to the Internet of Things, government’s role is less clear—as are its possible actions as an infrastructure provider. After all, with IoT technology, it is information—not trucks, planes, or rail cars—that creates value.

While not obvious, information still travels via public-sector infrastructure much as cars traverse highways. For example, every smartphone is able to deliver driving directions only because of the multibillion-dollar government investment in GPS satellites— not to mention the electromagnetic spectrum, a finite resource that government regulates to carefully share among competing public, private, and even military uses. Where paving highways and laying track cost taxpayers millions, allocation of spectrum is technically free—save for the time it takes to do the work. In fact, the potential IoT-based advances mean that governments can in some cases actually generate significant revenue from reallocating portions of the spectrum. Recently, both US and Canadian telecom regulators were able to raise billions of dollars from spectrum auctions, with the 2015 Canadian sale raising more than $2 billion and the US auction a year earlier generating a record $44.9 billion(2). In exercising its role as IoT infrastructure provider, a government may be able to efficiently allocate scarce wireless resources and, in the process, create benefits for both companies and taxpayers.

 

Government as a regulator:

For connected technology to create real value, it should be able to sense not just one particular piece of data but data from multiple sensors and sources. In reality, this means that different devices from different manufacturers often must be able to seamlessly communicate and share data. To do so requires common standards for data format and communications protocols. At first glance, this represents a great opportunity for the government to intervene in its role as regulator to create one common standard and accelerate the IoT’s growth. However, government action on standards may be superfluous or even counterproductive. The industry is not insensitive to the need for standards and has formed a number of competing groups aimed at designing the standards of the future. While none of these standards has yet won out, that is more a function of the continuing development of the technology and market, rather than intransigence of the groups (2).

In fact, with many of the underlying standards in place for communication protocols, such as 4G and Wi-Fi, and device addressing, such as IPv6, the situation resembles the early days of mobile operating system competition. In that arena, it was not government regulation but, rather, a dominant player creating a superior platform that created the de facto standard. Industry leaders produced winning mobile OS platforms that unified many elements of a fragmented technology landscape to produce industry standards (3). A similar process may be under way with IoT technology, leading both government and industry leaders to conclude that government regulation of IoT standards would be a mistake. While there may be a role for agencies to play in setting out IoT guidelines for specific critical industries—such as ensuring interoperability of electronic health data—full regulation of IoT standards may actually slow innovation rather than accelerating it.

1. Practical Uses of the Internet of Things in Government Are Everywhere- “http://www.govtech.com/network/Practical-Uses-of-the-Internet-of-Things-in-Government-Are-Everywhere.html
2. Guiding the IoT to safety- “https://dupress.deloitte.com/dup-us-en/focus/internet-of-things/regulating-iot-technology-role-of government.html
3. The Connected World: Examining the Internet of Things- https://www.commerce.senate.gov/public/index.cfm?p=Hearings&ContentRecord_id=d3e33bde-30fd-4899-b30d-906b47e117ca&ContentType_id=14f995b9-dfa5-407a-9d35-56cc7152a7ed&Group_id=b06c39af-e033-4cba-9221-de668ca1978a