N.H. Reps Pass RFID Privacy Bill

Kurk says he has hopes that the bill will pass the senate this year, based on greater public awareness of RFID and its privacy risks, as well as the presence of many new senate members, including a majority of Democrats who he believes may be more likely to vote in accordance with consumer privacy rights. While opponents of the bill—including retail associations—warn that it is still too early in RFID's adoption to place restrictions on the technology's use, Kurk likens that to adopting a lion cub. "You take it in as a pet," he says, "and as it grows up, it mauls you and eats you."

The commission spent many hours discussing the subtleties of privacy concerns that could develop from RFID, says Richard Varn, the City of San Antonio's chief information officer and the founder of RJV Consulting, an IT and business strategy consulting firm. Varn has expertise in information technology, privacy and identity security, and was appointed to the commission by the Retail Merchants Association of New Hampshire. Despite the amount of time spent by the commission members to create a consistent recommendation accommodating both business and privacy groups, he says, the bill does not take much of their work into account.

"This is not a black-and-white question," Varn states. "We spent two years working through the subtleties of these issues." For example, he says, the group considered who would be responsible for attaching notification labeling on all products in New Hampshire with RFID tags. Another question the bill raises, he adds, is whether it would be possible for retailers such as small-business owners to deactivate tags on the products they sell.

"The cost for that would be high," Varn says, "while the benefit would be low." He adds that the penalties are unduly restrictive, with a $1,000 fine allocated for each violation. Varn points to the potential for misuse of this penalty, such as fining a retailer for unknowingly selling products containing RFID tags, and charging that company $1,000 for every item it had sold.

Requiring retailers to place notification labels on RFID-enabled products may cause sales to drop in the state, warns John Dumais, a commission member and president and CEO of the New Hampshire Grocers Association, a trade organization representing the entire food-distribution system within the state. His fear is that retailers may decline to sell products with RFID tags because of the added costs to comply with the law. "They may not want to carry certain products at all," he says, which in the future is likely to include pharmaceuticals, wines and other high-value items.

"What we're trying to do is allow the industry to take advantage of what RFID can offer," Kurk says. "But where it could be abused, that's where consumers need protection." The bill has not yet been scheduled for senate discussion, he says. If it fails there, he expects to reintroduce the bill in 2011.

"I knock at the door [of the senate] because I expect it to open and be invited in," Kurk says, adding that he's willing to continue reintroducing the bill if the senate defeats it.