Senate Holds IoT Hearing

By Mary Catherine O'Connor

The Committee on Commerce, Science and Transportation met to discuss how the U.S. Congress can foster the development and proliferation of IoT technologies in a way that neither harms consumer privacy nor stifles innovation.

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Over the course of two and half hours on Wednesday, the U.S. Senate Committee on Commerce, Science and Transportation convened with a panel of investors, technologists and end users of Internet of Things technologies, to discuss the emergence of such technologies in commercial and consumer applications, as well as their current and future impacts on data privacy and security.

A bipartisan group of committee members—Senators Kelly Ayotte, Cory Booker, Deb Fischer and Brian Schatz—called for the hearing late last year. The hearing is part of the group’s efforts to draft a resolution about the government’s role in encouraging the safe, secure development of IoT technologies, which it plans to present to Congress.

Left to right: Panelists Michael Abbott, Douglas Davis, Lance Donny, Adam Thierer and Justin Brookman

“I’m very concerned with government getting in the way of innovation,” Senator Fischer told the assembled panel of experts, which included Michael Abbott, a general partner at venture capital firm Kleiner Perkins Caufield & Byers; Justin Brookman, the director of the Center for Democracy & Technology‘s Consumer Privacy Project; Douglas Davis, the VP and general manager of Intel‘s Internet of Things group; Lance Donny, the CEO of OnFarm, a technology provider to the agriculture industry; and Adam Thierer, a senior research fellow at George Mason University’s Mercatus Center.

The committee and panelists discussed a wide range of topics, but the most prevalent question posed to panelists was whether they thought Congress could help foster the IoT while also ensuring the protection of consumer privacy—and, if so, how.

Thierer, consistent with his past writings and public appearances regarding the topic of the IoT, strongly advised that the senators allow existing regulations to serve as adequate protections of consumer privacy and data security. The Federal Trade Commission (FTC), he noted, already has the power, under Section 5 of the FTC Act, to bring legal action against firms with business practices deemed unfair or deceptive to consumers. And referencing the “light touch” that the federal government took by not creating restrictive regulations around the development of the Internet, he recommended that the government be “responsive, not anticipatory” when it comes to the potential downsides of IoT technologies. “Policy should encourage best practices, not top-down controls,” he said.

Thierer reasoned that the market will dictate which companies fail and which lose, based on how well they protect consumer privacy. But the Center for Democracy & Technology’s Brookman noted that existing laws, since they are focused narrowly on protecting financial data, are insufficient to ensuring consumer privacy in a world of IoT devices, which may collect and share a wide range of personal data with third parties.

The FTC has been issuing a number of reports about the Internet of Things and data security, and while it has not proposed specific legislation to regulate IoT technologies, it does back general technology-neutral data-security legislation.

Douglas Davis, speaking at the panel

During the hearing, several senators cited concerns about Samsung‘s ability to collect consumers’ conversations recorded through the voice-recognition function of its Internet-connected television, and to forward those recordings to third-party partners. The panelists were split when asked if that kind of data collection and sharing should be something that consumers should have to opt into, or if it should be a default function from which they must opt out.

Committee member Senator Ed Markey released a report on Monday that he said exposes significant insecurities in the ways automakers are deploying IoT-related features in new cars. According to Markey, only two out of the 16 automakers interviewed indicated that they are capable of responding to hacking attacks on embedded communications systems in real time. “Thieves no longer need a crowbar to break into your car,” he said, “They just need a smartphone.”

The subject was the focus of a 60 Minutes special that aired last week, during which researchers from the Defense Advanced Research Projects Agency (DARPA) demonstrated how hackers could compromise not only a car’s communication systems, but also its functions—including braking and acceleration. Markey said he plans to introduce legislation that would call on the National Highway Traffic Safety Administration and the FTC to require automakers to submit to data-security tests, the results of which would appear on cars’ sales stickers, alongside fuel-consumption data and safety certifications.

Unmanned aerial vehicles, or drones, were discussed as well. Despite significant gains in capabilities and falling costs, manufacturers and users of drones are hamstrung by the Federal Communications Commission (FCC), which is deliberating over rules that would regulate how and where drones could be employed for commercial applications. While consumers are concerned about what the proliferation of hobbyists’ drones would mean for public privacy, Senator Booker said, their use could be a boon for many industrial users, including utility providers, farmers and miners.

Panelist Donny, from OnFarm, concurred, noting that drones can help farmers to identify diseased crops and apply pesticides more efficiently than with conventional practices. Abbott, from Kleiner Perkins Caufield & Byers, said that while the FCC deliberates about drone rules, they are being put to use in other countries that have already implemented regulations.

Adam Thierer speaking at the committee meeting

As for the best path forward, a number of senators and panelists suggested that public-private partnerships could be useful tools for encouraging best practices among technology companies, without stifling them from developing further IoT innovations. Intel’s Davis reported that these types of collaborations can spur new services, while Abbott said they could lend much-needed support to IoT startups, enabling them to grow.

Booker called the IoT technologies “a phenomenal opportunity” that can infuse trillions of dollars into the U.S. economy and support jobs, as well as create a more equitable society and improve the quality of life. “We should be embracing that,” the senator said, lending his support to public-private partnerships. “The Internet itself,” he added, “is a result of such a partnership.”