Internet of Things

Internet of Things – Smart Systems and Dumb Policy could be a Dangerous Combination in a Dynamic Global Arena

Steve Bell, President, KeySo Global LLC



As a result of a recent C-PET Internet of Things (IoT) round table teleconference and the recent 3rd Annual Internet of Things Europe 2011 conference in Brussels it was thought appropriate to share the following paper. This report is a summary extract of the key points discussed at a C-PET IoT conference held in December 2009. It is based on a comprehensive report developed by KeySo Global (available on request) of the meeting that examined these points in light of a number of trends and developments of the IoT during 2010.  In order to keep this document fresh and relevant, the opportunity was taken to carry out a hindsight/foresight review of the material and to test the temperature of the conclusions in the light of IoT developments in Europe, and the progress being made.


Hindsight & Foresight

Two years ago, the consensus appeared to be that the EU had first mover advantage on IoT but now it appears that China is clearly in the forefront of the countries developing the Internet of Things. Some of the issues that this observation surfaces are the cultural and philosophical differences between and amongst the eastern and western societies and governments.

The goal for IoT & Internet in the EU by 2020 is “smart, sustainable, inclusive” with values like privacy built in from the start on the assumption that it will fail otherwise. Peter Hustinx, European Data Protection Supervisor makes the point that “fundamental to the successful deployment is trust”. Privacy of data and trust of the consumer will be critical components to success of the Internet of Things. While the rhetoric on “right to silence” may be “hyperbole” it starts the global conversation on privacy by design.

Does an equivalent statement exist for the US and should it? Does Washington even understand the profound implications that the IoT will have on the U.S and global economy? These were some of the areas touched upon in the recent roundtable where Michael Nelson identified 3 Tech Cultures: W. Coast, Prototype Principle; E. Coast, Profit Principle; Europe, Precautionary Principle. As Dan Caprio & Mike concluded, the issue is not which is the right principle but how to embrace all 3 in a horizontal approach across the EU and the US, and at the same time recognize that China and Asia are moving at a rapid pace of development as well. There are a lot of moving parts and players involved in assessing multiple international policy issues but it is essential to start addressing them.

The paradox is about protecting a fragile and evolving Internet and those who want control over this and the emerging IoT technology. Today’s Internet policy framework is “elegant in its restraint” and has enabled extraordinary innovation, according to the OECD, but they see trends that threaten to balkanize the Internet, creating mini national Internets that will destroy economic and social potential.

M2M communications only become the true IoT when interfaces & data open up & everything talks globally. The sensors are the means not the end; they are ambient and do not need “modal” interfaces that require human attention. The Internet of Things is really about data management and the privacy implications that arise from this built environment. The IoT will indirectly enable the observation and understanding of human behavior in buildings and places. Where this information can be mashed together to create swarm behavior analysis, it raises the interesting issue of who owns the data and knowledge.

Open data will drive the Internet of Things. As Meglena Kuneva, European Consumer Commissioner, said in March 2009 “personal data is the new oil of the Internet & the new currency of the digital world.” It seems reasonable to anticipate that this complex global environment will spawn many different privacy solutions rather than a single “privacy by design” solution and that the focus should be on the transparency of the systems that hold the data, not necessarily on the transparency of the data itself.

This is why, instead of the Internet of Things, it should potentially be renamed the “Cloud of Everything”. This would be comprised of billions of people controlling the use of open data generated by billions of devices for millions of apps & services, which in turn utilize the data made available by the Cloud for the purposes of sharing and analysis.

The “Cloud of Everything” is the classic double power conundrum; it is the biggest opportunity and the biggest challenge to everything that individual societies and cultures hold absolute.


Impact of the Internet of Things

In December 2009 the Center for Policy on Emerging Technologies (C-PET), a non partisan think tank for the 21st century, held a roundtable discussion in Washington DC hosted at the offices of McKenna Long & Aldridge. The small but broad cross section of participants and experts brought a wealth of knowledge and perspectives. They facilitated a better understanding of the potential, the impact and the implications of the Internet of Things (IoT), both in the U.S.A and globally. One general conclusion arising from the C-PET panel was that competing visions exist for the IoT and that the general public does not yet have a clear and compelling sense of what it is or of the benefits that it could potentially provide. The C-PET panel recommended definition was much simpler and attempted to address the need for a clear, compelling, benefit-driven definition that could be understood by consumers. The C-PET panel’s vision emphasizes “connecting the things that matter to make life better”.

The Internet of Things (IoT) is the ultimate paradox; by definition its lineage is clear (Moore’s Law, Internet, cellular, RFID and the web) but the implications of what it yields or unleashes are truly unknown at this time.

Elements grounded in science are predictable but as you move up the software and services stack, second and third order derivatives are more difficult to predict, and their implications on society even less so.

A recent article in the Economist magazine on the Internet of Things highlights four main areas of concern for society

Privacy: an increasing number of sensors will mean that offline data can be mixed with online data, creating enhanced digital footprints

Control: the risk of abuse by a malevolent government using Orwellian ways to keep people under control

Security: the fear that smart systems might be vulnerable to malfunctioning or attacks by hackers – the Stuxnet scenario

Elitism: the concern that those with access to smart systems could be vastly better informed than those without, which could lead to control by a few

One challenge identified by the C-PET panel was how to unlock the latent value of the Internet of Things in order to unleash human creativity; specifically to ensure that it truly remains an Internet of Things and that, through policy, its potential is not limited to an “internet of fewer things”.


Enabling the Internet of Things

During the C-PET session consideration was given to what was needed to enable the Internet of Things to flourish.

The following enabling elements were explored and discussed during the meeting:

  • IT and broadband networks for backhaul, coupled with robust layers of wireless data networks, are essential for the provision of ubiquitous access anywhere, any time

  • These networks need to be scalable globally and have the ability for communicating with billions of billions of addresses (IPV6 adoption) and a domain name standard that allows devices to be traced

  • Spectrum management needs to address the future requirements of networks of smart systems, with billions of devices continuously refreshing their status and needing control guidance

  • The networks need to be robust, resilient, flexible and probably redundant if they are to interface, link and service utility and health systems. Denial of service and threat of cyber attack cannot be acceptable on critical infrastructure

  • Architectural and policy recognition that, unlike the Internet, the IoT is not a singular or totally open system but is in fact comprised of overlapping networks of open, closed and partially open systems. Standards and interfaces will be needed to ensure companies can protect proprietary supply chain information, but on the other hand have the ability to track and recall goods (food & drugs) across multiple systems when necessary

  • With the ability to gather data 24/7 from potentially billions and billions of devices, there is a need for heuristic software capability and deterministic rules

  • New data storage concepts need to be considered: despite the continually lowering cost of this, there is a distinct possibility of running out of storage

  • New capabilities in smart pattern recognition will be required to handle current and historic data, and to then determine how best to use this data effectively

  • Business processes need to adapt, and companies need to be able to see the economic benefit of investing in IoT. The lesson from RFID is that, even if the cost of sensors and chips continues to fall to extremely low levels, the issue becomes the total cost of the system as a whole

  • Equally, if the overall proposition is not attractive, easy to use and can be seamlessly adopted into consumers’ lives, they too will reject it

  • Provision needs to be made for security, privacy policy and mechanisms that address a new set of paradigms; where access, storage, usage and ownership of data related to someone or something are not necessarily under the control of an individual or corporate entity, and where national boundaries have little meaning

  • Consideration for regulation of smart grids where there is more than one owner, the owner is outside the national border or the grid is part of an international network

  • Global collaboration between governments and industry on consumer security and privacy service level agreements, and opt in rules regarding silent chips and surveillance

  • Policing and enforcement to address the federated crime syndicates that are already emerging and that recognize no borders, generating a shadow economy that is already more than a trillion dollars

  • The consideration of industry partnerships and stimulus funding to accelerate development of technical, economic and social capabilities; to ensure that IoT based structural change positions the U.S. to take a leadership role in what could be the next industrial revolution


Concluding comment


During this last 12 months C-PET has consistently raised the concern that Washington has not cultivated an innovation mindset. In this environment where will the cradle of innovation be for the IoT in the U.S. and how will it be encouraged? In fact, with the increasing emphasis on short term results, can it really be nurtured in the U.S. and can these enabling elements be addressed?


If you are interested in obtaining a copy of the full report from KeySo Global please contact