RFID, EPCglobal Face Public Policy Challenges

The battle could heat up as more citizens become aware of RFID and legislators push harder for laws limiting its use.

LOS ANGELES—There have been some serious public policy challenges to radio-frequency identification and, in turn, to EPCglobal, the standards-setting organization aligned to the supply chain side of RFID.

Those issues could impact the progress of EPC, the electronic product code and standards set forth by EPCglobal to accommodate technology and company-to-company communication around RFID data, according to Elizabeth Board, executive director of EPCglobals Public Policy Steering Committee.

"Without consumer acceptance [of RFID] this technology will never reach its full potential," said Board, who addressed a crowd of about 200 attendees at the EPCglobal US Conference here Oct. 17-19. "Our mission is to ensure [there is no] undue legislation or regulations that would slow technology."

Board pointed out that in 2005 there were 18 RFID bills in 17 states, and this year 15 bills in 10 states. While there have been some early successes for groups like EPCglobal—earlier this month California Governor Arnold Schwarzenegger struck down an RFID bill that was considered by many to be a bellwether for the rest of the nation—the battle only promises to heat up as more citizens become aware of RFID and legislators push harder for laws limiting its use. Board predicts that 2007 will bring fewer new bills around RFID, but more intense battles as some legislation makes its second or even third pass with state lawmakers.

"That makes it tougher for us," said Board.

There is some good news: Mainly, legislative efforts at the federal level have been largely ignored. Board said she does not expect any congressional hearings this year, and the last meetings around RFID were in 2004. A single report released by the Federal Trade Commission recommended self-regulation for the RFID industry with accountability rather than RFID legislation (despite some concerns with data security). The report also suggested broad consumer education, a route EPCglobal is happy to take.

"EPC data is about products, not people," said Board. "EPCglobal guidelines protect consumer privacy."

As a standard-setting body, EPCglobal sits in an awkward position when it comes to privacy issues. While it has nothing to do with the kind of mandates set forth by the federal government that will have an RFID chip in every U.S. passport by 2008 (EPCglobal deals with products, not people) it has everything to do with the other end of the spectrum—retailers and consumer packaged goods manufacturers who stand to put RFID chips in or on everything from clothing to electronics to childrens toys.

EPCglobals main goal is to bring about a revolution in the supply chain through the use of RFID. It plans to do that by enabling hardware—tags and readers—and software (read: trading partners) to communicate using EPCglobal standards. However, that mission is muddied by the very real privacy concerns around the data gathered at the point of sale from tagged goods purchased by consumers. From the public policy lens Board sees through, any advances in supply chain efficiencies brought about by RFID could be undone by the public debate around privacy—and legislative efforts that limit the technologys growth.

And its not just the United States that EPCglobal (and the trade organizations that are aligned with it) have to worry about. On Oct. 17 the European Union unveiled its findings on RFID based on a seven-month study. It confirmed that while it believes RFID is a useful and potentially widespread technology—but citizens overriding concerns are around privacy and surveillance.

"Citizens have concerns over privacy issues," said Viviane Reding, the EU information society commissioner, in a statement. "The large majority are willing to be convinced that RFID can bring benefits, but they want to be reassured that it will not compromise their privacy. We, the policy makers, will have to set the ground rules for ensuring the protection of citizen interests [and] if this requires an updating of the legal framework then I am prepared to act."

Some time between December of this year and January of next year the European Commission is expected to release its findings based on five RFID workshops it held, and a year of reflection on the topic.

"The European parliament will get involved at this point," said EPCglobals Board. "They will begin to influence debate, making it more political."

Any legislative attempts by the European parliament could take two years to see the light of day, according to Board. That can only be good news for EPCglobal. Because while European standards will not impact pending U.S. legislation directly, those companies that operate in Europe (and some countries in Asia) are impacted; it becomes a domino effect.

The debate around RFID could change dramatically in the United States as early as next year. In 2007, 85 percent of the state legislation seats will be open for re-election, as well as 36 governorships. There are also mid-term congressional elections and a warm-up to the 2008 presidential elections to look forward to in the same time frame. "Anyone can grab RFID and run with it," said Board. "That would be a concern."


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