[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]








                     INTERNET OF THINGS LEGISLATION

=======================================================================

                                HEARING

                               BEFORE THE

        SUBCOMMITTEE ON DIGITAL COMMERCE AND CONSUMER PROTECTION

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 22, 2018

                               __________

                           Serial No. 115-133






[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]












      Printed for the use of the Committee on Energy and Commerce

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                     U.S. GOVERNMENT PUBLISHING OFFICE 
		 
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                    COMMITTEE ON ENERGY AND COMMERCE

                          GREG WALDEN, Oregon
                                 Chairman
JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
  Vice Chairman                        Ranking Member
FRED UPTON, Michigan                 BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
MICHAEL C. BURGESS, Texas            ELIOT L. ENGEL, New York
MARSHA BLACKBURN, Tennessee          GENE GREEN, Texas
STEVE SCALISE, Louisiana             DIANA DeGETTE, Colorado
ROBERT E. LATTA, Ohio                MICHAEL F. DOYLE, Pennsylvania
CATHY McMORRIS RODGERS, Washington   JANICE D. SCHAKOWSKY, Illinois
GREGG HARPER, Mississippi            G.K. BUTTERFIELD, North Carolina
LEONARD LANCE, New Jersey            DORIS O. MATSUI, California
BRETT GUTHRIE, Kentucky              KATHY CASTOR, Florida
PETE OLSON, Texas                    JOHN P. SARBANES, Maryland
DAVID B. McKINLEY, West Virginia     JERRY McNERNEY, California
ADAM KINZINGER, Illinois             PETER WELCH, Vermont
H. MORGAN GRIFFITH, Virginia         BEN RAY LUJAN, New Mexico
GUS M. BILIRAKIS, Florida            PAUL TONKO, New York
BILL JOHNSON, Ohio                   YVETTE D. CLARKE, New York
BILLY LONG, Missouri                 DAVID LOEBSACK, Iowa
LARRY BUCSHON, Indiana               KURT SCHRADER, Oregon
BILL FLORES, Texas                   JOSEPH P. KENNEDY, III, 
SUSAN W. BROOKS, Indiana                 Massachusetts
MARKWAYNE MULLIN, Oklahoma           TONY CARDENAS, California
RICHARD HUDSON, North Carolina       RAUL RUIZ, California
CHRIS COLLINS, New York              SCOTT H. PETERS, California
KEVIN CRAMER, North Dakota           DEBBIE DINGELL, Michigan
TIM WALBERG, Michigan
MIMI WALTERS, California
RYAN A. COSTELLO, Pennsylvania
EARL L. ``BUDDY'' CARTER, Georgia
JEFF DUNCAN, South Carolina

        Subcommittee on Digital Commerce and Consumer Protection

                         ROBERT E. LATTA, Ohio
                                 Chairman
                                     JANICE D. SCHAKOWSKY, Illinois
                                       Ranking Member
GREGG HARPER, Mississippi            BEN RAY LUJAN, New Mexico
  Vice Chairman                      YVETTE D. CLARKE, New York
FRED UPTON, Michigan                 TONY CARDENAS, California
MICHAEL C. BURGESS, Texas            DEBBIE DINGELL, Michigan
LEONARD LANCE, New Jersey            DORIS O. MATSUI, California
BRETT GUTHRIE, Kentucky              PETER WELCH, Vermont
DAVID B. McKINLEY, West Virgina      JOSEPH P. KENNEDY, III, 
ADAM KINZINGER, Illinois                 Massachusetts
GUS M. BILIRAKIS, Florida            GENE GREEN, Texas
LARRY BUCSHON, Indiana               FRANK PALLONE, Jr., New Jersey (ex 
MARKWAYNE MULLIN, Oklahoma               officio)
MIMI WALTERS, California
RYAN A. COSTELLO, Pennsylvania
JEFF DUNCAN, South Carolina
GREG WALDEN, Oregon (ex officio)
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Robert E. Latta, a Representative in Congress from the State 
  of Ohio, opening statement.....................................     1
    Prepared statement...........................................     3
Hon. Janice D. Schakowsky, a Representative in Congress from the 
  State of Illinois, opening statement...........................     4
Hon. Greg Walden, a Representative in Congress from the State of 
  Oregon, opening statement......................................     5
    Prepared statement...........................................     6
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     7
Hon. Peter Welch, a Representative in Congress from the State of 
  Vermont, opening statement.....................................     8

                               Witnesses

Tim Day, Senior Vice President, Chamber Technology Engagement 
  Center, U.S. Chamber of Commerce...............................    10
    Prepared statement...........................................    12
    Answers to submitted questions...............................   103
Michelle Richardson, Deputy Director, Freedom, Security, and 
  Technology Project, Center for Democracy and Technology........    22
    Prepared statement...........................................    24
    Answers to submitted questions...............................   108
Dipti Vachani, Vice President, Internet of Things Group, General 
  Manager, Platform Management and Customer Engineering, Intel 
  Corporation....................................................    31
    Prepared statement...........................................    33
    Answers to submitted questions...............................   112

                           Submitted material

Statement of the Consumer Technology Association.................    95
Statement of CTIA................................................    97
Statement of the Electronic Privacy Information Center...........    98

 
                     INTERNET OF THINGS LEGISLATION

                              ----------                              


                         TUESDAY, MAY 22, 2018

                  House of Representatives,
     Subcommittee on Digital Commerce and Consumer 
                                        Protection,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:15 a.m., in 
room 2322 Rayburn House Office Building, Hon. Robert Latta 
(chairman of the subcommittee) presiding.
    Members present: Representatives Latta, Burgess, Lance, 
Guthrie, McKinley, Bilirakis, Mullin, Walters, Costello, Walden 
(ex officio), Schakowsky, Clarke, Cardenas, Dingell, Matsui, 
Welch, Kennedy, and Pallone (ex officio).
    Staff present: Mike Bloomquist, Deputy Staff Director; 
Melissa Froelich, Chief Counsel, Digital Commerce and Consumer 
Protection; Adam Fromm, Director of Outreach and Coalitions; 
Ali Fulling, Legislative Clerk, Oversight & Investigations, 
Digital Commerce and Consumer Protection; Elena Hernandez, 
Press Secretary; Paul Jackson, Professional Staff, Digital 
Commerce and Consumer Protection; Bijan Koohmaraie, Counsel, 
Digital Commerce and Consumer Protection; Austin Stonebraker, 
Press Assistant; Hamlin Wade, Special Advisor, External 
Affairs; Greg Zerzan, Counsel, Digital Commerce and Consumer 
Protection; Michelle Ash, Minority Chief Counsel, Digital 
Commerce and Consumer Protection; Jeff Carroll, Minority Staff 
Director; Lisa Goldman, Minority Counsel; Caroline Paris-Behr, 
Minority Policy Analyst; Michelle Rusk, Minority FTC Detailee; 
and C.J. Young, Minority Press Secretary.

OPENING STATEMENT OF HON. ROBERT E. LATTA, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF OHIO

    Mr. Latta. Well, good morning. I'd like to call the 
Subcommittee on Digital Commerce and Consumer Protection to 
order and the chair now recognizes himself for 5 minutes for an 
opening statement.
    And again, good morning to our witnesses and welcome to 
this legislative hearing on the Internet of Things. Today, we 
will discuss the bipartisan State of Modern Application, 
Research, and Trends of IoT Act, or the SMART Act IoT 
discussion draft.
    The SMART IoT Act discussion draft is the result of work 
the Digital Commerce and Consumer Protection Subcommittee has 
done over the past 2 years. Last July, this subcommittee held 
an Internet of Things Showcase. At that event, members invited 
companies from our districts and across America to demonstrate 
products and services in the IoT field. It was a wonderful 
opportunity to see this revolutionary work up close and 
interact with the inventors doing this important work. To 
accompany that Showcase, we held a hearing where participants 
from the Showcase discussed their companies, challenges they 
face with growing in this space, and what we, as policymakers, 
can do to help promote the continued development of the IoT 
solutions.
    This January, we held a hearing on the state of 
manufacturing in the IoT space and over the following months we 
met with other builders, suppliers, customers, and experts to 
better understand IoT's enormous potential.
    This technology is having a real-life impact for many of 
our constituents. I've personally met with manufacturers in my 
district that are using this cutting-edge technology to 
maintain their machinery and keep production on track. I also 
met with farmers in Defiance, Ohio, who are using IoT for 
better grain management, increased planting and harvesting 
efficiency, and improved monitoring of the temperature in their 
storage facilities.
    The draft legislation we discuss today is the result of 
important bipartisan work after hearing from the experts where 
we noticed one lingering question: What does the universe of 
rules, regulations, guidelines, and best practices look like 
for the IoT space?
    While we know there are many other topics of interest in 
this space, this legislation kicks off a process to give all 
stakeholders a base set of information to frame the other 
challenges without speculating or hypothesizing about what 
already exists.
    The IoT is already revolutionizing the way that we organize 
factories and supply chains, transport commodities like oil and 
gas, make manufacturing more efficient, maximize energy 
efficiency, and even restock our refrigerators.
    This subcommittee has engaged in historic bipartisan work 
with the SELF DRIVE Act this Congress and I am pleased to see 
that cooperation continue with the SMART IoT. When safely 
applied to autonomous vehicles, the Internet of Things holds 
the potential to significantly reduce traffic fatalities and 
make our roads safer while reducing costs through more 
efficient fuel consumption.
    In these areas and more, the IoT holds the potential to 
greatly improve the lives of Americans.
    I want to thank my colleague, Representative Welch, for his 
willingness to continue our work together on this very 
important issue. As many here know, in previous Congresses 
Representative Welch and I started the Internet of Things 
Working Group. We heard from industry and other stakeholders 
about the importance of light-touch regulation to foster 
innovation and jobs here in the United States. This bipartisan 
draft is a result of the lessons learned in those meetings, 
this subcommittee's Disrupter Series hearings, and lays the 
groundwork for constructive conversations in the future. The 
SMART IoT Act will give all stakeholders, both private in 
industry and at the Federal level, a better sense of what 
guidelines and best practices exist or are in development.
    As we all know, IoT issues cut across so many industries 
and so many Federal agencies. Ensuring that we know about 
overlaps or potential duplication is important for many reasons 
from ensuring efficient use of government resources to 
understanding how stakeholders are addressing some of the 
important but challenging issues of privacy and data security.
    From the Department of Commerce's efforts to foster the 
advancement of the IoT ecosystem to the Department of 
Transportation's focus on advancing automated vehicle, so much 
work is being done in this space. We want to encourage our 
interagency collaboration and foster an environment where 
transparency is key. Likewise, I would like to ensure that the 
environment for innovation in the United States across all of 
these industries remains a priority by optimizing our own 
efforts to promote good, consistent government. I believe the 
SMART IoT Act is an important step in doing just that.
    And again, one of the things I always like to say is that 
one of the great things about serving on the Energy and 
Commerce Committee is that we kind of look over the horizon 
five to 10 years.
    When we hear from our witnesses we want to hear from you to 
know exactly where you're going to be because we don't want to 
have our regulators or our laws that we were thinking about 
enacting looking in the rear view mirror or at the end of a 
car. We need to be looking far out into the future.
    So, again, I want to thank our witnesses for being with us 
today and I look forward to your testimony today and, with 
that, I recognize the gentlelady from Illinois, the ranking 
member of the subcommittee, for 5 minutes for an opening 
statement.
    [The prepared statement of Mr. Latta follows:]

               Prepared statement of Hon. Robert E. Latta

    Good Morning and welcome to this legislative hearing on the 
Internet of Things. Today we will discuss the bipartisan State 
of Modern Application, Research, and Trends of IoT Act or the 
SMART IoT Act discussion draft.
    The SMART IoT Act discussion draft is the result of work 
the Digital Commerce and Consumer Protection Subcommittee has 
done over the past two years. Last July, this Subcommittee held 
an Internet of Things Showcase. At that event, Members invited 
companies from our Districts and across America to demonstrate 
products and services in the IoT field. It was a wonderful 
opportunity to see this revolutionary work up close and 
interact with the inventors doing this important work. To 
accompany that Showcase, we held a hearing where participants 
from the Showcase discussed their companies, challenges they 
face with growing in this space and what we, as policymakers, 
can do to help promote the continued development of IoT 
solutions.
    This January we held a hearing on the state of 
manufacturing in the IoT space and over the following months we 
met with other builders, suppliers, customers and experts to 
better understand IoT's enormous potential.
    This technology is having a real-life impact for many of 
our constituents. I've personally met with manufacturers in my 
district that are using this cutting- edge technology to 
maintain their machinery and keep production on track. I also 
met with farmers in Defiance, Ohio who are using IoT for better 
grain management, increased planting and harvesting efficiency, 
and improved monitoring of the temperature in their storage 
facilities.
    The draft legislation we will discuss today is the result 
of important bipartisan work after hearing from the experts 
where we noticed one lingering question-what does the universe 
of rules, regulations, guidelines, and best practices look like 
for the IoT space?
    While we know there are many other topics of interest in 
this space, this legislation kicks off a process to give all 
stakeholders a base set of information to frame the other 
challenges without speculating or hypothesizing about 
whatalready exists.
    The IoT is already revolutionizing the way that we organize 
factories andsupply chains, transport commodities like oil and 
gas, make manufacturing more efficient, maximize energy 
efficiency, and even restock our refrigerators.
    This subcommittee has engaged in historic bipartisan work 
with the SELF DRIVE Act this Congress and I am pleased to see 
that cooperation continue with the SMART IoT Act discussion 
draft. When safely applied to autonomous vehicles the Internet 
of Things holds the potential to significantly reduce traffic 
fatalities, and make our roads safer while also reducing costs 
through more efficient fuel consumption.
    In these areas and more, the IoT holds the potential to 
greatly improve the lives of Americans.
    I thank my colleague, Representative Welch, for his 
willingness to continue our work together on this very 
important issue. As many here know, in previous congresses 
Representative Welch and I started the Internet of Things 
Working Group. We heard from industry and other stakeholders 
about the importance of light-touch regulation to foster 
innovation and jobs here in the U.S. This bipartisan draft is a 
result of the lessons learned in those meetings, this 
subcommittees' Disrupter Series hearings, and lays the 
groundwork for constructive conversations in the future. The 
SMART IoT Act will give all stakeholders, both in private 
industry and at the Federal level, a better sense of what 
guidelines and best practices exist or are in development.
    As we all know, IoT issues cut across so many industries 
and so many Federal agencies. Ensuring that we know about 
overlaps or potential duplication is important for many reasons 
from ensuring efficient use of government resources to 
understanding how stakeholders are addressing some of the 
important but challenging issues of privacy and data security.
    From the Department of Commerce's efforts to foster the 
advancement of the IoT ecosystem to the Department of 
Transportation's focus on advancing automated vehicle, so much 
work is going on in this space. We want to encourage 
interagency collaboration and foster an environment where 
transparency is key. Likewise, I would like to ensure that the 
environment for innovation in the U.S. across all of these 
industries remains a priority by optimizing our own efforts to 
promote good, consistent government. I believe the SMART IoT 
Act is an important step in doing just that.

       OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A 
     REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS

    Ms. Schakowsky. Thank you, Mr. Chairman.
    This subcommittee frequently discusses the Internet of 
Things. We have hearings on IoT in manufacturing and wearable 
devices, not to mention our IoT showcase last summer.
    Today, we transition from general discussion to discussion 
of actual legislation. The SMART IoT Act is a first step. It 
would require the Commerce Department to survey the use of 
connected devices and examine the Federal role in this space.
    As the bill acknowledged, internet-connected devices 
provide an opportunity for economic growth. But we want to 
ensure that those devices are developed securely. My hope is 
that the report generated by the SMART IoT Act provides the 
foundation for further legislative efforts.
    Our hearings on the Internet of Things have raised 
important issues. What privacy and cybersecurity protections 
are going to be baked into these devices? Normal household 
items can now collect very personal data that must be stored 
and used appropriately. Connected devices present new safety 
concerns. The Consumer Product Safety Commission just held a 
public hearing on IoT and safety last week with stakeholders on 
that very subject.
    We need the infrastructure to support the rise of connected 
devices including affordable broadband. The Internet of Things 
could also disrupt the current labor market. We must ensure 
workers are prepared for a changing economy.
    Finally, we must make the strategic investments in research 
to promote future innovation. Last week's hearing on quantum 
computing made clear that the United States is not providing 
the consistent support necessary to keep groundbreaking 
research moving forward. Standing on the sidelines is simply 
not an option. These are big issues for Congress to tackle and 
we must rise to the challenge. We know what happens if we rely 
on industry self-regulation. Consumer privacy goes unprotected 
and safety is put at risk. The SMART IoT Act should provide a 
resource for us to better understand the variety of devices on 
the market.
    I plan to use this information as I continue my push for 
comprehensive consumer privacy and data security legislation. 
We have had bipartisan furor over misuses of consumer data. 
It's time now for bipartisan solutions to the problem. The bill 
before us is a natural extension of the work that members of 
the subcommittee have been doing for the last couple of 
sessions.
    In 2016, Congressmen Latta and Welch convened stakeholders 
for several forums under their IoT Working Group to discuss the 
Internet of Things and the issues that new technology raise.
    In many ways, the study and the SMART IoT Act is a 
formalization of that very survey. In the coming weeks, I look 
forward to working on a bipartisan basis to move this 
legislation forward, and then I am ready to take the next step 
of updating consumer protections and funding key investments.
    The Internet of Things has tremendous potential. We must 
work together to make sure that America benefits from that 
opportunity.
    I thank you, Chairman Latta. I yield back, unless anybody 
wants the remaining time.
    I yield back.
    Mr. Latta. Thank you. The gentlelady yields back.
    The chair now recognizes the gentleman from Oregon, the 
chairman of the full committee for 5 minutes.

  OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF OREGON

    Mr. Walden. Good morning, Mr. Chairman, and other members 
on the committee and to our witnesses on the panel. Thank you 
for being here.
    Today, we will hear testimony about the draft bill, the 
SMART IoT Act, to support the development of the Internet of 
Things here in the United States. This bipartisan effort 
underscores one of the key goals of the Energy and Commerce 
Committee, and that is helping American entrepreneurs and 
established businesses expand to create jobs for American 
workers and help improve the lives of American consumers.
    So I would like to thank Chairman Latta and Representative 
Welch for working on this issue and finding a bipartisan path 
forward. This is what we do at the Energy and Commerce 
Committee, particularly on this subcommittee when faced with 
new technology policy questions. We have done that on the Self 
Drive Act. I would commend my colleagues on both sides of the 
aisle for the good work there. Now we just need to get the 
Senate to move forward, as we are won't to do in many cases.
    The Internet of Things, or IoT, does hold great promise to 
connect workers, suppliers, products, consumers throughout 
efficient networks that can save time, money, and bring about 
new innovation and resources.
    Building this network won't be easy. We know that. It 
requires engineers, entrepreneurs, and visionaries. It also 
requires public policies that foresee a world designed for the 
next-century policies that foresee a world designed for the 
next century policies that are forward looking and that reflect 
a world to come of self-driving cars, self-organizing 
materials, and innovations we have yet to even think of. These 
must replace many of our still-existing rules and policies that 
reflect the old technologies of the last century. While America 
has changed, many of our regulations, unfortunately, have not.
    That is one of the purposes of this legislation that's 
before us today. It is meant to set the stage by making sure 
stakeholders are aware of the playing field and are not 
creating conflicting or duplicative obligations or 
requirements. So the SMART IoT Act will create the first 
compendium of essentially who is doing what in the IoT space. 
This includes the efforts undertaken by private industry as 
well as a review of what agencies are doing.
    Removing regulatory barriers to innovation is one of the 
most important duties of this committee. Doing so allows our 
economy to grow, our workers to flourish, and innovation to 
occur here in the United States. The best way to start is to 
know what is out there already or being developed today.
    It's important to note that since January of 2017 more than 
3 million new jobs have been created in America. The U.S. 
unemployment rate, now at 3.9 percent, is the lowest seen in 
this country since the year 2000, and what's more, this comes 
as more Americans rejoin the workforce, millions once again 
finding work after years of hardship.
    So creating jobs and opportunity is a goal shared by all of 
us on this committee, in fact, reflected in the bipartisan work 
on the SMART IoT Act. Chairman Latta and Representative Welch 
have been working on these issues for several years now. Glad 
to see that this progress has been made and we have a great 
opportunity, going forward, to do even more.
    So, Mr. Chairman and members of both sides of the aisle, 
thanks for your good work on this. We have a couple hearings 
going on simultaneously, as I am sure our witnesses and members 
know.
    So some of us will be popping back and forth. But we value 
your testimony that we have here and the good bipartisan work.
    And with that, I yield back the remaining balance of my 
time.
    [The prepared statement of Mr. Walden follows:]

                 Prepared statement of Hon. Greg Walden

    Good morning, and thank you to our witnesses for appearing 
before theSubcommittee. Today we will hear testimony about a 
draft bill, the SMART IoT Act, to support the development of 
the Internet of Things here in the United States. This 
bipartisan effort underscores one of the key goals of the 
Energy and Commerce Committee: helping American entrepreneurs 
and established businesses expand to create jobs for American 
workers and help improve the lives of consumers.
    I would like to thank Chairman Latta and Representative 
Welch for working on this issue and finding a bipartisan path 
forward. This is what we do at the Energy and Commerce 
Committee and particularly on this subcommittee when faced with 
new technology policy questions.
    The Internet of Things, or IoT, holds the promise to 
connect workers, suppliers and products through more efficient 
networks that can save time, money and resources.
    Building this network will not be easy. It requires 
engineers, entrepreneurs and visionaries. It also requires 
public policies that foresee a world designed for the next-
century policies that are forward looking, and that reflect a 
world to come of self-driving cars, self-organizing materials, 
and innovations we have yet to even think of. These must 
replace many of our still-existing rules and policies that 
reflect the old technologies of the last century. While America 
has changed, many of our regulations have not.
    That is one of the purposes of the legislation we will 
discuss today. It is meant to set the stage by making sure 
stakeholders are aware of the playing field and are not 
creating conflicting or duplicative obligations or 
requirements. The SMART IoT Act will create the first 
compendium of essentially who is doing what in the IoT space. 
This includes the efforts undertaken by private industry as 
well as a review of what agencies are doing.
    Removing regulatory barriers to innovation is one of the 
most importantduties of this Committee. Doing so allows our 
economy to grow, our workers to flourish and our citizens to 
benefit. The best way to start is to know what is out there 
already or being developed today.
    Since January 2017 over three million new jobs have been 
created in America. The U.S. unemployment rate is 3.9 percent, 
the lowest seen in this country since the year 2000. What's 
more, this comes as more Americans rejoin the workforce, 
millions once again finding work after years of hardship.
    Creating jobs and opportunity is a goal shared by all of us 
on this Committee, a fact reflected in the bi-partisan work on 
the SMART IoT Act. Chairman Latta and Representative Welch have 
been working on these issues for several years now, and I'm 
glad to see the progress they have made.
    We have made great progress over the last two years in 
restoring jobs for American workers, restarting American 
manufacturing, and creating opportunities for Americans of all 
ages and backgrounds. But there is more work yet to be done. 
Legislation such as the draft bill we consider today is one way 
that we will continue to fulfill our duty to the American 
people to remove barriers to success while promoting policies 
that help our workforce.
    American ingenuity and leadership is once again 
transforming the world.That is something we can all be proud 
of. Thank you Chairman Latta for the leadership you have shown, 
and thanks as well to all the Members of this Subcommittee.
    Thank you Mr. Chairman and I yield back the balance of my 
time.

    Mr. Latta. Well, thank you very much. The gentleman yields 
back, and the chair now recognizes the gentleman from New 
Jersey, the ranking member of the full committee for 5 minutes.

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Pallone. Thank you, Mr. Chairman.
    Today's hearing on the draft SMART Internet of Things Act 
is the next step in this subcommittee's review of new and 
evolving technological development and I commend Chairman Latta 
and Representative Welch for working together over the last 
several years to explore and learn how the Internet of Things, 
or IoT, can enrich our lives, help us be more efficient, and 
grow the U.S. economy.
    Today, more and more people have multiple internet-
connected devices in their homes, things like thermostats, 
vacuums, and digital personal assistants, and more and more 
people are wearing internet-connected devices such as fitness 
trackers. But IoT is not limited to consumer products. 
Connected devices of all kinds are used in practically every 
industry sector like manufacturing, agriculture, and medicine.
    We have learned about drones that fly into dangerous areas 
to assess hazards, sensors helping farmers understand the 
topography acidity of their land, and doctors receiving real-
time data from monitors so that patients in remote areas do not 
have to travel for daily appointments.
    And today we are considering a bipartisan draft bill that 
would direct the Department of Commerce to conduct a 
comprehensive study and report on the Internet of Things. 
Commerce will survey the industry sectors that make internet-
connected devices as well as all industry sectors that use 
those devices. The study will also look at how the Federal 
Government oversees the use and development of connected 
devices, which agencies deal with the Internet of Things, what 
expertise those agencies have, and what entities those agencies 
interact with, and the study will identify government resources 
available to consumers and small businesses to help them 
evaluate connected devices.
    The report will provide a one-stop source of how businesses 
are integrating connectivity and how the Federal Government is 
helping the country adapt to this age of connectivity. Federal 
and local government agencies could also use the report to 
better coordinate their work and I hope the study will 
encourage them to do so. And any report will be a snapshot in 
time, but given the integration of IoT into all parts of our 
lives in the global economy, the report will provide a jumping-
off point for more work.
    I would certainly like to see cybersecurity issues given 
more emphasis when we look at IoT. Throughout our review, 
cybersecurity was the issue that came up most often. 
Cybersecurity is imperative to keeping ourselves and our 
country safe from malicious actors.
    And I know some stakeholders have asked that cybersecurity 
be specifically called out in the study. I would support such a 
change. But whether it's made part of the study required by 
this bill or not, Congress must take action to ensure that 
strong cybersecurity and data security are fundamental to IoT.
    So I am glad that this subcommittee is working on this 
bipartisan legislation and I'd like to yield the balance of my 
time to the sponsor, Congressman Welch.

  OPENING STATEMENT OF HON. PETER WELCH, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF VERMONT

    Mr. Welch. Thank you very much, and I want to thank 
Chairman Latta and Ranking Member Schakowsky for this hearing. 
It was great to work with Mr. Latta too in the IoT Working 
Group--21 members that had hearings in advance.
    We are trying to get educated before we pass legislation, 
which isn't necessarily how we usually operate. But this is a 
huge opportunity with the Internet of Things. McKinsey and 
Company did a study and says that it can be between $4 and $11 
trillion annually by 2025. So that's really quite 
extraordinary.
    My colleagues have already spoken about what many of these 
opportunities are and also, Ranking Member Schakowsky, I think 
pointing out some of the implications that we have to contend 
with with labor is really, really important for all of us to 
keep in mind.
    But I'll just give one example. In Vermont, the brutal 
pressure on our dairy farmers right now--the price is down, the 
costs are up--and technology is helping some of those farmers 
hang on. And Mangan Brothers, a dairy farm in East Fairfield, 
Vermont, has a computerized internet-based milking system 
that's really been helpful to them. They installed a milking 
parlor about two decades ago and now what happens when the cow 
comes in they have a pedometer on their leg, and as soon as the 
cow crosses the threshold of the milking parlor the sensor 
picks up which cow it is and relays the information to the 
computer and all the statistics about the cow's movements and 
body temperature and other pertinent information is sent to the 
computer, and it's even relevant for when the breedings are 
done just based on activity spikes. It also gives them a report 
at the end of every milking day with respect to the salt 
content and that's an indicator that allows the farmers to take 
steps to avoid diseases.
    So it's a big deal in terms of productivity for them and it 
is made possible by the Internet of Things. And just the last 
point in my last few seconds, the only way we are going to have 
the Internet of Things in rural America is to have broadband in 
rural America, and that's another enormous challenge we have 
and it's woefully underserved.
    So we can talk all we want about the Internet of Things, 
but unless we have broadband it's not going to happen.
    So I yield back and thank my colleagues for the time.
    Mr. Latta. The gentleman yields back, and I just want to 
say just briefly I really appreciate all the work that you and 
I have done on IoT and also not only chairing the working group 
but also working together chairing the rural broadband, so I 
appreciate all you've been doing and thank you very much.
    That now concludes members' opening statements and the 
chair now reminds members that pursuant to committee rules, all 
members opening statements will be made part of the record.
    And, again, I want to thank all of our witnesses for being 
with us today. We greatly appreciate you taking the time to 
testify before the subcommittee.
    Today's witnesses will have the opportunity to give 5-
minute statements followed by a round of questions from our 
members.
    Our witness panel for today's hearing will include Mr. Tim 
Day, the Senior Vice President of the Chamber Technology 
Engagement Center at the U.S. Chamber of Commerce, Ms. Michelle 
Richardson, Deputy Director of the Freedom Security and 
Technology Project at the Center for Democracy and Technology, 
and Dipti Vachani, Vice President of the Internet of Things 
Group and General Manager of the Strategy and Solutions 
Engineering Division at Intel.
    And, again, I want to thank you all for being here today 
and Mr. Day, you are recognized for 5 minutes. If you'd just 
pull that mic up close and turn the mic on, the microphone is 
yours.

     STATEMENTS OF TIM DAY, SENIOR VICE PRESIDENT, CHAMBER 
    TECHNOLOGY ENGAGEMENT CENTER, U.S. CHAMBER OF COMMERCE; 
 MICHELLE RICHARDSON, DEPUTY DIRECTOR, FREEDOM, SECURITY, AND 
TECHNOLOGY PROJECT, CENTER FOR DEMOCRACY AND TECHNOLOGY; DIPTI 
  VACHANI, VICE PRESIDENT, INTERNET OF THINGS GROUP, GENERAL 
 MANAGER, PLATFORM MANAGEMENT AND CUSTOMER ENGINEERING, INTEL 
                          CORPORATION

                      STATEMENT OF TIM DAY

    Mr. Day. Thank you very much.
    Good morning, Chairman Latta, Ranking Member Schakowsky, 
and distinguished members of the House Subcommittee of Digital 
Commerce and Consumer Protection.
    Thank you for the opportunity today to testify about the 
Internet of Things. I am Tim Day, Senior Vice President of the 
Chamber's Technology Engagement Center, or C 09TEC. The Chamber 
established C 09TEC 3 years ago to tell the story of how 
technology can empower all Americans. At C 09TEC, we have 
focused our work on autonomous vehicles, unmanned aircraft, 
telecommunications, and the new economy.
    All of these issues and technologies are connected and 
supported by the Internet of Things. Everyone participating in 
this hearing today is in one way or another one of the nearly 
11 billion internet-connected devices projected by Gartner to 
be in use today worldwide.
    Whether we are streaming this hearing on a smart phone, 
whether or not we have asked Amazon, Alexa, or Google Home 
directions to the Rayburn House Office Building, or a wearable 
counted the number of steps it took to get here, we all have 
been connected and our lives are being improved by the Internet 
of Things.
    Not only does IoT technology directly benefit consumers, it 
is also making businesses smarter and more efficient. For 
example, the agricultural sector for better crop yields, health 
care for improved patient outcomes, and manufacturing for 
improved operations and maintenance. One study has shown that 
industrial manufacturing IoT spending is predicted to increase 
to $890 billion worldwide by 2020. And, of course, government 
also stands to benefit from IoT by creating efficiencies in 
public services, by finding new value for citizens, enhancing 
capabilities, and streamlining processes. IoT may provide a 
much-needed answer for agencies seeking to meet increasing 
citizen needs with decreasing budgets.
    And, Chairman Latta, back home in the Buckeye State, 
Columbus, which was awarded the DoT's 2016 Smart Cities 
Challenge Grant, is using IoT in research and development to 
create smart vehicle technologies. Another study has shown that 
wireless providers will invest $275 billion towards building 5G 
networks, which will be part of the connectivity backbone of 
smart cities and IoT. This investment will add $500 billion in 
GDP and 3 million jobs to the American economy. This number 
pales in comparison to the $11 trillion worldwide economic 
impact that is predicted by 2025 for IoT.
    Needless to say, IoT is an economic game changer. The 
Chamber's president and CEO, Tom Donohue, has stated that 
technology must be embraced as the growth driver and game 
changer that it is. That is why it is so critical that the 
United States maintain leadership in IoT by adopting the right 
regulatory framework.
    I would like to suggest a couple of ideas for your 
consideration to strike the correct regulatory balance. 
Congress and agencies should do more to reduce the regulatory 
burdens, compliance costs, and overlap. Government should 
evaluate existing regulatory activities and bring together 
stakeholders in government industry to shape IoT policy.
    Legislation like the DIGIT Act and the draft legislation 
today, the SMART IoT Act, are much-needed steps in the right 
direction to achieve this goal. Additionally, actions like 
those done by the FCC led by Commissioner Carr to streamline 
communications siting rules are also to be praised. As IoT is 
still in its infancy, policymakers should avoid the temptation 
to impose prescriptive regulations on IoT and single out IoT 
for regulation for issues such as privacy.
    Congress should continue a policy of technology neutrality 
and, finally, a skilled workforce will also be critical to the 
development of this new technology and investment in human 
capital will determine which countries lead, going forward in 
this space.
    We are currently witnessing a new industrial revolution led 
by advanced technology including IoT, which is a force for good 
that should be fostered by smart regulatory frameworks that 
encourage investment, promote innovation, as well as connect 
and empower all Americans.
    Thank you for this opportunity. I look forward to your 
questions.
    [The prepared statement of Mr. Day follows:]

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    Mr. Latta. Thank you very much for your testimony.
    Ms. Richardson, you are recognized for 5 minutes.

                STATEMENT OF MICHELLE RICHARDSON

    Ms. Richardson. Chairman Latta, Ranking Member Schakowsky, 
thank you for the opportunity to testify today on behalf of the 
Center for Democracy and Technology.
    CDT is a nonprofit technology policy organization dedicated 
to protecting civil liberties and human rights in a digital 
world including privacy, free speech, and access to 
information.
    We believe the Internet of Things has the power to enrich 
people's lives in ways both big and small. But we also 
recognize that the Internet of Things poses unique privacy and 
security challenges. Many of these devices collect information 
that is intensely personal yet ungoverned by U.S. policy and 
privacy law. It has also become common to hear of serious 
security breaches which have allowed hackers to use IoT devices 
to either steal information or participate as part of a botnet.
    CDT's preference for technology policy is for private 
industry to voluntarily create and adopt standards. The 
government plays an important role in setting standards and 
incentivizing good behavior, especially in sectors where 
security failures had extreme consequences or in the consumer 
market when users don't have a fair shot at understanding or 
managing products.
    Congress has the authority and the responsibility to 
determine whether the current government and private balance is 
the right one. We hope this bill will help collect information 
to assess that in two ways. First, we hope the SMART IoT Act 
will collect information to determine whether voluntary 
standards and privacy standards are not only being created 
whether they are being adopted by a critical mass of industry 
players. Voluntary standards are the default in the IoT space 
and billions of devices are up and operating on the internet, 
and more are coming. The foundational question we should be 
asking is whether this approach is working as a general matter.
    Second, the study should tease out any overlap or gaps in 
government oversight of these IoT devices. Cross-agency 
coordination is crucial to sharing information and will help 
make sure that the government is not issuing conflicting 
guidance or requirements.
    Now, we recommend the bill clearly state that nothing in it 
should be interpreted to discourage agencies from continuing 
work in critical areas like connected cars or health devices. 
Agencies like the FDA and NHTSA are driving standards for 
devices or systems that have literal life or death consequences 
and that work cannot wait.
    While industry deserves an overarching government plan for 
IoT, IoT is already too large and too diverse to cabin in a 
single agency, and developing sector-specific expertise will 
ensure that government involvement is supported by the 
technical and policy knowledge needed to make the right 
decisions.
    After you receive this report, we expect that you will find 
that one of the largest gaps in standards and oversight is in 
the consumer market. As Ms. Vachani mentions in the IoT report 
for Intel, most IoT devices and applications relate to 
industrial products, smart cities, and the health industry. 
Many of these devices are subject to practical and regulatory 
limits already. For example, some of these devices are embedded 
in critical infrastructure, which is already regulated writ 
large, and some of these devices are really quite simple and do 
not collect personal information or offer computing power that 
makes them attractive hacking targets. Think of sensors that 
only measure water pressure or county the number of cars that 
pass through an intersection. The users of these sorts of 
devices also are often more sophisticated and the corporate 
versus corporate relationship can contractually ensure that IoT 
devices continue to work safely.
    But the consumer ecosystem does not have many of these 
checks and balances. Consumers are stuck in a take it or leave 
it system and they will not have the option to leave it much 
longer, as connectivity is built into everything. Lay users 
just do not have the technical capacity to understand and 
control the current crop of IoT devices on the market. They 
also have few legal remedies when something does go wrong. If 
security fails, devices can be a gateway to stealing personal 
information or subject the owner to actual spying. Failures can 
harm a person or her property in the real world like smart 
locks that can remotely open front doors. And these devices can 
be taken over as part of a botnet that can send scam email or, 
in the case of the Mirai botnet, take down websites and 
internet access, more generally.
    In other words, there's a lot at stake in the consumer 
market and the current system is just not working. We are 
hoping that this committee finds the report to be just the 
jumping off point for better oversight of consumer products and 
we look forward to working with you and your staff on this 
bill.
    [The prepared statement of Ms. Richardson follows:]

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    Mr. Latta. Well, thank you very much for your testimony.
    Ms. Vachani, you are recognized for 5 minutes.

                   STATEMENT OF DIPTI VACHANI

    Ms. Vachani. Thank you.
    Thank you, Mr. Chairman, Ranking Member Schakowsky, and 
members of the subcommittee.
    I appreciate the opportunity to testify today on behalf of 
Intel Corporation and I commend you and Congressman Welch for 
your leadership on the SMART IoT Act.
    First, I would like to turn to the vast benefits of the IoT 
and discuss real-life IoT use cases that are relevant to the 
committee's jurisdiction. Gartner predicts that IoT technology 
will be in 95 percent of electronics for new product design by 
2020. The transformational, societal, and economic benefits 
that will flow from this broad deployment of IoT technology is 
what energizes Intel. And the SMART IoT Act is a welcome 
indication that this enthusiasm is matched by this 
subcommittee. The IoT is already transforming sectors like 
health care, smart cities, and transportation.
    I would like to go over a few use cases. Smart health 
care--less than .01 percent of patient data is available beyond 
the bedside for health care teams to make clinical decisions. 
To solve this problem, Medical Informatics, Intel, and Dell 
partnered on an FDA-cleared IoT platform called Sickbay. 
Sickbay continuously captures patient data from the bedside 
medical devices and transforms it into actionable intelligence. 
This enables care teams to make better and fast decisions and 
predict patient deterioration before it occurs. In the last 4 
1A\1/2\ years, Texas Children's Hospital used Sickbay to 
improve health care for 2.1 million patients.
    Smart cities--92 percent of the world's population lacks 
access to clean air and leading to millions of deaths annually. 
To address this, Intel and Bosch developed IoT-powered 
pollution monitoring systems that provide intelligent data and 
enable real-time analysis. These IoT systems are used by 
governments to improve air quality in congested cities like 
Pune, India, by factory owners to track emissions and provide 
safety checks for all workers, by construction site managers to 
provide air quality warnings and improve efficiency, and by 
cities to provide residents with recommended times for 
exercising outdoors.
    Use case number three, transportation--as the subcommittee 
is aware, the impact of autonomous vehicles will be life 
changing, particularly in our disabled community and aging 
population. The number of U.S. residents aged 78 and older will 
increase by 53.7 million by 2030, compared to just 30.9 million 
in 2014. Many of these residents live in communities with poor 
or no public transportation. AVs will offer vastly improved 
mobility benefits. Intel applauds the committee's leadership on 
AV.
    Next, I would like to offer Intel's strong support for the 
SMART IoT Act and respectfully offer recommendations to enhance 
the legislation. Nations are racing to lead in this competitive 
IoT sector. It has been Intel's strong desire that the Federal 
Government be more proactive in ensuring U.S. IoT leadership in 
declaring the U.S. the IoT a national priority for the 
innovation in investment and competitiveness.
    We applaud the subcommittee for its bipartisan work to set 
America on its leadership path by ensuring an IoT study and 
recommendations to promote IoT adoptions to grow our economy.
    I was on the Hill last October to unveil a broadly 
supported industry report on IoT. Intel recommendations to the 
SMART IoT reflect this report. First, we urge the subcommittee 
to include a robust definition in IoT that is nonproprietary, 
neutral regarding technologies and applications, and 
contemplates both the consumer and the industrial IoT. In fact, 
industrial, smart city, and connected health will make up 70 
percent of the use cases.
    Second, we urge you to seek specific recommendations that 
would be highly impactful on laying the groundwork for the 
national IoT strategy. This includes recommendations on 
incentives for the Federal Government and agencies to adopt IoT 
technologies to advance their Federal mission including smart 
infrastructure solutions. How the Federal Government can best 
support global industry-led IoT standard efforts and avoid new 
regulations that duplicate existing industry standards and a 
criteria for the Federal Government to invest in IoT public-
private partnerships and testbeds.
    Thank you for the opportunity to share Intel's thoughts on 
the SMART IoT Act. We look forward to working with you to see 
this bipartisan bill enacted into law--that first step towards 
a national IoT strategy--and ensure U.S. leadership in this 
transformational sector.
    [The prepared statement of Ms. Vachani follows:]
 
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    Mr. Latta. Well, again, I want to thank our witnesses for 
being with us today. We really appreciate your testimony, and 
that will conclude our testimony from our witnesses and we'll 
begin our questioning from our members, and I will recognize 
myself for 5 minutes.
    Mr. Day, do you believe a compendium of all current Federal 
action on IoT-related issues will help promote interagency 
collaboration and consistent federal action?
    Mr. Day. Thank you, Mr. Chairman, and again, I think what 
we've heard is that the Internet of Things holds incredible 
promise for our economy and the quality of life for citizens.
    I do. I think the draft that we have before us today helps 
with increased transparency and how government regulates this 
technology in a better way.
    We are firm believers that the government should make data 
available and complying a list of Federal policies that affect 
IoT, I believe, would go a long way in enabling the companies 
that we are working with at the Chamber and others and 
especially also small and startup companies to understand the 
regulatory environment that we are faced with today.
    Mr. Latta. Yes, let me ask you about that right there 
because I know that when my friend from Vermont and I were 
doing our Working Group meetings--and actually we had them 
right here in this room--it didn't make any difference if 
you're from the East Coast, the West Coast, the Midwest, what 
type you're in, as Ms. Vachani was talking about, from 
everything from health care to manufacturing to FinTech, you 
name it.
    There was one thing that we heard from everyone--that we 
needed to make sure that we have a soft touch regulation out 
there so people can be out there innovating and it's no--we 
didn't hear anybody ever say that they were against regulations 
but not to have anything that was over burdensome that they 
couldn't go out and regulate.
    When you're talking about these smaller companies out 
there, could you talk to me or talk to the committee a little 
bit about what you have heard from them some of the major 
hurdles that they're facing right now or things that need to be 
overcome?
    Mr. Day. Absolutely, and I think what's exciting about this 
is that this does impact middle America, the coasts. Everyone, 
as you said, is impacted by this and I think when you're a 
small business and a startup, and my focus at the U.S. Chamber 
of Commerce in the emerging technology space, it is just that. 
It's emerging. It's changing by the day.
    We are still learning what the technology means and so I 
think there needs to be a structure but not too prescriptive in 
the approach and, you know, quite frankly, business leaders and 
new startups and entrepreneurs are looking to run their 
businesses with the support of the government but not being 
told exactly how to do it because we are still working on the 
benefits and how this actually applies to the companies that we 
are working with.
    And so I think what business leaders want to know is give 
me the ability to invest, to be able to take my idea to the 
next step but don't regulate me so much that I am not able to 
produce quality results and in the end be successful as a 
startup.
    Mr. Latta. Thank you.
    Ms. Vachani, again, I would like to turn a question to you 
now. What are some of the IoT applications that Intel is 
focused on and can you explain how those applications benefit 
the economy and jobs?
    And, again, I was very interested because I know you were 
going through the health care, the manufacturing, the 
transportation, and construction, but if you could get a little 
bit more in depth with that I would appreciate it.
    Ms. Vachani. Absolutely. So we have over 500 market-ready 
solutions that we work with the industry to create because one 
of the common misconceptions about IoT it's vertical, right.
    You have a retail solution and you have an industrial 
solution, and honestly, when you look across the board, our 
customers are looking at solutions that go across multiple 
industries.
    And so there are multi-industry solutions. They don't 
necessarily sit in one nice little box as a vertical, and so 
you will see an industrial environment where they're trying to 
do predictive maintenance at the same time as inventory 
management, the same time as building management, and you see 
several different vertical like solutions coming together into 
one application.
    And we believe that the maximum benefit is when these 
solutions start to come together. One of the areas that I want 
to reflect on is that the U.S. is actually a leader worldwide 
in our innovation that we have in IoT.
    So you will see solutions overseas that have Intel or other 
companies within the United States technology, our AI 
applications, our software, that are driving innovation around 
the world, and that's expanding our economy just the same 
because that's created here in the United States.
    It's built here by us and by our companies that are 
innovating at a faster rate.
    Mr. Latta. In my last 24 seconds follow up with that 
because, again, it's good to hear the United States is leading 
on this. What's happening across the globe that is making the 
United States be the innovator out there?
    Ms. Vachani. Well, I think that what we come down to is we 
have some companies here that are able to look at these 
solutions like Intel, truly, and that goes from the data center 
all the way to the thing.
    And so we can look at this problem holistically and that's 
important that we do that, as well as some of the new 
technologies that we come up with with specifically integrated 
circuits as well as the software and artificial intelligence 
and the leadership in artificial intelligence within this 
country.
    Mr. Latta. Well, thank you very much. My time has expired 
and I yield back, and I recognize the gentlelady from Illinois, 
the Ranking Member of the subcommittee, for 5 minutes.
    Ms. Schakowsky. Thank you.
    Connected devices can follow us through every aspect of our 
lives, collecting data. At the same time, the committee has 
spent a lot of time looking at how the data collected about us 
is used by companies and by the government.
    We heard from Facebook about how much data it collects, how 
it shared that data with third parties, and how it used our 
data to sell advertising. As more and more devices collect data 
about us, that data can be used to affect our decision making.
    So, Ms. Richardson, let me ask you some questions. While 
IoT devices provide benefits, are you concerned about their 
data collection?
    Ms. Richardson. Absolutely. The way the U.S. works its 
privacy law is to do it categorically, to cover, for example, 
communications, financial data, health information held by 
doctors, and if you don't fall into one of these categories 
you're just not protected and there are very few, if any, 
limits on how the information can be collected and used.
    It's going to be possible that a lot of these IoT devices 
are going to collect data that is not covered by one of these 
categories already and that would be one of the benefits of 
having a baseline comprehensive privacy law in the United 
States as we would not have so many cracks and you would see 
the IoT data have some procedural rights for Americans.
    Ms. Schakowsky. I would like to work with you on that.
    Five years ago, we were barely talking about location data 
or facial recognition and now we are talking about genetic 
information also.
    Ms. Richardson, should we be concerned about what personal 
information is out there and how the kinds of personal 
information available to collect change over time?
    Ms. Richardson. Yes. The information that is collected by 
these devices is really unique. You only have to go back a few 
years before we widely collected things, like you mentioned, 
that reflect, let's say, your heartbeat, your location, the 
food you eat, where you go, the people you know, and it can all 
be aggregated in ways that give a very rich picture about 
people in ways that they might be shocked to know.
    I think one of the things you saw at your hearing with 
Facebook is that the surprise factor is really what upsets 
people in many ways.
    So this is something we need to watch more closely and, 
hopefully, a universal privacy law would be able to protect 
that sort of really sensitive information right now.
    Ms. Schakowsky. So it's clear that privacy legislation is 
absolutely necessary. I like the way you talk about it in a 
nonsiloed way.
    In fact, the Federal Trade Commission has recommended many 
times that Congress enact comprehensive privacy legislation.
    Ms. Richardson, again, the SMART IoT Act would examine how 
different industries are using and developing IoT. Could such a 
resource be helpful in the development of best practices for 
privacy and IoT devices?
    Ms. Richardson. Yes. I think that would help us get a 
better view of where the industry is going. I think you're 
going to find, though, that there are very few when it comes to 
privacy and for the most part the standards are about 
interoperability, technical standards, and cybersecurity, and 
you're going to find a really big gap here.
    Ms. Schakowsky. So the FTC recommended in the past that 
privacy legislation should not be IoT specific. Do you agree 
with that?
    Ms. Richardson. Absolutely. We want a forward-looking tech-
neutral law that will be able to cover all sorts of information 
regardless of the type of device or entity that's creating it.
    Ms. Schakowsky. So Mr. Day said that one of the things that 
we need to worry about is too much regulation standing in the 
way. Don't you think there's a balance, though, of making sure 
that we set some rules of the road, some guidelines that 
industry needs to follow?
    Ms. Richardson. Yes, and in a way those can drive 
innovations themselves. You end up having requirements that 
inspire new solutions to protect privacy and security.
    And CDT does believe in a light touch but there are a few 
places that government intervention--or oversight is maybe a 
better word--is most urgent and that's where you look at things 
like cars or pacemakers and devices that really have life or 
death consequences if something goes wrong, and I think we are 
seeing the consumer market is just an area where everyday 
people are not able to make informed decisions about the 
devices they're buying, the information that's collected and 
then how to secure the devices.
    Mr. Latta. Thank you. The gentlelady yields back.
    The chair now recognizes the gentleman from Pennsylvania 
for 5 minutes.
    Mr. Costello. Thank you, Mr. Chair.
    I want to sort of continue down that path of consumer-
facing devices and speak a little bit more about being a small 
business owner or a startup, and approaching the infrastructure 
purchase questions from an adequate security measure 
perspective.
    In what direction do we need to head--and it may not be 
necessarily government, it may just be more industry--in what 
direction do we have to head in order to make sure that we are 
getting it right.
    A rather open-ended question, but why don't I start with 
you, Ms. Richardson?
    Ms. Richardson. As far as security standards go, we have 
endorsed tech-neutral cybersecurity controls. So these are 
really top-level decisions that both the manufacturers and the 
operators can make.
    So, for example, when you're building a device you should 
always have the capacity to update the software, right, and you 
could say that without getting a really prescriptive 
technology, description of how to do that and each company can 
decide how to do that.
    And there is a list of maybe a half dozen of these sorts of 
practices that I think are reasonably set as the baseline and 
they include other things like being able to have passwords or 
other authenticators that can be changed and things like that.
    Mr. Costello. Following through on that, steps or 
approaches that small and medium enterprises can utilize to 
overcome concerns or difficulties relating to the system 
integration side of IoT solutions, to--go ahead.
    Ms. Richardson. Can you repeat the question about system 
integration?
    Mr. Costello. Small and medium enterprises, overcoming 
their concerns or difficulties relating to system integration 
of IoT solutions. If you're a really big company, integrating 
is very easy. If you're a small----
    Ms. Richardson. Not actually. It's actually difficult 
either way.
    Honestly, the number-one challenge for IoT right now is 
scale. Scale is very difficult, right, and even with a company 
as large as, you would say, Intel, if you look at our market-
ready solutions, rarely do we have a solution that only 
involves Intel. There is others. There's Dell involved--as I 
mentioned, many of our solutions--Bosch was involved.
    And so you're talking about multiple companies coming 
together to include a complete solution and for a small or 
medium-sized company that gets even more difficult, right. And 
this is where the industry standards come into play because 
when we start to create standards that are interoperable and 
that we know work together that a small or medium-sized company 
can create a piece and we know that that piece will work with 
the rest of the system.
    And Intel and many other companies--we were here with 
Samsung--are working across the industry to help those 
standards get deployed and become more consistent 
interoperable.
    Mr. Costello. So when you use the term scale there, what 
are you saying?
    Ms. Richardson. What I mean by scale there is we are able 
to create--I will give you an example. We'll create a proof of 
concept inside of the walls of Intel in our building and it 
will look beautiful and work perfectly.
    It'll have the in system, the data center. It'll have the 
store, let's say. It'll do inventory management. As soon as I 
take that out of my office inside of Intel and try to put into 
a Levi's store or I try to put it inside of a mall, now it's 
working with everything else around it and that's when we 
struggle, because there's other systems. There's old data. 
There's new data. Maybe the infrastructure is there. Maybe they 
have connectivity. Maybe they don't.
    And so that becomes more difficult for us to deploy and 
then think about thousands and then add millions to that, 
right. And that's where we struggle with being able to take 
that technology and deploy it into multiple instances across 
the world.
    Mr. Costello. That's helpful. You were speaking about 
industry standards, and depending upon what industry we are 
talking about--health care, manufacturing, whatever it may be--
the place that you go for that industry standard to make its 
way into code or regulation or whatever the case may be is 
oftentimes different.
    Share with me challenges or frustrations in navigating 
Federal regulatory agencies to determine IoT industry standards 
and how we could go about improving that.
    Ms. Richardson. Well, one, I would encourage----
    Mr. Costello. That's a question for everyone.
    Ms. Richardson. Yes. I can start. One, I would encourage 
you to look at the industry standards that are already 
available to us because the industry is starting to coalesce 
around a few standards that go across multiple industries.
    Again, we are not saying this is just for industrial or 
environment or it's just for retail. This is how we collect 
data across the board and that could be a standard.
    So I would encourage you to look, and I think that's part 
of the recommendations here, is to look at what the industry is 
already doing and leverage that because we have come across 
together in this space, and I will allow you guys some time.
    Mr. Latta. Yes. Since the gentleman's time has expired, if 
you all could just real briefly answer that would be great.
    Mr. Day. Well, I think what we are doing today in 
discussing is the right first step. I think between the DIGIT 
Act and what we are doing with the legislation in draft form 
today is that first step and it's the right approach to some of 
these issues that we are discussing and bringing forward today.
    Thank you.
    Mr. Latta. Would you like to comment? OK, thank you very 
much.
    Mr. Costello. Yield back.
    Mr. Latta. The gentleman yields back. His time has expired.
    And the chair now recognizes the gentleman from California 
for 5 minutes.
    Mr. Cardenas. Thank you very much, Chairman Latta and 
Ranking Member Schakowsky, for having his important hearing and 
I would like to thank the witnesses for coming forward and 
enlightening us as to what's going on out there in the real 
world.
    My background is in engineering. I got my electrical 
engineering degree from UCSB back in the days when we used 
punch cards in our programming, your technical you lack.
    So I think a lot has changed, but I think that many of us 
do welcome these changes, and having said that I think that 
public policy needs to make sure that we are mindful of this 
fast-moving effort of the Internet of Things and how it affects 
individuals' privacy, how it affects industries, how it affects 
jobs, how it affects the jobs of today and tomorrow, and how do 
we get American workers ready and prepared to be the workers of 
today and tomorrow.
    These are the kinds of things that weigh on my mind. During 
my careers, I actually owned a small business at one time so I 
know what it's like for a small business to be able to pull 
something off the shelf in a very efficient cost-effective 
manner and I think the Internet of Things is making that much 
more efficient every single day and making smaller businesses, 
especially mom and pops a heck of a lot more competitive.
    Wherein, the old days, maybe back in my days in the '80s 
and '90s when I was a business owner, everything was in maybe 
fives and tens of thousands of dollars to get an innovative 
device. Now, it appears that we can actually get an innovative 
device that changes and allows us to be more efficient and hire 
more individuals and grow our business to the tune of hundreds 
of dollars. Is that correct? Do we have devices out there that 
maybe 20 years ago to innovate were in the thousands of dollars 
and today it might be only a few hundred?
    Can one of you give me an example of something that you can 
think of that actually touches on that?
    Ms. Vachani. Absolutely. If you think about, for example, 
the building management that was in New York, the deployment 
that we did, those were sensors that were not very expensive.
    We are talking sensors that are dollars on--as it is, and 
they can look into a room and save a small business on their 
costs--their infrastructure costs by looking at occupancy 
inside of a room and deciding that the AC needs to be turned on 
because no one's in the room. This isn't expensive technology 
from that standpoint but it's changing the way we live and the 
way we operate within our businesses and saving us cost, right.
    One of the major ways that this building in New York was 
able to save money is we found a leak in one of their pipes. 
Again, we are talking about a sensor that's able to determine 
that there's a leak in a pipe and will waste, right, and they 
were able to reduce that cost.
    And so from that standpoint, innovation isn't necessarily 
requiring extensive amount of investment but there are ways 
where we can start to make decisions very quick when this data 
comes together.
    Mr. Cardenas. Ms. Richardson, I have a question for you 
about consumer applications and how do you think the Internet 
of Things devices are being used inside manufacturing 
workplaces?
    I happen to represent a community in Los Angeles that has a 
big corridor of manufacturing, tens of thousands of 
manufacturing jobs in my district.
    Ms. Richardson. Yes, and I think it's still unknown how 
this is going to affect the workforce on balance, right. You're 
going to create new jobs of the people who actually have to 
create the devices, and we hope that a strong privacy and 
security practice will create professionals to deal with that 
also.
    I think there are questions to ask about whether they will 
replace human beings on the job. But there will always be 
decisions that human beings have to make that we can't let 
computers do.
    So I don't think it will eradicate humans altogether.
    Mr. Cardenas. Well, on that note, there are things such as 
smart helmets and smart glasses that now can be deployed in the 
workplace, and do you have any comments about how these devices 
might to affecting somebody's privacy in the workplace?
    Ms. Richardson. Yes, and peoples' privacy in the workplace 
is much more limited than in their home or out in public. This 
is long established that employers can really control the type 
of information that they're collecting on their property and 
while they're conducting their services.
    I think, though, when you see a lot of these sorts of 
applications they don't have to necessarily collect a lot of 
personal information, right.
    This is where, again, the controls built into the products 
on the front end are important so that you can collect the 
information necessary for your work but not, let's say, what 
they do on their breaks or the conversations they're having or 
things that are really not core to doing the job.
    Mr. Cardenas. Thank you. Mr. Welch talked about the cow and 
I was thinking, wow, I hope that cow is not creeped out about 
the privacy about every time she walks into the barn.
    [Laughter.]
    But, Ms. Vachani, I know Intel has been active on the 
connected worker's front and arguing that they keep workers 
safe and productive. Can you give us an example of that?
    Ms. Vachani. Absolutely. Actually, there's a really good 
example with a fireman which resonates with me, right. By 
connecting a fireman that goes inside a building we now know--
by the sensors we can tell what is the oxygen level around him, 
or her, if the firewoman--the fireman is laying down or 
standing up, what exact location they're in within the building 
if they're laying down.
    These are opportunities for us to save lives of some of our 
workers that are working in critical conditions. I think it's 
essential.
    Mr. Cardenas. Thank you. I yield back.
    Mr. Latta. Thank you. The gentleman yields back.
    And I am sure they only have happy cows in Vermont.
    The chair now recognizes the gentlelady from California for 
5 minutes.
     Mrs. Walters. Thank you, Mr. Chairman.
    Mr. Day, do you believe that a review of all regulations 
guidelines standards and other policy efforts undertaken by 
Federal agencies is important and do you think it will assist 
us in ensuring consistent policy of Internet of Things-related 
matters?
    Mr. Day. Thank you for the question, Congresswoman.
    Yes, I do. I think the SMART IoT Act, by studying all 
sectors of the IoT and how they regulate technology and current 
policies will go a long way in cutting down overly burdensome 
regulations and duplicative regulation as well.
    I think when you're looking at the broad spectrum of 
applications here it's critical when you're looking at the 
impact on self-driving cars to getting a patient through a 
hospital more efficiently, cost effectively.
    It's all important, and I think the legislation before us 
today will streamline that process and benefit by, frankly, 
everyone.
    Mrs. Walters. OK. Thank you.
    And Ms. Vachani, can you please discuss the benefits to a 
connected world both for business like Intel as well as 
consumers who use Internet of Things products?
    Ms. Vachani. There's multiple benefits through the Internet 
of Things. Whether it be more efficiency inside of a factory, 
so predictive maintenance is a very simple use case that we use 
in factories that allow us to determine if a machine is going 
down sooner than it actually does go down and that'll prevent 
the down time for the factory, right.
    This is a fundamental analytics that has changed how 
efficient our factories can be. Let's think of retail where one 
of the number-one determinations of success or how they lose 
customers is because the item you're looking for isn't there.
    So you go in for a pair of jeans, you don't have your size, 
you leave, you forget. That's important that we understand what 
people are looking for and that we have the inventory ready for 
them and that we understand what inventory you have. Inventory 
loss is a major loss for our retail businesses, especially 
brick and mortar businesses.
    And then I would also look at cities and how cities are 
using technologies to do gunshot detection at intersections or 
monitoring the environment as far as air quality is concerned. 
And that data enables us to decide if the changes we are 
making--let's say we have in India electric rickshaws. Are they 
actually having an impact on our air quality and to make wise 
decisions based on data rather than hypotheses that we are 
making things better?
    Mrs. Walters. OK. Thank you.
    Mr. Day, as we continue to advance toward an increasingly 
connected world, some have expressed concerns with protecting 
consumer information.
    These are vitally important concerns, yet we also must 
acknowledge that Internet of Things devices in a connected 
world provide substantial societal benefits.
    Can you speak to how we can protect consumer information 
without losing the upside to a more connected world?
    Mr. Day. I think it's obvious that the Chamber believes 
that consumers deserve to have their personal data respected by 
the companies and it's important that we are mindful of that, 
going forward.
    I think the other thing that I mentioned in my opening 
statement was that technology is not a single all-powerful 
industry and that I think it's important that this is a part of 
every industry.
    And when we are looking at the Internet of Things, I think 
it's something that we need to be mindful of but not directly 
linking the privacy issue to this legislation, as we go 
forward. But I think it is something, as we've all testified 
to, that it's important and we need to be considering what data 
means now, because data is being created in massive amounts and 
how that is handles is truly important.
    And I think that's one of the areas where the Chamber is 
doing a lot of work and you will be hearing more from us on 
some of the importance of privacy principles, going forward, as 
a result of some of the discussions that we've been hearing in 
Washington lately.
    Mrs. Walters. OK. Thank you.
    Ms. Vachani, as you may know, this committee is very 
focused on the advancement of self-driving cars. Your testimony 
discusses the enormous benefit of increased mobility that 
autonomous vehicles will provide for aging and disabled 
populations.
    Can you expand on this and discuss the role Internet of 
Things plays?
    Ms. Vachani. Autonomous vehicles, what the connection back 
to an aging population is if you don't have public 
transportation for someone to get to the hospital or someone to 
get to where they want to go for a social benefit, let's say, 
and having more independence for our elderly population, a 
vehicle that is autonomous is safer for them to get from point 
A to point B and that enables them the flexibility and the 
independence that we want for our elderly population.
    Mrs. Walters. OK. Thank you.
    And I am out of time. Thank you.
    Mr. Latta. Thank you very much. The gentlelady yields back.
    And the chair now recognizes the gentlelady from Michigan 
for 5 minutes.
    Mrs. Dingell. Thank you, Mr. Chairman, and to Ranking 
Member Schakowsky for the leadership on this issue and to 
everybody for being here.
    I think that it's safe to say that we do have agreement on 
both sides of the aisle about the significant and revolutionary 
things that the Internet of Things is bringing to industry and 
consumers, and you all have certainly talked today about 
examples where it's already making a difference.
    But I continue to have a reservation that's been expressed 
by a number of other of my colleagues. As we compare the rise 
of IoT to the development of the internet that the internet 
thrived because of the light regulatory touch used and I think 
we are not paying enough attention to security and privacy.
    So I have to already say to you, Mr. Day, before I even ask 
you my questions to say that we should deal with privacy is not 
something that I am going to be comfortable with because I 
think that the technology--that the Facebook hearings have 
showed people had no idea of the amount of data that was being 
tracked and there isn't security on how that information is 
being used and we are not protecting even the privacy of an 
individual.
    So I won't go off on that right now. But I had to respond 
to that comment. But I would like to ask a few questions.
    Ms. Richardson, in a market that's rapidly evolving, how 
have you seen companies balancing getting to the market first 
with protecting security?
    Ms. Richardson. Yes. We often see that privacy and security 
is what fall short here, and a lot of these controls that are 
considered to be best practices are not hard from a technical 
matter.
    For example, a couple of years ago the BitTag--the 
broadband internet technical advisory group--put out a report 
with a list of maybe 5 to 10 things that were of utmost 
priority like encryption, right, making sure that the data 
collected was protected in transit in storage, avoiding hard-
coded passwords--this is one of the problems with the Mirai 
botnet, right. All of those cameras were accessible with the 
same password the hackers knew and they were able to get all 
these cameras.
    And if you meet some of these baseline best practices 
you're going to lift all boats, right. It's not going to solve 
every problem but it will certainly give us herd immunity as 
users of all these different devices.
    Mrs. Dingell. Thank you.
    Ms. Vachani, on the consumer side, have you seen privacy 
being designed into these products before they're hitting the 
market?
    Ms. Vachani. Yes. Actually, I will tell you and hope to 
give you confidence that the security and privacy is utmost 
imperative when we are designing a solution--where we store 
data, how that data is transmitted, and we look at that as a 
fundamental premise as we are integrating these solutions, and 
we make decisions that are different.
    We may store data locally because it makes it easier for us 
to be able to protect it. And so these criterias are absolutely 
in the solutions that we create and we--if you look at the 
solution that we had with regards to the health care 
monitoring, that's FDA approved and we follow all HIPAA laws, 
right. We enable our silicon so that our solution developers 
are able to follow HIPAA laws.
    Mrs. Dingell. So not to be sarcastic, but as someone who 
has been hacked at least 15 times, every one of the major ones, 
and that's one of the difficulties is once that hack occurs--
once that data is obtained by somebody you can't put the genie 
back into the bottle.
    Mr. Day, I know your organization is concerned and 
apprehensive about regulations, as you expressed it. But one of 
my concerns is going to build right on what I just said--that 
down the road there will be these massive data breaches that we 
keep seeing or an abuse of privacy.
    We'll convene a hearing. The witnesses will be questioned. 
Everybody will express outrage and concern, but the damage will 
have already been done, which was one on Facebook, which I just 
talked about.
    Do you think it would be helpful to develop some clear 
rules of the road for companies now so we can try to mitigate 
this for the future?
    Mr. Day. Thank you, Congresswoman, for the question.
    And to answer you directly, yes, I firmly believe that and 
I think I would like to suggest that the offer is extended to 
work with you and your office on these issues.
    In fact, the Chamber is currently going through a process 
right now on developing privacy principles that we will be 
working with Congress on.
    And so I think probably earlier than later, to be engaging 
with you and your staff would be a great opportunity.
    I will tell you, again, that I firmly believe consumers 
deserve to have their personal data respected by companies that 
they're working with and I think that it's critical though that 
we strike that proper regulatory balance that protects 
consumers while promoting the technology that we all use every 
day and appreciate.
    Mrs. Dingell. That's one of the biggest challenges in this 
committee.
    I know I am out of time, Mr. Chairman, but it would be 
interesting for the record to get what principles they are 
coalescing around that you mentioned earlier in your testimony. 
I think it would be useful for all of us.
    Mr. Latta. Thank you very much. The gentlelady yields back.
    The chair now recognizes the gentleman from Kentucky for 5 
minutes.
    Mr. Guthrie. Thank you very much. It's great to be here.
    Thanks, Mr. Chairman. Thanks for having all the witnesses 
here. We've had some really interesting hearings in this space. 
The other day we did quantum computing, which I am still trying 
to figure out.
    The guy said, well, I will make it simple for you--it's 
like flipping a coin and getting heads or tails is normal. In 
the quantum world you can flip a coin and get heads and tails 
at the same time. So that really made it simple for me. I've 
been thinking about that all weekend, trying to figure out what 
he actually meant. That's how he explained it.
    But it is good that we are getting to a work product out of 
this so it's important. So that's what I want to focus on today 
and hopefully things I can understand.
    So, Mr. Day, can you briefly explain while voluntary 
industry-led, globally recognized, and consensus-based 
processes for Internet of Things standards are so critical and 
could you name some examples of industry-led efforts that are 
currently taking place?
    Mr. Day. So with this legislation is, as I testified to, I 
think is an important first step and I think by having certain 
standards set and compiling information again by all industries 
and sectors will benefit all of us and that I think the 
benefits both to consumers, to industrial, and to government 
are very clear and, you know, it's everything from keeping a 
global competitive lead on other countries and that this 
country needs to continue to be the leader in technology and, 
again, I think, it's a great attribution to what the 
subcommittee and full committee has done on a bipartisan basis 
on self-driving cars to the health care applications that we've 
discussed.
    So there's a whole host and wide variety of areas where 
this is a true benefit and, again, fully support the draft 
legislation and the DIGIT Act as well. We have come out in 
support of that early on and hope to work with the committee, 
going forward, on passing the legislation.
    Mr. Guthrie. Thanks. And so, Ms. Richardson, why do you 
believe compiling a list of industry standard-setting efforts 
under the SMART IoT Act will be a critical part of helping to 
inform future congressional action?
    Ms. Richardson. Yes, and we would go one step further to 
say the list should also come with an estimation of whether the 
standards are being estimated. We don't want you to come back 
or get a report back that has a thousand standards listed 
because the next question is going to be well, are these being 
implemented, right--who's using these and are they working. 
That's the logical question and I think that's what Congress, 
advocates, industry is dancing around at this moment--is that 
process working?
    So I would recommend to include that analysis top and that 
would help you figure out where you really want to focus your 
efforts, going forward.
    Mr. Guthrie. OK. Thank you.
    And Ms. Vachani, we've heard in the past hearings about the 
critical need for security and good cyber hygiene both in 
production lines for IoT devices and within the Federal 
Government.
    What are you doing at Intel to safeguard IoT devices and 
networks from hacking vulnerabilities and what can small to 
mid-size businesses do to take meaningful steps to address data 
security concerns?
    Ms. Vachani. So if I look at Intel's contribution here, our 
security is fundamentally written into the silicon development. 
So it's in hardware, its software. It's in the connectivity. So 
we think of silicon across the board and we think of security 
across the board.
    One of the areas that you talked about was software 
defined, right. As security standards start to change or as we 
learn more can we reprogram our devices--can we update those? 
And so that's included in our assumptions.
    So we enable the industry through not only hardware but 
software security to be able to implement the best known 
security that we know at this point in our space.
    So absolutely paramount in what we do.
    Mr. Guthrie. OK. Thank you.
    I know you mentioned earlier--and I had another hearing but 
I heard you mention earlier--scale. But could you name what you 
see as other potential impediments to deployment of IoT and 
what we should be aware of, going forward?
    Ms. Vachani. Well, we've talked quite a bit about standards 
and one thing I want to make sure we make the point of is these 
standards are international, and so scale is just not within 
the United States.
    I would like for us to be competitive internationally and 
having these standards that were global allows us to provide 
technology to other countries and export our great experience 
that we have here.
    And so I believe the interoperability and enabling us to be 
competitive internationally and taking advantage of these 
international standards will be important for us to be 
successful.
    Mr. Guthrie. Thank you, and thank you for your testimony. I 
appreciate it. It's a little more understandable for someone 
like me. I asked the guy how could you flip a coin and get 
both.
    Ms. Vachani. I have no idea.
    Mr. Guthrie. He says, it's like putting it in a box and the 
box is continually spinning and that really is the clue.
    [Laughter.]
    This is coming from a guy who's never solved the golf peg 
game at Cracker Barrel. So we'll figure it out.
    Thanks a lot. I appreciate it, and I yield back.
    Mr. Latta. The gentleman yields back.
    The chair recognizes the gentlelady from California for 5 
minutes.
    Ms. Matsui. Thank you, Mr. Chairman. I want to thank you 
and the ranking member for having this hearing today and I want 
to thank the witnesses very much for being here.
    I've discussed the potential block chain applications with 
the subcommittee before including its possibility to allow 
spectrum sharing as next-generation broadband networks are 
deployed. As you all know, block chain is a decentralized 
accounting technology that verifies transactions through a 
shared ledger system. When a transaction and a block chain is 
completed, that transaction is verified against a ledger stored 
on each computer in the network. The IoT and connected devices 
will facilitate a significant expansion of data transactions 
likely between multiple different networks and block chain 
could be used to verify and secure these transactions.
    Is there an opportunity for this legislation to more 
precisely explore how new technologies could facilitate the 
secure advancement of internet-connected devices? And anyone on 
the panel can answer that.
    Mr. Day. I will take a first attempt at answering that 
question. And I agree with you--I think block chain is 
certainly an area where IoT will offer a lot of benefit.
    At the Chamber we are just now beginning to work on our 
FinTech work and we are calling on members to help us 
understand the benefits. And so I think there are a number of 
ways that we should be looking at this.
    I think the legislation as drafted, though, is the correct 
step. It allows for technologies like block chain and others to 
progress.
    But as we are understanding the technology and the benefits 
thereof we can continue to work with you and other members of 
Congress on implementing certain regulations as appropriate 
facing the technology.
    Ms. Matsui. Anyone else?
    Ms. Vachani. Block chain is absolutely a technology that 
Intel is looking at and one that can be used in IoT 
applications, so a really good connection there.
    I think, though, one of the points that you made when you 
kicked off as you're looking 5 to 10 years out and you have the 
benefit of doing so, and so today it's block chain and tomorrow 
it could be something even more revolutionary and that's why 
it's important that we consider this not from a very 
technology-specific standpoint but you're more holistically as 
to what's necessary for us to be successful, regardless of the 
implementation technology.
    Ms. Matsui. OK. Narrow band IoT networks are particularly 
useful for long-range low-power applications. Specifically, 
these networks improve capacity, spectrum efficiency, and power 
consumption levels of user devices.
    Narrow band IoT networks have potential both nationwide and 
particularly for rural and indoor coverage. These networks can 
coexist with commercial mobile networks and their propagation 
characteristics could provide better range and reduce coverage 
costs for consumers in both rural areas and across the country.
    Anyone on the panel--what role do narrow band networks have 
in the IoT ecosystem from a spectrum efficiency cost and 
deployment perspective?
    Ms. Vachani. I think narrow band is going to help with--
there are several elements in narrow band that makes IoT 
applications you have already referred to--it's lower cost, 
lower power, and a longer--which enables longer battery life.
    So think about we currently have an application where we 
are sensing the environment for a case of strawberries, right. 
We want to make sure the humidity is right. We want to make 
sure the temperature is right. Narrow band allows for that 
connectivity--the continuous connectivity while extending the 
battery life and not increasing the cost of something that we'd 
want to do with a pack of strawberries.
    Also understand that when you move to the world of 5G, now 
all of this comes together. So now we have a narrow band 
spectrum. 5G includes all of those spectrums--will enable us to 
be able to pull this together as a complete solution.
    It revolutionizes how we think of connectivity and our 
spectrums because narrow band is included as well as low 
latency as well as high bandwidth.
    Ms. Matsui. OK. Great.
    Anyone else want to comment on that?
    OK. Spectrum is the invisible infrastructure and 
Congressman Guthrie and I are working on this. It underpins our 
communications infrastructure and adequate supply is necessary 
to realize the potential on next-generation broadband networks 
and the IoT. Specifically, agencies should have access to funds 
made available for engineering research that could lead to the 
repurposing of spectrum for commercial use.
    What role will next-generation networks play in our IoT 
strategy and how would delivering more spectrum to commercial 
users help?
    Ms. Vachani. I would summarize it into one word, which is 
interoperability. If you think about a wider spectrum analysis, 
so 5G enables low spectrum as well as low latency high 
bandwidth, and now you have that on one network.
    And so you're able to include all of those. Remember I said 
that it's not very much a vertical solution. We have all kinds 
of pieces that are coming together into an IoT solution, which 
can vary in spectrum and once we have a solution that 
encompasses all those spectrums now it makes deployments easier 
for our customers, thus enabling scale, which we----
    Ms. Matsui. OK. I've run out of time, so thank you very 
much.
    Ms. Vachani. Thank you.
    Ms. Matsui. Yield back.
    Mr. Latta. Thank you very much. The gentlelady's time has 
expired and the chair now recognizes the gentleman from West 
Virginia for 5 minutes.
    Mr. McKinley. Thank you, Mr. Chairman, and I apologize to 
the panel--that we've got a hearing going on downstairs so we 
are back and forth in between them, and perhaps I've missed 
some of your testimony that targeted what my questions were.
    But I want to begin with saying that I am going to start by 
assuming you have all read Case's book, ``The Third Wave.'' Two 
out of three have. I was fascinated with that book--that the 
possibilities of where we might go long term, it was mentioned 
about the refrigerator that could speak to you, your clothing 
could tell you how your--whether your wellness.
    Those were all in the long terms. I am somewhat interested 
in the short term, however, and that is, is there anyone--can 
you tell me from the three experiences we have up here, is 
there something in the pipeline of the IoT that might indicate 
the propensity of an area to have a problem with opioid abuse?
    I know some people have--or they've talked about doing it, 
to be able to develop where that might be. But is there anyone 
that you know of that's actually got something close to 
fruition that we could do this? Because we are getting, as we 
all know, nationally getting hit pretty hard with this and we 
don't know where the next problem is going to crop up until 
after. We are reacting rather than being proactive.
    So I am curious to see with the Internet of Things in a 
short term is there someone developing software that might be 
able to identify where the next problem could crop up?
    Ms. Vachani. Yes. Actually, Intel is working exactly on 
that problem, concerning the monitoring of medicine and the 
ability to know exactly where that medicine is going--is it 
going to the right person, monitoring how many tablets are 
there and knowing exactly who's taking those--having some 
facial detection--who's picking up those tablets.
    And so absolutely. I believe that you have made a very 
relevant connection, and thank you for that.
    Mr. McKinley. What's the time--do you have a sense of----
    Ms. Vachani. We are seeing an implementation immediately, 
and it's an evolution over time. We are not going to have 
facial detection immediately at all of our pharmacies but it'd 
be interesting.
    It's an evolution over time but we are seeing 
implementations right away in which we can start to monitor 
medicine better. It's just a matter of is it getting to the 
right person, how many, and are the right people taking it.
    So you think about in the opiate but you can also think 
about it with elderly patients as well, right, or making sure 
they are taking their medicines on time.
    Mr. McKinley. That may be a worry but, again, the 
propensity, this community may be hit hard next. That's what I 
am looking for as well.
    The fact that there could be some software that says the 
drugs--20 million pills are going to one pharmacy, that ought 
to trigger something.
    Ms. Vachani. Right.
    Mr. McKinley. But in the meantime, are there socioeconomic 
barriers that we need to break down?
    So, Mr. Day, you look like you were going to contribute to 
this conversation.
    Mr. Day. So yes, at the Chamber, Congressman, we have been 
looking at economic situations across the country and that 
impact of joblessness and how communities have been impacted by 
this plight and looking at ways that we can start to examine 
the linkage between the two.
    And I think to the point on monitoring pill bottles and 
knowing times of when they're taken and monitoring who are 
getting their prescriptions, et cetera, those are things that 
are happening now but there is a lot more to be done.
    Mr. McKinley. Well, if I could on that, because you touched 
on something I am kind of sensitive to is the socioeconomic--
household income, education level.
    Some will use that as the excuse for why West Virginia is 
leading the Nation in opioid overdose but number two, until 
last year, was New Hampshire, and New Hampshire has polar 
opposites on that. It has one of the highest household income. 
It has the highest education level, and on and on and on, with 
good socioeconomics.
    So I think there's something separating the two between us. 
So I am just curious if someone's developing something more 
sophisticated than just going on socioeconomics.
    Mr. Day. I am not personally aware, to be honest with you. 
But I think it would be an opportunity for us to work together 
as we continue our work with the Chamber and working with our 
member companies on various technologies, and I would be happy 
to do that.
    Mr. McKinley. I would like to pursue that.
    Ms. Vachani. I would like to offer that we can follow up 
with the details of the solution I just.
    Mr. McKinley. If you could, back to my office, I would 
appreciate that.
    Ms. Vachani. I would love to do that, if I could help.
    Mr. McKinley. All of you. Thank you very much.
    I yield back my time.
    Mr. Latta. Thank you very much. The gentleman yields back.
    The chair now recognizes the gentleman from Vermont, and I 
want to thank him for all of his hard work not only in this 
Congress but in the last Congress, working on IoT issues with 
me.
    So thank you very much. The gentleman is recognized for 5 
minutes.
    Mr. Welch. Thank you, and thank you as well, Mr. Latta.
    I want to focus a little bit on rural America--just to have 
each of you say what it is we need to do in rural America if we 
are going to have any opportunity to yield the benefits of IoT.
    I will start with you, Mr. Day.
    Mr. Day. So I think one of the most important things, and 
you mentioned it earlier, Congressman, is the fact that 
broadband is not in every household in the country and that's 
first and foremost, I think, for a lot of reasons, I think, for 
being able to compete globally, being able to be connected and 
be able to have a business based upon the internet is critical.
    And so I think for rural America--and I applaud your 
efforts. That's first and foremost.
    Mr. Welch. Thanks.
    Ms. Richardson.
    Ms. Richardson. Well, I think the whole point of having 
standards and what your bill is discussing is to shift the 
responsibility for security to the people who can best address 
it, right--the manufacturers, the operators--and I think this 
is where low-tech users benefit most from this.
    And so to the extent that your rural users are rapidly 
deploying new technology that they're not familiar with they 
will certainly benefit from better security standards.
    Mr. Welch. Thanks.
    Ms. Vachani.
    Ms. Vachani. Absolutely. I absolutely applaud the benefit 
to get broadband into rural America but understand that we can 
do to implement technology today whether it be a cellular 
signal, right.
    I will give you the example of my parents, who still live 
in the same house that I grew up in and won't leave no matter 
what I do at this point. Having some type of monitoring, making 
sure they're getting up in the morning and that they're--oh, 
somebody's opened the refrigerator, that she's eating--there's 
elements of that that I think is important that we can do today 
for rural America with the connectivity that we have and we 
don't have to limit ourselves to that deployment.
    Mr. Welch. OK. Thank you.
    The other broad question--I just want to go down the 
panel--is about privacy and security. You have talked a little 
bit about that.
    But is there a role that you believe the Congress has to 
play in ensuring an individual's personal data is protected and 
is it your view that an individual has to have the control over 
how his or her data is being used--something we asked Mr. 
Zuckerberg when he was here a while ago?
    Mr. Day. Well, again, I think to emphasize the point that 
consumers have and deserve the right to have their personal 
data respected by all.
    Mr. Welch. Let's go quickly because I have one more 
question.
    Mr. Day. As we develop our principles at the Chamber, I 
look forward to working with you on those details.
    Mr. Welch. Thank you.
    Ms. Richardson. We eventually need legislation. That's 
going to be the only way out of this mess we are in.
    Ms. Vachani. I think working together between government 
and industry is essential to come up with the solutions.
    Mr. Welch. But there has to be some role that Congress 
plays. We can't be passive observers of what's going on.
    Mr. Day. Right.
    Mr. Welch. Do you agree with that? Thanks.
    Let me ask you, Ms. Vachani--I know Intel has been a leader 
in IoT advancement and I know you have had a high position as a 
thought leader in that space for years.
    So I want to follow up your testimony and ask if you can 
expand your suggestions as to the definition that we should use 
in his bill and why it's so important to get that definition 
right.
    Ms. Vachani. One of the number-one challenges of scale, and 
it sounds very simple, is terminology. We talk past each other 
when we are having--and I see us doing it in the industry, and 
so we are in this space. We live it and breathe it. But we use 
different words to represent different things and we are 
talking past each other.
    So one of the fundamental things I've had to do within my 
organization, within my company as well as outside, is to start 
to get on the same language and that's one of the things we are 
asking for this as well is just to get on the same language so 
we know when we are speaking to each other what we are 
referring to.
    Mr. Welch. OK. Thank you.
    I thank the panel. Very helpful.
    And I yield back.
    Mr. Costello [presiding]. The gentleman yields back.
    The gentleman from Oklahoma, Mr. Mullin, is recognizes for 
5 minutes.
    Mr. Mullin. Thank you, Mr. Chairman, and thank our panel 
for being here.
    I have just a few questions, and Ms. Vachani--is that how 
you pronounce it? I appreciate you being here and I just, for 
the help of myself and you might have already been asked this 
question, but as you have heard we were running back and forth 
between committees.
    Ms. Vachani. No problem.
    Mr. Mullin. Are there barriers or what are the barriers 
that's keeping the U.S. from leading in the IoT?
    Ms. Vachani. I answered this question of scale but I will 
answer this question slightly differently, to add to that.
    What I find is, if you look at the city level there's quite 
a bit of innovation going on. I talked about San Diego and what 
San Diego is doing within their lights in California. We talked 
about New York and the building management that's happening in 
New York. At the city level, I believe that that implementation 
is taken seriously and there's a lot of innovation happening. 
But where I think we can make a difference is scale across the 
city at a nationwide--right.
    So these pockets of innovation, how we can reuse, how can 
we learn, and how can we deploy it more worldwide, more United 
States wide. That's slightly different than what I see in other 
countries where we are looking at it more nationally. India, 
China are looking at it more nationally, and so you'd get the 
benefit of the individual innovations that are happening at a 
national level.
    Mr. Mullin. Well, I will use my district, for example, even 
my personal house. We don't even have slow dial up. The best we 
can do is 3G through our phone, and 50 percent of my district 
has little to no access to the internet.
    Ms. Vachani. Yes.
    Mr. Mullin. And so we talk about metropolitan areas. But 
you're right, we are leaving out the rural pockets, which 
mileage-wise is the vast majority of our country.
    Are the other countries, as you alluded to, are they doing 
a better job at that and then--and if so, what are they doing 
that we are not?
    Ms. Vachani. So large parts of India and large parts of 
China don't have connectivity either, right, and so that isn't 
an isolated and probably more of an issue there than it is even 
here.
    They are looking at how to deploy faster so that these 
rural areas do have connectivities--that's one area we could 
look further at--as well as leveraging the technology that is 
available.
    So going into a factory in another country--they have 
connectivity, no broadband, but they have some level of 3G--we 
are able to leverage that to at least start to get some 
automation within the factory. So, again, taking advantage of 
the connectivity that we do have a maximizing that, at the same 
time deploying more robust connectivity.
    Mr. Mullin. So what role can Congress play then? How can we 
encourage companies or industry to look out farther than just 
in metropolitan areas?
    We did this with electricity. We did this with phone 
service. This is a new technology that's keeping us from 
connecting. So what is that we can do? What can Congress do, to 
put in place, to help encourage that?
    Ms. Vachani. I think we can look at this not in the siloes 
that we do today. You have the benefit of a holistic view, not 
just in each department but as a holistic view how we deploy 
this.
    Mr. Mullin. Right.
    Ms. Vachani. That's the benefit, and then, frankly 
speaking, how do we invest so that we start to deploy this 
technology more robustly--is there an investment strategy to 
that as well.
    Mr. Mullin. Thank you so much.
    Switching gears, Ms. Richardson, how difficult is it to 
secure an IoT device?
    Ms. Richardson. I think that would depend on the device 
itself and how it's connected to the internet. I think there 
are a handful of best practices that we see across different 
sectors and industries, things like encryption, strong password 
and other authentication models, update ability.
    Mr. Mullin. Have certain security measures been put in 
place since the 2014 Target breach, especially the Wanna Cry 
ransom?
    Ms. Richardson. There's nothing mandatory and I think these 
sorts of practices that----
    Mr. Mullin. Should there be?
    Ms. Richardson. That's a hard question and I am realistic 
about mandatory requirements on the private sector. I don't 
think we are there.
    I think, though, the government should explore its own 
purchasing power. Right now, the Trump administration and some 
of the agencies are writing privacy and security guidelines in 
preparation for a big level up in purchase of IT modernization 
and that would be one way that you could influence the market 
without forcing anybody to do anything specific.
    Mr. Mullin. Thank you, and I yield back.
    Mr. Costello. The gentleman yields back.
    The gentlewoman from New York, Ms. Clarke, is recognize for 
5 minutes.
    Ms. Clarke. I thank you, Mr. Chairman, and I thank our 
ranking member, Ms. Schakowsky. I would like to also thank our 
panel for their expert testimony here this morning.
    As you may be aware, earlier this year I launched the 
congressional Smart Cities Caucus and I would add Smart 
Communities with Rep. Darrell Issa. I was inspired to start the 
Smart Cities Caucus from my personal interactions with seeing 
the amazing build-out first hand in New York City. The Smart 
Cities Caucus serves as a bipartisan group of members dedicated 
to bringing American communities into the 21st century through 
innovation and technological change. Embracing smart technology 
will make our communities more sustainable, resilient, 
efficient, liveable, and competitive in a world in which 
technology is constantly advancing.
    So I would like to ask a couple of questions, first to you, 
Ms. Richardson. What are your recommendations for the SMART IoT 
Act considering the interplay of the Smart Cities and which 
Federal agencies should play an active role in sort of 
harnessing what we know already?
    Ms. Richardson. Well, you have some of the work horses of 
the cybersecurity world in Commerce, right, so that is a 
benefit that you have with NIST, NTIA, and other places.
    I think when you look at the smart cities you have a couple 
of different types of devices. You have really basic ones that 
don't collect personal information, they're low broadband 
information sharers, right, and they're just water pressure, 
how many cars passed through here, things like that, that are 
going to be less risky from both a security and privacy 
standard.
    I hope that your report will highlight some of the more 
high-risk things that are either facial recognition, location 
tracking, right. That's the result of many of these things like 
license plate readers or toll roads and how those are being 
deployed by the government.
    Ms. Clarke. Ms. Vachani, Intel IoT portfolio includes smart 
cities, smart buildings, and smart video. What are your 
recommendations and why are smart cities so important to 
Intel's IoT portfolio?
    Ms. Vachani. Essentially, the Smart Cities enables us to 
create an infrastructure for safer cities as well as enabling 
our cities to do better planning.
    If you look at the GE solution that we deployed on smart 
cities, it does stuff like gunshot detection, right. It's 
determining if there was a shot and, if so, what we do about 
it.
    It looks at air quality, right, and so this enables us to 
take advantage of the technology we've built for many other 
industries. Smart Cities is a culmination of many other 
technologies we've built maybe for a factory or for a home but 
we are able to leverage that to improve not only our 
environment as well as our cities and its planning.
    So we see that there's a leverage of our technology across 
the board and that Smart Cities can take advantage of it.
    Ms. Clarke. And would you just envision for some of my 
colleagues who are in rural communities how we can look at that 
ecosystem that is being developed in more densely populated 
areas and what can be taken from that for more sprawling 
communities in terms of connecting them in smart ways?
    Ms. Vachani. Yes, and I will go back to the GE solution. 
The GE solution takes advantage of a light pole. So that's what 
we are building on top of. It already has electricity. It 
already has power. You take advantage of that power to connect 
up sensors and then it uses a 3G connection that goes back up 
into a data center.
    So, again, we are able to take advantage of infrastructure 
that's already there and built in as best as possible.
    Ms. Clarke. Very well.
    And, Mr. Day, anything that you'd like to add in this?
    Mr. Day. Absolutely, and I want to applaud you on your 
efforts with Congressman Issa with co-chairing that caucus. 
It's very important, and C-TEC has joined a couple of events 
and we look forward to continuing to work with you.
    But I think when you look at a city, for example, 20 
percent of a given city in the United States is dedicated 
during the work day to parking, and I think one of the things 
that C 09TEC has been taking as a priority and working with you 
and others on is the fact that autonomous vehicles will impact 
both that issue as well as the environment and other issues and 
I think it, in the end, will prove to be very beneficial for a 
lot of reasons.
    And so smart city activities are critical and what we are 
trying to do and be creative in our thinking and our approach 
and how IoT plays in that is paramount and a top priority of 
ours, going forward.
    Ms. Clarke. Well, thank you very much for your response 
today, and I yield back, Mr. Chairman.
    Mr. Costello. Gentlewoman yields back.
    Seeing there are no further members wishing to ask 
questions, I would like to thank all of our witnesses for being 
here today.
    Before we conclude, I would like to include the following 
documents to be submitted for the record by unanimous consent: 
a letter from the Consumer Technology Association, a letter 
from CTIA, and a letter from EPIC.
    [The information appears at the conclusion of the hearing.]
    Pursuant to committee rules, I remind members that they 
have 10 business days to submit additional questions for the 
record and I ask that witnesses submit their response within 10 
business days upon receipt of the questions.
    Without objection, the subcommittee is adjourned. Have a 
good day.
    [Whereupon, at 11:54 a.m., the committee was adjourned.]
    [Material submitted for inclusion in the record follows:]

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