[Senate Report 116-179]
[From the U.S. Government Publishing Office]


                                                       Calendar No. 375
116th Congress }                                             { Report
                               SENATE                          
  1st Session  }                                             { 116-179
_______________________________________________________________________



     DEVELOPING INNOVATION AND GROWING THE INTERNET OF THINGS ACT

                               __________

                               R E P O R T

                                 of the

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   on

                                S. 1611
                                

                [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


               December 17, 2019.--Ordered to be printed
               
                               _________
                               
                   U.S. GOVERNMENT PUBLISHING OFFICE
                   
99-010                   WASHINGTON : 2019                   
                               

               
               
       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
       
                     ONE HUNDRED SIXTEENTH CONGRESS
                     
                             FIRST SESSION

                 ROGER F. WICKER, Mississippi, Chairman
JOHN THUNE, South Dakota             MARIA CANTWELL, Washington
ROY BLUNT, Missouri                  AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas                      RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska                BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas                  EDWARD J. MARKEY, Massachusetts
DAN SULLIVAN, Alaska                 TOM UDALL, New Mexico
CORY GARDNER, Colorado               GARY C. PETERS, Michigan
MARSHA BLACKBURN, Tennessee          TAMMY BALDWIN, Wisconsin
SHELLEY MOORE CAPITO, West Virginia  TAMMY DUCKWORTH, Illinois
MIKE LEE, Utah                       JON TESTER, Montana
RON JOHNSON, Wisconsin               KYRSTEN SINEMA, Arizona
TODD C. YOUNG, Indiana               JACKY ROSEN, Nevada
RICK SCOTT, Florida
                       John Keast, Staff Director
               David Strickland, Minority Staff Director
               
               
               

                                                       Calendar No. 375
116th Congress }                                            { Report
                                 SENATE
 1st Session   }                                            { 116-179

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

 
      DEVELOPING INNOVATION AND GROWING THE INTERNET OF THINGS ACT

                                _______
                                

               December 17, 2019.--Ordered to be printed

                                _______
                                

       Mr. Wicker, from the Committee on Commerce, Science, and 
                Transportation, submitted the following

                              R E P O R T

                         [To accompany S. 1611]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill (S. 1611) to ensure appropriate 
prioritization, spectrum planning, and interagency coordination 
to support the Internet of Things, having considered the same, 
reports favorably thereon with amendments and recommends that 
the bill (as amended) do pass.

                          Purpose of the Bill

    S. 1611 would take steps to help develop a national 
strategy to encourage the development of the Internet of Things 
(IoT).

                          Background and Needs

    IoT can be described as the widespread integration and 
proliferation of Internet-connected devices. Some commentators 
have observed that IoT brings the physical and digital world 
together.\1\ IoT use cases include subcutaneous body sensors 
that provide a patient's real-time vital signs to medical 
providers to applications that allow users' phones to monitor 
and adjust household functions (like pre-heating an oven, 
running a bath, and controlling smart lightbulbs). IoT can also 
be used in infrastructure, such as smart cities where 
ubiquitous sensors allow for smoother flow of traffic; and 
roadways, buildings, bridges, and dams with embedded sensors 
that automatically communicate their structural integrity to 
officials, providing alerts when repairs or upgrades are 
needed.\2\ Industries are expected to use IoT to speed 
processes, create operational and manufacturing efficiencies, 
and better serve consumers. Specifically, IoT may provide 
benefits in the following areas:
---------------------------------------------------------------------------
    \1\``Samsung CEO BK Yoon's Internet of Things Keynote at CES 2015'' 
(full transcript), The Sinju Post, Jan. 14, 2015 (https://
singjupost.com/samsung-ceo-bk-yoons-internet-of-things-
keynote-at-ces-2015-full-transcript/).
    \2\Anderson, Janna and Lee Rainie, ``The Internet of Things Will 
Thrive by 2025,'' Pew Research Center (May 14, 2014) (https://
www.pewinternet.org/2014/05/14/internet-of-things/); see also, Rainie, 
Lee and Janna Anderson, ``The Internet of Things Connectivity Binge: 
What Are the Implications?,'' Pew Research Center, Jun. 6, 2017 
(https://www.pewinternet.org/2017/06/06/the-internet-of-things-
connectivity-binge-what-are-the-implications/).
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   Gains in health care through remote monitoring;
   Improvements in manufacturing efficiency and supply 
        chain tracking;
   Reductions in peak electrical grid usage;
   Traffic management that adjusts traffic light timing 
        and bus routes; and
   Improvements in agriculture through better water 
        management and the ability to more closely track 
        changes in soil temperature, as well as levels of 
        carbon and nitrogen.\3\
---------------------------------------------------------------------------
    \3\McKinsey Global Institute, Disruptive Technologies: Advances 
That Will Transform Life, Business, and the Global Economy, May 2013, 
at pp. 56-58 (https://www.mckinsey.com/
business-functions/digital-mckinsey/our-insights/disruptive-
technologies).
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    IoT is rapidly growing.\4\ In 2017, there were an estimated 
8.4 billion IoT devices in use.\5\ By the end of 2019, more 
than 26 billion IoT devices are predicted to be in use.\6\ And 
by 2025, it is expected that the number of IoT devices will 
total at least 64 billion.\7\
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    \4\See, e.g., Manyika, James, et al, ``Unlocking the Potential of 
the Internet of Things,'' McKinsey Global Institute, Report, June 2015 
(https://www.mckinsey.com/business-functions/
digital-mckinsey/our-insights/the-internet-of-things-the-value-of-
digitizing-the-physical-world); see also, Kranz, Maciej, ``IoT For 
Economic And Social Good: How the Internet of Things Makes Our World 
Better,'' Forbes, Jun. 14, 2018 (https://www.forbes.com/sites/
forbestechcouncil/2018/06/14/iot-for-economic-and-social-good-how-the-
internet-of-things-makes-our-world-better/
#1263aff0100f); see also Rosenbush, Steve, ``The Morning Download: 
Steelcase CIO Bets Big on the Connected Office,'' Wall Street Journal, 
Apr. 6, 2018 (https://blogs.wsj.com/cio/2018/04/06/the-morning-
download-steelcase-cio-bets-big-on-the-connected-office/).
    \5\Gartner Says 8.4 Billion Connected ``Things'' Will Be In Use in 
2017, Up 31 Percent From 2016, Gartner, Feb. 7, 2017 (https://
www.gartner.com/newsroom/id/3598917).
    \6\Marr, Bernard, ``5 Internet of Things Trends Everyone Should 
Know About,'' Forbes, Feb. 4, 2019 (https://www.forbes.com/sites/
bernardmarr/2019/02/04/5-internet-of-things-trends-
everyone-should-know-about/#5d1d1cac4b1f).
    \7\Newman, Peter, ``IoT Report: How Internet of Things Technology 
Growth Is Reaching Mainstream Companies and Consumers,'' Business 
Insider, Jan. 28, 2019 (https://www.businessinsider.com/internet-of-
things-report).
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    It is forecast that worldwide technology spending on IoT 
will reach $1.2 trillion in 2022.\8\ One analyst group, 
McKinsey & Company, estimates that IoT has a potential to 
contribute as much as $11.1 trillion to the world economy 
annually by 2025.\9\ Health care applications alone could have 
an economic impact of more than $163 billion by 2020\10\ and 
$1.1 trillion to $2.5 trillion per year by 2025.\11\ Estimates 
for industrial uses of IoT, known as Industrial IoT (IIoT), 
suggest the addition of $14.2 trillion to the global economy by 
2030.\12\
---------------------------------------------------------------------------
    \8\Columbus, Louis, ``2018 Roundup of Internet of Things Forecasts 
and Market Estimates,'' Forbes, Dec. 13, 2018 (https://www.forbes.com/
sites/louiscolumbus/2018/12/13/2018-
roundup-of-internet-of-things-forecasts-and-market-estimates/
#149870eb7d83).
    \9\Menard, Alexandre, ``How Can we Recognize the Real Power of the 
Internet of Things?,'' McKinsey & Company, Nov. 2017 (https://
www.mckinsey.com/business-functions/
digital-mckinsey/our-insights/how-can-we-recognize-the-real-power-of-
the-internet-of-things); see also McKinsey Global Institute, The 
Internet of Things: Mapping the Value Beyond the 
Hype, McKinsey & Company, June 2015 (https://www.mckinsey.com//media/
McKinsey/
Business%20Functions/McKinsey%20Digital/Our%20Insights/
The%20Internet%20of%20Things
%20The%20value%20of%20digitizing%20the%20physical%20world/
Unlocking_the_potential_of_
the_Internet_of_Things_Executive_summary.ashx).
    \10\Accenture 2017 Internet of Health Things Survey, Accenture 
Consulting, at 2 (2017) (https://www.accenture.com/_acnmedia/PDF-42/
Accenture-Health-2017-Internet-of-Health-Things-
Survey.pdfla=en#zoom=50).
    \11\O'Sullivan, Andrea; Thierer, Adam, ``Projecting the Growth and 
Economic Impact of the Internet of Things,'' Mercatus Center Policy 
Briefing, Jun. 15, 2015, at p. 7 (https://www.mercatus.org/system/
files/IoT-EP-v3.pdf).
    \12\Winning With the Industrial Internet of Things, Accenture, 
2015, pp. 2-3 (https://www.accenture.com/t20150523T023647__w__/us-en/
_acnmedia/Accenture/Conversion-
Assets/DotCom/Documents/Global/PDF/Dualpub_11/Accenture-Industrial-
Internet-of-Things-Positioning-Paper-Report-20pdf (Accenture Report).
---------------------------------------------------------------------------
    Estimates of the impact of IoT on the U.S. economy vary, 
but experts project the impact to be substantial. For instance, 
Accenture estimates the U.S. economy will gain $6.1 trillion in 
cumulative GDP by 2030 from IIoT and, with additional measures 
such as infrastructure improvements, IIoT may be worth as much 
as $7.1 trillion to the U.S. economy.\13\
---------------------------------------------------------------------------
    \13\Accenture Report at 3.
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    Some have argued that, to fully realize the potential of 
IoT, countries should craft a national strategy to promote IoT 
development and adoption, which the United States has not 
done.\14\ Establishing such a national strategy to encourage 
the development of IoT has the support of a diverse set of 
business and industry stakeholders, including The App 
Association, the U.S. Chamber of Commerce, CTIA, the 
Competitive Carriers Association, the Computing Research 
Association, the Consumer Technology Association, Intel, the 
Information Technology Industry Council, the Information 
Technology and Innovation Foundation, Security Industry 
Association, the Semiconductor Industry Association, the 
Telecommunications Industry Association, and VMware.
---------------------------------------------------------------------------
    \14\See, e.g., ``Technology Industry Leaders Release National 
Strategy to Maximize U.S. Economic and Societal Benefits from the 
Internet of Things, Information Technology Industry Council, Oct. 3, 
2017 (https://www.itic.org/news-events/news-releases/technology-
industry-leaders-
release-national-strategy-to-maximize-u-s-economic-and-societal-
benefits-from-the-internet-of-things).
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                         Summary of Provisions

    If enacted, S. 1611, the Developing Innovation and Growing 
the Internet of Things Act, or the DIGIT Act, would do the 
following:
   Help create a national strategy for IoT.
   Require the Secretary of Commerce (Secretary) to 
        convene a working group of Federal agencies, advised by 
        a steering committee of nongovernmental stakeholders 
        established within the Department of Commerce (DOC), to 
        provide recommendations to Congress on how to plan and 
        encourage the growth of IoT.
   Direct the Federal Communications Commission (FCC), 
        in consultation with DOC's National Telecommunications 
        and Information Administration (NTIA), to issue a 
        report (after seeking public comment) on the spectrum 
        needs required to support IoT.

                          Legislative History

    S. 1611 was introduced on May 22, 2019, by Senator Fischer 
(for herself and Senators Booker, Gardner, and Schatz) and was 
referred to the Committee on Commerce, Science, and 
Transportation of the Senate. On July 10, 2019, the Committee 
met in open Executive Session and, by voice vote, ordered S. 
1611 reported favorably with amendments. Senator Lee offered 
two amendments--one amendment that would limit the compensation 
paid to private sector representatives on the steering 
committee created by the bill, and the second amendment that 
would terminate the DIGIT Act steering committee once it has 
filed its report with the working group.
    S. 1611 is substantially similar to S. 88, a bill 
introduced in the 115th Congress on January 10, 2017, by 
Senator Fischer (for herself and Senators Booker, Gardner, and 
Schatz), and which was referred to the Committee on Commerce, 
Science, and Transportation of the Senate. On January 24, 2017, 
the Committee met in open Executive Session and, by voice vote, 
ordered that bill reported favorably without amendment. On 
August 3, 2017, that bill passed the Senate with an amendment, 
by voice vote, and on August 11, 2017, that bill was referred 
to the Subcommittee on Communications and Technology of the 
Committee on Energy and Commerce of the House of 
Representatives.
    S. 1611 also is substantially similar to S. 2607, a bill 
introduced in the 114th Congress on March 1, 2016, by Senator 
Fischer (for herself and Senators, Ayotte, Booker, and Schatz), 
and which was referred to the Committee on Commerce, Science, 
and Transportation of the Senate. On April 27, 2016, the 
Committee met in open Executive Session and, by voice vote, 
ordered S. 2607 reported favorably with an amendment (in the 
nature of a substitute). On September 27, 2016, Senator Thune 
reported that bill favorably with an amendment (in the nature 
of a substitute), and it was placed on the Senate Legislative 
Calendar.
    On February 11, 2015, the Committee on Commerce, Science, 
and Transportation, as the Senate Committee with primary and 
general jurisdiction over Internet and IoT matters, held the 
first-ever congressional hearing examining the economic and 
policy implications of IoT. The Committee received testimony 
from a panel of five private sector witnesses.\15\
---------------------------------------------------------------------------
    \15\See, ``The Connected World: Examining the Internet of Things,'' 
Committee on Commerce, Science, and Transportation of the Senate, Feb. 
11, 2015, webcast (https://www.commerce.senate.gov/public/index.cfm/
hearings?ID=D3E33BDE-30FD-4899-B30D-906B47E117CA), and published 
hearing (https://www.govinfo.gov/content/pkg/CHRG-114shrg99818/pdf/
CHRG-114shrg99818.pdf).
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                            Estimated Costs

    In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:




    S. 1611 would require the Department of Commerce (DOC) to 
convene a federal interagency working group to report to the 
Congress on the Internet of things (IoT).\1\ The group would be 
required to identify laws and regulations that inhibit or 
promote IoT deployment, examine current and future federal IoT 
use, and recommend federal IoT security measures. The working 
group would consult with academic stakeholders and with those 
in the public, private, and nonprofit sectors.
---------------------------------------------------------------------------
    \1\The IoT consists of devices connected one another and to a 
network for exchanging data without human interaction. See Suzy E. 
Park, Internet of Things (IoT): An Introduction, In Focus Report 11239 
(Congressional Research Service, June 4, 2019), https.z/go.usa.gov/
xVcdR.
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    S. 1611 also would establish a steering committee within 
DOC to advise the working group on IoT issues. Topics of study 
would include the economic effects of IoT and the availability 
of electromagnetic spectrum to meet users' demands. The 
committee would submit its findings to the working group, which 
would report them to the Congress.
    Finally, under S. 1611 the Federal Communications 
Commission (FCC), in consultation with the National 
Telecommunications and Information Administration, would seek 
public comments on current and future spectrum needs to ensure 
adequate IoT connectivity and to report those findings to the 
Congress.
    Using information from the affected agencies, CBO estimates 
that implementing S. 1611 would cost $7 million over the 2020-
2021 period for DOC to hire about 22 employees, to convene the 
working group, and to issue the mandated reports. Such spending 
would be subject to appropriation of the estimated amounts.
    CBO also expects that participating in the working group 
and completing the spectrum report would cost the FCC less than 
$500,000. The FCC is authorized to collect fees sufficient to 
offset the costs of its regulatory activities each year; 
therefore, CBO estimates that the net cost of those activities 
would be negligible, assuming appropriation actions consistent 
with that authority.
    The CBO staff contact for this estimate is David Hughes. 
The estimate was reviewed by Theresa Gullo, Assistant Director 
for Budget Analysis.

                      Regulatory Impact Statement

    In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following evaluation of the regulatory impact of the 
legislation, as reported:

                       number of persons covered

    The bill does not authorize any new regulations and would 
not subject any individuals or businesses to new regulations.

                            economic impact

    The bill would not have an adverse economic impact on the 
Nation.

                                privacy

    The bill would not have any adverse impact on the personal 
privacy of individuals.

                               paperwork

    S. 1611, as reported, would require three reports from the 
Federal Government. The first report would be submitted by the 
steering committee to the working group within 1 year after the 
date of the bill's enactment. The second report would be 
submitted by the working group to Congress no later than 18 
months after the date of enactment. The third report would 
require the FCC to submit to the appropriate committees of 
Congress, no later than 1 year after enactment, a report (after 
seeking public comment) on the current, as of the date of 
enactment, and future spectrum needs of IoT.

                   Congressionally Directed Spending

    In compliance with paragraph 4(b) of rule XLIV of the 
Standing Rules of the Senate, the Committee provides that no 
provisions contained in the bill, as reported, meet the 
definition of congressionally directed spending items under the 
rule.

                      Section-by-Section Analysis


Section 1. Short title

    This section would provide that the legislation may be 
cited as the ``Developing Innovation and Growing the Internet 
of Things Act'' or the ``DIGIT Act.''

Section 2. Findings; sense of Congress

    This section would set out findings and express the sense 
of Congress that IoT policies should do the following:
   Promote solutions with respect to IoT that are 
        secure, scalable, interoperable, industry-driven, and 
        standards-based.
   Maximize the development and deployment of IoT to 
        benefit all stakeholders, including businesses, 
        governments, and consumers.

Section 3. Definitions

    This section would establish definitions for terms used 
throughout the bill.

Section 4. Federal working group

    This section would require the Secretary of Commerce to 
convene a working group of Federal entities to study and make 
recommendations on various IoT matters. It also would establish 
a steering committee within the DOC comprised of a wide range 
of stakeholders outside the Federal Government to make 
recommendations to the working group.
    The Secretary would have discretion in forming the Federal 
working group, but would be required to consider seeking 
representation from the Department of Commerce (including NTIA, 
the National Institute of Standards and Technology, and the 
National Oceanic and Atmospheric Administration) and the 
following departments and agencies: the Departments of 
Transportation, Homeland Security, and Energy; the Office of 
Management and Budget; the National Science Foundation; the 
FCC; the Federal Trade Commission; the Office of Science and 
Technology Policy; and the Federal Energy Regulatory 
Commission.
    The section would require the working group to do the 
following:
   Identify any Federal regulations, statutes, grant 
        practices, budgetary or jurisdictional challenges, and 
        other sector-specific policies that are inhibiting or 
        could inhibit the development of IoT;
   Consider policies or programs that encourage and 
        improve coordination among Federal agencies with 
        jurisdiction over IoT;
   Consider any findings or recommendations made by the 
        steering committee and, where appropriate, act to 
        implement those recommendations; and
   Examine how Federal agencies use and can benefit 
        from IoT, including preparedness to adopt IoT and any 
        additional security measures that Federal agencies may 
        need to take (ensuring that such security measures are 
        properly coordinated among Federal entities).
    The working group would be required to consult with various 
nongovernmental stakeholders, including, among others, the 
steering committee and subject matter experts representing a 
variety of industry and civil society stakeholders (including 
small business and rural stakeholders).
    The steering committee, which also would be appointed by 
the Secretary of Commerce, would advise the working group on 
the following:
   Potential regulatory, statutory, grant, 
        programmatic, budgetary, jurisdictional, and sector-
        specific challenges to the development of IoT;
   Situations in which the use of IoT is likely to 
        deliver significant and scalable economic and societal 
        benefits;
   Spectrum availability to support IoT;
   Policies, programs, and multi-stakeholder activities 
        relating to privacy, security, or coordination among 
        Federal agencies with jurisdiction over IoT;
   The use of IoT by small businesses; and
   International proceedings affecting IoT.
The steering committee, within 1 year of the bill's enactment, 
would be required to submit its findings and recommendations to 
the working group.
    The section would further provide that the steering 
committee would be required to set its own agenda in carrying 
out its duties, but that the working group could suggest topics 
or items for committee consideration. It also would state that 
the steering committee's report must be the result of the 
independent judgment of the committee. The steering committee 
would terminate upon the filing of its report, and members of 
the working group would receive no compensation for their 
service.
    The working group would be required to submit its findings 
and recommendations to Congress, along with the steering 
committee's findings and recommendations, no later than 18 
months after the bill's enactment. The report would be required 
to include the working group's recommendations for action or 
reasons for inaction on the steering committee's 
recommendations, along with an accounting of the progress made 
by Federal agencies in implementing recommendations from both 
the steering committee and the working group. A copy of the 
report would be required to be provided to several named 
Congressional committees.

Section 5. Assessing spectrum needs

    This section would require the FCC, in consultation with 
NTIA, to issue a notice of inquiry seeking public comment on 
the current and future spectrum needs of IoT. Specifically, the 
inquiry would seek comment on the following:
   The adequacy of available spectrum or planned 
        allocations for wireless services that could support 
        IoT;
   If adequate spectrum is not available for IoT, how 
        to ensure that it is made available;
   What regulatory barriers exist to providing any 
        needed spectrum; and
   The role of licensed and unlicensed spectrum in the 
        growth of IoT.
    This section would further provide that, within 1 year of 
the bill's enactment, the FCC be required to submit to various 
named congressional committees a report summarizing the 
comments submitted in response to the notice of inquiry.

                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee states that the 
bill as reported would make no change to existing law.