Internet of Things technologies are already all around us and with a market that is expected to reach a value of more than $ 14.4 trillion over the next decade with 50 billion connected devices by 2020, the question is whether ad hoc regulations are necessary to govern the Internet of Things sector.
The current scenario
The current rules applicable to wearable technologies, smart cities, smart home devices, eHealth technologies have not been drafted having in mind Internet of Things platforms. The consequence of that is that lawyers and regulators need to adapt rules issued to regulate a completely different environment reaching sometimes the conclusion that such regulations would make Internet of Things projects either financially or operationally unworkable.
Telecom regulators that have just closed consultations on Machine to Machine and Internet of Things technologies might struggle to see how current telecom roaming regulations can for instance operate for smart city or smart home devices that should be run on a permanent roaming status. Likewise, current telecom obligations might be disproportionate for Machine to Machine communications while an exemption to the applicability of current regulations for such technologies should be considered.
And the same applies with reference to data protection regulations. The position recently taken by the European privacy regulators on the Internet of Things might lead to a competitive disadvantage of the European Union if compared to the US and Asia where more liberal data protection regulations are in place. This is the reason why we are currently discussing with privacy regulators to find solutions ensuring data protection compliance, but at the same time preventing that privacy regulations become an obstacle to the growth of such technologies.
The possible future for the Internet of Things
It is still unclear the approach that regulators are planning to follow. The initial impression is that some regulators believe that Internet of Things technologies are difficult to identify since the category is very broad and still have to become part of our lives. This would prevent them from putting in place for instance exemptions to the applicability of specific regimes.
It can be shared the view that IoT technologies are still in an initial growth phase. However, considering the current growth estimates, it is certainly at least arguable that it is too early to regulate the Internet of Things sector. The examples above show that current regulations might actually slow down the development of these technologies in a period of financial crisis when they might be more needed.
This might be, among others, the case of telemedicine and eHealth projects that might lead to considerable savings for the national healthcare system especially in a period when the average age of the worldwide population is increasing.
Such proactive approach has been for instance adopted by the UK telecom regulator, OFCOM, in their consultation on the Internet of Things where the main objective has been to set the most appropriate regulatory framework to foster the growth of such technologies. And, based on our discussions with regulators, a similar approach is being followed in some other jurisdictions.
What next steps?
We will see the outcome of this transitional period and which regulator will take the first move to govern the Internet of Things. In the meantime, the Italian telecom regulator issued a report on the IoT and the privacy regulator launched a consultation on the topic seeking feedbacks from the industry as mentioned in this blog post.