Look around you for a second and count
the number of electronic devices, machines and gadgets. All of them -- light
bulbs, cars, TVs, digital cameras, refrigerators, stereos, cranes, beds – will
be connected to the Internet over the next 15 years, if they aren’t already.
Farmers will connect their livestock,
machinery and fields through sensors. Medical practitioners and patients,
fitness fanatics and those of us that require greater encouragement, will be
monitored for everything from our heart rates to glucose levels to the special
needs of pregnancy.
This is the potential of the “Internet
of Things”: billions and billions of devices and their components connected to one
another via the Internet. 50 billion devices by 2020, according to companies
like Ericsson. The “Internet of Things” will radically alter our world through “smart”
connectivity, save time and resources, and provide opportunities for innovation
and economic growth.
The basic building block of the “Internet
of Things” is machine-to-machine communication (M2M), devices equipped to
communicate without the intervention of humans. The trends are already visible:
Internet-connected TVs are now widespread; eBook readers must have a Wi-Fi or
3G connection; smart electricity meters have already become standard in many
countries. More often than not, however, M2M is hiding in plain sight: information
terminals in trains and buses, traffic lights and bicycle sharing systems, like
the ones in Paris and London.
This new “Internet of Things” is the
subject of a new OECD-report, “Machine-to-Machine Communication: Connecting Billionsof Devices”, and examines:
1. New Technology: the drivers behind connecting devices to the
Internet
2.
New Markets: user and business demands, and whether they are
being effectively met
3. New Policies: what governments can do to promote this new source of growth
New Technology
-
The
Internet of Things is enabled by ever cheaper communication modules, new
innovations and applications of existing technology and the fact that the
Internet has become available almost anywhere that people are.
-
M2M is
very different from traditional telecommunication. It does not need a human to
start or stop a communication. As a result it has the same economical life span
as the product in which it is embedded (10 years for consumer electronics, 15
years for cars, 30 years for smart meters). It can process extremely low data
volume or very high amounts.
-
Different
networking technologies can be used to connect M2M devices, depending on the
amount of mobility needed and dispersion over an area. 2G/3G/4G mobile wireless
is, however, often an ideal technology for most applications.
-
SIM-cards
could become the standard for authentication to use networks, as this removes
or reduces the need for human interaction. Devices can be connected straight
from the factory.
Table 1. Machine-to-machine
applications and technologies, by dispersion and mobility
|
Geographically
dispersed
|
Application: smart grid, meter, city
remote monitoring
Technology Required: PSTN, broadband, 2G/3G/4G, power line communication
|
Application: car automation, eHealth, logistics, portable consumer electronics
Technology
Required: 2G/3G/4G,
satellite
|
|
Geographically
concentrated
|
Application: smart home, factory automation,
eHealth
Technology
Required: wireless
personal area (WPA), networks, wired networks, indoor electrical wiring,
Wi-Fi
|
Application: on-site logistics
Technology
Required: Wi-Fi,
WPAN
|
|
|
Geographically
fixed
|
Geographically
mobile
|
New Markets
-
M2M
creates a new player in the mobile market: the “million device” user. These new
large scale M2M users will potentially manage hundreds of thousands of smart
meters, cars, and consumer electronics, possibly in higher numbers than some
countries have citizens.
-
Large
scale M2M users may offer their services in 10s to 100s of countries, selling
the same devices globally. Their customers may buy the devices abroad and
travel with them. As a result, manufacturers need to offer international
connectivity solutions. The telecommunication industry, however, is still largely
organised and regulated on a per country basis. Large M2M users will thus place
new demands on telecom companies, and regulation and business models will have
to adapt.
-
Companies
creating innovative M2M-based services are currently locked into 10-30 year mobile
data contracts and high roaming fees; this dependency hinders the role out of
new services and innovation.
New Policies
-
Governments hold the key to set large scale M2M
users free, by giving them access to wholesale markets. They will need to
change the rules so that large M2M users can have access to numbers and
SIM-cards, just like telecom companies have now. This will open up the market,
break lock-ins, make large M2M users responsible for their own innovation and
create a competitive market for roaming for M2M services. This liberalisation
of the market will be a major paradigm shift, but might by some estimates lead
to billions in savings and new services.
-
Privacy
and security need to be designed into products from the start. M2M could allow
a detailed view of people’s lives, and parliaments have already curbed or changed
some projects as a consequence. For example, cars are increasingly using
onboard M2M services (GM Onstar, Ford Sync, BMW ConnectedDrive) and the
European Union is now mandating their own service (eCall) to be built into
every car from 2014. Since EU legislation requires telephone companies to record
a person’s location at the start of each mobile communication, and since
turning a M2M car on will itself start a communication, these companies will be
inadvertently tracking the start and end of any trip! The current challenge requires
privacy by design, because as this example shows, even if the automobile
company does not register the location, the telecommunication company by law
will have to.
-
Governments
have tried to make spectrum policy more flexible in recent years, allowing
companies to change networking technologies when new technology becomes
available. M2M may rigidify spectrum policy, however, because any time M2M uses
a particular networking technology, it expects the spectrum to be there for the
lifetime of the device, which is 10 to 30 years. The consumer-oriented wireless
technology works on a timescale of a maximum 10 years.
-
Countries
may run out of phone numbers in their current numbering plans as a result of
M2M, because 2G and 3G equipped M2M devices require an E.164 telephone number
to work. Only when 4G is used can M2M work with just an IP-address.
-
It is
unclear which country should issue telephone numbers for any given device. Is
it the country that device is used in, the country of the mobile operator, or
the country of the large scale M2M user?
-
Combining
data generated by M2M devices may offer great insights to improve society. Cars
could notify local governments of icy roads or bottlenecks in infrastructures.
This may not always be seen as positive, however, as shown by a case in The
Netherlands where anonymous and aggregated data from GPS-systems was used by
the police to identify prime locations for speed cameras, which led to a public
outcry.
What is certain from the report is that
governments will have to change regulations in the telecommunications market,
will have to be vigilant to apply privacy and security regulation and stay innovative
to make use of the many possibilities it offers. Doing so promises to transform
the economy, promote growth in the telecommunications sector, and produce growth
and efficiency savings in government and society.
