Internet of things: Litmus test of the EU’s will to create a digital single market

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There needs to be EU regulation of the internet of things on top of industry-led standards, write Brian Humphries and Joakim Reiter. [Max Pixel]

The internet of things is at a crucial turning point. EU policymakers need to create the right environment to help it grow, write Brian Humphries and Joakim Reiter.

Brian Humphries is group enterprise director and Joakim Reiter is group external affairs director at Vodafone.

We are at an inflection point: demand is growing, costs are falling, and technology is advancing quickly. It’s high time for dynamic, forward-thinking policy making, which creates a genuine single market for IoT that allows Europe to become a global leader in its development.

The internet of things (IoT) is growing at a blistering pace. It also plays to two of Europe’s foremost strengths: a sophisticated industrial sector and a proliferation of advanced mobile networks. This gives Europe a unique opportunity to lead the world in the development of a new breed of digital services.

IoT is not a niche or fringe sector. It will have a profound impact on all aspects of society and the economy. From connected cars that reduce insurance premiums, to energy meters that automate central heating, to watches that track our health.

According to the analyst firm Gartner, a typical family home in a mature affluent market could have more than 500 smart devices by 2022.

The economic upside from this technology is also significant for consumers and businesses alike: the European Commission estimates that by 2020, the number of IoT connections within the EU will reach almost six billion, with a market value exceeding €1 trillion.

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But connecting billions of diverse devices to the internet is challenging and complex.

The new and diverse ecosystem of IoT devices will depend on the ubiquity of intelligent and reliable mobile networks. Even though IoT is a nascent technology, mobile networks are already connecting millions of machines and devices to the internet every month.

Furthermore, networks need to be able to cope with the different connectivity requirements of devices: some will require fast, high-capacity connections, while others require a small amount of bandwidth which is reliable and low-cost. Devices must be able to connect to networks and each other, irrespective of make, model, manufacturer, industry or network.

While common standards and regulations have been slow to emerge, some progress has been made, mainly through the industry’s own initiative.

However, if IoT is to reach its potential, then regulation has a role to play. While industry-led developments help at the technical level, there are still concerns about how existing EU and national regulations apply to IoT.

Today, the European IoT market is fragmented across different EU regulations and the union’s 28 different member states. The continued lack of a single and uniform regulatory framework, to guarantee a genuine digital single market for IoT, is working against Europe’s long-term commercial and societal interests.

So what needs to be done? There are five actions that policymakers need to consider:

First, policymakers need to recognise that IoT is global and that connected devices are traded across borders, so it is imperative that we have a single authorisation regime for IoT services in the EU. It should follow a simple, yet well-established, rule: if a product and service can be launched in one member state, it should be allowed to be launched in all of the EU.

Second, EU regulations need to be proportionate. Some consumer requirements are simply not relevant. For example, it makes no sense for an IoT device that monitors a parking space to be subject to number portability and emergency calling regulations. These regulations were designed for a time where only individuals communicated with each other. Keeping them alive in the IoT world will impede Europe’s ability to develop and introduce new digital services.

Third, IoT will see established companies competing with new “IoT native” players on a massive scale. It’s imperative that any regulation both applies equally to all players, thereby ensuring a level playing field. Specifically, and contrary to what is the case today, any connected IoT device or service should be regulated the same way, irrespective of the manner in which it is connected or what type of firm is providing the connection.

Fourth, European citizens and businesses must be confident that IoT devices are reliable and secure. Europe will not be able to unleash the power of IoT without ensuring an adequate level of trust in the technology. Security cannot be an afterthought. All products and services introduced on the EU market should be subject to a minimum set of security requirements, which need to be uniform across the EU’s internal market.

Fifth, fast and reliable communications networks are the platform on which the entire IoT ecosystem will be built. Any industry-specific policies must take into account the crucial role that these mobile networks play. This is particularly pertinent to automotive and aviation sectors where legislation is being revised with the advent of connected cars and drones. The regulatory environment should allow network operators to build and manage an infrastructure which meets all the demands of IoT.

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