[Senate Report 114-364]
[From the U.S. Government Publishing Office]
Calendar No. 652
114th Congress } { Report
SENATE
2d Session } { 114-364
_______________________________________________________________________
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. 2607
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
September, 27, 2016.--Ordered to be printed
______
U.S. GOVERNMENT PUBLISHING OFFICE
59-010 WASHINGTON : 2016
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
one hundred fourteenth congress
second session
JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi BILL NELSON, Florida
ROY BLUNT, Missouri MARIA CANTWELL, Washington
MARCO RUBIO, Florida CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas ED MARKEY, Massachusetts
DAN SULLIVAN, Alaska CORY BOOKER, New Jersey
RON JOHNSON, Wisconsin TOM UDALL, New Mexico
DEAN HELLER, Nevada JOE MANCHIN, West Virginia
CORY GARDNER, Colorado GARY PETERS, Michigan
STEVE DAINES, Montana
Nick Rossi, Staff Director
Adrian Arnakis, Deputy Staff Director
Jason Van Beek, General Counsel
Kim Lipsky, Democratic Staff Director
Christopher Day, Democratic Deputy Staff Director
Clint Odom, Democratic General Counsel
Calendar No. 652
114th Congress } { Report
SENATE
2d Session } { 114-364
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DEVELOPING INNOVATION AND GROWING THE INTERNET OF THINGS ACT
_______
September 27, 2016.--Ordered to be printed
_______
Mr. Thune, from the Committee on Commerce, Science, and Transportation,
submitted the following
R E P O R T
[To accompany S. 2607]
The Committee on Commerce, Science, and Transportation, to
which was referred the bill (S. 2607) to ensure appropriate
spectrum planning and interagency coordination to support the
Internet of Things, having considered the same, reports
favorably thereon with an amendment (in the nature of a
substitute) and an amendment to the title and recommends that
the bill (as amended) do pass.
Purpose of the Bill
S. 2607 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, such as home
appliances, remote sensors, medical devices, and cars. It has
been said that IoT brings the physical and digital world
together.\1\ Examples of IoT devices include: subcutaneous body
sensors that provide a patient's real-time vital signs to
medical providers; applications (``apps'') that allow users'
phones to monitor and adjust household functions--from pre-
heating an oven to running a bath to controlling smart
lightbulbs; smart cities where ubiquitous sensors allow for
smoother flow of traffic; and censored roadways, buildings,
bridges, and dams that automatically communicate their
structural integrity to officials, providing alerts when
repairs or upgrades are needed.\2\
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\1\CNET, ``Samsung 2015 CES Keynote with co-CEO BK Yoon,'' January
4, 2015, at http://live.cnet.com/Event/
Samsung_2015_CES_Keynote_with_co-CEO_BK_Yoon?Page=0.
\2\``The Internet of Things Will Thrive by 2025,'' Pew Research
Internet Project, May 4, 2015, at http://www.pewinternet.org/2014/05/
14/internet-of-things.
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IoT is expected to impact every sector of the economy to
varying degrees. Examples include gains in health care through
remote monitoring, manufacturing operational efficiency and
supply chain tracking, electrical grids via reduction in costly
peak usage, traffic management by adjustments in traffic light
timing and bus routes, and agriculture through water
management, including the ability to track changes in soil
moisture, carbon, nitrogen, and soil temperature.\3\
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\3\McKinsey Global Institute study, ``Disruptive technologies:
Advances that will transform life, business, and the global economy,''
May 2013, pp. 56-58, at http://www.mckinsey.com/insights/
business_technology/disruptive_technologies.
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McKinsey & Company, for one, estimates that IoT could
contribute $2.7 trillion to $6.2 trillion to the world economy
each year by 2025.\4\ Health care applications alone could have
an economic impact of $1.1 trillion to $2.5 trillion per year
by 2025.\5\ Using the McKinsey & Company study as a base, the
Progressive Policy Institute estimates the United States could
realize one-third of total global IoT economic benefit, raising
U.S. gross domestic product by 2 to 5 percent by 2025.\6\
Worldwide, the global market for IoT devices and services is
expected to exceed $7 trillion by 2020.\7\
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\4\Ibid, p. 54.
\5\Michael Mandel, ``Progressive Policy Institute, Can the Internet
of Everything Bring Back the High-Growth Economy?,''September 2013, at
http://www.progressivepolicy.org/wp-content/uploads/2013/09/09.2013-
Mandel_Can-the-Internet-of-Everything-Bring-Back-the-High-Growth-
Economy-1.pdf.
\6\Ibid.
\7\Molly Wood, ``At the International CES, the Internet of Things
Hits Home,'' The New York Times, January 4, 2015, at http://
www.nytimes.com/2015/01/05/technology/international-ces-the-internet-
of-things-hits-homes.html?_r=1.
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Estimates of the impact of IoT on the U.S. economy vary,
but experts project that it will be substantial. An estimated
50 billion devices are expected to be connected by the year
2020.\8\
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\8\Federal Trade Commission Staff Report, ``Internet of Things:
Privacy & Security in a Connected World, January,'' 2015, at http://
www.ftc.gov/system/files/documents/reports/federal-trade-commission-
staff-report-november-2013-workshop-entitled-internet-things-privacy/
150127iotrpt.pdf.
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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.
Establishing such a national strategy to encourage the
development of IoT has the support of a diverse set of
stakeholders, including The App Association, the U.S. Chamber
of Commerce, the Competitive Carriers Association, the Consumer
Technology Association, Intel, the Information Technology
Industry Council, the National Association of Manufacturers,
the Tech CEO Council, the Telecommunications Industry
Association, and the Semiconductor Industry Association.
Summary of Provisions
S. 2607, also known as the DIGIT Act, is intended to help
create a national strategy for IoT. The bill would require the
Secretary of Commerce to convene a working group of Federal
agencies, advised by a steering committee of nongovernmental
stakeholders established within the Department of Commerce
(DOC) to advise the Federal working group, all to provide
recommendations to Congress on how to plan and encourage the
growth of IoT.
The bill is structured so that the nongovernmental steering
committee would exist to: (1) advise the working group; and (2)
submit a report with recommendations to the working group. The
working group, in addition to its own duties and
recommendations, would also be required to assess steering
committee recommendations and comment on them in the report the
working group sends to Congress. The working group would be
required to submit its findings and recommendations to Congress
within 18 months of the bill's enactment.
The bill also would direct the Federal Communications
Commission (FCC), in consultation with the DOC's National
Telecommunications and Information Administration (NTIA), to
assess the spectrum needs required to support IoT.
Legislative History
On March 24, 2015, the Senate unanimously passed S. Res.
110, introduced by Senators Fischer, Ayotte, Booker, and
Schatz, a resolution calling for a national strategy to
encourage the development of IoT.
On March 1, 2016, Senators Fischer, Ayotte, Booker, and
Schatz introduced the DIGIT Act.
On April 27, 2016, the Committee met in open Executive
Session and, by voice vote, ordered the bill to be reported
with an amendment (in the nature of a substitute).
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. 2607--Developing Innovation and Growing the Internet of Things Act
S. 2607 would direct the Department of Commerce (DOC) to
convene a working group of various federal agency
representatives and a steering committee of private
stakeholders to produce reports and recommendations to the
Congress to improve intragovemmental coordination and to
encourage the development of the Internet of things. (The
Internet of things refers to the growing number of devices that
connect to the Internet and interact with one another.) It also
would direct the Federal Communications Commission to prepare a
report assessing the need for spectrum to support such
development.
On the basis of information from DOC and the Federal Trade
Commission, CBO estimates that implementing S. 2607 would
require about a dozen employees and would cost $3 million to
convene the working group and to develop the reports required
under the bill. Those costs would be spread among the federal
agencies that would be a part of the working group and such
spending would be subject to the availability of appropriated
funds.
Enacting S. 2607 would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply. CBO
estimates that enacting S. 2607 would not increase net direct
spending or on-budget deficits in any of the four consecutive
10-year periods beginning in 2027.
S. 2607 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or tribal
governments.
The CBO staff contact for this estimate is Stephen Rabent.
The estimate was approved by H. Samuel Papenfuss, Deputy
Assistant Director for Budget Analysis.
Regulatory Impact
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 will
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 a negative impact on the personal
privacy of individuals.
paperwork
The bill would require three reports from the Federal
Government. The first report would be submitted by the steering
committee to the working group, 1 year after the date of
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 within 1 year of
enactment a report summarizing the comments submitted in
response to a notice of inquiry.
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 establish the bill's short title as the
``Developing Innovation and Growing the Internet of Things
Act'' or the ``DIGIT Act.''
Section 2. Findings; sense of Congress.
This section sets out findings and expresses the sense of
Congress that IoT policies should maximize the potential and
development of IoT to benefit consumers, businesses, and the
government.
Section 3. Definitions.
This section establishes definitions for terms used
throughout the Act.
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 establishes 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 has discretion in forming the working group,
but is required to consider seeking representation from the
DOC, including from NTIA, the National Institute of Standards
and Technology, and the National Oceanic and Atmospheric
Administration, as well as from the FCC, the Federal Trade
Commission, the National Science Foundation, the Department of
Transportation, the Office of Management and Budget, the
Department of Homeland Security, and the White House Office of
Science and Technology Policy.
The section would require the working group to: (1)
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; (2) consider policies or programs that
encourage and improve coordination among Federal agencies with
jurisdiction over IoT; (3) consider any findings or
recommendations made by the steering committee and, where
appropriate, act to implement those recommendations; and (4)
examine how Federal agencies use and can benefit from IoT,
including preparedness to adopt IoT.
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 would advise the working group on:
(1) potential regulatory, statutory, grant, programmatic,
budgetary, and jurisdictional challenges to development of IoT;
(2) spectrum availability to support IoT; (3) policies and
programs relating to privacy, security, or coordination among
Federal agencies with jurisdiction over IoT; (4) the use of IoT
by small businesses; and (5) international proceedings
affecting IoT. The steering committee would submit its findings
and recommendations to the working group; the working group is
required to consider and comment on any recommendations made by
the steering committee within 1 year.
The section further provides that the steering committee
would be required to set its own agenda in carrying out its
duties, but that the working group can suggest topics or items
for steering committee consideration. It also states that the
steering committee's report must be the result of the
independent judgment of the steering committee. The steering
committee would terminate on the date on which the working
group submits its report to Congress as required by this
section, unless the Secretary of DOC files a new charter for
the steering committee.
The working group would be required to submit its findings
and recommendations to Congress, along with the steering
committee's findings and recommendations, within eighteen
months of the bill's enactment.
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 adequacy of available
spectrum, what regulatory barriers exist to providing any
needed spectrum, as well as the role of licensed and unlicensed
spectrum to support the IoT proliferation. The Commission would
be required to submit to the appropriate committees of
Congress, as defined by the DIGIT Act, within 1 year of
enactment 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.
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