[Senate Report 115-90]
[From the U.S. Government Publishing Office]
Calendar No. 113
115th Congress} { Report
SENATE
1st Session } { 115-90
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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. 88
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
June 5, 2017.--Ordered to be printed
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi BILL NELSON, Florida
ROY BLUNT, Missouri MARIA CANTWELL, Washington
TED CRUZ, Texas AMY KLOBUCHAR, Minnesota
DEB FISCHER, Nebraska RICHARD BLUMENTHAL, Connecticut
JERRY MORAN, Kansas BRIAN SCHATZ, Hawaii
DAN SULLIVAN, Alaska EDWARD J. MARKEY, Massachusetts
DEAN HELLER, Nevada CORY A. BOOKER, New Jersey
JAMES M. INHOFE, Oklahoma TOM UDALL, New Mexico
MIKE LEE, Utah GARY C. PETERS, Michigan
RON JOHNSON, Wisconsin TAMMY BALDWIN, Wisconsin
SHELLEY MOORE CAPITO, West TAMMY DUCKWORTH, Illinois
Virginia
CORY GARDNER, Colorado MARGARETWOODHASSAN,NewHampshire
TODD C. YOUNG, Indiana CATHERINE CORTEZ MASTO, Nevada
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
Calendar No. 113
115th Congress} { Report
SENATE
1st Session } { 115-90
======================================================================
DEVELOPING INNOVATION AND GROWING THE INTERNET OF THINGS ACT
_______
June 5, 2017.--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. 88]
[Including Cost Estimate of the Congressional Budget Office]
The Committee on Commerce, Science, and Transportation, to
which was referred the bill (S. 88) to ensure appropriate
spectrum planning and interagency coordination to support the
Internet of Things, having considered the same, reports
favorably thereon without amendment and recommends that the
bill do pass.
Purpose of the Bill
S. 88 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, medical devices, remote sensors, and cars. It has
been said that IoT brings the physical and digital world
together.\1\ Examples of IoT applications include the
following: subcutaneous body sensors that provide a patient's
real-time vital signs to medical providers; applications that
allow users' phones to monitor and adjust household functions,
from pre-heating an oven to running a bath and controlling
smart lightbulbs; smart cities where ubiquitous sensors allow
for smoother flow of traffic; and sensored roadways, buildings,
bridges, and dams that automatically communicate their
structural integrity to officials, providing alerts when
repairs or upgrades are needed.\2\
IoT is still in its early stages, but is expected to impact
every sector of the economy to varying degrees. Examples
include the following: 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\
One analyst group, McKinsey & Company, has estimated that
IoT could contribute $2.7 trillion to $6.2 trillion to the
world economy annually 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\ Worldwide, the global market for
IoT devices and services is expected to exceed $7 trillion by
2020.\6\ And an estimated 50 billion devices are expected to be
connected by 2020.\7\
Estimates of the impact of IoT on the U.S. economy vary,
but experts project the impact to be substantial. For instance,
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 2 to 5 percent by 2025.\8\
Some have argued, 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.
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\1\``Samsung CEO BK Yoon's Internet of Things Keynote at CES 2015''
(Full Transcript), The Sinju Post, January 14, 2015, at http://
singjupost.com/samsung-ceo-bk-yoons-internet-of-things-keynote-at-ces-
2015-full-transcript.
\2\Pew Research Center, ``The Internet of Things Will Thrive by
2025,'' May 4, 2014, at p. 8, at http://www.pewinternet.org/2014/05/14/
internet-of-things/.
\3\McKinsey Global Institute, Disruptive technologies: Advances
that will transform life, business, and the global economy, May 2013 at
pp. 56-58, at http://www.mckinsey.com/insights/business_technology/
disruptive_technologies.
\4\McKinsey Global Institute Study, at pp. 51-55.
\5\O'Sullivan, Andrea; Thierer, Adam, Projecting the Growth and
Economic Impact of the Internet of Things, Mercatus Center Policy
Briefing, June 15, 2015, at p. 7, at https://www.mercatus.org/
publication/projecting-growth-and-economic-impact-internet-things.
\6\Wood, Molly, ``At the International CES, the Internet of Things
hits home,'' The New York Times, May 4, 2014,
\7\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.
\8\Mandel, Michael, ``Can the Internet of Everything Bring Back the
High-Growth Economy?,'' Progressive Policy Institute, September 2013,
at p.2, at http://www.progressivepolicy.org/wp-content/uploads/2013/09/
09.2013-MandellCan-the-Internet-of-Everything-Bring-Back-the-High-
GrowthEconomy-1.pdf.
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Summary of Provisions
S. 88, also known as the DIGIT Act, is intended to help
create a national strategy for IoT. The bill would 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 advise the Federal working group, 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 do the following: (1) advise the
working group; and (2) submit a report with recommendations to
the working group. The working group, in addition to its duties
and recommendations, would be required to assess
recommendations made by the steering committee 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 no later than 18 months after the
bill's enactment.
The bill also would direct the Federal Communications
Commission (FCC or Commission), in consultation with DOC's
National Telecommunications and Information Administration
(NTIA), to complete a report summarizing notice of inquiry
assessing the spectrum needs required to support IoT no later
than 1 year after the bill's enactment.
Legislative History
On January 10, 2017, Senator Fischer introduced S. 88 with
Senators Booker, Gardner, and Schatz as cosponsors. On January
24, 2017, the Committee met in open Executive Session and, by
voice vote, ordered the bill to be reported without amendment.
On January 24, 2017, Representatives Paulsen and Welch
introduced H.R. 686, a House of Representatives companion bill
that is identical to this bill. That bill was referred to the
Committee on Energy and Commerce of the House of
Representatives.
On April 27, 2016, in the 114th Congress, the Committee
ordered S. 2607 to be reported favorably with an amendment (in
the nature of a substitute). The reported text of that bill is
substantially similar to this bill.
On February 11, 2015, the Committee, 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.
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. 88--Developing Innovation and Growing the Internet of Things Act
S. 88 would direct the Department of Commerce (DOC) to
convene a working group of representatives from various federal
agencies and a steering committee of private stakeholders to
produce reports and recommendations to the Congress to improve
intragovernmental 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.) The bill also would direct the
Federal Communications Commission (FCC) to prepare a report
assessing the need for spectrum to support such developments.
Based on an analysis of information from the affected
agencies, CBO estimates that implementing S. 88 would require
about sixteen employees and would cost $4 million over the
2018-2022 period 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. Participating in the
working group and completing the spectrum report would cost the
FCC less than $500,000. However, the FCC is authorized to
collect fees sufficient to offset the costs of its regulatory
activities each year; therefore, CBO estimates that the net
effect on discretionary spending for those activities would be
negligible, assuming appropriation actions consistent with that
authority.
Enacting S. 88 would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply. CBO
estimates that enacting S. 88 would not increase net direct
spending or on-budget deficits in any of the four consecutive
10-year periods beginning in 2028.
S. 88 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, 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 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
The bill 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
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 of
enactment a report summarizing the comments submitted in
response to the notice of inquiry 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 establish the bill's short title as
``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 would maximize the potential and
development 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 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 DOC and other departments and agencies
as follows: NTIA; the National Institute of Standards and
Technology; the National Oceanic and Atmospheric
Administration; the Departments of Transportation, Homeland
Security, and Energy; the Office of Management and Budget; the
National Science Foundation; the FCC; the Federal Trade
Commission; and the Office of Science and Technology Policy.
The section would require the working group to do the
following: (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 to 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, which would be appointed by the
Secretary, would advise the working group on the following: (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, within 1 year of the
bill's enactment, would be required to submit its findings and
recommendations to the working group; the working group would
be required to consider and comment on any recommendations made
by the steering committee within 1 year of the bill's
enactment.
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 steering committee consideration. It also would
state 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 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, no later than 18
months after 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 accessing
sufficient spectrum, as well as the role of licensed and
unlicensed spectrum to support the proliferation of IoT. The
Commission would be required to submit to the appropriate
committees of Congress, as defined in section 3, 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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