Proving the Business Case for the Internet of Things

Regulation a threat to IoT development: Machina Research

Iain Morris
August 28, 2014
Regulation could disrupt the growth of the Internet of Things, according to a new study from Machina Research, with rules related to the permanent roaming of mobile connections posing a particular risk.

According to Machina, the regulatory position over permanent roaming remains unclear and more than 80% of regulators still have no explicit rules.

However, the likelihood is that regulation will get tougher, and especially in the European region, with significant implications for mobile connections that rely on roaming either through necessity (because operators have a limited geographical footprint) or choice (because roaming SIMs can take advantage of national roaming).

Machina is highly critical of the introduction of a dedicated numbering scheme for M2M devices by a third of regulators – most of which are in Europe – arguing there is no particular value in implementing such schemes.

It says that data sovereignty issues could place onerous obligations on the management of data and that regulators have failed to clearly define the distinction between payload and communications.

Meanwhile, while countries such as Brazil and Turkey are reducing taxes on M2M SIM cards, certain legal and administrative barriers to M2M adoption still remain in many parts of the world.

Some countries, for instance, require SIMs to be registered to a particular person or legal entity at the point of activation, removing some flexibility in selling pre-activated off-the-shelf M2M devices.

There is also no specific spectrum allocation for M2M connectivity, although a number of regulators are looking at white space spectrum in the UHF band and how this might be used for IoT.

“As with all new technologies, in the Internet of Things regulation lags behind technical and commercial developments,” said Matt Hatton, a director at Machina. “To date this hasn’t caused a lot of problems, but it won’t be long until there is something of a crunch.”

“Issues such as permanent roaming and data sovereignty have the potential to slow down adoption,” he added. “Government legislators have been quite good at eliminating some obvious barriers such as punitive taxation, while the EU’s position on data privacy is timely.”

Hatton also says there is likely to be a regulatory crackdown on permanent roaming in the coming years.

“Those mobile operators that currently support lots of connections that way had better do two things,” he said. “Firstly, stop selling more, as that’s only exacerbating the problem. Secondly, build alliances with other operators to ensure local connectivity in every country.”
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