[Senate Report 116-179]
[From the U.S. Government Publishing Office]
Calendar No. 375
116th Congress } { Report
SENATE
1st Session } { 116-179
_______________________________________________________________________
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. 1611
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
December 17, 2019.--Ordered to be printed
_________
U.S. GOVERNMENT PUBLISHING OFFICE
99-010 WASHINGTON : 2019
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
ROGER F. WICKER, Mississippi, Chairman
JOHN THUNE, South Dakota MARIA CANTWELL, Washington
ROY BLUNT, Missouri AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas EDWARD J. MARKEY, Massachusetts
DAN SULLIVAN, Alaska TOM UDALL, New Mexico
CORY GARDNER, Colorado GARY C. PETERS, Michigan
MARSHA BLACKBURN, Tennessee TAMMY BALDWIN, Wisconsin
SHELLEY MOORE CAPITO, West Virginia TAMMY DUCKWORTH, Illinois
MIKE LEE, Utah JON TESTER, Montana
RON JOHNSON, Wisconsin KYRSTEN SINEMA, Arizona
TODD C. YOUNG, Indiana JACKY ROSEN, Nevada
RICK SCOTT, Florida
John Keast, Staff Director
David Strickland, Minority Staff Director
Calendar No. 375
116th Congress } { Report
SENATE
1st Session } { 116-179
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DEVELOPING INNOVATION AND GROWING THE INTERNET OF THINGS ACT
_______
December 17, 2019.--Ordered to be printed
_______
Mr. Wicker, from the Committee on Commerce, Science, and
Transportation, submitted the following
R E P O R T
[To accompany S. 1611]
[Including cost estimate of the Congressional Budget Office]
The Committee on Commerce, Science, and Transportation, to
which was referred the bill (S. 1611) to ensure appropriate
prioritization, spectrum planning, and interagency coordination
to support the Internet of Things, having considered the same,
reports favorably thereon with amendments and recommends that
the bill (as amended) do pass.
Purpose of the Bill
S. 1611 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. Some commentators
have observed that IoT brings the physical and digital world
together.\1\ IoT use cases include subcutaneous body sensors
that provide a patient's real-time vital signs to medical
providers to applications that allow users' phones to monitor
and adjust household functions (like pre-heating an oven,
running a bath, and controlling smart lightbulbs). IoT can also
be used in infrastructure, such as smart cities where
ubiquitous sensors allow for smoother flow of traffic; and
roadways, buildings, bridges, and dams with embedded sensors
that automatically communicate their structural integrity to
officials, providing alerts when repairs or upgrades are
needed.\2\ Industries are expected to use IoT to speed
processes, create operational and manufacturing efficiencies,
and better serve consumers. Specifically, IoT may provide
benefits in the following areas:
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\1\``Samsung CEO BK Yoon's Internet of Things Keynote at CES 2015''
(full transcript), The Sinju Post, Jan. 14, 2015 (https://
singjupost.com/samsung-ceo-bk-yoons-internet-of-things-
keynote-at-ces-2015-full-transcript/).
\2\Anderson, Janna and Lee Rainie, ``The Internet of Things Will
Thrive by 2025,'' Pew Research Center (May 14, 2014) (https://
www.pewinternet.org/2014/05/14/internet-of-things/); see also, Rainie,
Lee and Janna Anderson, ``The Internet of Things Connectivity Binge:
What Are the Implications?,'' Pew Research Center, Jun. 6, 2017
(https://www.pewinternet.org/2017/06/06/the-internet-of-things-
connectivity-binge-what-are-the-implications/).
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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\
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\3\McKinsey Global Institute, Disruptive Technologies: Advances
That Will Transform Life, Business, and the Global Economy, May 2013,
at pp. 56-58 (https://www.mckinsey.com/
business-functions/digital-mckinsey/our-insights/disruptive-
technologies).
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IoT is rapidly growing.\4\ In 2017, there were an estimated
8.4 billion IoT devices in use.\5\ By the end of 2019, more
than 26 billion IoT devices are predicted to be in use.\6\ And
by 2025, it is expected that the number of IoT devices will
total at least 64 billion.\7\
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\4\See, e.g., Manyika, James, et al, ``Unlocking the Potential of
the Internet of Things,'' McKinsey Global Institute, Report, June 2015
(https://www.mckinsey.com/business-functions/
digital-mckinsey/our-insights/the-internet-of-things-the-value-of-
digitizing-the-physical-world); see also, Kranz, Maciej, ``IoT For
Economic And Social Good: How the Internet of Things Makes Our World
Better,'' Forbes, Jun. 14, 2018 (https://www.forbes.com/sites/
forbestechcouncil/2018/06/14/iot-for-economic-and-social-good-how-the-
internet-of-things-makes-our-world-better/
#1263aff0100f); see also Rosenbush, Steve, ``The Morning Download:
Steelcase CIO Bets Big on the Connected Office,'' Wall Street Journal,
Apr. 6, 2018 (https://blogs.wsj.com/cio/2018/04/06/the-morning-
download-steelcase-cio-bets-big-on-the-connected-office/).
\5\Gartner Says 8.4 Billion Connected ``Things'' Will Be In Use in
2017, Up 31 Percent From 2016, Gartner, Feb. 7, 2017 (https://
www.gartner.com/newsroom/id/3598917).
\6\Marr, Bernard, ``5 Internet of Things Trends Everyone Should
Know About,'' Forbes, Feb. 4, 2019 (https://www.forbes.com/sites/
bernardmarr/2019/02/04/5-internet-of-things-trends-
everyone-should-know-about/#5d1d1cac4b1f).
\7\Newman, Peter, ``IoT Report: How Internet of Things Technology
Growth Is Reaching Mainstream Companies and Consumers,'' Business
Insider, Jan. 28, 2019 (https://www.businessinsider.com/internet-of-
things-report).
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It is forecast that worldwide technology spending on IoT
will reach $1.2 trillion in 2022.\8\ One analyst group,
McKinsey & Company, estimates that IoT has a potential to
contribute as much as $11.1 trillion to the world economy
annually by 2025.\9\ Health care applications alone could have
an economic impact of more than $163 billion by 2020\10\ and
$1.1 trillion to $2.5 trillion per year by 2025.\11\ Estimates
for industrial uses of IoT, known as Industrial IoT (IIoT),
suggest the addition of $14.2 trillion to the global economy by
2030.\12\
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\8\Columbus, Louis, ``2018 Roundup of Internet of Things Forecasts
and Market Estimates,'' Forbes, Dec. 13, 2018 (https://www.forbes.com/
sites/louiscolumbus/2018/12/13/2018-
roundup-of-internet-of-things-forecasts-and-market-estimates/
#149870eb7d83).
\9\Menard, Alexandre, ``How Can we Recognize the Real Power of the
Internet of Things?,'' McKinsey & Company, Nov. 2017 (https://
www.mckinsey.com/business-functions/
digital-mckinsey/our-insights/how-can-we-recognize-the-real-power-of-
the-internet-of-things); see also McKinsey Global Institute, The
Internet of Things: Mapping the Value Beyond the
Hype, McKinsey & Company, June 2015 (https://www.mckinsey.com/ /media/
McKinsey/
Business%20Functions/McKinsey%20Digital/Our%20Insights/
The%20Internet%20of%20Things
%20The%20value%20of%20digitizing%20the%20physical%20world/
Unlocking_the_potential_of_
the_Internet_of_Things_Executive_summary.ashx).
\10\Accenture 2017 Internet of Health Things Survey, Accenture
Consulting, at 2 (2017) (https://www.accenture.com/_acnmedia/PDF-42/
Accenture-Health-2017-Internet-of-Health-Things-
Survey.pdfla=en#zoom=50).
\11\O'Sullivan, Andrea; Thierer, Adam, ``Projecting the Growth and
Economic Impact of the Internet of Things,'' Mercatus Center Policy
Briefing, Jun. 15, 2015, at p. 7 (https://www.mercatus.org/system/
files/IoT-EP-v3.pdf).
\12\Winning With the Industrial Internet of Things, Accenture,
2015, pp. 2-3 (https://www.accenture.com/t20150523T023647__w__/us-en/
_acnmedia/Accenture/Conversion-
Assets/DotCom/Documents/Global/PDF/Dualpub_11/Accenture-Industrial-
Internet-of-Things-Positioning-Paper-Report-20pdf (Accenture Report).
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Estimates of the impact of IoT on the U.S. economy vary,
but experts project the impact to be substantial. For instance,
Accenture estimates the U.S. economy will gain $6.1 trillion in
cumulative GDP by 2030 from IIoT and, with additional measures
such as infrastructure improvements, IIoT may be worth as much
as $7.1 trillion to the U.S. economy.\13\
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\13\Accenture Report at 3.
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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.\14\ Establishing such a national strategy to encourage
the development of IoT has the support of a diverse set of
business and industry stakeholders, including The App
Association, the U.S. Chamber of Commerce, CTIA, the
Competitive Carriers Association, the Computing Research
Association, the Consumer Technology Association, Intel, the
Information Technology Industry Council, the Information
Technology and Innovation Foundation, Security Industry
Association, the Semiconductor Industry Association, the
Telecommunications Industry Association, and VMware.
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\14\See, e.g., ``Technology Industry Leaders Release National
Strategy to Maximize U.S. Economic and Societal Benefits from the
Internet of Things, Information Technology Industry Council, Oct. 3,
2017 (https://www.itic.org/news-events/news-releases/technology-
industry-leaders-
release-national-strategy-to-maximize-u-s-economic-and-societal-
benefits-from-the-internet-of-things).
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Summary of Provisions
If enacted, S. 1611, the Developing Innovation and Growing
the Internet of Things Act, or the DIGIT Act, would do the
following:
Help create a national strategy for IoT.
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
provide recommendations to Congress on how to plan and
encourage the growth of IoT.
Direct the Federal Communications Commission (FCC),
in consultation with DOC's National Telecommunications
and Information Administration (NTIA), to issue a
report (after seeking public comment) on the spectrum
needs required to support IoT.
Legislative History
S. 1611 was introduced on May 22, 2019, by Senator Fischer
(for herself and Senators Booker, Gardner, and Schatz) and was
referred to the Committee on Commerce, Science, and
Transportation of the Senate. On July 10, 2019, the Committee
met in open Executive Session and, by voice vote, ordered S.
1611 reported favorably with amendments. Senator Lee offered
two amendments--one amendment that would limit the compensation
paid to private sector representatives on the steering
committee created by the bill, and the second amendment that
would terminate the DIGIT Act steering committee once it has
filed its report with the working group.
S. 1611 is substantially similar to S. 88, a bill
introduced in the 115th Congress on January 10, 2017, by
Senator Fischer (for herself and Senators Booker, Gardner, and
Schatz), and which was referred to the Committee on Commerce,
Science, and Transportation of the Senate. On January 24, 2017,
the Committee met in open Executive Session and, by voice vote,
ordered that bill reported favorably without amendment. On
August 3, 2017, that bill passed the Senate with an amendment,
by voice vote, and on August 11, 2017, that bill was referred
to the Subcommittee on Communications and Technology of the
Committee on Energy and Commerce of the House of
Representatives.
S. 1611 also is substantially similar to S. 2607, a bill
introduced in the 114th Congress on March 1, 2016, by Senator
Fischer (for herself and Senators, Ayotte, Booker, and Schatz),
and which was referred to the Committee on Commerce, Science,
and Transportation of the Senate. On April 27, 2016, the
Committee met in open Executive Session and, by voice vote,
ordered S. 2607 reported favorably with an amendment (in the
nature of a substitute). On September 27, 2016, Senator Thune
reported that bill favorably with an amendment (in the nature
of a substitute), and it was placed on the Senate Legislative
Calendar.
On February 11, 2015, the Committee on Commerce, Science,
and Transportation, 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.\15\
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\15\See, ``The Connected World: Examining the Internet of Things,''
Committee on Commerce, Science, and Transportation of the Senate, Feb.
11, 2015, webcast (https://www.commerce.senate.gov/public/index.cfm/
hearings?ID=D3E33BDE-30FD-4899-B30D-906B47E117CA), and published
hearing (https://www.govinfo.gov/content/pkg/CHRG-114shrg99818/pdf/
CHRG-114shrg99818.pdf).
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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. 1611 would require the Department of Commerce (DOC) to
convene a federal interagency working group to report to the
Congress on the Internet of things (IoT).\1\ The group would be
required to identify laws and regulations that inhibit or
promote IoT deployment, examine current and future federal IoT
use, and recommend federal IoT security measures. The working
group would consult with academic stakeholders and with those
in the public, private, and nonprofit sectors.
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\1\The IoT consists of devices connected one another and to a
network for exchanging data without human interaction. See Suzy E.
Park, Internet of Things (IoT): An Introduction, In Focus Report 11239
(Congressional Research Service, June 4, 2019), https.z/go.usa.gov/
xVcdR.
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S. 1611 also would establish a steering committee within
DOC to advise the working group on IoT issues. Topics of study
would include the economic effects of IoT and the availability
of electromagnetic spectrum to meet users' demands. The
committee would submit its findings to the working group, which
would report them to the Congress.
Finally, under S. 1611 the Federal Communications
Commission (FCC), in consultation with the National
Telecommunications and Information Administration, would seek
public comments on current and future spectrum needs to ensure
adequate IoT connectivity and to report those findings to the
Congress.
Using information from the affected agencies, CBO estimates
that implementing S. 1611 would cost $7 million over the 2020-
2021 period for DOC to hire about 22 employees, to convene the
working group, and to issue the mandated reports. Such spending
would be subject to appropriation of the estimated amounts.
CBO also expects that participating in the working group
and completing the spectrum report would cost the FCC less than
$500,000. The FCC is authorized to collect fees sufficient to
offset the costs of its regulatory activities each year;
therefore, CBO estimates that the net cost of those activities
would be negligible, assuming appropriation actions consistent
with that authority.
The CBO staff contact for this estimate is David Hughes.
The estimate was reviewed by Theresa Gullo, Assistant Director
for Budget Analysis.
Regulatory Impact Statement
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
S. 1611, as reported, 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 the bill's 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 after enactment, a report (after
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 provide that the legislation may be
cited as the ``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 should do the following:
Promote solutions with respect to IoT that are
secure, scalable, interoperable, industry-driven, and
standards-based.
Maximize the development and deployment 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 of Commerce 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 Department of Commerce (including NTIA,
the National Institute of Standards and Technology, and the
National Oceanic and Atmospheric Administration) and the
following departments and agencies: the Departments of
Transportation, Homeland Security, and Energy; the Office of
Management and Budget; the National Science Foundation; the
FCC; the Federal Trade Commission; the Office of Science and
Technology Policy; and the Federal Energy Regulatory
Commission.
The section would require the working group to do the
following:
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;
Consider policies or programs that encourage and
improve coordination among Federal agencies with
jurisdiction over IoT;
Consider any findings or recommendations made by the
steering committee and, where appropriate, act to
implement those recommendations; and
Examine how Federal agencies use and can benefit
from IoT, including preparedness to adopt IoT and any
additional security measures that Federal agencies may
need to take (ensuring that such security measures are
properly coordinated among Federal entities).
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 also would be appointed by
the Secretary of Commerce, would advise the working group on
the following:
Potential regulatory, statutory, grant,
programmatic, budgetary, jurisdictional, and sector-
specific challenges to the development of IoT;
Situations in which the use of IoT is likely to
deliver significant and scalable economic and societal
benefits;
Spectrum availability to support IoT;
Policies, programs, and multi-stakeholder activities
relating to privacy, security, or coordination among
Federal agencies with jurisdiction over IoT;
The use of IoT by small businesses; and
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 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 committee consideration. It also would state that
the steering committee's report must be the result of the
independent judgment of the committee. The steering committee
would terminate upon the filing of its report, and members of
the working group would receive no compensation for their
service.
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. The report would be required
to include the working group's recommendations for action or
reasons for inaction on the steering committee's
recommendations, along with an accounting of the progress made
by Federal agencies in implementing recommendations from both
the steering committee and the working group. A copy of the
report would be required to be provided to several named
Congressional committees.
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 following:
The adequacy of available spectrum or planned
allocations for wireless services that could support
IoT;
If adequate spectrum is not available for IoT, how
to ensure that it is made available;
What regulatory barriers exist to providing any
needed spectrum; and
The role of licensed and unlicensed spectrum in the
growth of IoT.
This section would further provide that, within 1 year of
the bill's enactment, the FCC be required to submit to various
named congressional committees 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.