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SPEECH/06/162












Viviane Reding

Member of the European Commission responsible for Information Society and Media




The RFID Revolution: challenges and options for action





















International CeBIT Summit
Hannover, 9 March 2006

Ladies and Gentlemen,

It is a privilege for me to be here this afternoon with so many leaders and actors of the Radio Frequency Identification industry.

And I am delighted, of course, to be on stage with our special guest, Vinton Cerf, whom we all know respectfully and gratefully. I take great pride in standing with Vinton – a person of high principle and clear thought. Vinton, you are a strong, convincing and also lyrical voice for those who believe that RFID devices are poised to become more ubiquitous.

Not many new technologies have triggered so much attention from public authorities and consumer organisations around the world as RFID devices. The place taken by RFID in the public debate today largely derives from the fact that this technology is moving swiftly from the research laboratory to mass applications.

RFID technology offers several improvements over traditional methods such as bar coding which have to be directly in direct view of a scanner to be readable. RFID tags especially have undisputable advantages in applications such as stock control in shops or hospitals or libraries where the usage of many items has to be managed in real-time. These developments open the door to a new wave of productivity gains across a wide range of sectors. And remember that productivity is the engine of economic growth and job creation.

It is expected that in the next decade the number of tags employed will be several thousand times the number delivered this year. But we will only get this growth and the productivity gains it offers if we quickly overcome key barriers as regards incompatible standards and inadequate frequency allocation. This is key for enabling European as well as global interoperability of RFID systems. Also, before things go too far, we must also make some decisions of principle on the security and privacy issues associated with widespread government and commercial use of RFID technology.

The time for action is now.

That is why I decided to use today to launch a public dialogue in both the business and public sectors on the European approach to RFID.

What are the key elements of the debate concerning RFID?

Research and technological development

Rarely in our history have we faced technological challenges such as the ones that we face today. And it is our duty to mobilise our knowledge and cultural value to address them.

RFID technology as we know it today will evolve and reach unprecedented levels of functionality, of memory storage and processing capabilities. In the near future, we will see the breakdown of the boundary between cyberspace and real space. The worlds of data and things will merge so that the virtual world of the Web will be rendered physical as we move towards – what computer scientists have called “the Internet of Things”.

We’re heading for a world in which billions of networked objects and sensors will report their location, identity, and history.

Such a phenomenal development, hard to imagine not long ago, should open up tremendous opportunities for both economic prosperity and the quality of life of citizens. For instance, over the next 50 years, the innovative marriage of RFID tags, sensors, Galileo, 4G networks, Wi-Fi and artificial intelligence, will create an “intelligent infrastructure” that has the potential to dramatically reduce congestion and pollution, and enhance security, passenger monitoring and comfort.

RFID applications

RFID is a dazzling new technology, as we all have the opportunity to see right here at CeBIT. These tiny chips are the new form of traditional barcodes.

There are several basic advantages of RFID tags over conventional bar codes. First, there is their ability to carry much more information than a barcode. Secondly, they can be read remotely and do not need to be in line of sight to be read. And thirdly, many tags can be read simultaneously, where bar codes need to be scanned one at a time.

Currently the cost of tags stops them being used for very low cost items. But, very soon, the price of the RFID tags will drop low enough for them to be in use in virtually all products. At the same time, the ability of tags to have data deleted and re-written means that for some applications, the initial cost can be spread over a number of cycles of use.

We have already seen RFID tags at toll booths, at gas stations, at car rental installations.

Airbus’ A-380 double-decker passenger aircraft will have passive RFID chips on removable parts such as passenger seats, life vests, and brakes, which will be key in the maintenance of those parts.

In pharmaceuticals might RFID be used to combat drug counterfeiting? This would give real teeth to the drug pedigree regulations that are on track in some countries around the world today.

And I do not forget the potential in retailing. The ‘Future Store Initiative’ here at CeBIT shows RFID technology could be deployed throughout the distribution chain.

Interoperability and standardisation

RFID technology has undergone and is still subject to extensive standardisation activities at the international, regional and industry level. As economies increasingly depend on the global trading system, the need for interoperability among standards, and harmonisation of standards, has never been so pressing.

The issue of standards is a complex one. On one hand, multiple standards represent huge costs for product development and may create significant non-tariff trade barriers.

In particular, for global activities such as supply chains and passports, interoperability and common international standards are a prerequisite; tags used in one country should be easily readable by readers in other countries. But, competing technologies based on alternative standards are powerful drivers of competition and innovation.

So we need to agree on a common international framework, which will pave the way for this competition to innovation to take place. For example, we could have common answers to how tags are read; how data is represented on the tag; the tag links to remote databases and applications.

In addition, there are questions about the governance structure? Technical developments will eventually make it feasible to give virtually every object on Earth an internet identity! This means that we will be confronted with a new debate on the governance of the internet: the governance of the “Internet of Things”. This will be essential given that the root servers matching RFID tags to information about the products will carry important economic intelligence.

Adequate radio spectrum resources

RFID tags are objects mobile by nature and therefore should be able to operate anywhere in the world. International frequency coordination and harmonisation of its usage conditions is therefore a “de facto” requirement. However, the process of coordinating spectrum allocation at international level has traditionally been slow, and free spectrum is scarce, which makes access for new applications increasingly difficult. Well established RFID applications have already obtained some spectrum allocation, with variable degree of global - or regional - harmonisation. In particular RFIDs operating in the so-called “UHF” bands, poised to be deployed by hundred of millions, do not yet enjoy access to globally harmonised spectrum resources.

In Europe, some agreement on spectrum harmonisation has been reached in 2004 in the context of a CEPT recommendation to support the start-up phase of UHF RFIDs. Unfortunately, several Member States have not yet implemented those recommendations. To address this issue, the Commission has taken the initiative, to be approved by the Radio spectrum Committee, to introduce binding EU provisions to open this band to RFIDs without any further delay and to harmonise the usage conditions. I am pleased to say that we are confident that this process can be finalised within a reasonable time frame. It would create a Europe-wide regulatory certainty for the anticipated initial phase of deployment.

In addition, the Commission has called on Industry to cooperate in order to identify its longer term needs for frequencies, in particular the expected amount of radio spectrum and the level of global harmonisation which is required. I am committed to support this initiative to identify additional spectrum resources, including through international negotiations, once those needs are clearly defined.

Privacy

European citizens value the right to privacy very high. And quite rightly so.

It is true that RFID technology intertwined with ever more sophisticated databases and networks allows to easily collect, store, distribute and combine digital trails of our daily transactions. The marriage between RFID and databases can indeed lead to micro-monitoring and widespread tracking of people’s daily lives.

The European Commission shares concerns about a future of ubiquitous surveillance, identity theft and low trust. User trust and confidence is a crucial element for the take-up of RFID.

We do listen to those people who say they are concerned about the capability of RFID technology for the thorough, automatic, and widespread surveillance of our daily lives. And it is our duty to respond to these concerns.

We need above all to have an informed debate on the issue. First not all applications raise privacy concerns, and we need to make this distinction. And where privacy and data protection are indeed at stake, we must find the right balance between privacy and the public interest.

In particular, we need to ask what information will RFID systems gather, and how long that data will be kept? Who will have access to it? How will the data be secured from theft, negligence and abuse, and how will accuracy be ensured? In what cases should law enforcement agencies be able to use this information, and what safeguards should apply? What can be done to ensure that when personal information is collected, the individual concerned can see it, and can eventually correct it or suppress it?

These are fundamental issues on which we have to give citizens, consumers and organisations the legal certainty that their rights are protected, so that they can take-up RFIDs with confidence. If it requires legal measures to build this confidence I will be willing to take them. The business opportunities of RFID can only be built on a basis of mutual trust.

Let me be clear: I will not see the liberty of citizens and their fundamental rights being compromised.

To conclude

We are at risk of a fragmented approach to RFID. Now is the right time to think about these issues.

This is why I am encouraging a wide ranging discussion involving all European stakeholders – and also beyond Europe. These are the steps:

  • Between March and June 2006 there will be a series of public workshops to discuss the main issues relevant to RFID. The earlier we begin this discussion, the greater the prospects for success in reaching consensus on a set of guiding principles.
  • The conclusions of these workshops will assist the European Commission in the preparation of an online consultation.
  • This additional feedback will be analysed and the Commission will report on it in a Communication to be issued by the end of 2006. In the Communication I will outline concrete any follow-up steps that are needed, including legislative measures where necessary.
  • This dialogue will be accompanied by an intensified international dialogue. In the age of instant global communication, the need of nations to work together is greater than ever. The technological challenges we face today are too complex, too immense, and too pervasive for the European Union or any nation to face alone.
  • The scope will cover all of our important goals -protecting security, aiding law enforcement, closing the digital inclusion gap, and at the same time ensuring the privacy of each of our citizens.

I look forward to engaging the private and public sectors in this discussion, and I look forward also to consulting widely with private and public sector leaders as we strive to balance technological innovation, privacy and security, and industrial development.

Thank you for your interest in these cutting-edge issues, and thanks so much for the pleasure to share some ideas with you.


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