Machine to machine networks, sometimes called the Internet of things, are the logical extension of today’s connected society, but creating such a network will require multiple technologies; telcos to open up their networks; governments to figure out a way to assign unique numbers for each device on the network; and new rules to protect security and privacy. In short, while the idea is fairly mature, the tools to make it a reality are lagging.
To outline what still needs to be done, and give governments a framework for understanding how 50 billion devices could be connected in the next 8 years, the OECD has released a report laying out the needs of an M2M network and the tradeoffs associated wtih different technologies. It offers a few interesting use cases, as well, although the focus is more squarely on the practicalities of making it work. As usual, it starts with the networks.
The OECD breaks down the needs depending on the type of device and its function, basically if a device moves or not, and then how far it moves. For highly mobile devices that travel around the world, we’re actually short on options, but cellular is probably the best bet. For stationary devices in the home, power line communications or Wi-Fi could offer compelling options. However, with each technology there are tradeoffs, and those tradeoffs become magnified if you’re considering connections for products designed to be used globally.
For example, cellular technology has drawbacks because 2G networks, which are fairly ubiquitous are also being phased out, and the lifetime of a connected device may stretch for decades (think of how long you keep your fridge or a bike. However 3G networks aren’t going to arrive everywhere, which means some places might then never have a connection. Imagine if you had a pet tracking service for Fido that used 3G and Fido wandered out of a coverage zone. LTE and 4G might seem like a good solution for offering the longest time until obsolescence, but right now radios suck power and networks are thin on the ground.
Each wireline and wireless network technology offers drawbacks of this nature plus those associated with costs, reliability and security. It’s enough to make one’s head spin, or to at least hope that someone might combine a variety of services under one roof and just offer connectivity packages.
The role of wholesalers.
It’s not that companies don’t want to take on the role of aggregating connectivity for customers, but that the wholesale market for access has a few roadblocks, according to the report. One roadblock is how devices will be identified on M2M networks. From IP addresses to individual mobile subscriber numbers, there are a variety of ways to authenticate devices on a network. But not all methods of identification are available to everyone.
In some cases the government will only allow telecom providers to offer identifying numbers, which means only they can provide service for M2M communications. The OECD believes that will keep prices high and limit the market. That brings us to the role governments will have to play in the creation of a viable system. From the report:
Access to a unique and verifiable identity is another important requirement for many M2M applications. The model provided by SIM-cards seems to offer a great deal of flexibility and possibilities. There are other ways of providing a secure identity, but using a SIM-card chip soldered onto a motherboard or integrated into a chipset appears to be a very cost-effective method of providing security. As regulators play an important role in assigning SIM-card numbers (so called ESN-numbers) they will have to take this role into account in terms of the future of M2M.
The role of regulation
In asking governments to rethink their regulatory environment for a new age of communications built on IP networks and between people, machines and back-end computers processing data, the report hits on an increasingly common problem of the Internet age. Ironically, a decade or so after IP communications became widespread in the U.S. we are only now getting to a place in our regulatory regime where the government is discussing how this changes the way laws should be written and enforced. Legislation and regulation lagging the marketplace isn’t new, but the OECD report makes a good first step in understanding one of the next regulatory battles looming on the horizon.