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THE INTERNET OF THINGS: EXPLORING THE NEXT 

TECHNOLOGY FRONTIER 

HEARING 

BEFORE THE

SUBCOMMITTEE ON COMMERCE, MANUFACTURING, 

AND TRADE 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

MARCH 24, 2015 

Serial No. 114–26 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

GREG WALDEN, Oregon 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Ohio 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

LARRY BUCSHON, Indiana 

BILL FLORES, Texas 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

CHRIS COLLINS, New York 

KEVIN CRAMER, North Dakota 

FRANK PALLONE, JR., New Jersey 

Ranking Member 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

BEN RAY LUJA ́ N, New Mexico 

PAUL TONKO, New York 

JOHN A. YARMUTH, Kentucky 

YVETTE D. CLARKE, New York 

DAVID LOEBSACK, Iowa 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California 

SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND TRADE

MICHAEL C. BURGESS, Texas 

Chairman 

LEONARD LANCE, New Jersey 

Vice Chairman 

MARSHA BLACKBURN, Tennesseem 

GREGG HARPER, Mississippi 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

GUS M. BILIRAKIS, Florida 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

FRED UPTON, Michigan (ex officio) 

JANICE D. SCHAKOWSKY, Illinois 

Ranking Member 

YVETTE D. CLARKE, New York 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California 

BOBBY L. RUSH, Illinois 

G.K. BUTTERFIELD, North Carolina 

PETER WELCH, Vermont 

FRANK PALLONE, JR., New Jersey (ex 

officio) 

(II) 

(III) 

C O N T E N T S 

Page 

Hon. Michael C. Burgess, a Representative in Congress from the State of 

Texas, opening statement .................................................................................... 1 

Prepared statement .......................................................................................... 3 

Hon. Janice D. Schakowsky, a Representative in Congress from the State 

of Illinois, opening statement .............................................................................. 4 

Prepared statement .......................................................................................... 5 

Hon. Marsha Blackburn, a Representative in Congress from the State of 

Tennessee, opening statement ............................................................................ 5 

Hon. Frank Pallone, Jr., a Representative in Congress from the State of 

New Jersey, opening statement .......................................................................... 6 

Prepared statement .......................................................................................... 7 

WITNESSE

Daniel Castro, Vice President, Information Technology and Innovation Foundation .................................................................................................................... 9 

Prepared statement .......................................................................................... 12 

Brian Van Harlingen, Chief Technology Officer, Belkin International, Inc. ...... 23 

Prepared statement .......................................................................................... 25 

Rose Schooler, Vice President, Internet of Things Group, and General Manager, Internet of Things Strategy and Technology Office, Intel Corporation . 30 

Prepared statement .......................................................................................... 32 

R. Brad Morehead, Chief Executive Officer, LiveWatch Security, LLC .............. 50 

Prepared statement .......................................................................................... 53 

SUBMITTED MATERIAL

Letter of March 24, 2015, from Gary Shapiro, President and CEO, Consumer 

Electronics Association, to Mr. Burgess and Ms. Schakowsky, submitted 

by Mr. Burgess ..................................................................................................... 74 

(1) 

THE INTERNET OF THINGS: EXPLORING THE 

NEXT TECHNOLOGY FRONTIER 

TUESDAY, MARCH 24, 2015 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND

TRADE, COMMITTEE ON ENERGY AND COMMERCE, Washington, DC. 

The subcommittee met, pursuant to call, at 11:03 a.m., in room 

2123 of the Rayburn House Office Building, Hon. Michael Burgess 

(chairman of the subcommittee) presiding. 

Members present: Representatives Burgess, Lance, Blackburn, 

Harper, Guthrie, Olson, Kinzinger, Brooks, Mullin, Schakowsky, 

Ca ́ rdenas, Butterfield, and Pallone (ex officio). 

Staff present: Charlotte Baker, Deputy Communications Director; 

James Decker, Policy Coordinator, Commerce, Manufacturing, and 

Trade; Graham Dufault, Counsel, Commerce, Manufacturing, and 

Trade; Kirby Howard, Legislative Clerk; Paul Nagle, Chief Counsel, Commerce, Manufacturing, and Trade; Olivia Trusty, Professional Staff, Commerce, Manufacturing, and Trade; Michelle Ash, 

Democratic Chief Counsel, Commerce, Manufacturing, and Trade; 

Christine Brennan, Democratic Press Secretary; Jeff Carroll, 

Democratic Staff Director; and Brendan Hennessey, Democratic 

Policy and Research Advisor. 

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. BURGESS. The Subcommittee on Commerce, Manufacturing, 

and Trade will now come to order. The Chair now recognizes himself for 5 minutes for the purposes of an opening statement. And 

again, I want to say good morning to everyone in the hearing room 

today and especially to our panel of witnesses as we begin to explore the emerging market in our digital ecosystem, the Internet of 

Things. 

The Internet of Things marks a crucial juncture for the U.S. 

economy and for American consumers as our country looks for new 

economic engines and new sources for jobs. It promises a world in 

which digital and physical elements connect, gather information 

real-time, predict circumstances, prevent problems, and create opportunities. 

This morning some of us attended the subcommittee’s Internet of 

Things showcase. We saw first-hand some of the innovative ways 

that companies are using the Internet and networked sensors to 

create, enhance, and customize products to better meet consumer 

2 

preference. I thank all of the companies who participated in this 

morning’s event. 

The products and services displayed at the showcase represent 

how, in just a very short period of time, increased Internet 

connectivity, capability have led to the creation of a vast ecosystem 

in which machines, devices, appliances, and a whole host of other 

things are able to connect to the Internet. 

We may be most familiar with this concept in the context of a 

connected refrigerator that lets us know what we need to purchase 

on our next trip to the grocery store or a smart watch that informs 

us when we have reached 10,000 steps or met our caloric intake 

for the day or a video monitor in our homes that can be watched 

remotely when traveling for work or vacation. These types of 

ground-breaking technologies, among many others, are providing 

valuable conveniences and invaluable information to users. 

And yet this is just the beginning. Much of the excitement surrounding the Internet of Things lies in its immeasurable scope and 

potential to touch everything, to touch everyone, and every sector 

of the economy. We are already seeing the fulfillment of this promise as this technology expands to other areas and captures more 

than just objects and things. 

Internet connectivity is being integrated into industrial processes, transportation routes, workforce practices, buildings, and 

other operational systems and entities across several different industries and environments. This is improving, this is revolutionizing the efficiency, productivity, and effectiveness of the way that 

individuals, businesses, and Governments are conducting various 

tasks and responsibilities. The Internet of Things, or the Internet 

of Everything, is fundamentally transforming the way we operate 

and participate in today’s world. 

The market is still very young. The potential for growth and innovation is at this point virtually limitless. As a physician, I see 

this potential first hand in the healthcare space. Medical professionals are able to interact with patients in revolutionary ways 

through connected devices, really devices that no one could have 

imagined just a few short years ago. This technology is offering opportunities to reduce healthcare costs, improve healthcare quality, 

and most importantly, to save lives. 

The significance of the Internet of Things is that these types of 

benefits are not unique to healthcare. This technology truly has the 

potential to transform every sector of the economy in most profound ways. Notwithstanding the economic and societal benefits of 

the Internet of Things, the consumer impact of this market should 

be a key focus of our discussion today. While consumers are benefitting from the technologies, attention must also be given to appropriate consumer protections for privacy and security. 

Today we will explore these issues, and we should recognize that 

not all devices are created equal. They are manufactured for different purposes. They have different capacities, and they generate 

varying levels and degrees of consumer information. Unlike other 

established markets, the Internet of Things is still developing, and 

quite honestly, we are trying to understand the nature and basis 

of the threats that face this ecosystem. In our examination of privacy and security issues, it is important that we balance these conVerDate Mar 15 2010 09:40 Oct 21, 2016 Jkt 037690 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X26INTERNETTHINGSASKOK082916\114X26INTERNETTHINGS
3 

cerns with the creativity and innovation that is driving this market. Too much potential for economic progress and consumer welfare is at stake to act without a full appreciation for what this market can offer. 

[The prepared statement of Mr. Burgess follows:] 

PREPARED STATEMENT OF HON. MICHAEL C. BURGESS

The Internet of Things marks a crucial juncture for the U.S. economy and American consumers as our country looks for new economic engines and more jobs. It 

promises a world in which digital and physical elements connect and gather information in real-time to predict circumstances, prevent problems, and create opportunities. 

This morning we attended the subcommittee’s Internet of Things showcase. We 

saw first-hand the innovative ways in which companies are using the Internet and 

networked sensors to create, enhance and customize products to better meet consumer preferences and demand. I thank all companies that participated in this 

event. 

The products and services displayed at this showcase represent how, in just a 

short period of time, increased Internet connectivity, capability, and use have led 

to the creation of a vast ecosystem in which machines, devices, appliances, and a 

whole host of other things are able to connect to the Internet. 

We may be most familiar with this concept in the context of a connected refrigerator that lets us know what we need to purchase at our next trip to the grocery 

store; or a smart watch that informs us when we’ve reached 10,000 steps and met 

our caloric intake for the day; or a video monitor in our homes that can be watched 

remotely when traveling for work or on vacation. These types of ground-breaking 

technologies—among many others—are providing valuable conveniences and information to users. 

And yet this is just the beginning. Much of the excitement surrounding the Internet of Things lies in its immeasurable scope and potential to touch everything, everyone, and every sector of the economy. 

We are already seeing the fulfillment of this promise as this technology expands 

to other areas and captures more than just objects and things. 

Internet connectivity is being integrating into industrial processes, transportation 

routes, workforce practices, buildings, and other operational systems and entities 

across several different industries and environments. This is improving and revolutionizing the efficiency, productivity, and effectiveness of the way individuals, businesses, and Governments are conducting various tasks and responsibilities. The 

Internet of Things—or the Internet of Everything—is fundamentally transforming 

the way we operate and participate in today’s world. 

While this market is still in its infancy, the potential for growth, innovation, and 

advancement is limitless. As a licensed physician, I see this potential first hand in 

the health care space. Medical professionals are able to interact with patients in 

revolutionary ways through connected devices that we only could have imagined just 

a few years ago. This technology is offering opportunities to reduce health care 

costs, improve health care quality, and most importantly, save lives. 

The significance of the Internet of Things is that these types of benefits are not 

unique to health care. This technology truly has the potential to transform every 

sector of the economy in profound ways. 

Notwithstanding the economic and societal benefits of the Internet of Things, the 

consumer impact of this market should be a key focus of our discussion today. While 

consumers are benefitting from these technologies, attention must also be given to 

appropriate consumer protections for privacy and security. 

As we explore these issues, we should recognize that not all devices are created 

equally; they are manufactured for different purposes, have different capacities and 

generate varying levels and degrees of consumer information. Unlike other established markets, the Internet of Things is still developing and we are still trying to 

understand the nature and basis of threats facing this ecosystem. In our examination of privacy and security issues, it is important that we balance these concerns 

with the creativity and innovation driving this market forward. Too much potential 

for economic progress and consumer welfare is at stake to act without a full appreciation for what this market can offer. 

Mr. BURGESS. I want to thank the witnesses again for making 

time to be with us here this morning. I look forward to an informVerDate Mar 15 2010 09:40 Oct 21, 2016 Jkt 037690 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X26INTERNETTHINGSASKOK082916\114X26INTERNETTHINGS
4 

ative and engaged discussion on this very important topic and now 

would like to yield back my time and recognize the subcommittee 

ranking member, Ms. Schakowsky, for the purpose of an opening 

statement. 

OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Ms. SCHAKOWSKY. Well, you don’t think often of events in this 

building as being like really fun, and this is a day that we can say 

that it is because the showcase down the hall is very, very exciting. 

And we are going to hear about things that I think certainly can 

enhance and spice up and make our lives easier and better from 

incredible entrepreneurs. So I want to thank you all for being here 

today. I want to thank the chairman for holding the showcase and 

the hearing. 

I would like to take a moment to introduce one of our witnesses, 

Brad Morehead, CEO of LiveWatch Security, which does have a 

demonstration over in the showcase. It is an innovative company 

from my hometown of Evanston, Illinois, that uses the Internet of 

Things technology to better protect, inform, and connect its customers. LiveWatch has been honored with the 2014 gold Stevie 

Award for Customer Service, the 2013 silver Stevie Award for Ecommerce Customer Service, and was recognized as an enterprise 

leader by The Economist. 

Mr. Morehead also participated in our showcase this morning. I 

welcome him and thank him for his time today as someone who 

often has people coming in and out of my house who don’t always 

know the code on my security system and someone who regularly 

can’t find her key. I want to tell you that these kinds of technologies can mean a lot in my life. 

The Internet of Things is one of the fastest-growing technologies 

today. An estimated 25 billion products are now connected to the 

Internet, and that number is expected to double by 2020. Internet 

of Things technology brings very clear benefits to consumers, vehicles that can tell a driver if a part is in need of replacement, as 

the chairman mentioned, refrigerators can tell a parent to buy another gallon of milk, health gadgets that monitor a person’s heart 

rate, running or walking speed, distance covered. All of these products and many more are made possible through the Internet of 

Things. 

But this technology also presents some new challenges. How do 

we ensure that these technologies are secure? The chairman was 

right to raise the question of the important balance, that sensitive 

information doesn’t get out to unintended audiences or that products connected to the Internet aren’t remotely deactivated by an 

unauthorized user. We must ensure that as this technology continues to grow we take common-sense steps to assure that it is safe 

and secure. 

These are issues worthy of the subcommittee’s time and consideration. Again, I look forward to hearing from this distinguished 

panel about how they are creatively harnessing the Internet of 

Things, and I would yield at this time for Mr. Ca ́ rdenas. 

[The prepared statement of Ms. Schakowsky follows:] 

5 

PREPARED STATEMENT OF HON. JANICE D. SCHAKOWSKY

Thank you, Mr. Chairman, for holding today’s showcase and hearing on the Internet of Things. I am eager to learn more from our distinguished panel about this 

technology’s promise as well as the new challenges it presents. 

I’d like to take a moment to introduce one of our witnesses—Brad Morehouse, 

CEO of LiveWatch Security. LiveWatch is an innovative company from my hometown of Evanston, Illinois, using Internet of Things technology to better protect, inform, and connect its customers. LiveWatch has been honored with the 2014 Gold 

Stevie Award for Customer Service, the 2013 Silver Stevie Award for eCommerce 

Customer Service, and was recognized as an enterprise leader by The Economist. 

Mr. Morehead also participated in our showcase this morning. I welcome him and 

I thank him for his time today. 

The Internet of Things is one of the fastest-growing technologies today. An estimated 25 billion products are now connected to the Internet, and that number is 

expected to double by 2020. 

Internet of Things technology brings very clear benefits to consumers. Vehicles 

that can tell a driver if a part is in need of replacement. Refrigerators that can tell 

a parent if they need an extra gallon of milk at the grocery store. Health gadgets 

that monitor a person’s heart rate, running or walking speed, and distance covered. 

All of those products—and more—are made possible through the Internet of Things. 

But this technology also presents some new challenges. How do we ensure that 

these technologies are secure? That sensitive information doesn’t get out to unintended audiences? Or that products connected to the Internet aren’t remotely deactivated by an unauthorized user? We must ensure that as this technology continues 

to grow, we take commonsense steps to ensure that it is safe and secure. These are 

issues worthy of this subcommittee’s time and consideration. 

Again, I look forward to hearing from our distinguished panel about how they are 

creatively harnessing the Internet of Things. I yield back. 

Mr. CA ́ RDENAS. Thank you. Good afternoon. I want to thank the 

ranking member for yielding me some of her time. I want to introduce Brian Van Harlingen, the Chief Technology Officer at Belkin. 

Belkin is a local Los Angeles company, and we are proud of them. 

And they have been doing a great job as a driver for jobs and innovations in our great city. 

Since the 1980s, Belkin has been on the forefront of innovation 

creating products that benefit all of our constituents in their daily 

lives. I look forward to watching how Belkin will use what we are 

calling the Internet of Things to bring new products and services 

to their consumers, and I look forward to their testimony today. So 

welcome to Washington, DC, and thank you so much for your testimony. 

I yield back my time to the ranking member. 

Mr. BURGESS. I thank the gentlelady. The Chair now recognizes 

the vice chairwoman of the full committee, the gentlelady from 

Tennessee, Ms. Blackburn, 5 minutes for an opening statement. 

OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TENNESSEE 

Mrs. BLACKBURN. Thank you, Mr. Chairman. And I really do appreciate the attention to this issue and that my colleagues on both 

sides of the aisle are willing to work on this. We don’t need to let 

this get away from us if you will. And Mr. Welch and I have put 

a great deal of attention on the privacy and data security issue for 

the past couple of years and thereby have had the opportunity with 

our colleagues to dig a little deeper into some of these issues. 

Going back to the chairman’s remarks, I think it is important 

that we look at size and scope when we discuss the Internet of 

6 

Things. You can look at Cisco’s report, 50 billion devices, 50 billion 

devices connected to the Internet by the time we get to the end of 

this decade. And then you layer upon that what the expectations 

are for global economic output and contribution to the global economy from this. And right now and by the time we get to 2025, they 

are saying $2.7 to $6.2 trillion looking at that. So when you look 

at size and scope and impact, it behooves us to say, OK, how do 

we get our hands around this and make certain that we approach 

this in a light-touch way, that we encourage innovation? As Ms. 

Schakowsky said, we rely on a lot of these, and people like this because it does add convenience to our lives. But that accelerates the 

additional problem of privacy and security, whether it is B to B, or 

B to C, and how that is going to be filtered data and how we are 

going to mine it and what we are going to extrapolate and how we 

protect that, how we anonymize it, et cetera, et cetera. We have to 

realize that we are still running and hopefully always will on an 

open-source platform. Go back to when the Internet started, four 

known users, four disparate in varied locations, all known one to 

another, all vetted, all secure. 

So we want to be here to enhance that experience for the 50 billion items that are going to be attached and still provide the underpinning and infrastructure that was there when it was the initial 

project of four known users. 

So we welcome you all. We are going to be direct with our questions and probably a bit more conversational than some of the 

other hearings that you participate in. 

Mr. Chairman, I thank you for the attention to the issue and 

look forward to the discussion. I yield the balance of my time for 

whomever would like to claim it. 

Mr. BURGESS. Does any other member of the Republican side 

seek time? Seeing none, the gentlelady yields back her time. The 

Chair recognizes ranking member of the full committee Mr. 

Pallone, 5 minutes for an opening statement, please. 

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY 

Mr. PALLONE. Thank you, Mr. Chairman. Today’s hearing gives 

us an opportunity to look at a new and evolving technological development. The Internet of Things has great potential for growing 

the American economy and offering consumers new technology that 

will enrich their lives and empower them in ways never before 

thought possible. 

Earlier today, along with my colleagues, I had an opportunity to 

see some of the innovation coming out of the Internet of Things at 

a showcase hosted by the subcommittee, and I was proud to have 

there IMPak Health, a New Jersey company that is building wireless technologies into products to solve practical healthcare needs. 

IMPak Health has taken advantage of wireless technology to help 

ensure patients are taking their medication and staying healthy. 

And the growth in these types of devices is so rapid that they soon 

will be as ubiquitous as electrical outlets. In fact, it is estimated 

that there will be 50 billion connected products by the year 2020. 

7 

But in many ways, the future is already here. Just last Friday 

Tesla announced that it would remotely install software updates in 

its Model S cars providing them with capability of autonomous 

driving. Cars that drive themselves were once found only in science 

fiction, but today it can be a reality with a quick update sent over 

the Internet. 

Yet, along with these innovations come some new vulnerabilities, 

the vulnerabilities that we in Congress have a responsibility to protect consumers against. Let us take a hypothetical situation for a 

moment. Let us say that I wear a bracelet that monitors different 

aspects of my health and physical activity. It helps me keep track 

of how many steps I take each day. It tells me how well I sleep 

at night. It monitors my heart rate and along with an app in my 

phone, it tracks where I have gone. While, all this data is important to me, I may not want to have it released to a potential employer who requires it as part of the job application. I might not 

want the bracelet manufacturer selling it to an insurance company 

who might then utilize it for my insurance coverage, and I certainly do not want a hacker accessing the bracelet to post my information on the Internet or to monitor my location. 

So without strong security and privacy protections, consumers 

can be at real risk. These risks can have devastating consequences 

when the product is accessed and controlled remotely by an unscrupulous actor. One hacker has shown that he can remotely access 

an insulin pump and induce a lethal overdose. Others have shown 

that they can remotely hijack the operations of a car, suddenly 

turning the wheel or cutting off the brakes. 

In order to protect consumers, there has to be strong security 

and privacy protections built into these products. By building in security, manufacturers can more effectively prevent hackers from 

accessing a device or the data it produces or collects. 

At last week’s hearing, the FTC’s witness stated that his experience in evaluating the vulnerability in Internet of Things products 

has led the agency to recommend that device security be added to 

data security and breach notification legislation. By building in privacy, consumers could have confidence in these products, and consumers need to know that their intensely personal information will 

not be shared with the world without their consent. 

So I am confident great things will be done through the Internet 

of Things, but I believe that while we encourage innovation 

through these new technologies, we also have to be innovative in 

how we protect the consumer. 

[The prepared statement of Mr. Pallone follows:] 

PREPARED STATEMENT OF HON. FRANK PALLONE, JR. 

Thank you, Chairman Burgess. Today’s hearing gives us an opportunity to look 

at a new and evolving technological development. The Internet of Things has great 

potential for growing the American economy and offering consumers new technology 

that will enrich their lives and empower them in ways never before thought possible. 

Earlier today, along with my colleagues, I had an opportunity to see some of the 

innovation coming out of the Internet of Things at a showcase hosted by the subcommittee. I was proud to have there iMPak Health, a New Jersey company that 

is building wireless technology into products to solve practical healthcare needs. 

iMPak Health is taking advantage of wireless technology to help ensure patients are 

taking their medication and staying healthy. 

8 

The growth in these types of devices is so rapid that they soon will be as ubiquitous as electrical outlets. In fact, it is estimated that there will be 50 billion connected products by 2020. 

But in many ways, the future is already here. Just last Friday, Tesla announced 

that it would remotely install software updates in its Model S cars providing them 

with capability of autonomous driving. Cars that drive themselves were once only 

found in science fiction, but today it can be reality with a quick update sent over 

the Internet. 

Yet, along with these innovations come new vulnerabilities—vulnerabilities that 

we in Congress have a responsibility to protect consumers against. 

Let’s take a hypothetical situation for a moment. Let’s say that I wear a bracelet 

that monitors different aspects of my health and physical activity. It helps me keep 

track of how many steps I take each day, it tells me how well I sleep at night, it 

monitors my heart rate, and along with an app in my phone, it tracks where I have 

gone. 

While all of this data is important to me, I may not want to have to release it 

to a potential employer who requires it as part of the job application. I may not 

want the bracelet manufacturer selling it to an insurance company who might then 

utilize it for my insurance coverage. And I certainly do not want a hacker accessing 

the bracelet to post my information on the Internet or to monitor my location. 

Without strong security and privacy protections, consumers can be at real risk. 

These risks can have devastating consequences when the product is accessed and 

controlled remotely by an unscrupulous actor. One hacker has shown that he can 

remotely access an insulin pump and induce a lethal overdose. Others have shown 

that they can remotely hijack the operations of a car, suddenly turning the wheel 

or cutting off the brakes. 

In order to protect consumers, there has to be strong security and privacy protections built into these products. 

By ‘‘building-in’’ security, manufacturers can more effectively prevent hackers 

from accessing a device or the data it produces or collects. At last week’s hearing, 

the Federal Trade Commission’s witness stated that its experience in evaluating the 

vulnerability in Internet of Things products has led to the agency recommending 

that device security be added to data security and breach notification legislation. 

By ‘‘building-in’’ privacy, consumers can have confidence in these products. Consumers need to know that their intensely personal information will not be shared 

with the world without their consent. 

I am confident great things will be done through the Internet of Things. But I 

believe that while we encourage innovation through these new technologies, we also 

must be innovative in how we protect the consumer. 

Mr. PALLONE. I yield back. I don’t think any other member on 

our side wants the time. So I will yield—oh, you do? OK. I will 

yield my remaining time to the gentleman from California. 

Mr. CA ́ RDENAS. Thank you very much. I would be remiss if I 

didn’t take this opportunity to thank Intel. So Ms. Schooler, I just 

wanted to say thank you very much. Intel made an announcement 

just a few months ago that they are investing $300 million into 

their internal diversity initiatives over at Intel, and I hope that 

would be a starting point for all of the industries to follow suit as 

these industries are growing. They are the jobs of the future. And 

for Intel to make that commitment and that self-assessment is just 

wonderful. And many people on both sides of the aisle believe that 

industry does a great job when they police themselves and when 

they look in the mirror and they say we can do better. And I think 

this is a great opportunity for us to remind everyone that self-reflection and self-understanding of where we stand as individuals or 

organizations in the community certainly would give us an opportunity to step forward and say we can do better. And I think Intel 

has done a tremendous job, and thank you for that commitment. 

Thank you. I yield back my time. 

Mr. BURGESS. The Chair thanks the gentleman. The gentleman 

yields back. 

9 

So again, we want to welcome all of our witnesses, and thank 

you for agreeing to testify before the subcommittee today. Our witness panel for today’s hearing will include Mr. Daniel Castro who 

is the Vice President of the Information Technology and Innovation 

Foundation; Mr. Brian Van Harlingen who is the Chief Technology 

Officer of Belkin International; Ms. Rose Schooler, Vice President 

of the Internet of Things Group and the General Manager of the 

Internet of Things Strategy and Technology Office at Intel Corporation; and Mr. Brad Morehead, the Chief Executive Officer at 

LiveWatch Security. 

You each are going to be recognized in turn for 5 minutes for the 

purposes of an opening statement. Mr. Castro, we will begin with 

you. You are recognized for 5 minutes. 

STATEMENTS OF DANIEL CASTRO, VICE PRESIDENT, INFORMATION TECHNOLOGY AND INNOVATION FOUNDATION; 

BRIAN VAN HARLINGEN, CHIEF TECHNOLOGY OFFICER, 

BELKIN INTERNATIONAL, INC.; ROSE SCHOOLER, VICE 

PRESIDENT, INTERNET OF THINGS GROUP, INTEL CORP.; 

AND R. BRAD MOREHEAD, CHIEF EXECUTIVE OFFICER, 

LIVEWATCH SECURITY, LLC 

STATEMENT OF DANIEL CASTRO 

Mr. CASTRO. Thank you. Thank you, Chairman Burgess, Ranking 

Member Schakowsky, and members of the committee. I appreciate 

the opportunity to discuss the Internet of Things with you today. 

The Internet of Things represents the idea that ordinary objects 

will be imbedded with sensors and connected to the Internet. While 

many of these changes will be subtle, over the long term, this technology could ultimately have an enormously positive impact on individuals, businesses, and society. For example, consider 

healthcare. Individuals can use connected devices to prevent, 

screen, and diagnose a variety of medical conditions. By collecting 

and tracking data about their health, individuals can identify 

health problems sooner, get treatment faster, and save on 

healthcare costs. 

For example, patients can use smart pill bottles to receive automated alerts when it is time to take a dose, and these types of 

interventions can help decrease the rate of medication non-compliance which costs the United States almost $300 billion annually. 

Or look at energy. The Internet of Things is helping to provide 

solutions to the global energy challenge by enabling clean energy 

technologies. For example, in home, connected devices like smart 

thermostats can automate energy efficient practices and save consumers money. 

Or look at public safety. The Internet of Things helps build not 

only smarter cities but safer cities. In homes connected sensors can 

improve safety by detecting fires and other emergencies quickly 

and reliably and alert authorities sooner. 

In vehicles, the sensors can detect a crash and automatically 

alert emergency responders about the vehicle’s location and the 

number of occupants. Some of these systems can even predict the 

injuries that might have resulted. 

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The availability of this real-time data is crucial in an emergency 

since the faster response time can mean the difference between life 

and death. 

The Internet of Things is transforming industries like manufacturing as well. Using low-cost sensors in automation, factories can 

automatically turn off the lights and air-conditioning when the 

workers leave, shut off valves if sensors detect leaks, and shut 

down dangerous equipment if sensors detect a malfunction. Innovative manufacturers can use the data collected on the factory floor 

to gain insights about the physical fabrication process, thereby improving efficiency, increasing yields, and reducing product defects. 

Manufacturers can also use sensors to collect real-time data such 

as temperature and moisture about their shipments to help ensure 

quality and optimize logistics. More information can mean the difference between a recall and a successful shipment. 

As you can see, a significant amount of the data collected by the 

Internet of Things will not involve information about individuals 

but instead will be about the environment, factories, vehicles, infrastructure, and other electronic devices. And when data is collected 

about people, much of it will be de-identified and aggregated. But 

when it comes to personal privacy, Congress should tread lightly so 

as to avoid impeding innovation. In particular, Congress should 

recognize the privacy principles designed for a small-data world do 

not work in a big-data world. Proposals such as data minimization 

are based on the mistaken belief that it is always possible to predetermine what information is useful in the early stage and collect 

only that minimum amount. Many of the benefits from data come 

from exploratory analysis that finds new trends, relationships, and 

insights that were not obvious at the outset. Restricting data collection could severely curtail the many potential benefits of the Internet of Things. 

As more devices are connected to the Internet, it will be more important than ever that they incorporate strong security features. 

While the private sector is moving in the right direction, Congress 

should further incentivize companies to adopt strong security practices by adopting policies that decrease the cost of strong security 

and increase the cost of weak security. For example, Congress 

should pass data breach notification legislation that preempts State 

laws and reduces the legal compliance costs companies face from 

abiding by multiple rules. This will allow them to focus more resources on improving the security of their products. 

Congress should also pass cybersecurity information sharing legislation to help organizations respond to real-time threats. 

Finally, Congress should encourage universities to integrate 

cybersecurity training and to technical degrees so that the next 

generation of coders and engineers build strong security into their 

products. By improving education, Congress can help raise the bar 

for security across the entire U.S. tech sector. 

The success of the Internet of Things will depend in part on the 

actions of Congress. Just as the United States needed a national 

broadband strategy, it also needs a national strategy for the Internet of Things. Not only should Congress avoid policies that would 

impose costs, limit innovation, and slowed adoption, they should actively support accelerating the development and deployment of the 

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Internet of Things, such as by creating pilot projects for smart cities, encouraging smart infrastructure projects, and designing an efficient regulatory review process for wearable health technologies. 

The Internet of Things has the potential to positively impact virtually every industry from agriculture to healthcare, and the Federal Government should be an active partner in ensuring its success. 

Thank you for the opportunity to speak with you today. I look 

forward to your questions. 

[The prepared statement of Mr. Castro follows:] 

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Mr. BURGESS. The Chair thanks the gentleman. The gentleman 

yields back. Mr. Van Harlingen, you are recognized for 5 minutes 

for the purpose of an opening statement, please. 

STATEMENT OF BRIAN VAN HARLINGEN 

Mr. VAN HARLINGEN. Thank you, and good morning, Chairman 

Burgess, Ranking Member Schakowsky, and members of the committee. Thank you for holding this important hearing on the Internet of Things, otherwise known as IoT. My name is Brian Van Harlingen, and I am the Chief Technology Officer at Belkin International. 

Belkin is the maker of the WeMo home automation brand, which 

allows users to remotely measure, monitor, and manage their 

homes via a software suite including applications, cloud infrastructure, and a portfolio of more than 25 connected devices. Surpassing 

1 million activations, the WeMo ecosystem ranges from switches to 

lighting to home appliances. 

After years of talk, the Internet of Things has arrived, and the 

pace of innovation is accelerating at a phenomenal speed. We are 

pleased that Congress and other policy makers have joined the conversation, as policy awareness and leadership will help to maximize the benefits of this technological revolution and ensure consumer confidence. IoT will drive economic growth, create jobs, and 

facilitate entrepreneurship in completely new markets. 

In my testimony, I will discuss three key topics: consumer benefits, technological considerations, and privacy and security. 

First, consumer benefits. WeMo has been designed as the most 

approachable entry point into the smart home. Affordable and easy 

to use, WeMo provides bite-sized solutions to make consumers’ 

lives easier, simpler, and better. WeMo’s new Echo technology uses 

the home’s existing infrastructure to monitor, measure, and manage water, electricity, and natural gas usage. Using advanced data 

science and machine learning, these technologies have enormous 

potential to save both money and resources. 

As a connected solution, WeMo gains insight into how consumers 

use WeMo devices in order to provide better experiences and design 

future products. For example, through data analytics, we learned 

that consumers were finding ways to turn on their devices at sunrise and sunset, so we built that functionality directly into our 

WeMo app. We also learned that most WeMo Switch users were 

using them for lighting purposes. So we developed and marketed 

the WeMo Light Switch as our next product. These are examples 

of how we use the data from the WeMo cloud to drive better experiences for our consumers. 

Second, technological considerations. IoT for the home and business cannot exist without two primary technologies: Wi-Fi and 

smart devices. As the maker of both WeMo and Linksys Wi-Fi routers, Belkin understands both markets. Wi-Fi has been widely 

adopted with a 61 percent penetration rate in U.S. homes. WeMo 

products use familiar Wi-Fi technology. They do not rely on hubs 

for connectivity or intelligence. WeMo can integrate directly into 

partner products and serve as an on-ramp to the Internet of Things 

for everyday products like Crock-Pot slow cookers, Mr. Coffee 

coffeemakers, and Osram Sylvania light bulbs. 

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From a policy perspective, the Government and Congress can 

help promote and grow the Internet of Things by making sure 

these devices can talk to each other. Wireless spectrum, already an 

important technology policy issue, becomes even more important as 

IoT adoption accelerates and billions of new devices come on line. 

Congress and the FCC should continue to free up new spectrum, 

particularly on an unlicensed basis. Failure to expand spectrum 

will stifle IoT innovation and growth. 

Last but not least, privacy and security. At WeMo, we believe the 

nascent IoT market will benefits when consumers know privacy 

and security are our top priorities. We believe the Federal Government can take a light-touch regulatory approach and work with the 

industry to ensure consumer confidence. 

We applaud this committee’s efforts to pass data breach legislation that would address the patchwork of State data breach laws. 

WeMo has a very transparent data policy and strictly controls all 

PII. The data collected from WeMo devices is aggregated and 

anonymized. Non-personal information is used to identify trends, to 

improve network performance, and to provide additional benefits to 

consumers. We understand the importance of data security and employ a combination of industry-led security standards, procedures, 

and organizational measures. 

We have safeguards in place to prevent security breaches and 

work closely with outside security researchers to identify and address potential security vulnerabilities. We support the latest security applications and continuously improve and push consumer device firmware and application updates. Security will always be a 

top priority, and as the technology evolves, so will our efforts to 

provide safe and secure products for consumers. 

In conclusion, at WeMo, we are focused on delivering the most 

user-friendly, innovative, and secure products. I appreciate the opportunity to testify today and to share our vision of the Internet 

of Things and answer any questions the committee might have. 

[The prepared statement of Mr. Van Harlingen follows:] 

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Mr. BURGESS. The Chair thanks the gentleman. The Chair now 

recognizes Ms. Schooler 5 minutes for the purpose of an opening 

statement, please. 

STATEMENT OF ROSE SCHOOLER 

Ms. SCHOOLER. Good morning, Chairman Burgess, Ranking 

Member Schakowsky, and members of the subcommittee. Thank 

you for the opportunity to provide testimony on the importance of 

the United States’ establishing a global leadership role in the 

Internet of Things or the IoT. 

As head of Intel’s IoT’s Strategy and Technology Office, own the 

IoT strategy for the company. Intel’s 30 years of investment, innovations, and standards leadership in the evolution of computing 

provide the foundational elements of the strategy. Intel believes the 

IoT presents a transformational opportunity for the United States 

and for the world. It will enable innovation, increase productivity, 

and deliver efficiencies across the public and private sector. While 

some think of the IoT as smart thermostats and wearables, these 

consumer devices are only a few of the many applications. The primary economic driver will be non-consumer areas such as industrial and commercial applications. I will address three topics that 

are important to consider as you chart your policy. One: Why is the 

IoT important? Two: What are the barriers to a successful IoT ecosystem? And three: How can policymakers accelerate deployments 

to ensure U.S. leadership? 

First: Why is the IoT important? It will drive unprecedented benefits for Government, businesses, consumers, and communities. It 

is estimated that 50 billion devices will connect to the Internet by 

2020 generating 44 zettabytes of data. Consider that in 2009, the 

World Wide Web was estimated at just a half a zettabyte. The IoT 

presents the opportunity to connect these devices, efficiently analyze the data, and use the information to improve our decisionmaking. In doing so, the IoT is expected to have a multitrillion-dollar global economic impact. What should most excite U.S. policymakers is that America and other developed economies are expected to capture 20 percent of this impact if we lead. 

Let us consider one IoT application. Saia Trucking is located in 

Georgia and has a nationwide fleet of 3,000 trucks. They recently 

deployed an Intel-based IT solution which alters routes and guides 

drivers’ performance real-time. Saia increased fuel efficiency by 6 

percent translating into $15 million of annual savings. The U.S. 

trucking industry consumes 54 billion gallons of fuel per year. Extrapolating that success, our Nation could save over 3 billion gallons of fuel yearly while reducing our CO2 emissions. 

What are potential barriers to a successful IoT ecosystem? One 

barrier as noted could be security. It is not implemented from the 

outset. For this reason, Intel prioritizes security as the 

foundational element of our IoT strategy. We will integrate security 

at the outset building cryptography into our chips to enable strong 

identity and data protection. In addition to the compute device 

itself, our solutions will employ advanced software security to prevent harmful applications from being activated on the device or 

taking down the network. Integrating multiple layers of security at 

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the outset enables trusted data transmission necessary for successful IoT deployments. 

Other potential barriers include connecting to legacy infrastructure, interoperability between devices, and developing global standards. To address these barriers, Intel collaborated with industry 

leaders to define five tenants of successful IoT solutions. They are 

security, ease of connectivity, interoperability, data analytics, and 

ease of deploying new applications and services. Based on these 

tenants, we recently launched the Intel IoT platform. 

Finally, how can policymakers accelerate IoT deployments to ensure U.S. leadership? Candidly, the United States is behind. Other 

countries are aggressively investing and deploying IoT implementations to transform their economies, address societal problems, and 

spur innovation. China, Brazil, Germany have all adopted national 

IoT plans with time-bound goals and are investing heavily in IoT 

R&D and infrastructure. The United States must leverage our vast 

resources and capabilities, promoting industry alignment around 

these large-scale IoT deployments based on secure, open, and interoperable solutions will showcase U.S. leadership. 

Congress can advance our Nation’s IoT momentum by collaborating with industry to establish a national IoT strategy, encourage 

public/private partnerships, and invest in IoT research. Intel is confidence that the United States can lead the IoT transformation 

with a continued open dialogue as you are doing here today and by 

implementing some of these recommendations. 

Thank you for your time, and I look forward to your questions. 

[The prepared statement of Ms. Schooler follows:] 

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Mr. BURGESS. Thank you. The Chair recognizes Mr. Morehead 

for 5 minutes for the purpose of an opening statement, please. 

STATEMENT OF R. BRAD MOREHEAD 

Mr. MOREHEAD. Thank you, Chairman Burgess, Ranking Member Schakowsky, and members of the committee. We use the IoT 

every day when we check traffic or look at the weather forecast. We 

also see it in the wide variety of smart devices that are popping 

up everywhere, like smart refrigerators, smart coffee makers, or 

smart watches. But rather than talking about smart coffeemakers 

and refrigerators, I would prefer to illustrate the potential benefits 

of a robust Internet of Things by sharing a brief story about how 

the security alarm industry works. 

Imagine an emergency at your home or at your school or at your 

work, a burglary or violent crime in progress with multiple potential victims on the scene where the intruder or the victim has triggered an alarm. Speed and information are critically important to 

the first responders. However, when that security alarm goes off at 

that home, business, or public location, that signal is delayed for 

over a minute to reduce false alarms. Furthermore, the process of 

notifying the alarm monitoring center is surprisingly manual, as 

the alarm is transmitted after the delay to a person in the alarm 

center who must then be connected to another person at a 911 public safety answering point, or PSAP, for emergency dispatch. 

After an average 1- to 3-minute phone conversation between that 

security station and the PSAP safety agency, emergency responders 

are contacted and dispatched to the site of the alarm—again, where 

time is of the essence. But the first responders are given nothing 

more than basic information about the type of alarm and location 

of the incident. This average dispatch total can take 5 to 10 minutes, and that is valuable time and information that is lost in a 

true emergency. By some estimates from the DOJ, each year more 

than 1 million police hours are wasted due to these human errors 

and communication issues in this transmission process. 

Adding to that frustration is the fact that there may be additional security cameras, motion sensors, door sensors, or other sensors at the site of the emergency capturing valuable information. 

Unfortunately, in most cases, those additional sensors and cameras 

have no way of communicating to the monitoring station, 911 

PSAP, or the first responders. 

In other words, there is potential lifesaving data available that 

no one sees. This can cause first responders to arrive at the wrong 

place at the wrong time and without important information to save 

lives. 

With the IoT, these processes could be seamlessly automated and 

integrated to prevent and mitigate crimes in a more efficient way. 

In the future, the transmission of emergency alarms and sensor 

data could occur instantly from machine to machine, or M–2-M, instead of manually. Automated applications could be used to gather 

and interpret the alarm information from various IoT devices to determine the probability of a false alarm or help first responders use 

their time more efficiently and arrive at the right place. Smart sensors and cameras could be used to automatically transmit images 

and data from the scene of the crime directly to the officers. 

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Using IoT, two companies and centers were able to cut alarm 

transmission times down to 5 seconds and reduce the volume of 

calls going between these centers by 10 percent. Now imagine if 

that was implemented nationwide, how much more 

productive our police, fire, and EMT responders could be with 

fewer false alarms and better, faster information from IoT connected systems and devices. Internet of Things can help deliver 

first responders to the scene faster, more efficiently and with more 

information on the current emergency, if we invest now in the IoT 

infrastructure that we need so that we go beyond smart 

coffeemakers and refrigerators. 

Unfortunately, there are still a few technological barriers that 

are preventing us from implementing an ideal system. The IoT consists of a few key components: a power source, a communication 

protocol and data processing. 

Let us begin with power, since this is a subcommittee of the Energy and Commerce Committee. These connected sensors in the 

Internet of Things must have a power source, and while wired is 

preferred in some cases, it is typically too expensive to implement. 

Therefore battery power offers the widest array of uses, but the 

currently short battery life must be improved to lower the cost of 

ongoing maintenance and fully tap the potential of IoT. 

As an example of this, recently a tech startup called Quirky developed a smart egg holder that would tell you when you were out 

of eggs in your refrigerator. This sounds like an interesting and 

useful, but due to current battery technology, it unfortunately it 

needed its batteries replaced more often than it ran out of eggs to 

replace. So when lives are on the line instead of omelets, we need 

to make sure that these smart devices don’t lose power. This will 

require investment in more powerful batteries with longer lifespans. 

Secondly, we need to insure the availability of open wireless 

spectrum for IoT and specifically IoT for public safety agencies. A 

Government program called FirstNet is developing new wireless 

applications to aid first responders instead of existing radio-dispatch technology first used in the 1960s. We need more funding for 

projects that involve improving our Nation’s infrastructure for 

wireless integration and emergency dispatch. 

As an example of our outdated emergency infrastructure, currently only about 200 out of 5,900 911 PSAP centers can handle 

text messages. Text messaging has been around for 20 years, but 

approximately 3 percent of 911 centers can receive texts. And when 

you consider that 96 percent of young people text regularly but 

only 67 percent make phone calls regularly, you can see how much 

emergency information we may be missing. 

Also in our way looms the threat of multiple connection standards for smart devices. Computers generally connect to the Internet 

using one of two methods, Ethernet or Wi-Fi. However, smart devices connect using a plethora of standards including Wi-Fi, 

Bluetooth, Ethernet, z-wave, ZigBee, and Thread, in addition to numerous proprietary protocols. So currently a Nest thermostat may 

know the temperature in a home is increasing due to a fire but it 

is unable to contact the 911 PSAP through the security system if 

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the homeowner is asleep or unavailable. IoT standards and 

interconnectivity would solve this. 

As an example, my company, LiveWatch Security, developed As 

Soon As Possible Emergency Response, or ASAPer, which is an application that is a step in that direction. It combines the speed of 

machine-to-machine communication with the latest group chat 

communication technology to allow people to process this information from the IoT and sensors. This IoT-enabled system has reduced false alarms by up to 30 percent while also improving response times, in some cases, by 80 percent. We must continue to 

invest in the entrepreneurs that will develop these new applications and improve the way we process data from the IoT to turn 

it into useful information for our first responders. 

These are all issues that can be solved with additional smart investment in the smart things that make up the Internet of Things. 

We can obtain the most progress towards eliminating these obstacles by focusing on engineering advances in battery efficacy and 

low-power radio range, finding better ways to utilize wireless spectrum for first responders and creating standards for communication 

between the IoT ecosystems, and finally, investing in better firstresponder infrastructure that can handle new types of communication to, and from, IoT devices and users. 

We are at the beginning of the next big shift in technology where 

machines and devices can talk to each other and instantly share 

data in ways that change lives. 

We can use IoT to enhance the security of Americans and the 

safety of our first responders. To me, these are compelling reasons 

to invest in this new frontier of technology. Thank you. 

[The prepared statement of Mr. Morehead follows:] 

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Mr. BURGESS. The Chair thanks the gentleman for his remarks. 

We will now move into the question-and-answer portion of the 

hearing. I will begin by recognizing myself 5 minutes for the purpose of questions. 

I want to ask a couple of general questions just on the general 

theme of the governance of the Internet of Things, and I would like 

to ask each panelist to respond briefly in turn. And Mr. Castro, we 

will start with you. It is an open-ended question, and I will acknowledge that. And many of you have already addressed this partially in your testimony, but what do you see is the appropriate 

role of Congress right now relative to the Internet of Things, bearing in mind we are marking up data breach notification tomorrow 

and probably before the spring is over, we will have a mark-up on 

patent demand letters. But irrespective of that, I welcome your 

thoughts. 

Mr. CASTRO. Sure. Absolutely. I think the number one issue right 

now, just because it is growing in attention, is data breach. We 

saw, you know, so many data breaches over the past year, high 

profile. This is something that Americans are worried about, and 

it is something where I think Congress could take an immediate 

and important step. But long-term, as I think you have heard from 

at least two panelists up here, we are really thinking about national strategy for the Internet of Things. This is something that 

Congress can get behind, that the Federal Government can get behind, and you really create a new vision for the future of commerce, the future of houses that interact with technology and how 

we can have an impact in so many different areas. 

Mr. BURGESS. Thank you. Mr. Van Harlingen? 

Mr. VAN HARLINGEN. As has been mentioned, I think data 

breach management and rules around that and consistency around 

that nationwide would be very helpful to both the industry and 

consumers. 

As I mentioned in my opening statement, I think spectrum management, both for the unlicensed spectrum and as Mr. Morehead 

mentioned, for emergency first responders in a more licensed fashion would be very good investments of time for the committee and 

for the Federal Government. 

I would advocate a light-touch approach. This is a very new and 

emerging space where we have a lot to learn about what is possible 

and what value we can create. 

Mr. BURGESS. Thank you. Ms. Schooler, your thoughts on the appropriate role of Congress. 

Ms. SCHOOLER. Yes, absolutely. I think it is starting today, an 

open dialogue between industry and Government, consumer groups 

to get the needs and the interests of the consumers on the table 

as we chart policy moving forward as well as people from industry 

environments. 

I think we need, as I mentioned in my statement, to encourage 

a focus on security and interoperability. I think the opportunity to 

leverage public and private partnerships will be key, and I think 

even if you look at the infrastructure and the capabilities within 

transportation’s $351 billion opportunity in that segment over I 

think it is 650,000 fleets and tires and trucks within the Postal 

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Service in the U.S. Government, excellent opportunity to try out 

some of this technology with public and private partnerships. 

We talked about a national IoT strategy. I think that is critical 

moving forward. And again, open standards, open architecture, 

open source, interoperability, allow for the continuation of innovation. 

Mr. BURGESS. Very good. Mr. Morehead? 

Mr. MOREHEAD. I agree on the points about open standards and 

interconnectivity. For most of the sensors, I think that investment 

in battery power and improved performance for batteries will be incredibly important as we develop new sensors. But finally I do 

think investing in the infrastructure of our Nation’s PSAPs and 

emergency first responders is incredibly important. 

There was an article in the Journal recently about a company 

called Smart Things, and the journal reviewed the technology of 

smart things. And at the end of the article, what they found is that 

the most compelling use of the technology was turning on the 

coffeemaker in the morning, which frankly wasn’t compelling, was 

the summary of the article. 

When you talk about investing the types of time and money that 

you would be investing, I think you could look to the Nation’s infrastructure and truly save lives which has an immeasurable benefit 

of both the first responders and potential victims by investing in 

the public infrastructure and the PSAPs to get the right information distributed to emergency first responders faster. And that has 

a faster payback than potentially some other projects. 

Mr. BURGESS. Great. I thank all the panelists for their thoughts 

on that. Just being mindful that I want to stay within the constraints of 5 minutes because I am going to insist that everyone 

else do that on the dais, Mr. Morehead, you referenced the fact 

that, well, the Journal article about the coffeemaker, well, that is 

really not that important. But what some days seems trivial to one 

person may down the road actually be very significant, and I guess 

the overarching theme here is a regulatory touch. You heard Ms. 

Blackburn mention it, the light regulatory touch. Could each of you 

speak in one word or two words to the regulatory touch that you 

would like to see on the side of the agencies? 

Mr. CASTRO. I think we want to embrace innovation and let, you 

know, let these companies—you saw the showcases out there today. 

Imagine what it will look like 10 years from now. You want to see 

that innovation flourish. 

Mr. BURGESS. Mr. Van Harlingen? 

Mr. VAN HARLINGEN. Agreed, a light touch that fosters innovation and creativity and exploration in this space. 

Mr. BURGESS. Great. Ms. Schooler? 

Ms. SCHOOLER. Light touch to spur innovation. 

Mr. MOREHEAD. The coffee from the smart coffeemaker is good 

dark, but regulatory touch I think would be better light. 

Mr. BURGESS. Very good. You have all allowed me to fit within 

the constrains. I will now recognize the ranking member of the subcommittee, Ms. Schakowsky, 5 minutes for questions, please. 

Ms. SCHAKOWSKY. Thank you very much for all your testimony. 

I wanted to give a little bit of opportunity to Mr. Morehead to tell 

us a little bit more about LiveWatch. Mr. Morehead, home security 

61 

systems have been in existence long before 2002 when LiveWatch 

was created. So as we increase our technologies, et cetera, what 

motivated you and your business partners to enter this space? And 

how do you think that what you are doing improves consumer experience? 

Mr. MOREHEAD. Thank you, Ranking Member Schakowsky. 

When we entered the space, we saw an opportunity with a business 

model in the home security industry that was relatively unchanged 

for decades, predominantly ADT where customers were paying significant amounts of money and not getting the value that they 

needed. And we saw an opportunity to bring a technology focus, a 

disruptive technology focus to a relatively nascent industry. 

And the nice thing about home security is it is formed upon a 

foundation of security, right? We talk about security and privacy 

here, home security is by definition focused on security. So we use 

that as a foundation to disrupt the business by going direct to consumers and lower their prices by about 30 to 50 percent, by eliminating the middlemen of sales and delivery and having customers 

self-install their wireless systems. 

So all of our infrastructure is wireless. It is formed on a basis 

of security, and then from that point, we added layers of additional 

technology, received multiple patents for that to determine how 

customers could use the information that was flowing from those 

systems. Specifically the opportunity we saw there is a home security system was really Internet of Things before there was an 

Internet of Things. We have sensors in homes and businesses 

throughout the country, throughout the world. Those produce data. 

That data is then transmitted to a central station where it looks 

for alarms. 

But the fact of the matter is, we can do additional things with 

that information, and that is where we have taken the next step 

with our product, ASAPer, to allow customers to process the information, the data coming from those devices, in a more effective 

way. 

Ms. SCHAKOWSKY. Are you concerned at all? Because a number 

of people will be contacted that there is some sort of breach of security in the home, right? How do you protect against unwanted invasions of that information that is circulated to a certain population 

of people, family members for example? 

Mr. MOREHEAD. The main thing that we try to do is we limit the 

information to the people that the homeowner or the business 

owner specifically selects to receive that information. So we keep 

it in a tight-knit group that is selected by that person to receive 

the information. 

The challenge is that there is power in numbers, and so we want 

to get the information to as many people as we can in an emergency because we are looking for the one person that knows what 

is actually happening and that can help resolve it. 

So we need to get it ideally just to the one person that knows, 

but to do that we have to get the information to multiple people. 

So we allow the homeowner to put those people on the list, and 

then we bring them into a group chat to help facilitate the resolution of that alarm signal. And we found that thus far, implementing the right technology and security on the back end, it has 

62 

been a productive way to do it. And instead of having two to three 

fixed members on an alarm distribution list, we have tested it with 

up to in a school setting, up to 170 people simultaneously on one 

group chat to see what would happen if there was an emergency 

at a school and there is no other system that can facilitate that 

communication. 

Ms. SCHAKOWSKY. Have you seen any particular problems that 

result from having a universe as large as 170? 

Mr. MOREHEAD. At this point we have not. Overall it has been 

pretty positive. I think that there is some learning curve for consumers and users as they get up to speed and say, oh, I am chatting and trying to have a conversation with 170 other people. But 

in the end, what you tend to find is that only one or two people 

actually step up in that conversation because they are the ones 

with the relevant information. So of that 170, we are really just 

looking for the one or two people that can help resolve the situation. 

Ms. SCHAKOWSKY. Thank you. Mr. Castro, you said something interesting at the end of your written testimony about education and 

building cybersecurity education. I am going to read it. Congress 

should encourage universities to integrate cybersecurity training 

into technical degrees so that the next generation of coders, engineers, build strong security into products at the outset. 

Do we not do that now as we are training people? 

Mr. CASTRO. Yes, it is a great question. I mean, the field of information security has evolved over time. So originally many of the 

problems that we saw in computer systems were because the coders weren’t thinking about the security issues, and you had people 

fixing that afterwards. As we are moving into the Internet of 

Things, we want people to be thinking about the big issues that 

exist today and how they can fix them at the outset rather than 

doing it later on. 

Ms. SCHAKOWSKY. Thank you. I think universities and educational systems have a role, too, to play, and I thank you for 

pointing that out. 

Mr. BURGESS. The Chair thanks the gentlelady. The gentlelady 

yields back. The Chair recognizes the gentlelady from Tennessee 5 

minutes for questions, please. 

Mrs. BLACKBURN. Thank you, Mr. Chairman, and I have got 

three questions, and I want to hear from each of you on them. So 

I appreciate brevity. And if you want to expand to anything further, please do it in writing within the next week or so. 

First of all, let us talk about privacy because that is always top 

of mind. What is this going to do to me if I use this thing? And 

when you talk about big data and the explosion of data that is out 

there, first of all, let us look at it like this. What do you think the 

trend is for growth of data on the Internet? Are we going to continue to see this explosion? And secondly, what should Congress’ 

role be in protecting that data? And let us just start. Very quickly, 

Mr. Castro, I am going to start with you. Let us work down so we 

can move to question two. 

Mr. CASTRO. Sure. So in terms of the trend, it is increasing. 

Mrs. BLACKBURN. OK. 

Mr. CASTRO. Do you want me to address the second part? 

63 

Mrs. BLACKBURN. Sure. 

Mr. CASTRO. Yes, and so the second part about this is, you know, 

Congress should be really looking at how consumers are hurt or not 

hurt by the use of the data. 

Mrs. BLACKBURN. So define harm? 

Mr. CASTRO. Define harm and not regulate the collection. We 

want data to be collected and shared. 

Mrs. BLACKBURN. OK. Yes, sir? 

Mr. VAN HARLINGEN. So I agree the trend is huge. The amount 

of data that we have is directly proportional to the value we can 

create, and I think the way to deal with it as in the FTC’s recommendations is pay very attention to providing notice and choice 

to the consumers. 

Mrs. BLACKBURN. OK. 

Ms. SCHOOLER. I saw data recently where 90 percent of the data 

today was created in the last 2 years. 

Mrs. BLACKBURN. That is right. 

Ms. SCHOOLER. I think that is indicative of the pace of innovation 

and the creation of data, and I think whatever we say in terms of 

data growth, we will be grossly wrong. 

Mrs. BLACKBURN. OK. 

Ms. SCHOOLER. We will under-call it. What do we need to do 

from a policy perspective? Again, I think we need to bring multiple 

parties to the table. I think we need to bring the Government, industry, consumer groups to understand what some of the use cases 

are and create policy around use case versus a broad, blanket policy to try to manage every scenario. And two, I think we need to 

build security in from the onset as I mentioned in my testimony 

from the device to the network to the cloud. 

Mrs. BLACKBURN. OK. 

Ms. SCHOOLER. And when we often say we want to create redundancy in that transmission, it means you don’t always secure it at 

one point. You secure it throughout the transmission and the manipulation of the data. So those are my two comments. 

Mrs. BLACKBURN. OK. Mr. Morehead? 

Mr. MOREHEAD. I think there will obviously be substantial 

growth in the data. I think you will see multiple models emerge because this is not a winner-take-all market, and for lack of better 

terms, I will call it an Apple model and a Google model, an Apple 

model where the data is more private and a Google model where 

the data is used publically. The customer, the consumer, may get 

less expensive hardware, less expensive or free services, but the 

data will be used to provide other options. So I think multiple models will emerge for the data. 

Mrs. BLACKBURN. OK. Second question, I want to look at education for consumers and some of the consent agreements that companies have when you are talking about the Internet of Things and 

the utilization of this data. 

Do you think that companies in these agreements for a particular 

service, did they adequately inform consumers and the consumers 

understand how this data is going to be utilized and what can be 

done to improve those privacy policies if you will so that consumers 

are offering true informed consent when they agree to utilization 

of some of the services that are there? And you know, one we disVerDate Mar 15 2010 09:40 Oct 21, 2016 Jkt 037690 PO 00000 Frm 00067 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X26INTERNETTHINGSASKOK082916\114X26INTERNETTHINGS
64 

cussed yesterday was insurance companies wanting you to utilize 

some type of component, and it gives you the number of hard 

breaks and fast stops and speeds driven, things of that nature. And 

we have got only 45 seconds left. So let me do this. I will ask for 

that response. I want to move onto the third question just to lay 

it out since we are going to run out of time, the economic impact. 

And Accenture had a great report on the economic impact of the 

Internet of Things. And I would like to get your take on that statement. We have it for you. And I want to know if you agree with 

it, and then I would like for you to speak specifically when you respond in writing to the challenges that exist in the United States 

to realizing this type of economic growth. What are the barriers to 

entry? What are the hurdles that are going to be there? What are 

we doing wrong from a regulatory side that are disenfranchising 

innovators? And I yield back my time. 

Mr. BURGESS. The Chair thanks the gentlelady. The gentlelady 

yields back, and those responses will be anticipated as written responses. Mr. Ca ́ rdenas of California, you are recognized for 5 minutes for questions, please. 

Mr. CA ́ RDENAS. Thank you, Mr. Chairman. The first question 

that I have is to Ms. Schooler. The City of Los Angeles is still a 

pretty big economic juggernaut for manufacturing in this country. 

When it comes to the Internet of Things and that type of innovation, what do we anticipate for manufacturing and production of 

products, et cetera, and the streamlining? And what is in the back 

of my mind is jobs, the opportunity to have successful businesses 

and therefore, a good, robust economy. So what can we expect 

going forward? Is this something that is going to be utilized more 

and more when it comes to manufacturing or something that we 

plateaued on where are we at, do you think? 

Ms. SCHOOLER. Excellent question. We very much believe manufacturing will be smart manufacturing, in particular will be an excellent opportunity for the Internet of Things. At Intel we actually 

deployed a smart manufacturing pilot within one of our manufacturing facilities, and as you know, we make millions of things every 

year. So I think we are a pretty good test case. In that implementation we found that we collected data that allowed us to do predictive maintenance, and with predictive maintenance you increase 

up-time, you improve yields. And in that pilot, we realized a $9 

million return on that single opportunity for that pilot in that single factory. 

Accenture published a report recently that they said 87 percent 

of the CEOs in the country see a long-term job growth opportunity, 

and I think to put that into practical terms, if you think about lowering the cost of goods sold, that is a great way to attract jobs back 

to the United States. So number one, let us optimize our manufacturing facilities from a product-cost perspective, use the technology 

to use predictive maintenance as a capability to increase up-times, 

again bringing down the total cost of goods, and to improve the utilization and the effective utilization rates of the equipment, again, 

improving output. 

So I think all of these things will result in job creation and bringing jobs back on shore. 

65 

Mr. CA ́ RDENAS. Thank you. And I like your example that you 

gave, and it reminds me that efficiency is a win, win, win, win, 

win, not only for the manufacturer but also for the consumer and 

for the community. 

Which leads me to my next question. Brian, if you could please. 

Hopefully it is a great answer for Los Angeles. California is going 

through a drought. We have yet to see the worst of it. So what do 

you see in the consumer space or even in the industrial space when 

it comes to efficiency, opportunities for energy, water, things of 

that nature with this technology? 

Mr. MOREHEAD. So one of the technologies that we are working 

on in particular is a technology that we call Echo that allows the 

consumer’s home or a business to monitor their energy use, their 

water use, in great detail through a single point using the existing 

infrastructure in the home. It is a very cost-competitive technology 

or cost-effective technology. We think we will educate people about 

how water and power are being used in their house and lead to improved behavior around that consumption. 

Mr. CA ́ RDENAS. So you see a lot of advancements there and a lot 

more usage? 

Mr. MOREHEAD. Absolutely. It is a place that we are putting a 

lot of our research efforts. 

Mr. CA ́ RDENAS. Yes. Hopefully it is a lot more efficient than 

pounding on the door when I tell my kids they have to take shorter 

showers. 

Mr. MOREHEAD. Agreed. It is also very good at detecting leaks 

which are a huge source of water waste in the city. 

Mr. CA ́ RDENAS. Absolutely. Well, thank you. And the last question to whoever would like to help enlighten us, what can we learn 

from the rest of the world? We are very spoiled in this country. We 

are still the economic juggernaut of the planet. We are looked to 

by many places around the planet for leadership. But once in a 

while we see ourselves looking and jog our head back and go wow. 

They got it right over there. They did something really cool or they 

did something that is advanced or something that we probably 

should have thought of but we didn’t. What examples can you enlighten us about what is going on maybe around the world that we 

could learn from and then take their leadership? 

Mr. CASTRO. Well, following up on your question about the water, 

if you look at India, I mean, so many countries have these big economic and social problems. They don’t have any alternative but to 

go to the best technology and really look for an innovative solution. 

So in India, you know, they have decaying water infrastructure. 

Using smart technology, they are able to actually you know, cut 

significant waste at less cost than it would have been to replace the 

infrastructure. So really the United States should be looking at the 

same thing. We have decaying infrastructure. We just have a lot 

more money. So how can we do it really efficiently? 

Mr. CA ́ RDENAS. Thank you. Real quick? 

Ms. SCHOOLER. I would be happy to go next. I think I noted in 

my testimony that we see national IoT plans in other countries, 

Germany, Brazil, China. I definitely think as we had a broadband 

plan, we should have an IoT strategy and plan for the country. I 

66 

think that would help us accelerate our learnings and accelerate 

our deployments which is critical. 

And just interestingly enough, a little tidbit from the demo room, 

I was talking to the SteadyServ beer keg optimizer which I think 

is a fascinating IoT use case. And in that deployment, one of the 

things that he was discussing and we were talking about was the 

adoption between the United States and Europe. Well, in Europe, 

they are looking at the opportunity, looking at the return on the 

investment in adopting the technology much more aggressively. 

And in the United States, there is still some hesitancy because it 

is not how we are used to doing it. And I think collectively between 

Government and industry, large business and small business, we 

have to start embracing technology in a much more aggressive 

fashion than we have in the past. 

Mr. CA ́ RDENAS. Thank you, Mr. Chairman. I yield. 

Mr. BURGESS. The Chair thanks the gentleman. The gentleman 

yields back. The Chair recognizes the gentleman from New Jersey, 

vice chairman of the committee, Mr. Lance, for 5 minutes for your 

questions, please. 

Mr. LANCE. Thank you, Mr. Chairman. And good morning to the 

panel. I was very pleased to see Alcatel-Lucent, Bell Labs, and 

Qualcomm representing the district I serve at the showcase today, 

and I thought it was a wonderful showcase. And I commend the 

chairman for his hard work in making sure that it occurred. 

Bell Labs demonstrated truly remarkable 5G wireless technology 

that will enable a variety of Internet of Things applications such 

as high-quality videos, smart meters, and connected cars. One 

thing is clear. Spectrum is one of the engines that will drive the 

Internet of Things revolution. 

To the panel in its entirety, what would you suggest that Congress do to provide the spectrum resources needed to support next 

generation networks in the Internet of Things? Mr. Castro? 

Mr. CASTRO. Thank you. As we can see in these demos and just 

looking around the market, there are going to be a growing number 

of devices, a huge number of devices everywhere. So I think just 

in general, we are looking for commercial spectrum to be available, 

both licensed and unlicensed, and that is something that I think 

we are just going to have—Congress will have to continue to monitor and promote. 

Mr. LANCE. Thank you. 

Mr. VAN HARLINGEN. I agree. I think that there are requirements for both licensed and unlicensed spectrum for a variety of 

different applications. I would encourage Congress to collaborate in 

detail with the industry on what those needs are and provide that 

spectrum as available. 

Mr. LANCE. Thank you. 

Ms. SCHOOLER. I agree with the previous comments. I think we 

need to leverage both the licensed and unlicensed spectrum, utilize 

the technologies that exist today to get the economies of scale that 

will enable us to drive and growth and accelerate deployments. 

That in lieu of looking at a specific use case and a specific spectrum band for IoT, I think we should leverage what we have today. 

Mr. LANCE. Thank you. Mr. Morehead? 

67 

Mr. MOREHEAD. As we look forward, it is important to understand where we are going with the spectrum. I think that there are 

some lessons we can learn from the past. One of the challenges for 

those of us that have been doing IoT for the last decade or so is 

backward compatibility and sunset of existing wireless 

connectivity, 2G, 2 1⁄2G and the sunset that is happening with the 

wireless providers there is creating a big issue for us where we already have Internet of Things systems in the field and we are having to replace those. It is a large expense. 

So as you think about moving forward what you want to do with 

the spectrum, I think it is important to consider backward compatibility and when and how those wireless systems sunset. 

Mr. LANCE. OK. Thank you very much to the entire panel. Mr. 

Castro, privacy oftentimes means different things to different people. Do you think the market is capable of addressing concerns related to privacy in the Internet of Things market over time? 

Mr. CASTRO. Yes. I think, you know, consistently what we see is 

when there is new technologies—and this goes back, you know, decades, centuries even—when new technologies come out, there are 

fears and doubt and uncertainty about the technology. But what we 

see is over time many of those issues are resolved just by the market, that you have this, you know, convergence between what business wants to do, what consumers want to have, and what Government regulates. And a lot of these issues are worked out which is 

why in general I think we want this light touch approach. Especially it is important with the Internet of Things because so much 

of the innovation is around the data, and if you can’t have companies sharing or reusing this data for lots of innovative purposes, 

this kind of long tail of innovation, you are not going to get this 

magnitude of benefits that we want to see. 

Mr. LANCE. Thank you. Belkin has a close connection to consumers and access to very personal data. How has Belkin approached the privacy and security of consumer data in its product 

offerings? 

Mr. VAN HARLINGEN. So Belkin takes privacy very seriously. 

Some of our products, you know, are very close to consumers, as 

you mentioned, including cameras and things like that. We work 

very closely on security, stay standard and ahead of the curve with 

industry standards. We have an application security team that is 

very active in the industry working with the Black Hat Community 

and other security researchers, and they are very thorough at reviewing our products, both before launch as well as after launch. 

Mr. LANCE. Thank you. Mr. Chairman, I yield back 28 seconds. 

Mr. BURGESS. The Chair thanks the gentleman. The gentleman 

does yield back. The Chair recognizes the gentleman from Houston, 

Mr. Olson, 5 minutes for your questions, please. 

Mr. OLSON. I thank the Chair, and welcome to our witnesses. I 

want to follow up on my colleague’s comments from California 

about manufacturing. As you all know, in the last decade, loss of 

good manufacturing jobs have left America and gone overseas. 

Many reasons, excessive taxes, excess regulations, but this appears 

to be the opportunity to bring things back to America with the IoT. 

So my question to you, Ms. Schooler, as one who has manufacturing as part of your business, you mentioned Germany, Brazil, 

68 

and China. What are they doing that we are not doing? What can 

we learn from them and how can we make sure we have U.S. leadership to quote you in the future on the IoT? 

Ms. SCHOOLER. Thank you. So one of the things that I noted was 

some of the advancements in the manufacturing capabilities in the 

IoT standards and national policy in other countries. If you look in 

areas like Germany, you will see some of the most highly automated, highly advanced connected factories in the world. I think 

there is a lot we can learn by going into some of these other geographies and understanding and levering some of the advancements 

that they have put into place up until now. 

If you look at places like China, they are highly adopting and 

supporting things like smart cities where they are using the technology, not only for manufacturing capability but also for societal 

positive impact by looking at the air quality as an example. We can 

look at use cases such as monitoring the health of an oil pipeline, 

all of these things, and a lot of it is around predictive maintenance. 

I think as we journey as industry over into these other geographies, understand the deployment capabilities that are in place. 

We need to bring that back into the dialogue that we are having 

on a regular basis, both with our other industry partners as well 

as Government to continue to progress our policy to support some 

of the implementations of these technologies moving forward. 

Mr. OLSON. I know there are at least two domestic groups that 

are looking at interoperability here in America and open standards. 

Is that enough? Should there be more? Who else should be involved 

in this? Because let us bring those jobs back. 

Ms. SCHOOLER. Standards is an excellent point. We have the OIC 

and the IIC which I believe are the two—— 

Mr. OLSON. Yes. 

Ms. SCHOOLER [continuing]. Consortiums that you are inferring. 

One is the Industrial Internet Consortium and the other is the 

Open Internet Consortium. In both of those cases, you are taking 

very large members of industry, bringing them together to really 

set whether it be an architectural framework or series of test beds 

that allow for the understanding of the deployment. It is one thing 

to set standards. It is another thing to architect and build solutions 

based on those standards. 

So in both of those bodies you have not only the definition of the 

architecture but the deployment and the testing of the implementation of that architecture. 

So I think those are a good start. I think if you look from a 

connectivity perspective, you have efforts in 3GPP around 5G that 

are looking at IoT-specific use cases. We need to continue to put 

wood behind the arrow on the connectivity solutions as well. So I 

think we have a good start. I think as we continue through the 

commercial deployment phase, it remains to be seen as if it is 

enough or if we need to extend those standards’ efforts further as 

we learn more through our initial commercialization efforts. 

Mr. OLSON. Thank you. Mr. Castro, any comments, sir, on the 

issue of manufacturing, bringing it back to America? And Mr. Van 

Harlingen? Anybody before I get my time run out here? 

Mr. CASTRO. I think you are absolutely right. When we look at, 

you know, the opportunity here, the United States leads in this 

69 

technology area, and we want to, you know, regain these manufacturing jobs. The way to do it is by investing and having the most 

innovative factories. And when we look—you know, the examples 

that I have in my testimony I submitted for the record, you know, 

we see U.S. companies leading in this space on the Intel, Harley 

Davidson, Raytheon, you know, these companies that are able to 

track to the turn of the screw what is going on in the factory and 

use that data to operate more efficiently than anyone else. That is 

our competitive advantage. We have to make sure we are investing 

in that opportunity. We have to make sure that our schools that 

are leading the development of this have the funding to do that, 

and that is one opportunity that Congress might be able to help 

support further. 

Mr. OLSON. Mr. Harlingen? 

Mr. VAN HARLINGEN. As a consumer electronics company, most 

of our focus is on consumer products. A lot of our manufacturing 

is done off shore, but we are constantly evaluating opportunities to 

bring manufacturing back on shore. There have been a couple of instances in some of our business areas where we have done so, and 

we are enthusiastic about doing so. We look forward to IoT technologies brought by other companies into the manufacturing sector 

to make that more possible and more practical for companies like 

ourselves. 

Mr. OLSON. Well, come back to Texas. Mr. Morehead, your final 

thoughts, sir? 

Mr. MOREHEAD. I am not as involved in the manufacturing side, 

but most of our vendors unfortunately do use off-shore partners. 

Where I see the opportunity, though, here is the fact that we are 

talking about 25 billion devices being implemented in the United 

States or some portion of that. You can’t outsource the installation, 

activation, servicing, and redeployment of those devices here in the 

United States. So potentially retraining that workforce to get them 

intelligent and smart on how to maintain and install the devices 

could be another way to engage the workforce in the United States 

as opposed to just being dependent on the manufacturing. 

Mr. OLSON. Thank you. Yield back. Out of time. 

Mr. BURGESS. The gentleman’s time has expired. The gentleman 

yields back. The Chair recognizes the gentleman Mr. Mullin from 

Oklahoma for questions, 5 minutes, please. 

Mr. MULLIN. Thank you, Mr. Chairman, and first off, I would 

like to thank the CMT staff for organizing the showcase earlier this 

morning and of course, all the participants. I was kind of blown 

away. 

One technology that was out there is brought to you by Al Sutherland from my State who shared the amazing technology that has 

already proven extremely useful to people like myself in the farming and ranching business. Mr. Sutherland has a product called the 

Mesonet where basically—and I hope I said that right—but basically it has a monitoring station in all 77 counties throughout the 

State. One of them is just located a couple miles from our place. 

It gives us real up-to-date information. He was demonstrating the 

app on the phone. I had that app downloaded real shortly, considering that this time of the year we begin to start burning off fields 

and then we enter hay season. It is very useful. In fact, I was very 

70 

upset that I didn’t already have it on my phone. It would have 

helped a few times laying that hay down. You can predict weather 

only so well. Well, it gives us some great technology. 

So it shows itself very useful out there. But there is been some 

fear around technology. There is this group of people out there that 

says, you know, it is going to eliminate jobs. And so for our panel, 

whoever wants to answer this, how do we combat that fear? You 

know, people automatically fear things that they don’t understand. 

We see that all the time. But there is an argument being said that, 

look. If we go so far and we start continuing getting smart machines, our unemployment is going to rise. Go ahead, ma’am. 

Ms. SCHOOLER. Yes, I think we need to continue to communicate 

the positive impacts that we see by doing things like the smart 

manufacturing use case that we talked about earlier. As I noted 

Intel implemented a smart capability within our own factory, and 

it provided a $9 million savings in just one factory. And what was 

that savings based on? Equipment utilization rates, predictive and 

preventative maintenance, and for every time you institutionalize 

one of those learnings, you bring down product cost. You bring 

down product costs, you get more competitive on a world-wide 

basis, and you have the opportunity to bring jobs back to the 

United States. 

In those cases, I think we need to get much more aggressive in 

sharing those stories and sharing those learnings to balance out 

some of the fear and uncertainty that are put into the press around 

the other use cases where the news is very negative around job destruction. 

Mr. MULLIN. All right. 

Ms. SCHOOLER. I noted the data point earlier that in the January 

Accenture survey, 87 percent of the CEOs believe it is going to create new jobs. Mr. Morehead noted that, even in some cases if it is 

a consumer device and it is being manufactured off shore, these 

still need installed. There are still services. There are still new information-type positions that are going to be created. It may not be 

in all cases the types of jobs that we are used to today, but it will 

result in job creation moving forward. I am very passionate about 

that. 

Mr. MULLIN. So how do we educate the people? Do we start putting these in trade schools? Do we start in high school? How do we 

implement it? And that is for anybody on the panel that wants to 

try answering this. 

Mr. CASTRO. I will jump in. I mean so, you know, there is myth 

that robots or automation kill jobs. I think part of that is an education problem that, you know, better economics lessons will teach 

people that, you know, if you look at the history—you know, I 

mean, if we want full employment, yes, we can get rid of John 

Deere and all the tractors on farms and, you know, problem solved. 

That is not what we want to do. We want to lower prices for consumers. We want more efficiency. And most of the Internet things 

examples that we are talking about, they are addressing these 

issues. They are addressing, you know, productivity on farms. You 

look at safety issues, you know, automation with grain bins, you 

know, making workers safer. That is not eliminating jobs. That is 

actually improving quality of life. 

71 

So I think once people start to see how this actually helps them, 

they are going to realize it is not technology to be feared but that 

technology improves their life. 

Mr. MULLIN. Anybody else? 

Mr. VAN HARLINGEN. So agreed. You know, this technology promises, like any new technology, it is going to bring change. Hopefully 

it will bring manufacturing opportunities back to the United 

States, and that will create jobs. But it is also going to create different types of jobs. As we mentioned in the service industry and 

things like that, I think it is going to be important to invest in education to prepare people for those new types of roles. 

Mr. MULLIN. Thank you. I appreciate your time and once again 

appreciate the CMT putting this hearing together. Thank you. I 

will yield back. 

Mr. BURGESS. The Chair thanks the gentleman. The gentleman 

yields back. The Chair recognizes Mr. Harper from Mississippi 5 

minutes for questions, please. 

Mr. HARPER. Thank you, Mr. Chairman, and thanks to each of 

you for being here today and really exciting to see the stuff on display this morning at the showcase, and I was obviously very happy 

to see Camgian Microsystems there which had a display on their 

new product, Egburt, so Gary Butler who started that. It is pretty 

remarkable what it does and can be used for a broad range of remote monitoring including the infrastructure help for say bridges 

and dams, and the future looks great for our country and to make 

sure that we have the innovation that we need and how we handle 

that, how we do it from Congress. So thank you for adding your 

insight to that. 

Mr. Castro, I know we discussed the governance aspect of this 

already, but within that Internet of Things, would there be a difference on that governance based upon the specific product or machines in that variance there? How would you comment on that? 

Mr. CASTRO. Absolutely. I think, you know, the traditional way 

that Congress has looked at a lot of data issues is industry specific. 

I think that is a very useful framework. And it, you know, differentiates us from Europe which has these broad-based privacy rules. 

And I think that is one of the reasons we were so much more successful I this space. 

But going forward, we should continue to do that. We should 

look. Are there areas where people have particular sensitivities? 

Maybe it is in education. Maybe it is in healthcare. We have different rules there, but we allow that same flexibility of sharing 

data throughout all of those sectors. 

Mr. HARPER. And so should that governance even different within itself be different than other industries, let us say? Give me a 

little bit more meat on the bones for that. 

Mr. CASTRO. Yes. So you know, it really depends I think on what 

the consumer harm is that we are trying to protect against. So for 

example, you know, a really good example that we have historically 

is discrimination against pregnant women when they go to apply 

for a job. You know, that is something that we don’t want to have 

happen. So we restrict that use. It doesn’t matter how you found 

that information out. It doesn’t matter if it is accurate or not. It 

doesn’t matter if you guessed it from, you know, using some kind 

72 

of in-home smart system or you, you know, just saw someone walking down the street. The point is we regulate the use. And that is 

what we want to do. We want to look very clearly at what it is we 

don’t want to have happen and make that illegal. And that provides consumers with confidence no matter where their data goes, 

or if there is a data breach, they are still safe. 

Mr. HARPER. Well, what we want to make sure of from our end 

is we don’t issue some regulation or enable some regulation that 

stifles innovation within the creative industry. And so that sometimes is a tough balancing act. But it seems to allow for more innovation if we get out of the way sometimes and don’t create that 

roadblock at the beginning. 

Ms. Schooler, if I could ask you, do you see an overlap between 

consumer uses and enterprise or industry use of the Internet of 

Things? 

Ms. SCHOOLER. I will respond to that in two factions. 

Mr. HARPER. OK. 

Ms. SCHOOLER. I think from a privacy concern the use cases are 

very different. As Mr. Castro noted, I think the consumer privacy 

issues are going to need to have a specific type of set of considerations around how you share information, what personal information you share, versus in an enterprise implementation, you are 

really collecting, analyzing data within the confines of your own enterprise yourself. So I think those use cases will be very different. 

The area that I do think that we can leverage learnings is in security. I think if we look at security as a foundational element built 

in from the onset of implementation, there is a couple different vectors that we have to consider. One, you need to secure the device, 

the network, and the cloud because all are critical on-ramps into 

the Internet of Things. And if you only secure one of those assets 

and not the entire pipeline, if you will, I think that is an insufficient way to look at the architecture from a device to a cloud perspective. So that is one. 

Number two, I think we not only need to build in intellectual 

property into our silicon architectures and we are doing much of 

that at Intel, we also need to also build upon that software that 

monitors and manages those security concerns. The unique position 

that we are in at Intel is that we have both assets. So we are looking at how do we not only secure the device to the network to the 

cloud, how do we do it in silicon and how do we do it in software, 

such that we can create the most robust, secure, IoT implementation possible across consumer, industrial, and commercial implementations. 

Mr. HARPER. Thanks to each of you, and I yield back the balance 

of my time. 

Mr. BURGESS. The gentleman yields back. The Chair thanks the 

gentleman from Mississippi. Seeing no other members wishing to 

ask questions, I do want to thank the witnesses and the members 

for participating in today’s hearing. Before we conclude, I would 

like to include the following document to be submitted for the 

record by unanimous consent: A letter on behalf of the Consumer 

Electronics Association. 

[The information appears at the conclusion of the hearing.] 

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Mr. BURGESS. Pursuant to committee rules, I remind members 

they have 10 business days to submit additional questions for the 

record. I ask that the witnesses submit their response within 10 

business days upon receipt of those written questions. I also want 

to take just a moment and thank the subcommittee staff for their 

hard work on the showcase this morning. I thought it was very informative and instructive, and without objection, the subcommittee 

is adjourned. 

[Whereupon, at 12:28 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

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