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M2M is coming under increasing legal and regulatory scrutiny, with significant implications, both good and bad

M2M is coming under increasing legal and regulatory scrutiny, with significant implications, both good and bad

Posted by IoT Now MagazineAugust 18, 2014

Over the last few months Machina Research has been engaged in a lot of research on the legal and regulatory environment surrounding M2M and the Internet of Things. This has included extensive interviews with dozens of regulators complemented by lots of secondary research and analysis. There are a number of important regulatory issues that come to the fore as the areas that regulators are, or should be, looking at. These can all play a critical role in facilitating, or blocking, the adoption of M2M and the growth of the Internet of Things.

Matt Hatton

Matt Hatton – Director, Machina Research

Permanent roaming is one of the key areas, and one that we at Machina Research have been focusing a lot of attention on in recent years. The ability to offer services globally is a critical one for supporting many vertical sectors including automotive and consumer electronics. Regulatory prohibition of permanent roaming will fundamentally influence how connectivity is provided. There are a number of markets around the world where prohibition on permanent roaming is quoted as being a barrier. Brazil is probably the most famous. Even there, however, the regulatory situation is unclear, to say the least. The most interesting thing to watch in the next few months will be the shifting attitude of regulators around the world to this key issue. At Machina Research we anticipate stricter rules, particularly in Europe.

National roaming is another interesting area. The ability to make use of multiple networks within a territory will be useful for many IoT applications. There doesn’t seem to be any particular motivation to change the rules as they relate to, say, consumer electronics. However, where there are connections that are inherently ‘in the national interest’ such as smart meters, supply chain or critical healthcare, there is an argument for allowing national roaming. Regulatory positions vary around the world.

One area where regulators, particularly in Europe, have been active is in numbering. The European Communications Committee (ECC) of the European Conference of Postal and Telecommunications Administrations (CEPT) recommended that National Regulatory Authorities should set out numbering plans for M2M, including considering opening up new E.164 number ranges. As a result, many countries have chosen to do so.

A final area that is worth flagging up is around data management. In general, there is increasingly stringent legislation on how data is managed. For instance, the EU’s General Data Protection regulation was passed into law in March. This covers more than just the much publicised “right to be forgotten” and will have implications for any organisation looking to transfer or store data.

One of the specific ways in which data regulations might affect M2M and IoT deployments relates to the international transfer. So-called ‘data sovereignty’ concerns the ability of organisations to send data overseas. Regulations vary wildly around the world and could have implications for how applications are managed, and even how connectivity is provisioned.

With the growing number of connections it was inevitable that issues relating to M2M would come under increasing scrutiny. Where previously it was only an afterthought in the industry it is increasing important. This scrutiny can be positive. Both Brazil and Turkey recently reduced taxes on M2M SIM cards because they were punitive to low ARPU M2M. In other countries regulators are looking at how they can best serve the demands of M2M; see for instance UK regulator Ofcom’s recent report on the implications of M2M for spectrum. The scrutiny can also have negative consequences. Where previously permanent roaming might have slipped under the radar, now it is a significant issue that regulators will need to resolve one way or the other.

Over the next few weeks Machina Research will be releasing some of the key findings of the regulatory research.

Matt Hatton – Director, Machina Research

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  • October 21, 2016 at 4:59 pm

    One of the myths about the Internet of Things is that companies have all the data they need, but their real challenge is making sense of it. In reality, the cost of collecting some kinds of data remains too high, the quality of the data isn’t always good enough, and it remains difficult to integrate multiple data sources.

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