Devices such as cars and Household Appliances. Among the witnesses is a gary shapiro of the Consumer Electronics association. And a number with the a number with the automobile manufacturers. The chair is authorized to declare a recess of the subcommittee at any time. Today, we welcome everyone for a hearing on the internet of things. Throughout its short history the internet has been transformative and powerful tool. It has a doubling capacity so quickly that by the time you run out of your short warranty, you in fact, have a product that can outperform the one on your desk. But the internet of things, which probably refers to a Network Connected to realworld items, able to Exchange Data with each other and across existing Network Infrastructure is a newer version of what now becomes the future of our lives and our communication in the 21st century. It is estimated by 2020, there will be 25 billion connected things. Without a doubt before we reach 2020, i will be wrong and there will be more connected things. By embedding devices with software capable of connecting a market we have smart devices. Smarter devices today already include, if you choose, every light switch in your home, the watch you wear, and products throughout the home, whether they be speakers to hear from, or in fact sensors to control climate down to a portion of every room. Data driven technology is also improving the way we understand health care, and the introduction of new Health Monitoring systems can in fact prevent, detect, and treat today any number of afflictions. A generation ago, the insulin pump was an amazing product. But it wasnt a true demand pump. It wasnt connected to your physician. It wasnt, in fact, sensing other environments. Today, it not only could, but it soon will. At the same time as we talk about your home, your lighting, your messaging, your voice, and of course your health and actual biological function, issues like privacy and Data Security for these approval technologies operable technologies become a not just something to talk about, but in area in which we in Congress Play a large and potentially destructive role if we are not careful in the development of these technologies. Every day in america somewhere someone is being hacked, and somewhere, someone is finding out that their personally identifiable information has been compromised. Too often, it is in fact the government that we hear it from. The government who controls, if you will, whether or not you can further secure your internet of things products or not. A generation ago, i stood with one of our witnesses at a time in which a member of congress, the former fbi agent, was trying to prevent 256 encryption. He was doing so because the fbi needed to crack the bad guys transitions. Transmissions. They needed to be able to unbundle a floppy dislkl information if they were going to be able to deter organized crime. Unfortunately it meant that hackers were taking microsofts operating system and quickly duplicating it and denying them millions of billions of dollars. Its took a number of years for congress to realize that that artificial control was not only circumvent double circumventable, but it was ludicrous, because the bad guys were not going to limit their protection to 256 bits. Unlicensed speculating within the internet of things is going to be talked about again and again today. I hope my witnesses will feel free to talk about the benefits of greater spectrum for the internet of things. I would remind all panelists however, notthat the fcc is not within our primary jurisdiction. But to unbundle these things will take coordination between committees that do control spectrum, those of us who control a great deal of the primacy requirements and the overseeing of what government allows. In january, the federal trade commission released a report that followed months of roundtables on a data privacy and security. The report made a broad nonbinding recommendation on how companies should address these issues from the onset, and laid out the groundwork for future ftc involvement in the internet of things. When covers women delve any congresswoman dell benny and i launched the Congress Caucus of the internet of things in january, the question is what is the internet of things, and why does Congress Care . We have laid out a number of those, even in my Opening Statement today. But i would be remiss if i didnt say that the ftc is an agency that has been in forcing enforcing breaches in security but providing guidance. This is yet another example of where we can come in with the heavy hand of government, but seldom with a safe haven. That is an area in which the internet of things caucus and this committee have an obligation to ensure that we do both. I look forward to a hearing with stakeholders in the internet of things. And further opportunities to deal with just challenges that congress brings, and those that we can bring relief. Thank you and i look forward to our witnesses. I know recognize mr. Nadler for his Opening Statements. The internet of things to the next revolution in our increasingly wired world. Everything from Household Appliances to Transportation Systems can harness the power of the internet to increase productivity, efficiency, and consumer choice. This Technology Holds great promise for consumers businesses and government alike. But we must also address security and privacy that involves massive data collection. Todays hearing is an opportunity to analyze the benefit and risk that internet presents. The internet of things is expressing expose of growth in recent years. By some estimates, there are already 25 billion and a kid devices today. By 2020, in five short years there may be as many as 50 billion. We are seeing many innovative uses of the internet of things, across various industries, as well as the potential risks that this may hold. 21 study by 2020, one study by 2020, a number of cars will have an internet connection. With this technology, drivers can determine whether their car needs maintenance and even the fuel efficiency of various routes. But these are burial vulnerable to cyber attacks. As the New York Times described last week, the internet can track a cars location, turn off the blinkers, when chilled wipers and radios, interfere with navigation devices, and in some cases, control their breaks and steering. As more and more vehicles use internet technology, it is vital that automakers install security features to ward off potential attacks. Similarly, some smart cities are incorporating the internet of things into Transportation Energy and even Waste Management systems to increase efficiency. For example, traffic lights can be tied to maximize traffic flow in ease congestion in realtime. Speed ramps to conserve energy when no one is around. Trash can scan signal when trash ought to be collected. Such technology has the potential to revolutionize investiture. Infrastructure. But unless we integrate Strong Security measures when employing this technology, the intersection would be vulnerable to attack by hackers or terrorists seeking to bring a city to a standstill. In addition to security concerns the internet raises a host of privacy implications, particularly with respect to consumer devices. There is no doubt that internet enabled technology can improve a consumers life. Your thermostat can be controlled remotely and learn your patterns. Amazon introduced the dash button, which lets people automatically reorder household supplies. What are these companies do with the massive amount of data they collect about their customers . What notice do they provide to consumers about their privacy policies and what choice do consumers have about how their information is used . How are companies protecting Sensitive Information from being comprised in a cyber attack . These are all questions that must be considered as this technology continues to expand its reach. Another example, millions of americans have devices that relate to health care. One Insurance Company is endorsing a device to encourage healthy lifestyles. It is not clear how else insurance compete may seek to use this personal information in the future. Would it be sold for marketing purposes . Would it be used in a disco montgomery manner is committed torry manner for discriminatory manner for credit . This is why the ftc made a number of recommendations we must consider. It recommended that they monitor connected devices throughout their expected lifestyle and provide 30 patches to cover risks. Provide security patches. Also providing notice and choices to consumers as to how their data might be used. Although the ftc didnt make legislative recommendations we should consider whether the congressional act is appropriate at this time to address security concerns. If so, should we Seek Solutions to these concerns that are specific to the internet of things, or should they be addressed to broader legislation . The internet of things already went through technological breakthroughs. It has the potential to spur tremendous innovation. Our challenge is to find the proper balance between promoting this innovation and ensuring that are privacy and security is protected as this valuable technology grows. I look forward to hearing from our witnesses on how to address these challenges. I yield back the balance of my time. I now recognize the gentleman from virginia, the chairman mr. Goodlatte. Mr. Goodlatte we are here to hear more about the internet of things. This technology has the ability to not only improve the more mundane aspects of our lives but transform health care, transportation and Information Technology industries. This new area of technology is of particular interest to the judiciary committee, considering our longstanding jurisdiction with issues like intellectual property, Cloud Computing, and digital trade. The internet of things refers to machines containing sensors connect and transmit it up to other connected devices and the internet. Dramatic growth in Cloud Computing over the past several years has enabled this technology to reach its full potential. Without the ability for data of an internet of things device that can be analyzed in realtime, the data itself would serve little value. The ability to access this information through mobile apps or even our cars makes this internet of things devices a key tool to finding Creative Solutions for many of the problems of daily life in the 21st century. Smart agriculture help us to grow more food and prevent waste. Smart transportation help us prevent traffic jams. But can also be used to monitor Road Conditions and structural components of bridges and overpasses to detect problems immediately. New wearables not only monitor the number of steps we take, but can include sensors that can catch an alert us to potential medical emergencies before it becomes ones. At this committee studies this new technology, its important for us to keep in mind the full scope of the internet of things and be cognizant of its effects on Public Policy today and in the future. In particular, we need to examine the privacy and Security Locations of this technology and look into the security and privacy measures the industry is building now and the measures they intend to implement as open standards are developed. I am hopeful that this new technology will help fuel the engine of american innovation, prosperity, and creativity. I think we have a fantastic panel assembled today. I know all of the witnesses and i look forward to hearing from all of them about this exciting new area of technology. Thank you mr. Chairman. On behalf of the Ranking Member, the gentlelady from washington. I want to thank my cochair on the internet of things as well as the Ranking Member for calling this hearing on this important subject. I want to examine the way that the internet connected products and sensors are being used in what is called the internet of things. From appliances to personal wearables. It may be easy will include that it is limited only by american ingenuity. But we had an emerging set of challenges and opportunities to address for both innovators and consumers. To start we need to make sure that we update existing laws to reflect the way the world works today and where we are headed in the future. That means, for example updating the electronic munication privacy act Electronic Communications privacy act to make sure a server is protected in the same way a file in a file cabinet is. We need to be responsible stewards of policy. Consumers must feel they can trust their devices will be secure and private, not vulnerable to hacking or spiking. Devices must be able to talk to each other. That means forging a path to adoption of the uniform preferably International Standards from regulatory agencies that must find ways to strike the right balance between encouraging innovation and firmly upholding their duty to protect the Public Health and safety particularly in the realm of connected cars. As all of these devices collect unprecedented amounts of data, they provided great promise for things like health research. We much work with we must work with stakeholders that internet of things users can understand that provides uers with control over their own data. I want to thank the chairman and Ranking Member for calling todays important hearing. Thank you mr. Chairman, and i yield back. Thank you for your leadership on this issue. It is now my pleasure to introduce our distinguished panel, with written statements entered into the record. They will be placed in their entirety. I asked the witnesses to summarize in about five minutes their statements so that we can leave timef for lots of questions. Before i introduce the witnesses formally pursuant to the Committee Rules i would ask all witnesses stand to take the of. Take the oath. Customarily raising the right hand. Let the record reflect that all witnesses answered in the affirmative. Today our witnesses include mr. Gary shapiro president and ceo of the Consumer Electronics association. Mr. Dean garfield, president and ceo of the technology and information consul. Mr. Pitch greenwald, part of the alliance of automobile manufacturers. In mr. Morgan reed, executive director of the apt association. Act association. Before i go down the road for the witnesses i have to take a bit of a personal privilege. The other three know it. Mr. Shapiro and i go back a long time. We were there at the birth of the modern Consumer Electronics association. I once worked for him on an unpaid, highly commentated, but unpaid position highly compensated, but unpaid position as the chairman. If i roughed him up, remember that givebacks take a while. [laughter] now mr. Shapiro. Mr shapiro this is a historic moment in my life, because i have been referring to you as boss for a number of years. Thank you mr. Good lot and other chairman as well. We own and produce ces which is held each january in las vegas. The World Largest novation event. Innovation event. Ces is so big that some 900 of our 3600 exhibitors have an internet of things about in a recent show. One thing that you should know exists because of smartphones. Over one billion smart phones have been sold, they contain some called mims. Microelectronic mechanical systems. Tiny devices that actually moved and measure all sorts of things like pressure, temperature location movement, and other valuable information. Because of the billions of cells in these phones, they cost pennies a piece. They are creating new Services Rather rapidly. They use very Little Energy and hook up to the internet. That is what the internet of things is based on. With fitness trackers and Baby Monitors to Household Appliances to connected cars, consumers are using these devices to stay healthy, increase efficiency, to be secure, and to make better decisions. Youve heard of the estimates of how these are going to grow. And they are estimates. I just wanted to tell the truth i cant say they are factual. But there is definite growth. We grew 32 in the u. S. Alone through connected home devices. It is already an almost 1 billion market place. These home control systems allow consumers to manage security systems, manage heating and cooling. They also increase home efficiency and cut bills. They can learn rote patterns over time. They can adjust temperatures and maximize efficiency, even when no one is home. There is an opportunity here to care for our aging population as well as the millions of those with disabilities. These can be customized and costly. These products provide novel interfaces like voice control. Smoke detectors can now be connected to lighting control so that lights can flash to those who cant hear, they can light up the whole house were a safe exit. These products are lifestage lifechanging. Think about our older loved ones. We have limited caregivers in an aging population. These devices will let seniors live comfortably. They can do this with caregivers watching remotely, and at the same time, Older Americans will retain their privacy and share just what they are comfortable sharing. Its coming quickly, but it does face some impediments. First, it requires section wireless section is the platform in which most of these devices connect. We need add