August 18, 2003 Hearing Information

SUBCOMMITTEE ON NEW TECHNOLOGIES

Informational Hearing: RFID Technology and Pervasive Computing

State Capitol, Room 113
August 18, 2003
2:00 p.m.

While new technologies can make businesses more efficient and shopping more convenient, many carry implications for personal privacy that need to be explored, understood, and resolved as new technologies become a part of everyday life. Radio Frequency Identification (RFID) devices are small electronic tags that can be read, much like a bar code is read, by hand held scanners or readers mounted on countertops, walls or doorways. RFID technology was invented more than 30 years ago, but recent technological advances have reduced both the size and cost of RFID chips and have prompted businesses to consider embedding the tags in products from razor blades to cell phones to track them from manufacturer to warehouse to store shelf to cash register. Privacy advocates predict RFID will become yet another method of following people after they leave the store and compiling data on their movements and shopping behaviors.

I. Opening Comments

• Senator Debra Bowen, Chairwoman, Senate Subcommittee on New Technologies

II. What Is RFID Technology And How Can It Be Used?

• Dan Mullen, Interim CEO, Association for Automatic Identification and Data Capture Technologies (AIM)
• Kevin Ashton, Executive Director, Auto-ID Center (not present)

III. Concerns About RFID Technology

• Beth Givens, Founder and Director, Privacy Rights Clearinghouse
• Katherine Albrecht, Founder and Director, Consumers Against Supermarket Privacy Invasion and Numbering (CASPIAN)

IV. The Big Picture: Pervasive Computing

• Dr. Greg Pottie, Deputy Director, Center for Embedded Networked Sensing (CENS) and Professor, Electrical Engineering Department, University of California, Los Angeles

V. Discussion

• All panelists

Transcripts from hearing

BACKGROUND

What is RFID?

Radio Frequency Identification (RFID) tags are conceptually similar to, though much more advanced than, price bar codes found on most products people buy and to the magnetic strips found on credit cards and driver’s licenses.

A bar code, for example, pulls up a product name and price when it’s passed over a scanner designed to read the code. The strip on the back of a driver’s license contains all of the information that’s printed on the front of the card and can be read quickly by a computer when swiped though the machine.

RFID tags are tiny electronic computer chips that can be placed, for example, on pallets of factory-sealed products to readily tell shippers the quantity, type, date manufactured and destination as they pass through warehouse doors that are equipped with an RFID reader (also called an antenna). The tags can be read from 25-30 feet away and at indirect angles, removing any need for a person with a hand-held scanner to read the product.

RFID antennas can be placed on walls, shelves and doorways. Not only can they read the RFID tags that pass by, they can also electronically add brand new data to the tag, such as shipping date, arrival date, and condition.

What are other uses of RFID?

RFID technology is making its way into people’s everyday lives in a number of areas:

• RFID technology is what makes California’s FasTrak automated bridge toll payment program possible. Drivers with FasTrak’s RFID tags inside their car windshield can cross bridges without having to stop and pay a cash toll because the RFID tag contains a prepaid dollar amount (e.g., $50), and as the car passes the toll plaza, an overhead antenna reads the tag and automatically deducts the appropriate toll from the prepaid account.
   
• RFID is also used in the microchips frequently implanted in pets with information on the name of their owner, address, phone number, and more to help animal shelters readily identify and reunite lost animals with their owners.
   
• Wal-Mart and Gillette recently tested the usefulness of placing RFID tags on Gillette razor blades sold at Wal-Mart stores. RFID antennas on store shelves tracked when customers picked up razors, when they put them back on the shelf, and when they carried them to the register. The project was designed to help give the retailer insight on shopping behavior, prevent shoplifting, and to alert employees when shelves needed to be re-stocked.
   
• Alexandra Hospital in Singapore used RFID tags to track the movements of nurses, doctors, and visitors who came in contact with SARS patients. The European Union is considering embedding miniscule RFID tags into the fibers of European currency to reduce counterfeiting.
   
• At about 20 to 50 cents per tag and $1,000 per reader, RFID systems are still too expensive for widespread use. Some experts project, though, that as demand grows, manufacturing costs will drop and within the next decade the use of RFID technology will become much more prevalent.

Are there concerns with RFID?

The Privacy Rights Clearinghouse and Consumers Against Supermarket Privacy Invasion and Numbering (CASPIAN) have raised several concerns about the potential privacy implications of RFID technology.

Their main concern has to do with who will have access to the data RFID technology allows companies to collect and how it that data can be aggregated. For example, it would be theoretically possible for businesses to tag everything with RFID, allowing RFID antennas anywhere to scan the contents of people’s purses, wallets, shopping bags, not to mention identifying the makers of the clothes, jewelry, and shoes they’re wearing. The ability to collect, aggregate, and manipulate this information could give businesses a powerful marketing tool if they can use it to profile and identify potential customers as they walk through the mall entering stores and restaurants.

What laws limit businesses from tracking people?

Technology already allows people to be tracked from their morning coffee stop to their evening trip home from work. In many cases, the federal or state government has acted to restrict how businesses can use the information they collect on people.

• Every purchase made by ATM or credit card, leaves a detailed electronic record with both the store and the bank, which over time can indicate interests, shopping patterns, likely income levels, and more to financial institutions. Federal law allows businesses to share that information freely with their many affiliates and subsidiaries.
   
• People who sign up for loyalty card programs at their local supermarket are essentially allowing their grocer to keep tabs on what they buy and how much they spend over days, weeks and years. California law restricts how that information can be used.
   
• People who watch cable or satellite TV often don’t realize their viewing records can be monitored and used for marketing purposes by their provider. However, federal and state laws prohibit cable and satellite companies from selling that data to others.
   
• Libraries and video stores keep track of the books and movies people check out, but federal laws ban them from revealing that data to anyone.
   
• Phone companies keep track of the local and long distance calls their customers make, though federal and state laws strictly prohibit them from listening in on phone conversations or selling information about who their customers call.
   
• Many employers read employee e-mail, track keystrokes, and follow employees as they visit Internet websites at work. This practice isn’t precluded by law and employers aren’t required to tell their employees that their actions may be monitored.
   
• Internet businesses frequently drop bits of software, such as "cookies" and "web bugs" on the computers of people who visit their sites to track people’s whereabouts online.
   
• Meanwhile, as people walk down city streets, enter businesses, drive through intersections or ride public transit, surveillance cameras may be recording their every move. Some cities have begun to test whether they can more effectively reduce crime by combining surveillance cameras with face scanning technology and criminal databases containing mugshots of former inmates and suspected terrorists.

Recent RFID Events

• January 16, 2003. ACLU releases a report entitled, "Bigger Monster, Weaker Chains: The Growth of an American Surveillance Society." The report points out how RFID chips could be used for many purposes beyond their stated intent.
   
• March 2003. The U.S. military uses RFID tags to track food and supplies entering Iraq. Chips are sewn into wristbands worn by wounded soldiers to track them as they move through field hospitals.
   
• March 11, 2003. A press release by Phillips Semiconductors announces Benetton Group will be placing RFID tags on its Sisley garments in more than 5,000 stores throughout the world.
   
• April 2003. Auto-ID Center announces a password-associated "kill" command for its chips being developed by companies such as Alien Technologies, Matrics Corporation, and Phillips Semiconductors.
   
• April 2003. Merloni Elettrodomestici of Italy unveils plans to manufacture "intelligent" appliances: refrigerators and washing machines that can read RFID chips on groceries or clothing to determine expiration dates or washing directions.
   
• April 4, 2003. Benetton announces it has not embedded RFID tags in its clothing products and merely plans to study the technology, including the potential implications for personal privacy.
   
• May 2003. Visa and Phillips Electronics announce a partnership to develop a credit card with an RFID chip.
   
• May 2003. Metro AG of Germany implements RFID technology in its Rheinburg store. Loyalty cards guide shoppers to products that might interest them, based on their previous purchases. RFID chips on store merchandise also help Metro determine when a product needs to be restocked and helps expedite the check-out process for customers.
   
• May 2003. Hitachi and the European Central Bank (ECB) discuss implanting small RFID chips in currency to halt counterfeiting.
   
• May 2003. Alexandra Hospital in Singapore uses RFID tags to track the movements of patients, visitors and staff in contact with SARS patients.
   
• May 1, 2003. Research firm Gartner reports poor performance of RFID in trials, including statistics showing scanners used to read product data embedded in RFID chips are often less than 80% accurate. Gartner researchers report difficulty in reading tags through certain materials such as shampoo, canned goods, and foil packaging.
   
• June 2003. Gillette Co. orders 500 million RFID tags from Alien Technology and states it plans to test RFID in its warehouses and on store shelves to sense when inventory is running low and to detect shoplifting. Wal-Mart agrees to test the "smart shelf" concept with Gillette.
   
• June 1, 2003. The United Nations unveils a plan to test RFID technology in Africa to track VIPs, negotiators, and political advisors.
   
• June 11, 2003. Wal-Mart announces plans to require its top 100 goods suppliers to tag shipping cases and pallets with RFID technology by 2005.
   
• June 11, 2003. CASPIAN, a nonprofit opposed to RFID technology, proposes federal legislation called the "RFID Right to Know Act of 2003," which would require companies to label products containing RFID tags. The bill has yet to be introduced in Congress.
   
• June 18, 2003. Delta Airlines announces plans to test RFID-chipped luggage tags this fall on flights from Jacksonville, Florida, to its Atlanta hub.
   
• June 2003. Benetton clarifies it’s only researching RFID and has no plans to place RFID tags in clothing.
   
• July 9, 2003. Wal-Mart halts initial tests to develop an RFID "smart shelf" system with Gillette.
   
• July 17, 2003. The Advanced Airport Systems Technology Research Consortium announces tests using RFID tags on luggage at Changi Airport in Singapore, Schiphol Airport in Amsterdam, and John F. Kennedy International in New York in the coming months.