Machine-to-Machine Communication

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* Report: Machine-to-Machine Communication: Connecting Billions of Device. OECD, 2012

URL = http://oecdinsights.org/2012/01/31/the-internet-of-things/ [1]

"To outline what still needs to be done, and give governments a framework for understanding how 50 billion devices could be connected in the next 8 years, the OECD has released a report laying out the needs of an M2M network and the tradeoffs associated wtih different technologies. It offers a few interesting use cases, as well, although the focus is more squarely on the practicalities of making it work. As usual, it starts with the networks." (http://gigaom.com/broadband/m2m-one-network-will-not-rule-them-all/)


Summary

Stacey Higginbotham:

The networks

"The OECD breaks down the needs depending on the type of device and its function, basically if a device moves or not, and then how far it moves. For highly mobile devices that travel around the world, we’re actually short on options, but cellular is probably the best bet. For stationary devices in the home, power line communications or Wi-Fi could offer compelling options. However, with each technology there are tradeoffs, and those tradeoffs become magnified if you’re considering connections for products designed to be used globally.

For example, cellular technology has drawbacks because 2G networks, which are fairly ubiquitous are also being phased out, and the lifetime of a connected device may stretch for decades (think of how long you keep your fridge or a bike. However 3G networks aren’t going to arrive everywhere, which means some places might then never have a connection. Imagine if you had a pet tracking service for Fido that used 3G and Fido wandered out of a coverage zone. LTE and 4G might seem like a good solution for offering the longest time until obsolescence, but right now radios suck power and networks are thin on the ground.

Each wireline and wireless network technology offers drawbacks of this nature plus those associated with costs, reliability and security. It’s enough to make one’s head spin, or to at least hope that someone might combine a variety of services under one roof and just offer connectivity packages.


The role of wholesalers

It’s not that companies don’t want to take on the role of aggregating connectivity for customers, but that the wholesale market for access has a few roadblocks, according to the report. One roadblock is how devices will be identified on M2M networks. From IP addresses to individual mobile subscriber numbers, there are a variety of ways to authenticate devices on a network. But not all methods of identification are available to everyone.

In some cases the government will only allow telecom providers to offer identifying numbers, which means only they can provide service for M2M communications. The OECD believes that will keep prices high and limit the market. That brings us to the role governments will have to play in the creation of a viable system. From the report:

- Access to a unique and verifiable identity is another important requirement for many M2M applications. The model provided by SIM-cards seems to offer a great deal of flexibility and possibilities. There are other ways of providing a secure identity, but using a SIM-card chip soldered onto a motherboard or integrated into a chipset appears to be a very cost-effective method of providing security. As regulators play an important role in assigning SIM-card numbers (so called ESN-numbers) they will have to take this role into account in terms of the future of M2M.


The role of regulation

In asking governments to rethink their regulatory environment for a new age of communications built on IP networks and between people, machines and back-end computers processing data, the report hits on an increasingly common problem of the Internet age. Ironically, a decade or so after IP communications became widespread in the U.S. we are only now getting to a place in our regulatory regime where the government is discussing how this changes the way laws should be written and enforced. Legislation and regulation lagging the marketplace isn’t new, but the OECD report makes a good first step in understanding one of the next regulatory battles looming on the horizon." (http://gigaom.com/broadband/m2m-one-network-will-not-rule-them-all/)


Discussion

Rudolf Van der Berg of the OECD’s Science, Technology and Industry Directorate:

'The Internet of Things is the subject of a new OECD report, Machine-to-Machine Communication: Connecting Billions of Devices that examines new technology (the drivers behind connecting devices to the Internet); new markets (user and business demands); new policies (what governments can do to promote this new source of growth).

The basic building block of the Internet of Things is machine-to-machine communication (M2M), devices equipped to communicate without the intervention of humans. Different networking technologies can be used to connect M2M devices, depending on the amount of mobility needed and dispersion over an area. Mobile wireless is often an ideal technology for most applications. However, countries may run out of phone numbers in their current numbering plans as a result of M2M, because 2G and 3G equipped M2M devices require a telephone number to work, unlike 4G where M2M can work with just an IP-address.

M2M creates a new player in the mobile market: the “million device” user. These new large scale M2M users will potentially manage hundreds of thousands of smart meters, cars, and consumer electronics, possibly in higher numbers than some countries have citizens.

Large scale M2M users may offer their services dozens of countries, selling the same devices globally. Their customers may buy the devices abroad and travel with them. The telecommunication industry, however, is still largely organised and regulated on a per country basis. Large M2M users will thus place new demands on telecom companies, and regulation and business models will have to adapt.

Companies creating innovative M2M-based services are currently locked into 10-30 year mobile data contracts and high roaming fees; this dependency hinders the roll-out of new services and innovation.

Governments can set large-scale M2M users free by giving them access to wholesale markets. by changing the rules so that large M2M users can have access to numbers and SIM-cards, just like telecom companies. This will open up the market, break lock-ins, make large M2M users responsible for their own innovation and create a competitive market for roaming for M2M services.

Liberalisation will be a major paradigm shift, and might lead to billions in savings and new services.

Privacy and security need to be designed into products from the start. M2M could allow a detailed view of people’s lives, and parliaments have already curbed or changed some projects as a consequence. For example, cars are increasingly using onboard M2M services and the European Union is now mandating their own service (eCall) to be built into every car from 2014. Since EU legislation requires telephone companies to record a person’s location at the start of each mobile communication, and since turning a M2M car on will itself start a communication, these companies will be inadvertently tracking the start and end of any trip, so even if the automobile company does not register the location, the telecommunication company has to by law.

Governments have tried to make spectrum policy more flexible in recent years, allowing companies to change networking technologies when new technology becomes available. M2M may rigidify spectrum policy, however, because anytime M2M uses a particular networking technology, it expects the spectrum to be there for the lifetime of the device, which is 10 to 30 years. Consumer-oriented wireless technology works on a timescale of a maximum 10 years.

Combining data generated by M2M devices may offer insights to improve society. Cars could notify local governments of icy roads or bottlenecks in infrastructures. This may not always be seen as positive, however, as shown by a case in The Netherlands where anonymous and aggregated data from GPS-systems was used by the police to identify prime locations for speed cameras, which led to a public outcry.

What is certain from the report is that governments will have to change regulations in the telecommunications market, will have to be vigilant to apply privacy and security regulation and stay innovative to make use of the many possibilities it offers. Doing so promises to transform the economy, promote growth in the telecommunications sector, and produce growth and efficiency savings in government and society." (http://oecdinsights.org/2012/01/31/the-internet-of-things/)