communicasia summit m2m and the internet of things

8/13/2019 CommunicAsia Summit M2M and the Internet of Things

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Peter Waters Adrian Chotar Andrew Hii Joshua Gray

Challenges Posed by M2M

M2M & the Internet of Things

19 June 2012


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22172840_1.PPT | Legal Risks and Challenges Posed by M2M | May 2012 page | 2

Overview

1. M2M solutions: key components and issues

2. Commercialising M2M: Drivers enabling M2M

solutions and factors inhibiting M2M development3. Impact of M2M on business models

4. Legal risks and challenges posed by M2M

technology


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The 8 characteristics of M2M


Issue Consequence

Multitude Magnitude in number of devices creates scalability problems for networks

designed with fewer users at greater throughput levels

Variety M2M devices vary widely in data exchange rates, computing capabilities etc

Mainly designed as vertical applications interoperability

Invisibility No or limited human control otherwise cost driven into application

Intrusiveness As Google shows, privacy is no longer regulatory compliance headache but

about product acceptability

Criticality mission/life critical messages problem of network latency in current store an

forward model for data such as SMS

Low throughput /frequent tolling Challenge to usage based chargingARPUs at 5-10% of traditional data usage Set-up/tear costs much the same

Cuts across capacity management and strategies

Functionality Limited functionality to keep costs down

Often lack remote software update capabilities

Embedded + captive base churn difficult

- long life can be drag on technology change


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But the Big Four Issues are

1. Challenge of aligning technical/economic characteristics

of networks and M2M requirements

different traffic profile of M2M requires re-engineering of

network architecture but also tariff models

does M2M really need high speed fixed or wireless

broadband?

2. Managing risks and liability

Although individual messages may only bear a lowusage charge, the risks may be substantially greater

because they involve mission critical or life line services

contractual risk allocation across complex supply chain



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But the Big Four Issues are

3. Challenge of traditional end user pays model

economic model needs to take into account avoided

costs of current service delivery e.g. should health payments models cover doctors

using M2M rather than face to face?

scalability global solutions based on roaming:

economics and regulatory viability4. Privacy and data security

end user acceptance critical to ubiquity: concerns over

tracking and surveillance over end user activity



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M2M solutionskey components


Need for SLAs

Privacy

Cost

Who funds?

Monetisation

Reconfiguring

networks

Risk allocation

Lock in

Monetisation

Risk allocationCommercialisation

challenges

Legal issues cut across the value chain

Solution complexity across software / network layer stack

Willingness to pay?

Privacy

Liability claims against providers


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Case study of M2M application

Consider a medicine bottle with device

tracking dosage of pills similar to

Vitalitys GlowCap Who ultimately pays for the application?

Traditional user pay model will not work

Government costs saving in providing

better delivery of health services

Economic model needs to take into

account the avoided cost of service

delivery


Will a patient pay 20 centsevery time they unscrew the

pill bottle lid?


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No single value proposition = no consistentbusiness case


M2M Who realises value?

Anti-theft/service automobile

applications

End user

Car manufacturer

Telematics-based insurance End user

Smart energy grid End user in lower charges

Generator/distributors with lower

investment

Societal benefit re globalwarming society

Health care Government health budgets

Road tolls Government revenue


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Legal issuesRisk allocation

Whos doing what? M2M value chain features vertical

integration of a number of players

Risk allocation:

managing legal risks and liability within a complex

supply chain and the overall M2M solution

traditional approaches to contractual risk allocationmechanisms for once-off technology purchase will not

work within complex supply chains where parties have

ongoing relationship



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Legal issuesRisk allocation

Risk allocation (contd):

contractual performance needs to be assessed over anextended period of time rather than single event (eg

through SLAs)

Independent standardisation and universal

specifications can assist in providing baseline formeasuring performance

technology solution has to match risk allocation:

changes in network core for M2M



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Legal issuesPrivacy and data security

Pervasive nature of monitoring and collection of data raises

serious concerns about use and disclosure of personal

information

Potential use of personal information to market goods and

services based on individuals behavioural patterns and

preferences



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Legal issuesPrivacy and data security

Examples of privacy legislation regulating a utilitys use of

a consumers energy consumption data

Privacy concerns in the Netherlands saw an initialproposal for mandatory introduction of smart to give

consumers a right to refuse the service

anti-surveillance laws: eg, Australia

European Commissions public consultation on theInternet of Things seeking views on ethical and legal

framework to manage privacy, safety and security

concerns



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Conclusions

M2M business cases need to be built on a fundamentally

different equation:

high volume + low throughput + low usage charge + high risk= what reward / who pays?

M2M involves a complex ecosystem in which

commercialisation depends on multiple participants

agreeing a new business model allocating value, costs andrisks compared to todays voice and data models

Privacy and data security hurdles to end user acceptance



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Slides and useful links can be

downloaded from www.gtlaw.com.au

http://www.gtlaw%2Ccom.au/http://www.gtlaw%2Ccom.au/

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