Tech companies concerned about possible US laws on radio tag chips

By Tom Foremski - June 21, 2005

. . . should RFID technology be restricted?
By Tom Foremski for SiliconValleyWatcher

I try to check in with our sponsors at regular intervals but lately we've been swamped with exclusive stories and scoops to write, and we've been neglecting our stalwart supporters. However, it is all thanks to our sponsors, Infineon Technologies, Tibco Software, and Nooked, that we can bring you this unique coverage of Silicon Valley, the world's capital of innovation.

A few weeks ago I visited with Infineon, one of our first sponsors, to chat about what they are watching. I met with Christoph Liedtke, who heads media relations and his assistant, Mansi Agarwal, at the HQ of Infineon's US operations in San Jose.

Top of Infineon's watch list is possible legislation that could limit the use of RFID chips, tiny semiconductors used to tag shipments and eventually most commercial products. Concerns about user privacy has led to some US and Californian lawmakers to support calls for greater controls and limits on the use of the technology.

Can tech firms stop RFID backlash?

Infineon is one of many large global technology companies keen to see faster adoption of RFID chips. Other supporters include IBM, Microsoft, and leading Silicon Valley companies such as Oracle, Sun, HP, Cisco and others. And why not? The use of RFID is forecast to boost IT spending overall, as retailers and others install and build out the significant infrastructure needed.

RFID supporters argue that the technology itself should not be restricted or regulated by government. How RFID-generated information is used is a societal issue not a technology issue.

Technology companies however, are generally lousy about figuring out how to lobby governments and how to fight what they see as bad legislation. Large companies such as Intel and Texas Instruments have over the years developed their Washington offices and have figured out how the Beltway functions. But they are a rarity, and it is an expensive conversation to join — Washington lobbyists sell their services for a high price.

Trade organizations such as the Semiconductor Industry Association are reasonably effective at making their presence felt in Washington but, again, it takes time to establish the right connections and be heard.

Many young tech companies don't have the means — or often the awareness — that they need to be involved in the political debates.

Things become even more complex when US states pass laws, making it tough to become involved in public discourse in many different states.

Community PR trend

Most corporate communications is tailored to reach potential customers or investors—the trend in the PR industry is to create specialist firms that target messages to the public and legislators.

463 Communications is one such company, partially funded by Next Fifteen, the publicly traded European PR giant, which owns Text 100 and Bite PR--two of the leading Silicon Valley PR firms. Tim Dyson, CEO of Next Fifteen, is chairman of 463.

Sean Garrett, a partner at 463, says "This sector is still fairly small but is bound to grow as tech companies mature and realize that they could be directly impacted by some legislation, and they need to make sure they can communicate their message to politicians and the public."

At Infineon, the challenge is keeping track of pending RFID legislation and trying to determine where it might lead, and how to gain the ear of sympathetic legislators. Christoph Liedtke used to work as a speech writer within the German political establishment and is aware of the need for companies to be involved in politcal debates. But US politics is a different animal.

I would have offered some advice if I had it, but my understanding of US and Californian politics is tiny, probably matching that of most citizens of Silicon Valley.

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Some recent articles on RFID issues:

I.B.M. Expands Efforts to Promote Radio Tags to Track Goods
New York Times, 06/14/05

AP: U.S. to Scale Back Passport Standards

News and features on RFID from UsingRFID.com (UK), 06/14/05

The RFID Weblog by Anita Campbell.

Tim Dyson's blog and his recent post on Apple turning to Intel for microprocessors

The 463 blog, an interesting peek into some of the key legislative issues facing its clients.

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