Existing Business Laws IoT

Adugn G.
Akrem M.
Behailu G
Semir K.
Yigrem B.
Wubalem
Contents
 Introduction
 Business Laws of IoT
 Governance
 Security & Privacy
 Spectrum Management
 Addressing IoT Devices
 Taxation
 Existing Laws
1. Introduction
 2. Business laws of IoT
2.1. Governance
Governments six main focus
 2. Business laws of IoT

Governments or other authorized bodies Responsibility

 Regulating the intangible entities of data and information that flows between
 huge amounts of sensors,
 devices, and
 Networks
 Design unified standards for data structures, formats, and communication protocols.
 Regulation for Data privacy and Network security
 Government plays as user role and service provider role
 Spectrum Management
 Taxation of IoT
2. Business laws of IoT
2.2. Security & Privacy
 As the Internet of Things (IoT) becomes more popular in enterprises, the likelihood of security breaches
increases. Consumer IoT devices can deliver real benefits to individuals and society, but research shows that
concerns over poor security practices act as a significant barrier to their take-up.
 There are a couple of reasons why IoT security is of particular concern at the moment:
 One is simply that IoT device manufacturers have prioritized new features and functionality when bringing new
products to the market, while leaving a startling array of security vulnerabilities because of the cost.
 Another is the rising awareness of cybersecurity among both the general public and lawmakers, who are increasingly
concerned about their data being leaked into the public realm.
2. Business laws of IoT
2.2. Security & Privacy…
 Understanding the complex nature of IoT security and determining the minimum requirements has been a
challenge so far.
 Although most developers consider security one of the most important factors when designing IoT devices,
certain aspects of IoT lag behind.
 Infrastructure needed to make these devices truly secure. IoT devices are in nature low in processing and memory
capacity and embedding such security capabilities into this type of devices are somewhat difficult
 Hence, security will need to become much more innovative to be able to successfully tackle these issues.
2. Business laws of IoT
2.2. Security & Privacy…
 One possibility to address this problem is to sensitize consumers about these security requirements. Security
breaches can lead to physical harm to people.
 For example, a security breach in a connected car or a connected pacemaker can result in loss of life.
 But most importantly the government should interfere on this aspect. It should legislate laws that hold firms
manufacturing and selling internet-connected devices to account and stop hackers threatening people’s
privacy and safety.
2. Business laws of IoT
2.3. Spectrum Management
 Spectrum is a sovereign asset.
 That is, use of the airwaves in each country is overseen by the government or the designated national regulatory
authority, which manages it and issues the needed licenses.
 Spectrum bands have different characteristics, and this makes them suitable for different purposes.
 In general, low-frequency transmissions can travel greater distances before losing their integrity, and they can pass
through dense objects more easily. Less data can be transmitted over these radio waves, however.
 Higher-frequency transmissions carry more data, but are poorer at penetrating obstacles [5]. National regulatory
authorities have a big job, therefore, to allocate and license appropriate resources to the services and sectors that can
make the most of it.
2. Business laws of IoT

2.3. Spectrum Management…

 Proper spectrum management implies a good understanding of IoT connectivity technologies and the trends in
IoT.
 IoT technologies differ based on how they connect to the Internet—whether by fixed, satellite, low-power-
wide-area(“LPWA”) networks, cellular, or other solutions.
 Many IoT use-cases involve short-range uses and/or applications that can tolerate signal latency or delay.
 But the need for a technology such as Low-Power Wide-Area (LPWA) is much greater in industrial IoT
 Spectrum used in IoT solutions can be dedicated (licensed) or shared (unlicensed); each option has benefits
and disadvantages.
2. Business laws of IoT
2.3. Spectrum Management…
 Act on the spectrum resources available for IoT, considering the compatibility with existing services.
 The redeployment of existing bands assigned to older technology devices are re-farmed
 dedicated to new technology, such as IoT.
• 'fit for purpose' and it has a narrow use in one area downside.
 International spectrum harmonization is vital for a global, affordable cellular IoT market.
2. Business laws of IoT

2.4. Addressing IoT devices

 identify, control and manage IoT devices.
 Addressing depends on the network structure. Type IoT service network are:
I. Non dedicated network
• “Things” connect to users’ network
II. Dedicated network connected to the Internet
III. IoT dedicated closed network
IV. ‐ network with IP gateway, etc.
Non-­IP
 IPV6 addressing and E.164 numbers (Telephone Numbers) methods as needed
 There will be trade‐offs between performance, scalability, interoperability, efficiency, privacy
preservation, ease of authentication, reliability, flexibility, extensibility, and mobility support.
 2. Business laws of IoT

2.5. Taxation laws of IoT

As dump devices become smart through internet, IoT tax is communications taxes.
IoT technology advances at rapid pace resulted in changing tax laws.
Roadblock threatening progress of IoT providers.
Trade Facilitation and Trade Enforcement Act established a new legislation
internet tax a firm cease date of June 30, 2020.
 to keep internet access from becoming overly expensive for consumers,
 to make it easier for providers to expand to rural areas.
A key requirement of the moratorium is that the service and the seller have to meet
narrow definitions to qualify.
 Determining tax Options of IoT

Simplified IoT tax complexity

1. How is the connectivity provided?
 Wi-Fi -not taxable
 Existing home or business internet – not taxable
 Embedded on the actual device- Communications taxable

2. How is the application service provided?

 Directly via the device - likely communications taxable
 “Over-the-top” of an existing service, it may not be communications taxable.

3. Who provides the service? - the most complicated question.

 Must be a transaction, or a point of consideration, for taxability.
 Who in the supply chain is supplying the taxable service?
 And is it to a taxable entity?
 How is it bundled? There are many more layers of complexity.
 … cont’d
BYOI Not Leveraged
Many prominent IoT products rely on a bring-your-own-internet (BYOI) model.
BYOI is not being leveraged, Is it Legal definition of internet access?
Yes = browsing, streaming, or launching apps — no retail communications taxes will apply.
e.g. Many “smart” thermostats


No = using the connection to transmit data, may be communications taxes. Eg. On farms, In the over-the-
road trucking industry
Bottom line= assume connected device won’t be subject to taxes or regulatory fees
Taxation testing
Is it BYOI? Yes
Can internet access be used for surfing the web? Yes — just not on the thermostat
Is it taxable? Not likely
 INTEROPERABILITY AND
STANDARDS
 Currently IoT have both public and proprietary standards
 Standardization is important for Interoperability, reducing costs and barriers to entry
 ITU-T SG 20 (IoT and Smart Cities, Smart Communities)
 National Standardization bodies
 International Standardization bodies , How to coordinate interoperability amongst
public and private sector entities?
 e.g. parking meters, thermostats, cardiac monitors, tires, roads, car components,
supermarket shelves
 Cross-sectoral collaboration is very important as IoT are deployed in multiple
sectors