OPINION
RFID, Politics and the Technology Marketplace

RFID tags are like the bar codes on a cereal box but different in that they have microchips that listen for a radio query and respond by transmitting their unique code. Businesses such as Wal-Mart (NYSE: WMT) are using the tags to increase efficiency, reduce theft and cut costs. But privacy regulation advocates warn of potential problems and some politicians are jumping to offer government help.

At a conference in Chicago this week, Senator Byron Dorgan (D-North Dakota) told participants that it's time for the federal government to get involved in the development of RFID technologies.

According to RFID Journal, Senator Dorgan said, "We need to move now, as this technology is driven by others like the [department of defense] and Wal-Mart. We can observe this or be an active partner, playing a role in addressing the challenges [of RFID]."

Senator Dorgan has welcomed RFID manufacturers to his state, but his enthusiasm for political meddling in the market should send shivers through the tech community's spine. For as much as congressional attention might bring federal pork, it also changes the environment. Decisions that should be based on the marketplace instead become influenced by political favors and pressure.

Politics and Technology

Politicians should not be deciding how to design and implement this technology, from either an efficiency or security perspective. That role should go to those involved in creating and using the technology, and it's time for tech experts to say so. If they don't, political agendas could get in the way of a positive future for RFID. And the senator is not alone in his interest.

Lawmakers in at least five states, including California, are considering RFID legislation. But why legislation is needed at this time, other than to assuage fears whipped up by professional privacy hawks, is unclear.

There is no current harm taking place as a result of RFID. That's not to say it could never happen, but legislators should not be exploiting a scared public to score political points. This is not the way to make policy or ensure the best use of technology.

Imagine if talk-show host Phil Donahue had been successful in convincing American legislators to stop the rollout of bar codes. As CNet's Declan McCullagh wrote recently, in the 1970s Donahue was telling his audiences that bar codes would allow "grocery stores to trick consumers." The reality is that "the humble bar code saves Americans more than $17 billion a year in grocery stores alone."

Privacy Issues and Advocates

One of the fears current privacy advocates often discuss is the possibility that attaching RFID tags to individual products will allow thieves or others with an RFID reader to be able to tell from the outside what's in someone's home.

Because this is a plausible scenario, before Wal-Mart or any other store starts labeling individual products -- right now they are only labeling cases and pallets -- they will have to find a way to address this potential problem. For instance, they could commit to offering "kill command" readers that turn off the RFID tags permanently when consumers leave the store.

Another issue is that stores could be able to see what product people pick up but don't buy, allowing greater insight into consumer behavior. This concern seems less likely to bother the average consumer, because many are willing to give away privacy for a Big Mac .

Indeed, one could imagine a scenario in which consumers want a discount, so they pick up products and put them down to trick the retailer into giving them deals. But if this type of tracking did become a concern, it seems likely that other stores would rein it in with ads enticing customers to enter their "hassle-free" store.

RFID is poised to revolutionize retail and other areas of commerce, but it will only reach its full potential if allowed the flexibility to respond to market demands. If industry insiders don't step up and take on the professional privacy hawks and scheming politicians, we could all lose out on what promises to be an extremely useful technology.