WASHINGTON - U.S. Sen. John Thune (R-S.D.), chairman of the Senate Committee on Commerce, Science, and Transportation, spoke at the South Dakota Technology Showcase on August 2, 2016, in Sioux Falls, S.D.

Thank you, Cheryl, for the introduction.  And thank you to AT&T, SDN Communications, and the South Dakota Chamber of Commerce and Industry for organizing this excellent event.  We have a wonderful lineup of speakers today who will highlight how the Internet of Things and other new technologies are benefiting South Dakota’s economy.  I’m honored to be kicking off the discussion today.

As hard as it may be to believe, the Internet as we know it is now in its third decade.  While it is no longer novel, this essential technology continues to transform the world around us, often in unexpected ways.  For instance, back in the 1990’s when folks were getting acquainted with America Online, how many people thought the Internet would end up in our farms’ combines and tractors?  Today, however, wireless connectivity in precision ag equipment is making agriculture more and more efficient.  Indeed, some researchers have claimed wireless ag tech “will offer the same type of quantum leap forward for farming that GPS provided.”  We are also seeing some really remarkable advancements in health care, which is now more accessible than ever before due to telemedicine and remote monitoring services powered by the Internet.  These are all fundamental changes from the way we used to do things, and they’re only made possible because data is shared and transmitted online. 

I look at the impact the Internet has had already on South Dakota, and I believe this is merely the beginning.  That’s why I have used my position as Chairman of the Senate Commerce Committee to promote policies that grow Internet connectivity and benefit consumers. 

Last year, I held Congress’s first-ever hearing on the Internet of Things or “IoT.”  IoT is so consequential that some call it the “third wave” of the Internet, following the fixed Internet of the 1990s and the mobile Internet of the 2000s.  By now, all of us are used to having at least one or two electronic items near us that are connected to the Internet – from computers, to phones, and even our TVs.  Increasingly, however, we are seeing common, everyday objects being connected online – a literal Internet of things that will soon be ubiquitous.  “Things” like thermostats and refrigerators, along with those precision ag machines and health sensors I mentioned earlier.  These devices unobtrusively gather data and communicate with users, and with other devices, to solve a variety of consumer and business needs. 

The Internet of Things will bring significant economic benefits and drive growth in every sector of our economy.  There are currently about 16 billion Internet-connected devices worldwide, and by 2020 some believe that number will be between 50 and 200 billion devices.  According to McKinsey, this explosion of growth has the potential to create an economic impact of up to $6.2 trillion annually by 2025.  And, as much as consumers will see IoT devices proliferate, most of the real benefit and growth will be seen in industrial, commercial, and civic applications. 

The connected economy is creating massive economic and societal impacts.  And this means it also presents complex policy challenges.  These challenges, however, are not insurmountable obstacles.  They are simply issues we need to work through together to achieve great outcomes.

Chief among these issues is the need to spread Internet connectivity to every pocket of the country for IoT and the data economy to ride on.  Privacy considerations will loom large as devices collect increasing amounts of information, making privacy tradeoffs less straightforward than ever before.  And as we’ve unfortunately learned with the all too many high-profile data breaches, Internet security will be paramount due to the scope and sensitivity of the data collected.

Connectivity, privacy, and security – these policy issues are central to the success of a connected economy and the growth of IoT.  And sitting at the intersection of these issues in Washington is the committee I am fortunate enough to chair, the Senate Commerce, Science, and Transportation Committee.  We have engaged in a serious discussion about the government’s role in this dynamic sector of innovation. 

I have counseled and urged my colleagues to tread carefully before jumping in head first to regulate IoT and other new online business models.  When the Internet was in its infancy, it really began to prosper once the federal government stepped back and allowed the new technology to blossom.  By treating IoT and the connected economy with a similar light touch, we can ensure that consumers and entrepreneurs are in the driver’s seat, rather than politicians and bureaucrats.  If issues arise in the marketplace, policymakers should examine them closely.  When doing so, we need to have the humility to recognize that the best solutions to difficult challenges created by new services are often not government solutions.  But if government intervention is necessary and unavoidable, then the fixes should be as narrow and targeted as possible. 

I am quite optimistic on how the economy is going to be transformed by IoT and other Internet-based technologies.  But this is only possible if South Dakota and the rest of the country have fast, ubiquitous Internet connectivity.  Unlike some other rural states, South Dakota is blessed to have broadband services that are often on par with more urban states.  According to the National Broadband Map, 86 percent of South Dakotans have access to 25 megabit or better broadband service, which is better than Virginia and about equal to Ohio.  And when it comes to the availability of gigabit connections that can really spur local economic activity, South Dakota ranks 6th in the country.

Of course, there is always room for improvement, and one of the ways Congress can help is to find ways to improve wireless broadband connectivity, including in the more rural areas of South Dakota and our reservations.  For IoT to really take off, we need to make more abundant those wonderful, invisible radio waves that transmit data from one point to another, seemingly without effort.  Except it’s not effortless, as many of you know.  Wireless spectrum, as it is called, can be extremely expensive; the private sector spent $45 billion in the last spectrum auction.  Building out wireless networks to take advantage of those airwaves requires massive private investment.  And then there are the infrastructure challenges in deploying wireless broadband to rural consumers and businesses, which we know all too well. 

For these reasons, I put forward legislation known as the MOBILE NOW Act to meet the communications needs of the twenty-first century.  This bill has broad bipartisan and industry support and passed the Commerce Committee earlier this year.  It will ensure huge swaths of spectrum are made available for commercial use by the year 2020, which is when we expect to see the next generation of ultra-high speed mobile services known as “5G.”  MOBILE NOW will also cut through much of the bureaucratic red tape that makes it difficult to build wireless facilities on federal property.  And the bill will facilitate inclusion of broadband-ready conduit in federally-supported highway projects, reducing the time and cost of building out Internet service. 

This legislation has the potential to quietly and subtly impact all of our lives.  One example comes from former Federal Communications Commissioner Meredith Atwell Baker.  She pointed out that, right now, a “smart car” communicating with today’s wireless technology takes four and a half feet to brake in response to an obstacle.  By contrast, a smart car with forthcoming 5G technology would travel only one inch before braking—which could literally be the difference between life and death.

Unfortunately, in what has become a story that is told all-too-often, this noncontroversial bill has gotten mired in the partisan politics of Washington, D.C.  Senate Minority Leader Harry Reid is holding up MOBILE NOW over a dispute with other Senators about a Presidential nomination.  While this gridlock jeopardizes the prospects of the bill advancing, I am not going to give up trying to push it forward.  It is rare for Republicans and Democrats to come together to write truly bipartisan, pro-growth legislation, so I am going to do everything I can to see MOBILE NOW enacted into law this year.

At the end of the day, however, it is not going to be politicians and regulators who will determine what our digital future holds.  It will be the entrepreneurs and the engineers and the innovators, like many of you in this room and the people you are going to hear from later this morning.  You all are the ones making that digital future a reality for South Dakota.  The best that the government can do is try to facilitate your success while making sure we are not accidentally standing in the way.  I am excited to watch how IoT and other technologies develop over the coming years, and I am eager to do my small part in fostering their success.