IoT Update: Federal Lawmakers Focus on Smart Cities

IoT Update: Federal Lawmakers Focus on Smart Cities


Since the beginning of the year, lawmakers in this Congress have introduced a number of  proposals to study, cultivate, and guide the growth of smart cities.  This blog post summarizes seven smart cities bills introduced in this Congress.  Some bills focus broadly on Federal efforts to prioritize smart cities, whereas others focus on specific topics, like transportation and smart utilities.


Interestingly, most smart cities legislation introduced this year includes a grant program, which could reflect Congressional interest in demonstrating best practices capable of being replicated, as well as interest in providing financial support to accelerate smart cities growth.  The size of these grant programs typically hovers around $20-50M, though some bills leave the funding amount to the grant administrator.

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AI and IoT Legislative Update: Second Quarter 2019

Federal and state policymakers continued to focus on artificial intelligence (“AI”) and the Internet of Things (“IoT”) in the second quarter of 2019, including by introducing both substantive measures that would regulate the use of the technology and by supporting funding bills aimed at increasing investment. In our second AI & IoT Quarterly Legislative Update, we detail the notable legislative events from this quarter on AI, IoT, cybersecurity as it relates to AI and IoT, and connected and autonomous vehicles (“CAVs”).

Artificial Intelligence

In the second quarter of 2019, members in both the House and Senate introduced legislation focused on issues at the core of President Trump’s February 11, 2019, Executive Order, “Maintaining American Leadership in Artificial Intelligence” (the “AI Executive Order”). In particular:

  • Senator Martin Heinrich introduced the Artificial Intelligence Initiative Act (S.1558), which would establish a coordinated federal initiative to accelerate research and development on AI.
  • Representative Dan Lipinski introduced the Growing Artificial Intelligence Through Research Act (“GrAITR Act”) (H.R. 2202), which would direct the President to establish and implement the “National Artificial Intelligence Initiative,” to create a comprehensive research and development strategy and increase coordination among federal agencies.
  • Representative Jerry McNerney introduced the AI in Government Act of 2019 (H.R.2575), which would create an “AI Center of Excellence” to advise and promote the efforts of the federal government in developing innovative uses of AI, and require the Director of the Office of Management and Budget to issue guidance to federal agencies on developing AI governance plans.

Like the AI Executive Order, these bills address AI research and development, the development of AI technical standards, the needs of an AI workforce, and governance frameworks for AI technologies. (You can find more information on the AI Executive Order in our prior blog post.)

Internet of Things

Federal lawmakers have also introduced a number of measures to encourage development of smart cities, which collect, use and analyze data collected through IoT technologies to efficiently manage assets and resources. For example, the Smart Cities and Communities Act of 2019, was introduced in in the House by Representative Suzan DelBene (H.R. 2636) and in the Senate by Senator Maria Cantwell (S.1398), to promote the advancement of smart cities technologies. The legislation would establish a council of federal agencies to prioritize activities that demonstrate the value of smart cities, and establish a grant program to facilitate the adoption of smart city technologies, including in small- and medium-sized cities. Other smart city proposals focus on specific types of technologies used in smart cities, including:

  • smart transportation, addressed in the Smart Technologies Advancing Reliable Transportation Act (H.R. 3156) introduced by Representative Yvette Clarke; the Less Traffic with Smart Stop Lights Act of 2019 (H.R. 3261), introduced by Representative Tony Cardenas, and the Moving and Fostering Innovation to Revolutionize Smarter Transportation Act (S. 1939), introduced by Senator Catherine Cortez Masto, and (H.R. 3388) introduced by Representative Mark DelSaulnier
  • smart utilities, addressed in the Distributed Energy Demonstration Act of 2019 (S. 1742), introduced by Senator Ron Wyden; and
  • smart buildings, addressed in the Smart Building Acceleration Act (H.R. 2044), introduced by Representative Peter Welch.

Legislators are also focused on the state of the IoT industry broadly, with Representative Robert Latta in May re-introducing the SMART IoT Act, which passed the House last year. The new bill (H.R. 2644) would direct the Secretary of Commerce to conduct a study and submit to Congress a report on the state of internet-connected devices industry in the United States.

At the state level, legislators are showing increased interest in smart home devices, particularly those that collect voice recordings. Both California (A.B. 1395) and New York (A.B. 8113) have introduced proposals that would prohibit manufacturers from using voice recordings for an advertising purpose and from sharing or selling voice recordings with a third party. The California measure was amended on June 26 to narrow its scope, from applying to any “connected device with a voice recognition feature” to only those “speaker or voice command devices” with an “integrated virtual assistant connected to a cloud computing storage service that uses hands-free verbal activation.” The amended California measure would also impose a cumbersome consent requirement, mandating disclosure of a specific 114-word statement set out in the statute that is to be provided during installation of the device, separate from the terms of use.

Cybersecurity – Relating to AI and IoT

Last month, committees in both chambers considered and advanced amended versions of the IoT Cybersecurity Improvement Act (S. 734, H.R. 1668), which was introduced in the Senate by Senators Mark Warner and Cory Gardner and in the House by Representative Robin Kelly. The bills seek to strengthen cybersecurity requirements for IoT devices purchased by the federal government, with the goal of affecting IoT cybersecurity standards more broadly, as detailed in our prior blog post.

The Senate amendment removes the definition of “covered devices” subject to the Act and instead refers to “Internet of Things devices,” without defining them. It also requires OMB only to issue “principles” for federal agencies on the use of IoT devices, rather than policies, principles, standards, or guidance. The Senate amendment would also authorize agencies to waive compliance with those principles when use of an IoT device is (1) “necessary for national security or for research purposes”; (2) “appropriate to the function of the covered device”; (3) “secured using alternative and effective methods”; or (4) “of substantially higher quality or affordability than a product that meets such policies, principles, standards, or guidelines.”

In addition, several measures introduced in the second quarter focus on supply chain and infrastructure cybersecurity. They include:

  • The Leading Infrastructure for Tomorrow’s America Act (H.R. 2741), a wide-ranging bill introduced by Representative Frank Pallone, which incorporates cybersecurity requirements throughout, aims to “rebuild and modernize the Nation’s infrastructure to expand access to broadband and Next Generation 9–1–1, rehabilitate drinking water infrastructure, modernize the electric grid and energy supply infrastructure, redevelop brownfields, strengthen health care infrastructure, create jobs, and protect public health and the environment,” among other things.
  • The SUPPLY CHAIN Act (S. 1457), introduced by Senator Marsha Blackburn and co-sponsored by Senators John Cornyn and Marco Rubio, aims to coordinate federal agencies to secure the American communications equipment supply chain.
  • The U.S.-China Economic and Security Review Act of 2019 (H.R. 2565, S. 987), a bipartisan measure introduced in the House by Representatives Brad Sherman and Mike Gallagher and in the Senate by Senators Christopher Coons, Tim Kaine, and Mitt Romney. The bill aims to address IoT supply chain vulnerabilities associated with China by requiring the Chief Information Officers Council to submit an annual report to Congress.

Connected and Autonomous Vehicles

Federal lawmakers have yet to reintroduce two comprehensive bills that died in the previous Congress: the Safely Ensuring Lives Future Deployment and Research in Vehicle Evolution (“SELF DRIVE”) Act (H.R. 3388) and American Vision for Safer Transportation through Advancement of Revolutionary Technologies (“AV START”) Act (S. 1885). Rather, new legislation has focused on CAV-related grant programs. The Preparing Localities for an Autonomous and Connected Environment (“PLACE”) Act (H.R. 2542), introduced by Representative Earl Blumenauer, would direct the Secretary of Transportation to make grants to study secondary influences of CAVs on communities (e.g., influences on land use, urban design, transportation, real estate, and municipal budgets). Another measure introduced by Representative Mark DeSaulnier (H.R. 3388), would direct the Secretary of Transportation to establish the Strengthening Mobility and Revolutionizing Transportation (“SMART”) Challenge Grant Program, to encourage technological innovation, including with respect to CAVs, in communities nationwide.

In the absence of comprehensive federal legislation on CAVs, states continue to introduce measures to foster innovation in the CAV industry and protect consumers and communities. In the second quarter of this year, Washington State enacted a law governing delivery robots on sidewalks (H.B. 1325), which goes into effect September 1, 2019. California legislators continue to consider a number of CAV bills, including a new measure that would establish a working group on autonomous passenger vehicle policy development (S.B. 59) and another to require transit operators to ensure certain automated transit vehicles are staffed by employees (S.B. 336). California’s Department of Motor Vehicles is also considering a proposed rule to allow the testing and deployment of certain autonomous motor trucks. And in Florida, the state legislature recently enacted a law (H.B. 311) to allow CAVs without human operators, effective July 1, 2019.

This is the second installment in Covington’s quarterly update on AI and IoT legislative developments.

If you have any questions concerning the material discussed in this post, please contact the following members of our Artificial Intelligence and Internet of Things initiatives:

Layth Elhassani         +1 202 662 5063
Holly Fechner             +1 202 662 5475
Muftiah McCartin     +1 202 662 5510
Lindsey Tonsager     +1 415 591 7061

AI Update: New York City, Vermont, and Other State and Local Governments Evaluating AI Trustworthiness

As the policy debate concerning government oversight of artificial intelligence evolves, public procurement regulations have become a potential entry point for regulating artificial intelligence.  Earlier this year, the White House issued an Executive Order on AI mandating that the National Institute of Standards and Technology develop a guide to federal engagement on AI technical standards.  While the federal government’s actions have understandably garnered significant attention, state and local governments are also undertaking preliminary efforts to engage on the technical standards for AI procured and utilized by their agencies.  Continue Reading

AI Update: White House Announces RFI on Improving AI R&D Data and Models

On July 10, 2019, the White House Office of Management and Budget (“OMB”) published a Request for Information (“RFI”) in the Federal Register, requesting comments on how to improve Federal data sets and models for artificial intelligence (“AI”) research and development (“R&D”) and testing.  The RFI is a part of the White House’s AI Initiative, as kicked off by the Executive Order on Maintaining American Leadership in Artificial Intelligence. Continue Reading

ICO’s Call for Input on Bias and Discrimination in AI systems

On June 25, 2019, as part of their continuing work on the AI Auditing Framework, the UK Information Commissioner’s Office (ICO) published a blog setting out their views on human bias and discrimination in AI systems. The ICO has also called for input on specific questions relating to human bias and discrimination, set out below.

The ICO explains in its blog how flaws in training data can result in algorithms that perpetuate or magnify unfair biases. The ICO identifies three broad approaches to mitigate this risk in machine learning models:

  1. Anti-classification: making sure that algorithms do not make judgments based on protected characteristics such as sex, race or age, or on proxies for protected characteristics (e.g., occupation or post code);
  2. Outcome and error parity: comparing how the model treats different groups. Outcome parity means all groups should have equal numbers of positive and negative outcomes. Error parity means all groups should have equal numbers of errors (such as false positives or negatives). A model is fair if it achieves outcome parity and error parity across members of different protected groups.
  3. Equal calibration: comparing the model’s estimate of the likelihood of an event and the actual frequency of said event for different groups. A model is fair if it is equally calibrated between members of different protected groups.

The guidance stresses the importance of appropriate governance measures to manage the risks of discrimination in AI systems. Organizations may take different approaches depending on the purpose of the algorithm, but they should document the approach adopted from start to finish. The ICO also recommends that organizations adopt clear, effective policies and practices for collecting representative training data to reduce discrimination risk; that organizations’ governing bodies should be involved in approving anti-discrimination approaches; and that organizations continually monitor algorithms by testing them regularly to identify unfair biases. Organizations should also consider using a diverse team when implementing AI systems, which can provide additional perspectives that may help to spot areas of potential discrimination.

The ICO seeks input from industry stakeholders on two questions:

  • If your organisation is already applying measures to detect and prevent discrimination in AI, what measures are you using or have you considered using?
  • In some cases, if an organisation wishes to test the performance of their ML model on different protected groups, it may need access to test data containing labels for protected characteristics. In these cases, what are the best practices for balancing non-discrimination and privacy requirements?

The ICO also continues to seek input from industry on the development of an auditing framework for AI; organizations should contact the ICO if they wish to provide feedback.

UK Government’s Guide to Using AI in the Public Sector

On June 10, 2019, the UK Government’s Digital Service and the Office for Artificial Intelligence released guidance on using artificial intelligence in the public sector (the “Guidance”).  The Guidance aims to provide practical guidance for public sector organizations when they implement artificial intelligence (AI) solutions.

The Guidance will be of interest to companies that provide AI solutions to UK public sector organizations, as it will influence what kinds of AI projects public sector organizations will be interested in pursuing, and the processes that they will go through to implement AI systems.  Because the UK’s National Health Service (NHS) is a public sector organization, this Guidance is also likely to be relevant to digital health service providers that are seeking to provide AI technologies to NHS organizations.

The Guidance consists of three sections: (1) understanding AI; (2) assessing, planning and managing AI; (3) using AI ethically and safely, as summarized below. The guidance also has links to summaries of examples where AI systems have been used in the public sector and elsewhere.

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Privacy Shield Ombudsperson Confirmed by the Senate

On June 20, 2019, Keith Krach was confirmed by the U.S. Senate to become the Trump administration’s first permanent Privacy Shield Ombudsperson at the State Department.  The role of the Privacy Shield Ombudsperson is to act as an additional redress avenue for all EU data subjects whose data is transferred from the EU or Switzerland to the U.S. under the EU-U.S. and the Swiss-U.S. Privacy Shield Framework, respectively.

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IoT Update: Senators Introduce Legislation to Regulate Privacy and Security of Wearable Health Devices and Genetic Testing Kits

Last week, Senators Amy Klobuchar (D-MN) and Lisa Murkowski (R-AK) introduced the Protecting Personal Health Data Act (S. 1842), which would provide new privacy and security rules from the Department of Health and Human Services (“HHS”) for technologies that collect personal health data, such as wearable fitness trackers, social-media sites focused on health data or conditions, and direct-to-consumer genetic testing services, among other technologies.  Specifically, the legislation would direct the HHS Secretary to issue regulations relating to the privacy and security of health-related consumer devices, services, applications, and software. These new regulations will also cover a new category of personal health data that is otherwise not protected health information under HIPAA. Continue Reading

IoT Update: Expert Q&A on the EU Cybersecurity Act

An Expert Q&A with Mark Young of Covington & Burling LLP on the EU Cybersecurity Act and its new cybersecurity certification schemes for information and communication technology (ICT) products, services, and processes, especially internet of things (IoT) devices. It also discusses how the Act supports the EU Directive on the Security of Network and Information Systems (Directive 2016/1148/EC) (NIS Directive), the expanded role for the EU Agency for Cybersecurity (ENISA), and what companies need to know about timelines and enforcement. Continue Reading

Artificial Intelligence and the Patent Landscape – Views from the USPTO AI: Intellectual Property Policy Considerations Conference

The U.S. Patent and Trademark Office (USPTO) held its Artificial Intelligence: Intellectual Property Policy Considerations conference on January 31, 2019. The conference featured six panels of speakers, including policy makers, academics, and practitioners from Canada, China, Europe, Japan, and the United States. As stated by USPTO Director Iancu during his introductory remarks, the purpose of the conference is to begin discussions about the implications that artificial intelligence (“AI”) may have on intellectual property law and policy. In this post, we provide an overview of Director Iancu’s Introductory Remarks and of three of the conference panels that addressed several current and forward-looking issues that will impact patent law and society at large.

Opening Remarks by Director Iancu

The Director noted that governments around the world are adopting long-term comprehensive strategies to promote and provide leadership for technological advances of the future, and that America’s national security and economic prosperity depend on the United States’ ability to maintain a leadership role in AI and other emerging technologies.

The USPTO is using AI technology to increase the efficiency of patent examination. For example, the USPTO has developed and is exploring a new cognitive assistant called Unity which is intended to allow patent examiners to search across patents, publications, non-patent literature, and images with a single click. The Director concluded by stating that one of his top priorities is ensuring that the U.S. continues its leadership when it comes to innovation, particularly in the emerging technologies such as AI and machine learning. Continue Reading