Radio ID: Asset or snoop?

Nearly unknown a decade ago, a device the size of a pencil tip is beginning to infiltrate every corner and pocket of American life.

This recent technology — called RFID for “radio frequency identification” — is making everything from warehouse inventory to lost-luggage tracking to library checkouts easier, faster and much more informed.

Some examples of RFID uses that have proliferated in just the past several years:

• Electronic key-size purchase tags in Arizona that are replacing conventional credit cards.

• ID tags for Texas schoolchildren that allow local law enforcement officers to monitor their movements.

• A proposal to examine the possible use of E-ZPass- type trackers in California autos to enforce a statewide mileage tax.

• Medicine containers electronically fitted nationwide to alert to fraud, counterfeiting and even mistakes by hospital staff.

• More than 100 suppliers to Wal-Mart and Sam’s Club will use RFID technology beginning Saturday to track shipments to stores in Texas and Oklahoma.

At the same time, the rush to harness the technology is raising a host of regulatory and other concerns, including the invasion of privacy, personal freedom and civil rights. Those issues, in turn, are generating concern by lawmakers about how access to data collected by such methods should be limited and protected.

Although much legislation has accompanied the new technology in some arenas — most notably the health care and financial areas — many experts say the United States lags behind other countries overall and has several key gaps that could be exploited as new applications reach the marketplace.

“Five years ago, no one was talking about RFIDs and the issues they raise for public policy, consumer and citizen protection,” says Lisa Sotto, who analyzes the industry for the law firm Hunton and Williams. “Now the national discussion is just starting as both the states and federal government realize that the current lack of overall framework for regulating the collection of [this] data is untenable.”

Opponents of RFIDs worry that widespread use of the tags could lead to all kinds of misuse. Besides the gathering — and perhaps selling — of biographical and logistical data, unknown by unsuspecting consumers, companies could track consumers who buy their products to find how often the products are used and where.

For example, if someone bought a pair of shoes with an RFID embedded in them, the store could track how many times that customer returned to the store wearing those shoes. Knowing by radio signal that a repeat customer was in the store could prompt better service from salespersons.

However, such practices also could lead to customized prices after companies create consumer profiles showing how much residents in different neighborhoods are willing to pay for the same merchandise. Proponents counter that such misuses easily could be avoided with encryption and other safeguards.

“We have not even gotten close to the big picture on what will be the good side and the bad side of this burgeoning technology,” says Jeff Wacker, a futurist at Electronic Data Systems who consults with businesses and consumers about the prospects of RFIDs. “For now, the only thing that is clear is that this is a genie that is out of the bottle, a juggernaut whose use is only going to get bigger.”

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