RFID dodges bullet in California

In late September, the federal government announced the completion of one of its biggest RFID initiatives to date, when it revealed that 69 facilities at 19 Department of Defense distribution centers had been outfitted with RFID readers. Two days later, California Governor Arnold Schwarzenegger vetoed a bill that contained some of the toughest language yet directed at the use of RFID throughout California.

Sounds like a clear cut victory for the RFID industry. And while that may be the case, it's too soon to stop worrying about the California legislation—or any of the approximately 20 similar measures pending in other states.

California State Senator Joe Simitian, who sponsored the initial bill, has indicated he plans to reintroduce some version of the bill next year. The bill primarily sought to curb the use of RFID in public entities such as libraries, government agencies and transportation systems like the Bay Area Rapid Transit District, which use government-issued RFID cards.

"He still thinks it's an important issue and wants to understand why the governor vetoed it," says Doug Farry, chair of law firm McKenna Long & Aldridge's RFID Practice. "This is certainly not over in California."

Still, the fact that the bill came so close to becoming law is expected to prompt technology suppliers and industry groups to renew their advocacy and education efforts. Dan Mullen, president of AIM Global, says the group plans to step up its advocacy initiatives next year. In addition, Farry says that he's seen a flurry of activity since the California ruling. "I have seen first hand a number of efforts by technology companies and [industry] organizations [to get involved]," he says. "I think some of them have seen this as a wakeup call."

That's not to say the RFID industry hasn't already been trying to reach out to lawmakers. In early September, AIM Global hosted its third annual RFID Executive Summit and Legislative Fly-In. Sixty industry executives from around the world attended the event in Washington, D.C., which included more than 40 meetings with senators and representatives. Earlier this summer, senators Byron Dorgan (D-N.D.) and John Cornyn (R-Texas) convened a congressional caucus in Washington to discuss RFID. The event included a panel discussion with industry experts and vendor technology demonstrations, all aimed at educating U.S. policymakers about RFID technology and its potential applications.

Right now, the federal and state governments appear to be distinctly at odds when it comes to RFID. A number of federal agencies, including the Defense Department, NASA, and the departments of Agriculture and Transportation, are pushing aggressively to expand their use of RFID technology; at the same time, a host of state legislatures are mulling legislation to restrict the technology's use. "I think the main difference is between the perspective of elected politicians who are responding to the perception of the technology in the public," says Farry, "contrasted with the people within the government who are responsible for executing supply chain strategies and see RFID as a tool to help them do their job."