Monday, March 15, 2010

Jeffery Dygert: Let the Free Market Work it Out

This posted to smartgrid@ostp.gov by Jeffrey Dygert, AT&T Services, Inc.

This area of inquiry raises numerous and complicated issues, but they are issues that industry, not government, is best suited to resolve. As the RFI acknowledges, a standardized physical communications interface will facilitate the speedy and broad deployment of smart appliances. However, AT&T strongly believes that policy makers should avoid selecting or endorsing a particular form of connectivity for the appliance industry. Rather, appliance manufacturers should be allowed to reach consensus among themselves about the interface or interfaces that best meet the needs of the marketplace. We note that smart appliances will need to be able to operate effectively in at least three different environments:

In homes that are not served by Smart Grid capabilities and where a HAN may or may not exist, smart appliances will need to communicate with their manufacturers for firmware upgrades and diagnostics.

In homes served by Smart Grid capabilities but without a HAN to mediate communications, smart appliances will need to receive and respond to signals or instructions coming through the smart meter.

In homes served by Smart Grid and equipped with a HAN, smart appliances likely will need to communicate with both the HAN and the smart meter to accomplish different tasks.

Each of these environments presents its own unique communications challenges and limitations, which appliance manufacturers – likely in consultation with HAN equipment manufacturers and communications service providers – are best suited to address. Moreover, for the promise of smart appliances to be fully realized, it will be necessary for consumers to embrace the technology. This is particularly true when the appliances will need to fit into homes that consumers are already networking for other purposes. Appliance manufacturers are more likely to achieve broad consumer acceptance if they are responding to market signals, rather than to a government decision mandating a particular communications interface. Manufacturers may settle on a single interface, or they may determine that it is most effective to equip appliances with multiple options (or even offer adapters or converters) to ensure that they are more broadly functional. In either event, manufacturers will be responding to what their consumers want, thereby driving broader adoption.
Additionally, leaving this question up to industry and the marketplace likely will spur greater innovation over the long run, as manufacturers remain free to respond to new developments in technology or consumer preference.

As we discuss above, in addition to communicating with the smart meter, smart appliances are likely to communicate with manufacturers for diagnostics and firmware upgrades and, potentially, with third-parties providing energy management services. Given this broader scope of communications, many of which will not involve the smart meter, it is best to avoid mandating a particular interface for communicating with the Smart Grid. Rather, manufacturers should be allowed to determine what interface best suits the numerous different communications that appliances will need to make.
This is not to say, however, that government does not have an important role to play with respect to smart appliance communications interfaces.

Policy makers can help the industry to achieve consensus by establishing an open, collaborative process to examine the issues and reach a decision, much as the National Institute of Standards and Technology has done with its Smart Grid standard setting process. The NIST standard-setting process also can contribute significantly to integrating smart appliances into the Smart Grid by establishing standards governing how appliances and home gateways will authenticate themselves and communicate with the grid.

AT&T appreciates the opportunity to contribute its views on these important issues and looks forward to continued engagement with policy makers throughout the federal government as the conversation about Smart Grid and its exciting potential continues.
Dorothy Attwood
Senior Vice President, Public Policy
& Chief Privacy Officer

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