Dear Senator Bowen:

The undersigned organizations regret to inform you of our opposition to your measure, Senate Bill 1834, which would impose a number of restrictions on the use of electronic product code (EPC) system using radio frequency identification (RFID).

As you know, RFID is the generic term used for technologies that use radio waves to automatically identify items. In common usage, a unique number that identifies a product is stored on a microchip that is attached to an antenna which then can transmit information to a reader. Some well-known and widespread uses in the United States include EZ Pass on highways and bridges and Speed Pass at gas stations.

Several major retail operators have required manufacturers to implement EPC and RFID at the case and pallet level by January 1, 2005. We believe this implementation will have consumer benefit by the swift replenishment of products on shelves, theft control and the identification of counterfeit products. Further, product recalls could be conducted in a much more efficient and effective manner as products in the supply chain could be continuously monitored.

The retail and manufacturing community takes the issue of consumer privacy very seriously and has been actively involved in addressing the issue since the founding of the MIT AutoID Center in 1999. Field tests and pilots currently underway are allowing participants to think through privacy concerns and the protection of consumer privacy.

The sponsors of EPC have adopted guidelines for all companies implementing EPC systems. The guidelines address consumer notice, consumer choice, consumer education and records use, retention and security.

SB 1834 would place a number of restrictions on the use of EPC and RFID at a time when the technology is at its infancy. We believe these restrictions could have a number of unintended consequences that could blunt the potential benefits consumers could derive from the technology. We appreciate your thoughtful consideration of this issue and the work you and your staff have engaged in to develop the proposed amendments; however, we must regretfully oppose your measure.

Please contact Kristin Power at Grocery Manufacturers of America at (916) 447-9425 if you have questions regarding this letter. Sincerely,

American Electronics Association
California Chamber of Commerce
California Grocers Association
California Retailers Association
Consumer Specialty Products Association
Grocery Manufacturers of America

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