In Depth Houses along Grove Avenue in the Helderberg neighborhood of Albany, New York

Published on January 18th, 2016 | by Daniel Castro

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No, Americans Are Not Afraid of Smart Homes

The Pew Research Center released a survey last week that investigated the circumstances under which U.S. citizens would share their personal information in return for getting something of perceived value. The survey found that only 27 percent of respondents found the proposed exchange for smart thermostats “acceptable”—the lowest of all of the technologies in the study—a surprising result given the rising popularity of this technology. While some have begun suggesting this shows that consumers are ambivalent about smart homes, a closer look at the survey shows that the result is anything but surprising.

In the study, Pew set up six hypothetical scenarios about different technologies—including office surveillance cameras, health data, retail loyalty cards, auto insurance, social media, and smart thermostats—and asked respondents whether the tradeoff they were offered for sharing their personal information was acceptable. For smart thermostats, Pew offered this scenario:

“A new technology company has created an inexpensive thermostat sensor for your house that would learn about your temperature zone and movements around the house and potentially save you on your energy bill. It is programmable remotely in return for sharing data about some of the basic activities that take place in your house like when people are there and when they move from room to room.”

Given how the survey describes the scenario, it is not surprising that respondents did not find the so-called “bargain” acceptable. After all, the consumer benefit here (savings money) is only described as being “potential” but the alleged loss of privacy is definite. Indeed, in this scenario, there is very little incentive to participate. For what it is worth, in its marketing materials, the home automation company Nest states that its popular smart thermostat saves the average customer 10-12 percent on heating and 15 percent on cooling.

Moreover, the tradeoff set up in Pew’s question does not reflect the reality of how smart thermostat companies share data. Based on Pew’s description of how smart thermostats collect data, many respondents might believe that they are required to share with other people information about when they are home or what they are doing inside their home. But all of the major smart thermostat companies—Nest, Honeywell, and Ecobee—have strict privacy policies to protect consumer data. For example, Nest asks permission from customers before sharing any data, and even when they share that information, it is almost always for the customer’s benefit, such as to connect to another smart home device of the customer’s choosing. Customers can still use Nest’s smart thermostat even without consenting to these additional sharing permissions. Even after consumers give Nest permission to share, they can revoke that permission at any time. While there are some legitimate critiques of these devices as companies continue to work out the bugs, careless distribution of consumer data to third parties is not one of them.

Given the new slate of gadgets for the home on display at the Consumer Electronic Show (CES) this year, it looks like the age of the smart home is only beginning to arrive. While some consumers may not yet adopt smart home technologies, cost and features will likely be the most important factors in this decision. This most recent Pew survey is not compelling evidence that Americans have strong privacy fears about technology in the home, but rather it is a reminder that consumers are savvy shoppers and they still want a bargain.

Alan McQuinn contributed to this article.

Photo credit: Wikipedia user UpstateNYer


About the Author

Daniel Castro is the director of the Center for Data Innovation and vice president of the Information Technology and Innovation Foundation. Mr. Castro writes and speaks on a variety of issues related to information technology and internet policy, including data, privacy, security, intellectual property, internet governance, e-government, and accessibility for people with disabilities. His work has been quoted and cited in numerous media outlets, including The Washington Post, The Wall Street Journal, NPR, USA Today, Bloomberg News, and Businessweek. In 2013, Mr. Castro was named to FedScoop’s list of “Top 25 most influential people under 40 in government and tech.” In 2015, U.S. Secretary of Commerce Penny Pritzker appointed Mr. Castro to the Commerce Data Advisory Council. Mr. Castro previously worked as an IT analyst at the Government Accountability Office (GAO) where he audited IT security and management controls at various government agencies. He contributed to GAO reports on the state of information security at a variety of federal agencies, including the Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC). In addition, Mr. Castro was a Visiting Scientist at the Software Engineering Institute (SEI) in Pittsburgh, Pennsylvania where he developed virtual training simulations to provide clients with hands-on training of the latest information security tools. He has a B.S. in Foreign Service from Georgetown University and an M.S. in Information Security Technology and Management from Carnegie Mellon University.



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