Subject: [NEXTEL-1] GPS Providers Could Reap Big Homeland-Security Bucks

From: NEXTEL-1
Date: Tue, 15 Jun 2004 16:16:16 -0400

GPS Providers Could Reap Big Homeland-Security Bucks
Jun 02, 2004

Any communications company that weathered the last few down years knows
that diversification was key to survival, and those that focused on
either homeland security or the trucking industry may see their efforts
pan out in a big way. A pending California homeland-security bill geared
to the trucking industry could open up a huge market opportunity for
providers of Global Positioning System (GPS) tracking services. Assembly
Bill 575 would require trucks hauling hazardous materials to have GPS or
other location-tracking technology along with a disabling device.
However, this bill could end up being a blueprint for future federal
regulation, according to John Phillips, president of Satellite Security
Systems (S3).

GPS and trucking is not a new phenomenon, what with Qualcomm getting
into the business many years ago and many companies using tracking not
only to monitor a shipment's whereabouts but also to track a driver's
activities. When the first GPS systems were introduced, there was a
certain amount of resistance, which led to tampering and damage, but
monitoring - at least with the major trucking lines - is pretty pro
forma today.

"It is my understanding from talking with a consultant who is helping to
push the California bill through that the federal side has come and
asked California to sit on its bill until at least May or June,"
Phillips told sister publication Government Procurement Report. "By
then, the federal side should be able to introduce a bill that is going
to piggyback off of what California is doing."
He added, "We are seeing a lot of legislative actions, and people are
starting to understand that not only are businesses going to have to
embrace the need for additional technology as a part of their business
focus, but they are going to have to do so in a way that they comply
with homeland-security measures."

If passed, this bill could prove to be the benchmark for a federal plan.
Phillips raised the question of what requirements California could place
on a Nevada trucking company that does business within the state of
California.
Involving Public Safety

Phillips, in discussing what the possible laws and regulations might be,
stressed the need for local and/or federal law enforcement to be
involved in the process.  "We are working with [the California Highway
Patrol] and the [Federal Bureau of Investigation] to have them
understand that they need to be a part of the decision-making process,"
Phillips said.
To illustrate this point, Phillips said he commonly asks prospective
customers if they are willing to assume the liability of potentially
having a tanker truck shut down on a busy interstate or in an crowded
intersection, based on an arbitrary decision of a driver or dispatch
agent.

"You have to have some sort of third-party, 24-hour monitoring center
that law enforcement can interact with so these decisions [to remotely
shut down a truck] aren't arbitrarily made by a dispatcher or by a
driver who is upset that he just got yanked out of his truck," Phillips
said. "You've got to have a process or decision model in place that
works with law enforcement that makes that decision because it is a
tactical decision." He added that 14 minutes was the longest time it
took a law-enforcement unit to arrive at the scene after an emergency
call from a S3 monitoring site.

Acceptance Challenges

Phillips noted a variety of challenges that need to be overcome in order
to get a mass level of acceptance. The first thing needed is
standardization of the regulations, including:

The ability to remotely shut down a truck or other vehicle, A minimum
coverage area across the United States, 24/7 coverage, and Positioning
support on the back end to identify threat levels within a quarter-mile
of a federal building, a state capital or other secure locations.

Once these standards are determined, it will be up to the companies
servicing the trucking industry to make an affordable business case that
will allow trucking companies to come into compliance.

"We can't push homeland security from the government down because the
government's not willing to pay for it," Phillips said. "We're trying to
create the efficiency and reporting features that businesses need so
that they will buy the technology that, as a value add, will get them in
compliance with homeland security."

In addition to selling trucking companies such a service, savvy
companies will be able to sell services that will help trucking
companies enhance their bottom lines via the monitoring capabilities
inherent in these tracking systems.

"We have been able to package this [monitoring and shutdown capability]
for sub-$500 per vehicle cost and anywhere from $15 to $50 per month for
monitoring, depending on how you are using the technology," Phillips
said. "You can go as simple as $10 to $15 to have your service be
a...compliant device, or you can pay a little more and receive reports
that could help a company better manage its trucking fleet."

Phillips noted S3 has been able to get smaller companies a return on
investment in between two months and seven months. However, he noted
larger companies are waiting for something to happen legislatively
before they invest.

"Our concern is that you are going to have this huge bottleneck where
[the government is] going to require you to, within six to eight months,
be in compliance and there is not going to be enough people to get these
things installed in a timely manner," Phillips said.

And given the far-reaching manner in which these types of regulations
could apply, that kind of bottleneck would not be a surprise. Phillips
said there are 350 million vehicles that potentially could get swept up
in these regulations, including vehicles like U-Haul trucks, and FedEx
[FDX] and UPS [UPS] delivery vans, in addition to the traditional hazmat
carrier.
"They all have different levels of potential threats from a
homeland-security standpoint," Phillips said. "Imagine trying to track
down a UPS truck that you think has some sort of hazardous material that
is going to be used in a negative way toward the United States. The only
way it's going to be implemented is if we provide the businesses that
are buying it a business model or ROI that makes sense. We have to give
them technology that gives them the reporting, the field service, the
interaction with their remote fleet so that it makes business sense and
then it will just happen to fall into compliance with the government
regulations."

He also noted that this technology has been deployed on vehicles used by
federal, state and local governments.
>>John Phillips, 619/574-1452<<
www.telecomweb.com

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