When will we see one-cent tags?
That's a good question. There are some people who think we will never see one-cent tags and there are those who say about five or six years away.

Are the privacy concerns imagined or is there some substance?

It depends on how you look at the issue. To my mind, there's a privacy issue around data that has nothing to do with RFID. I mean if I collect data on you through RFID transactions or through a loyalty card or through the fact that I'm your doctor or whatever, what am I allowed to do with that data? That's a privacy issue. It's not exclusive to RFID. The issue around who can read tags in your clothes for example, it is a potential issue -- people could surreptitiously scan you. Frankly, it's not something I think is a great concern but it's something that companies are going to need to address. To my mind it's more a consumer perception issue. Some people are uncomfortable with the idea of having an active microchip in their clothes.

Yet privacy issues seem to have derailed Benetton's plans for RFID.

It hasn't derailed anything at Benetton. They've just been a little more circumspect. But they are continuing to do the research that they were doing when that whole thing blew up. Marks & Spencer recently did a clothing trial and was widely praised for having handled it properly. They educated consumers that there were readers and there were tags -- they had these bright lavender tags strung off of the garments. When you got home and you cut off that tag, you cut off the RFID chip. So there were no privacy concerns.

The concern that privacy people have is that I can take a specific pair of jeans that you bought and I can marry that to your credit card information. So next time you come into my store, I can read the tag in your pants and look up who you are. Is that feasible? Yes. Is it likely? No. First of all, only the company that put the tag in the clothes will know what the serial number in the tag is-the tag doesn't contain your address, your phone, your name, your social security number, or anything else about you. It contains a simple serial number. So if I attach your name to a serial number, I'm the only one that knows that serial number is attached to your name. No one else can scan that. I'm not going to buy a pair of clothes in Wal-Mart and go into Target to find they know what I've bought. I have seen privacy advocates say that's the case but it's impossible.

The question the privacy people don't answer is "what's the value of doing that?" And why would a company spend money to do that if there's no value? That's the big issue: There's no value. The company doesn't care that you've bought this pair of jeans. It only cares that it knows your likes and your dislikes so that it can try to fulfill your needs. There's no benefit and several potential negatives to tracking individual data about the particular purchase someone has.

First, of all there's a potential privacy backlash, which no retailer wants. There is the cost associated with maintaining the data. And there's another issue. If you can track my clothing, there's the potential that you will some day be hauled into court, as a retailer, in a lawsuit. For example, you're cheating on your wife and you go to Victoria's Secret and you buy lingerie and give it to your girlfriend. Then your wife sues you for divorce. And she says, "I'm going to subpoena Victoria's Secret and prove that that specific lingerie in the girlfriend's closet was paid for with my husband's credit card." Today, you couldn't prove that. You could prove he bought an item at Victoria's Secret, you couldn't prove which item. So now Victoria's Secret is put in a situation where it could be hauled into court, have to spend tens of thousands of dollars on a lawyer, just to have to say, "Yes, we sold him that item." Plus that hurts their business because people will read in the press that Victoria's Secret was brought into court and said this and that, and then think who wants to shop there if they're going be subpoenaed and everyone's going to know what I've bought.

Businesses will only do what's in their own business interests to do. And if they perceive negative reasons for attaching personal information to specific items, then they won't do it. In my view, the biggest negative is it will turn off a lot of their customers.

So RFID isn't so much an issue as is general data privacy?

This was the case with JetBlue giving out its passenger list. They didn't use RFID, but they could have-they could've had a loyalty card with an RFID chip in it and scanned that to compile their passenger list. It doesn't matter how you collect the data. It matters what you do with the data. And we haven't really gotten far enough along in the education process to convince people that RFID is not very different from everything else. The one difference is you could possibly be walking around with an active tag outside a store and someone who's not subject to privacy laws or rules or regulations or market forces could scan your tags.