Smart Card: Driver's License Plan Puts N.J. in Fast Lane

The New Jersey governor's State of the State Message in January included a plug for smart cards.

Gov. Christine Todd Whitman said the state expects to convert its driver's licenses to smart cards by 2000. The industry-standard chips would be able to link to financial and health records, and put the New Jersey government in a position to support the multiple applications that card industry observers say will drive acceptance of the advanced encoding technology.

Several states have instituted or sought bids to implement smart cards for services such as food stamps. But driver's licenses, which reach larger proportions of residents, have been a harder sell.

A plan several years ago for virtually universal issuance through the Utah motor vehicle agency, which stirred considerable enthusiasm in the smart card community, crashed amid financial, religious, and civil libertarian objections.

New Jersey wants to learn from that failure and from other, more successful pilot experiences, to bring its antiquated driver's licenses- which do not even have photographs-into the 21st century.

"What we have tried to do is observe as much as we could through data and from consultation with other programs," said David Mortimer, assistant state treasurer. "We have crafted something from the lessons learned from others."

A formal proposal for the smart card system will be made in July, during the state Legislature's budgeting process. If the motion is approved, New Jersey will issue a request for proposals from technology providers.

The state issues driver's licenses to just over five million people. It wants to issue 110,000 cards a month on a pilot basis, starting in the fall of 1999.

Dan A. Cunningham, senior vice president of business development for Phoenix Planning and Evaluation Ltd., said the 1999 goal will be hard to meet. Phoenix Planning, based in Rockville, Md., has been a consultant on many government card programs.

"The difficulty in this case is that the card issuer, which will be the state, is not the same entity delivering the application," Mr. Cunningham said. "It will take coordination between the providers who want to use the chip to deliver applications within the state."

Another consultant, Paul F.P. Coenen, said the time pressure may not be as intense as it seems.

"So many people have researched this and got right up to the point of issue that there is enough information out there to make it old hat," said Mr. Coenen, president of Electronic Strategy Associates Inc., Cumming, Ga.

The New Jersey card would be limited to the basic driver's license function for its first six months.

Besides the chip, the card would also carry a magnetic stripe, and possibly a bar code that would be usable in the card readers that many police departments use to verify the validity of licenses.

"What they ultimately are trying to do is get multiple use of the plastic, and that reduces the cost to any of the users," said Jerome Svigals, head of Jerome Svigals Inc., a Redwood City, Calif., consulting firm.

Mr. Svigals said consumers are looking for products that will give them added convenience and service. A card that combines banking and telephone services with a driver's license would presumably be seen as an improvement.

Despite some initial enthusiasm in Utah, "we had no legislative support," said Bart Blackstock, driver services bureau chief in the Utah driver's license division. "Consumer groups were pretty much in favor of the proposal, but there were some groups that viewed the chip as a Big Brother effort to control the citizens."

Mr. Blackstock said some religious groups objected because they associate smart cards with prophesies of the end of the world.

David Snodgrass, a consultant in North Manchester, Ind., and president of Q&A Consulting, who worked on the Utah project, said feelings ran so high that a legislator who introduced the driver's license proposal received death threats.

Such objections have not hindered smart cards on college campuses, many of them state institutions. But those are closed systems, Mr. Cunningham said, and the cards are integrated into day-to-day campus routines.

"When you compare that to a statewide, state-mandated approach like the one in Utah, that is where privacy concerns come in," he added.

Much consumer concern revolves around the proliferation of direct marketing and data mining, Mr. Coenen said. "The question is whether there is new information on that card that someone couldn't get from some public source."

In New Jersey, Mr. Mortimer said, "we believe that we will be able to demonstrate to people that privacy will be protected."

"One of the things the procurement asks for are security measures to make sure the financial relationships are secure, using current encryption methods," he said.

New Jersey also wants to expand the smart card service to residents who do not have driver's licenses, and to social programs such as WIC, the nutrition program for women, infants, and children.

"What we hope we are creating is an electronic key ring that a lot of different people can have a key-mate for," Mr. Mortimer said.

"I think once one or two states do it, it will be quickly communicated to the other states," Mr. Svigals said. "It is to the state's advantage because it improves the acceptance, and it is to the participants' advantage because it reduces their cost."

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