The Ontario government may have bitten off more than it can chew, according to an American smart card group.

The notion of a provincial smart card containing driver’s licence, birth certificate and health information was first introduced in 1999. Last week, the Toronto Star reported that

the Harris government was scrapping its smart card project due to prohibitive costs and privacy concerns.

“”Ontario was trying to come out with a multi-application card. Sometimes when you try to do too much, you may find that the costs well exceed the benefit of any of those single parts,”” said John Burke, a senior partner at Boston/Washington D.C. law firm Foley Hoag and policy advisor to N.Y.-based Smart Card Alliance.

The alliance, comprised of smart-card technology providers, related industries such as banking and healthcare, and government agencies, delivered a report Wednesday detailing technical progress on smart cards to date and their various applications.

The cost of issuing smart cards to citizens doesn’t come from the cards themselves, said Jeff Katz, head of corporate marketing for San Jose, Calif.-based Atmel Corp. The company manufacturers semiconductor chips, including secure chips embedded in smart cards and card readers.

“”The cost of the card itself is a small fraction of the total cost. Even though there’s a chip in the card, it doesn’t cost much more than a card without a chip,”” said Katz. “”The big difference is in the infrastructure and also in the people you have to hire to operate it and manage the issuance policies. That can be overwhelming compared to the cost of actual cards and even the reader costs.””

Just because smart cards now have the technological sophistication to hold thousands of bytes of data, it doesn’t necessarily mean card-issuing bodies should cram in as much as they possibly can, said Burke. It may make more sense to start small and add data incrementally.

“”You don’t have to solve all your problems today. You can solve the ones that are most looking you in face and still have the ability to migrate and be flexible,”” he said.

Ontario may have abandoned its smart cards, but other government bodies are still considering them. Citizenship and Immigration Canada may issue smart ID cards to permanent residents, for example.

There similar initiatives are in progress or under consideration in Germany, Finland, Sweden, India, Malaysia and Hong Kong, according to Cathy Medich, an independent consultant to the Smart Card Alliance. The U.S. Department of Defense will issue four million smart cards to its employees by the end of 2003.

Interoperability issues have stalled the progress of smart cards in some European countries. There are internationally-recognized standards for card readers, according to Katz, but no standard as yet for smart card software.

“”We’re not saying it’s someday going to be all wonderful,”” he said. “”There still has to be a lot of work done. That’s no reason why individual enterprises or agencies that are (looking for) a near term solution shouldn’t be considering smart cards.””

The terrorist attacks of Sept. 11 have certainly spurred efforts to find viable solutions for smart cards, according to the Smart Card Alliance. “”What’s the cost of not doing it?”” said Katz. “”If you have trusted IDs, maybe you can prevent some very profound activities you don’t want to happen — whether they’re hacking into systems or stealing aircraft.””

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