Subsequent reports exposed numerous blunders with the VCF project, including under-qualified FBI personnel, poor oversight and inadequate planning. Further complicating things, the FBI opted to build a customized system from the ground up rather than use readily-available commercial software.

DHS is poised to repeat this mistake if it opts for chip-based licenses. Infrastructure at departments of motor vehicles is dominated by machines that read 2-D technology. No state currently uses chips in its licenses and few foreign countries have adopted the idea. A chip mandate would force some states to shelve millions of dollars of investment into their own security solutions and start over from scratch. According to National Conference of State Legislatures (NCSL) Transportation Committee Director Cheye Calvo, “State officials don’t want DHS to choose one security solution for all states. They prefer trying different techniques with various business partners.”

Even more troubling than the financial cost is the potential invasion of privacy. RFID chips have the memory to store every detail about a person, including health records, family history and bank and credit card transactions. RFID chips can also be remotely accessed by a hand-held scanner, raising the risk of identity theft. In contrast, non-chip licenses have to be physically read and therefore physically stolen to be compromised. In the wake of recent controversy over the federal government’s domestic spying program, chip-based licenses could also multiply the opportunities for abuse.

If DHS mandates computer chips, it might try to pacify privacy concerns by restricting the categories of data that can be stored on the cards. But any such rule could be amended by subsequent action. After all, the Real ID Act is interpreted by many observers as a major step toward a national ID card and it passed with nary a whisper of public warning or debate. With that excess chip capacity in place, there’ll be no shortage of ideas for using it.

DHS is not facing a question of cost versus security. Currently, 49 states use reliable and cost-effective magnetic stripes or 2-D technology and their residents have had minimal identity theft problems related to their driver’s license. States have been making substantial progress in securing and authenticating driver’s licenses with innovations such as holograms and digital watermarks.

The National Conference of State Legislatures estimates that it will cost states a total of $9 to $13 billion over six years to comply with Real ID regulations based on current techniques. Requiring computer chips could double that amount.. At an NCSL seminar in Chicago on December 7, 2005, many of the speakers and attendees expressed concern that the DHS would adopt RFID chips.