The starting point for Smart Electrics is making consumer equipment location dependent so that it only works in an environment where it has been registered.

The equipment is registered with the home control centre (HCC) which is tied to that location by the caller line identification in the phone line. When the device is switch on, it sends a request for a code to the HCC over the mains line via a simple modem using frequency shift keying (FSK). If the device is in the house, it is received and a unique code sent out. If that code is not received, the device will not operate.
This is not cutting off the power, but integrating the protocol into the firmware of the controllers in the electronics devices so that the devices will not operate without the code. To get access to the relevant codes, a hacker would have to access the firmware each time, and the point is to make such hacking uneconomic, says Dave McGlaughlin, one of the inventors. The other point is that, unlike a broadcast system such as Open where once you have cracked the code its open to everyone, once the code is cracked for the one device, all you can use is that one device. To do that you would have to reverse engineer the ROM and blow another, uneconomic for just one unit.
It also will not be vulnerable to tricks such as putting the units in the freezer to reset the flash memory, as the code will be in ROM and wiping the security code will wipe the firmware.
The powerline modem is using the European EN50065 standard running at just 30 characters per second with parts developed by Michat, a French subsidiary of Dutch electronics giant Philips. The whole HCC unit will have a basic cost of under £20 says Charles Brennan, business development manager of the team. "Really it's the economic issues that determines what we use," he said.
A Bluetooth-type short range wireless technology could be used to link to portable, battery powered devices, says Brennan. The problem with Bluetooth is that it is in-room rather than in-house, he said. But there are some parts of the Bluetooth protocol, layers one to three, that could be used. "What we are doing is to take the Bluetooth protocols and develop a de facto open standard," said Brennan. "We are putting together off-the-shelf solutions from whatever is the best available." u