But the integration woes don't end with the communications network. Another headache has to do with protecting proprietary information, such as the data gathered by a car's sensors. As Volvo's Gustavsson notes, it's one thing to work with a third party when it comes to interactive maps or streaming Twitter feeds, but something else entirely when a partner's app taps into, say, the actual brake sensor on a car.
Due to companies' concerns about protecting trade secrets, it's likely that the automakers themselves will develop the various endpoint systems and related encryption to make sure no one can steal sensor data, Gustavsson says.
That might make integration more difficult, but, as VW's Lee explains, we're talking about a car with very complex internal systems moving at highway speeds, so any outside connection to check on diagnostics or to transmit other sensor data from the car has to be thoroughly verified.
To keep hackers from interfering, car makers will use strong encryption and send the encrypted data over the closed DSRC band, says Gustavsson.
Other concerns: Liability, privacy and more
Attorney Laurenza points out that the new technology might raise concerns about liability. Citing his earlier example about cars communicating with one another to avoid collisions, he says liability questions may arise if a car transmits faulty information to another car and someone is killed as a result. For example, a car might send the wrong signal, or a sensor on the road could communicate the wrong information, or data might become corrupted during transmission.
Similarly, there are questions about who owns the data that's collected and transmitted by cars, Laurenza says. Under NHTSA's current "black box" recorder regulation, issues of data ownership and access are left to state law, although the Motor Vehicle Safety Act of 2010, which did not pass, would have brought such issues under federal regulation.
And the black box itself is changing: Instead of just storing data, newer versions will use wireless signals such as DSRC to communicate data about the car's state in real time to the black box vendor, which will store the data for later use.
"There could be a question, if a legal issue arose, about who owns the data that goes out over the network," says Laurenza. "That is an issue the DOT is looking at. There are systems linked to the car manufacturers as well, and who gains access depends on how the data is transmitted."
Insurance companies, for example, might be very interested in knowing where and when their customers drive, how fast, how many close calls they have, and so on. "An insurance company might set more accurate premiums based on the technology in the car," he says.
This raises another concern: privacy. Do you really want your car to transmit every move you make?
Laurenza says that the privacy issues are not as critical as other legal concerns, because the data transmitted is anonymized by the automaker and does not relate directly to the individual driver. But Senators Al Franken (D-Minn.) and Chris Coons (D-Del.), among others, have expressed doubt over the effectiveness of data anonymization technology, citing "a broad body of research showing that it is extraordinarily difficult to successfully anonymize highly personal data like location."
The senators were responding to a recent OnStar announcement in which the company said it had changed its policy and planned continue to track data from cars -- including location, odometer readings, vehicle diagnostics and more -- even after customers had stopped using the OnStar service, and that it would sell anonymized data to third parties. It set up the policy on an opt-out basis, meaning former customers would have to tell OnStar that they did not want to be tracked.
Under severe criticism from customers and lawmakers, and facing a possible FTC probe, the company reversed course and made the policy an opt-in option, meaning former customers could request such tracking from OnStar if they so desired. (The company reserves the right to sell anonymized data from customers who opt in.)
The OnStar privacy flap shows that data privacy is very much on consumers' minds, whether car makers and service providers like it or not.
Ready or not...
Despite all the legal, technical, security and privacy issues that have yet to be worked out, the connected car is already here. Wi-Fi and 3G connections are making it possible to feed movies and music to cars, send real-time traffic and weather data, and track location and diagnostic information.
In the coming years, such connections will become available in more and more vehicles, providing more information and perhaps even changing the way we drive. As Peterson suggests, this opens up a new world of possibilities, but it also means that the car companies will have to work with one another and with government agencies to make the connected car truly useful, safe, and not too intrusive.
John Brandon is a former IT manager at a Fortune 100 company who now writes about technology. He has written more than 2,500 articles in the past 10 years. Follow him on Twitter (@jmbrandonbb.