Abstract Service capabilities are reusable software modules that provide speciic functions and may be shared by different applications. The paper presents an approach to resolving interactions between service capabilities in the area of smart metering. By using abstraction, semantic information for home energy saving and prepaid smart metering is identiied. The information is structured as resources, described by their states and operations that trigger the state changes. Description logic is used to formalize the model of semantic information. Service capabilities are described by logical statements. The service capability interaction is resolved by policies, where policy rules reine the service capability behaviour. Keywords: Machine-to-Machine Communications, Smart Metering, Knowledge Management, Description Logic Knowledge Based Interaction of Smart Metering Service Capabilities Ivaylo Ivanov Atanasov* * Faculty of Telecommunications, Technical University of Soia, Bulgaria. Email: iia@tu-soia.bg Article can be accessed online at http://www.publishingindia.com Introducion Recent service development platforms exploit the idea of reusable software modules that encapsulate generic functions. The idea was born with the introduction of the Intelligent Network concept, where service independent building blocks represent generic functions in the telecommunication network. Next, it was developed in open service access which is standardised as service architecture for mobile networks, and where service capability features are network functions accessible by an application via open interfaces. The same idea was adopted in the area of machine-to-machine (M2M) communications which allow interconnection between smart objects (devices with sensors and/ or actuators) and network infrastructure (ETSI TR 102 725 v.1.1, 2013). M2M network applications share functions exposed by service capabilities through a set of open interfaces and they are software modules that provide speciic services, such as location and status of a particular device (Hernandez & Reiff-Marganiec, 2014). The variety of applications that may be developed by the use of software modules representing speciic functions introduces the problem with service interaction. A lot of research has been done in the area of resolving the problem with undesired behaviour caused by interaction of two or more services (Seigmund et al., 2012; Chentouf & Khoumsi, 2013; Apel et al., 2013; Takeyama & Chiba, 2013). A lot of services use policies to express operational criteria and policies might contradict each other (Maternaghan & Turner, 2013). Mechanisms for discovering and resolving service interaction and policy conlicts are of main importance in service deployment. Description logic appears to be a suitable tool for description of policies and policy-based service logics (Schutte & Wahl, 2010; Hu et al., 2012; Tang et al., 2014). Description logic is a mathematical formalism used for description of concepts and relations (roles) in semantic networks (Zhang et al., 2013; Krotzsch et al., 2014). In this paper, an approach is presented to resolve interaction between M2M service capabilities whose logic is based on policies. Service capability interactions are resolved by reasoning about consistency of logical statements.