[Senate Hearing 107-674]
[From the U.S. Government Publishing Office]
S. Hrg. 107-674
HOLES IN THE NET:
SECURITY RISKS AND THE E-CONSUMER
=======================================================================
HEARING
before the
SUBCOMMITTEE ON SCIENCE, TECHNOLOGY,
AND SPACE
OF THE
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
__________
JULY 16, 2001
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
ERNEST F. HOLLINGS, South Carolina, Chairman
DANIEL K. INOUYE, Hawaii JOHN McCAIN, Arizona
JOHN D. ROCKEFELLER IV, West TED STEVENS, Alaska
Virginia CONRAD BURNS, Montana
JOHN F. KERRY, Massachusetts TRENT LOTT, Mississippi
JOHN B. BREAUX, Louisiana KAY BAILEY HUTCHISON, Texas
BYRON L. DORGAN, North Dakota OLYMPIA J. SNOWE, Maine
RON WYDEN, Oregon SAM BROWNBACK, Kansas
MAX CLELAND, Georgia GORDON SMITH, Oregon
BARBARA BOXER, California PETER G. FITZGERALD, Illinois
JOHN EDWARDS, North Carolina JOHN ENSIGN, Nevada
JEAN CARNAHAN, Missouri GEORGE ALLEN, Virginia
BILL NELSON, Florida
Kevin D. Kayes, Democratic Staff Director
Moses Boyd, Democratic Chief Counsel
Mark Buse, Republican Staff Director
Jeanne Bumpus, Republican General Counsel
------
SUBCOMMITTEE ON SCIENCE, TECHNOLOGY, AND SPACE
RON WYDEN, Oregon, Chairman
JOHN D. ROCKEFELLER IV, West GEORGE ALLEN, Virginia
Virginia TED STEVENS, Alaska
JOHN F. KERRY, Massachusetts CONRAD BURNS, Montana
BYRON L. DORGAN, North Dakota TRENT LOTT, Mississippi
MAX CLELAND, Georgia KAY BAILEY HUTCHISON, Texas
JOHN EDWARDS, North Carolina SAM BROWNBACK, Kansas
JEAN CARNAHAN, Missouri PETER G. FITZGERALD, Illinois
BILL NELSON, Florida
C O N T E N T S
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Page
Hearing held on July 16, 2001.................................... 1
Statement of Senator Nelson...................................... 36
Statement of Senator Wyden....................................... 1
Witnesses
Cerf, Dr. Vinton G., Senior Vice President, Internet Architecture
& Technology, WorldCom......................................... 3
Prepared statement........................................... 6
Miller, Harris N., President, Information Technology Association
of America..................................................... 10
Prepared statement........................................... 13
Schneier, Bruce, Chief Technical Officer, Counterpane Internet
Security, Inc.................................................. 20
Prepared statement........................................... 23
Appendix
McCurdy, Dave, President, Electronic Industries Alliance......... 49
Article from Newsweek Business Information, Inc., Newsbytes, by
Brian McWilliams............................................... 52
HOLES IN THE NET:
SECURITY RISKS AND THE E-CONSUMER
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MONDAY, JULY 16, 2001
U.S. Senate,
Subcommittee on Science, Technology, and Space,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Subcommittee met, pursuant to notice, at 1:05 p.m. in
room SR-253, Russell Senate Office Building, Hon. Ron Wyden,
Chairman of the Subcommittee, presiding.
OPENING STATEMENT OF HON. RON WYDEN,
U.S. SENATOR FROM OREGON
Senator Wyden. The Subcommittee will come to order. I last
chaired a congressional subcommittee in the early 1990's, when
the Internet was not part of anyone's jurisdiction in the U.S.
Congress. Given how dominant the Internet is today in our
lives, I think it is appropriate to begin by just looking back
for a couple of minutes.
Not very long ago, the Senate Committee on Commerce,
Science, and Transportation had a very different purview.
Commerce in the United States largely involved the physical
movement of goods. This Committee was charged with writing the
ground rules for an economy where millions of workers--most of
them men, by the way--got up at the crack of dawn, ate
thousands of calories for breakfast, and then moved those goods
physically from one point to another.
Today, commerce in the United States has changed, and there
is an increasing role for the movement of ideas and goods
through packets of light. I feel very strongly that it makes no
sense to try and shoe-horn the new challenges of a technology-
driven economy into rules and policies written for another day.
Therefore, a special priority of this Subcommittee will be to
examine fresh, creative ideas for a world driven by information
technology.
The purpose of today's hearing is to examine how the
Internet has changed since its inception, and to look at the
security risks and vulnerabilities that have developed along
with the rise of e-commerce. All America is reading the
newspaper about occasional virus attacks, computer glitches,
and hacker mischief, but today this Subcommittee is fortunate
to have three excellent witnesses who can look beyond
individual incidents and help provide some long-term
perspective.
Specifically, we will examine what risks are introduced as
Americans move more and more critical business functions onto
the Internet, and what can be done to minimize those risks. The
Internet is certainly not risk-free, but this Subcommittee will
show that there are practical steps the public can take to make
the open house of the Internet a safer house and not a house of
cards.
Things have changed since the inception of the Net.
Worldwide Web has evolved from a platform for researchers
sharing information, to an entertaining and useful vehicle for
surfing the Web, to a core medium for American commerce.
Hacking is no longer a joke, a mischievous prank that teenagers
pull for fun. Where e-commerce is concerned, sabotage might be
a better term.
As we explore this issue today, there are several elements
that I would like to emphasize. First, the Senate should keep
its eye on the principal challenge before the Congress,
overcoming obstacles to electronic commerce. That is what I
have tried to do with the Internet Tax Freedom Act, the Digital
Signatures law, and the Y2K liability law. I see reducing risk
for the e-consumer as continuing the effort to overcome the
obstacles to e-commerce.
Second, the job is not going to get done by taking an
ostrich approach to security issues by sticking our heads in
the sand and pretending that there are simply no risks. I
believe that when consumers and businesses understand fully
what those risks are and how to minimize them, they will shift
more business functions to the Net, and that is what this
Subcommittee hopes to promote.
It is important to do this now, because our lives are
increasingly intertwined with the Net. Our mobile phones
connect us; our personal digital assistants connect us; and our
home appliances may soon be connected to order new groceries or
detergent. With this growth, there is going to be an increase
in the array of attacks against the Net. Even now, there is
something of a sort of hacker hierarchy, allowing two very
different kinds of people to damage e-commerce.
Most problems originate with a small minority of people who
are certainly not technological simpletons, but their work is
now available Internet-wide. Programs today are sophisticated
enough to provide a hacking how-to for folks who cannot manage
it alone.
There are a number of ways the Government can buttress e-
commerce security efforts in the private sector. Law
enforcement officials can provide the tools to track down
attackers and the consequences that will discourage them. Since
people, not programs, will be ultimately responsible for making
the Internet more secure, the Government can encourage
education and support research and development of security
services. The government can also facilitate information-
sharing that might not otherwise occur in the private sector,
fostering discussions to identify the best practices that might
better serve the public Internet-wide.
The New York Times, for example, recently reported that
companies providing Internet security are still booming,
despite an overall slow-down in the high tech sector. I hope
our witnesses today will be able to tell us what risks exist,
what precautions we can realistically achieve, and how business
and consumers can best meet the security challenges of e-
commerce.
We have got a first-rate panel here today. I want to thank
all three of you for allowing me, as the new Chairman of this
Subcommittee, to begin with such valuable testimony.
Dr. Vinton Cerf is our first witness. He is the Senior Vice
President for Internet Architecture and Technology at WorldCom,
and is often described as the ``father of the Internet.'' Mr.
Harris Miller is President of the Information Technology
Association of America, a trade association representing the
broad information technology industry.
Finally, Mr. Bruce Schneier is Chief Technology Officer of
Counterpane Internet Security, and the author of Secrets and
Lies: Digital Security in a New World. I want to note for the
record, Mr. Schneier comes directly from Las Vegas, where he
was at the DEFCON meeting which I saw you described in one of
the online services this morning as sort of a cross between a
Startrek convention and a Ramones concert.
[Laughter.]
Senator Wyden. I thought that was certainly an apt and
colorful way to describe it.
Gentlemen, we welcome all of you. We are going to make your
prepared remarks a part of the record in their entirety. Dr.
Cerf, why don't you begin.
STATEMENT OF DR. VINTON G. CERF, SENIOR VICE
PRESIDENT, INTERNET ARCHITECTURE & TECHNOLOGY, WORLDCOM
Dr. Cerf. Thank you very much, Mr. Chairman, and may I say
that that was a remarkable summary of the problem at hand in
such a short period of time. Plainly, you have taken the reins
of this Subcommittee and you are on your way.
I would like to first thank you for inviting me to
participate in these hearings today. I think it would be
helpful to begin by reminding everyone that the Internet's
origins now nearly 30 years ago were academic and research-
oriented in nature. Although the work was funded by the Defense
Department, almost all the work actually went on in an academic
setting.
The network itself was not for commercial use at all until
about 1990. Now, I have to say with some mixed feeling that in
fact there was a DARPA-sponsored classified design for a fully
secured network for military use that was begun in 1975, and
that was a classified effort, and I was never allowed to
release any of the results of that work to the academics who
were participating in the public version of the Internet, so
today we find ourselves struggling with some network security
problems that might have been solved a few decades ago, if only
we could have released the information. Plainly, at the time,
that would have been inappropriate, so we just have to deal
with the alligator that faces us now.
Commercialization of the Net did not happen until 1989,
when the Federal Government gave permission for the use of the
NSF Net backbone for commercial activity, and released, or at
least made less restricted the appropriate use policies for
that system. That quickly led to commercial Internet services
in the form of Internet service providers, one of which is
UUNet, which is a company now integrated into WorldCom. The
other is PSINet. Those were the two first commercial services
in the United States.
The worldwide Web arrives technically in 1989, but visibly
only in 1994, and it shows up in the public view in the form of
Netscape Communications, and then later, of course, software
from Microsoft and others, so the general public did not see
Internet as part of its visible universe until 1994, which is
now only 7 years ago.
The intensity of commercial use has been rising since that
time, and in particular, many, many of the commercial
applications arose in the context of the worldwide Web. Today's
network has about 500 million users. That is a small number
relative to the world's population of 6 billion, but it is
still a fairly large population of users.
There are about 150 million computers on the Net acting as
servers, and an additional 300 million or so personal computers
or other Internet-enabled devices, personal digital assistants,
and now even cell phones, so it is a fairly large universe of
users and servers in the system.
For purposes of this discussion, I would like to split the
Net into three parts, a backbone, a host component, and a
client component. The backbone is the system that the Internet
service providers operate. It is the communications portion of
the Net. The hosts are the things that supply services. That is
where the applications run, and the clients are the personal
computers, personal digital assistants and the like, that the
users operate.
The risks of using the Net fall into those three different
categories. I would also note that in spite of any deliberate
attacks and others things, that Murphy's Law is still very much
at work. We are all capable of shooting ourselves in the foot,
and we seem to do it regularly, without the help of hackers.
Let us talk about backbone threats. One of the most visible
is what is called the denial of services threat. It is
something that simply overwhelms the target with too much
traffic. There is a particularly fancy version of it called
distributed denial of service attack, which means that the
attackers are scattered over hundreds of thousands of machines,
and it is very hard to isolate any one of them as the source of
the attack.
There are also attacks--those, by the way, are launched
typically against the host computers. There are also attacks
against the core of the Net, the routers and the other elements
that actually move packets back and forth, so that the Internet
service providers have to protect against that by one means or
another.
Threats against the host and the Net often go against the
operating system vulnerabilities. The operating system of a
machine, or of a Web server, is what essentially keeps it
running, but there are all kinds of attacks that are possible,
because there are all of these bugs in the software that create
vulnerabilities and, of course, smart people find them.
There are even attacks against passwords. Unfortunately, we
use what are called reusable passwords to a greater degree than
we should. That means that it is the same password. Every time
you put a user name in, you put a password in, and since it is
the same one every time, it is often possible to mount what are
called dictionary attacks against people's passwords, even if
they are encrypted by what is called a one-way encryption
function, and kept on the host computer.
It is possible to encrypt all the words in the dictionary
and compare, if you get your hands on it, with the one-way
encrypted password files, and if you find a match, then you
just check to see which word in the dictionary that matched,
and that might be the password, so unfortunately, reusable
passwords are a bad habit.
To make things worse, people pick really bad passwords.
They pick their birth dates, and their wives' mothers' names,
or their past names, things like that, things that other people
might know, and might be able to guess, so we have some
training to do of users.
Then there are Trojan horses. These are pieces of software
that can be injected into a host computer or another computer
and run in the background to do bad things to you later on.
Probably the most visible threats, though, that show up are
threats against personal computers themselves. These are
software attacks, and you hear words like viruses, and worms,
and things of that sort. These are codes that are carried into
your computer, sometimes by electronic mail attachments, and
they do all kinds of damage, the I love you virus being one of
the most visible, and possibly one of the most expensive ones.
We are faced with more risks as we put more and more people
on line on a permanent basis. Instead of dialing into the
network, which is what 80 percent of the users do today, people
get on the Net on a permanent basis with digital subscriber
loop technology, or cable modems, but that means their machines
are exposed 24 hours a day while they are online, and most of
the personal computers of the world were not designed to
withstand the sorts of attacks that can be mounted against
permanent hosts on the network, and so that is yet another
source of vulnerability.
There are other risks that consumers face, and I am just
going to mention a few, because I am now over time, and I
appreciate the Chairman's indulgence.
Senator Wyden. Go right ahead.
Dr. Cerf. Some people imagine that e-mail is private, and
that once you have thrown it away it will not ever appear
again. Well, it turns out that in order to provide good-quality
service, often the e-mail service providers back things up for
you.
I had a little incident a few months ago where some
messages from two years ago were sitting in an old computer
that woke up one day and realized that none of those messages
which had been stored away as a backup had been delivered, and
it panicked about this, and sent notes out to everyone who sent
those messages to me saying this message has not been delivered
in two years, there must be something wrong, and of course I
got an avalanche of messages from my friends saying, I am
getting messages I sent to you two years ago back from this
machine, and why are you doing this.
Of course, I had no idea what was going on, so if anyone
believes that e-mail is private, please take note, it may not
be.
There are other risks. Identity theft is common and
increasing, and the network is used in part of that. Credit
card theft, even fraudulent storefronts that put up what look
to be businesses, but are simply in the business of capturing
your credit card for purposes of abusing it later.
What about public access to Government records? Is that a
risk? Well, it could be, if lots of details about your house
and the design of it and all the other details that may be your
transactions with the system of justice, all of which are
public records, but in the past they have not been easily
obtained, and now they are online, and that could be an issue.
And then there is cyber-stalking, just to name another
thing, where people are tracked through the network e-mail is
sent to them, harassing them.
Other kinds of activities could potentially be conducted
through the network, and constitute yet another consumer risk.
You are going to hear from my colleagues in a moment. Bruce is
going to tell you that eternal vigilance is the price of
security on the Net. You cannot secure the network once and
have it be locked up. You have to keep checking over and over
again to make sure it is still buttoned up, and what Mr. Miller
is going to tell us among other things is that industry
cooperation is critical for network security to be achieved by
the industry. We cannot do this each individually by ourselves.
And of course, Mr. Chairman, you are wondering what on
earth can the Congress do about this. Well, one thing that you
should not do is pass legislation that cannot be enforced, and
so if it is technically impossible to enforce a piece of
legislation, it leads to all kinds of side-effects, one of
which is people ignore the law, and I think ignoring the law is
a very bad precedent to set, so one wants legislation which is
enforceable.
Possibly the most valuable things you can do in the near
term would be to pass laws, if necessary, to help us prosecute
offenders to make sure that those who are apprehended and do
such damage can, in fact, be successfully prosecuted and
punished.
There is a balance here which I think is difficult for you,
and that is to figure out how to create those laws, while at
the same time protecting the rights of personal privacy, and
that balance is not easy. One could imagine building a very
secure network environment by simply observing everything
everyone does, and anything that looks even the slightest bit
improper could be captured, recorded, and analyzed.
I would not be a strong proponent of such an approach, but
it is plain that that balancing act lies squarely in the hands
of the members of this Subcommittee and the Members of
Congress.
Well, let me stop there, Mr. Chairman. I appreciate your
allowing me to go on at length. I think you will find the
comments of my colleagues to be most enlightening.
[The prepared statement of Dr. Cerf follows:]
Prepared Statement of Dr. Vinton G. Cerf, Senior Vice President,
Internet Architecture & Technology, WorldCom
Introduction
As a historical matter, the Internet and its predecessor systems
were developed in a largely academic environment focused on research,
information and resource sharing and a general atmosphere of
cooperative enterprise. For over twenty years, from 1969 to 1990, the
Internet research program and user population benefited from this
academic setting. However, by 1990, the environment began to change.
For one thing, Internet services were just beginning to be made
available on a commercial basis. As the cross section of users changed
from its academic and military origins to encompass the business sector
and the general public, a far broader range of behaviors were manifest
in the Internet world. Various kinds of vandalism and other deliberate
attacks increased in incidence.
If not daily, then more often than one would like, one reads
reports about a variety of network vulnerabilities, hacker attacks,
unintended information releases and other frailties on the Internet.
For the most part, these problems center on the computers that serve
users on the Internet, but a good number also reflect vulnerabilities
of the network itself. The network vulnerabilities are a primary
concern for the Internet Service Providers who have responsibility for
keeping the Internet in operation 24 hours per day, 365 days per year.
It is also worth observing that many of the operational problems
arising on the Internet have little to do with deliberate attacks.
Rather, these problems arise simply from the complexity of the system,
the proclivity of Murphy's Law to take effect at any moment,\1\ bugs in
the software, human errors and things that simply break down. While
network-related problems are a consumer concern, to the extent that
they interfere with access and use of Internet services, the more
critical concerns revolve around the serving computers (so-called
Internet hosts) through which all online services are implemented, the
client computers (desktops, lap-tops, personal digital assistants,
internet-enabled cellular phones, and so on) and the policies of
companies that provide services through the Internet. I will
concentrate my testimony, therefore, on the end-points of the Internet:
hosts, client devices and the companies that provide Internet-based
services.
---------------------------------------------------------------------------
\1\ Murphy's Law reads, ``If anything can possibly go wrong, it
will.'' A corollary suggests that Murphy was an optimist!
---------------------------------------------------------------------------
Consumers are particularly vulnerable to weaknesses in application
software. Email can carry attachments that harbor so-called ``viruses''
that can ``infect'' the rest of the software in the user's computer.
Web pages can deliver software that is interpreted by the user's
browser and may cause damage to the user's information or interfere
with proper operation of the user's computer. This topic is explored in
more detail later in this paper.
Host Vulnerabilities
Among the most visible of the consumer-affecting problems are
denial-of-service attacks aimed at interfering with the normal
operation of one or more servers on the Net. These attacks are
sometimes very hard to distinguish from legitimate overloads, such as
the famous Victoria's Secret Lingerie webcast that drew a reported 1.5
million viewers whose attempts to download streaming video completely
outstripped the server's ability to deliver traffic. The server simply
could not respond to all the user requests for data. Such problems are
analogous to overloaded emergency service centers that cannot accept
all the telephone calls made during a crisis.
If the overload comes from a single source or a small number of
sources, ISPs sometimes can track down the source and filter out the
offending packets as they enter the network. However, hackers have
developed distributed denial-of-service (DDOS) attack tools that
harness tens to hundreds of thousands of computers in the Internet.
Each of these may send only a small amount of traffic but the aggregate
may overwhelm the target. Such attacks are much harder to defend
against and to track down. A principal reason that such distributed
attacks are even possible is that many hosts on the Internet are
unprotected from break-ins and become unwitting ``hosts'' for so-called
``Trojan horse'' software that can be activated remotely and used to
originate traffic towards the target. The irony of this situation is
that the unprotected hosts often contain no information or provide no
services that are considered critical in nature. They might be serving
computers and workstations in an academic setting. They might even be
laptops or desktops that are connected to the Internet by dedicated
links (such as Digital Subscriber Loops or cable modems). If these
platforms can be found by methodical probing of the Net, they may be
subsequently ``infected'' with ``zombie'' software that can later be
used in a DDOS attack. But because these computers might not be thought
to contain critical or valuable information, they may not be as
protected from invasion as they might otherwise be.
These vulnerable resources may not be configured by their operators
to be resistant to the exploitation of vulnerabilities. The systems may
be operating with ``default'' passwords that come with the
manufacturer's ``standard'' configuration--such passwords are widely
known (especially among the hacking crowd) and should be changed by the
operator before going online. Desktop machines (and operating systems)
that were designed to be used mostly as client computers, may become
more vulnerable when they participate in so-called ``peer-to-peer''
operations. Examples of such applications include Instant Messaging,
file transfer services, Internet telephony and so on, in which the
computer behaves both as a client and as a server.
Apart from a variety of denial-of-service risks associated with
host machines on the Net, e-consumers run a variety of risks of
information compromise in which data they consider private could be
exposed to unauthorized view. The least technical and most common
avenue for such exposure is a consequence of corporate policies that
simply do not protect consumer privacy. User names, addresses,
telephone and fax numbers, email identifiers, account numbers, social
security numbers, credit card numbers and any of a variety of other
data might well be released, deliberately, by a corporation that does
not have a consumer privacy protection practice and chooses to share
this information for business purposes. The same data might be released
unintentionally by the operator of a host who has failed to protect an
online system from exploitation.
One of the more ironic scenarios occurs when the user's client
computer establishes an encrypted channel over the Internet to a server
machine, transmits private information to that machine, and the
information, so carefully protected while in transit, is exposed to
unauthorized parties either by business practice or by negligence in
configuring the server from invasive attack.
Rip Van Wrinkle
Consumers are sometimes surprised by the unexpected consequences of
well-intended service features. For example, a few months ago, I
suddenly received a barrage of messages from my email correspondents
who reported that a batch of messages they had sent me nearly two years
ago had suddenly emerged on the Internet accompanied by rejection
notices saying that these messages had not been delivered. A back-up
email server had received and recorded these messages and awakened from
its slumbers (for reasons never quite clear) to realize that from its
perspective, this cache of messages had not been delivered in two
years. The machine dutifully set out to notify every sender of this
fact and included a copy of the ``undelivered'' message.
More generally, email services often make backup copies of the
email so as to recover from a catastrophic failure of a primary server.
From time to time, email users are surprised to discover that email
they thought they had long since deleted has been retained in backup
files and has been released by accident or has become discoverable in a
legal proceeding or is accessible under appropriate warrants. This is
perhaps a specific case of the more general case of record keeping,
such as is done in the consumer telecommunications service industry.
Detailed billing records of calls (telephone number called, originating
telephone number, date and time of day of call) are often kept for
periods ranging from three months to a year to resolve subsequent
disputes. Anyone who uses a major credit card that provides a report
annually on their use can confirm that the credit card industry knows a
great deal about specific consumer activities in the form of detailed
transaction records.
Passwords
One of the more serious consumer risks arises in the use of access-
controlled services requiring user authentication. The most common
method of authentication is to associate a ``password'' with a user
identifier (ID). These passwords are often fixed and reused repeatedly.
Users are notorious for the poor choices of passwords and their
unwillingness to change them regularly. Passwords can often be guessed
(birthdate, pet's name, spouse's name, the current year, anniversary
date, social security number, telephone number, address). Password
files at the service hosts are usually one-way encrypted \2\ but if a
hacker can get a copy of the encrypted password file it is possible to
run a ``reverse dictionary attack'' to try to find the password. In a
reverse dictionary attack, all the words in the dictionary are
encrypted and then compared with each of the encrypted passwords taken
from the target computer. A match exposes the password. Such tools are
very commonly available. Good password practices dictate at the least
that reusable passwords be changed regularly, contain more than just
alphabetic characters, be 6-10 characters long and not contain common
words found in the dictionary. An example of such a password is
``SOLIPIKU98.''
---------------------------------------------------------------------------
\2\ ``One-way'' means that the original password is encrypted in
such a way that even if you know the encryption algorithm, you cannot
directly decrypt the password. However, one could use a dictionary,
encrypt its words, then look for encrypted text in the dictionary that
matches the one-way encrypted password.
---------------------------------------------------------------------------
There are a number of alternatives to these so-called ``reusable''
passwords. Some of these require the use of a device that introduces a
constantly changing password. Others authenticate by means of a
challenge and an encrypted response that can be verified.
Risks
The July 2, 2001 edition of TIME Magazine carried a cover story
devoted to online privacy risks faced by consumers. Identity theft is
one of the most critical and increasing risks faced by consumers.
Information about consumer use of Web services can be collected in each
user's personal computer by Web service providers in small caches of
information called ``cookies.'' The Web service providers can use this
information to tailor services provided to individual users. However,
this data might contain personal information that could be linked with
data obtained through other sources and possibly even re-sold to third
parties for marketing purposes. Consumers are at risk if companies that
collect this data make use of it in ways that consumers do not expect
or would not approve. It is this concern that led to requirements for
companies to report their privacy protection practices to consumers on
a regular basis.
Not all Web sites are what they seem and some may appear to offer
products or services but may in fact simply be ``fronts'' for purposes
of capturing personal information, credit card numbers and the like.
This is outright fraud. It is illegal and actionable.
Public access to government records may expose a considerable
amount of personal information to public view. Details of court
records, registrations, building permits and designs, home addresses
and phone numbers, traffic violations are all potentially available.
This is through no weakness in the design of the Internet and its
applications but a consequence of state or local policy with regard to
access to ``public'' records.
So-called ``data brokers'' obtain personal information from a
variety of sources, often government sources, and amass databases of
personal information which they then resell to the public for a fee.
There is often considerable debate about the legality of making such
information accessible, even if it is obtained by legitimate means from
legal sources.
Software can be put into your computer by someone with physical
access to it that will provide a record of virtually everything you do
with your machine. Similar software might be ingested over the Internet
as an attachment to an email message or possibly as a consequence of
loading a Web page and executing ``applets'' (written in programming
languages such as Java). Such ``Trojan horse'' software can expose all
of your personal computer's data and activity to view. The recent wave
of interest in dedicated, high speed access to Internet using Digital
Subscriber Loops (DSL) or cable modems creates a new risk for
consumers. If their computers are online all the time, with fixed
Internet addresses, they may become subject to hacker attacks, just as
the Web servers and other Internet hosts are exposed today.
Consumers may be misled by email, chat room or instant messaging
exchanges into believing things about their correspondents that are not
true. This works both ways. A person may misrepresent himself or
herself deliberately or you may be the target of an attack against you
by someone pretending to be you. Such terms as ``cyberstalking'' have
entered the language to account for this kind of behavior.
Reactions
Consumers can respond by being far more careful about the
information they provide to online service providers. They can avoid
downloading, opening or executing attachments on email messages until
they confirm their origin. They can purchase, use and frequently update
virus detection software. Even if you use secure Web sites, the
protection extends only to the delivery of personal information to the
Web site. The Web service provider's privacy protection policies
determine whether the data provided is propagated further to third
parties. Consumers should make a point of learning company privacy
protection policies.
Companies seeking to protect their own computing assets and
networks can install firewalls and make use of encryption methods to
protect employee access to corporate networks via the public Internet.
Software manufacturers need to pay closer attention to the potential
abuses their software can support--not simply focus on the constructive
functionality they offer. Internet service providers need to configure
their networks to increase resistance to various forms of hacking. And
legislators may be able to help law enforcement agencies by providing
tools for combating criminal use of online systems. There is a tension
in the latter response because it is possible to erode privacy in
severe ways in the process of trying to assist in law enforcement.
The Internet has the potential to be an enormously powerful,
positive and constructive force in our society. It is also a potential
source of serious abuse. As a society, we are challenged to find a
balance between protecting the society from abusive practices and
protecting individuals from abuse by various state, local and federal
government agencies. The next decade will surely be filled with
unexpected twists and turns as we learn how to apply online
technologies to our daily needs. One can only hope that out of all the
experience will come wisdom and the will to apply it.
Senator Wyden. Dr. Cerf, thank you for an excellent
statement, and your admonition to pass no foolish laws; that is
particularly important. Congress has to look at these issues in
a different way.
The Internet is this vast system, decentralized, made up of
millions of content-creators worldwide, and the last thing that
one should do would be to impose a sort of Washington one-size-
fits-all solution. That, as you say, would just breed contempt
for the law because it could not be enforced. Your points are
very well-taken. I will have some questions in a moment, and
feel free, any time I am around, to go over the time limit,
because that was very well-said.
Dr. Cerf. Thank you very much.
Senator Wyden. Mr. Miller, welcome.
STATEMENT OF HARRIS N. MILLER, PRESIDENT, INFORMATION
TECHNOLOGY ASSOCIATION OF AMERICA
Mr. Miller. It is good to see you again, Mr. Chairman.
Thanks for including ITAA in this hearing. In our 40th
anniversary year, we have spent a lot of time focusing on the
issue of cyber security, and one of the obvious reasons is that
because so much of the Internet as Dr. Cerf has described it is
managed, owned, and operated by the private sector.
In fighting physical crime, we always look to Government as
the lead, because Government has the law enforcement tools and
the law enforcement community to do that. However, in fighting
cyber crime, there is a unique onus on the private sector in
partnership with Government to come up with solutions.
Certainly, one thing which we believe is particularly
important, Mr. Chairman, is a higher level commitment both in
corporations and in the Government to fighting cyber crime.
That is because consumers demand it, and citizens demand it. As
Dr. Cerf pointed out, the Internet has morphed into something
now where the commercial and governmental reliance on it is
very high, and yet the focus on security has not been, up until
recent years, a major part of the Internet, but even with this
growth, as Dr. Cerf pointed out, the Internet is still in its
infancy.
At any one time, no more than 3 or 4 percent of the globe
is connected to it, and most experts will tell you that in the
not-too-distant future we will live in a truly digital world
transformed by Internet technology.
The Internet today, which we think of as basically a PC-
based model sitting at our desk, will change dramatically to
become ubiquitous, seamless, and integrated into everything we
do. Digital ubiquity means that we no longer will think about
how we use and access information on the Internet. A virtual
information bubble will be formed around our lives,
anticipating and addressing many of our needs, and this mobile
commerce, sometimes called m-commerce, or ubiquitous commerce,
called u-commerce, will be enabled by wireless networking.
Now, how important is this wireless issue? Well, I
understand, Mr. Chairman, that there is a major United States
Cabinet official who has been prohibited by his staff from
using his wireless PDA because of concern about security, and I
suggest that this kind of attitude toward the wireless Internet
is not the way we move toward ubiquity. The security challenges
in the wire-line world, as extensive as they are today, will
become even more extensive in the wireless world.
Let us put this concept into perspective. In the world
today there are about 20 billion microprocessors, give or take
a few. Only about 3 billion of them, however, are in computers.
These others are going to be linked going well beyond some of
the devices we think about today, such as the cellular phone
which I have with me, or my PDA, into all kinds of aspects of
our lives, into automobiles, into thermostats in your homes,
smart tags used for tollways, and all kinds of other
opportunities which we are just beginning to think about.
Operating on multiple protocols, which is part of this
development of the wireless world, magnifies security
vulnerabilities, and this proliferation of devices and
protocols is not surprising, because we are still in the early
days of this ubiquitous Internet, but we need to develop viable
security solutions not just in the wire-line world, but also in
the wireless world.
Again, we must have this high-level commitment from the
CEO's, from boardrooms, by political leaders at all levels of
Government, and this attention must be global, not just in the
U.S., because we are talking about a global medium.
We must bring together vertical industries, which are
unfortunately sometimes segregated, such as telecommunications,
IT industry, health care, finance, energy, and others, and
create a broad industry dialog on additional pieces to the
security puzzle which will take us toward this ubiquitous
Internet. We need to move toward consolidation, toward
simplification, toward improved security, if we are going to
have a truly ubiquitous Internet.
Today, I suggest a four-point call to action for industry
to focus beyond the security realities of today by addressing
u-commerce. First, we need industry collaboration at the
highest levels. Simply bringing together technical people, as
important as they are, will not get the job done.
Second, this collaboration must be across industries.
Again, the Internet industry itself cannot solve all these
challenges.
Third, we have to put aside some egos and some initial
investments and come together for consolidation and
collaboration, and it must focus on a point which I know is
very dear to your heart, Mr. Chairman, that privacy and
security are often two sides of the same coin.
We at ITAA are already starting to address this challenge,
which we know will not be easy to meet. No one, least of all
the IT industry which I represent, wants to be dictated to
about its products and capabilities. After all, the IT industry
believes it knows best its own industry. But I believe unless
we get some common threads going on these issues, it will be
very difficult to get a secure world in a wireless Internet.
A couple more points about cyber security, which I know Mr.
Schneier will also be addressing. Too often, the assumption is
made that improving cyber security and fighting cyber crime can
be done with technology alone. Just give me the right software,
just give me the right hardware, just give me the right
firewall and I am all set.
That is wrong. Just as the best alarm system will not
protect a building if the alarm code falls into the wrong
hands, or is not turned on at night, a network will not be
protected if the passwords are given out freely. Failures in
the people and in the processes part of the cyber crime
solution may, in fact, be the majority of the problems we see.
That means that organizations must be willing to invest not
just in the technology solutions, but also in the training, the
security procedures, and this must be across the enterprise,
not just in the IT department. We need to practice what Dr.
Cerf has called cyber hygiene. Everyone needs to be a part of
the solution.
Now, in many ways, solutions of cyber security challenges
are no different than any other Internet-related policy issue.
Industry leadership, again, must be the hallmark--but,
Government does have an important role.
So let me review a few points that I believe Government
must focus on. First, I would like to reiterate the point Dr.
Cerf made. The Congress must provide for what I call the
Internet Hippocratic oath. First, do no harm. Do not try to
pass laws that seem to be ways of dealing with the challenge,
but in fact miss the mark.
Second, Government must do a better job of practicing what
it preaches. The rules of the challenges of technology, people,
and processes apply to the Government sector just as much to
the private sector, yet we constantly hear about failures in
the Government. The U.S. Government must lead by example in
preventing intrusions into agency Web sites, data banks, and
information systems. Leadership in this area means substantial
investments, which I fear candidly are not being made today,
Mr. Chairman, to deal with the cyber security challenge to the
Government.
Number 3, we need a more sophisticated process in the
Government of leadership. ITAA has advocated the creation of an
information security czar similar to the one that John Koskanen
played as the Y2K czar. We have been told that is not likely to
happen, but we have also been advised of a draft executive
order which may be issued soon by the President which will
bring more centralization and focus to Government leadership,
and we believe that is absolutely essential, and look forward
to the issuance of that executive order, leading to more
coordination across all agencies of Government, not just law
enforcement and national security.
Funding. Funding is critical. Funding is critical in terms
of IT spending for the Government, in terms of research and
development, in terms of work force. We need to focus on these
issues, not to waste money, not to duplicate what the private
sector is doing, but to coordinate and collaborate with the
private sector.
In conclusion, Mr. Chairman, society's reliance on the
Internet has just begun. The ubiquitous Internet, u-commerce,
is going to mean more people connected to the Internet, and
they need to also have the trust and confidence that these
media they are using are reliable, so it is important that we
focus, as this Subcommittee is doing, on information security,
and come together to meet the challenges.
Thank you very much.
[The prepared statement of Mr. Miller follows:]
Prepared Statement of Harris N. Miller, President, Information
Technology Association of America
Introduction
Chairman Wyden and Members of the Subcommittee, thank you for
inviting me here to testify today on Internet security. My name is
Harris N. Miller, and I am President of the Information Technology
Association of America (ITAA), now celebrating its 40th Anniversary. I
am proud that ITAA has emerged as the leading association on cyber
security issues. ITAA represents over 500 corporate members. These are
companies that have a vested economic interest in assuring that the
public feels safe in cyberspace; in the United States and around the
world, the vast majority of the Internet related infrastructure is
owned and operated by the private sector.
I am also President of the World Information Technology and
Services Alliance (WITSA), a consortium of 41 global IT associations
from economies around the world, so I offer a global perspective. ITAA
also houses the Global Internet Project (GIP), an international group
of senior executives that are committed to fostering continued growth
of the Internet, and which is spearheading an effort to engage the
private sector and governments globally on the Next Generation Internet
and related security and reliability issues. The GIP recently sponsored
a major event on security and privacy in the next generation of the
Internet that drew industry leaders from around the world.
I commend this Subcommittee for holding today's hearing on Internet
security, and I submit to you that security is ultimately a business
challenge that must be addressed at the highest levels of corporate
hierarchy. Customers and citizens--whether consumers in the B2C space,
or business partners in B2B operations, or Americans receiving services
electronically from their governments--demand it.
The stakes involved are enormous. Information technology represents
over 6 percent of global gross domestic product (GDP), a spending
volume of more than $1.8 trillion, and over 8 percent of US GDP,
according to Digital Planet 2000, a report released last year by WITSA.
According to the US Department of Commerce, IT accounted for
approximately one-third of the nation's real economic growth from 1995
to 1999. Despite the current slowdown, IT-driven productivity increases
have enabled our country to have what many economists thought we could
not have: high growth, low unemployment, low inflation, and growth in
real wages.
The IT industry's importance to the economy goes beyond the numbers
I just recited, however, because the IT industry is not only a vertical
industry--such as financial services or health care--it is also a
horizontal industry whose technology and services under gird all the
other industry sectors. For instance, the failure of a particular IT
company to meet the information security challenge not only hurts that
company's bottom line, it also hurts the bottom line of companies to
which it provides software or IT services.
The Evolution of the Internet
In order to look at security issues surrounding the Internet, we
need to first recall its intended nature. The Internet, when it was
created nearly thirty years ago, was a collaborative product developed
by industry, government and academia. It was designed to be an open,
borderless medium for communication and sharing information, and was
not programmed with security features. Nor was it intended for
commercial use.
As they say, we've come a long way, baby. As you know, the Internet
today is used extensively as a commercial medium, augmenting or even
forming the basis of entire business models. Forrester research
estimates that worldwide B-to-C e-Commerce revenues will reach $96
billion this year. According to a report by eMarketer, B-to-B online
commerce revenues will nearly double this year to reach $448 billion,
with fifty-seven percent of that commercial activity occurring here in
the U.S.
And we are moving forward still. Quickly. Most Internet executives
will tell you that in the not too distant future, we will live in a
truly digital world, transformed by Internet technology. The Internet
will be ubiquitous, seamless and integrated into everything we do.
Digital ubiquity means that we no longer consciously think about how we
use and access information on the Internet. Phrases like ``always on''
and ``24/7'' will be quaint. Just as we assume that the power grid is
always available, we will have Internet Protocol in and on everything--
our cars, our home appliances, even the products we buy at the
supermarket. The Internet will allow these items to communicate--
forming a virtual information bubble around our lives, anticipating and
addressing many of our needs.
Mobile or Ubiquitous Commerce will be enabled by wireless
networking. Individuals will move from network to network through the
use of mobile computing, becoming guests on others' networks. This is
already starting to happen around the globe.
The growing e-commerce space and the very real prospect of digital
ubiquity pose challenges in securing the Internet. Government and
businesses increasingly have as much at stake digitally as physically.
Assets and value are no longer based on material objects but on
information, knowledge and network connections. In the old economy and
the new, more businesses are using technology to manage operations,
sales, employee relations, partnerships and supply chains. More revenue
is derived and more cost savings realized from online activity.
Yet the same companies and organizations that devote considerable
financial and human resources to physical security pay much less
attention--or, sometimes, virtually no attention--to cybersecurity.
Just like a business cannot properly function without sound financial
processes and systems, the same has become true for managing network
activity and the valuable, critical information that flows through the
network.
As I mentioned earlier, the Internet was not designed with
commercial and security features in mind, yet as businesses become
dependent on it for growth and market share, vast security needs have
emerged. ITAA believes strongly that for this reason, Internet security
measures must be addressed at the CEO and boardroom level of every
company and by political leadership at all levels. And this attention
must occur around the globe, not just in the U.S.
Economy at Risk
Cyber crime places the digital economy at risk. Just as the reality
or threat of real crime can drain the economic vitality of
neighborhoods, cities and even nations, so to can the reality or threat
of crimes committed online against people and property shutter
businesses and cause an otherwise motivated digital public to break
their Internet connection.
Cyber crime falls into several categories. Most incidents are
intended to disrupt or annoy computer users in some fashion.
Distributed denial of service (DoS) attacks crash servers and bring
down websites through the concerted targeting of thousands of email
messages to specific electronic mailboxes. Viruses and other malicious
code introduce phantom computer software programs to computers,
designed intentionally to corrupt files and data. Other online
intrusions are conducted to deface websites, post political messages or
taunt particular groups or institutions. Even though no one stands to
profit, damages caused by such attacks can run from the trifling to the
millions of dollars. What motivates these attackers? Hackers may view
the attack as a technology challenge, may be seeking to strike a blow
against the establishment, may be looking for group acceptance from
fellow hackers, or may be just indulging themselves in a perverse
thrill.
Other cyber criminals are more material guys and gals. They hope to
profit from their intrusions by stealing valuable or sensitive
information, including credit card numbers, social security numbers,
even entire identities. Targets of opportunity also include trade
secrets and proprietary information, medical records, and financial
transactions.
For some cyber criminals, the Internet is a channel for the
dissemination of child pornography and a tool used in the furtherance
of other crimes against children and adults. These crimes include
fraud, racketeering, gambling, drug trafficking, money laundering,
child molesting, kidnapping and more.
Cyber terrorists may seek to use the Internet as a means of
attacking elements of the physical infrastructure, like power stations
or airports. As we have seen in the Middle East, cyber terrorists
encouraging political strife and national conflict can quickly turn the
Internet into a tool to set one group against another and to disrupt
society generally.
Another class of cyber criminal and, unfortunately, the most common
is the insider who breaks into systems to eavesdrop, to tamper, perhaps
even to hijack corporate IT assets for personal use. These could be
employees seeking revenge for perceived workplace slights, stalking
fellow employees, looking for the esteem of peers by unauthorized
``testing'' of corporate security, or other misguided individuals.
Regardless of category, the threat is real. A recent study produced
by Asta Networks and the University of California San Diego monitored a
tiny fraction of the addressable Internet space and found almost 13,000
DoS attacks launched against over 5000 targets in just one week. While
most targets were attacked only a few times, some were victimized 60 or
more times during the test period. For many small companies, being
knocked off the Internet for a week means being knocked out of business
for good.
The Computer Security Institute/FBI also documents the problem in a
widely reported study on computer breaches. This year's survey of 538
respondents found 85 percent experiencing computer intrusions, with 64
percent serious enough to cause financial losses. Estimated losses from
those willing to provide the information tallied $378 million, a 43
percent increase from the previous year.
A nationwide public opinion poll released last year by ITAA and EDS
showed that an overwhelming majority of Americans, 67 percent, feel
threatened by or are concerned about cyber crime. In addition, 62
percent believe that not enough is being done to protect Internet
consumers against cyber crime. Roughly the same number, 61 percent, say
they are less likely to do business on the Internet as a result of
cyber crime, while 33 percent say crime has no effect on their e-
commerce activities. The poll of 1,000 Americans also revealed that 65
percent believe online criminals have less of a chance of being caught
than criminals in the real world, while only 17 percent believe cyber
criminals have a greater chance of being caught.
These threats collectively represent a chipping away at the trust
that is so critical to the Internet. Thankfully, technology is moving
faster than public policy ever could to secure the technology that will
dominate our economic future.
The Industry Securing the Internet: Information Security
Information security, or cyber security, is the multifaceted
discipline that counteracts cyber crime and works to secure the
Internet. Information security--or InfoSec--deals with cyber crime
prevention, detection and investigation. How do we achieve improved
security for the Internet of today and minimize the security challenges
of tomorrow's Internet?
Cyber Security is Built From Technology, Processes and People
Too many times, the assumption is made that improving cyber
security and fighting cyber crime can be done with technology alone.
That is wrong. Just as the best alarm system will not protect a
building if the alarm code falls into the wrong hands, a network will
not be protected if the passwords are given out freely. Failures in the
``process and people'' part of the cyber crime solution may, in fact,
be the majority of the problems we see. Processes and people tend to be
the more problematic elements of the Internet security puzzle. The two
are closely linked. From a strategic point of view, the challenge is to
make cyber security a top priority issue. Moving from platitudes to
practical action requires the sustained commitment of senior
management.
The goal is to embed cyber security in the corporate culture. That
is not always easy to do. CEO's want their IT systems to be as fast as
Ferrari but as safe as an armored truck. Whenever tradeoffs arise, the
bias is towards speed, not safety and security. The challenge for the
IT sector and its customers working together is to provide security at
the speed of business.
Organizations must be willing to invest in the development of
comprehensive security procedures and to educate all employees--
continuously. We call this practicing sensible cyber hygiene, a term
that my friend Vint Cerf frequently uses as he speaks about these
challenges around the globe. The primary focus of improving processes
and changing behaviors is inside the enterprise. However, the scope of
the effort must also take into account the extended organization--
supply chain partners, subcontractors, customers, and others that must
interact on a routine basis.
With cyber hygiene practices in place, companies can more
effectively use the technologies that are available. A very simple
example is that a company may diligently employ the latest virus
detection software. But, if individual users within the company do not
regularly heed messages to update virus profiles covered by the
software, it renders the company's security less effective.
Industry Plan for Cyber Security
ITAA and its members have been working to execute a multi-faceted
plan designed to improve U.S. cooperation on issues of information
security. However, Mr. Chairman, we would all be remiss if we believed
it was just the IT industry that must cooperate within its own
industry--we must work cross industry, and industry with government.
Protecting our infrastructure is a collective responsibility, not just
the IT community's role.
We are working on multiple fronts to improve the current mechanisms
for combating threats and responding to attacks through our role as a
Sector Coordinator for the Information and Communications sector,
appointed by the U.S. Department of Commerce. Through ITAA's InfoSec
Committee, our member companies also are exploring joint research and
development activities, international issues, and security workforce
needs. Elements of the plan include Information Sharing, Awareness,
Education, Training, Best Practices, Research and Development, and
International Coordination.
Information Sharing: Sharing information about corporate information
security practices is inherently difficult. Companies are
understandably reluctant to share sensitive proprietary information
about prevention practices, intrusions, and actual crimes with either
government agencies or competitors. Information sharing is a risky
proposition with less than clear benefits. No company wants information
to surface that they have given in confidence that may jeopardize their
market position, strategies, customer base, or capital investments. Nor
would they risk voluntarily opening themselves up to bogus but costly
and time-consuming litigation. Releasing information about security
breaches or vulnerabilities in their systems presents just such risks.
Negative publicity or exposure as a result of reports of information
infrastructure violations could lead to threats to investor--or worse--
consumer confidence in a company's products. Companies also fear
revealing trade secrets to competitors, and are understandably
reluctant to share such proprietary information. They also fear sharing
this information, particularly with government, may lead to increased
regulation of the industry or of electronic commerce in general.
Public policy factors also act as barriers to industry information
sharing. One of the obstacles is the Freedom of Information Act (FOIA).
Companies worry that if information sharing with government really
becomes a two-way street, FOIA requests for information they have
provided to an agency could prove embarrassing or costly. FOIA requests
place the private sector's requirement for confidentiality at odds with
the public sector's desire for sunshine in government information. We
are working with Congressman Tom Davis (R-VA), Senator Robert Bennett
(R-UT), and other key players on legislation to meet this concern.
Anti-trust concerns are a second potential legal hurdle to
information sharing. Fortunately, such risks appear small. The
antitrust laws focus on sharing information concerning commercial
activities. Information Sharing Advisory Centers (ISACs) should be in
compliance with the antitrust laws because they are not intended to
restrain trade by restricting output, increasing prices, or otherwise
inhibiting competition, on which the antitrust laws generally focus.
Rather, ISACs facilitate sharing of information relating to members'
efforts to enhance and to protect the security of the cyber
infrastructure, so the antitrust risk of such exchange is minimal. The
Justice Department has also indicated that there are minimal antitrust
concerns involving properly structured joint industry projects for
dealing with externalities. An entity created to share information
regarding common threats to critical infrastructure should fall into
this category.
Given the changing nature of the cyber crime threat and in spite of
the many business, operational and policy hurdles standing in the way,
many companies in the private sector recognize the need to have formal
and informal information sharing mechanisms. Internet Service Providers
are an example of the latter circumstance. Because these firms provide
networking capability commercially, these businesses often have
extensive network security expertise. Such firms act as virtual
Information Sharing and Analysis Centers, gathering information about
detected threats and incursions, sanitizing it by removing customer
specific data, and sharing it with customers.
The IT industry has adopted a formal approach to the information
sharing challenge. In January 2001, nineteen of the nation's leading
high tech companies announced the formation of a new Information
Technology Information Sharing and Analysis Center (IT-ISAC) to
cooperate on cyber security issues. The objective of the IT-ISAC is to
enhance the availability, confidentiality, and integrity of networked
information systems. The group has made excellent progress in the six
months since its founding and is in the process of being formally
``stood up,'' although information sharing is already beginning to take
place within this ISAC.
The IT-ISAC is a not-for-profit corporation that will allow the
information technology industry to report and exchange information
concerning electronic incidents, threats, attacks, vulnerabilities,
solutions and countermeasures, best security practices and other
protective measures. Its internal processes will permit information to
be shared anonymously. The organization is a voluntary, industry-led
initiative with the goal of responding to broad-based security threats
and reducing the impact of major incidents. Membership in the IT-ISAC
is open to all U.S.-based information technology companies. It will
offer a 24-by-7 network, notifying members of threats and
vulnerabilities. The group also is clear on what is will not undertake.
Excluded activities include standards setting, product rating, audits,
certifications or dispute settlement. Similarly, the IT-ISAC is not a
crime fighting organization. The nineteen Founding Member companies of
the IT-ISAC, all represented at the announcement, are AT&T, Cisco
Systems, Computer Associates, CSC, EDS, Entrust Technologies, Hewlett-
Packard Company, IBM, Intel Corporation, KPMG Consulting, Microsoft
Corporation, Nortel Networks, Oracle Corp., RSA Security, Securify
Inc., Symantec Corporation, Titan Systems Corp., Veridian and VeriSign,
Inc.
The group plans to evolve its information sharing activities over
time, starting with IT companies and then moving across sectors. It is
also expected that the ISAC will enable sensitive information to be
shared between industry and government. But that sharing must be a two-
way street, if it is going to be effective.
The Software Engineering Institute's CERT Coordination Center plays
an information sharing role for numerous industries. The oldest and
largest of information sharing programs, CERT is a Federally funded
research and development center at Carnegie Mellon University in
Pittsburgh. The organization gathers and disseminates information on
incidents, product vulnerabilities, fixes, protections, improvements
and system survivability. The organization strives to maintain a leak
proof reputation while collecting thousands of incident reports yearly.
These could be anything from a single site reporting a compromise
attempt to a virus with worldwide impact.
The IT-ISAC is specifically designed to support the IT industry in
this country. Other ISACs have been formed in the financial services
and telecommunications industries. And I would like to mention two
other groups that play an important information sharing role. The
Partnership for Critical Infrastructure Security provides a venue for
organizations from numerous industries to pool their knowledge and
experience about information infrastructure risks and protections. PCIS
also examines critical interdependencies among infrastructure providers
and seeks common solutions to risk mitigation. The Partnership for
Global Information Security provides a forum for
executives from both the public and private sector in economies around
the world to share information about InfoSec topics. PGIS members are
focused on five areas for collaboration: sound practices, workforce,
research and development, cyber crime and law enforcement and public
policy. ITAA is proud to have played a leadership role in the formation
of both organizations, and I sit on the Boards of Directors of both.
Awareness: ITAA and its member companies are raising awareness of the
issue within the IT industry and through partnership relationships with
other vertical industries, including finance, telecommunications,
energy, transportation, and health services. We are developing regional
events, conferences, seminars and surveys to educate all of these
industries on the importance of addressing information security. An
awareness raising campaign targeting the IT industry and vertical
industries dependent on information such as the financial sector,
insurance, electricity, transportation and telecommunications is being
overlaid with a targeted community effort directed at CEOs, end users
and independent auditors. The goal of the awareness campaign is to
educate the audiences on the importance of protecting a company's
infrastructure, and instructing on steps they can take to accomplish
this. The message is that information security must become a top tier
priority for businesses and individuals.
Education: In an effort to take a longer-range approach to the
development of appropriate conduct on the Internet, the Department of
Justice and the Information Technology Association of America have
formed the Cybercitizen Partnership. Numerous ITAA member companies and
recently the Department of Defense have joined this effort. The
Partnership is a public/private sector venture formed to create
awareness in children of appropriate on-line conduct. This effort
extends beyond the traditional concerns for children's safety on the
Internet, a protective strategy, and focuses on developing an
understanding of the ethical behavior and responsibilities that
accompany use of this new and exciting medium. The Partnership is
developing focused messages, curriculum guides and parental information
materials aimed at instilling a knowledge and understanding of
appropriate behavior on-line. The Partnership hosted a very successful
event last fall at Marymount University in Northern Virginia that
brought together key stakeholders in this area. Ultimately, a long
range, ongoing effort to insure proper behavior is the best defense
against the growing number of reported incidents of computer crime. The
Cybercitizen website has received over 600,000 hits in the past year.
Training: ITAA long has been an outspoken organization on the
impact of the shortage of IT workers--whether in computer security or
any of the other IT occupations. Our groundbreaking studies on the IT
workforce shortage, including the latest, ``When Can You Start,'' have
defined the debate and brought national attention to the need for new
solutions to meet the current and projected shortages of IT workers. We
believe it is important to assess the need for and train information
security specialists, and believe it is equally important to train
every worker about how to protect systems.
We have planned a security skills set study to determine what the
critical skills are, and will then set out to compare those needs with
courses taught at the university level in an effort to determine which
programs are strong producers. We encourage the development of
``university excellence centers'' in this arena, and also advocate
funding for scholarships to study information security. We commend the
Administration and Congress for supporting training more information
security specialists.
The challenge to find InfoSec workers is enormous, because they
frequently require additional training and education beyond what is
normally achieved by IT workers. Many of the positions involving
InfoSec require US citizenship, particularly those within the federal
government, so using immigrants or outsourcing the projects to other
countries is not an option.
Best Practices: We are committed to promoting best practices for
information security, and look to partners in many vertical
sectors in order to leverage existing work in this area. In
addition, our industry is committed to working with the
government--whether at the federal, state or local levels. For
example, we are working with the Federal Government's CIO
Council on efforts to share industry's best information
security practices with CIOs across departments and agencies.
At the same time, industry is listening to best practices
developed by the government. This exchange of information will
help industry and government alike in creating solutions
without reinventing the wheel.
While we strongly endorse best practices, we strongly discourage
the setting of ``standards.'' Why?
Broadly, the IT industry sees standards as a snapshot of technology
at a given moment, creating the risks that technology becomes frozen in
place, or that participants coalesce around the ``wrong'' standards.
Fighting cyber crime can be thought of as an escalating arms race, in
which each time the ``good guys'' develop a technology solution to a
particular threat, the ``bad guys'' develop a new means of attack. So
to mandate a particular ``solution'' may be exactly the wrong way to go
if a new threat will soon be appearing.
It is also critical that best practices are developed the way much
of the Internet and surrounding technologies have progressed--through
``de facto'' standards being established without burdensome technical
rules or regulations. While ITAA acknowledges the desire within the
Federal government to achieve interoperability of products and systems
through standard-setting efforts, the reality is that the IT industry
can address this simply by responding to the marketplace demand. The
marketplace has allowed the best technologies to rise to the top, and
there is no reason to treat information security practices differently.
Research and Development: While the information technology industry is
spending billions on research and development efforts--maintaining our
nation's role as the leader in information technology products and
services--there are gaps in R&D. Frankly, for industry, more money is
frequently spent on ``D''--development--then ``R''--long-term research.
Government, mainly in the Department of Defense, focuses its
information security R&D spending on defense and national security
issues. We believe that between industry's market-driven R&D and
government's defense-oriented R&D projects, gaps may be emerging that
no market forces or government mandates will address. Government
funding in this gap--bringing together government, academia and
industry--is necessary.
International: In our work with members of the information technology
industry and other industries, including financial services,
banking, energy, transportation, and others, one clear message
constantly emerges: information security must be addressed as
an international issue. American companies increasingly are
global corporations, with partners, suppliers and customers
located around the world. This global business environment has
only been accented by the emergence of on-line commerce--
business-to-business and business-to-consumer alike.
Addressing information security on a global level clearly raises
questions. Many within the defense, national security and intelligence
communities rightly raise concerns about what international actually
means. Yet, we must address these questions with solutions and not
simply ignore the international arena. To enable the dialogue that is
needed in this area, ITAA and WITSA conducted the first Global
Information Security Summit in Fall 2000. This event brought together
industry, government and academia representatives from around the world
to begin the process of addressing these international questions. A
second Summit is planned for later this year to continue the dialogue.
The governmental international linkages must be strengthened--and not
just among the law enforcement and intelligence communities. Government
ministries around the world involved in economic issues--such as our
own Department of Commerce--need to be key players.
How Government Can Help
In many ways, solutions to cyber security challenges are no
different than any other Internet-related policy issue. Industry
leadership has been the hallmark of the ubiquitous success of our
sector. Having said that, we also believe that government has several
roles to play in helping achieve better cyber security and combating
cyber crime:
First and foremost, like a good physician practicing under
the Hippocratic oath, do no harm. Excessive or overly broad
legislation and subsequent regulation crafted in a rapidly
changing technology environment is apt to miss the mark and
likely to trigger a host of unintended consequences. In many
instances, existing laws for crimes in the physical world are
adequate to address crimes conducted in cyberspace. New
legislation should always be vetted for circumstances that
single out the Internet for discriminatory treatment.
Practice what you preach. The rules of technology, process
and people apply equally to the public sector. The U.S.
government must lead by example in preventing intrusions into
agency websites, databanks and information systems. Leadership
in this area means substantial investments of new money in
information security technology and services. Responding to the
issue by reallocating existing dollars from current programs is
robbing Peter to pay Paul and likely to play out at the expense
of the American public and their confidence in e-government. It
also means insisting that government agencies implement
rigorous information security processes and practice them on a
daily basis. Making InfoSec part of the government culture will
require extensive senior management commitment.
Reach out to international counterparts for crucial
discussions of cyber security, and in particular, how to most
constructively and effectively enforce existing criminal laws
in the increasingly international law enforcement environment
fostered by the Internet and other information networks.
Bring leadership to bear through existing structures
including the new cyber security board that will likely be
established by Executive Order later this year. ITAA, its
members and the IT industry continue to work hard to develop
collegial and constructive relationships with the leadership
and staff of the Critical Information Assurance Office (CIAO),
the Commerce Department (DOC), the National Institute of
Standards and Technology (NIST), and the Critical Information
Infrastructure Assurance Program Office (CIIAP) at NTIA, as
well as the National Security Council (NSC), Department of
Justice (DOJ), Department of Energy, the National Information
Protection Center (NIPC), and the National Security Agency
(NSA).
Funding will also help in the areas of workforce development
and research. We have a critical shortage of information
technology professionals generally and information security
specialists specifically. In general, we support legislation to
increase the number of appropriately skilled workers in this
critical area. We also support additional R&D funding.
Conclusion
Society's reliance on the Internet will only increase over time.
The evolution of the Internet over these thirty-some years tells us
that its possibilities are limited only by our imaginations. The
prospect of ubiquitous commerce, brought about by wireless computing,
could pose greater security challenges as we move forward.
Internet security is an enabler to continued progress, and without
it, public trust could erode and the true limits of technology never be
pushed. I submit to you that the market is moving quickly to establish
and maintain public trust in this new and exciting medium.
In closing, I leave the committee with the following thoughts on
securing the Internet.
Internet security must continue to become the focus of
corporate CEOs and Boards of Directors and their counterparts
in the public sector. Internet security is economic security,
and market forces will continue to draw the attention of the
highest levels of corporate hierarchy. This is a beneficial
development.
The Internet will continue to evolve towards ubiquity. As it
does, technological developments will move quickly to secure
it, but implementing those technologies will be essential.
Technology is only part of the answer. People and processes
are the other key ingredients. Assuring that users and
companies practice sound ``cyber hygiene'' is important to
securing the Internet.
Market forces are the key. These forces will prevent an
erosion of trust, will contribute to efficiently developing
security products, and will drive management at all levels to
focus on Internet security.
Educating young people about the need to be good
cybercitizens--through programs such as the ITAA/Department of
Justice/Department of Defense Cybercitizen Partnership--is one
tool to fight cybercrime that needs wider support.
Thank you and I welcome any questions from the Committee.
Senator Wyden. Very well said.
Mr. Schneier, welcome.
STATEMENT OF BRUCE SCHNEIER, CHIEF TECHNICAL OFFICER,
COUNTERPANE INTERNET SECURITY, INC.
Mr. Schneier. Thank you. Thanks for having us. I spent the
entire weekend at DEFCON sort of wondering what I would tell
the Committee. It has been interesting, I spent a lot of time
talking to different people, and when I got here I actually
snitched one of your pads and wrote a bunch of notes.
Kind of the neat thing is, I am listening to your opening
remarks, and about five of the points I wanted to make you made
to me, so I feel like I am in good company. Now, you said very
well, the Internet is important to business, to people. The
ramifications of that are interesting, but what we want to do
fundamentally is take all of our business and social constructs
and move them from the real world to the Net, whether it is
having a private conversation, engaging in commerce, having a
meeting, political discussions, potentially we are talking
about putting everything that we do in the real world on the
Net.
Fundamentally, security is the enabling technology, the
limits of security are in a very real sense the limits of the
Internet. If you cannot do it securely, whether it is you
knowing who I am when I speak to you, or me making an anonymous
purchase, or voting, we are not going to do it, and this is
only going to get bigger.
Now, I have been doing security for, I do not know, 10, 15
years, and what I have learned sort of watching the world and
being involved in it is that security is not working. Every
year, the problem gets worse. Security is failing us. We see
this in all the press reports you mentioned. We see this in how
much damage there is, how much money is lost, how many
incidents there are. I mean, every metric.
Things are not getting better, despite computer security
being a 40-year-old academic discipline, and every year there
are new products, new ideas, new services. It is not that we
are not winning, we are not even breaking even, and I spent a
lot of time writing my most recent book and thinking about the
problem, because it is surprising--why are we not getting
better?--and I believe fundamentally it is about complexity,
and we heard that here, in some ways.
Complexity to me is the enemy of security. As things get
more complex, they necessarily get less secure, and our
Internet, our electronic world is getting more complex faster
than our security knowledge is improving, whether it is always
on connections, whether it is rich content, whether it is a new
version of Windows, it is more complex, more features, more
interactions, more users, and it is less secure.
So what do we do? To a first approximation, the Internet is
about people. You said very well that technology alone cannot
be the solution, because it is not a technology problem.
Fundamentally, it is a people problem. I mean, the same
problems we have in the real world we have on the Net. We have
fraud, threat, trespass, damage. None of these crimes are new.
Now, also, the Internet is different. There are three main
differences that are worth bringing out. The first one is
automation. The fact that you can automate an attack, the fact
that you can automate a crime, makes certain things a lot
easier to do as a criminal, and a lot harder to find.
You know, picking up a penny from everybody becomes a valid
way of doing crime on the Net. In the real world, you could
never make that efficient.
We talk about the notion of the script kitty, and I think
Vint mentioned this, the idea of taking an attack where a
skilled person knows how to do it, encapsulating it in
software, and giving it to 10,000 people. We have separated
skill from ability through automation, and that is a very big
difference, and a very big deal.
Another big difference is a lack of political boundaries.
All of our law enforcement is based on proximity, an attacker
going up to you and hitting you over the head. We know how to
prosecute that, but if the attacker starts in Russia and
accesses computers in France to get to Citibank in New York,
suddenly that is a lot less clear, and things are much more
complicated, and this lack of political boundaries makes any
security work much more difficult, because you are not dealing
with any coherent group.
The third difference is how techniques propagate. Because
the Internet is so pervasive in communication, criminal
techniques, hacking techniques propagate much quicker, and you
can see this in the real world, when a new way of breaking into
an ATM machine, for example, is discovered, people learn about
it slowly, and the attack becomes in vogue. On the Net, this
can happen overnight, so a lot of our traditional ways of
dealing with crime, which is fixing it after we see it is a
problem, fails when things happen so fast.
So again, to me, I believe Internet security will continue
to get worse in the foreseeable future. I do not see any magic
bullets. I do not see any ways to solve the problem.
So the question to ask is, what do we do? Given this
reality, and I believe 100 percent this is true, what can we
do? We cannot shut the Net down. We cannot say, less
complexity. I know you think the operating system is fun. We
are not going to do that. We are not going to put cell phones
in the Net. We are not going to have mobile commerce. They are
going to happen, whether they are secure or not, so I have some
suggestions.
The first one is something that I am working on in my
company, not really something for you to do, is to look at
detection response. I mean, I look at security in terms of
prevention, detection, and response. A lot of what we have done
in computer security is prevention. We have built all of these
prophylactics that we assume will prevent fraud, prevent crime,
and that is what is failing in the real world. We get security
through detection response.
I do not wear body armor, but I am safe on the streets not
because I have prevented crime, but because I understand that
if there is a crime, that there will be detection response. If
you want to improve the security in your house, you do not make
your walls thicker, you get a burglar alarm, and to me this is
very important. This makes security robust. Right now, security
is very fragile on the Net, and you see it in the newspapers. A
new vulnerability is discovered, and we are all at risk.
Suddenly, we are not secure.
Alarm systems are robust. If you have enough motion sensors
and pressure plates and electric eyes in your house, you will
catch the burglar, regardless of how he got in, and we need
that same kind of thinking on the Net.
The second thing, and you talked about this, and I am
thrilled you did, risk management. A lot of us talk about how
do we avoid the threat? We cannot avoid the threat. The
question is, how do we manage the risk? Just like any other
business risk, computer crime and fraud is a risk, and this has
some ramifications. I believe the insurance industry will be
key in dealing with computer security, just like the insurance
industry over the century has been key in safe automobile
practices, in building and housing codes, because they are the
risk manager of last resort.
In a few years, you will get cyber insurance. You will have
to, as a business, and then a few years later, premiums will
diverge, depending on what products you are using, what you are
doing, and what this will bring is something else we are
lacking, is liability.
Right now, there is no liability in software. An automobile
manufacturer could, conceivably, put an oxyacetylene shunt into
your fuel line and boost the performance of your car. They do
not do that because they know the liability to be enormous. The
software industry has no such compunctions. There is no
liability. If you read software licenses, they basically say,
if this product deliberately maims your children, and we knew
about it, and we chose not to tell you because we thought it
would hurt sales, we are not liable. This is a disaster,
because it means that features come unfettered with any
controls.
My third piece of advice is about legislation. I worry
about rushing into legislation. This is all very new. We do not
understand how the technology works, how it interacts, even
things like what it means to trespass on a Web site. What does
unauthorized access mean? It is not at all obvious.
I am spending time talking with a Stanford law professor
trying to write a paper on this. It is very hard to pin down
what these things mean in this new environment, and we will
figure it out, but it is going to take a while, and I worry
about quick laws that have unintended consequences. We have
seen that a couple of times.
I also think we really can no longer have laws that trail
technology. Up to now a new technology has appeared, the
telephone, and over 10 or 20 years we have figured out what the
laws are. Technology moves too fast today. We do not have time
to do that. This is an enormous challenge because we almost
have to make laws that are based on principles, not based on
the details of technology, and then that way you can make the
technology match what you want.
To a very real extent, technology can determine what laws
are possible. There are some things we cannot do on the Net, no
matter how much you want, but if we have some guiding
principles as to what we as a society believe is good, and
right, and important, we can codify that into the actual
technology, and to me this is an enormous opportunity for
America to take its principles of free speech, personal
privacy, of liberty, and weave them into the fabric of a very
international Net. We could fail to do that, but we could also
do that.
I guess those are my points. I will take questions, and if
there is ever a job application for that information security
czar, I would love to do it.
[Laughter.]
[The prepared statement of Mr. Schneier follows:]
Prepared Statement of Bruce Schneier, Chief Technical Officer,
Counterpane Internet Security, Inc.
My name is Bruce Schneier. I am the founder and Chief Technical
Officer of Counterpane Internet Security. Inc. Counterpane was founded
to address the immediate need for increased Internet security, and
essentially provides burglar alarm services for computer networks. I am
the author of seven books on cryptography and computer security, as
well as hundreds of articles and papers on those topics. For several
years, I have been a security consultant to many major Internet
companies.
I'd like to thank the Committee for holding this hearing today.
Internet security is an enormously important issue, and one that will
become increasingly important as the Internet affects the lives of more
people. Simply stated, during the last decade the Internet has
transitioned from a technological plaything for a few people to a
critical infrastructure as fundamental as the phone system. Internet
security has transitioned from an academic curiosity to a fundamental
enabling technology for our future. The limits of Internet security are
the limits of the Internet, and the limits of the Internet profoundly
affect our country as the Information Economy continues to grow.
I believe that there are two questions before the Committee today.
The first is whether the Internet is safe enough to conduct business
on. The second, if you agree that the Internet is not safe enough, is
what we can do to improve the situation. I will focus my remarks on
these two issues.
Introduction
The Internet is critical to business. Companies have no choice but
to connect their internal networks to the rest of the world--to link
with customers, suppliers, partners, and their own employees. But with
that connection comes new threats: malicious hackers, criminals,
industrial spies. These network predators regularly steal corporate
assets and intellectual property, cause service breaks and system
failures, sully corporate brands, and frighten customers. Unless
companies can successfully navigate around these, they will not be able
to unlock the full business potential of the Internet.
Traditional approaches to computer security center around
preventive techniques, and they don't work. Despite decades of
research, and hundreds of available security products, the Internet has
steadily become more dangerous. The increased complexity of the
Internet and its applications, the rush to put more services and people
on the Internet, and the desire to interconnect everything all
contribute to the increased insecurity of the digital world.
Security based solely on preventive products is inherently fragile.
Newly discovered attacks, the proliferation of attack tools, and flaws
in the products themselves all result in a network becoming vulnerable
at random (and increasingly frequent) intervals.
Active security monitoring is a key component missing in most
networks. Insurance is another. In business, insurance is the risk
manager of last resort. And in most cases, insurance drives security
requirements. Companies install a burglar alarm system in their
warehouse not because it reduces theft, but because it reduces their
insurance rates. As the need for Internet security becomes more
universally recognized , insurance companies will begin to drive
security requirements and demand product improvements.
The third key component to a secure Internet is law enforcement.
The primary reason we live in a safe society is that we prosecute
criminals. Today the Internet is a lawless society; hackers can break
into computers with relative impunity. We need to turn the Internet
into a lawful society, through regular prosecution and conviction of
Internet criminals.
The Importance of Security
When I began working in computer security, the only interest was
from the military and a few scattered privacy advocates. The Internet
has changed all that. The promise of the Internet is to be a mirror of
society. Everything we do in the real world, we want to do on the
Internet: conduct private conversations, keep personal papers, sign
letters and contracts, speak anonymously, rely on the integrity of
information, gamble, vote, publish digital documents. All of these
things require security. Computer security is a fundamental enabling
technology of the Internet; it's what transforms the Internet from an
academic curiosity into a serious business tool. The limits of security
are the limits of the Internet. And no business or person is without
these security needs.
The risks are real. Everyone talks about the direct risks: theft of
trade secrets, customer information, money. People also talk about the
productivity losses due to computer security problems. What's the loss
to a company if its e-mail goes down for two days? Or if ten people
have to scramble to clean up after a particularly nasty intrusion? I've
seen figures as high as $10 billion quoted for worldwide losses due to
the ILOVEYOU virus; most of that is due to these productivity losses.
More important are the indirect risks: loss of customers, damage to
brand, loss of goodwill. Last year Egghead.com had a network break-in
and it was rumored that a million credit card numbers were stolen.
Regardless of how the investigation turned out, some percentage of
customers decided to shop elsewhere. When CD Universe suffered a credit
card theft in early 2000, it cost them dearly in their war for market
share against Amazon.com and CDNow. In the aftermath of the Microsoft
attack in October 2000, the company spent much more money and effort
containing the public relations problem than fixing the security
problem. The public perception that their source code was untainted was
much more important than any effects of the actual attack.
And more indirect risks are coming. European countries have strict
privacy laws; American companies can be held liable if they do not take
steps to protect the privacy of their European customers. While ``safe
harbor'' provisions may provide immediate relief, it will not solve the
problem once the European countries realize that their data is not
being protected.
The U.S. has similar laws in particular industries--banking and
healthcare--and there are bills in Congress to protect privacy more
generally. We have not yet seen shareholder lawsuits against companies
that failed to adequately secure their networks and suffered the
consequences, but they're coming. Can company officers be held
personally liable if they fail to provide for network security? The
courts will be deciding this question in the next few years.
As risky as the Internet is, companies have no choice but to be
there. The lures of new markets, new customers, new revenue sources,
and new business models are just so great that companies will flock to
the Internet regardless of the risks. There is no alternative. This,
more than anything else, is why computer security is so important.
The Failure of Traditional Security
Five years ago, network security was relatively simple. No one had
heard of denial-of-service attacks shutting down Web servers, Web page
scripting flaws, or the latest vulnerabilities in Microsoft Outlook
Express. In recent years came intrusion detection systems, public-key
infrastructure, smart cards, VPNs, and biometrics. New networking
services, wireless devices, and the latest products regularly turn
network security upside down. There are literally hundreds of network
security products you can buy, and they all claim to provide you with
security. They regularly fail, but still you hear companies say: ``Of
course I'm secure. I bought a firewall.''
Network security is an arms race, and the attackers have all the
advantages. First, network defenders occupy what military strategists
call ``the position of the interior'': the defender has to defend
against every possible attack, while the attacker only has to find one
weakness. Second, the immense complexity of modern networks makes them
impossible to properly secure. And third, skilled attackers can
encapsulate their attacks in software, allowing people with no skill to
use them. It's no wonder businesses can't keep up with the threat.
What's amazing is that no one else can either. Computer security is
a 40-year-old discipline; every year there's new research, new
technologies, new products, even new laws. And every year things get
worse.
If there's anything computer security professionals have learned
about the Internet, it's that security is relative. Nothing is
foolproof. What's secure today may be insecure tomorrow. Even companies
like Microsoft can get hacked, badly. There are no silver bullets. The
way forward is not more products, but better processes. We have to stop
looking for the magic preventive technology that will avoid the
threats, and embrace processes that will help us manage the risks.
Security and Risk Management
Ask any network administrator what he needs security for, and he
can describe the threats: Web site defacements, corruption and loss of
data due to network penetrations, denial-of-service attacks, viruses
and Trojans. The list seems endless, and the endless slew of news
stories prove that the threats are real.
Ask that same network administrator how security technologies help,
and he'll discuss avoiding the threats. This is the traditional
paradigm of computer security, born out of a computer science
mentality: figure out what the threats are, and build technologies to
avoid them. The conceit is that technologies can somehow ``solve''
computer security, and the end result is a security program that
becomes an expense and a barrier to business. How many times has the
security officer said: ``You can't do that; it would be insecure''?
This paradigm is wrong. Security is a people problem, not a
technology problem. There is no computer security product--or even a
suite of products--that acts as magical security dust, imbuing a
network with the property of ``secure.'' It can't be done. And it's not
the way business works.
Businesses manage risks. They manage all sorts of risks; network
security is just another one. And there are many different ways to
manage risks. The ones you choose in a particular situation depend on
the details of that situation. And failures happen regularly; many
businesses manage their risks improperly, pay for their mistakes, and
then soldier on. Businesses are remarkably resilient.
To take a concrete example, consider a physical store and the risk
of shoplifting. Most grocery stores accept the risk as a cost of doing
business. Clothing stores might put tags on all their garments and
sensors at the doorways; they mitigate the risk with a technology. A
jewelry store might mitigate the risk through procedures: all
merchandise stays locked up, customers are not allowed to handle
anything unattended, etc. And that same jewelry store will carry theft
insurance, another risk management tool.
More security isn't always better. You could improve the security
of a bank by strip-searching everyone who walks through the front door.
But if you did this, you would have no business. Studies show that most
shoplifting at department stores occurs in dressing rooms. You could
improve security by removing the dressing rooms, but the losses in
sales would more than make up for the decrease in shoplifting. What all
of these businesses are looking for is adequate security at a
reasonable cost. This is what we need on the Internet as well--security
that allows a company to offer new services, to expand into new
markets, and to attract and retain new customers. And the particular
computer security solutions they choose depend on who they are and what
they are doing.
Detection and Response
Most computer security is sold as a prophylactic: encryption
prevents eavesdropping, firewalls prevent unauthorized network access,
PKI prevents impersonation. To the world at large, this is a strange
marketing strategy. A door lock is never sold with the slogan: ``This
lock prevents burglaries.'' No one ever asks to purchase ``a device
that will prevent murder.'' But computer security products are sold
that way all the time. Companies regularly try to buy ``a device that
prevents hacking.'' This is no more possible than an anti-murder
device.
When you buy a safe, it comes with a rating. 30TL--30 minutes,
tools. 60TRTL--60 minutes, torch and tools. What this means is that a
professional safecracker, with safecracking tools and an oxyacetylene
torch, can break open the safe in an hour. If an alarm doesn't sound
and guards don't come running within that hour, the safe is worthless.
The safe buys you time; you have to spend it wisely.
Real-world security includes prevention, detection, and response.
If the prevention mechanisms were perfect, you wouldn't need detection
and response. But no prevention mechanism is perfect. This is
especially true for computer networks. All software products have
security bugs, most network devices are misconfigured, and users make
all sorts of mistakes. Without detection and response, the prevention
mechanisms only have limited value. They're fragile. And detection and
response are not only more cost effective, but also more effective,
than piling on more prevention.
On the Internet, this translates to monitoring. In October 2000,
Microsoft discovered that an attacker had penetrated their corporate
network weeks before, and might have viewed or even altered the source
code for some of their products. Administrators discovered this breach
when they noticed twenty new accounts being created on a server. Then
they went back through their network's audit logs and pieced together
how the attacker got in and what he did. If someone had been monitoring
those audit logs--automatically generated by the firewalls, servers,
routers, etc.--in real time, the attacker could have been detected and
repelled at the point of entry.
That's real security. It doesn't matter how the attacker gets in,
or what he is doing. If there are enough motion sensors, electric eyes,
and pressure plates in your house, you'll catch the burglar regardless
of how he got in. If you are monitoring your network carefully enough,
you'll catch a hacker regardless of what vulnerability he exploited to
gain access. And if you can respond quickly and effectively, you can
repel the attacker before he does any damage. Good detection and
response can make up for imperfect prevention.
And real security is about people. On the day you're attacked, it
doesn't matter how your network is configured, what kind of boxes you
have, or how many security devices you've installed. What matters is
who is defending you.
Prevention systems are never perfect. No bank ever says: ``Our safe
is so good, we don't need an alarm system.'' No museum ever says: ``Our
door and window locks are so good, we don't need night watchmen.''
Detection and response are how we get security in the real world, and
they're the only way we can possibly get security on the Internet. We
must invest in network monitoring if we are to properly manage the
risks associated with our nation's network infrastructure.
Insurance
Eventually, the insurance industry will subsume the computer
security industry. Not that insurance companies will start marketing
security products, but rather that the kind of firewall you use--along
with the kind of authentication scheme you use, the kind of operating
system you use, and the kind of network monitoring scheme you use--will
be strongly influenced by the constraints of insurance.
Consider security, and safety, in the real world. Businesses don't
install building alarms because it makes them feel safer; they do it
because they get a reduction in their insurance rates. Building owners
don't install sprinkler systems out of affection for their tenants, but
because building codes and insurance policies demand it. Deciding what
kind of theft and fire prevention equipment to install are risk
management decisions.
The risk taker of last resort is the insurance industry, and
businesses achieve security through insurance. They take the risks they
are not willing to accept themselves, bundle them up, and pay someone
else to make them go away. If a warehouse is insured properly, the
owner is significantly less worried about fire or other disasters.
Similarly, if a network is insured properly, the owner is significantly
less worried about the hacking risks.
This is the future. Concerned about denial-of-service attacks? Get
bandwidth interruption insurance. Concerned about data corruption? Get
data integrity insurance. (I'm making these policy names up, here.)
Concerned about negative publicity due to a widely publicized network
attack? Get a rider on your good name insurance that covers that sort
of event. The insurance industry isn't offering all of these policies
yet, but it is coming.
The effects of this change will be considerable. Every business
will have network security insurance, just as every business has
insurance against fire, theft, and any other reasonable threat. To do
otherwise would be to behave recklessly and be open to lawsuits.
Details of network security become check boxes when it comes time to
calculate the premium. Do you have a firewall? Which brand? Your rate
may be one price if you have this brand, and a different price if you
have another brand. Do you have a service monitoring your network? If
you do, your rate goes down this much.
This process changes everything. What will happen when the CFO
looks at his premium and realizes that it will go down 50% if he gets
rid of all his insecure Windows operating systems and replaces them
with a secure version of Linux? The choice of which operating system to
use will no longer be 100% technical. Microsoft, and other companies
with shoddy security, will start losing sales because companies don't
want to pay the insurance premiums. In this vision of the future, how
secure a product is becomes a real, measurable, feature that companies
are willing to pay for...because it saves them money in the long run.
Already some insurance companies are starting to do this.
Other systems will be affected, too. Online merchants and brick-
and-mortar merchants will have different insurance premiums, because
the risks are different. Businesses can add authentication mechanisms--
public-key certificates, biometrics, smart cards--and either save or
lose money depending on their effectiveness. Computer security ``snake-
oil'' peddlers who make outlandish claims and sell ridiculous products
will find no buyers as long as the insurance industry doesn't recognize
their value. In fact, the whole point of buying a security product or
hiring a security service will not be based on threat avoidance; it
will be based on risk management.
And it will be about time. Sooner or later, the insurance industry
will sell everyone anti-hacking policies. It will be unthinkable not to
have one. And then we'll start seeing good security rewarded in the
marketplace.
Law Enforcement
The primary reason we feel safe walking the streets of our country
is because criminals are arrested and prosecuted. In areas where
prosecution is less common, the streets are more dangerous. In
countries where prosecution is rare or arbitrary, criminals run
rampant. This same thinking must be applied to the Internet.
Right now, most criminal hackers can operate with impunity, and
they know that. Most Internet crimes are never discovered by the
victims. Of those that are known, most are covered up. Of those that
are made public, most never result in arrests, let alone convictions.
The Internet is still a lawless environment.
This needs to change. Prosecution and conviction of criminals has
two effects. One, it sends a clear message to everyone else. And two,
it takes the convicted criminals out of circulation during their
incarceration. Both of these things act as a deterrence.
One of the best things that happened for Internet security in the
year 2000 was the series of high-profile prosecutions and convictions.
This has had a visible chilling effect on some hacking groups. But more
is required.
This is not easy. The Internet was not designed to aid forensic
analysis, and many types of hacks are not currently traceable.
Jurisdiction is also a problem; our criminal justice system is not
designed to deal with criminals who can be anywhere in the world while
attacking someone in another part of the world. But we need to do it.
Conclusion
Network security risks will always be with us. The downside of
being in a highly connected network is that we are all connected with
the best and worst of society. Security products will not solve the
problems of Internet security, any more than they solve the security
problems in the real world. The best we can do is to manage the risks:
employ technological and procedural mitigation while at the same time
allowing businesses to thrive.
Security equals vigilance, a day-to-day process. There are hundreds
of technological solutions, but none that will ultimately fix the
problem. It's been thousands of years, and the world still isn't a safe
place. There is no way to ``solve'' the burglary problem. There is no
device you can buy to prevent murder. No matter how fast technology
advances, guards and alarms are still state-of-the-art.
The key to effective security is human intervention. Automatic
security is necessarily flawed. Smart attackers bypass the security,
and new attacks fool products. People are needed to recognize, and
respond to, new attacks and new threats. It's a simple matter of
regaining a balance of power: human minds are the attackers, so human
minds need to be the defenders as well.
I believe that the Internet will never be totally secure. In fact,
I believe that the Internet will continue to get less and less secure
as it gets more interesting, more useful, and more valuable. Just like
the real world, security is a process. And the processes of detection
and response, risk management and insurance, and forensics and
prosecution will serve the Internet world just as they serve the real
world.
Senator Wyden. This has been a superb panel. Having
specialized in these issues in health for a number of years, I
have gone to a pretty hefty number of panels, and this has been
as good as it gets, and I really thank you for it.
Mr. Schneier, what was interesting about your last comment,
and I am going to have questions for all of you, is that in
your past writings, and talks in the past, you had usually
raised as the centerpiece of an effort to deal with security
this question of alarms and guards. What you have essentially
done today is added a new dimension, and that is that there
really ought to be consequences for important players in the
economy if they are providing insufficient efforts to address
security.
That is something I had never thought of, and I will want
to explore it with you, because it raises a number of
interesting questions, not the least of which is if you are
going to have consequences, you have got to have some standards
by which you even look at consequences. I think your point
about cyber insurance is a very intriguing one, and the
question about at what point would people be held liable for
insufficient attention to security is certainly an area we will
want to explore.
Let me start with the three of you by putting this in the
context of Jane and Joe, the typical consumer who is using
their computer. They probably listen to this, and they say to
themselves, I do not have any secrets on my computer. I am not
doing any multimillion dollar commercial transactions. Who
would want to steal my recipes and hear about the text of a
letter that I sent to Aunt Gertrude? Why should I be concerned
about something like this? What would be the response of the
panel members, just starting down the line with you, Dr. Cerf.
Dr. Cerf. Well, I hope we do not end up with a hear no
evil, see no evil, speak no evil situation. This is a very
alarming observation you have just made, because it is very
common, and it is not just Joe and Jane, it is Frank, who runs
the computer center over at the university, who says, we do not
have any secret on our machine. Forget the one with the student
grades and so on. This is the R&D machine, but there is nothing
secret on it, and so I do not really have to protect it very
much.
The problem is that that machine becomes a weapon. It
becomes a platform. If it can be penetrated and Trojan horse
software placed on it, or what some people call zombie
software, that software can later be activated by a hacker and
used as a weapon against some other target in the network, and
so the failure of a person to observe reasonable security
practices, in fact, endangers and hurts everyone.
Now, I am not so foolish as to imagine that we will get
everyone to cooperate. In fact, security is inconvenient, and I
think it is sort of an unfortunate binding there, that if it
was not inconvenient, it would not work very well, so we can
encourage good practices, we can explain to people why they
should have passwords that are not words, but are, you know,
some kind of a pronounceable sequence of vowels and consonants
with some numbers thrown in somewhere as well.
Or we can introduce technology that creates what are called
nonreusable passwords using public key cryptography as a tool,
but we need to have the manufacturers of the software and
hardware help us, perhaps by releasing machines configured with
more security in them, and you have to deliberately decide to
reduce the level of security so that you know that you are
doing that.
Sun Microsystems tried that, and to be honest it did not
work very well. the customers did not like it, because it
required more work, and they all decided they wanted to reduce
their level of security in the machine from the buttoned-up
form it was in, so the answer is, we need a lot of education
for people to cooperate, and maybe we need simpler practices to
make security easier.
Mr. Miller. Let me go back one question. First, on
insurance. There already are insurance companies doing what you
and Mr. Schneier have discussed. AIG Insurance, for example, is
now promoting very actively to its customers that they will
actually send out and do a risk assessment to help you fortify
your information security practices, and that will affect the
risk premium you end up paying, so it has not become as
ubiquitous as Mr. Schneier is suggesting. I agree it is a good
idea. It is in its formative stages, beginning out there, and
of course AIG is one of the, if not the largest insurance
company in the world, so it will have an impact.
To go back to your Joe and Jane question, I think the short
answer is again an issue that is very near and dear to your
heart, which is privacy. When we go out and do surveys, whether
ITAA does them or other people, we find two-thirds of
Americans, whether you are talking about doing business on the
Internet, or whether you are talking about e-government, are
concerned about privacy/security, but when you really start to
bore down into their answers, into the second-level questions,
what they are really worried about is security, whether they
give credit card information over the Internet to a vendor,
whether they pass that information to a Government agency, is
someone going to steal that information, either while it is in
transmission, or when it has arrived at its ultimate
destination point.
So the reason the individual Joe and Jane should be
concerned about it is, we know they are already concerned about
their privacy on the Internet. Every survey shows that Some say
70 percent, some say 80 percent. My question is, why aren't 100
percent of people? It seems like they should be concerned about
their privacy on the Internet, but the real solution in most
cases is security.
If you do not have security, if that information you are
transmitting over the Internet or to your friends, or through
I-messaging, whatever you may do, can be easily intercepted,
or, when it arrives at its destination, if someone can easily
hack into that data base, as has been done--for example, even
the Davos Forum had sensitive information of some of the world
leaders stolen from that data base. That is what really should
begin to strike Joe and Jane to understand why this is so
important, so they should be just as concerned as a Member of
the U.S. Senate or anybody else about this issue.
Dr. Cerf. Harris, don't you think we should also remind
people that it is not just a matter of technology and security.
If a company successfully receives personal information over an
encrypted channel that has all been locked up tighter than a
drum, the machine itself is well-protected, but the company's
policies are to release the information to anybody that it
chooses for business purposes, all of a sudden, all the
technology in the world did not satisfy and solve and protect
people's privacy, and so there are some decisions that get
made, policies that are set that are independent of the actual
technology that we also need to be aware of.
Mr. Miller. Absolutely. Again, Senator Wyden is a leader in
this, so I am not telling him anything he does not know, but
obviously we believe that full disclosure by all vendors online
is absolutely essential. If anybody violates that full
disclosure, the FTC or the State Attorneys General should
prosecute them, and third we are very excited about the new
technology coming online, the P3P, the platform for privacy
protection, which will enable basically every consumer sitting
at his or her browser to be able to preset a lot of his or her
privacy preferences.
Senator Wyden. We will not start to reiterate last week's
privacy hearing. However, part of my concern on the privacy
debate, not unlike the security issue, is that unless you can
figure out a way to come up with a practical, enforceable set
of policies you have got a very difficult situation where the
vast majority are trying to subscribe to the rules and the
principles, and a handful of scofflaws are inflicting great
damage.
We will not go down the privacy route for the purposes of
this afternoon. Mr Schneier, your response to Jane and Joe
sitting there following this and saying this really did not
apply to me.
Mr. Schneier. If you think about it, pretty much every law
we have is subject to the bad actor problem, whether it is our
murder statutes or anything, so I think we are stuck with that.
It is an interesting question, why the average person should
care, because in a lot of ways the average person does not. I
mean, if you ask them, are you concerned about security, they
will say yes. If you ask them, are you willing to be
inconvenienced to get security, they will most likely say no,
so people do care, but a lot of it is very superficial caring.
The reasons stated here are about the right ones.
The fact that your computer could be a launching pad for
other attacks, so I have my computer at home, I do not care if
someone breaks into it and then attacks some large e-commerce
site. This happens again and again. It used to make the papers
a year ago, and now it is business as usual.
There is the notion of identity theft. As more and more of
our identity goes online, then identity theft becomes easier
and easier. As more and more abilities go online, then identity
theft becomes more dangerous and more powerful, and it is a
large growth area in crime, and breaking into people's
computers to steal their identity, their credit card numbers,
their birth date, their address, whatever is needed to get
credit issued in their name, that is a big worry, and there is
privacy. People are concerned about their information getting
leaked.
I guess we saw a couple of weeks ago, or last week, Eli
Lilly and Company leaked a bunch of names of drug users out in
the open, and this kind of thing is a disaster, and this is why
the Europeans have very strong privacy laws. We do not. We rely
on companies to sort of do whatever they want, and they inform
you, and maybe they do, maybe they do not, and maybe you can
understand what they say, but the information is collected and
stored, and I worry about this, because once the information is
stored, it is vulnerable.
If, indeed, people are concerned about privacy, the
information should not be collected in the first place, because
now, once it exists--I mean, the two-year-old e-mail appears.
The Web site is broken into. So you take precautions, but they
do not actually work, so I think my feeling is people are less
concerned than they should be because they do not understand
what is going on.
The Internet is very, very new. Our intuitions do not
really apply. We think that e-mail is like a chat, is like a
conversation, until old e-mail shows up, and maybe shows up in
a court trial. We do not know what standards to hold different
things to.
Senator Wyden. Since all of you have said Jane and Joe
ought to be concerned, why don't each of you state what you
would say would be the seven or eight biggest and most
important specific security risks for the typical consumer. You
have already mentioned e-mail, credit card, and identity theft,
but I might have missed some other ones. Dr. Cerf, why don't
you start.
Dr. Cerf. I am trying to do a bubble sort in my head here.
The one that comes to mind, the top, frankly, is password
theft, because people do such a bad job of picking their own
passwords, and they often will pick one and stick with it
forever and ever, and never change it.
Senator Wyden. My staff always wants me to use Boss, and
that always seems to me to be a little obvious.
[Laughter.]
Mr. Schneier. As long as you trust your staff, that is
fine.
[Laughter.]
Dr. Cerf. I would say, of the various things that allow a
hacker to get into an account, that is probably the most
obvious, and getting people to choose different passwords for
all the various accounts they have to use is very hard. What do
they do, they cannot remember them all, so they write them
down, and they stick them on a little post-it next to the
machine, so we could help them, I think, with better
technology.
Something that Bruce Schneier mentioned is, we have not
really engaged public cryptography very well. We do not have
that system. If we had that technology in place, we could
probably allow people to achieve much better security. They
would not ever use reusable passwords. They might have to carry
a small device that contains some digital information in it. Of
course if they ever lost that device, that is their identity
now, so we have to protect that, so there is some recursion
here, but I would go after that as one place where Joe and
Jane----
Senator Wyden. So let us see, we have got e-mail, credit
cards, identity theft, passwords--anything else that you think,
Dr. Cerf. Did you not mention something about public access to
Government documents? Were you talking about mortgages, and
that sort?
Dr. Cerf. This is one of those tension things where being
able to get to what should be and is legally public information
is very attractive, but many people do not expect their house
designs, for example, to become visible. They had to be
examined for meeting the codes, for example, and so they are on
record, but one does not think the same way about those plans
and designs and details until you realize they might be online
and available to anyone, including the criminal who is figuring
out how to break into your house.
I do not know what to do about that, to be quite honest
with you, other than just perhaps say that access to them has
to be more restricted than it is today.
Senator Wyden. And the reason that you do not is, you see
the public interest in the disclosure. For example, if you were
to look at a United States Senator's financial disclosure form,
and various other kinds of forms, we could be very certain that
there is a strong public interest in those kinds of materials
being online, and what you are saying is that we are not yet in
a position to ensure that those are secure.
Dr. Cerf. I think that we also have not fully internalized
what it means to have so many of these Government records
online, readily available and sorted through, and perhaps
collated in ways that we could not do before.
Senator Wyden. OK. Mr. Miller.
Mr. Miller. I would add something Mr. Schneier mentioned,
which is just personal communications. Again, people do not
realize that--because it is digital, they do not understand
that there is a nondigital form of that communication. They may
send someone an e-mail, and they think somehow it vaporizes,
the same way as whispering to them in the back of the room.
Well, it is not. Those personal communications in fact do
exist some place. In many cases, they exist many places, and
those are showing up in surprising places, in courts of law, in
the press, when people assume that somehow that thing just
disappears, so I think people have to be much more sensitive to
those communications.
However, Mr. Chairman, I would say, while I appreciate your
focusing on Joe and Jane, I do not think we as an industry want
people to think that the individual citizen has a tremendous
amount of personal responsibility that requires a lot of time
and effort on his or her part in order to be safe and secure on
the Internet, any more than when we pick up the telephone, that
we think they have to bring out some kind of special encoder
before we have a telephone conversation, or before we get in
our car every day we have to spend a lot of time putting
special devices in.
That is the tradeoff that you were suggesting before.
Everyone wants to go as fast as a Ferrari, but we all want to
have a Brinks truck safety at the same time, and from the
perspective of the individual consumer, we do not want to tell
that individual consumer that he or she cannot go very fast on
the Internet because we have added all kinds of burdens to the
use of the Internet in the name of security, so that is the
constant challenge we have, is to make those security features
as easy and as ubiquitous as possible, not so complicated
people are afraid of using it altogether, or get so frustrated
using it that they will not use it at all.
Senator Wyden. Would there be a world where there could be
more Government spending, and we could keep the Government
deficit down, and a world where there could be more security
and lots of convenience.
Mr. Schneier. With world peace.
Senator Wyden. Did you want to add anything else?
Mr. Schneier. Yes. Actually, I sort of agree with what Mr.
Harris said. There was a security disaster that happened a few
months ago, a serious one. My mother got a computer. Actually--
this is on the record, right?
Senator Wyden. She is listening.
[Laughter.]
Mr. Schneier. There are security practices that there is no
way in the world she could be expected to do, will do, will
understand doing. It is just too different, so we cannot expect
the average person to take this matter into their own hands,
because that is the average person.
So what other risk--I tried to put them in some kind of
order. You talk about passwords. Passwords are not in
themselves--some passwords are an entre into getting something
else, so I do not like saying that your password is a
vulnerability. Your password is the means by which other things
are gotten at, and it is stuff we talked at.
It is basically private information, whether it is personal
information about yourself, about your life, about things you
do, or health information, what your health is, and as we say
this, you can imagine who either in industry or friends and
colleagues or enemies might want this information, what they
might want to do with it. It is not just credit card numbers,
it is credentials.
Credit card numbers are a credential by which you buy
something, and it is sort of--under that umbrella of
credentials is not only credit card numbers, it is your
account, in one click. I buy stuff on Amazon with one click. I
do not type in my credit card number, and so that password I
use to get into Amazon is as valuable as my credit card numbers
as far as Amazon is concerned. Different accounts I have, maybe
on eBay or other, maybe--there are premium news services I
subscribe to. These are all credentials.
Political speech in the United States, that is not a
problem. In many countries, political speech is a big deal, and
needing to keep that private is a matter of life and death.
One of the major gay and lesbian Web sites regularly has on
their Web site people who would be put to death if the fact
that they were on the Web site became known, and there are
countries where that is illegal, punishable by death.
Going back to commerce, it is purchasing patterns. If you
remember, when Judge Bork was not confirmed for the Supreme
Court, one of the local D.C. papers pulled his videotape
rentals, records from whatever store he went to. The hope was
that they were exciting, but very quickly Congress passed a law
making those records private.
More generally, your purchasing patterns, whether they are
books, whether they are videos, your browsing patterns, what
Web sites you look at, how often you spend time there, this is
all information that if I told my mother that anybody could
find out that, telemarketers could learn and could exploit, she
would not be happy, because she expects, just as when she walks
into a bookstore and pays for her book with cash, she is
anonymous. She wants to be able to go to a Web site, and for
that to be anonymous, and that is what is expected.
Senator Wyden. In a recent news article, gentlemen,
entitled, ``Microsoft Outlook Vulnerable to New Attack,'' the
author makes a statement that there is an e-mail software flaw
that, in his words, could enable an attacker to take full
control of a victim's computer. In your view, is that an
overstatement? Is that far-fetched? Dr. Cerf.
Dr. Cerf. I am not going to be able to respond fully,
because I do not have all the details of that particular
vulnerability. Mr. Schneier might be able to do that. But on
the face of it, it is a pretty serious problem, and it is a
classic problem. The word complexity has been used more than
once in today's hearings, and by any reasonable stretch, that
software and the rest of the software ensemble that makes up
the e-mail system of the Internet is large and complex and is
subject to holes.
I will say that a responsible company would do two things
in providing new software for its customers. One thing, of
course, is to add new features and services that the customers
want. That is good business practice, but the second thing is
to make sure that vulnerabilities have not been opened up
either by simple bugs or by abuse. Sometimes you can make very
powerful software. Some things you can do amazing things with,
but that same tool could become an enormous vulnerability,
because someone could exploit it.
I think software companies have to pay attention to both
sides of that coin, and I do not believe in general they all
do.
Senator Wyden. Mr. Miller.
Mr. Miller. I think that is a gross overstatement, if not
an outright falsehood. Software companies, including Microsoft
and others, focus a great deal on their information security
because at the end of the day their customers would not
tolerate having to operate on the Internet if they believe
there are flaws that are constantly on the system that are not
being attended to.
However, I would agree with what both Dr. Cerf and Mr.
Schneier said. There is a very complex world, and in a sense
the information security challenge is, it is an arms race.
Every time a company comes up with a solution to a particular
flaw, or problem that is identified, then the bad guys go out
there and try to find other flaws, or other problems. It is not
a fixed situation, as it is in the physical world, where once
you have put your fence in and bought your dogs and electrified
your operation, you are pretty much comfortable with where you
are.
So it is a constant challenge. That is why companies like
Microsoft and others devote so many of the dollars resources to
fighting this challenge, and why they are going to have to be,
as Mr. Schneier said, eternally vigilant, otherwise we are
going to constantly have these problems.
Senator Wyden. I think that is a good point. I know there
is a hack attack Web site, and a variety of places where people
look constantly to do just exactly what you are talking about,
which is to move several steps ahead. I very much appreciate
that comment.
Mr. Schneier.
Mr. Schneier. I am a little less optimistic. Taking
Microsoft as an example, every time there is a new version of
Windows, they will tout how much they spent on security, how
much time, how much effort.
For Windows NT, the number was 500 man-years of testing,
which includes security, and this was the most secure operating
system ever, and every time the press asks me what I think of
that, and every time I say, this will be the least secure
operating system Microsoft has produced, and every time that
happens to be true. As it gets more complex, as it gets bigger
it gets less secure, and now they are touting the new version
of Windows, and all the security in there, and I believe we
will come back here in three years, and we will see it as the
least-secure operating system they have ever produced.
You mentioned the news report, and I actually do not know
which one you are talking about. If you actually follow this,
there are 50 to 60 new vulnerabilities discovered per week.
Some of them are minor and obscure, some of them are as bad as
the news headline you read indicates.
There are regularly vulnerabilities in that Microsoft
product that are that severe. There are regularly
vulnerabilities in other products that are that severe. This is
software This is the way software works. This is the way
software is developed. It is actually a very tough problem. As
a business, the way software is secured is the notion of, you
throw it out there, hackers find these vulnerabilities, they
issue them to the press, or maybe tell the vendor, and then the
vendor patches them.
Now, it is an interesting notion--and it used to sort of
work, it does not any more, and again it is because of
complexity. There might be a dozen or so patches that come out
every week in major software products, and maybe half a dozen
apply to you. This means every day you are expected to install
a patch in your network, and you are actually expected--many
news reports read on the order of, his patches were not up to
date, he deserved to get hacked, which to me is very much
blaming the victim. You know, she walked down that darkened
street. She deserved to get mugged.
I do not buy it any more. The Net is getting so complex
that this notion of patching is failing. We are losing ground,
and we see lots of hacks that happen based on vulnerabilities
that have been patched. There are a plethora of worms around
Christmastime that attack versions of Linux that should have
been patched. The FBI announced, I think in March, the East
European thieves who were breaking into Web sites stealing
credit card numbers, and extorting companies. Those are
vulnerabilities that should have been patched a year earlier.
One of the first big credit card thefts was CD Universe.
This was back when these things made the newspapers. That was a
vulnerability that was patched a year and a half ago. It was a
Microsoft vulnerability, and the company did not install the
patch.
A number of the Government break-ins are a patch that
should have been installed, so there are vulnerabilities that
are that serious, and they are out there, even if they are
patched. Companies are still vulnerable three years later.
Senator Wyden. That is a good response. I was struck again,
in reviewing some of the latest literature, that there does
seem to be some evidence that people actually target patches,
because they see that as a weak point. I appreciate your
comment.
Mr. Miller wants to respond.
Mr. Miller. One thing Mr. Schneier said earlier I do
disagree with slightly, although I do not think it undermines
the fundamental point all three of us are making, is that he
said something to the effect of by no metrics are we getting
more successful than we were, because if you look at all of
these numbers in absolute terms, the amount of dollars stolen
reported by the Computer Security Institute, the number of
attacks that take place, et cetera, they have all been going
up, they are trending up, and that is certainly accurate, but
what Mr. Schneier's comment does not take into account is the
denominator.
We are talking about a tremendously widened use of the
Internet, and so I do not know that it is true--in fact, it
strikes me probably is not true, that as a percentage of all
financial transactions on the Internet today, we are doing a
worse job than we were three years ago of preventing credit
card information from being stolen, for example, so it is a
little hard, I think, to say that under no metrics are we doing
better.
I am actually inclined to think that as a percentage,
because the Internet itself and all of these governmental uses
is expanding so dramatically, that we can get carried away by
saying, well, last year it was $300 million that was stolen
according to the Computer Security Institute, this year it is
$400 million.
First I guess that number is way low. That is the only
people reporting incidents. That probably does not take into
account the huge number of people who never report the
incidents that occur anyhow, but even given that, I think in
terms of as a percentage of overall transactions we probably
are actually doing better, not worse.
Again, it does not undermine the fundamental point that
information security needs to be a higher priority.
Senator Wyden. We are about to trigger a very vigorous
debate now.
Mr. Schneier. Actually, he is basically right.
Senator Wyden. Dr. Cerf wanted to comment also. I wanted to
recognize, in fact, before we have your response, that Senator
Nelson has joined us. He and I go back some 20 years, since our
days in the House, when I had a full head of hair and rugged
good looks.
We are so pleased that Senator Nelson has joined us on this
Committee. He has a long interest in technology and science
questions. Bill, would you like to make any comments?
STATEMENT OF HON. BILL NELSON,
U.S. SENATOR FROM FLORIDA
Senator Nelson. I should have been here two hours ago if
the airlines had done their job.
Senator Wyden. We can talk about the airline passenger bill
of rights another day.
Senator Nelson. As a result of my experience today.
Senator Wyden. We are glad you are here.
Dr. Cerf, on this point that we are exploring with respect
to Mr. Miller's last comment----
Dr. Cerf. Actually, I had two comments, maybe three now. As
of this morning, I had a full head of hair, but in the process
of fighting all the problems of computer security I no longer
do.
[Laughter.]
Dr. Cerf. Mr. Harris' comments draw to mind the phrase,
your mileage may vary, and the degree of security that we
achieve will probably vary from one company to another and one
installation to another. I am a kind of techno-optimist, to try
to counterbalance Mr. Schneier. However, his point is extremely
well-taken.
No matter how careful you are to fix problems in software,
and there always will be problems, getting people to implement
them is hard, and so one begins to wonder--and this is the
optimistic side of me. One wonders if we cannot do more to
automate the process of keeping the software up to date and
repaired.
It is not a trivial exercise, and we had at least one
embarrassing incident where a person other than Microsoft
registered the ability to digitally sign some code that looked
like it came from Microsoft. I do not think anything bad
actually came of it, but the potential was pretty severe.
So looking for ways to safely automate the process of
keeping software up to date would be a very attractive goal if
we could figure out how to do it.
Senator Wyden. That certainly is sensible from my vantage
point, because what it is about is ensuring that, at every
step, we are minimizing risk. What we are trying to do is say,
these are the tools that we have available to us at this time,
recognizing that it is not a risk-free world. It is not a risk-
free world online, and it is not a risk-free world offline. In
that sense, there is some common ground with the three of you.
Let me turn now to the business side specifically, because
I tried to talk initially about the typical consumer. When
determining whether or not to conduct a transaction online,
gentlemen, how can an e-consumer judge whether a business is
managing risk properly? As of today, Dr. Cerf, how does a
consumer make that assessment?
Dr. Cerf. I do not think there are any more or better
metrics for users today than there were pre-e-commerce. One
wonders--for example, I buy merchandise from some store, how do
I know that the store has tried to make sure the merchandise is
of good quality or not? Well, I do not have a good way to know
that, but I consult Consumers Review, and I consult my friends,
and I consult the business pages, I consult the Better Business
Bureau.
I suspect that tools of that ilk will be common for the e-
world, just as much as they have been helpful in the real
world, but I do not have a finger to point.
There is one interesting thing, however. Look at eBay, an
interesting lesson that we can learn from that. The providers
of goods, and the purchasers of those goods, are just ordinary
folks like you and me and they encompass the full range of our
human race, including people who are cheating and people who
are quite sincere. eBay has built in a feedback mechanism that
lets people know what others' experiences have been.
I am not sure that that can apply in all cases, but the
notion of consumer feedback, visible to other consumers, is
pretty fascinating to me. I think there is one company called
Bizrate that is invited by some companies to interrogate users
after they have completed the transaction, or a consumer, to
find out whether the consumer was satisfied, and if not, why
not, and that information is reported back to the company. It
might be reported by Bizrate back to other consumers.
Senator Wyden. In effect, it puts the company on its toes.
Dr. Cerf. Exactly.
Senator Wyden. Mr. Miller.
Mr. Miller. We are very fortunate in the United States in
these early days of the Internet that financial intermediaries
are actually assuming a tremendous amount of the financial
risk, and by the way, this is not true outside much of the
United States, but if you, as a consumer, go online and order
something online using your credit card, and for some reason
the process falls apart, you do not get what you wanted, or you
cannot settle, usually the credit card company will have your
maximum liability at $50, or in some cases liability at zero,
so in a sense the risk has been transferred there by the credit
card companies to themselves in order to encourage you to go
online, and even eBay and some of these other online auction
services are now going in that direction.
They in a sense escrow the money for you at certain levels.
I believe it is $250, so should that product you were expecting
not be what was advertised, instead of a Mickey Mantle
baseball, that it is just a baseball, that they bought at
Rawlings that day, that your check which you sent for $5,000
does not get forwarded on to the person who sold you this under
fraudulent circumstances, and so we are very fortunate to have
that kind of protection for people in the online world.
Nevertheless, even with those protections, there still is
fraud on the Internet, as Dr. Cerf said. There still are
problems on the Internet, and I think what we need to focus on
here, Mr. Chairman, is much more vigorous enforcement by our
law enforcement agencies, the Federal Trade Commission, State
Attorneys General, and I have already seen some references by
the new Chairman of the FTC, who I am supposed to be meeting
with later this afternoon, that that is one of his priorities.
Third, I very much think the other point Dr. Cerf made
about these ratings systems are very, very important. If you go
on to some of the very popular Web sites like Yahoo, and they
will refer you to a list of merchants from whom you can buy
certain electronic products, or CDs, whatever it is online,
they have a very sophisticated rating system that they monitor
very carefully, because they feel they are tied to that rating
system.
Now, you as a consumer may choose to ignore that rating
system that you do not care, you just want the lowest price,
and even though Yahoo has not given that any rating based on
feedback of its customers, you may choose to buy anyhow, but at
least there is an attempt on the Internet to constantly create
that loop, and one of the beauties of the Internet is that you
as a consumer can instantly change, if you are unhappy with
Barnes&Noble.com you can switch to Amazon.com in a second. You
do not have to worry about whether one is 5 miles away, as
opposed to one being 50 miles away. Distance is now gone on the
Internet, and one is just as close as another, and so that is
another incentive that acts as a check on consumer problems.
But again, I do not think we should pretend there is no
consumer fraud. What we need to make sure is, the Government
has the appropriate authority and the appropriate resources to
go after those cases of fraud.
Senator Wyden. Mr. Schneier.
Mr. Schneier. What I first wrote down when you asked the
question is, he is screwed. Technically, that is true. There is
no technical way the consumer can figure out whether this
particular vendor is reputable, will protect their privacy,
will sell them good products, will uphold their end of the
contract. The mechanisms people use are the same as they use in
the real world. If you listen to what Mr. Miller said, it was
actually very interesting. The credit card company is taking
the liability, and that liability transfer acts as a substitute
for good security.
If the credit card company takes liability, I do not care
if the vendor behaves rationally. I could buy something online,
they do not deliver it, I call my credit card company up, and
they reverse the charge. I mean, I have inconvenience, but
there is an example of a risk management way of solving a
security problem that did not involve any technology, and we do
that in the real world all the time, and we are going to do
that online.
Dr. Cerf talked about--the name of the thing he talked
about is reputation. We use reputation a lot when we make
buying decisions. We make all sorts of social decisions. When I
walk into a restaurant I actually do not check the health
certificate. I assume that it is going to be a good restaurant.
Maybe I hear from friends. The reputation of the restaurant
will precede it, and occasionally I get it wrong. I have gotten
sick from meals. But the social reputation is extremely
important.
This is slightly different on the Net, because the Net is
global, and there are more companies out there. Only the
biggest brands have their reputation. There are millions of
little brands, but some of them are aggregating into larger--I
mean, you mentioned the Yahoo brands. Amazon has a similar
program, where individual companies go under their rubric and
can be an Amazon trusted seller. I forget the name it has.
So these are the sorts of methodologies. One of the
differences is, in the real world, when I walk into a store,
let us say I walk into a McDonald's, I know it is a McDonald's.
I see the signs. It looks like a McDonald's. On the Net, it is
much easier to forge trade dress.
You can set up a Web site, I can set up a Web site that
looks exactly like eBay. It is a perfect replication, and you
could come to it, and you would not know. I would be stealing,
basically, all of eBay's reputation in an effort to defraud.
This has happened. It is not common. I suspect it will get more
common, because you do not have the physicality you have in the
real world.
So last, I would definitely want to echo what Mr. Miller
said on enforcement. To me, this is important. I talk about
prevention, detection, and response. The feedback of the
mechanism for all of that is deterrence.
One of the best things to me about the year 2000 are in
this country the very high-profile arrests and convictions. The
Net is still very much a lawless society that you can hack with
impunity. The odds of you getting caught are infinitesimal, and
to change it, we need to bring the rule of law to the Net, and
the way you do that is, after detection and response, after the
alarm goes off, forensics, prosecution, conviction, and all of
that will give us a safer Net.
We have had problems over the years. we have had
overreaction. We have had punishments that do not fit crimes,
but to me enforcement is extremely important in giving us a
safe world. That is why I am safe when I walk around the
streets, not because I am wearing body armor, and not because I
have a bodyguard, and not even because I have an alarm, but
because I know that the police are out there, and the police
have taken crime off the streets.
Dr. Cerf. There are a couple of observations. One is, the
antidote for bad information in the network environment is more
information, and when you discover a hoax or a fraud, there are
Web sites out there that make--I do not know that they make a
business, but they make a practice of supplying information
about those hoaxes and frauds, and sophisticated users who know
about that can go to them and check. I imagine any number of
people in this room have received the infamous variations on
Notes from Nigeria, describing the $25.6 million which is left
in some bank account which is being transferred out of the
country.
Mr. Schneier. You know that fraud is a few hundred years
old. It is called Spanish prisoner. There is nothing new on the
Net.
Dr. Cerf. In any case, the knowledge that that is a hoax is
a helpful thing.
The other thing I wanted to raise a little caution about,
the enforcement idea. It is possible to go overboard and try to
do the impossible. At one point, a person whose name I will not
mention in a fairly public setting wanted me to find a way to
ring a bell on the routers every time a packet carrying
copyrighted material passed through the router.
I had two reactions to that. One is, the bell might be
ringing incessantly and you would not know what to do about it,
but--so much for Mr. Schneier's alarm, but the second point is
that you might not even know if something was copyright,
because when you are looking at the packet level you might see
just the words, ``call me Ish,'' and the next packet would say,
``mael,'' and if you could put them--you might know that is the
beginning of Moby Dick, but even if you figured that out down
at the packet level, you would not know whether the party that
was sending the object had the right to do it or not, and
certainly when you are moving trillions of packets through the
network you do not have time to stop, wait just a moment, I
have to do a validity check to find out who owns the copyright
on Moby Dick.
So we have to be very cautious now about the notion of
enforcement in the presence of such rapidly growing huge scale,
and so our mechanisms cannot be to capture all of the
information there is to know about everything in the network
and record it as an audit trail in case something bad happens.
I think we need to do more or less what I believe Mr. Schneier
was suggesting, is find a way to alarm conditions that are
visibly bad, or in fact we have to wait until somebody says,
there is fraud out there, or I was treated improperly, and that
is the alarm, and then we try to go into action.
Senator Wyden. Let me recognize Senator Nelson.
Senator Nelson. Mr. Chairman, in his statement Dr. Cerf has
said that tools for combatting criminal use of online systems
may erode privacy in severe ways during the process of trying
to assist law enforcement. Have you already discussed his
examples of some of those tools?
Senator Wyden. Not directly, Senator Nelson. I think it is
a very good question. We have sort of tangentially talked about
the relationship of privacy and security, but Dr. Cerf, I think
Senator Nelson's point is a very good one. Do you want to add
to that?
Dr. Cerf. Indeed it is, Senator Nelson. It is something
that all of us worry about. In our zeal to capture the
criminal, we may put everyone in jail in some sense by
attempting to lock up our society. I do not think anyone in
this country wants that.
We need, though, to have tools available. It is just that
they have to be applied in a way that was mentioned earlier
under the rule of law, under appropriate circumstances, with
the appropriate constraints, and perhaps even more important
for our system of justice, the data collected has to be
collected in a way that maintains the chain of evidence, and
that is a delicate and not so easy matter to preserve, so there
is, I think, a great deal of care that has to be taken in the
exercise of those tools, but we need them.
Senator Nelson. Can you give us an example of some of those
counterproductive tools?
Dr. Cerf. One of the most visible and perhaps even
notorious ones came out of the FBI. It was once called
Carnivore. It is called DCS-1000, and I happen to believe that,
properly used, that is a very powerful and suitable tool. In
fact, it is under better control technically than the classical
piece of equipment that we all use in the networking world
called a protocol analyzer, which is something that simply
swallows every bit that flies across the circuit and analyzes
it to tell you hat protocols are in use and what packet
contents there are.
Those tools are regularly in use for debugging problems,
and you need them for that, but wholesale application of such a
tool without the kinds of constraints that I understand have
been applied to the FBI system would be a terrible invasion of
privacy.
Senator Nelson. So would you, then, suggest that aside from
law enforcement agencies in the commercial world, that we not
employ those tools?
Dr. Cerf. No, I would not say we should not employ them. I
would say that they should be employed, but only under proper
circumstances, under the authority of a court, for example, in
the same way that we would do for the older system of wire taps
in the telephone system.
Senator Nelson. In your opinion, do the criminal laws need
revision to give law enforcement updated tools to go after this
new type of high tech criminal?
Dr. Cerf. I have to plead incompetence, Senator. I do not
know the answer to that, and I do not think it would be wise
for me to answer it and give you bad data. You would get an
opinion, but it would not be a very well-informed one. Perhaps
one of my colleagues would be better prepared.
Mr. Miller. Senator, there is actually a matter that
addresses directly Dr. Cerf's point that may come before the
Senate very soon, and that is the Council of Europe Cyber Crime
Convention, which you may have heard about. About two years
ago, the Council of Europe, of which the U.S. has an observer
role, decided to achieve a good purpose, we believe, which is
to try to develop a convention that would be adopted throughout
the world for basic criminal laws to enable there to be
existing laws against various cyber crimes.
As we know, in the Philippines, at the time that the
ILOVEYOU virus as initiated, the Philippines did not have on
its books at that time laws that would enable the Philippines
Government to prosecute the individuals when they tracked them
down, and they were able to track them down, but they could not
do anything with them. The Philippines, to its credit, has
updated its laws.
The problem with the cyber crime convention, which has now
been virtually finalized, it was developed primarily by law
enforcement, with very little input, very untransparent system,
very little input by the privacy community, very little input
by the consumer community, very little input by the business
community and, as a result, while that treaty has some
excellent provisions in it, and we still think it is a very
good idea, there are many privacy groups, virtually all the
privacy groups I am aware of, and some business groups, and
some consumer groups, which are uncomfortable with that
convention.
Again, it is not to say it is a bad document, but had the
Council of Europe worked a little more assiduously to be a
little more inclusive of the stakeholders, they probably could
have gotten virtually, if not unanimous support for the
convention, which would have then been brought to you as
Members of the Senate, and your role as ratifiers of treaties,
and to other bodies, legislatures around the world, a document
that could have become a standard.
Because I think the answer to your last question is, well,
we do not believe the U.S. laws by and large need to be
changed. There are a lot of other countries around the world
where there are huge holes in the abilities of those countries
to prosecute cyber criminals, and most of the work to be done
is not necessarily in the U.S. Code, or in State laws. Most of
the work to be done is around the world.
Dr. Cerf. Two very quick points. One of them is that the
cyber crime legislation appears to run afoul of cyber privacy
legislation in Europe, and I do not know that they have
resolved that yet.
The second observation goes with something Harris was just
saying. Everything that you do, every law you pass associated
with cyber-related matters plainly has jurisdiction in the
continental United States and Hawaii and other protectorates,
but it does not have jurisdiction in other countries. For this
to work on a global scale, there will have to be some degree of
collaboration and work to make the laws at the national
boundary somehow be at least compatible so that law enforcement
can work across international boundaries.
This is not new. It is just, perhaps, made more visible,
more highlighted by the global nature of the Internet.
Mr. Schneier. Can I address that question?
Senator Wyden. Absolutely.
Mr. Schneier. Fundamentally, the tools we are talking
about, the tools are to try to balance security versus liberty,
and a lot of these tools that come in question are tools that
basically take the approach of very broad surveillance in the
event at some future time that becomes relevant, so on the Net
it might be sucking down every packet looking for copyright
violations, or photographing every person going into the Super
Bowl in case they had committed a crime.
In the real world there are controls. I mean, I do not
believe police are allowed to stop every car and run the
license plates. There needs to be some probable cause, so these
tools that are potentially dangerous are the ones that do not
make the minimization efforts that violate everybody's liberty
in an effort to catch a few criminals.
Now, there are countries that do this. This is the rule of
law in many countries, and we get to decide what our balance
is. What is due process? When is search allowed? When is
seizure allowed? This august city has spent 200 years figuring
out how this works, and my hope is you guys continue to do so,
because they are not easy questions, but that is where all of
these tools go in.
To your question about laws, I actually do not believe we
need new laws. We need old laws applied cleanly to the new
environment, because the crimes are the same, the people are
the same, the environment is the same. The techniques are
different, but you do not want the same crime to be suddenly
much worse or much better if a computer is used. Fraud is
fraud, theft is theft, and just because the tool is different
does not mean the ramifications should change, and I made this
one before you arrived.
We are coming to an age where technology is changing so
fast that we cannot make laws that only apply to a certain
technology. We are going to forever be playing catch-up. The
criminals will work faster than Washington, so we need laws
that will stay ahead.
Senator Nelson. Generally, I would agree with you, but in
the late seventies that was not the case. When the computer was
just coming to be ubiquitous, the prosecutors really did not
have the tools at that time. I say this simply from my own
experience of having the first computer crimes law in the
country in 1978, in the State of Florida, and then having to
come up here after the election of 1978. It took me a few
years, but we finally got the computer crimes law into the
Federal code.
But, I would probably agree with you on your assessment now
that there is enough basic criminal law that you can apply to
these new high tech crimes.
Mr. Chairman, thank you very much for having a very
stimulating discussion.
Senator Wyden. Senator Nelson, thank you, and again we are
so pleased you are going to be on this Subcommittee.
Gentlemen, just a few other questions. One that I want to
examine is the impact of technological developments on security
issues. Let us start here with the area of always-on broadband
connectivity. I am interested in your thoughts about whether
this is going to cause additional security problems. Again, I
think part of this whole debate also gets you into Internet-
enabled phones and other wireless Internet devices.
Let us start with some of the technological developments
such as always-on connectivity, and the new phones. Dr. Cerf.
Dr. Cerf. Well, one of the things we have already seen is
the invention of something that was not part of the original
Internet architecture, a thing called a ``firewall.'' It is
intended to shield things that are on the inside from the rest
of the unwashed public Internet, and for many years, at least
in Internet terms, firewalls were typically applied to the host
computers of the network, the ones that supplied the services,
but now we are starting to find that individuals with their
personal computers that are on all the time connected by
digital subscriber loops, or cable modems or the like, need to
have firewalls to protect that computer, or maybe an ensemble
of computers that happen to be in use at home, or in a small
office, from the same kinds of attacks that the host computers
were subject to in the past.
But what has happened is that as the functionality
available to the consumer increases, then the risk that it will
be damaged or interfered with or modified goes up. There is
more risk associated with the more functional capability that
we now have in these small laptops and personal digital
assistants.
I do not know that we need to have firewalls built into our
cell phones exactly, but many of us who look at these small
devices believe that they need to be created and programmed
with the idea in mind that they, too, might be the target of
abuse as opposed to simply being a consumer device that is at
the edge and no one would ever look at it, so firewalls, and
integration of firewall technology into these devices I think
is going to be much more common.
Senator Wyden. Mr. Miller.
Mr. Miller. What he said.
Senator Wyden. Mr. Schneier.
Mr. Schneier. My rule of thumb is, if it is a new thing, it
increases in security. Always-on connections are less secure
than dial-up connections, so when we are talking about always
on, or Napster, and other pier to pier, when you are talking
about Internet telephony, all of this functionality increases
the complexity and will increase in security, and that is just
the nature of the beast, and the question is, how do we deal
with this?
In some ways we cannot. A lot of these solutions, and these
are denial of service attacks, problems, these are the viruses
and worms problems, a lot of these solutions are sort of, the
draining the swamp variety. We are going to fix the problem by
fixing all of these--how many hosts were there? You gave a
number, so many millions of hosts.
The problem is, the swampland is being created so fast that
we cannot keep up with it. My mother got a computer, and now
all of her friends have one. I will put up a personal firewall.
I cannot get her to.
So yes, things like always-on connections do increase the
risk, and they increase the risks in areas you do not realize.
If you remember last February, February of 2000, the big denial
of service hacks, the first ones that made the newspaper
against CNN and eBay and Amazon and a bunch of other Web sites,
what we learned very graphically is that if you are the
security manager at eBay, your security depends on the security
of the University of California at Santa Barbara.
Because it is one big Net, your security depends on other
people you cannot control. Right now, the security of your
computers, the Senate computers, depends on all of those
always-on connections. It depends on people like my mother, and
that is pretty scary.
Dr. Cerf. In fact, Bruce, I hope we can make it not the
case that we have to rely on everyone, those billions, some
day, of people on the Net, and we have to do that in several
different ways. We have to make it easier for people to have
protection. That means building it in as not an afterthought or
an add-on, but as part of the design.
An example that you brought up, Bruce, was what is called
peer-to-peer exchanges. Napster is an example of that, and
Instant Messaging is another example. People like to share
things with each other, and the act of sharing means you have
to be open to exchange information. You have to allow another
party sort of into your inner sanctum.
It would be nice if we had good tools for authenticating
those other parties before we opened the door and allowed the
peer-to-peer exchanges to happen. We have got pretty good
assurance that the party at the other end is the one that we
want, and this lets me bring up something that has caused me
great difficulty in legislation.
There was a spate of digital signature acts passed both at
the State and at the Federal level, and on the one side it is
wonderful, because it means people are waking up to the need
for this kind of legislation to make digital signatures a real
thing in the eyes of the law.
The dismay comes from what appears to be an absence of any
standards as to how that digital signature was bound to any
individual. What identification did I ask for before I
generated the digital signature certificate and associated it
with that person, and so far as I can tell, either you have no
common standards at all, and sometimes there is nothing even
said about validation, and so someone could show up and hand me
a thing that is digitally signed, and I have not the foggiest
idea whether I can rely on it to mean anything.
So as a kind of small flag-waving exercise, it is very
important, if we are going to pass legislation like that, to
try to take care of all aspects of it, including the part that
says, and by the way, here is how we will rate the quality of
the validation.
Senator Wyden. As the Democratic sponsor of the digital
signatures law, I both agree in part and disagree as well.
Certainly, we left some of the details to be filled in. We did
it largely because technology companies, consumers, and others
said, let us make sure that there is a wide enough berth so as
to not freeze innovation. I think this is going to be one of
the biggest challenges, as we look at these legislative issues
down the road.
We are trying to be very sensitive to your point about
doing no harm. I think you will hear that from one legislator
after another, Democratic and Republican when you make that a
particular focus. In this case, the consumers wanted the ease
of a digital John Hancock, and the insurance companies and
financial services company wanted to simplify their records.
There was a lot of interest in this issue. There was also a
feeling that, (a) even if you left some of the details that you
are discussing blank, you would not do any harm, and (b) you
would have a chance to flesh it out. What you have told us is
that you may end up doing some harm as well with people not
being sensitive to all of the ramifications. Suffice it to say,
by the time you get back home my staff will be on the phone to
you about the digital signatures law.
Mr. Schneier.
Mr. Schneier. A couple of points. The idea about
authentication brings up some of the main issues. If we decide
that authentication is important, we give up anonymity, which
is a right that our country believes in, so every time we make
decisions we have to balance them with what it is we are trying
to do.
This is back to my point that we should try to be
technologically variant. We should try to figure out what it is
we want, and then apply it to the technology.
You asked about the security of computer telephony. I did
not bring it with me, but actually I finished an essay on
computer telephony and security. I would be happy to send it to
you and, since it came up, I also have any number of essays on
digital signatures and authentifications, and the good, bad,
and the ugly, so I am willing to inundate you or the record, if
it is possible, with paper.
Senator Wyden. We would very much like both your general
essays and the ones on digital signatures.
Senator Wyden. Mr. Miller, just one point, because you
touched on this issue earlier--I gather your companies are
going to put much more emphasis on security issues in the
future. I saw one study in preparing for the hearing that
indicated that even though we are going to see $65 billion this
year in online purchases, only 4/10ths of 1 percent of a
company's revenue is now dedicated to information security. To
your credit, you have indicated several times today that this
is going to be an area that your members and businesses
generally try to turn around. I think it is clear that is
important.
Mr. Miller. Well, again, Mr. Chairman, that is a very
important point, but it is not just the Internet companies, it
is the users of the Internet, and that is where we see a
tremendous variation. We see industries like the financial
services industry, which of course is extremely sensitive to
security and reliability, and is heavily regulated by
Government regulators, which devotes upwards of 10 percent of
its IT budget each year to security, so whenever they are
spending $1,000 on computers, whether it is hardware, software,
whatever it is, $100 of that is going to be related to
security, but there are plenty of other industries that are
spending less than 1 percent, and so they are just not focusing
so much on it. They have not bought into it.
A lot of it has to do with best practices in industry, a
lot of it has to do with the insurance industry, which Mr.
Schneier and I have raised, but a lot of it just has to do with
volume, Mr. Chairman.
As you know, it was in the lead of Y2K, and back in 1995,
we worked with you very closely, we held many Y2K hearings, and
meetings in very small phone booths. We just could not get the
executive level buy-in that we needed. We could not get the
CEO's. We could not get Governors. We could not get mayors, we
could not get the top level of Government, and through people
like you speaking out, political leaders and business leaders,
we eventually did get that kind of level of buy-in.
We need to get the same thing here. Again, it is not
enough. It is the CEO's of IT companies. It has to be the CEO's
of retail stores, the CEO's of manufacturing firms, the CEO's
of pharmaceutical firms, the CEO's of energy firms saying
information security is important, and I think that that again
is going to be reflected even upward to the President of the
United States.
And I think President Bush, like his predecessor, has put a
lot of attention on this. We are seeing a new stage in
development under President Bush, where he is trying to pull
this together in a much more coordinated fashion, and I am
hoping that will send the right signal to the CEO's and to the
political leaders around the country.
Senator Wyden. Before we wrap up, gentlemen, I want to
recognize in the audience--I think they are still here--the two
representatives of the Tunisian Digital Certification Agency.
Where are they?
[A show of hands.]
Senator Wyden. We are glad you are here, and look forward
very much to working with your Government on these issues that
are worldwide in nature.
Gentlemen, this has been an excellent panel. It is exactly
what I hoped to have in terms of our first hearing of this
Subcommittee, and suffice it to say, we have a lot to do.
I deliberately steered clear of some of the articles and
the quotes of a pretty alarming nature that have been written
on this subject. There are various people who are talking about
Internet Chernobyls, claiming that we are living right on the
edge and the like. I think a point that Mr. Schneier has made
both today and in his writing is that people talk very often
about those problems offline, as well. We are not seeing mass
murderers every single day, fortunately, offline, because there
are precautions being taken in that regard. All three of you
have made it clear today that you want to be part of doing that
online as well.
This is heavy lifting. It is, as you all have said, a
tremendous challenge, because we all love the vibrant, open,
convenient nature of the Internet. The ability to get all of
this information so quickly, and to do what would literally
have taken weeks in the past, is an exhilarating, exciting
aspect of our lives today. At the same time, we all want the
maximum amount of security.
I have found this to be very helpful. You have given us
excellent testimony. We are going to keep the hearing record
open for two weeks. I think some of my colleagues may want to
ask you questions in writing. Please know that as someone who
has really tried to focus on these issues here in the U.S.
Senate, I think it has been very, very helpful to be able to
have this at a time when clearly the public and private sector
need to be more involved, and Mr. Miller has indicated that
that is going to be the case. With your leadership, Dr. Cerf
and Mr. Schneier, in terms of keeping us up on the state-of-
the-art, so to speak, I think that Congress is going to be
anxious to work with the private sector to address these
issues. Unless you all have anything further, we will adjourn
at this time.
Gentlemen, anything further?
Dr. Cerf. Nothing from me, Mr. Chairman.
Senator Wyden. The Subcommittee is adjourned.
[Whereupon, at 2:50 p.m., the Subcommittee adjourned.]
A P P E N D I X
Prepared Statement of Dave McCurdy, President,
Electronic Industries Alliance
Chairman Wyden, Senator Allen, members of the Subcommittee on
Science, Technology and Space, I appreciate the opportunity to submit
testimony today on behalf of the Electronic Industries Alliance. I
thank the Chairman for holding today's hearing on Internet security.
There are few issues that are of more importance to the 2,300 member
companies of EIA.
The Internet has become indispensable to the way we do business.
The Internet empowers organizations to conduct e-commerce, provide
better customer service, collaborate with partners, reduce
communications costs, improve internal communication, and access
information quickly.
In the rush to benefit from the Internet, organizations often
overlook significant risks. For example, the engineering practices and
technology used by many system providers do not produce systems that
are immune to attack. Most network and system operators do not have the
resources and technical expertise to defend attacks and minimize
damage. Policy and law in cyberspace lag behind the pace of change. And
lastly, security practices are underdeveloped, poorly disseminated and
erratically followed.
For the first time, intruders are developing techniques to harness
the power of hundreds of thousands of vulnerable systems on the
Internet. Using what are called distributed-system attack tools,
intruders can involve a large number of sites simultaneously, focusing
all of them to attack one or more victim hosts or networks. The
sophisticated developers of intruder programs package their tools into
user-friendly forms and make them widely available. As a result, even
unsophisticated users can use them. Subsequently, serious attackers
have a pool of technology they can use and mature to launch damaging
attacks and to effectively disguise the source of their activities.
Attack technology is developing in an open source environment and
is evolving rapidly. Technology experts and users are improving their
ability to react to emerging problems, but we are behind. Significant
damage to our systems and infrastructure can occur before effective
defenses can be implemented. As long as our strategies are reactionary,
this trend will worsen.
Our dependence on the Internet and the increased prevalence of
attacks have created a true challenge for policymakers. As policymakers
contemplate how to best protect the Internet and try to ascertain the
proper role of government on the Internet, the reality remains: as a
rule, technology has exponentially outpaced the establishment of sound
policy.
As a result, it is incumbent upon the business community to take
the lead in providing answers to Internet security. Similar to the Y2K
crisis, only when our corporate boardrooms recognize their fiduciary
responsibility to provide secure systems that Internet security will be
addressed adequately.
Relatedly, the Electronics Industry Alliance recently formed the
Internet Security Alliance (ISA) in conjunction with Carnegie Mellon
University's CERT Coordination Center and a cross-sector of private
companies including NASDAQ, Mellon Financial and AIG. The Alliance is
an industry-led, global, cross-sector network focused on providing
solutions to the challenges of the Internet economy. The mission of ISA
is to bring Internet security to the forefront in corporate boardrooms
worldwide.
Current Internet Security Policy
The control of U.S. cybercrime/cybersecurity policy has
traditionally been viewed as an issue for the law enforcement and
national defense communities--not an economic policy issue. Solutions
have been expressed in terms of criminal sanctions, counter-terrorism
efforts and law enforcement training rather than the prevention managed
by the users of the information assets, like businesses and
individuals.
However, law enforcement and national security communities do not
have all the answers. In addition to leadership from private industry,
the following goals need to be met in any national policy:
A National strategy from the President after consultation
with leadership of constituencies for coordinated responses to
threats and attacks, like those developed for Y2K including:
Establishment of empowered organizations for sharing
information about cyber-threats, attacks and remedies such
as the Internet Security Alliance, the sectoral ISACs, and
similar government and international groups
Incentives for industrial and government institutions to
adopt top-down policies of institutional security--including
information technology/network security--that include:
Clear designation of responsibility/delegation from CEO
Creation of risk management plan
Investments in employee enculturation and user education
Establishment of best practices regarding high value/high
risk environments in information technology, for example:
Establishment of organizational CIO
Employee education on IT security practices
Deployment of best practices technologies
Firewalls
Antiviral software
PKI authentication/encryption for e-mail/Internet
In government, necessary training and funding for these
types of programs.
What we need to avoid in establishing a national policy:
New technology-specific criminal statutes that will result in the
hobbling of vendor industries and slowing of deployment of leading edge
technologies to the mass of internet users.
Where can the private sector help?
Organizations must search for an industry-led, global, cross-sector
network focused on providing solutions to the challenges of the
Internet Economy. We are at risk, and the business community must make
it a leadership priority. The following are examples of what the
private sector should be doing:
Information Sharing
Maintaining an adequate level of security in this dynamic
environment is a challenge, especially with new vulnerabilities
being discovered daily and attack technology evolving rapidly
in an open-source environment. To help organizations stay
current with vulnerabilities and emerging threats the private
sector must concentrate on providing the following:
Vulnerability catalog: a complete record of past
vulnerability reports. New entries would be added to the
catalog as they were reported.
Technical threat alerts: in the form of ``special
communications'' provide early warning of newly discovered
security threats and are updated as analysis activities
uncover additional information. Ranging from alerts on
newly discovered packages of malicious code, such as
viruses and trojan horses, to in-depth analysis reports of
attack methods and tools, these reports would help
organizations defend against new threats and associated
attack technology.
Member information exchange: augmenting the basic services
listed above, an organization would have to develop an
automated information sharing mechanism that allows
business and individuals to anonymously report
vulnerability, threat, and other security information that
they are willing to share with other secure channels.
Threat analysis reports: today the great majority of
Internet security incidents are conducted by unknown
perpetrators who act with unknown motivations to achieve
unknown goals. Managing security risks in the long-term
will require a better understanding of the perpetrators and
the economic, political and social issues that drive them.
Best Practices/Standards
Effective management of information security risks requires
that organizations adopt a wide range of security practices.
From basic physical security controls that prevent unauthorized
access to computing hardware, to user-focused practices on
password selection, to highly-detailed system administration
practices focused on configuration and vulnerability
management, these practices help organizations reduce their
vulnerability to attacks from both outsiders and insiders.
Practices catalog: beginning with existing practice
collections and standards, and in collaboration with any
participating companies an organization must develop a
catalog of practices that span the full range of activities
that must be addressed when developing an effective risk
management program. The catalog will contain high-level
descriptions of the required practices and should be made
publicly available
Security Tools
While a sizeable commercial marketplace has developed for
hardware and software tools that can be used to enhance an
organization's security and a variety of tools can now be
purchased, comprehensive tool sets are lacking. To fill the
gaps, organizations build their own or find and evaluate public
domain tools--a time consuming and expensive activity. An
organization would have to establish a tools exchange: a
restricted access repository where network administrators only
can exchange special purpose tools they have created as well as
information about, and evaluation of, public domain tools
available over the Internet.
Policy Development
While there are many things an organization can do to enhance
its security, some issues require broad action. For example,
overall security could be improved through increased
information sharing between industry and government, but FOIA
(Freedom Of Information Act) regulations deter companies from
sharing sensitive information with the government. Other issues
like privacy and the proposed HIPPA legislation could also
affect network security. An organization needs to identify
these overarching issues and work with the appropriate industry
and government organizations to advocate policy that
effectively addresses the issues.
Other Critical Areas
The current state of Internet security is the result of many
additional factors, such as the ones listed below. A change in any one
of these can change the level of Internet security and survivability.
Enhanced incident response capabilities--The incident
response community has handled most incidents well, but is now
being strained beyond its capacity. In the future, we can
expect to see multiple broad-based attacks launched at the
Internet at the same time. With its limited resources, the
response community will fragment, dividing its attention across
the problems, thereby slowing progress on each incident.
The number of directly connected homes, schools, libraries
and other venues without trained system administration and
security staff is rapidly increasing. These ``always-on,
rarely-protected'' systems allow attackers to continue to add
new systems to their arsenal of captured weapons.
The problem is the fact that the demand for skilled system
administrators far exceeds the supply.
Internet sites have become so interconnected and intruder
tools so effective that the security of any site depends, in
part, on the security of all other sites on the Internet.
The difficulty of criminal investigation of cybercrime
coupled with the complexity of international law mean that
successful apprehension and prosecution of computer criminals
is unlikely, and thus little deterrent value is realized.
As we face the complex and rapidly changing world of the
Internet, comprehensive solutions are lacking. There is
increased reliance on ``silver bullet'' solutions, such as
firewalls and encryption. The organizations that have applied a
``silver bullet'' are lulled into a false sense of security and
become less vigilant. Solutions must be combined, and the
security situation must be constantly monitored as technology
changes and new exploitation techniques are discovered.
There is little evidence of improvement in the security
features of most products. Developers are not devoting
sufficient effort to apply lessons learned about the sources of
vulnerabilities. Until their customers demand products that are
more secure, the situation is unlikely to change.
Engineering for ease of use is not being matched by
engineering for ease of secure administration. Today's software
products, workstations, and personal computers bring the power
of the computer to increasing numbers of people who use that
power to perform their work more efficiently and effectively.
Products are so easy to use that people with little technical
knowledge or skill can install and operate them on their
desktop computers. Unfortunately, it is difficult to configure
and operate many of these products securely. This gap leads to
increasing numbers of vulnerable systems.
Summary
While it is important to react to crisis situations when they
occur, it is just as important to recognize that information assurance
is a long-term problem. The Internet and other forms of communication
systems will continue to grow and interconnect.
More and more people and organizations will conduct business
and become otherwise dependent on these networks.
More of these organizations and individuals will lack the
detailed technical knowledge and skill that is required to
effectively protect systems today.
More attackers will look for ways to take advantage of the
assets of others or to cause disruption and damage for personal
or political gain.
The network and computer technology will evolve and the
attack technology will evolve along with it.
Many information assurance solutions that work today will
not work tomorrow.
Managing the risks that come from this expanded use and dependence
on information technology requires an evolving strategy that stays
abreast of changes in technology, changes in the ways we use the
technology, and changes in the way people attack us through our systems
and networks. To move forward, we will need to make improvements to
existing capabilities as well as fundamental changes to the way
technology is developed, packaged, and used.
Attacks will happen--they will become more sophisticated as our
technology becomes more sophisticated. The best defense we can take as
a nation is to ensure our networks and systems are properly fortified
against them.
______
Article from Newsweek Business Information, Inc., Newsbytes
Brian McWilliams, July 21, 2001
A glitch in an ActiveX control shipped with Microsoft's Outlook e-
mail program could enable an attacker to take full control of a
victim's computer, Microsoft confirmed today.
The flaw, which affects all versions of Outlook, including Outlook
2002, which Microsoft bundles with its new Office XP suite, lies in an
ActiveX program named ``Microsoft Outlook View Control,'' according to
Scott Culp, head of Microsoft's security response center.
By design, the affected ActiveX control allows Web pages to
passively display to users the contents of their Outlook inbox. But a
bug in the program could enable a specially designed Web page or HTML-
based e-mail to run malicious programs on the victim's computer without
permission.
The flaw, which was reported to the company Monday by security
researcher Georgi Guninski, also could allow an attacker to read,
modify, or delete e-mail in the victim's Outlook inbox, said Culp.
Guninski published an advisory on the bug today at his Web site
titled ``The more money I give to Microsoft, the more vulnerable my
Windows computers are.'' Guninski also posted a harmless demonstration
of the vulnerability, including source code.
Culp said Microsoft intends to release a bulletin about the flaw
later today, and will follow with a patch as soon as possible. To
protect against attacks in the meantime, the company advises Outlook
users to disable ActiveX in the Internet Zone of Internet Explorer.
Outlook users who have applied the Outlook Security Update are not
vulnerable to the e-mail based vector of attack, nor are Outlook 2002
users. But the flawed ActiveX control could still expose them to Web-
based exploits, according to Culp.
While Guninski has uncovered dozens of security vulnerabilities in
Microsoft's products including Internet Explorer, Outlook, Windows
Media Player, Word, and Excel, the bug published today is the first he
has found that affects Office XP, which Microsoft launched in May.
According to Guninski's advisory, Bulgarian native recently bought
a copy of Office XP and discovered ``it was quite unpleasant feeling
giving so much money for so buggy product.''
Microsoft's Culp told Newsbytes that by publishing the flaw before
Microsoft had a patch ready, Guninski was only benefiting malicious
hackers.
``Mr. Guninski is a poster child for bad behavior when it comes to
responsible reporting practices. If your goal is to make the Internet
more secure, you work with the vendor. Unfortunately, Mr. Guninski has
put countless of customers at risk for no good reason,'' said Culp.
The Guninski advisory is at http://www.guninski.com/vv2xp.html.
Microsoft's security homepage is at http://www.microsoft.com/
technet/itsolutions/security/default.asp.
Information on disabling ActiveX in Internet Explorer is at http://
users.rcn.com/rms2000/acctroj/howto.htm.
Reported by Newsbytes, http://www.newsbytes.com.