CRYPTO-GRAM, February 15, 2008

Bruce Schneier <[email protected]> Fri, 15 Feb 2008 03:51:13 -0600
Newsgroups gmane.comp.security.crypto-gram
Message-ID <[email protected]>
                  CRYPTO-GRAM

               February 15, 2008

               by Bruce Schneier
                Founder and CTO
                 BT Counterpane
              [email protected]
             http://www.schneier.com
            http://www.counterpane.com


A free monthly newsletter providing summaries, analyses, insights, and 
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appear in the "Schneier on Security" blog: 
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In this issue:
      Security vs. Privacy
      MySpace and U.S. Attorneys General Agree to Fight Sexual
        Predators
      Anti-Missile Technology on Commercial Aircraft
      News
      Lock-In
      Hacking Power Networks
      Schneier/BT Counterpane News
      Mujahideen Secrets 2
      TSA News
      DHS Warns of Female Suicide Bombers
      Giving Drivers Licenses to Illegal Immigrants


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      Security vs. Privacy



If there's a debate that sums up post-9/11 politics, it's security 
versus privacy. Which is more important? How much privacy are you 
willing to give up for security? Can we even afford privacy in this age 
of insecurity? Security versus privacy: It's the battle of the century, 
or at least its first decade.

In a Jan. 21 "New Yorker" article, Director of National Intelligence 
Michael McConnell discusses a proposed plan to monitor all -- that's 
right, *all* -- Internet communications for security purposes, an idea 
so extreme that the word "Orwellian" feels too mild.

The article contains this passage:  "In order for cyberspace to be 
policed, Internet activity will have to be closely monitored. Ed 
Giorgio, who is working with McConnell on the plan, said that would mean 
giving the government the authority to examine the content of any 
e-mail, file transfer or Web search. 'Google has records that could help 
in a cyber-investigation,' he said. Giorgio warned me, 'We have a saying 
in this business: "Privacy and security are a zero-sum game."'"

I'm sure they have that saying in their business. And it's precisely 
why, when people in their business are in charge of government, it 
becomes a police state. If privacy and security really were a zero-sum 
game, we would have seen mass immigration into the former East Germany 
and modern-day China. While it's true that police states like those have 
less street crime, no one argues that their citizens are fundamentally 
more secure.

We've been told we have to trade off security and privacy so often -- in 
debates on security versus privacy, writing contests, polls, reasoned 
essays and political rhetoric -- that most of us don't even question the 
fundamental dichotomy.

But it's a false one.

Security and privacy are not opposite ends of a seesaw; you don't have 
to accept less of one to get more of the other. Think of a door lock, a 
burglar alarm and a tall fence. Think of guns, anti-counterfeiting 
measures on currency and that dumb liquid ban at airports. Security 
affects privacy only when it's based on identity, and there are 
limitations to that sort of approach.

Since 9/11, approximately three things have potentially improved airline 
security: reinforcing the cockpit doors, passengers realizing they have 
to fight back, and -- possibly -- sky marshals. Everything else -- all 
the security measures that affect privacy -- is just security theater 
and a waste of effort.

By the same token, many of the anti-privacy "security" measures we're 
seeing -- national ID cards, warrantless eavesdropping, massive data 
mining, and so on -- do little to improve, and in some cases harm, 
security. And government claims of their success are either wrong, or 
against fake threats.

The debate isn't security versus privacy. It's liberty versus control.

You can see it in comments by government officials: "Privacy no longer 
can mean anonymity," says Donald Kerr, principal deputy director of 
national intelligence. "Instead, it should mean that government and 
businesses properly safeguard people's private communications and 
financial information." Did you catch that? You're expected to give up 
control of your privacy to others, who -- presumably -- get to decide 
how much of it you deserve. That's what loss of liberty looks like.

It should be no surprise that people choose security over privacy: 51 to 
29 percent in a recent poll. Even if you don't subscribe to Maslow's 
hierarchy of needs, it's obvious that security is more important. 
Security is vital to survival, not just of people but of every living 
thing. Privacy is unique to humans, but it's a social need. It's vital 
to personal dignity, to family life, to society -- to what makes us 
uniquely human -- but not to survival.

If you set up the false dichotomy, of course people will choose security 
over privacy -- especially if you scare them first. But it's still a 
false dichotomy. There is no security without privacy. And liberty 
requires both security and privacy. The famous quote attributed to 
Benjamin Franklin reads: "Those who would give up essential liberty to 
purchase a little temporary safety, deserve neither liberty nor safety." 
It's also true that those who would give up privacy for security are 
likely to end up with neither.

McConnell article from "New Yorker":
http://www.newyorker.com/reporting/2008/01/21/080121fa_fact_wright
http://arstechnica.com/news.ars/post/20080117-us-intel-chief-wants-carte-blanche-to-peep-all-net-traffic.html 
or http://tinyurl.com/2xkwvu
http://blog.wired.com/27bstroke6/2008/01/feds-must-exami.html

Trading off security and privacy:
http://www.huffingtonpost.com/ka-taipale/privacy-vs-security-se_b_71785.html 
or http://tinyurl.com/2gdqbn
http://www.huffingtonpost.com/marc-rotenberg/privacy-vs-security-pr_b_71806.html 
or http://tinyurl.com/2hozm8
http://findarticles.com/p/articles/mi_m0GER/is_2002_Winter/ai_97116472/pg_1 
or http://tinyurl.com/2yk23v
http://www.rasmussenreports.com/public_content/politics/current_events/general_current_events/51_say_security_more_important_than_privacy 
or http://tinyurl.com/ypcen8
http://www.scu.edu/ethics/publications/briefings/privacy.html
http://www.csmonitor.com/2002/1015/p11s02-coop.html

False dichotomy:
http://www.schneier.com/crypto-gram-0109a.html#8
http://www.wired.com/politics/law/commentary/circuitcourt/2006/05/70971

Donald Kerr's comments:
http://www.schneier.com/blog/archives/2007/11/redefining_priv.html

Related essays:
http://www.schneier.com/essay-008.html
http://www.schneier.com/essay-096.html
http://www.schneier.com/essay-036.html
http://www.schneier.com/essay-160.html
http://www.schneier.com/essay-100.html
http://www.schneier.com/essay-108.html
http://www.schneier.com/essay-163.html
http://arstechnica.com/news.ars/post/20080119-analysis-metcalfes-law-real-id-more-crime-less-safety.html 
or http://tinyurl.com/23h88d
http://www.schneier.com/blog/archives/2007/09/more_on_the_ger_1.html
http://www.schneier.com/blog/archives/2007/06/portrait_of_the_1.html
http://www.schneier.com/blog/archives/2006/05/the_value_of_pr.html"

This essay originally appeared on Wired.com.
http://www.wired.com/politics/security/commentary/securitymatters/2008/01/securitymatters_0124 
or http://tinyurl.com/yr98nf


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      MySpace and U.S. Attorneys General Agree to Fight Sexual Predators



MySpace has reached an agreement with the attorneys general of 49 states 
-- Texas sat out -- to protect children from sexual predators on the site.

The attorneys general are all congratulating themselves, as is MySpace 
-- and there's a lot of commentary out there.  To me, this all seems 
like much ado about nothing.

The measures won't do anything to stop child predators on MySpace.  But 
on the other hand, there isn't really any problem with child predators 
-- just a tiny handful of highly publicized stories -- on MySpace.  It's 
just security theater against a movie-plot threat.  But we humans have a 
well-established cognitive bias that overestimates threats against our 
children, so it all makes sense.

http://www.reuters.com/article/technology-media-telco-SP/idUSN1441132520080115 
or http://tinyurl.com/28hunb
http://www.nytimes.com/2008/01/15/us/15myspace.html
http://www.huffingtonpost.com/anastasia-goodstein/myspaces-missed-opportun_b_81637.html 
or http://tinyurl.com/yuyk8v
http://www.informationweek.com/blog/main/archives/2008/01/myspace_child_p.html 
or http://tinyurl.com/294l9m
http://www.news.com/8301-13577_3-9850057-36.html?tag=newsmap
http://www.myfoxstl.com/myfox/pages/News/Detail?contentId=5485524&version=1&locale=EN-US&layoutCode=TSTY&pageId=3.2.1 
or http://tinyurl.com/273hxu
http://www.techliberation.com/archives/043224.php
http://www.techcrunch.com/2008/01/14/what-does-myspaces-child-protection-deal-mean-for-facebook-bebo-and-google/ 
or http://tinyurl.com/3ba2sd

Details of the measures:
http://ago.mo.gov/newsreleases/2008/pdf/MySpace-JointStatement0108.pdf


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      Anti-Missile Technology on Commercial Aircraft



There have been stories previously but this time it looks like it will 
actually happen.  From MSNBC:  "The technology is intended to stop a 
missile attack by detecting heat given off from the rocket, then firing 
a laser beam that jams the missile's guidance system."

I have several feelings about this.  One, it's security theater against 
a movie-plot threat.  Two, given that that's true, attaching an empty 
box to the belly of the plane and writing "Laser Anti-Missile System" on 
it would be just as effective a deterrent at a fraction of the cost. 
And three, how do we know that's not what they're doing?

http://www.msnbc.msn.com/id/22507209/
http://blog.wired.com/27bstroke6/2008/01/dhs-testing-thr.html

Previous stories:
http://www.schneier.com/blog/archives/2005/07/anti-missile_de.html
http://www.schneier.com/blog/archives/2006/08/antimissile_def.html

Blog entry URL:
http://www.schneier.com/blog/archives/2008/01/antimissile_tec.html


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      News



Social-engineering bank robberies in the DC area:
http://www.schneier.com/blog/archives/2008/01/socialengineeri.html

This is a good article on a new trend in corporate spying: companies 
like Wal-Mart and Sears have resorted to covert surveillance of 
employees, partners, journalists, and even Internet users to protect 
itself from "global threats."
http://www.ciozone.com/index.php/Management/Wal-Mart-Spying-Good-Bad-Or-Just-The-Wave-Of-The-Futureu.html 
or http://tinyurl.com/24pud9

Rudy Giuliani on terrorism security:
http://www.city-journal.org/2008/18_1_homeland_security.html
http://padraic2112.wordpress.com/2008/01/17/why-rudy-giuliani-should-not-be-the-next-president-part-i/
http://padraic2112.wordpress.com/2008/01/18/why-rudy-giuliani-should-not-be-the-next-president-part-ii/ 
or http://tinyurl.com/23vzpc

"The New York Times" writes about a plausible connection between fear 
and heart disease.
http://www.nytimes.com/2008/01/15/science/15tier.html

A 14-year-old modified a TV remote control to switch trains on tracks in 
the Polish city of Lodz.  The lesson here is that security by obscurity, 
combined with physical security of the equipment, wasn't enough.  This 
kid jumped whatever fences there were, and reverse-engineered the IR 
control protocol.  Then he was able to play "trains" with real trains.
http://www.theregister.co.uk/2008/01/11/tram_hack/
http://www.cs.columbia.edu/~smb/blog/2008-01/2008-01-11.html
http://www.telegraph.co.uk/news/main.jhtml;jsessionid=Y5X3DLZOSFSAPQFIQMFSFFOAVCBQ0IV0?xml=/news/2008/01/11/wschool111.xml 
or http://tinyurl.com/3af8uh

In the late 1800s, fire alarm boxes were kept locked to prevent false 
alarms; this exacerbated the Great Chicago Fire of 1871.  Compare this 
with a proposed law in New York City that will require people to  get a 
license before they can buy chemical, biological, or radiological attack 
detectors.
http://www.schneier.com/blog/archives/2008/01/locked_fire_box.html

The Dutch RFID public transit card, which has already cost the 
government $2B -- no, that's not a typo -- has been hacked even before 
it has been deployed.  By some students.  My guess is the system was 
designed by people who don't understand security, and therefore thought 
it was easy.
http://www.cs.vu.nl/~ast/ov-chip-card
http://www.freedom-to-tinker.com/?p=1250

More on SmartWater:
http://www.schneier.com/blog/archives/2008/01/smartwater_work.html

Combined taser and MP3 player.  Not a joke, apparently.
http://www.guardian.co.uk/business/2008/jan/08/technology.gadgets

I have absolutely no doubt that there will be security flaws in remotely 
controllable thermostats, allowing hackers to seize control of them.  Do 
this on a too-hot day, and you might even cause a large blackout.
http://www.nytimes.com/2008/01/11/us/11control.html?ex=1357707600&en=608b7b5bb2921934&ei=5088 
or http://tinyurl.com/2f8cqs
The proposal has been withdrawn:
http://www.energy.ca.gov/title24/2008standards/faq.html
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/01/17/BARNUGIKF.DTL 
or http://tinyurl.com/yp6ft7

Unshredding documents with software.  The context is shredded and torn 
East German Stasi documents, but the technology is more general.
http://www.wired.com/politics/security/magazine/16-02/ff_stasi?currentPage=all 
or http://tinyurl.com/38talc

Fear-mongering story about non-Muslims being recruited as terrorists in 
the UK.
http://www.schneier.com/blog/archives/2008/01/al_qaeda_recrui.html

A gun slips through a TSA airport checkpoint, and when the owner reports 
the mistake, he's arrested.  What's that supposed to teach?
http://www.cnn.com/2008/US/01/23/airport.gun/index.html

Continuing battles in the War on the Unexpected:
A suitcase in New Zealand.
http://www.stuff.co.nz//4366917a11.html
An American photographing all 50 state capitols.
http://www.nytimes.com/2008/01/20/arts/design/20shat.html
Offshore oil rig evacuated after someone dreamed of a bomb.
http://news.scotsman.com/scotland/Rig-worker39s-39dream39-sparked-bomb.3763123.jp
http://www.timesonline.co.uk/tol/news/uk/article3346196.ece
http://www.guardian.co.uk/uk/2008/feb/11/uksecurityandterrorism
http://www.metro.co.uk/news/article.html?in_article_id=98289&in_page_id=34
Sheridan College under lock-down because someone notices a tripod.
http://video.msn.com/?mkt=en-ca&brand=sympatico&fg=rss&vid=1e18560e-eab4-4cd7-a1e3-d2e45e2f465f&from=37
http://blogto.com/city/2008/02/tripod_prompts_lockdown_at_sheridan_college/
http://www1.sheridaninstitute.ca/corporate/news/2008/post_lockdown.cfm
Man arrested for posession of an MP3 player.
http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=513875&in_page_id=1770

An update on cameras in the New York City subways:
http://blog.wired.com/defense/2008/01/nycs-subway-spy.html

The ethics of autonomous military robots:
http://www.cc.gatech.edu/ai/robot-lab/online-publications/formalizationv35.pdf

Remember the "cyberwar" in Estonia last year?  When asked about it, I 
generally say that it's unclear that it wasn't just kids playing 
politics.  The reality is even more mundane:  "...the attacker...isn't a 
member of the Russian military, nor is he an embittered cyber warrior in 
Putin's secret service. He doesn't even live in Russia. He's an 
[20-year-old] ethnic Russian who lives in Estonia, who was pissed off 
over that whole statue thing."
http://blog.wired.com/27bstroke6/2008/01/we-traced-the-c.html

Two Ethiopian cabin cleaners were found hiding in the ceiling of an 
aircraft after it landed at Dulles.  Presumably they were allowed on the 
plane at Addis Abbaba, but no one checked to make sure they got off.
http://www.wusa9.com/news/local/story.aspx?storyid=67662

Interesting article on terrorist tradecraft:
http://www.washingtonpost.com/wp-dyn/content/article/2008/01/04/AR2008010403573_pf.html

Data as pollution:
http://www.schneier.com/blog/archives/2008/01/data_as_polluti.html

Does the FBI know the identity of the Storm worm writers?
http://www.schneier.com/blog/archives/2008/01/fbi_knows_ident.html

"Psychology Today" on risk assessment and why we're so bad at it:
http://www.psychologytoday.com/articles/pto-20071228-000005.html

A leaked document shows the UK government has plans to coerce its 
citizens into a national ID database.
http://www.boingboing.net/2008/01/29/leaked-uk-govt-doc-r.html
http://craphound.com/NIS_Options_Analysis_Outcome.pdf

Bavarian government wants to intercept Skype calls:
http://wikileaks.org/wiki/Bavarian_trojan_for_non-germans
http://www.boingboing.net/2008/01/26/german-govt-caught-b.html

Detecting nuclear weapons using the cell phone network.  I'm not 
convinced it's a good idea to deploy such a system, but I like the idea 
of piggy-backing a nationwide sensor network on top of our already 
existing cell phone infrastructure.
http://news.uns.purdue.edu/x/2008a/080122FischbachNuclear.html

Think Illegal Downloading Is Free?
http://www.flickr.com/photos/68708714@N00/2219282175/sizes/l/

I have mixed feelings about the NSA monitoring U.S. government Internet 
traffic, but in general I think it's a good idea.
http://www.washingtonpost.com/wp-dyn/content/article/2008/01/25/AR2008012503261.html 
or http://tinyurl.com/2avcq2

Little people are hiding in luggage on Swedish buses, and stealing 
things while the bags are in the cargo holds.  Weird, but clever.
http://www.theregister.co.uk/2008/01/23/dwarf_coach_robberies/

The DHS is paying for open source software to be scanned for security 
bugs, and then fixing them.  They find, on average, one security flaw 
per 1,000 lines of code.  And when the flaw is fixed, everyone's 
security improves.
http://www.informationweek.com/story/showArticle.jhtml?articleID=205600229&cid=RSSfeed_IWK_All 
or http://tinyurl.com/2gdbst
http://www.pcworld.com/businesscenter/article/141226/open_source_security_bugs_uncovered.html 
or http://tinyurl.com/yqua3t

UK's two-tier tax security system: poor security for everyone except the 
rich and powerful:
http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2008/01/26/ntax126.xml 
or http://tinyurl.com/2xamfq

Undersea cable failures in the Middle East.  What's going on?
http://www.schneier.com/blog/archives/2008/02/fourth_undersea.html

"The Top 5 VoIP Security Threats of 2008": a nice little list of things 
to worry about.
http://www.voip-news.com/feature/top-security-threats-2008-012408/

Criminals are using cloned trucks to bypass security:
http://abcnews.go.com/Blotter/story?id=4156618&page=1
This is the same problem as fake uniforms, and the more general problem 
of fake credentials.  It's very hard to solve.
http://www.schneier.com/blog/archives/2007/10/photo_id_requir_1.html
http://www.schneier.com/blog/archives/2006/01/forged_credenti.html

Here's someone who puts on a red shirt and pretends to be a Target 
employee so he can steal stuff:
http://cbs4.com/local/target.fake.clerk.2.645377.html

Why does anyone think that heavily armed officers on New York City 
subways is a good idea?  What does it accomplish besides intimidating 
innocent commuters?
http://www.nytimes.com/2008/02/02/nyregion/02machinegun.html

Recently the Associated Press obtained hundreds of pages of documents 
related to the 2006 "Cyber Storm" exercise.  Most interesting is the 
part where the participants attacked the game computers and pissed the 
referees off.
http://www.siliconvalley.com/security/ci_8126437
http://news.wired.com/dynamic/stories/C/CYBER_STORM?SITE=WIRE&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2008-01-31-07-38-13 
or http://tinyurl.com/3a4ffs
Cyber Storm report:
http://www.dhs.gov/xlibrary/assets/prep_cyberstormreport_sep06.pdf

"The Onion" on Terror:  "We must all do whatever we can to preserve 
America by refocusing our priorities back on the contemplation of lethal 
threats -- invisible nightmarish forces plotting to destroy us in a 
number of horrific ways. It is only through the vigilance and 
determination of every patriot that we can maintain the sense of total 
dread vital to the prolonged existence of a thriving, quivering America."
http://www.theonion.com/content/opinion/we_must_all_do_our_part_to?utm_source=onion_rss_daily 
or http://tinyurl.com/23l3rj

Improvements in face recognition
http://www.schneier.com/blog/archives/2008/02/improvements_in.html

Interesting speculation from Nicholas Weaver on how the MPAA might 
enforce copyright on the Internet:
http://nweaver.blogspot.com/2008/01/security-thought-at-copyright-fighting.html 
or http://tinyurl.com/2gmp8z
http://www.nnsquad.org/archives/nnsquad/msg00439.html

U.S. Customs seizing laptops at the border: if you travel abroad, this 
is important:
http://www.schneier.com/blog/archives/2008/02/us_customs_seiz.html

Canon has filed a patent on embedding an iris scan of the photographer 
in the metadata of photographs, presumably secured with a digital signature.
http://www.photographybay.com/2008/02/09/canon-iris-registration-watermark/

Cryptographer Stefan Brands has a new company, Credentica, that allows 
people to disclose personal information while maintaining privacy and 
minimizing the threat of identity theft.
http://www.credentica.com/
http://www.wired.com/politics/security/news/2008/02/credentica
I know Stefan; he's good.  The cryptography behind this system is almost 
certainly impeccable. I like systems like this, and I want them to 
succeed.  I just don't see a viable business model.  I'd like to be 
proven wrong.

HotPlug allows you to seize and move a computer without losing power.
http://www.wiebetech.com/products/HotPlug.php
http://www.youtube.com/watch?v=erq4TO_a3z8
http://www.youtube.com/watch?v=-G8sEYCOv-o
See also: MouseJiggler.
http://www.wiebetech.com/products/MouseJiggler.php

DHS in "The Onion." Funny.
http://www.theonion.com/content/news/dept_of_homeland_security_has


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      Lock-In



Buying an iPhone isn't the same as buying a car or a toaster. Your 
iPhone comes with a complicated list of rules about what you can and 
can't do with it. You can't install unapproved third-party applications 
on it. You can't unlock it and use it with the cell phone carrier of 
your choice. And Apple is serious about these rules: a software update 
released in September 2007 erased unauthorized software and -- in some 
cases -- rendered unlocked phones unusable.

"Bricked" is the term, and Apple isn't the least bit apologetic about it.

Computer companies want more control over the products they sell you, 
and they're resorting to increasingly draconian security measures to get 
that control. The reasons are economic.

Control allows a company to limit competition for ancillary products. 
With Mac computers, anyone can sell software that does anything. But 
Apple gets to decide who can sell what on the iPhone. It can foster 
competition when it wants, and reserve itself a monopoly position when 
it wants. And it can dictate terms to any company that wants to sell 
iPhone software and accessories.

This increases Apple's bottom line. But the primary benefit of all this 
control for Apple is that it increases lock-in. "Lock-in" is an economic 
term for the difficulty of switching to a competing product. For some 
products -- cola, for example -- there's no lock-in. I can drink a Coke 
today and a Pepsi tomorrow: no big deal. But for other products, it's 
harder.

Switching word processors, for example, requires installing a new 
application, learning a new interface and a new set of commands, 
converting all the files (which may not convert cleanly) and custom 
software (which will certainly require rewriting), and possibly even 
buying new hardware. If Coke stops satisfying me for even a moment, I'll 
switch: something Coke learned the hard way in 1985 when it changed the 
formula and started marketing New Coke. But my word processor has to 
really piss me off for a good long time before I'll even consider going 
through all that work and expense.

Lock-in isn't new. It's why all gaming-console manufacturers make sure 
that their game cartridges don't work on any other console, and how they 
can price the consoles at a loss and make the profit up by selling 
games. It's why Microsoft never wants to open up its file formats so 
other applications can read them. It's why music purchased from Apple 
for your iPod won't work on other brands of music players. It's why 
every U.S. cell phone company fought against phone number portability. 
It's why Facebook sues any company that tries to scrape its data and put 
it on a competing website. It explains airline frequent flyer programs, 
supermarket affinity cards and the new My Coke Rewards program.

With enough lock-in, a company can protect its market share even as it 
reduces customer service, raises prices, refuses to innovate and 
otherwise abuses its customer base. It should be no surprise that this 
sounds like pretty much every experience you've had with IT companies: 
once the industry discovered lock-in, everyone started figuring out how 
to get as much of it as they can.

Economists Carl Shapiro and Hal Varian even proved that the value of a 
software company is the total lock-in. Here's the logic: Assume, for 
example, that you have 100 people in a company using MS Office at a cost 
of $500 each. If it cost the company less than $50,000 to switch to Open 
Office, they would. If it cost the company more than $50,000, Microsoft 
would increase its prices.

Mostly, companies increase their lock-in through security mechanisms. 
Sometimes patents preserve lock-in, but more often it's copy protection, 
digital rights management (DRM), code signing or other security 
mechanisms. These security features aren't what we normally think of as 
security: They don't protect us from some outside threat, they protect 
the companies from *us*.

Microsoft has been planning this sort of control-based security 
mechanism for years. First called Palladium and now NGSCB 
(Next-Generation Secure Computing Base), the idea is to build a 
control-based security system into the computing hardware. The details 
are complicated, but the results range from only allowing a computer to 
boot from an authorized copy of the OS to prohibiting the user from 
accessing "unauthorized" files or running unauthorized software. The 
competitive benefits to Microsoft are enormous,

Of course, that's not how Microsoft advertises NGSCB. The company has 
positioned it as a security measure, protecting users from worms, 
Trojans and other malware. But control does not equal security; and this 
sort of control-based security is very difficult to get right, and 
sometimes makes us more vulnerable to other threats. Perhaps this is why 
Microsoft is quietly killing NGSCB -- we've gotten BitLocker, and we 
might get some other security features down the line -- despite the huge 
investment hardware manufacturers made when incorporating special 
security hardware into their motherboards.

Earlier in this issue of Crypto-Gram, I talked about the 
security-versus-privacy debate, and how it's actually a debate about 
liberty versus control. Here we see the same dynamic, but in a 
commercial setting. By confusing control and security, companies are 
able to force control measures that work against our interests by 
convincing us they are doing it for our own safety.

As for Apple and the iPhone, I don't know what they're going to do. On 
the one hand, there's this analyst report that claims there are over a 
million unlocked iPhones, costing Apple between $300 million and $400 
million in revenue. On the other hand, Apple is planning to release a 
software development kit this month, reversing its earlier restriction 
and allowing third-party vendors to write iPhone applications. Apple 
will attempt to keep control through a secret application key that will 
be required by all "official" third-party applications, but of course 
it's already been leaked.

And the security arms race goes on...

Apple and the iPhone;
http://www.nytimes.com/2007/09/29/technology/29iphone.html
http://www.bloomberg.com/apps/news?pid=20601087&sid=aWmgi08ZjbpM
http://www.engadget.com/2007/10/17/apple-planning-iphone-sdk-for-february/ 
or http://tinyurl.com/yvx5hr
http://www.engadget.com/2008/01/28/iphone-sdk-key-leaked/

Shapiro and Varian's book:
http://www.amazon.com/Information-Rules-Strategic-Network-Economy/dp/087584863X/ref=sr_1_1?ie=UTF8&s=books&qid=1202236504&sr=1-1 
or http://tinyurl.com/2eo23e

Microsoft and Trusted Computing
http://schneier.com/crypto-gram-0208.html#1
http://www.cl.cam.ac.uk/~rja14/Papers/tcpa.pdf
http://www.microsoft.com/technet/archive/security/news/ngscb.mspx
http://www.schneier.com/blog/archives/2005/08/trusted_computi.html

Commentary:
http://yro.slashdot.org/yro/08/02/07/2138201.shtml
http://stumble.kapowaz.net/post/25792347
http://www.kryogenix.org/days/2008/02/08/there-can-be-no-fud
http://girtby.net/archives/2008/2/8/vendor-lock-in

This essay previously appeared on Wired.com.
http://www.wired.com/politics/security/commentary/securitymatters/2008/02/securitymatters_0207 
or http://tinyurl.com/2mf82q


** *** ***** ******* *********** *************

      Hacking Power Networks



The CIA unleashed a big one at a SANS conference:  "On Wednesday, in New 
Orleans, US Central Intelligence Agency senior analyst Tom Donahue told 
a gathering of 300 US, UK, Swedish, and Dutch government officials and 
engineers and security managers from electric, water, oil & gas and 
other critical industry asset owners from all across North America, that 
'We have information, from multiple regions outside the United States, 
of cyber intrusions into utilities, followed by extortion demands. We 
suspect, but cannot confirm, that some of these attackers had the 
benefit of inside knowledge. We have information that cyber attacks have 
been used to disrupt power equipment in several regions outside the 
United States. In at least one case, the disruption caused a power 
outage affecting multiple cities. We do not know who executed these 
attacks or why, but all involved intrusions through the Internet.'

"According to Mr. Donahue, the CIA actively and thoroughly considered 
the benefits and risks of making this information public, and came down 
on the side of disclosure."

I'll bet.  There's nothing like a vague unsubstantiated rumor to 
forestall reasoned discussion.  But, of course, everyone is writing 
about it anyway.

SANS's Alan Paller is happy to add details.  From Forbes.com: "In the 
past two years, hackers have in fact successfully penetrated and 
extorted multiple utility companies that use SCADA systems, says Alan 
Paller, director of the SANS Institute, an organization that hosts a 
crisis center for hacked companies. 'Hundreds of millions of dollars 
have been extorted, and possibly more. It's difficult to know, because 
they pay to keep it a secret,' Paller says. 'This kind of extortion is 
the biggest untold story of the cybercrime industry.'"

And to up the fear factor.  "Information Week":  "The prospect of 
cyberattacks crippling multicity regions appears to have prompted the 
government to make this information public. The issue 'went from "we 
should be concerned about to this" to "this is something we should fix 
now, "' said Paller. 'That's why, I think, the government decided to 
disclose this.'"

More rumor from ibls.com:  "An attendee of the meeting said that the 
attack was not well-known through the industry and came as a surprise to 
many there. Said the person who asked to remain anonymous, 'There were 
apparently a couple of incidents where extortionists cut off power to 
several cities using some sort of attack on the power grid, and it does 
not appear to be a physical attack.'"

And more hyperbole from someone in the industry in "The Washington 
Post":  "Over the past year to 18 months, there has been 'a huge 
increase in focused attacks on our national infrastructure networks, . . 
. and they have been coming from outside the United States,' said Ralph 
Logan, principal of the Logan Group, a cybersecurity firm.

"It is difficult to track the sources of such attacks, because they are 
usually made by people who have disguised themselves by worming into 
three or four other computer networks, Logan said. He said he thinks the 
attacks were launched from computers belonging to foreign governments or 
militaries, not terrorist groups."

I'm more than a bit skeptical here.  To be sure -- fake staged attacks 
aside -- there are serious risks to SCADA systems (Ganesh Devarajan gave 
a talk at DefCon this year about some potential attack vectors), 
although at this point I think they're more a future threat than present 
danger.  But this CIA tidbit tells us nothing about how the attacks 
happened.  Were they against SCADA systems?  Were they against 
general-purpose computers, maybe Windows machines?  Insiders may have 
been involved, so was this a computer security vulnerability at all?  We 
have no idea.

Cyber-extortion is certainly on the rise; we see it at Counterpane. 
Primarily it's against fringe industries -- online gambling, online 
gaming, online porn -- operating offshore in countries like Bermuda and 
the Cayman Islands.  It is going mainstream, but this is the first I've 
heard of it targeting power companies.  Certainly possible, but is that 
part of the CIA rumor or was it tacked on afterwards?

And Wikipedia has a list of power outages.  Which ones were hacker 
caused?  Some details would be nice.

I'd like a little bit more information before I start panicking.

Quote from SANS:
http://www.sans.org/newsletters/newsbites/newsbites.php?vol=10&issue=5

News articles:
http://www.engadget.com/2008/01/19/hackers-reportedly-targeting-cities-power-systems/ 
or http://tinyurl.com/35jlap
http://www.forbes.com/2008/01/18/cyber-attack-utilities-tech-intel-cx_ag_0118attack.html 
or http://tinyurl.com/344t3w
http://www.ibls.com/internet_law_news_portal_view.aspx?s=latestnews&id=1963 
or http://tinyurl.com/ypo8fz
http://www.informationweek.com/news/showArticle.jhtml?articleID=205901631 
or http://tinyurl.com/34r575
http://www.washingtonpost.com/wp-dyn/content/article/2008/01/18/AR2008011803277.html 
or http://tinyurl.com/2dd3lv
http://www.pcworld.com/article/id,141564-c,hackers/article.html
http://www.forbes.com/2008/01/18/cyber-attack-utilities-tech-intel-cx_ag_0118attack.html 
or http://tinyurl.com/344t3w
http://it.slashdot.org/article.pl?sid=08/01/19/0138209

Fake staged SCADA attack:
http://www.schneier.com/blog/archives/2007/10/staged_attack_c.html

DefCon talk:
http://www.defcon.org/html/defcon-15/dc-15-speakers.html#Devarajan

Wikipedia list of power outages:
http://en.wikipedia.org/wiki/List_of_power_outages


** *** ***** ******* *********** *************

      Schneier/BT Counterpane News


An interview with Schneier:
http://searchsecurity.techtarget.com.au/topics/article.asp?DocID=1283751 
or http://tinyurl.com/2aj9jw

Schneier given the Norbert Wiener Award by the Computer Professionals 
for Social Responsibility:
http://www.cpsr.org/news/press/wiener2008

Schneier gave the keynote talk at Linux.conf.au.
Article on the talk:
http://www.itnews.com.au/News/69146,information-is-our-only-security-weapon-bruce-schneier.aspx 
or http://tinyurl.com/387yyn
Video of the talk:
http://linux.conf.au/programme/presentations
http://mirror.linux.org.au/pub/linux.conf.au/2008/Wed/mel8-305.ogg
http://mirror.linux.org.au/pub/linux.conf.au/2008/Wed/mel8-305.spx
Q&A afterwards:
http://www.itwire.com/content/view/16422/1090/


** *** ***** ******* *********** *************

      Mujahideen Secrets 2



Mujahideen Secrets 2 is a new version of an encryption tool, ostensibly 
written to help Al Qaeda members encrypt secrets as they communicate on 
the Internet.

A bunch of sites have covered this story, and a couple of security 
researchers are quoted in the various articles.  But quotes like this 
from "Computerworld" make you wonder if they have any idea what they're 
talking about:  "Mujahideen Secrets 2 is a very compelling piece of 
software, from an encryption perspective, according to Henry. He said 
the new tool is easy to use and provides 2,048-bit encryption, an 
improvement over the 256-bit AES encryption supported in the original 
version."

No one has explained why a terrorist would use this instead of PGP -- 
perhaps they simply don't trust anything coming from a U.S. company. 
But honestly, this isn't a big deal at all: strong encryption software 
has been around for over fifteen years now, either cheap or free.  And 
the NSA probably breaks most of the stuff by guessing the password, 
anyway.  Unless the whole program is an NSA plant, that is.

My question: the articles claim that the program uses several encryption 
algorithms, including RSA and AES.  Does it use Blowfish or Twofish?

http://www.networkworld.com/news/2008/020108-al-qaeda-encryption.html
http://www.networkworld.com/news/2008/012308-al-qaeda-encryption-security.html 
or http://tinyurl.com/2g3lju
http://www.techworld.com/security/features/index.cfm?featureID=3950&pagtype=all 
or http://tinyurl.com/22rwdf
http://www.computerworld.com/action/article.do?command=viewArticleBasic&taxonomyId=16&articleId=9058619&intsrc=hm_topic 
or http://tinyurl.com/ypzpuo
http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9060939 
or http://tinyurl.com/2cf9nu
http://www2.csoonline.com/exclusives/column.html?CID=33516
http://blogs.csoonline.com/a_gift_from_the_islamic_faithful_network_mujahedeen_secrets_2_program 
or http://tinyurl.com/3dn7ja
http://www.informationweek.com/internet/showArticle.jhtml?articleID=205918296 
or http://tinyurl.com/yv34um

Me on PGP:
http://www.schneier.com/essay-199.html

Me on password guessing:
http://www.schneier.com/essay-148.html


** *** ***** ******* *********** *************

      TSA News



The TSA is checking IDs more carefully, looking for forgeries:  "More 
than 40 passengers have been arrested since June in cases when TSA 
screeners spotted altered passports, fraudulent visas and resident ID 
cards, and forged driver's licenses. Many of them were arrested on 
immigration charges. "  ID checks have nothing to do with airport 
security.  And even if they did, anyone can fly on a fake ID.  And 
enforcing immigration laws is not what the TSA does.
http://www.usatoday.com/news/nation/2008-01-20-blacklights_N.htm?csp=34

Read this from the TSA's website:  "We screen every passenger; we screen 
every bag so that your memories are from where you went, not how you got 
there. We're here to help your travel plans be smooth and stress free. 
Please take a moment to become familiar with some of our security 
measures. Doing so now will help save you time once you arrive at the 
airport. "  I know they don't mean it that way, but doesn't it sound 
like it's saying "We know it doesn't help, but it might make you feel 
better"?
http://www.tsa.gov/travelers/airtravel/index.shtm

And why is it news when a test breaches TSA security?
http://www.cnn.com/2008/US/01/28/tsa.bombtest/index.html

"Confessions of a TSA Agent": there is some speculation that this is a hoax.
http://information.travel.aol.com/article/air/_a/confessions-of-a-tsa-agent/20080123105909990002 
or http://tinyurl.com/2ygsjh

I have no idea why Kip Hawley is surprised that the TSA is as unpopular 
with Americans as the IRS.
http://www.theaviationnation.com/2007/12/30/tsa-leaked-memo-reveals-frustrated-chiefs/ 
or http://tinyurl.com/yr3rwy

The TSA has a blog:
http://www.tsa.gov/blog
http://blog.wired.com/27bstroke6/2008/01/tsa-launches-bl.html
http://arstechnica.com/news.ars/post/20080131-tsa-blog-smackdown-explain-to-me-about-bomb-juice.html 
or http://tinyurl.com/2fldwo
http://it.slashdot.org/it/08/02/01/2152216.shtml
http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9060458 
or http://tinyurl.com/26rajb
I'm even on the blogroll.


** *** ***** ******* *********** *************

      DHS Warns of Female Suicide Bombers



First paragraph:  "Terrorists increasingly favor using women as suicide 
bombers to thwart security and draw attention to their causes, a new 
FBI-Department of Homeland Security assessment concludes."

Photo caption:  "Female suicide bombers can use devices to make them 
appear pregnant, a security assessment says."

Second paragraph:  "The assessment said the agencies 'have no specific, 
credible intelligence indicating that terrorist organizations intend to 
utilize female suicide bombers against targets in the homeland.'"

Does the DHS think we're idiots or something?

http://edition.cnn.com/2008/US/02/12/suicide.bombers/index.html


** *** ***** ******* *********** *************

      Giving Driver's Licenses to Illegal Immigrants



Many people say that allowing illegal aliens to obtain state driver's 
licenses helps them and encourages them to remain illegally in this 
country. Michigan Attorney General Mike Cox late last year issued an 
opinion that licenses could be issued only to legal state residents, 
calling it "one more tool in our initiative to bolster Michigan's border 
and document security."

In reality, we are a much more secure nation if we do issue driver's 
licenses and/or state IDs to every resident who applies, regardless of 
immigration status. Issuing them doesn't make us any less secure, and 
refusing puts us at risk.

The state driver's license databases are the only comprehensive 
databases of U.S. residents. They're more complete, and contain more 
information -- including photographs and, in some cases, fingerprints -- 
than the IRS database, the Social Security database, or state birth 
certificate databases. As such, they are an invaluable police tool -- 
for investigating crimes, tracking down suspects, and proving guilt.

Removing the 8 million-15 million illegal immigrants from these 
databases would only make law enforcement harder. Of course, the 
unlicensed won't pack up and leave. They will drive without licenses, 
increasing insurance premiums for everyone. They will use fake IDs, buy 
real IDs from crooked DMV employees -- as several of the 9/11 terrorists 
did -- forge "breeder documents" to get real IDs (another 9/11 terrorist 
trick), or resort to identity theft. These millions of people will 
continue to live and work in this country, invisible to any government 
database and therefore the police.

Assuming that denying licenses to illegals will make them leave is 
head-in-the-sand thinking.

Of course, even an attempt to deny licenses to illegal immigrants puts 
DMV clerks in the impossible position of verifying immigration status. 
This is expensive and time-consuming; furthermore, it won't work. The 
law is complicated, and it can take hours to verify someone's status 
only to get it wrong. Paperwork can be easy to forge, far easier than 
driver's licenses, meaning many illegal immigrants will get these 
licenses that now "prove" immigrant status.

Even more legal immigrants will be mistakenly denied licenses, resulting 
in lawsuits and additional government expense.

Some states have considered a tiered license system, one that explicitly 
lists immigration status on the licenses. Of course, this won't work 
either. Illegal immigrants are far more likely to take their chances 
being caught than admit their immigration status to the DMV.

We are all safer if everyone in society trusts and respects law 
enforcement. A society where illegal immigrants are afraid to talk to 
police because of fear of deportation is a society where fewer people 
come forward to report crimes, aid police investigations, and testify as 
witnesses.

And finally, denying driver's licenses to illegal immigrants will not 
protect us from terrorism. Contrary to popular belief, a driver's 
license is not required to board a plane. You can use any 
government-issued photo ID, including a foreign passport. And if you're 
willing to undergo secondary screening, you can board a plane without an 
ID at all. This is probably how anybody on the "no fly" list gets around 
these days.

A 2003 American Association of Motor Vehicle Administrators report 
concludes: "Digital images from driver's licenses have significantly 
aided law enforcement agencies charged with homeland security. The 19 
(9/11) terrorists obtained driver licenses from several states, and 
federal authorities relied heavily on these images for the 
identification of the individuals responsible."

Whether it's the DHS trying to protect the nation from terrorism, or 
local, state and national law enforcement trying to protect the nation 
from crime, we are all safer if we encourage every adult in America to 
get a driver's license.

This op-ed originally appeared in the Detroit Free Press.
http://www.schneier.com/essay-205.html


** *** ***** ******* *********** *************

      Comments from Readers



There are hundreds of comments -- many of them interesting -- on these 
topics on my blog. Search for the story you want to comment on, and join 
in.

http://www.schneier.com/blog


** *** ***** ******* *********** *************

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CRYPTO-GRAM is written by Bruce Schneier.  Schneier is the author of the 
best sellers "Beyond Fear," "Secrets and Lies," and "Applied 
Cryptography," and an inventor of the Blowfish and Twofish algorithms. 
He is founder and CTO of BT Counterpane, and is a member of the Board of 
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<http://www.schneier.com>.

BT Counterpane is the world's leading protector of networked information 
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Copyright (c) 2008 by Bruce Schneier.