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Business Implications of the President ’ s NSA Review Group

This talk discusses the business and economic implications of the President's NSA Review Group, including issues related to foreign affairs, US-based cloud companies, and offense versus defense in cybersecurity.

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Business Implications of the President ’ s NSA Review Group

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  1. Business Implications of the President’s NSA Review Group Peter Swire Huang Professor of Law and Ethics Scheller College of Business Georgia Institute of Technology Law Seminars International: 3/28/14

  2. Overview of the Talk • Intro to Review Group • Four business issues: • Business & economics issues into the IC calculus • US-based global businesses affected by IC decisions • Lean toward defense in cyber-security • Support better Internet governance

  3. Creation of the Review Group • Snowden leaks of 215 and Prism in June, 2013 • August – Review Group • 5 members

  4. December 2013: The Situation Room

  5. Our assigned task • Protect national security • Advance our foreign policy, including economic effects • Protect privacy and civil liberties • Maintain the public trust • Reduce the risk of unauthorized disclosure

  6. Our Report • Meetings, briefings, public comments • 300+ pages in December • 46 recommendations • Section 215 database “not essential” to stopping any attack; recommend government not hold phone records; proposal this week basically agrees • Pres. Obama speech January • Adopt 70% in letter or spirit • Additional recommendations under study • Organizational changes to NSA not adopted

  7. Issue 1: Foreign Affairs/Economics • Major theme of the report is that we face multiple risks, not just national security risks • Effects on allies, foreign affairs • Risks to privacy & civil liberties • Risks to economic growth & business • Historically, intelligence community is heavily walled off, to maintain secrecy • Now, convergence of civilian and military/intelligence communications devices, software & networks • Q: How respond to the multiple risks?

  8. Addressing Multiple Risks • RG Recs 16 & 17: • New process & WH staff to review sensitive intelligence collection in advance • Senior policymakers from the economic agencies (NEC, Commerce, USTR) should participate • Monitoring to ensure compliance with policy • RG Rec 19: New process for surveillance of foreign leaders • Relations with allies, with economic and other implications, if this surveillance becomes public

  9. Issue 2: US-Based Cloud Companies in a Global Market • The issue: effects on US-based cloud industry • Understanding contrasting perspectives of IC and the IT industry • Intelligence community perspective: • Snowden a criminal; 0% say whistleblower • Substantial assistance to adversaries by ongoing revelations of sources & methods • E.g., reports on techniques for entering into “air-gapped” computer systems • IC Tradition of expecting secrecy over long time scale, so details of intelligence activities rarely disclosed and harms from disclosures rarely experienced

  10. Tech Industry Perspective • Tech industry perspective: • Silicon Valley – 90% say whistleblower • Snowden has informed us about Internet realities • Tech industry libertarianism: “information wants to be free” and suspicion of government & secrecy • Anger at undermining encryption standards • More anger for stories that leased lines for Yahoo and Google servers were tapped • Microsoft GC: the US Government as an “advanced persistent threat”

  11. What is at Stake for the IT Industry • Biggest focus on public cloud computing market • Double in size 2012-2016 • Studies estimate US business losses from NSA revelations: tens of billions $/year • An opening for non-U.S. providers • Market has been dominated by US companies • Deutsche Telecomm and others: “Don’t put your data in the hands of the NSA and US providers” • US industry response: more transparency • Boost consumer confidence that the amount of government orders is modest

  12. Moving to More Transparency • RG Rec 9: OK to reveal number of orders, number they have complied with, information produced, and number for each legal authority (215, 702, NSL, etc.), unless compelling national security showing • RG Rec 31: US should advocate to ensure transparency for requests by other governments • Put more focus on actions of other governments • DOJ agreement with companies in January

  13. Issue 3: Offense v. Defense for Cyber-security • The issue of trading off offense & defense: • NSA/IC offensive missions • Foreign intelligence surveillance • Title 10 – military authorities • US Cyber Command • NSA/IC defensive missions • Information Assurance Directorate of NSA • Protect government systems • Counter-intelligence • We use precisely one communications infrastructure for both offense and defense

  14. Conflict between Offense & Defense Has Increased (1) Before: separate communications system behind the Iron Curtain; nation-state actors Now: same Internet for civilians, terrorists & military (2) Before: military protected its communication security within the chain of command Now: critical infrastructure largely civilian; tips to defense get known to attackers (3) Before: episodic flares of military action Now: daily & hourly cyber-attacks, to businesses and others, right here at home

  15. Strong Crypto for Defense • RG Rec 29: support strong crypto standards and software; secure communications a priority; don’t push vendors to have back doors (defense) • No announcement yet on this recommendation – it is a tech industry priority

  16. Zero Days & the Equities Process • A “zero day” exploit means previously unused vulnerability, where defenders have had zero days to respond • Press reports of USG stockpiling zero days, for intelligence & military use • RG Rec 30: Lean to defense. New WH equities process to ensure vulnerabilities are blocked for USG and private networks. Exception if inter-agency process finds a priority to retain the zero day as secret. • Software vendors and owners of corporate systems have strong interest in good defense • No announcement yet on this recommendation

  17. Issue 4: Internet Governance • The issue: Snowden becomes a huge talking point against the US approach to Internet governance. Potential harms to business, including US-based business.

  18. International Telecommunications Union? • US & US industry position: Internet governance as bottom-up, tech-based, multi-stakeholder process. Outputs: innovation, growth, Internet freedom, democracy. • Russia & China: push for major ITU role. Governance by governments. Respect local norms (called “cyber-security” but meaning “censorship”). Oppose “chaos” of current approach. • Swing votes at the ITU: medium-sized economies pay more for Internet service than rich countries, lose inter-connection fees, don’t know how to have a voice in W3C & IETF.

  19. How to Bolster Multi-stakeholder • US Internet Freedom agenda – secure communications by dissenters, democratic freedom, human rights. • Russia & China: Snowden shows US hypocrisy. • Response: legal checks & balances in US; First Amendment; emphatically not used for political repression • RG Rec 32: senior State Department official on these issues • RG Rec 33: support multi-stakeholder approach • Many RG recs: reinforce privacy & civil liberties & oversight in foreign surveillance • PPD-28: extend protections to non-US persons

  20. Localization Proposals • Brazil, Vietnam, Indonesia proposals to require storage locally • EU proposals to restrict data transfers to US; using T-TIP & Safe Harbor as bargaining chips for less US surveillance • RG: emphasize economic & other harms from localization/”splinternet” • Strengthen relations with allies • RG Rec 31: build international norm against localization • RG Rec 34: streamline multi-lateral assistance treaties (MLATs), so no need to hold data there, can get it in US

  21. The Lessons for Business • Business & economics issues into the IC calculus • US-based global businesses affected by IC decisions • Lean toward defense • Support better Internet governance

  22. Conclusion • Are pessimists correct that nothing will change? • Section 215 program quite possibly will end • DOJ agreed to the transparency agreement • EU privacy regulation seemed dead, but Snowden-related sentiments resulted this month in EU Parliament 621-10 in favor • We are in a period where change is possible • Businesses, and their advisors, should support changes that meet the multiple goals of our national and economic security

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