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A Framework for Cyber Security Insurance

New paper: “Policy measures and cyber insurance: a framework,” by Daniel Woods and Andrew Simpson, Journal of Cyber Policy, 2017.

Abstract: The role of the insurance industry in driving improvements in cyber security has been identified as mutually beneficial for both insurers and policy-makers. To date, there has been no consideration of the roles governments and the insurance industry should pursue in support of this public­-private partnership. This paper rectifies this omission and presents a framework to help underpin such a partnership, giving particular consideration to possible government interventions that might affect the cyber insurance market. We have undertaken a qualitative analysis of reports published by policy-making institutions and organisations working in the cyber insurance domain; we have also conducted interviews with cyber insurance professionals. Together, these constitute a stakeholder analysis upon which we build our framework. In addition, we present a research roadmap to demonstrate how the ideas described might be taken forward.

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Surveillance Intermediaries

Interesting law-journal article: “Surveillance Intermediaries,” by Alan Z. Rozenshtein.

Abstract:Apple’s 2016 fight against a court order commanding it to help the FBI unlock the iPhone of one of the San Bernardino terrorists exemplifies how central the question of regulating government surveillance has become in American politics and law. But scholarly attempts to answer this question have suffered from a serious omission: scholars have ignored how government surveillance is checked by “surveillance intermediaries,” the companies like Apple, Google, and Facebook that dominate digital communications and data storage, and on whose cooperation government surveillance relies. This Article fills this gap in the scholarly literature, providing the first comprehensive analysis of how surveillance intermediaries constrain the surveillance executive. In so doing, it enhances our conceptual understanding of, and thus our ability to improve, the institutional design of government surveillance.

Surveillance intermediaries have the financial and ideological incentives to resist government requests for user data. Their techniques of resistance are: proceduralism and litigiousness that reject voluntary cooperation in favor of minimal compliance and aggressive litigation; technological unilateralism that designs products and services to make surveillance harder; and policy mobilization that rallies legislative and public opinion to limit surveillance. Surveillance intermediaries also enhance the “surveillance separation of powers”; they make the surveillance executive more subject to inter-branch constraints from Congress and the courts, and to intra-branch constraints from foreign-relations and economics agencies as well as the surveillance executive’s own surveillance-limiting components.

The normative implications of this descriptive account are important and cross-cutting. Surveillance intermediaries can both improve and worsen the “surveillance frontier”: the set of tradeoffs ­ between public safety, privacy, and economic growth ­ from which we choose surveillance policy. And while intermediaries enhance surveillance self-government when they mobilize public opinion and strengthen the surveillance separation of powers, they undermine it when their unilateral technological changes prevent the government from exercising its lawful surveillance authorities.

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Election Security

It’s over. The voting went smoothly. As of the time of writing, there are no serious fraud allegations, nor credible evidence that anyone tampered with voting rolls or voting machines. And most important, the results are not in doubt.

While we may breathe a collective sigh of relief about that, we can’t ignore the issue until the next election. The risks remain.

As computer security experts have been saying for years, our newly computerized voting systems are vulnerable to attack by both individual hackers and government-sponsored cyberwarriors. It is only a matter of time before such an attack happens.

Electronic voting machines can be hacked, and those machines that do not include a paper ballot that can verify each voter’s choice can be hacked undetectably. Voting rolls are also vulnerable; they are all computerized databases whose entries can be deleted or changed to sow chaos on Election Day.

The largely ad hoc system in states for collecting and tabulating individual voting results is vulnerable as well. While the difference between theoretical if demonstrable vulnerabilities and an actual attack on Election Day is considerable, we got lucky this year. Not just presidential elections are at risk, but state and local elections, too.

To be very clear, this is not about voter fraud. The risks of ineligible people voting, or people voting twice, have been repeatedly shown to be virtually nonexistent, and “solutions” to this problem are largely voter-suppression measures. Election fraud, however, is both far more feasible and much more worrisome.

Here’s my worry. On the day after an election, someone claims that a result was hacked. Maybe one of the candidates points to a wide discrepancy between the most recent polls and the actual results. Maybe an anonymous person announces that he hacked a particular brand of voting machine, describing in detail how. Or maybe it’s a system failure during Election Day: voting machines recording significantly fewer votes than there were voters, or zero votes for one candidate or another. (These are not theoretical occurrences; they have both happened in the United States before, though because of error, not malice.)

We have no procedures for how to proceed if any of these things happen. There’s no manual, no national panel of experts, no regulatory body to steer us through this crisis. How do we figure out if someone hacked the vote? Can we recover the true votes, or are they lost? What do we do then?

First, we need to do more to secure our elections system. We should declare our voting systems to be critical national infrastructure. This is largely symbolic, but it demonstrates a commitment to secure elections and makes funding and other resources available to states.

We need national security standards for voting machines, and funding for states to procure machines that comply with those standards. Voting-security experts can deal with the technical details, but such machines must include a paper ballot that provides a record verifiable by voters. The simplest and most reliable way to do that is already practiced in 37 states: optical-scan paper ballots, marked by the voters, counted by computer but recountable by hand. And we need a system of pre-election and postelection security audits to increase confidence in the system.

Second, election tampering, either by a foreign power or by a domestic actor, is inevitable, so we need detailed procedures to follow–both technical procedures to figure out what happened, and legal procedures to figure out what to do–that will efficiently get us to a fair and equitable election resolution. There should be a board of independent computer-security experts to unravel what happened, and a board of independent election officials, either at the Federal Election Commission or elsewhere, empowered to determine and put in place an appropriate response.

In the absence of such impartial measures, people rush to defend their candidate and their party. Florida in 2000 was a perfect example. What could have been a purely technical issue of determining the intent of every voter became a battle for who would win the presidency. The debates about hanging chads and spoiled ballots and how broad the recount should be were contested by people angling for a particular outcome. In the same way, after a hacked election, partisan politics will place tremendous pressure on officials to make decisions that override fairness and accuracy.

That is why we need to agree on policies to deal with future election fraud. We need procedures to evaluate claims of voting-machine hacking. We need a fair and robust vote-auditing process. And we need all of this in place before an election is hacked and battle lines are drawn.

In response to Florida, the Help America Vote Act of 2002 required each state to publish its own guidelines on what constitutes a vote. Some states — Indiana, in particular — set up a “war room” of public and private cybersecurity experts ready to help if anything did occur. While the Department of Homeland Security is assisting some states with election security, and the F.B.I. and the Justice Department made some preparations this year, the approach is too piecemeal.

Elections serve two purposes. First, and most obvious, they are how we choose a winner. But second, and equally important, they convince the loser–and all the supporters–that he or she lost. To achieve the first purpose, the voting system must be fair and accurate. To achieve the second one, it must be shown to be fair and accurate.

We need to have these conversations before something happens, when everyone can be calm and rational about the issues. The integrity of our elections is at stake, which means our democracy is at stake.

This essay previously appeared in the New York Times.
http://www.nytimes.com/2016/11/09/opinion/american-elections-will-be-hacked.html

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Regulation of the Internet of Things

Late last month, popular websites like Twitter, Pinterest, Reddit and PayPal went down for most of a day. The distributed denial-of-service attack that caused the outages, and the vulnerabilities that made the attack possible, was as much a failure of market and policy as it was of technology. If we want to secure our increasingly computerized and connected world, we need more government involvement in the security of the “Internet of Things” and increased regulation of what are now critical and life-threatening technologies. It’s no longer a question of if, it’s a question of when.

First, the facts. Those websites went down because their domain name provider — a company named Dyn —­ was forced offline. We don’t know who perpetrated that attack, but it could have easily been a lone hacker. Whoever it was launched a distributed denial-of-service attack against Dyn by exploiting a vulnerability in large numbers ­— possibly millions — of Internet-of-Things devices like webcams and digital video recorders, then recruiting them all into a single botnet. The botnet bombarded Dyn with traffic, so much that it went down. And when it went down, so did dozens of websites.

Your security on the Internet depends on the security of millions of Internet-enabled devices, designed and sold by companies you’ve never heard of to consumers who don’t care about your security.

The technical reason these devices are insecure is complicated, but there is a market failure at work. The Internet of Things is bringing computerization and connectivity to many tens of millions of devices worldwide. These devices will affect every aspect of our lives, because they’re things like cars, home appliances, thermostats, lightbulbs, fitness trackers, medical devices, smart streetlights and sidewalk squares. Many of these devices are low-cost, designed and built offshore, then rebranded and resold. The teams building these devices don’t have the security expertise we’ve come to expect from the major computer and smartphone manufacturers, simply because the market won’t stand for the additional costs that would require. These devices don’t get security updates like our more expensive computers, and many don’t even have a way to be patched. And, unlike our computers and phones, they stay around for years and decades.

An additional market failure illustrated by the Dyn attack is that neither the seller nor the buyer of those devices cares about fixing the vulnerability. The owners of those devices don’t care. They wanted a webcam —­ or thermostat, or refrigerator ­— with nice features at a good price. Even after they were recruited into this botnet, they still work fine ­— you can’t even tell they were used in the attack. The sellers of those devices don’t care: They’ve already moved on to selling newer and better models. There is no market solution because the insecurity primarily affects other people. It’s a form of invisible pollution.

And, like pollution, the only solution is to regulate. The government could impose minimum security standards on IoT manufacturers, forcing them to make their devices secure even though their customers don’t care. They could impose liabilities on manufacturers, allowing companies like Dyn to sue them if their devices are used in DDoS attacks. The details would need to be carefully scoped, but either of these options would raise the cost of insecurity and give companies incentives to spend money making their devices secure.

It’s true that this is a domestic solution to an international problem and that there’s no U.S. regulation that will affect, say, an Asian-made product sold in South America, even though that product could still be used to take down U.S. websites. But the main costs in making software come from development. If the United States and perhaps a few other major markets implement strong Internet-security regulations on IoT devices, manufacturers will be forced to upgrade their security if they want to sell to those markets. And any improvements they make in their software will be available in their products wherever they are sold, simply because it makes no sense to maintain two different versions of the software. This is truly an area where the actions of a few countries can drive worldwide change.

Regardless of what you think about regulation vs. market solutions, I believe there is no choice. Governments will get involved in the IoT, because the risks are too great and the stakes are too high. Computers are now able to affect our world in a direct and physical manner.

Security researchers have demonstrated the ability to remotely take control of Internet-enabled cars. They’ve demonstrated ransomware against home thermostats and exposed vulnerabilities in implanted medical devices. They’ve hacked voting machines and power plants. In one recent paper, researchers showed how a vulnerability in smart lightbulbs could be used to start a chain reaction, resulting in them all being controlled by the attackers ­— that’s every one in a city. Security flaws in these things could mean people dying and property being destroyed.

Nothing motivates the U.S. government like fear. Remember 2001? A small-government Republican president created the Department of Homeland Security in the wake of the Sept. 11 terrorist attacks: a rushed and ill-thought-out decision that we’ve been trying to fix for more than a decade. A fatal IoT disaster will similarly spur our government into action, and it’s unlikely to be well-considered and thoughtful action. Our choice isn’t between government involvement and no government involvement. Our choice is between smarter government involvement and stupider government involvement. We have to start thinking about this now. Regulations are necessary, important and complex ­— and they’re coming. We can’t afford to ignore these issues until it’s too late.

In general, the software market demands that products be fast and cheap and that security be a secondary consideration. That was okay when software didn’t matter —­ it was okay that your spreadsheet crashed once in a while. But a software bug that literally crashes your car is another thing altogether. The security vulnerabilities in the Internet of Things are deep and pervasive, and they won’t get fixed if the market is left to sort it out for itself. We need to proactively discuss good regulatory solutions; otherwise, a disaster will impose bad ones on us.

This essay previously appeared in the Washington Post.

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Manipulating Juries with PowerPoint

Interesting article on the subconscious visual tricks used to manipulate juries and affect verdicts.

In December 2012 the Washington Supreme Court threw out Glasmann’s convictions based on the “highly inflammatory” slides. As a general rule, courts don’t want prosecutors expressing their personal opinion to a jury; they’re supposed to couch their arguments in terms of what the evidence shows. Plastering the word “GUILTY” on a slide — not once or twice, but three times — was a “flagrant and ill intentioned” violation of this principle, the Washington Supreme Court wrote. The captions superimposed on the photos were “the equivalent of unadmitted evidence.”

One justice, Tom Chambers, wrote that he was stunned at the state’s contention that there was nothing wrong with digitally altering the booking photo. “Under the State’s logic, in a shooting case, there would be nothing improper with the State altering an image of the accused by photoshopping a gun into his hand,” Chambers wrote.

Jeffrey Ellis, a lawyer from Portland, Oregon, represented Glasmann on appeal. “We all know that commercials can try to persuade people on a subconscious level,” Ellis said in an interview. “But I don’t think the criminal-justice system wants to enter into that base arena.”

I think we need some clear rules as to what’s permitted.

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The Limits of Police Subterfuge

“The next time you call for assistance because the Internet service in your home is not working, the ‘technician’ who comes to your door may actually be an undercover government agent. He will have secretly disconnected the service, knowing that you will naturally call for help and — ­when he shows up at your door, impersonating a technician­ — let him in. He will walk through each room of your house, claiming to diagnose the problem. Actually, he will be videotaping everything (and everyone) inside. He will have no reason to suspect you have broken the law, much less probable cause to obtain a search warrant. But that makes no difference, because by letting him in, you will have ‘consented’ to an intrusive search of your home.”

This chilling scenario is the first paragraph of a motion to suppress evidence gathered by the police in exactly this manner, from a hotel room. Unbelievably, this isn’t a story from some totalitarian government on the other side of an ocean. This happened in the United States, and by the FBI. Eventually — I’m sure there will be appeals — higher U.S. courts will decide whether this sort of practice is legal. If it is, the country will slide even further into a society where the police have even more unchecked power than they already possess.

The facts are these. In June, Two wealthy Macau residents stayed at Caesar’s Palace in Las Vegas. The hotel suspected that they were running an illegal gambling operation out of their room. They enlisted the police and the FBI, but could not provide enough evidence for them to get a warrant. So instead they repeatedly cut the guests’ Internet connection. When the guests complained to the hotel, FBI agents wearing hidden cameras and recorders pretended to be Internet repair technicians and convinced the guests to let them in. They filmed and recorded everything under the pretense of fixing the Internet, and then used the information collected from that to get an actual search warrant. To make matters even worse, they lied to the judge about how they got their evidence.

The FBI claims that their actions are no different from any conventional sting operation. For example, an undercover policeman can legitimately look around and report on what he sees when he invited into a suspect’s home under the pretext of trying to buy drugs. But there are two very important differences: one of consent, and the other of trust. The former is easier to see in this specific instance, but the latter is much more important for society.

You can’t give consent to something you don’t know and understand. The FBI agents did not enter the hotel room under the pretext of making an illegal bet. They entered under a false pretext, and relied on that for consent of their true mission. That makes things different. The occupants of the hotel room didn’t realize who they were giving access to, and they didn’t know their intentions. The FBI knew this would be a problem. According to the New York Times, “a federal prosecutor had initially warned the agents not to use trickery because of the ‘consent issue.’ In fact, a previous ruse by agents had failed when a person in one of the rooms refused to let them in.” Claiming that a person granting an Internet technician access is consenting to a police search makes no sense, and is no different than one of those “click through” Internet license agreements that you didn’t read saying one thing and while meaning another. It’s not consent in any meaningful sense of the term.

Far more important is the matter of trust. Trust is central to how a society functions. No one, not even the most hardened survivalists who live in backwoods log cabins, can do everything by themselves. Humans need help from each other, and most of us need a lot of help from each other. And that requires trust. Many Americans’ homes, for example, are filled with systems that require outside technical expertise when they break: phone, cable, Internet, power, heat, water. Citizens need to trust each other enough to give them access to their hotel rooms, their homes, their cars, their person. Americans simply can’t live any other way.

It cannot be that every time someone allows one of those technicians into our homes they are consenting to a police search. Again from the motion to suppress: “Our lives cannot be private — ­and our personal relationships intimate­ — if each physical connection that links our homes to the outside world doubles as a ready-made excuse for the government to conduct a secret, suspicionless, warrantless search.” The resultant breakdown in trust would be catastrophic. People would not be able to get the assistance they need. Legitimate servicemen would find it much harder to do their job. Everyone would suffer.

It all comes back to the warrant. Through warrants, Americans legitimately grant the police an incredible level of access into our personal lives. This is a reasonable choice because the police need this access in order to solve crimes. But to protect ordinary citizens, the law requires the police to go before a neutral third party and convince them that they have a legitimate reason to demand that access. That neutral third party, a judge, then issues the warrant when he or she is convinced. This check on the police’s power is for Americans’ security, and is an important part of the Constitution.

In recent years, the FBI has been pushing the boundaries of its warrantless investigative powers in disturbing and dangerous ways. It collects phone-call records of millions of innocent people. It uses hacking tools against unknown individuals without warrants. It impersonates legitimate news sites. If the lower court sanctions this particular FBI subterfuge, the matter needs to be taken up — ­and reversed­ — by the Supreme Court.

This essay previously appeared in The Atlantic.

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