California — Our Governator passed a law making it illegal to secretly scan RFID tags

He then killed a bill that would limit the amount of time retailers could hold onto customer information, for the second year in a row.

Nevada — A new law requires businesses to encrypt customer information sent outside “the secure system of the business” except by fax

Massachusetts — New rules require that organizations that store personal data about its residents must encrypt the data on portable devices starting in 2009.

Brian Krebs at the Washington Post has the nitty gritty about the above new laws.

One of the main problems in counterterrorism today is that there are so many people and vehicles, and so much data and material, moving through globalization's myriad networks that it seems virtually impossible to track it all effectively. Nowhere has this problem been more acute than on the high seas.

In 2006, Adm. Harry Ulrich, then U.S. commander of NATO Naval Forces Europe, decided to do something about it. Despite having virtually no resources, his dream was to transpose the global air-traffic control system onto sea traffic.

Worldwide, aircraft are transparent, because they're all required to carry an identification beacon that allows them to be tracked leaving and entering airports, and monitored between airports, by a global network of sensors. Act suspiciously and somebody's fighter aircraft will soon be on your tail.

No such pervasive system currently exists globally for maritime traffic. While bigger ships carry an ID beacon similar to aircraft, without a shared monitoring network, that's like tracking only selected commercial jets and giving everyone else a pass.
So Ulrich, upon taking command, asked a simple question: "If we can do that in the air, why can't we do it on the sea?" He made a point of pioneering his sea-traffic-control effort first inside the Mediterranean, where NATO's southern naval forces have historically been concentrated, but his real target was waters off Africa -- the most ungoverned maritime space in the world.

Ulrich knew the U. S. Navy couldn't do it alone, much less bring Africa's meager coast-guard-like navies up to snuff so they could do it on their own. So he quickly created a network of assets -- both public and private -- to manage that space, modeling his monitoring system on international air-traffic control.

Ulrich began stitching together a network of shore-based sensors ringing the Mediterranean. His naval command then began initial monitoring by tapping into the International Maritime Organization's existing Automated Identification System, transforming NATO's ability to track ship traffic in the Med.

Almost overnight, NATO went from tracking dozens of ships on the Mediterranean to thousands, and instead of getting the data sometimes up to 72 hours late, now the contacts were being tracked in one to five minutes -- to an accuracy within 50 feet on the earth's surface.

When the classic big-firm systems integrators told Ulrich it would be too costly to pull it off, the admiral turned to the Volpe Center in Cambridge, Massachusetts, a U.S. Department of Transportation research center. Instead of hundreds of millions of dollars, Ulrich's initial network cost $900,000. The shore-based receivers are small, roughly the size of a radar dish you might find on a pleasure craft.

The strength of the system is a function of its reach: the more countries join, the larger the shared operational picture. By the time Ulrich retired at the end of 2007, he had enlisted 32 countries throughout the Mediterranean, the North Atlantic, along the west coast of Africa, around the Black Sea, and in the Pacific. Today, the network continues to spread around the planet.

With Ulrich's system in place, local police, coast guards, and border patrols catch most bad guys, obviating American military responses. As Harry told me for an article I wrote about his work in a fall 2007 issue of Esquire, "I don't do defense; I do security. When you talk defense, you talk containment and mutually assured destruction. When you talk security, you talk collaboration and networking. This is the future."

The admiral's legacy program, the Maritime Safety and Security Information System, earned the Volpe Center a prestigious "Innovations in American Government" award this month from Harvard University's Ash Institute for Democratic Governance and Innovation.

You'll have to pardon me this morning if the round-up seems a bit off. I'm still a little stunned at the spectacle of an arena full of (seemingly sober and sane) adults chanting, "Drill, baby, drill".

So let's see, what's in the news? Well, last night Republicans trotted out a Massachusetts venture capitalist and governor, the former mayor of New York City, former executives of eBay and HP, and an Alaskan neophyte pol who as mayor of a small town delivered $4,000 in federal pork for every man, woman, and child, in railing against coastal elites and Washington politics, while supporting a candidate who's been in the Senate for 26 years.

The "Oyster card" used on the London Tube was at issue in the Dutch case, and a similar fare card used on the Boston "T" was the center of the U.S. case. The Dutch court got it right, and the American court, in Boston, got it wrong from the start -- despite facing an open-and-shut case of First Amendment prior restraint.

The U.S. court has since seen the error of its ways -- but the damage is done. The MIT security researchers who were prepared to discuss their Boston findings at the DefCon security conference were prevented from giving their talk.

The ethics of full disclosure are intimately familiar to those of us in the computer-security field. Before full disclosure became the norm, researchers would quietly disclose vulnerabilities to the vendors -- who would routinely ignore them. Sometimes vendors would even threaten researchers with legal action if they disclosed the vulnerabilities.

Later on, researchers started disclosing the existence of a vulnerability but not the details. Vendors responded by denying the security holes' existence, or calling them just theoretical. It wasn't until full disclosure became the norm that vendors began consistently fixing vulnerabilities quickly. Now that vendors routinely patch vulnerabilities, researchers generally give them advance notice to allow them to patch their systems before the vulnerability is published. But even with this "responsible disclosure" protocol, it's the threat of disclosure that motivates them to patch their systems. Full disclosure is the mechanism (.pdf) by which computer security improves.

Outside of computer security, secrecy is much more the norm. Some security communities, like locksmiths, behave much like medieval guilds, divulging the secrets of their profession only to those within it. These communities hate open research, and have responded with surprising vitriol to researchers who have found serious vulnerabilities in bicycle locks, combination safes (.pdf), master-key systems and many other security devices.

Researchers have received a similar reaction from other communities more used to secrecy than openness. Researchers -- sometimes young students -- who discovered and published flaws in copyright-protection schemes, voting-machine security and now wireless access cards have all suffered recriminations and sometimes lawsuits for not keeping the vulnerabilities secret. When Christopher Soghoian created a website allowing people to print fake airline boarding passes, he got several unpleasant visits from the FBI.

This preference for secrecy comes from confusing a vulnerability with information about that vulnerability. Using secrecy as a security measure is fundamentally fragile. It assumes that the bad guys don't do their own security research. It assumes that no one else will find the same vulnerability. It assumes that information won't leak out even if the research results are suppressed. These assumptions are all incorrect.

The problem isn't the researchers; it's the products themselves. Companies will only design security as good as what their customers know to ask for. Full disclosure helps customers evaluate the security of the products they buy, and educates them in how to ask for better security. The Dutch court got it exactly right when it wrote: "Damage to NXP is not the result of the publication of the article but of the production and sale of a chip that appears to have shortcomings."

In a world of forced secrecy, vendors make inflated claims about their products, vulnerabilities don't get fixed, and customers are no wiser. Security research is stifled, and security technology doesn't improve. The only beneficiaries are the bad guys.

If you'll forgive the analogy, the ethics of full disclosure parallel the ethics of not paying kidnapping ransoms. We all know why we don't pay kidnappers: It encourages more kidnappings. Yet in every kidnapping case, there's someone -- a spouse, a parent, an employer -- with a good reason why, in this one case, we should make an exception.

The reason we want researchers to publish vulnerabilities is because that's how security improves. But in every case there's someone -- the Massachusetts Bay Transit Authority, the locksmiths, an election machine manufacturer -- who argues that, in this one case, we should make an exception.

We shouldn't. The benefits of responsibly publishing attacks greatly outweigh the potential harm. Disclosure encourages companies to build security properly rather than relying on shoddy design and secrecy, and discourages them from promising security based on their ability to threaten researchers. It's how we learn about security, and how we improve future security.

This essay previously appeared on Wired.com.

EDITED TO ADD (8/26): Matt Blaze has a good essay on the topic.

The "Oyster card" used on the London Tube was at issue in the Dutch case, and a similar fare card used on the Boston "T" was the center of the U.S. case. The Dutch court got it right, and the American court, in Boston, got it wrong from the start -- despite facing an open-and-shut case of First Amendment prior restraint.

The U.S. court has since seen the error of its ways -- but the damage is done. The MIT security researchers who were prepared to discuss their Boston findings at the DefCon security conference were prevented from giving their talk.

The ethics of full disclosure are intimately familiar to those of us in the computer-security field. Before full disclosure became the norm, researchers would quietly disclose vulnerabilities to the vendors -- who would routinely ignore them. Sometimes vendors would even threaten researchers with legal action if they disclosed the vulnerabilities.

Later on, researchers started disclosing the existence of a vulnerability but not the details. Vendors responded by denying the security holes' existence, or calling them just theoretical. It wasn't until full disclosure became the norm that vendors began consistently fixing vulnerabilities quickly. Now that vendors routinely patch vulnerabilities, researchers generally give them advance notice to allow them to patch their systems before the vulnerability is published. But even with this "responsible disclosure" protocol, it's the threat of disclosure that motivates them to patch their systems. Full disclosure is the mechanism (.pdf) by which computer security improves.

Outside of computer security, secrecy is much more the norm. Some security communities, like locksmiths, behave much like medieval guilds, divulging the secrets of their profession only to those within it. These communities hate open research, and have responded with surprising vitriol to researchers who have found serious vulnerabilities in bicycle locks, combination safes (.pdf), master-key systems and many other security devices.

Researchers have received a similar reaction from other communities more used to secrecy than openness. Researchers -- sometimes young students -- who discovered and published flaws in copyright-protection schemes, voting-machine security and now wireless access cards have all suffered recriminations and sometimes lawsuits for not keeping the vulnerabilities secret. When Christopher Soghoian created a website allowing people to print fake airline boarding passes, he got several unpleasant visits from the FBI.

This preference for secrecy comes from confusing a vulnerability with information about that vulnerability. Using secrecy as a security measure is fundamentally fragile. It assumes that the bad guys don't do their own security research. It assumes that no one else will find the same vulnerability. It assumes that information won't leak out even if the research results are suppressed. These assumptions are all incorrect.

The problem isn't the researchers; it's the products themselves. Companies will only design security as good as what their customers know to ask for. Full disclosure helps customers evaluate the security of the products they buy, and educates them in how to ask for better security. The Dutch court got it exactly right when it wrote: "Damage to NXP is not the result of the publication of the article but of the production and sale of a chip that appears to have shortcomings."

In a world of forced secrecy, vendors make inflated claims about their products, vulnerabilities don't get fixed, and customers are no wiser. Security research is stifled, and security technology doesn't improve. The only beneficiaries are the bad guys.

If you'll forgive the analogy, the ethics of full disclosure parallel the ethics of not paying kidnapping ransoms. We all know why we don't pay kidnappers: It encourages more kidnappings. Yet in every kidnapping case, there's someone -- a spouse, a parent, an employer -- with a good reason why, in this one case, we should make an exception.

The reason we want researchers to publish vulnerabilities is because that's how security improves. But in every case there's someone -- the Massachusetts Bay Transit Authority, the locksmiths, an election machine manufacturer -- who argues that, in this one case, we should make an exception.

We shouldn't. The benefits of responsibly publishing attacks greatly outweigh the potential harm. Disclosure encourages companies to build security properly rather than relying on shoddy design and secrecy, and discourages them from promising security based on their ability to threaten researchers. It's how we learn about security, and how we improve future security.

---

Bruce Schneier is Chief Security Technology Officer of BT Global Services and author of Beyond Fear: Thinking Sensibly About Security in an Uncertain World. You can read more of his writings on his website.

From the Confidential Memo Prepared for the MBTA which was publicly disclosed by the MBTA is court filing:

This seems to break all the rules of integrity of sensitive data storage. How could someone store money on a magnetic stripe in 2008 and not store an identifier that references the account in a central database?

The tickets do have a unique identifier generated when the card is initially purchased so a fraud detection system could be in place or is planned. But this would require tracking the value on the ticket or the usage of the ticket centrally so it isn’t clear why the value is stored on the card in the first place.

There are so many question about the security of this public system.  Fraud costs the Massachusetts taxpayer money and refitting an insecure, ill-designed system costs the Massachusetts taxpayer money. [Disclosure: I am a Massachusetts taxpayer.]

It should be a requirement that the current system or the (hopefully) upgraded system be tested by an independent organization that specializes in cryptosystems.  If the independent testing uncovers vulnerabilities, they need to be fixed before the system is fielded. Then the system should be retested to verify the fixes.  Once the system is deemed secure by an independent organization, a summary of the test document should be published for public inspection.  It should include the types of testing conducted and the results.

The public trust requires inspection of taxpayer funded projects to make sure they meet acceptible standards and vendors held responsible for deficiencies.  Projects that use computers and software should not get a free pass. It will be interesting to see if the CharlieTicket system is ever held up to public scrutiny.

From the Confidential Memo Prepared for the MBTA which was publicly disclosed by the MBTA is court filing:

This seems to break all the rules of integrity of sensitive data storage. How could someone store money on a magnetic stripe in 2008 and not store an identifier that references the account in a central database?

The tickets do have a unique identifier generated when the card is initially purchased so a fraud detection system could be in place or is planned. But this would require tracking the value on the ticket or the usage of the ticket centrally so it isn’t clear why the value is stored on the card in the first place.

There are so many question about the security of this public system. Fraud costs the Massachusetts taxpayer money and refitting an insecure, ill-designed system costs the Massachusetts taxpayer money. [Disclosure: I am a Massachusetts taxpayer.]

It should be a requirement that the current system or the (hopefully) upgraded system be tested by an independent organization that specializes in cryptosystems. If the independent testing uncovers vulnerabilities, they need to be fixed before the system is fielded. Then the system should be retested to verify the fixes. Once the system is deemed secure by an independent organization, a summary of the test document should be published for public inspection. It should include the types of testing conducted and the results.

The public trust requires inspection of taxpayer funded projects to make sure they meet acceptible standards and vendors held responsible for deficiencies. Projects that use computers and software should not get a free pass. It will be interesting to see if the CharlieTicket system is ever held up to public scrutiny.