Conventional wisdom holds that terrorism is inherently political, and that people become terrorists for political reasons. This is the "strategic" model of terrorism, and it's basically an economic model. It posits that people resort to terrorism when they believe -- rightly or wrongly -- that terrorism is worth it; that is, when they believe the political gains of terrorism minus the political costs are greater than if they engaged in some other, more peaceful form of protest. It's assumed, for example, that people join Hamas to achieve a Palestinian state; that people join the PKK to attain a Kurdish national homeland; and that people join al-Qaida to, among other things, get the United States out of the Persian Gulf.

If you believe this model, the way to fight terrorism is to change that equation, and that's what most experts advocate. Governments tend to minimize the political gains of terrorism through a no-concessions policy; the international community tends to recommend reducing the political grievances of terrorists via appeasement, in hopes of getting them to renounce violence. Both advocate policies to provide effective nonviolent alternatives, like free elections.

Historically, none of these solutions has worked with any regularity. Max Abrahms, a predoctoral fellow at Stanford University's Center for International Security and Cooperation, has studied dozens of terrorist groups from all over the world. He argues that the model is wrong. In a paper (.pdf) published this year in International Security that -- sadly -- doesn't have the title "Seven Habits of Highly Ineffective Terrorists," he discusses, well, seven habits of highly ineffective terrorists. These seven tendencies are seen in terrorist organizations all over the world, and they directly contradict the theory that terrorists are political maximizers:

Terrorists, he writes, (1) attack civilians, a policy that has a lousy track record of convincing those civilians to give the terrorists what they want; (2) treat terrorism as a first resort, not a last resort, failing to embrace nonviolent alternatives like elections; (3) don't compromise with their target country, even when those compromises are in their best interest politically; (4) have protean political platforms, which regularly, and sometimes radically, change; (5) often engage in anonymous attacks, which precludes the target countries making political concessions to them; (6) regularly attack other terrorist groups with the same political platform; and (7) resist disbanding, even when they consistently fail to achieve their political objectives or when their stated political objectives have been achieved.

Abrahms has an alternative model to explain all this: People turn to terrorism for social solidarity. He theorizes that people join terrorist organizations worldwide in order to be part of a community, much like the reason inner-city youths join gangs in the United States.

The evidence supports this. Individual terrorists often have no prior involvement with a group's political agenda, and often join multiple terrorist groups with incompatible platforms. Individuals who join terrorist groups are frequently not oppressed in any way, and often can't describe the political goals of their organizations. People who join terrorist groups most often have friends or relatives who are members of the group, and the great majority of terrorist are socially isolated: unmarried young men or widowed women who weren't working prior to joining. These things are true for members of terrorist groups as diverse as the IRA and al-Qaida.

For example, several of the 9/11 hijackers planned to fight in Chechnya, but they didn't have the right paperwork so they attacked America instead. The mujahedeen had no idea whom they would attack after the Soviets withdrew from Afghanistan, so they sat around until they came up with a new enemy: America. Pakistani terrorists regularly defect to another terrorist group with a totally different political platform. Many new al-Qaida members say, unconvincingly, that they decided to become a jihadist after reading an extreme, anti-American blog, or after converting to Islam, sometimes just a few weeks before. These people know little about politics or Islam, and they frankly don't even seem to care much about learning more. The blogs they turn to don't have a lot of substance in these areas, even though more informative blogs do exist.

All of this explains the seven habits. It's not that they're ineffective; it's that they have a different goal. They might not be effective politically, but they are effective socially: They all help preserve the group's existence and cohesion.

This kind of analysis isn't just theoretical; it has practical implications for counterterrorism. Not only can we now better understand who is likely to become a terrorist, we can engage in strategies specifically designed to weaken the social bonds within terrorist organizations. Driving a wedge between group members -- commuting prison sentences in exchange for actionable intelligence, planting more double agents within terrorist groups -- will go a long way to weakening the social bonds within those groups.

We also need to pay more attention to the socially marginalized than to the politically downtrodden, like unassimilated communities in Western countries. We need to support vibrant, benign communities and organizations as alternative ways for potential terrorists to get the social cohesion they need. And finally, we need to minimize collateral damage in our counterterrorism operations, as well as clamping down on bigotry and hate crimes, which just creates more dislocation and social isolation, and the inevitable calls for revenge.

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Bruce Schneier is Chief Security Technology Officer of BT, and author of Beyond Fear: Thinking Sensibly About Security in an Uncertain World.

Imagine you're in charge of infiltrating sleeper agents into the United States. The year is 1983, and the proliferation of identity databases is making it increasingly difficult to create fake credentials. Ten years ago, someone could have just shown up in the country and gotten a driver's license, Social Security card and bank account -- possibly using the identity of someone roughly the same age who died as a young child -- but it's getting harder. And you know that trend will only continue. So you decide to grow your own identities.

Call it "identity farming." You invent a handful of infants. You apply for Social Security numbers for them. Eventually, you open bank accounts for them, file tax returns for them, register them to vote, and apply for credit cards in their name. And now, 25 years later, you have a handful of identities ready and waiting for some real people to step into them.

There are some complications, of course. Maybe you need people to sign their name as parents -- or, at least, mothers. Maybe you need to doctors to fill out birth certificates. Maybe you need to fill out paperwork certifying that you're home-schooling these children. You'll certainly want to exercise their financial identity: depositing money into their bank accounts and withdrawing it from ATMs, using their credit cards and paying the bills, and so on. And you'll need to establish some sort of addresses for them, even if it is just a mail drop.

You won't be able to get driver's licenses or photo IDs on their name. That isn't critical, though; in the U.S., more than 20 million adult citizens don't have photo IDs. But other than that, I can't think of any reason why identity farming wouldn't work.

Here's the real question: Do you actually have to show up for any part of your life?

Again, I made this all up. I have no evidence that anyone is actually doing this. It's not something a criminal organization is likely to do; twenty-five years is too distant a payoff horizon. The same logic holds true for terrorist organizations; it's not worth it. It might have been worth it to the KGB -- although perhaps harder to justify after the Soviet Union broke up in 1991 -- and might be an attractive option to existing intelligence adversaries like China.

Immortals could also use this trick to self-perpetuate themselves, inventing their own children and gradually assuming their identity, then killing their parents off. They could even show up for their own driver's license photos, wearing a beard as the father and blue spiked hair as the son. I’m told this is a common idea in Highlander fan fiction.

The point isn't to create another movie plot threat, but to point out the central role that data has taken on in our lives. Previously, I've said that we all have a data shadow that follows us around, and that more and more institutions interact with our data shadows instead of with us. We only intersect with our data shadows once in a while -- when we apply for a driver's license or passport, for example -- and those interactions are authenticated by older, less-secure interactions. The rest of the world assumes that our photo IDs glue us to our data shadows, ignoring the rather flimsy connection between us and our plastic cards. (And, no, REAL-ID won't help.)

It seems to me that our data shadows are becoming increasingly distinct from us, almost with a life of their own. What's important now is our shadows; we're secondary. And as our society relies more and more on these shadows, we might even become unnecessary.

Our data shadows can live a perfectly normal life without us.

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Bruce Schneier is Chief Security Technology Officer of BT, and author of Beyond Fear: Thinking Sensibly About Security in an Uncertain World.

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.

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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.

It's basically what you would expect: Appoint a national cyber security advisor, invest in math and science education, establish standards for critical infrastructure, spend money on enforcement, establish national standards for securing personal data and data-breach disclosure, and work with industry and academia to develop a bunch of needed technologies.

I could comment on the plan, but with security the devil is always in the details -- and, of course, at this point there are few details. But since he brought up the topic -- McCain supposedly is "working on the issues" as well -- I have three pieces of policy advice for the next president, whoever he is. They're too detailed for campaign speeches or even position papers, but they're essential for improving information security in our society. Actually, they apply to national security in general. And they're things only government can do.

One, use your immense buying power to improve the security of commercial products and services. One property of technological products is that most of the cost is in the development of the product rather than the production. Think software: The first copy costs millions, but the second copy is free.

You have to secure your own government networks, military and civilian. You have to buy computers for all your government employees. Consolidate those contracts, and start putting explicit security requirements into the RFPs. You have the buying power to get your vendors to make serious security improvements in the products and services they sell to the government, and then we all benefit because they'll include those improvements in the same products and services they sell to the rest of us. We're all safer if information technology is more secure, even though the bad guys can use it, too.

Two, legislate results and not methodologies. There are a lot of areas in security where you need to pass laws, where the security externalities are such that the market fails to provide adequate security. For example, software companies who sell insecure products are exploiting an externality just as much as chemical plants that dump waste into the river. But a bad law is worse than no law. A law requiring companies to secure personal data is good; a law specifying what technologies they should use to do so is not. Mandating software liabilities for software failures is good, detailing how is not. Legislate for the results you want and implement the appropriate penalties; let the market figure out how -- that's what markets are good at.

Three, broadly invest in research. Basic research is risky; it doesn't always pay off. That's why companies have stopped funding it. Bell Labs is gone because nobody could afford it after the AT&T breakup, but the root cause was a desire for higher efficiency and short-term profitability -- not unreasonable in an unregulated business. Government research can be used to balance that by funding long-term research.

Spread those research dollars wide. Lately, most research money has been redirected through DARPA to near-term military-related projects; that's not good. Keep the earmark-happy Congress from dictating (.pdf) how the money is spent. Let the NSF, NIH and other funding agencies decide how to spend the money and don't try to micromanage. Give the national laboratories lots of freedom, too. Yes, some research will sound silly to a layman. But you can't predict what will be useful for what, and if funding is really peer-reviewed, the average results will be much better. Compared to corporate tax breaks and other subsidies, this is chump change.

If our research capability is to remain vibrant, we need more science and math students with decent elementary and high school preparation. The declining interest is partly from the perception that scientists don't get rich like lawyers and dentists and stockbrokers, but also because science isn't valued in a country full of creationists. One way the president can help is by trusting scientific advisers and not overruling them for political reasons.

Oh, and get rid of those post-9/11 restrictions on student visas that are causing (.pdf) so many top students to do their graduate work in Canada, Europe and Asia instead of in the United States. Those restrictions will hurt us (.pdf) immensely in the long run.

Those are the three big ones; the rest is in the details. And it's the details that matter. There are lots of serious issues that you're going to have to tackle: data privacy, data sharing, data mining, government eavesdropping, government databases, use of Social Security numbers as identifiers, and so on. It's not enough to get the broad policy goals right. You can have good intentions and enact a good law, and have the whole thing completely gutted by two sentences sneaked in during rulemaking by some lobbyist.

Security is both subtle and complex, and -- unfortunately -- it doesn't readily lend itself to normal legislative processes. You're used to finding consensus, but security by consensus rarely works. On the internet, security standards are much worse when they're developed by a consensus body, and much better when someone just does them. This doesn't always work -- a lot of crap security has come from companies that have "just done it" -- but nothing but mediocre standards come from consensus bodies. The point is that you won't get good security without pissing someone off: The information broker industry, the voting machine industry, the telcos. The normal legislative process makes it hard to get security right, which is why I don't have much optimism about what you can get done.

And if you're going to appoint a cyber security czar, you have to give him actual budgetary authority -- otherwise he won't be able to get anything done, either.

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Bruce Schneier is chief security technology officer of BT, and author of Beyond Fear: Thinking Sensibly About Security in an Uncertain World.

The details of the vulnerability aren't important, but basically it's a form of DNS cache poisoning. The DNS system is what translates domain names people understand, like www.schneier.com, to IP addresses computers understand: 204.11.246.1. There is a whole family of vulnerabilities where the DNS system on your computer is fooled into thinking that the IP address for www.badsite.com is really the IP address for www.goodsite.com -- there's no way for you to tell the difference -- and that allows the criminals at www.badsite.com to trick you into doing all sorts of things, like giving up your bank account details. Kaminsky discovered a particularly nasty variant of this cache-poisoning attack.

Here's the way the timeline was supposed to work: Kaminsky discovered the vulnerability about six months ago, and quietly worked with vendors to patch it. (There's a fairly straightforward fix, although the implementation nuances are complicated.) Of course, this meant describing the vulnerability to them; why would companies like Microsoft and Cisco believe him otherwise? On July 8, he held a press conference to announce the vulnerability -- but not the details -- and reveal that a patch was available from a long list of vendors. We would all have a month to patch, and Kaminsky would release details of the vulnerability at the BlackHat conference early next month.

Of course, the details leaked. How isn't important; it could have leaked a zillion different ways. Too many people knew about it for it to remain secret. Others who knew the general idea were too smart not to speculate on the details. I'm kind of amazed the details remained secret for this long; undoubtedly it had leaked into the underground community before the public leak two days ago. So now everyone who back-burnered the problem is rushing to patch, while the hacker community is racing to produce working exploits.

What's the moral here? It's easy to condemn Kaminsky: If he had shut up about the problem, we wouldn't be in this mess. But that's just wrong. Kaminsky found the vulnerability by accident. There's no reason to believe he was the first one to find it, and it's ridiculous to believe he would be the last. Don't shoot the messenger. The problem is with the DNS protocol; it's insecure.

The real lesson is that the patch treadmill doesn't work, and it hasn't for years. This cycle of finding security holes and rushing to patch them before the bad guys exploit those vulnerabilities is expensive, inefficient and incomplete. We need to design security into our systems right from the beginning. We need assurance. We need security engineers involved in system design. This process won't prevent every vulnerability, but it's much more secure -- and cheaper -- than the patch treadmill we're all on now.

What a security engineer brings to the problem is a particular mindset. He thinks about systems from a security perspective. It's not that he discovers all possible attacks before the bad guys do; it's more that he anticipates potential types of attacks, and defends against them even if he doesn't know their details. I see this all the time in good cryptographic designs. It's over-engineering based on intuition, but if the security engineer has good intuition, it generally works.

Kaminsky's vulnerability is a perfect example of this. Years ago, cryptographer Daniel J. Bernstein looked at DNS security and decided that Source Port Randomization was a smart design choice. That's exactly the work-around being rolled out now following Kaminsky's discovery. Bernstein didn't discover Kaminsky's attack; instead, he saw a general class of attacks and realized that this enhancement could protect against them. Consequently, the DNS program he wrote in 2000, djbdns, doesn't need to be patched; it's already immune to Kaminsky's attack.

That's what a good design looks like. It's not just secure against known attacks; it's also secure against unknown attacks. We need more of this, not just on the internet but in voting machines, ID cards, transportation payment cards ... everywhere. Stop assuming that systems are secure unless demonstrated insecure; start assuming that systems are insecure unless designed securely.

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Bruce Schneier is chief security technology officer of BT, and author of Beyond Fear: Thinking Sensibly About Security in an Uncertain World.

In a man-in-the-middle attack, the attacker inserts himself between two communicating parties. Both believe they're talking to each other, and the attacker can delete or modify the communications at will. The Wall Street Journal reported how this gambit played out in Colombia.

This ploy worked because Cesar and his guerrilla bosses didn't know each other well. They didn't recognize each others' voices, and didn't have a friendship or shared history that could have tipped them off about the ruse. Man-in-the-middle is defeated by context, and the FARC guerillas didn't have any.

And that's why man-in-the-middle, abbreviated MITM in the computer security community, is such a problem online: Internet communication is often stripped of any context. There's no way to recognize someone's face. There's no way to recognize someone's voice. When you receive an e-mail purporting to come from a person or organization, you have no idea who actually sent it. When you visit a website, you have no idea if you're really visiting that website. We all like to pretend that we know who we're communicating with -- and for the most part, of course, there isn't any attacker inserting himself into our communications -- but in reality, we don't. And there are lots of hacker tools that exploit this unjustified trust, and implement MITM attacks.

Even with context, it's still possible for MITM to fool both sides -- because electronic communications are often intermittent. Imagine that one of the FARC guerillas became suspicious about who he was talking to. So he asks a question about their shared history as a test: "What did we have for dinner that time last year?" or something like that. On the telephone, the attacker wouldn't be able to answer quickly, so his ruse would be discovered. But e-mail conversation isn't synchronous. The attacker could simply pass that question through to the other end of the communications, and when he got the answer back, he would be able to reply.

This is the way MITM attacks work against web-based financial systems. A bank demands authentication from the user: a password, a one-time code from a token or whatever. The attacker sitting in the middle receives the request from the bank and passes it to the user. The user responds to the attacker, who passes that response to the bank. Now the bank assumes it is talking to the legitimate user, and the attacker is free to send transactions directly to the bank. This kind of attack completely bypasses any two-factor authentication mechanisms, and is becoming a more popular identity theft tactic.

There are cryptographic solutions to MITM attacks, and there are secure web protocols that implement them. Many of them require shared secrets, though, making them only useful in situations where people already know and trust each other.

The NSA-designed STU-III and STE secure telephones solve the MITM problem by embedding the identity of each phone together with its key. (The NSA creates all keys and is trusted by everyone, so this works.) When two phones talk to each other securely, they exchange keys and display the other phone's identity on a screen. Because the phone is in a secure location, the user now knows who he is talking to, and if the phone displays another organization -- as it would if there were a MITM attack in progress -- he should hang up.

Zfone, a secure VoIP system, protects against MITM attacks with a short authentication string. After two Zfone terminals exchange keys, both computers display a four-character string. The users are supposed to manually verify that both strings are the same -- "my screen says 5C19; what does yours say?" -- to ensure that the phones are communicating directly with each other and not with an MITM. The AT&T TSD-3600 worked similarly.

This sort of protection is embedded in SSL, although no one uses it. As it is normally used, SSL provides an encrypted communications link to whoever is at the other end: bank and phishing site, alike. And the better phishing sites create valid SSL connections, so as to more effectively fool users. But if the user wanted to, he could manually check the SSL certificate to see if it was issued to "National Bank of Trustworthiness" or "Two Guys With a Computer in Nigeria."

No one does, though, because you both have to remember and be willing to do the work. (The browsers could make this easier if they wanted to, but they don’t seem to want to.) In the real world, you can easily tell a branch of your bank from a money changer on a streetcorner. But on the internet, a phishing site can be easily made to look like your bank's legitimate website. Any method of telling the two apart takes work. And that's the first step to fooling you with a MITM attack.

Man-in-the-middle isn't new, and it doesn't have to be technological. But the internet makes the attacks easier and more powerful, and that's not going to change anytime soon.

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Bruce Schneier is chief security technology officer of BT, and author of Beyond Fear: Thinking Sensibly About Security in an Uncertain World.

OnStar will soon include the ability for the police to shut off your engine remotely. Buses are getting the same capability, in case terrorists want to re-enact the movie Speed. The Pentagon wants a kill switch installed on airplanes, and is worried about potential enemies installing kill switches on their own equipment.

Microsoft is doing some of the most creative thinking along these lines, with something it's calling "Digital Manners Policies." According to its patent application, DMP-enabled devices would accept broadcast "orders" limiting capabilities. Cellphones could be remotely set to vibrate mode in restaurants and concert halls, and be turned off on airplanes and in hospitals. Cameras could be prohibited from taking pictures in locker rooms and museums, and recording equipment could be disabled in theaters. Professors finally could prevent students from texting one another during class.

The possibilities are endless, and very dangerous. Making this work involves building a nearly flawless hierarchical system of authority. That's a difficult security problem even in its simplest form. Distributing that system among a variety of different devices -- computers, phones, PDAs, cameras, recorders -- with different firmware and manufacturers, is even more difficult. Not to mention delegating different levels of authority to various agencies, enterprises, industries and individuals, and then enforcing the necessary safeguards.

Once we go down this path -- giving one device authority over other devices -- the security problems start piling up. Who has the authority to limit functionality of my devices, and how do they get that authority? What prevents them from abusing that power? Do I get the ability to override their limitations? In what circumstances, and how? Can they override my override?

How do we prevent this from being abused? Can a burglar, for example, enforce a "no photography" rule and prevent security cameras from working? Can the police enforce the same rule to avoid another Rodney King incident? Do the police get "superuser" devices that cannot be limited, and do they get "supercontroller" devices that can limit anything? How do we ensure that only they get them, and what do we do when the devices inevitably fall into the wrong hands?

It's comparatively easy to make this work in closed specialized systems -- OnStar, airplane avionics, military hardware -- but much more difficult in open-ended systems. If you think Microsoft's vision could possibly be securely designed, all you have to do is look at the dismal effectiveness of the various copy-protection and digital-rights-management systems we've seen over the years. That's a similar capabilities-enforcement mechanism, albeit simpler than these more general systems.

And that's the key to understanding this system. Don't be fooled by the scare stories of wireless devices on airplanes and in hospitals, or visions of a world where no one is yammering loudly on their cellphones in posh restaurants. This is really about media companies wanting to exert their control further over your electronics. They not only want to prevent you from surreptitiously recording movies and concerts, they want your new television to enforce good "manners" on your computer, and not allow it to record any programs. They want your iPod to politely refuse to copy music a computer other than your own. They want to enforce their legislated definition of manners: to control what you do and when you do it, and to charge you repeatedly for the privilege whenever possible.

"Digital Manners Policies" is a marketing term. Let's call this what it really is: Selective Device Jamming. It's not polite, it's dangerous. It won't make anyone more secure -- or more polite.

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Bruce Schneier is chief security technology officer of BT, and author of Beyond Fear: Thinking Sensibly About Security in an Uncertain World.

There are also a lot of errors and misconceptions. With its aggressive advertising campaign and a CEO who publishes his Social Security number and dares people to steal his identity -- Todd Davis, 457-55-5462 -- LifeLock is a company that's easy to hate. But the company's story has some interesting security lessons, and it's worth understanding in some detail.

In December 2003, as part of the Fair and Accurate Credit Transactions Act, or Facta (.pdf), credit bureaus were forced to allow you to put a fraud alert on their credit reports, requiring lenders to verify your identity before issuing a credit card in your name. This alert is temporary, and expires after 90 days. Several companies have sprung up -- LifeLock, Debix, LoudSiren, TrustedID -- that automatically renew these alerts and effectively make them permanent.

This service pisses off the credit bureaus and their financial customers. The reason lenders don't routinely verify your identity before issuing you credit is that it takes time, costs money and is one more hurdle between you and another credit card. (Buy, buy, buy -- it's the American way.) So in the eyes of credit bureaus, LifeLock's customers are inferior goods; selling their data isn't as valuable. LifeLock also opts its customers out of pre-approved credit card offers, further making them less valuable in the eyes of credit bureaus.

And, so began a smear campaign on the part of the credit bureaus. You can read their points of view in this New York Times article, written by a reporter who didn't do much more than regurgitate their talking points. And the class action lawsuits have piled on, accusing LifeLock of deceptive business practices, fraudulent advertising and so on. The biggest smear is that LifeLock didn't even protect Todd Davis, and that his identity was allegedly stolen.

It wasn't. Someone in Texas used Davis's SSN to get a $500 advance against his paycheck. It worked because the loan operation didn't check with any of the credit bureaus before approving the loan -- perfectly reasonable for an amount this small. The payday-loan operation called Davis to collect, and LifeLock cleared up the problem. His credit report remains spotless.

The Experian credit bureau's lawsuit basically claims that fraud alerts are only for people who have been victims of identity theft. This seems spurious; the text of the law states that anyone "who asserts a good faith suspicion that the consumer has been or is about to become a victim of fraud or related crime" can request a fraud alert. It seems to me that includes anybody who has ever received one of those notices about their financial details being lost or stolen, which is everybody.

As to deceptive business practices and fraudulent advertising -- those just seem like class action lawyers piling on. LifeLock's aggressive fear-based marketing doesn't seem any worse than a lot of other similar advertising campaigns. My guess is that the class action lawsuits won't go anywhere.

In reality, forcing lenders to verify identity before issuing credit is exactly the sort of thing we need to do to fight identity theft. Basically, there are two ways to deal with identity theft: Make personal information harder to steal, and make stolen personal information harder to use. We all know the former doesn't work, so that leaves the latter. If Congress wanted to solve the problem for real, one of the things it would do is make fraud alerts permanent for everybody. But the credit industry's lobbyists would never allow that.

LifeLock does a bunch of other clever things. They monitor the national address database, and alert you if your address changes. They look for your credit and debit card numbers on hacker and criminal websites and such, and assist you in getting a new number if they see it. They have a million-dollar service guarantee -- for complicated legal reasons, they can't call it insurance -- to help you recover if your identity is ever stolen.

But even with all of this, I am not a LifeLock customer. At $120 a year, it's just not worth it. You wouldn't know it from the press attention, but dealing with identity theft has become easier and more routine. Sure, it's a pervasive problem. The Federal Trade Commission reported that 8.3 million Americans were identity-theft victims in 2005. But that includes things like someone stealing your credit card and using it, something that rarely costs you any money and that LifeLock doesn't protect against. New account fraud is much less common, affecting 1.8 million Americans per year, or 0.8 percent of the adult population. The FTC hasn't published detailed numbers for 2006 or 2007, but the rate seems (.pdf) to be declining.

New card fraud is also not very damaging. The median amount of fraud the thief commits is $1,350, but you're not liable for that. Some spectacularly horrible identity-theft stories notwithstanding, the financial industry is pretty good at quickly cleaning up the mess. The victim's median out-of-pocket cost for new account fraud is only $40, plus ten hours of grief to clean up the problem. Even assuming your time is worth $100 an hour, LifeLock isn’t worth more than $8 a year.

And it's hard to get any data on how effective LifeLock really is. They've been in business three years and have about a million customers, but most of them have joined up in the last year. They've paid out on their service guarantee 113 times, but a lot of those were for things that happened before their customers became customers. (It was easier to pay than argue, I assume.) But they don't know how often the fraud alerts actually catch an identity thief in the act. My guess is that it's less than the 0.8 percent fraud rate above.

LifeLock's business model is based more on the fear of identity theft than the actual risk.

It's pretty ironic of the credit bureaus to attack LifeLock on its marketing practices, since they know all about profiting from the fear of identity theft. Facta also forced the credit bureaus to give Americans a free credit report once a year upon request. Through deceptive marketing techniques, they've turned this requirement into a multimillion-dollar business.

Get LifeLock if you want, or one of its competitors if you prefer. But remember that you can do most of what these companies do yourself. You can put a fraud alert on your own account, but you have to remember to renew it every three months. You can also put a credit freeze on your account, which is more work for the average consumer but more effective if you're a privacy wonk -- and the rules differ by state. And maybe someday Congress will do the right thing and put LifeLock out of business by forcing lenders to verify identity every time they issue credit in someone's name.

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Bruce Schneier is Chief Security Technology Officer of BT, and author of Beyond Fear: Thinking Sensibly About Security in an Uncertain World.

Yet people do, all the time. I've signed book contracts, credit card authorizations, nondisclosure agreements and all sorts of financial documents -- all by fax. I even have a scanned file of my signature on my computer, so I can virtually cut and paste it into documents and fax them directly from my computer without ever having to print them out. What in the world is going on here?

And, more importantly, why are fax signatures still being used after years of experience? Why aren't there many stories of signatures forged through the use of fax machines?

The answer comes from looking at fax signatures not as an isolated security measure, but in the context of the larger system. Fax signatures work because signed faxes exist within a broader communications context.

In a 2003 paper, Economics, Psychology, and Sociology of Security, professor Andrew Odlyzko looks at fax signatures and concludes:

He's right. Thinking back, there really aren't ways in which a criminal could use a forged document sent by fax to defraud me. I suppose an unscrupulous consulting client could forge my signature on an non-disclosure agreement and then sue me, but that hardly seems worth the effort. And if my broker received a fax document from me authorizing a money transfer to a Nigerian bank account, he would certainly call me before completing it.

Credit card signatures aren't verified in person, either -- and I can already buy things over the phone with a credit card -- so there are no new risks there, and Visa knows how to monitor transactions for fraud. Lots of companies accept purchase orders via fax, even for large amounts of stuff, but there's a physical audit trail, and the goods are shipped to a physical address -- probably one the seller has shipped to before. Signatures are kind of a business lubricant: mostly, they help move things along smoothly.

Except when they don't.

On October 30, 2004, Tristian Wilson was released from a Memphis jail on the authority of a forged fax message. It wasn't even a particularly good forgery. It wasn't on the standard letterhead of the West Memphis Police Department. The name of the policeman who signed the fax was misspelled. And the time stamp on the top of the fax clearly showed that it was sent from a local McDonald's.

The success of this hack has nothing to do with the fact that it was sent over by fax. It worked because the jail had lousy verification procedures. They didn't notice any discrepancies in the fax. They didn't notice the phone number from which the fax was sent. They didn't call and verify that it was official. The jail was accustomed to getting release orders via fax, and just acted on this one without thinking. Would it have been any different had the forged release form been sent by mail or courier?

Yes, fax signatures always exist in context, but sometimes they are the linchpin within that context. If you can mimic enough of the context, or if those on the receiving end become complacent, you can get away with mischief.

Arguably, this is part of the security process. Signatures themselves are poorly defined. Sometimes a document is valid even if not signed: A person with both hands in a cast can still buy a house. Sometimes a document is invalid even if signed: The signer might be drunk, or have a gun pointed at his head. Or he might be a minor. Sometimes a valid signature isn't enough; in the United States there is an entire infrastructure of "notary publics" who officially witness signed documents. When I started filing my tax returns electronically, I had to sign a document stating that I wouldn't be signing my income tax documents. And banks don't even bother verifying signatures on checks less than $30,000; it's cheaper to deal with fraud after the fact than prevent it.

Over the course of centuries, business and legal systems have slowly sorted out what types of additional controls are required around signatures, and in which circumstances.

Those same systems will be able to sort out fax signatures, too, but it'll be slow. And that's where there will be potential problems. Already fax is a declining technology. In a few years it'll be largely obsolete, replaced by PDFs sent over e-mail and other forms of electronic documentation. In the past, we've had time to figure out how to deal with new technologies. Now, by the time we institutionalize these measures, the technologies are likely to be obsolete.

What that means is people are likely to treat fax signatures -- or whatever replaces them -- exactly the same way as paper signatures. And sometimes that assumption will get them into trouble.

But it won't cause social havoc. Wilson's story is remarkable mostly because it's so exceptional. And even he was rearrested at his home less than a week later. Fax signatures may be new, but fake signatures have always been a possibility. Our legal and business systems need to deal with the underlying problem -- false authentication -- rather than focus on the technology of the moment. Systems need to defend themselves against the possibility of fake signatures, regardless of how they arrive.

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Bruce Schneier is Chief Security Technology Officer of BT, and author of Beyond Fear: Thinking Sensibly About Security in an Uncertain World.

We leave data everywhere we go. It's not just our bank accounts and stock portfolios, or our itemized bills, listing every credit card purchase and telephone call we make. It's automatic road-toll collection systems, supermarket affinity cards, ATMs and so on.

It's also our lives. Our love letters and friendly chat. Our personal e-mails and SMS messages. Our business plans, strategies and offhand conversations. Our political leanings and positions. And this is just the data we interact with. We all have shadow selves living in the data banks of hundreds of corporations' information brokers -- information about us that is both surprisingly personal and uncannily complete -- except for the errors that you can neither see nor correct.

What happens to our data happens to ourselves.

This shadow self doesn't just sit there: It's constantly touched. It's examined and judged. When we apply for a bank loan, it's our data that determines whether or not we get it. When we try to board an airplane, it's our data that determines how thoroughly we get searched -- or whether we get to board at all. If the government wants to investigate us, they're more likely to go through our data than they are to search our homes; for a lot of that data, they don't even need a warrant.

Who controls our data controls our lives.

It's true. Whoever controls our data can decide whether we can get a bank loan, on an airplane or into a country. Or what sort of discount we get from a merchant, or even how we're treated by customer support. A potential employer can, illegally in the U.S., examine our medical data and decide whether or not to offer us a job. The police can mine our data and decide whether or not we're a terrorist risk. If a criminal can get hold of enough of our data, he can open credit cards in our names, siphon money out of our investment accounts, even sell our property. Identity theft is the ultimate proof that control of our data means control of our life.

We need to take back our data.

Our data is a part of us. It's intimate and personal, and we have basic rights to it. It should be protected from unwanted touch.

We need a comprehensive data privacy law. This law should protect all information about us, and not be limited merely to financial or health information. It should limit others' ability to buy and sell our information without our knowledge and consent. It should allow us to see information about us held by others, and correct any inaccuracies we find. It should prevent the government from going after our information without judicial oversight. It should enforce data deletion, and limit data collection, where necessary. And we need more than token penalties for deliberate violations.

This is a tall order, and it will take years for us to get there. It's easy to do nothing and let the market take over. But as we see with things like grocery store club cards and click-through privacy policies on websites, most people either don't realize the extent their privacy is being violated or don't have any real choice. And businesses, of course, are more than happy to collect, buy, and sell our most intimate information. But the long-term effects of this on society are toxic; we give up control of ourselves.

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Bruce Schneier is Chief Security Technology Officer of BT, and author of Beyond Fear: Thinking Sensibly About Security in an Uncertain World.