SPEAKERS CONTENTS INSERTS
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CYBER SECURITY ENHANCEMENT ACT OF 2001
SUBCOMMITTEE ON CRIME
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
FEBRUARY 12, 2002
Serial No. 58
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Printed for the use of the Committee on the Judiciary
Available via the World Wide Web: http://www.house.gov/judiciary
COMMITTEE ON THE JUDICIARY
F. JAMES SENSENBRENNER, JR., WISCONSIN, Chairman
HENRY J. HYDE, Illinois
GEORGE W. GEKAS, Pennsylvania
HOWARD COBLE, North Carolina
LAMAR SMITH, Texas
ELTON GALLEGLY, California
BOB GOODLATTE, Virginia
ED BRYANT, Tennessee
STEVE CHABOT, Ohio
BOB BARR, Georgia
WILLIAM L. JENKINS, Tennessee
CHRIS CANNON, Utah
LINDSEY O. GRAHAM, South Carolina
SPENCER BACHUS, Alabama
JOHN N. HOSTETTLER, Indiana
MARK GREEN, Wisconsin
RIC KELLER, Florida
DARRELL E. ISSA, California
MELISSA A. HART, Pennsylvania
Page 3 PREV PAGE TOP OF DOCJEFF FLAKE, Arizona
MIKE PENCE, Indiana
JOHN CONYERS, Jr., Michigan
BARNEY FRANK, Massachusetts
HOWARD L. BERMAN, California
RICK BOUCHER, Virginia
JERROLD NADLER, New York
ROBERT C. SCOTT, Virginia
MELVIN L. WATT, North Carolina
ZOE LOFGREN, California
SHEILA JACKSON LEE, Texas
MAXINE WATERS, California
MARTIN T. MEEHAN, Massachusetts
WILLIAM D. DELAHUNT, Massachusetts
ROBERT WEXLER, Florida
TAMMY BALDWIN, Wisconsin
ANTHONY D. WEINER, New York
ADAM B. SCHIFF, California
PHILIP G. KIKO, Chief of Staff-General Counsel
PERRY H. APELBAUM, Minority Chief Counsel
Subcommittee on Crime
LAMAR SMITH, Texas, Chairman
Page 4 PREV PAGE TOP OF DOCMARK GREEN, Wisconsin
HOWARD COBLE, North Carolina
BOB GOODLATTE, Virginia
STEVE CHABOT, Ohio
BOB BARR, Georgia
RIC KELLER, Florida
ROBERT C. SCOTT, Virginia
SHEILA JACKSON LEE, Texas
MARTIN T. MEEHAN, Massachusetts
WILLIAM D. DELAHUNT, Massachusetts
ADAM B. SCHIFF, California
JAY APPERSON, Chief Counsel
SEAN MCLAUGHLIN, Counsel
ELIZABETH SOKUL, Counsel
KATY CROOKS, Counsel
BOBBY VASSAR, Minority Counsel
C O N T E N T S
FEBRUARY 12, 2002
Page 5 PREV PAGE TOP OF DOC The Honorable Lamar Smith, a Representative in Congress From the State of Texas, and Chairman, Subcommittee on Crime
The Honorable Robert C. Scott, a Representative in Congress From the State of Virginia, and Ranking Member, Subcommittee on Crime
Mr. John G. Malcolm, Deputy Assistant Attorney General, Criminal Division, U.S. Department of Justice
Ms. Susan Kelley Koeppen, Corporate Attorney, Microsoft Corporation
Mr. Clint Smith, Vice President and Chief Network Counsel, WorldCom
Mr. Alan Davidson, Staff Counsel, Center for Democracy and Technology
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Material Submitted for the Hearing Record
The Honorable Sheila Jackson Lee, a Representative in Congress From the State of Texas
The Honorable Bob Goodlatte, a Representative in Congress From the State of Virginia
Letter from Mr. Harris N. Miller, President, the Information Technology Association of America (ITAA)
Letter from Mr. Doug Lowenstein, President, Interactive Digital Software Association (IDSA), Washington, DC
Letter from Mr. Marc Rotenberg, Executive Director, and Mihir Kshirsagar, IPIOP Policy Fellow of the Electronic Privacy Information Center, Washington, DC
Letter from Ms. Rachel King and Ms. Katie Corrigan, Legislative Counsel of the American Civil Liberties Union, Washington National Office, Washington, DC
Letter from Judge Diana E. Murphy, Chair, United States Sentencing Commission, Washington, DC
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Statement of Dr. Stephen E. Cross, Director, Software Engineering Institute, Carnegie Mellon University, Pennsylvania, PA
News Release from Business Software Alliance, Washington, DC
CYBER SECURITY ENHANCEMENT ACT
TUESDAY, FEBRUARY 12, 2002
House of Representatives,
Subcommittee on Crime,
Committee on the Judiciary,
The Subcommittee met, pursuant to call, at 4:05 p.m., in Room 2237, Rayburn House Office Building, Hon. Lamar Smith [Chairman of the Subcommittee] presiding.
Mr. SMITH OF TEXAS. The Subcommittee on Crime will come to order. Now, today we are having a legislative hearing on H.R. 3482, the Cyber Security Enhancement Act of 2001. I will recognize Members for their opening statements after which we will look forward to hearing from the witnesses.
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And I will start off by recognizing myself for an opening statement.
Last summer, the Subcommittee on Crime held a series of hearings on cyber security and cyber crime. Since then, mainly after September 11th, much has changed. What has not changed is the increasing need to improve our Nation's cyber security to advance our own technology and to strengthen our criminal laws to prevent, deter and respond to such attacks.
As we increase individual's physical safety at our airports, borders and even sporting events, we should not forget to strengthen cyber security as well. Just as a physical attack could cause destruction, a cyber attack could substantially harm our economy and endanger public health and lives.
This hearing affords the Subcommittee an opportunity to review H.R. 3482, the Cyber Security Enhancement Act of 2001, which includes law enforcement technology and strengthens criminal laws.
Last summer's hearings highlighted the growing threat of cyber crime and cyber terrorism against our citizens and our Nation. Criminals, whether they are terrorists or vandals, use computers and other types of technology to threaten lives, incomes, businesses and our Nation's future. At the previous hearings, law enforcement officials testified that better training, additional resources and increased cooperation and coordination are needed. Private industry testified that cyber crime was a growing problem and cost businesses and the economy billions of dollars every year. Those witnesses urged the Subcommittee to strengthen the penalties for such attacks and improve the coordination and information-sharing capabilities of law enforcement agencies and businesses.
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In response to those hearings, I drafted the Public Safety and Cyber Security Enhancement Act of 2001. Most of H.R. 2915 was adopted as part of the USA Patriot Act, the antiterrorism bill that was enacted in October 2001. To address the issues that were not incorporated, as well as new ones, we introduced a bill that we have before us today.
This legislation increases penalties to better reflect the seriousness of cyber crime, enhance the Federal, State and local law enforcement efforts through better coordination, and assist State and local law enforcement through better grant management, accountability and dissemination of technical advice and information. Additionally, the bill helps protect the Nation's critical infrastructure by authorizing and supporting the National Infrastructure Protection Center, which handles threat assessment and responds to attacks on the Nation's critical infrastructure from both physical and cyber sources.
America must protect our national security, critical infrastructure and economic base from attack, including the growing threat of cyber attacks. Penalties and law enforcement capabilities must be adequate to prevent and deter such attacks.
The chairman of the board, Bill Gatesor I should say chairman of the board of Microsoft, Bill Gates, recently declared that making Microsoft's software less vulnerable to security breaches would take precedent over adding new features, and Oracle's chief security officer said, ''one of the most threatening types of attack is one that is launched in cyberspace to bring down our critical infrastructures.'' And Richard Clark, the White House cyberspace security adviser stated, ''there is a willingness to admit that there are vulnerabilities, and it is not inconceivable that they will be used against us in a way that could be very damaging to our economy.''
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So bolstering our homeland defense, while neglecting cyber security, is like locking the front door of your house but leaving the windows wide open. As a matter of national and economic security, we cannot afford to let technology be our weakest link. With that goal in mind, we welcome our witnesses today and look forward to their comments on this legislation that we have before us. I will now recognize the Ranking Member, Bobby Scott, for his opening statement.
Mr. SCOTT. Thank you, Mr. Chairman, and I appreciate your holding this hearing on H.R. 3482, the Cyber Security Enhancement Act of 2001. I also appreciate the studious approach in which you have approached the issue of cyber crime in general. And by taking this approach, you can make sure that we are doing substantively the best job that we can do. This is our fourth hearing on the issue over the past year in which we have looked at the Federal effort and responsibility, the State and local effort and responsibility and the effort and responsibility of the private sector.
One of the things we have learned is that we risk overreacting to the threats with a heavy-handed law enforcement approach. Indeed, in the USA Patriot Act, we actually repealed some approaches which were found to be virtually unenforceable because they were so heavy-handed. Indeed, we have worked with the industry to give it a chance to develop stronger security systems, and I believe that approach has worked well.
So, Mr. Chairman, I am pleased to see that in the bill before us, of which you are the chief sponsor, there is no such heavy-handed law enforcement approaches. There are some sensible enhancements in the bill, and we may want to make sure that we are doingthat what we are doing does not conflict with the work of the Sentencing Commission already in this area.
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I am sure we can work those issues out. The primary concern I have with the bill is in section 102, which expands the emergency sharing of private information with law enforcement to address threats of death and serious injury. We approved this in the Patriot Act. However, the bill changes the showing required for release of such information from reasonable cause to good faith. As you will recall, Mr. Chairman, during the consideration of the issue in the Patriot Act, a number of us fought the relaxation of the traditional probable cause standard for access to private information by law enforcement and voted for only reluctantly as a compromise on the bill as a whole.
Although the Senate amendments tighten the process some, many of us have remained uneasy with the reasonable cause standard. Now we are faced with further loosening of the standard, and I am not convinced that the case has been made for that yet.
I understand the Department of Justice has concerns with the organizational changes called for in the bill, and we want to hear more from them before we reach conclusions. So I look forward to the testimony of the witnesses to shed light on these matters and look forward with working with you to address the issues in the legislationas the legislation moves forward.
Thank you, Mr. Chairman.
Mr. SMITH OF TEXAS. Thank you, Mr. Scott, for your comments, and I am hopeful that our witnesses today will address some of the questions that you have raised as well.
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Does the gentleman from North Carolina, Mr. Coble, whom we are glad to see, have an opening statement?
Mr. COBLE. No opening statement, Mr. Chairman. Thank you.
Mr. SMITH OF TEXAS. Thank you, Mr. Coble. Let me proceed now. I will introduce our witnesses, as I say, to hear from them directly. Our witnesses are John G. Malcolm, Deputy Assistant Attorney General, Criminal Division, U.S. Department of Justice; Susan Kelley Koeppen, former prosecutor with the Department of Justice, I might add, who is now the corporate attorney for Microsoft Corporation; Clint Smith, Vice President and Chief Network Counsel of WorldCom; and Alan Davidson, Staff Counsel, Center for Democracy and Technology.
Mr. SMITH OF TEXAS. Now, we welcome you all. Obviously, we look forward to your testimony, and Mr. Malcolm, we will begin with you.
STATEMENT OF JOHN G. MALCOLM, DEPUTY ASSISTANT ATTORNEY GENERAL, CRIMINAL DIVISION, U.S. DEPARTMENT OF JUSTICE
Mr. MALCOLM. Thank you, Mr. Chairman. Mr. Chairman, and Members of the Subcommittee, thank you for giving me this opportunity to testify on behalf of the criminal division of the Department of Justice regarding title I of H.R. 3482, the Cyber Security Enhancement Act of 2001. Mr. Chairman, I commend you for sponsoring a bill addressing the issue of computer crime, an issue that is of the utmost importance to our national defense and security, to the strength and vitality of our economy and to the health, safety and privacy of our citizens.
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Internet crime is on the rise. A recent Washington Post article reported that one Internet security firm documented more than 128,000 unauthorized accesses to its clients' computer systems between July and December of last year alone. The Computer Security Institute estimates that the economic loss resulting from such crimes has more than doubled in the last 5 years, and America's ongoing war on terrorism casts such crimes in a grave new light.
Title I of H.R. 3482 increases penalties, thereby deterring more effectively those who would commit computer crimes. The Department strongly supports title I. The Department recommends, however, that the Subcommittee consider two changes: First, the Department urges the Committee to consider broadening slightly the scope of section 106 so that it covers not only hackers who damage computer systems knowing that death or serious injury will result, but also hackers who actually cause death or serious injury by damaging a computer system with reckless disregard for these outcomes.
In an era in which computer systems play an integral role in our critical infrastructures, such as electrical power, telecommunications and medical care, the law should clearly warn would-be hackers of the potential consequences of their actions and hold them fully responsible if they recklessly disregard those consequences.
Consider, for example, a hacker who shuts down a town's phone service. While phone technicians race frantically to restore service, no emergency 9-1-1 calls can go through. As a result, several people needing urgent medical care may die or be seriously injured. Although the hacker might not have known that his conduct would cause death or serious bodily injury, such reckless conduct may well merit punishment greater than the 10 years currently provided by the statute.
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Mr. Chairman, the Internet is a powerful tool, but when the Internet is misused by criminals, it is turned into a harmful weapon. When criminals intentionally damage computer systems recklessly causing severe harm or even death to others, they must be held fully responsible. Thus, the Department encourages this Subcommittee to expand the scope of section 106 to include criminals who recklessly cause death or serious bodily injury.
Second, the Department encourages the Committee to modify section 101 so that it more clearly directs the Sentencing Commission to enhance penalties as you are reexamining the sentencing guidelines that pertain to computer crimes. In my written testimony, which has been provided to the Committee and which I would like to be made a part of the record, I have set forth three suggestions to better achieve this result. With the help of the Chairman and of this Subcommittee, Congress has made great strides to modernize the laws that relate to the investigation and prosecution of cyber crime. We at the Department of Justice look forward to continuing to work with this Committee to address new issues as they arise in this evolving area of law.
Mr. Chairman, that concludes my prepared remarks. I would like to thank you and the Subcommittee again for soliciting the views of the Department of Justice on these important issues, and for allowing me to express them through my oral presentation today. I would be happy, of course, to answer any questions the Subcommittee may have.
Mr. SMITH OF TEXAS. Okay. Thank you, Mr. Malcolm, and I will say to you as I would say to all witnesses that your entire testimony will be made a part of the record. Without objection. But we appreciate also your keeping your testimony within 5 minutes, which you have done very well. Thank you, Mr. Malcolm.
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[The prepared statement of Mr. Malcolm follows:]
PREPARED STATEMENT OF JOHN G. MALCOLM
Mr. Chairman and Members of the Subcommittee, thank you for giving me this opportunity to testify on behalf of the Criminal Division of the Department of Justice regarding Title I of H.R. 3482, the Cyber Security Enhancement Act of 2001. Mr. Chairman, I commend you for sponsoring a bill addressing the issue of computer crime, an issue that is of the utmost importance to our national defense and security, to the strength and vitality of our economy, to the health and safety of our citizens, and to the privacy of every individual.
Working with our partners in state and federal law enforcement, the Department of Justice has made great strides in recent years in investigating and prosecuting computer crime. Through the Department's Computer Crime and Intellectual Property Section, we have trained scores of federal prosecutors and developed a strong network of computer crime coordinators that extends to every United States Attorney's office. We have expanded the Computer Crime and Intellectual Property Section and have established Computer Hacking and Intellectual Property units in key districts. Not only have these prosecutors addressed computer hacking violations and intellectual property theft, but they have provided expertise critical to the ongoing terrorism investigation.
Despite these important achievements, Internet crimes are on the rise. A recent Washington Post article reported that one Internet security firm documented more than 128,000 unauthorized accesses to its clients' systems between July and December last year. The Computer Security Institute estimates that the economic loss resulting from such crimes has more than doubled in the last five years. These crimes also pose a grave threat to the security, safety, and privacy of all Americans. Just last year, federal law enforcement officers captured two Russian hackers who had infiltrated American banks and businesses, stolen private data, including credit card numbers, and extorted those companies by threatening to destroy their computers or release their customers' private information. Had these criminals not been apprehended, the damage they could have done to credit card holders would have been difficult to overstate.
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Title I of H.R. 3482 strengthens the deterrent effect of current laws by increasing penalties and closing loopholes. The Department strongly supports these amendments. The Department recommends, however, that the Subcommittee consider three changes to Title I. The first change would modify section 106 to address the increasing threat of death or serious bodily injury that computer hackers might recklessly cause. The second change would provide a more structured mandate to the Sentencing Commission, directing it to tailor the Sentencing Guidelines to address the burgeoning problem of computer crime in the United States. These two suggested changes are addressed in greater detail below.
The third suggested change concerns section 104(a) of the bill. This provision directs the Attorney General, ''acting through the Federal Bureau of Investigation, to establish and maintain the National Infrastructure Protection Center to serve as a national focal point for threat assessment, warning, investigation and response attacks on the Nation's critical infrastructure for physical and cyber sources. The Administration requests that the phrase, 'acting through the Federal Bureau of Investigation,' be stricken from section 104(a). As a matter of efficiency and effectiveness in government and good drafting practice, statutes that grant authority to the Attorney General should not limit which of his subordinate officers or organizations in the Department of Justice he can act through.
I. PUNISHMENT OF CRIMINALS WHO RECKLESSLY CAUSE DEATH OR SERIOUS BODILY INJURY THROUGH COMPUTER HACKING
Section 106 institutes a welcome increase in the penalty for crimes committed in the cyber world when the criminal knows that death or serious bodily injury will result in the flesh-and-blood world. Because we rely so heavily on computer systems to provide basic services such as electric power, telecommunications, and medical care, disruption of those systems can have a catastrophic effect. Current federal law does not adequately punish those who damage computers resulting in death or serious bodily injury. Although statutes severely punish foreign terrorists who commit such acts, there is no parallel provision for domestic actors. Section 106 would close that loophole.
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To protect Americans against the risk that damage to a critical computer system might threaten their health or safety, however, the Committee may want to consider broadening slightly the scope of Section 106 so that it covers not only hackers who damage a computer system knowing that death or serious injury will result, but also hackers who damage a computer system with reckless disregard for whether death or serious injury will result.
In an era in which computer systems play an integral role in our critical infrastructures, it is not difficult to imagine an assault on such a system that recklessly causes death or serious injury. Consider, for example, a hacker who infiltrates a hospital's medical database to erase records that reveal the diagnosis of his sexually transmitted disease. In the course of erasing his record, he also erases other patients' records, thereby preventing them from receiving vital medication or treatment. Although the hacker has not intentionally or knowingly harmed those other patients, his reckless conduct has clearly put them at risk of death or serious injury. If such reckless criminal conduct were to cause someone to die or to be permanently injured, the appropriate penalty might well exceed the ten-year maximum currently imposed by the statute.
Similarly, suppose a hacker shuts down a town's phone service. While phone technicians race to restore service, no emergency 911 calls can go through. It is easy to envision in such a situation that somebody might die or suffer serious injury as a result of this conduct. Although the hacker might not have known that his conduct would cause death or serious bodily injury, such reckless conduct would seem to merit punishment greater than the ten years permitted by the current statute.
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The Internet is a powerful tool. But when the Internet is misused by criminals, it can turn into a harmful weapon. When criminals intentionally damage computer systems, recklessly causing severe harm or even death to others, they must be held fully responsible. Thus, the Department encourages the Subcommittee to expand the scope of Section 106 to encompass not only computer criminals who knowingly cause death or serious bodily injury, but also those who recklessly cause death or serious bodily injury.
II. SENTENCING GUIDELINES
Title I achieves another essential objective in the fight against computer crime by requiring the Sentencing Commission to re-examine the policy statements and guidelines that apply to computer crime. To guide the Commission in this endeavor, the Department recommends that Title I more clearly articulate its intent that the Commission enhance penalties to reflect the threat of computer crime. To that end, the Department outlines below three changes to Section 101 of the Bill.
First, Section 101 could better express the Bill's intent to raise penalties by directing the Commission to consider the fact that the USA PATRIOT Act increased the maximum penalties for many crimes involving unauthorized access to computers. For example, the USA PATRIOT Act doubled the maximum penalty for criminals and terrorists who cause damage to protected computers.
Second, the Bill's intent to enhance penalties would be emphasized if Section 101 required the Commission to examine the penalty structures that pertain to the disruption of computers that control our nation's critical infrastructures. Through the Internet, terrorists and criminals can attack the computer systems that control America's financial systems, power plants, health care providers, and transportation networks. Such attacks have the potential to cause grave economic disruption in addition to threatening American lives.
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Third, we encourage the Subcommittee to impress upon the Commission the need for increased penalties by requiring it to consider harm to individuals. The Guidelines should take into account what this Bill already recognizes: where hackers cause death or bodily injury, they should face appropriately tough sentences.
In sum, Congress has already recognized the need to enhance penalties for cyber-crime; Section 101 should clearly express Congress' intent that the Sentencing Commission commensurately enhance such penalties.
III. EMERGING ISSUES
With the help of the Chairman and this Subcommittee, Congress has made great strides to modernize the laws that relate to the investigation and prosecution of cyber-crime. We look forward to continuing to work with the Subcommittee to address new issues as they arise in this evolving area of the law. With that in mind, I would like to share with the Committee a few issues forming on the horizon.
Concerns have been raised about the Department's ability under the current statutory scheme to assist other countries in foreign terrorism and criminal investigations when there is not an active corresponding investigation in the United States. Our continuing cooperation with foreign law enforcement agencies is essential, however, if we expect them to support our own requests for information and evidence found within their borders.
The Department has also been concerned for some time about the adequacy of the penalties imposed upon those who violate the privacy of others by intentionally intercepting their cellular phone calls. Today, such privacy invasions are treated as a minor infraction punished only by a fine. As cell phone use becomes more and more prevalent, however, it is increasingly important to protect the privacy of all wire and electronic communications without regard to the transmission technology used.
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Finally, we are concerned about law enforcement's ability to respond to computer attacks in emergencies that involve a threat to a national security interest or an ongoing cyber-attack on a computer that controls a national critical infrastructure. Timely use of a pen register or trap and trace device may be the only way to identify the perpetrator of such an attack or to prevent the attack from causing further harm. Yet current law may not allow emergency use of such devices under these circumstances.
Mr. Chairman, that concludes my prepared statement. I would like to thank you and the Subcommittee again for soliciting the Department's views on these important issues and for allowing me to express them through my testimony here today. I would be pleased to answer any questions that you may have on Title I of the Bill.
Mr. SMITH OF TEXAS. Ms. Koeppen.
STATEMENT OF SUSAN KELLEY KOEPPEN, CORPORATE ATTORNEY, MICROSOFT CORPORATION
Ms. KOEPPEN. I will strive to do the same, Mr. Chairman. Mr. Chairman and Members of the Subcommittee, it is my pleasure to testify this afternoon in support of H.R. 3482, and I would also like to commend you on your leadership for sponsoring this bill.
I am a corporate attorney at Microsoft focusing on legal issues surrounding security and cyber crime, but from 1994 to 1999, I was a Federal prosecutor at the Department of Justice Computer Crime and Intellectual Property Section. This afternoon, I would like to tell you why security has become Microsoft's top priority, why we feel cyber crime is such a serious problem, discuss sections 101 and 102 of the bill and offer an additional proposal regarding the forfeiture of personal computers used in cyber crime.
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As an industry leader, Microsoft takes security very seriously. Every few years, Bill Gates sends an e-mail to the entire company that sets the course for all employees, and as you noted, Chairman Smith, in this year's e-mail, he places security as one of our top priorities as part of something we call trustworthy computing. Based on his direction when faced with a choice between new features or security, we will choose security in developing new products. We see our role in creating more secure software as one element among many in this fight against cyber crime.
One of the reasons that we need H.R. 3482 is because in the online world, we don't treat cyber crime like real crime, and we don't treat cyber criminals like real criminals. No software, no operating system is immune from attack. The ''I Love You,'' ''Ramen,'' ''Lion,'' ''Code Red'' and ''Trinoo'' attacks harmed different operating systems. They caused billions of dollars in losses and disruption to e-business and e-government.
Despite these costly and highly publicized online attacks, punishment has not always fit the crime. As a former Federal prosecutor, I speak from my own experience in saying that cyber criminals often don't get punished, because the applicable sentencing guidelines focus primarily on economic harm, which is often difficult to calculate and may not reflect the true harm caused.
Because these crimes do not merit stiff sentences, they may, in turn, not be investigated or prosecuted. Section 101 of the bill would change this by directing the Sentencing Commission to promulgate a guideline that enables judges to consider several additional factors so they have a better picture of the true harm caused by computer crime and a greater range of sentencing options. We strongly support section 101 and believe it will significantly help create a meaningful deterrent to cyber crime.
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An important part of our trustworthy computing initiative is ensuring the privacy of our customer's information. Existing law provides that Internet service providers shall not divulge to anyone the contents of a communication held in electronic storage, but existing law creates an exception permitting disclosure in emergency situations. Our concern, however, is that ISPs may be constrained in making decisions in good faith to disclose information in an emergency situation. Section 102 makes several important improvements to existing law that will enable providers to make decisions promptly and without hesitation in emergency situations.
We are mindful that this is a sensitive area that needs to strike a delicate balance. We are eager to work with the Committee and other entities, such as the Center for Democracy and Technology, to find this balance.
One provision not in the current bill that we believe would help deter cyber crime is one which would permit criminal and civil forfeiture of personal equipment used to commit computer crime. We think forfeitures should apply to personal property that is used, or intended to be used, to commit a computer crime. The deterrent effect of expanded forfeiture for computer crime will be significant, particularly in cases of felons who attack cyber systems, not for personal gain, but merely for malicious effect.
In conclusion, we need H.R. 3482. Despite billions in cyber crime damage, many criminals remain at large. We worry that some may be the instruments of terrorist organizations or hostile nations. This is a risk we face, and we must take steps now to deter these actions.
Page 23 PREV PAGE TOP OF DOC Like traditional crime, cyber crime needs to be imposed with strict criminal laws, tough criminal penalties, strong enforcement capabilities and well equipped and highly trained law enforcers. That is why we support H.R. 3482 and commend you, Mr. Chairman, for introducing this bill. Thank you.
Mr. SMITH OF TEXAS. Thank you, Ms. Koeppen.
[The prepared statement of Susan Kelley Koeppen follows:]
PREPARED STATEMENT OF SUSAN KELLEY KOEPPEN
INTRODUCTION AND SUMMARY
Mr. Chairman and Members of the Subcommittee, it is a pleasure to testify this afternoon in support of H.R. 3482, the ''Cyber Security Enhancement Act of 2001.''
My name is Susan Kelley Koeppen and I am a Corporate Attorney in the Microsoft Corporation's Product Development & Marketing E-Commerce Section. At Microsoft I focus on the legal issues surrounding electronic commerce, including security and cybercrime. From 19941999, I was a federal prosecutor at the U.S. Department of Justice in the Computer Crime and Intellectual Property Section. While at the Department, I investigated and prosecuted computer intrusions, economic espionage, and intellectual property crime, and helped develop government policy on critical infrastructure protection, cyber-terrorism, and encryption. I also served as an attorney advisor on intelligence policy.
Page 24 PREV PAGE TOP OF DOC This afternoon I would like to:
emphasize that cyber crime is real and serious crime
tell you why security has become Microsoft's top priority
support Section 101 of the bill which gives judges greater direction in their punishment of cyber criminals by directing the U.S. Sentencing Commission to amend cyber crime sentencing guidelines
support Section 102 of the bill which will enable Internet Service Providers acting in good faith to help the government in emergency situations involving danger of death or serious physical injury
offer an additional proposal to strengthen the fight against cyber crime by permitting the criminal and civil forfeiture of computers and other equipment used to violate the Computer Fraud and Abuse Act.
CYBER CRIME IS REAL AND SERIOUS CRIME
In the online world, we often face a problem with criminal actions that are not treated as crimes, and with criminals who do not do time. While our society does not tolerate people breaking into brick-and-mortar homes and businesses, we inexplicably seem to have more tolerance for computer break-ins. Yet breaking into computers is just as much a crime as breaking into homes and businesses. Both break-ins harm innocent people and weaken American businesses, and computer attacks need to be treated as the truly criminal activities that they most assuredly are.
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In the last few years, we have realized that the issues posed by criminal hackers are real, cross-platform, and costly. The ''ILOVEYOU'' virus of 2000 slowed down worldwide e-mail. The Ramen and Lion worms attacked Linux software to deface websites and extract sensitive information such as passwords. The Code Red worm exploited Windows server software to deface websites, infect servers, and attack other websites. The Trinoo attacks exploited vulnerabilities in the Solaris operating system to stage distributed denial of service attacks against several prominent websites. Estimated damage in these attacks runs into the billions of dollars.
As my former colleague Howard Schmidt likes to say, these attacks are genuine ''weapons of mass disruption.'' Yet these attacks did not occur because the extremely innovative engineers creating the underlying codes disregarded security. They occurred because equally innovative criminal hackers worked day after day to find, create and exploit vulnerabilities in the software or in human nature that gave them new ways to trespass on your computers, steal your data and shut down your networks.
CYBER SECURITY HAS BECOME MICROSOFT'S TOP PRIORITY
As an industry leader, we have an important responsibility to lead on security issues. For many years, Microsoft has been in the forefront of industry efforts to increase the security of computer programs, products and networks; improve industry response to security breaches; enhance industry coordination with law enforcement; and better protect our critical information infrastructures.
Page 26 PREV PAGE TOP OF DOC Our senior executives are personally involved in this effort. Bill Gates, our Chairman and Chief Software Architect, is a presidentially-appointed member of the National Infrastructure Assurance Council (NIAC). The NIAC will advise the President and encourage cooperation between the public and private sectors to address physical threats and cyber threats to the Nation's critical infrastructure. Craig Mundie, Microsoft's Senior Vice President and Chief Technical Officer for Advanced Strategies and Policy, was appointed by the President to the National Security Telecommunications Advisory Council (NSTAC). The NSTAC advises the President on policy and technical issues associated with information infrastructure security. Steve Lipner, Microsoft's Lead Program Manager for Security, serves on the congressionally-mandated Computer Systems Security and Privacy Advisory Board. I am also pleased to be able to report that Scott Charney, former Chief of the Computer Crime and Intellectual Property Section at the Department of Justice when I served there, joins us on April 1st as our Chief Security Strategist, replacing Howard Schmidt, who has just joined the National Security Council staff under Richard Clarke, the President's cyber security advisor.
At their direction, we have taken many steps over several years to address security matters. This includes helping to found the IT-ISAC and the Partnership for Critical Infrastructure Security, and supporting White House Cyber Space Security Advisor Dick Clarke's new National Cyber Security Alliance which serves to educate home users on good security practices.
We also formed what we believe is the industry's best security response center, which investigates all reported vulnerabilities in our products, then builds and disseminates any needed security updates. In 2000, for instance, we received and investigated over 10,000 reports from outside sources. Where we found vulnerabilitiesas we did in only 100 cases across all of our products and serviceswe delivered updated software through well publicized web sites and our free mailing list to 200,000 subscribers.
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In another key security element, we announced at our second annual Trusted Computing conference a new partnership that will create best practices for handling product vulnerability information. We have agreed with several other companies, that the public release of vulnerabilities, also known as ''exploit code,'' before a patch is available is harmful to customers and inconsistent with professional responsibility if done while a vendor is creating the patch. Some firms or individuals release exploit code before there is a patch, and the end result is an increase in one's exposure to attack. [We believe that reaching a broad consensus for responsible reporting practices can improve both security awareness and lead to real security improvements.
Transcending all these past efforts was the recent decision to make ''Trustworthy Computing'' the company's highest priority. In a January e-mail, Bill Gates issued a call to action to all Microsoft employeesfrom developers, testers, customer support, to all executivesto make the hallmarks of a trustworthy computing experience our top priorityincluding security, availability and privacy in the way we design, test and support our products and services.
Operating system software is one of the most complex things humans have ever created, and there will never be software without vulnerabilities. While Bill's comments reflect many of the things we have already done to build more secure software, they also recognize what we have learned from the September's terrorist attacks as well as malicious and highly publicized computer viruses: We face great threats, and we have a role to play in ensuring the integrity and security of our critical infrastructures.
Page 28 PREV PAGE TOP OF DOC Part of this program includes a new customer service program called the Strategic Technology Protection Program (STPP). Through this initiative, we are helping our customers to ''Get Secure'' and ''Stay Secure'' so they have the most recent versions of patches and so they know how to manage their security needs going forward. This includes a toll free hotline that provides immediate assistance in dealing with viruses and more advanced development processes that will help reduce subtle flaws that can create vulnerabilities.
Another major element of our protection efforts focuses on incorporating new security features in our products. For example, we integrated previous stand-alone patches in products like Outlook 2001, installed a personal firewall in Windows XP, enabled users to have security patches downloaded automatically through the Windows Update tool, and added software restriction policies to Windows XP to allow administrators to limit what software can run on the system.
In the past, Microsoft has made software and services more compelling for users by adding new features and functionality, and by making our platform richly extensible. We've done a terrific job at that, but as Bill Gates noted, all those great features won't matter unless customers trust our software. So now, when we face a choice between adding features and resolving security issues, we will choose security.
JUDGES NEED TO RECOGNIZE THE SERIOUSNESS OF COMPUTER CRIME
As a technology company, we, like many of our competitors, are doing all that we can to fight criminal hackers through superior technology and the initiatives mentioned above. Yet as a former federal prosecutor, I can tell you that nothing puts a chill on aggressive enforcement of a law than obtaining a conviction which then goes unpunished or under-punished. Unfortunately, that is the case today with respect to many computer crimes. Currently, sentences for violations of the Computer Fraud and Abuse Act (18 U.S.C. 1030) are determined primarily by calculating actual economic loss, which is often difficult to determine in the computer crime context. As a result, defendants convicted of computer crimes often serve little or no term of imprisonment. Not only is there no justice, but the deterrent effect from bringing the case evaporates and it makes computer crimes less likely to be prosecuted in the future.
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Section 101 of the bill directs the Sentencing Commission to promulgate a guideline specifically addressing computer fraud and abuse. The Sentencing Commission, in determining the appropriate sentence for computer crime, is to consider a number of factors in order to create an effective deterrent to computer crime, including:
the level of sophistication and planning involved in such an offense;
whether or not such an offense was committed for purposes of commercial advantage or private financial benefit;
whether or not the defendant acted with malicious intent to cause harm in committing such an offense;
the extent to which such an offense violated the privacy rights of individuals harmed by the offense;
whether the offense involved a computer used by the Government in furtherance of national defense, national security, or the administration of justice.
We believe individual cyber crimes need to be viewed in the context of the overall incidence of such offenses and the extent to which they constitute a threat to civil peace and economic prosperity. Cyber crime will never be effectively curbed if society continues to treat it merely as pranksterism.
Page 30 PREV PAGE TOP OF DOC We want sentences to take into account the persistence and skill applied by felons in the destruction, disruption or theft of information systems. We think it important that the invidious or destructive motives such violators pursue also be taken into account. It also is important that judges look not just at the monetary damage a violation may cause, but at the important intangible loss of personal privacy that often results from cyber crime. Finally, it is imperative that sentences reflect that any damage, tangible or intangible, to national security concerns or the delivery of needed government services is a loss to all society and must be punished.
By taking into account these additional factors, courts will have a better picture of the true harm caused by computer crime, and will have a greater range of sentencing options as a result. We strongly support Section 101 and believe that such sentencing guidelines will significantly help create a meaningful deterrent to cyber crime.
ISP'S MUST BE ALLOWED TO HELP IN EMERGENCIES
An important part of Trustworthy Computing is ensuring the privacy of users' information. We take this task very seriously, and we recognize that failures to provide privacy will undermine every attempt we make to build our consumer base for all products and services. We also work closely with entities such as the Center for Democracy and Technology to develop privacy enhancing tools and practices.
We believe existing law (the Electronic Communications and Privacy Act of 1986, 18 U.S.C. 2701 et. seq.) as recently amended by the PATRIOT Act (P.L. 10756) correctly provides that those who offer electronic communication services to the public shall not knowingly divulge to anyone the contents of a communication held in electronic storage by that provider. The same prohibition on disclosure applies to those who provide remote computing services, if the provider is simply transmitting the information and has it for the purpose of providing storage or computer processing services to the user.
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Exceptions include those situations where consent has been granted. Importantly, there is also an exception for disclosure to law enforcement agencies if the contents were inadvertently obtained and appear to pertain to the commission of a crime. Further, Congress has also added a provision that allows disclosure to law enforcement where immediate danger of death or serious bodily harm requires disclosure without delay.
We support that provision added in the PATRIOT Act. Our concern, however, is that even under that provision (18 U.S.C. 2702(b)(6)(C)) communications providers or Internet Service Providers may be unnecessarily constrained in making decisions in good faith to disclose information in an emergency situation involving the danger of death or serious physical injury which requires immediate disclosure of that information. Section 102 makes several improvements to existing law that will enable such providers to make decisions promptly and without hesitation in emergency situations.
First, Section 102 permits disclosure of the contents of a private electronic communication when a good faith judgment has been made that there is an emergency involving a threat to life or serious bodily injury. We believe this is an appropriate adjustment in legal standards because there is a strong public interest in prompt decision making in such cases. Providers must feel free to use their best judgment without fear that their decision inevitably will be litigated afterwards.
Second, we believe that it is appropriate that the emergency disclosures contemplated by Congress need not be limited solely to law enforcement personnel, and this is consistent with the provision in the ECPA regarding emergency disclosure of subscriber information and records. Section 102 permits any government entity to receive such emergency disclosures of the contents of communications, just as they can now receive emergency disclosures of subscriber information and records. We believe that such emergency situations will be rare, but that law enforcement personnel may not always be reachable or even the best prepared to take immediate action. We think it appropriate that any government entity in a position to act to deter the threat of serious harm or death ought to be notified. Thus fire fighters, emergency response personnel, even school principals may be appropriate recipients of mortal threat information.
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We are mindful that this raises concerns among some, and we look forward to working with Congress and others to strike the delicate balance that is required.
STRENGTHEN THE BILL BY INCLUDING THE FORFEITURE OF ASSETS USED TO COMMIT CYBER CRIME
One provision not in the current bill, but which we believe would help deter cyber crime, is one which would permit criminal and civil forfeiture of personal equipment, including computers used or intended to be used to violate or facilitate the violation of the Computer Fraud and Abuse Act.
Today, only the proceeds of an actual computer crime can be forfeited to the government. The actual means to commit those crimes are not.
Under existing law, both real and personal property which is derived from proceeds traceable to a violation of section 18 U.S.C. 1030 is subject to both criminal and civil forfeiture. See 18 U.S.C. §981(a)(1)(C) & 982(a)(2)(B). Criminal forfeiture additionally will reach the proceeds of conspiracy to commit computer crime, but not attempted violations, nor are the actual tools of crimes or attempted crimes subject to seizure. Microsoft strongly supports the seizure of the proceeds of computer crime, but we urge that forfeiture also apply to any personal property, such as computer equipment, used or intended to be used in the commission of such crimes.
We propose clarifying in section 1030 itself that forfeiture applies to personal property that is used or intended to be used to commit or to facilitate the commission of a computer crime. We believe the deterrent effect of expanded forfeiture for computer crime will be significant, particularly in the cases of felons who attack cyber systems for malicious effect, but not personal gain. If the government can take away the means of the commission of cyber crime, it can complement the threat of conviction and jail time to law breakers in cyber space. In some cases, loss of personal computer equipment may actually be a stronger deterrent.
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OTHER GOVERNMENT ACTION CAN HELP TOO
In addition to passage of H.R. 3482, there are other things government can do to promote cyber security. Microsoft supports:
increased funding for law enforcement personnel, training, and equipment to investigate and prosecute cyber-crimes. These hard working officials are often short-staffed and under-funded. Many also lack the state-of-the-art technology used by hackers, and increased funding is needed to modernize and place them on par with those they investigate. There is also a role for hiring experts in cyber security as well as funding state and local law enforcement efforts to deter, investigate and prosecute cyber-security offenses.
greater international cooperation among law enforcers in these time-sensitive investigations. Cyber-criminals and cyber-terrorists operate across international borders, as in the ''ILOVEYOU'' virus, the ''Solar Sunrise'' attack, and the ''Anna Kournikova'' virus. Enhanced international law enforcement cooperation is a vital tool our law enforcers need to fight and find the cyber criminals and cyber-terrorists. We also see the clear need for an international law enforcement framework that establishes minimum liability and penalty rules for cyber-crime. Without this, all the computer crime laws on the books are useless when cyber-criminals cross international borders.
legislation to facilitate cyber security information sharing by: granting an exemption from the Freedom of Information Act (FOIA) for such information voluntarily shared with the federal government. This legislation will lead many companies to answer the government's urging that they provide much more computer security data to the government. When that happens, the government network administrators will learn much more about network vulnerabilities from the private sector and be in a far better position to secure their own networks. They will also be able to model future attacks and position themselves to anticipate them in advance, whereas today most analysis occurs after the attack.
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WE NEED H.R. 3482
Despite billions in cyber crime damage and significant network disruption, many criminal code writers remain at large. In this troubled time, we also can expect that some may fall under the control of terrorist organizations and hostile nations. Although the recent horrific terrorist attacks in New York and Washington were physical in nature, Congress quite rightly must look beyond the current tragedy and loss of those catastrophic attacks. We were fortunate that the terrorists or a random hacker did not unleash a corresponding cyber attack. Yet that is a risk we face, and we must take steps now to deter these actions.
Like traditional crime, cyber-crime needs to be opposed with strict criminal laws, tough criminal penalties, strong enforcement capabilities, and well-equipped and highly trained law enforcers.
That's why we seek clear guidance from the Sentencing Commission on how courts should punish these convicted felons. That's why we want ISPs to have the authority to share information voluntarily with the entire government once they see that life or limb are endangered. That's also why we support tougher forfeiture provisions for criminal hackers. That's why we support H.R.3482 and commend you, Mr. Chairman, for introducing this bill. This bill reflects a strong affirmation that cyber crime is just as dangerous to society as physical destruction through terrorism, arson or vandalism. It needs to be punished more severely, and Title I takes us in the right direction.
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Mr. SMITH OF TEXAS. Mr. Smith.
STATEMENT OF CLINT SMITH, VICE PRESIDENT AND CHIEF NETWORK COUNSEL, WORLDCOM
Mr. SMITH. Mr. Chairman, Mr. Ranking Member, Members of the Subcommittee, my name is Clint Smith. I am the current President of the U.S. Internet Service Providers Association. USISPA member companies include America Online, Cable & Wireless, EarthLink, eBay, BCE Teleglobe, Verizon Online and WorldCom, where I work. Our association provides a forum for the ISP community to develop solutions to the critical issues that affect our industry. Cyber security is one such issue, and we are grateful for this opportunity to testify on H.R. 3482.
USISPA strongly supports 3482, and for the reasons set out in my testimony, we believe its enactment would increase Internet security and help deter cyber attacks.
We support H.R. 3482 for three reasons: It increases funding for law enforcement; it strengthens penalties for cyber crime; and it reduces potential impediments to ISP corporation with law enforcement. I will discuss each of these three items in turn and then discuss one provision in the bill that USISPA would like clarified.
First, we endorse the increased funding for the fight against cyber crime. We work with law enforcement agents every day on cyber crime investigations, and they need more resources. We commend section 104 for authorizing the National Infrastructure Protection Center and appointing NIPC as a focal point for security threat assessments and education.
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NIPC has some of the world's best security experts, and it is uniquely positioned to serve as a national focal point for this work.
With respect to penalties for cyber crime, we support section 101 and the amendment to the sentencing guidelines. We also are strong supporters of section 106. Mr. Chairman, as you mentioned in your opening statement, online crime can result in physical injury or death in the offline world. Hospitals, airlines, railroads, energy companies all rely on computer networks, and a disruption in their networks will disrupt their organizations and could result in physical injury or death. Section 106 is good policy.
Let me turn to cooperation between ISPs and law enforcement. H.R. 3482 contains important provisions that if enacted, will reduce existing impediments to ISP cooperation with law enforcement. Cyber security cannot exist without cooperation between service providers and law enforcement.
Let me touch on two points of the bill that we think are very important. Existing law, as Ms. Koeppen mentioned, authorizes an ISP to disclose customer records or communications if the ISP reasonably believes that there is an immediate risk of death or personal injury, such as with an e-mail bomb threat. This was a positive change in the law, but it put ISPs in an odd position. We have to determine when a threat is immediate, and we have to establish that we have a reasonable belief in the credibility of that threat.
Let me pose a hypothetical. Tonight an ISP is notified that someone in one of their chat rooms claiming to be a fourth grader intends to blow up his school with a bomb on March 15. The ISP has to decide March 15; that is more than a month away. Is that an immediate harm that I am authorized to report under this section? The ISP has to think a fourth grader gaining access to a bomb. Is that a reasonable belief that I have about this threat? And our point here is that the ISPs are being put in the position to make a judgment about the timing and the credibility of a threat that ought to be made by law enforcement. And so we support your bill that changes the standard to a good-faith standard and removes the immediacy requirement, because it is good policy for ISPs to report this type of threat to law enforcement rather than make a judgment as to whether it should be reported.
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The second point relating to cooperation between ISPs and law enforcement relates to the immunity that is provided to service providers when cooperating with law enforcement. H.R. 3482 clarifies that ISPs are immune from liability for acting in good faith, one, when they turn over information to law enforcement in an emergency situation such as the chat room bomb threat I just mentioned, and second, when they invite law enforcement to monitor communications of a computer trespasser.
My last point is a part of the bill that we think requires some clarification, and that is section 105, relating to Internet advertising of illegal devices. In our view, this section of the bill leaves it unclear whether an ISP, a portal like a Yahoo, a third-party transaction site like an eBay or an online directory company like a yellow pages would have some criminal liability or an obligation to take down content that advertise such a device. We ask this Committee to clarify that section 105 neither requires our members in any way to monitor traffic or to screen or filter content nor restricts our members from doing so when that is appropriate.
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In conclusion, I believe the successful investigation and prosecution of crime on the Internet requires a legal framework that balances the powers of law enforcement, the privacy rights of individuals and the responsibilities and liabilities of service providers. The members of the USISPA commend the authors of H.R. 3482 for finding an appropriate balance of these interests in their legislation. We urge the prompt consideration and passage of this bill.
Mr. SMITH OF TEXAS. Thank you, Mr. Smith.
[The prepared statement of Mr. Smith follows:]
PREPARED STATEMENT OF CLINT N. SMITH
Mr. Chairman, Mr. Ranking Member, members of the Subcommittee, my name is Clint Smith. I am the current President of the U.S. Internet Service Providers Association (''USISPA'').
USISPA, based in Washington D.C., is a 501(c)(6) trade association for Internet service providers. Member companies include America Online, Cable & Wireless, EarthLink, eBay, BCE Teleglobe, Verizon Online, and WorldCom, where I work as the Vice President and Chief Network Counsel. Our association provides a forum for the ISP community to develop solutions to the critical issues that affect our industry. Cyber security is one such issue, and we are grateful for this opportunity to testify on HR 3482, ''The Cyber Security and Enhancement Act of 2001.''
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USISPA strongly supports HR 3482 and, for the reasons set out in this testimony, believes its enactment would increase Internet security and help deter cyber-attacks.
BACKGROUND: THE USA PATRIOT ACT
HR 3482 builds upon the legal foundation set out in the USA Patriot Act, Public Law 10756. The ISP community generally supported the USA PATRIOT Act. We greatly appreciated the efforts made by the legislation's authors in Congress and all interested parties to draft that law under tight deadlines and extraordinary circumstances.
As would be expected from such an accelerated process, the USA PATRIOT Act contained some ambiguities and generated questions for ISPs. In our view HR 3482 clarifies these points and, in doing so, will further the objectives of the USA PATRIOT Act.
USISPA collectively supports HR 3482 for three reasons:
It increases funding for law enforcement,
It strengthens penalties for cybercrime, and
It reduces potential impediments to ISP cooperation with law enforcement.
In my allotted time, I will discuss each of these three items in turn and then discuss one provision in the bill that USISPA would like clarified.
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NATIONAL INFRASTRUCTURE PROTECTION CENTER
First, USISPA endorses the increased funding for the fight against cybercrime provided by HR 3482.
Section 104 of the bill provides for the authorization of $57.5 million for fiscal year 2003, to be appropriated to the National Infrastructure Protection Center (''NIPC''). This funding would assist NIPC to serve as a national focal point for security threat assessments and warnings, and to coordinate responses to attacks on the country's critical infrastructure.
PENALTIES FOR CYBERCRIME
USISPA also endorses the bill's strengthened penalties for cybercrime.
Sec. 101 would authorize the amendment of the federal sentencing guidelines to encompass a wider range of criteria when sentencing cybercriminals. We commend the bill's authors for expressly identifying for harsher punishment (1) acts done with malicious intent to cause harm and (2) offenses that violate the privacy rights of individuals.
Section 106 amends title 18 U.S.C. §1030(c) to allow for criminal penalties to be increased if the offender knowingly causes or attempts to cause death or serious bodily injury through a cyber attack.
Increased penalties provided for in HR 3482 could deter would-be hackers, benefiting law enforcement, the public, and the ISP industry.
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ISP COOPERATION WITH LAW ENFORCEMENT
HR 3482 contains important provisions that, if enacted, will reduce impediments to ISP cooperation with law enforcement.
Service providers and law enforcement agencies form an essential partnership in fighting cybercrime. Cyber security cannot exist without that cooperation. It is important that the legal framework for ISP interaction with law enforcement is clear because ambiguities will create impediments to cooperation on an important investigation. HR 3482 would clarify ambiguities in the existing legal framework by making the following amendments to current law:
First, the USA PATRIOT Act authorized an ISP to disclose customer records or communications if the ISP reasonably believes there is an immediate risk of death or personal injury, such as with an email bomb threat. This was a positive change for both law enforcement and ISPs. But it put ISPs in the odd position of having to determine whether the danger was ''immediate,'' and the ''reasonable'' belief standard may require an ISP to research whether an emergency situation is a bona fide emergency prior to alerting law enforcement. HR 3482 removes the requirement that the danger be ''immediate'' and allows ISPs to act on a ''good faith'' belief rather than the higher standard of a ''reasonable'' belief. These changes will encourage ISPs to promptly report threats of death or personal injury to law enforcement.
The USA PATRIOT Act expanded law enforcement investigative powers to fight terrorism but did not explicitly grant ISPs immunity from liability in all cases for their role in this fight. HR 3482 clarifies that ISPs are immune from liability for acting in good faith (1) when they turn over information to law enforcement in emergency situations and (2) when they invite law enforcement to monitor the communications of a computer trespasser. Equivalent statutory immunity applies in other contexts involving ISP involvement in electronic surveillance conducted under statutory authorization. Making such immunity explicit will remove an ambiguity that might otherwise reduce cooperation between ISPs and law enforcement.
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INTERNET ADVERTISING OF ILLEGAL DEVICES
While USISPA endorses HR 3482 generally, and specifically supports the preceding sections of Title I relating to cybercrime, one provision deserves fine-tuning to avoid ambiguity and ensure that those who merely act as conduits for informationsuch as ISPs, portals, third-party transactions sites, and online directory companiesare not inadvertently exposed to liability.
Specifically, Section 105 (''Internet Advertising of Illegal Devices'') of HR 3482, in our view, leaves it unclear whether the modifications to 18 USC §2512(c) would make ISPs, portals, third-party transactions sites, online directory companies or other Internet advertisers liable when illegal monitoring and wiretapping devices are advertised on their networks or through their services. While we recognize that this may not be the intent of the legislation, USISPA urges this committee to clarify that Section 105 neither requires our members, in any way, to monitor traffic or to screen or filter content nor restricts our members from doing so.
The successful investigation and prosecution of crime on the Internet requires a legal framework that balances the powers of law enforcement, the privacy rights of individuals, and the responsibilities and liabilities of service providers. The members of USISPA commend the authors of HR 3482 for finding an appropriate balance of these interests in their legislation.
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We urge prompt consideration and passage of HR 3482.
Mr. SMITH OF TEXAS. Mr. Davidson.
STATEMENT OF ALAN DAVIDSON, STAFF COUNSEL, CENTER FOR DEMOCRACY AND TECHNOLOGY
Mr. DAVIDSON. Mr. Chairman and Members of the Subcommittee, thank you very much for calling this hearing. We very much appreciate the opportunity to testify on H.R. 3482.
I am Alan Davidson, Associate Director of the Center for Democracy and Technology, a public interest nonprofit group based here in Washington that focuses on promoting civil liberties and human rights on the Internet.
In the aftermath of September 11th, it is more clear than ever that cyber security is a serious problem that demands a real response from Government. At the same time, such responses must be respectful of the protections for personal privacy enshrined in our Constitution and in our electronic surveillance laws. If we are forced to give up these essential liberties fundamental to our American way of life, then our country will truly have lost something important. It is in this context and with this in mind, this need to protect both security and privacy, that we offer the following three comments on the bill.
First, Mr. Chairman, my organization has never been shy about pointing out bills that raise serious privacy concerns. This is not one of those bills, with one exception, which I will speak about, section 102, the emergency disclosure provision, and we appreciate the chance of this hearing and also your measured response in terms of dealing with this serious issue.
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I will focus my remarks then, on section 102 and on thesome of the things that we believe the Committee could do otherwise. The emergency disclosure provision of section 102 as drafted currently is overly broad, and we fear would eviscerate some important privacy protections that exist in the law right now.
Right now emergency disclosure provisions exist based on this idea, that ISPs who encounter material thatwhere they believe there is an imminent danger of threator threat of serious injury or death, can contact and reveal those communications to law enforcement agencies. In practice, what we are hearing in the field is that that is not exactly the way it works. More and more what we have heard from ISPs, from other providers like libraries, universities, the way this interaction happens is that a law enforcement official will come to the provider and say, we have reason to believe that there is somethingthat there are communications that we need access to that will reveal information about an imminent threat of death or serious injury and will you give us this information. And the providers are left with this Hobbesian choice, either protect the privacy of their subscribers or say noI'm sorry, reveal these sensitive communications to law enforcement or have to say no to law enforcement, and nobody wants to say no to law enforcement, certainly not in this environment.
And our fear is that these voluntary disclosures are turning into a major loophole in current law, because small providers are not in a position to evaluate these requests when they come, and of course, just turn around and provide this information.
There are some major differences in the provision in section 102 versus the provision that was passed just 4 months ago in the USA Patriot Act. The biggest one, I think the most important one, is the breadth of the entities to which this information can be revealed. Any governmental entities, not just law enforcement agencies. That is, literally thousands of Federal employees, State and local government employees, potentially even foreign government entities who could have access to this information or this information could be revealed legally.
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The issue with imminent danger I think is an extremely important provision that has been dealt with in a lot of the emergency disclosure rules that exist, and it is an important protection in terms of making sure that this is not just about a hypothetical danger, but a reasonable imminent danger that needs to be dealt with.
So we urge the Committee to rethink this expansion. It is our belief that, in fact, there are ways to craft this carefully, and we look forward to working with the Committee and members of industry to find ways to meet these needs.
The third point we wanted to make is that we urge the Committee to continue its work to balance powerful surveillance authorities with appropriate privacy protections. The USA Patriot Act, which was passed this fall, provides substantial new Government capabilities to conduct surveillance on Americans. H.R. 3482 also provides additional and powerful new resources and tools, but in both cases there are virtually no new measures for accountability and oversight or any protections for the sensitive personal information that is increasingly available in the information age.
We urge the Committee to adopt a more comprehensive approach to cyber security that recognizes the additional need to provide privacy protections as we provide new law enforcement capabilities, and I have detailed, in my testimony, some of the very excellent provisions that this Committee itself adopted in the last Congress in H.R. 5018, and I think would go a long way toward providing that balance, including providing standards for access to the sensitive GO location information from cell phones, dealing with some of the issues raised by pen/trap standards. There are others that I have listed in my testimony.
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In conclusion, I would just say again, to recap that we urge the Committee to narrow the new emergency disclosure provision of section 102, to look back at H.R. 5018 and find ways to add some balance into these new authorities and capabilities that are being given to law enforcement. Powerful new Government surveillance and law enforcement capabilities demand powerful oversight and accountability and privacy protection mechanisms. We look forward to working with you and other Members to deal with that.
Mr. SMITH OF TEXAS. Thank you, Mr. Davidson.
[The prepared statement of Mr. Davidson follows:]
PREPARED STATEMENT OF ALAN DAVIDSON
Mr. Chairman and Subcommittee Members, thank you for calling this hearing and giving CDT the opportunity to testify on H.R. 3482, the ''Cyber Security Enhancement Act of 2001.''
I am Alan Davidson, Associate Director of the Center for Democracy and Technology, a public interest non-profit group based here in Washington. CDT works to promote civil liberties and human rights on the Internet. Since its creation in 1994, CDT has been heavily involved in the policy debates concerning privacy, computer security, and government surveillance online. As Staff Counsel I have led CDT's project on encryption policy and done substantial research on computer security and privacy based on my own training as a computer scientist. CDT also coordinates the Digital Privacy and Security Working Group, a collaboration of over 40 leading Internet companies and public interest organizations pursuing issues of privacy and security online.
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Our nation is at a point where revolutionary changes in communications and computer technology have created new concerns about public safety, security, and privacy online. In the aftermath of September 11, cybersecurity is a serious problem that demands a real response from government. At the same time, such responses must be respectful of the protections for personal privacy and from overly broad governmental authority, enshrined in our Constitution and electronic surveillance laws.
If we are forced to give up essential liberties fundamental to our American way of life than our country will truly have lost something important.
With this need to protect both security and Constitutional privacy principles, CDT offers the following comments on H.R. 4382:
First, CDT commends this committee for holding this hearing, and for the relatively measured approach taken in HR 3482. We agree that computer crime and security is a serious problem that requires serious government response. In the USA PATRIOT Act, passed this fall, substantial changes were made to the computer crime and government surveillance statutes that raised serious privacy concerns and are to this date still not fully understood. In contrast and with one notable exceptionthe emergency disclosures provision of Section 102H.R. 4382 takes a more modest approach to these laws that does not raise the same types of privacy concerns.
Second, the emergency disclosure provision of Section 102, as drafted, is overly broad and would eviscerate important privacy protections in current law.
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Current law protects the privacy of electronic communications by prohibiting service providers from revealing those communications to anyone without proper lawful orders. Emergency disclosure provisions exist in the current law based on a reasonable ideaISPs who reasonably believe there is an imminent threat of death or serious injury should be able to reveal communications to law enforcement agencies on an emergency basis even without judicial oversight.
Sec. 102 would substantially expand this ability to reveal private communications without any judicial authority or oversight.
In practice, however, we have heard reports from large and small providers, universities, and libraries, that the emergency disclosure is being used in a different way. Providers are often approached by government agents and asked to voluntarily disclose communications or other subscriber information for investigations that the government claims involve a danger to life and limb. Providers are then faced with a Hobbesian choiceeither turn over sensitive private communications of subscribers without any court order, or say no to a government request. Of course many comply with the requests. Small providers have few legal resources to evaluate such requests. Others receive requests from the same agents they may seek help from the next day regarding hacking attacks or other problems. Without proper restrictions, such ''voluntary disclosure'' provisions risk becoming a major loophole.
Current law, passed just four months ago, confines these extraordinary disclosures to law enforcement agents in limited circumstances. As drafted, Sec. 102 would threaten the privacy of communication by substantially broadening these disclosures:
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It allows these disclosures to any governmental entity, not just law enforcement agents. That could include literally thousands of federal, state, and local employeesperhaps even foreign government officials.
It no longer requires imminent danger for disclosure. It would allow these extraordinary disclosures when there is some danger, which might be far in the future and far more hypothetical.
It no longer requires a reasonable belief that there is a danger on the part of the ISP. Section 102 would allow these sensitive disclosures if there is any good faith beliefeven if unreasonableof danger.
Thus as drafted, Sec. 102 would allow many more disclosures of sensitive communications without any court oversight or notice to subscribers. It would allow these disclosures to (and based on requests from) potentially hundreds of thousands of government employees, ranging from local canine control officials to schoolteachers to Agriculture Department cotton inspectors to foreign government officials.
We urge the committee to carefully rethink this expansion. We understand the argument that in some narrow circumstances disclosures to some entitiessuch as the Center for Disease Controlmight be warranted. As supported in current law, in cases of imminent threats of death or serious injury, law enforcement agenciestrained to deal with such situations and cognizant of legal stricturesshould be the first contact point for concerned citizens. We also urge the committee to maintain the requirements of a reasonable belief in imminent danger.
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We are confident that if other disclosures are needed they can be carefully crafted, and we look forward to working with the Committee as well as experts in industry and other interested parties to find a more balanced approach.
In addition, we strongly encourage this Committee to add accountability mechanisms for this extraordinary power. Congress should consider requiring notice to the subscriber, after the fact (and deferrable based on a judicial order), as a means of providing subscribers with some way of knowing that their communications have been disclosed. And at a bare minimum Congress should mandate a reporting requirement for these emergency disclosures to federal law enforcement, to give Congress some method of evaluating their use.
Third, we urge the Committee to continue its work to balance powerful surveillance authorities with appropriate privacy protections.
An essential element of security in cyberspace is trust. If Internet users cannot trust that their most sensitive personal and business communications will be private, than we cannot realize the promise of the Internet as a communications medium.
Powerful new surveillance authorities require powerful oversight and accountability. In addition, the digital age is making more personal information available than ever before, also increasing the need for a legislative framework that protects personal information from inappropriate surveillance.
The USA Patriot Act passed this fall provides substantial new government capabilities to conduct surveillance on Americans and to combat terrorism and cyber crime. H.R. 4382 also provides additional and powerful new resources and tools. But in both cases there are virtually no new measures for oversight and accountability, or any protections for all the sensitive personal information increasingly available in the digital and wireless age. (We note that this committee's own admirable efforts to strike a greater balance in the PATRIOT Act were largely ignored.)
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We urge this committee to adopt a more comprehensive approach to cybersecurity that recognizes the urgent need for additional privacy protections. The Congress could start by taking up the helpful changes to surveillance law developed and passed by the House Judiciary Committee in the last Congress, under H.R. 5018, including:
Heightened protections for access to wireless location information, requiring a judge to find probable cause to believe that a crime has been or is being committed. Today tens of millions of Americans are carrying (or driving) mobile devices that could be used to create a detailed dossier of their movements over timewith little clarity over how that information could be accessed and without an appropriate legal standard for doing so.
An increased standard for use of expanded pen registers and trap and trace capabilities, requiring a judge to at least find that specific and particularly facts reasonably indicate criminal activity and that the information to be collected is relevant to the investigation of such conduct.
Addition of electronic communications to the Title III exclusionary rule in 18 USC b2515 and add a similar rule to the section 2703 authority. This would prohibit the use in any court or administrative proceeding of email or other Internet communications intercepted or seized in violation of the privacy standards in the law.
Require statistical reports for b2703 disclosures, similar to those required by Title III.
Page 52 PREV PAGE TOP OF DOC Require high-level Justice Department approval for applications to intercept electronic communications, as is currently required for interceptions of wire and oral communications.
In addition, other issuessome of broader scopeneed to be addressed:
Improve the notice requirement under ECPA to ensure that consumers receive notice whenever the government obtains information about their Internet transactions.
Provide enhanced protection for personal information on networks: probable cause for seizure without prior notice, and a meaningful opportunity to object for subpoena access.
Require notice and an opportunity to object when civil subpoenas seek personal information about Internet usage.
The bills put before this Committee last Congress were efforts towards a modest improvement in privacy protections without in any way denying the government any investigative tools. They should serve as a starting point, and we hope that you will consider including them to address the privacy concerns of many Americans and the imbalance that exists in today's electronic surveillance laws.
In conclusion, we urge to Subcommittee to
Substantially narrow the new emergency disclosure provisions of Section 102. If retained, they should greatly limit the scope of governmental entities that can receive such disclosure, could provide deferred notice to the subscribers whose communications were revealed, and should absolutely require reporting to Congress on their use.
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Take a more balanced approach by including some of the privacy protections passed by this committee last Congress. Among the most urgent of these: a need for clearer protection of wireless location information, clearer definitions of what constitutes content for pen/trap orders online, and additional statistical reporting requirements.
Protecting national security and public safety in this digital age is a major challenge and priority for our country. On balance, however, we believe that new sources of data and new tools available will prove to be of great benefit to government surveillance and law enforcement. It is essential that we offer a measured response to these concerns, and urgently take up the need for additional privacy protections in the electronic surveillance laws.
Powerful new government surveillance and law enforcement capabilities demand powerful oversight, accountability, and privacy protection mechanisms. We look forward to working with the Subcommittee and other interested parties to craft an approach that protects both security and privacy online.
Mr. SMITH OF TEXAS. I am going to yield my initial time to the gentleman from North Carolina, the Chairman of the Intellectual Property and Internet Subcommittee, because I know he has another engagement he has to attend. So Mr. Coble you are recognized for your questions.
Mr. COBLE. Thank you for that courtesy, Mr. Chairman. I do have another meeting that starts in about 5 or 10 minutes. Good to have you all with us, by the way.
Page 54 PREV PAGE TOP OF DOC Mr. Davidson, in your testimony, you indicate that you have special concerns about section 102 and that the rest of the bill does not raise the same types of privacy concerns. Now, do I correctly or accurately conclude that you have no problem with the rest of the bill?
Mr. DAVIDSON. Well, let me say that I thinkfirst of all, as far as title II goes, I think our organization doesn't really havehas not worked in that area, doesn't really have a strong opinion about that issue in terms of the creation of these new centers within the Justice Department.
Mr. SMITH OF TEXAS. Mr. Coble, if he doesn't have a strong opinion, I take that as an endorsement.
Mr. COBLE. I was trying to lead him in that direction, but he
Mr. DAVIDSON. Well, let me just say that I think we hope that there will be balance. These are certainly not the same levelhonestly, I want to say that these are not the same level of concerns that were raised, for example, by the USA Patriot Act, and I hope that the Committee appreciates our candor in saying that even though there may be minor issues here, and I think that more probably are some and I hope that we will continue to provide more accountability mechanisms for law enforcement in exercising these authorities, but these are not the same things as the USA Patriot Act. I think it is important for Congress to know that.
Mr. COBLE. That is not an unreasonable response, Mr. Chairman. Mr. Scott, don't you agree?
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Thank you, sir. The bill includes important provisions for combatting cyber crime and improving cyber security, it seems to me. And some of you have touched on this, but I want to give you another shot on it, starting, Mr. Malcolm, with you. What other steps, if any, do you think Congress should take in this area?
Mr. MALCOLM. Well, Congressman Coble, I believe that I mentioned several of them. However, there are a few that I would like to talk about. One of them deals with illegal wiretaps. Congress has gone a long way toward protecting the public against illegal wiretaps and unlawful access to stored communications. However, I do believe that two changes are appropriate for this Committee to consider. Under current law, Congressman, illegal interceptions of cellular telephone conversations are treated as mere infractions, subject only to a fine. Now, this might have been appropriate back in 1986 when the law was enacted and cell telephones were seldom used. However, that is no longer the case, and the Department believes that it no longer makes sense to treat the interceptionsillegal interceptions of cell telephone conversations any differently than illegal interceptions of any other electronic or wire communication.
As well, Congressman, another change is that with respect to invasions of privacy through hackers or system administrators working on an inside, improperly accessing communications that are in electronic storage, at the moment such invasions, while intensely personalI mean, somebody can access your e-mail and read your communications about your family, communications with your accountant, communications with the doctor, communications with a lawyer. At the moment a first offense is treated as a 6-month petty offense, and if somebody acts with a malicious intent, say, toor an aggravated intent in order to gain financially or maliciously destroy property, it is still a misdemeanor, subject to a 1-year penalty.
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The Department believes that this does not provide adequate protection to individuals and believes that it would be appropriate in today's world if somebody accesses e-mail or stored communication improperly, that a first offense should be treated as subject to a penalty of up to a year and that if somebody acts with an aggravated mental state seeking commercial or financial gain, seeking to maliciously destroy property, acting with a criminal or tortiousin furtherance of criminal and tortious conduct, that that person ought to be subject to a 5-year penalty.
Another provision, Congressman, deals with how juveniles are treated in the law. Under current lawwell, I should say adults who have juvenile recordsI am not proposingthe Department is not proposing that juveniles be treated any differently. Under current law, if a first offender is an adult offender, they get treated to a certain penalty. This bill recognizes that people who recidivate should be treated more seriously. However, under current law, Congressman, juvenile adjudications of delinquency for hacking are not treated, for purposes of sentencing guidelines in the statute, as a prior conviction.
Mr. COBLE. All right. Now, my 5 minutes are about up. Anybody else want to be heard? Thank you for that, Mr. Malcolm.
Mr. MALCOLM. Sure.
Mr. COBLE. Any other panelist? Thank you, Mr. Chairman. Thank you.
Page 57 PREV PAGE TOP OF DOC Mr. SMITH OF TEXAS. Thank you, Mr. Coble. The gentleman from Virginia, Mr. Scott, is recognized for his questions.
Mr. SCOTT. Thank you, Mr. Chairman.
Mr. Malcolm, did I understand you to say that the 5-year penalty, does that have any effect on the Department's enthusiasm about prosecution?
Mr. MALCOLM. I am sorry. Congressman
Mr. SCOTT. The enthusiasm for prosecution, does the Department of Justice more likely to go after somebody if you can get 5 years rather than the maximum 6 months?
Mr. MALCOLM. Yes, Congressman.
Mr. SCOTT. Okay. Ms. Koeppen, and I guess anybody, have you reviewed section 101 with the various concerns that we had asked the Sentencing Commission to consider, and are there other considerations that might be appropriate? And if you are not prepared to answer that now, if you could either later in the hearing or soon, I would like to hear
Mr. DAVIDSON. I would be happy to provide some additional comments on this. We have provided some comments I think informally to staff, and there are other efforts underway, I believe, sentencing guidelines that need to be taken into account, and there are some issues that I think should be considered as well and we are happy to amend our testimony to add some of those comments.
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Mr. SMITH. USISPA as well can submit some additional comments in writing. I would offer one right now, which would be the activity of sharing information with others who had the same malicious intent. We see quite a bit of activity in hacker discussion groups, in chat rooms, where an exploit in one person's hand is a nuisance. An exploit in 200 young hackers' hands is a catastrophe.
Mr. SCOTT. And I guess if you up load something or e-mail it to hundreds of people, it is worse than just one or two people looking at it?
Mr. SMITH. Yes, sir.
Ms. KOEPPEN. I will also submit personal comments.
Mr. SCOTT. Okay. Mr. Davidson, one of the things that you consider when you start looking in privacy is whether or not there was an expectation of privacy. Is there an expectation of privacy in a chat room?
Mr. DAVIDSON. I think that the answer was probably that it depends. But I think in a public chat room, it is a very differentit is a different expectation than
Mr. SCOTT. So it is
Mr. DAVIDSON. It is much more
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Mr. SCOTT. If you catch somebody in a public chat room, I mean, there is no expectation of privacy. You wouldn't have anythere wouldn't be any reason why you wouldn't share that information with law enforcement if you saw it.
Mr. DAVIDSON. Well, I think that ISPs are in a particular position under the law in terms of theirtheir special position with their customers in terms of collecting information. I am not exactly sure where you are going with this, but I guess the
Mr. SCOTT. I guess some areas you get some information where there is an expectation of privacy and other areas there may not be. If there is no expectation of privacy, then, you know, we don't have a problem. If an e-mailI would think there would be an expectation of privacy, and if thesosomebody had gone into a little bit aboutI think you had gone into information about how you get the information to begin with. There is a difference if the police come to you and say we are looking into activities of a certain person. Give us what you got is different than if you trip over some information yourself, for which particularly, there wasn't an expectation of privacy, there would be no problem in giving that information up. Your question would be when the police come and ask you for information which your customer might expect to be private.
Mr. DAVIDSON. Well, I think that there are going to be a lot of reasons that customers would expect their information to be private even in ''chat rooms.'' Recognize that some chat rooms might just be a couple of people, small private settings. Even chat rooms that might be open to lots of people, one might not expect their communications to be overheard. It is a very different situation than we have. I think the analogy in the real world is oh, gosh, you don't have any expectation of privacy, and your chat is on a street corner.
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For example, that might be overheard by a passerby. At the same time, there is nobody onwho is sitting on every street corner monitoring every communication recording it like an ISP might be in a position to. So I think the analogies fail. I would have to think more carefully about whether or not there might be some situations where there is enough of a diminished expectation that we might not need these requirements that ISPs not provide the information without a lawful order, which I think may be what you are getting at.
Mr. SCOTT. Mr. Malcolm, how do the police determine when they ask for information and when they don'tI mean, do you wait for a little probable cause before you start asking for people's private information?
Mr. MALCOLM. I am a little bit unclear
Mr. SCOTT. This bill would allow you presumably to start asking for people's private computer information, so long as the ISP can give it to you in good faith. That is not much of a standard.
Mr. MALCOLM. I fail to see that, Congressman, with all due respect, because there are still statutory standards that are set out before the ISP can provide the information, and if I could in that respect respond to Mr. Davidson, I don't believe that it is the situation that ISPs simply roll over whenever law enforcement contacts them. ISPs, when they are contacted by law enforcement, assuming that they have been contacted as opposed to coming forward with the information voluntarily, are supposed to act independently. They are supposed to act in good faith. There has to be a determination that an emergency exists. The determination about an emergency has to be that there is a threat
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Mr. SCOTT. Well, I think this bill recognizes the position that the ISP is in when a law enforcement officer says it is important I get the information. I mean
Mr. DAVIDSON. That is enough. I mean, not to interrupt, Mr. Scott, but I think that that is exactly the situation that we are hearing about, especially with small ISPs and small providers who don't have legal counsel, who don't have the abilityand who want to do the right thing. I think people really want to do the right thing.
Mr. SCOTT. And so the screening ought to take place when law enforcement decides to ask.
Mr. MALCOLM. Well, Congressman Scott, first of all, I believe that it will be a rare circumstance if ever a circumstance would exist, when law enforcement would contact an ISP saying that we believe that there is an emergency situation going on, when, in fact, they have no such belief. Once law enforcement contacts the ISP, while the ISP may still want to do right, there is a statutory standard that is set in place.
The ISP is to make an independent judgment, and if they decide after making that independent judgment that they are not entitled in good faith to turn over that information, then law enforcement has no choice but to appropriate
Mr. SCOTT. Well, if the ISPif the law enforcement asks the ISP to give up the information, aren't they, per se, in good faith, by giving it up?
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Mr. MALCOLM. Congressman, I believeI am not meaning to get into a semantic distinction with youlaw enforcement is not contacting an ISP saying I want information; give it up. They are contacting an ISP and saying, we believe, ISP, that an emergency situation exists. It is an emergency situation that involves a threat of death or serious bodily injury and that you must provide the information without delay or else grave consequences
Mr. SCOTT. And the ISP would be in good faith just giving it up?
Mr. MALCOLM. No. The ISP, with all due respect, Congressman, is supposed to make an independent judgment as to whether those circumstances exist, and if they, in good faith, believe that those circumstances exist, they provide the information.
Mr. DAVIDSON. This situation happens all the time, though and the only information that is available is the information that comes from law enforcement. I think the ISPs and the small providersand again, we are talking potentially about libraries or State universities. And I have heard these stories wheresometimes foreign government entities will come and say we are investigating a case, a kidnapping, a serious thing, a potential terrorist act perhaps. But the cases that we have heard about are serious cases. They will say, we think we need information that you have, and the only thing that I think thatin the anecdotal situations that we have heard, the thing that the ISPs have had to rely on are the clear law that says, we are not allowed to turn this over unless you can show X, Y or Z. That is very important that that be there.
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Mr. SCOTT. I am well over my time limit, but I did want to get in one more point, not really a question. And that is, Mr. Malcolm, you indicated that people don't take these seriously, and I was wondering whether or not we ought to have some advertising like cable TV does to explain to people that stealing cable service is, in fact, a crime. Some advertising to let people know that cyber crime is, in fact, a serious crime so that it will not be taken lightly. I don't know if that is something the Department of Justice could do, but I think that might get the message out a little more directly than waiting for people to have committed serious crimes and then worry about whether they are going to get 2 years, 6 months, 10 years or what.
Mr. MALCOLM. Well, Congressman, as the deputy assistant who oversees the computer crime and intellectual property section, we firmly believe in sending out a message of deterrence. And I will be happy to take your views back to the Department.
Mr. SMITH OF TEXAS. Thank you, Mr. Scott and I will recognize myself now for questions. Actually, both Mr. Coble and Mr. Scott have asked questions that I had intended to, so let me follow up first on Mr. Scott's. Mr. Malcolm, you did a good job of explaining, I think, why we are looking to a good faith standard as opposed to reasonable person standard. Mr. Smith, you had your hand in the air. You gave a good example a while ago. I don't know if you want to add to it or not, and I was going to ask Ms. Koeppen if she wanted to add to that as well.
Mr. Smith, why don't you go on.
Page 64 PREV PAGE TOP OF DOC Mr. SMITH. What I would urge the Committee to consider is who is in a better position to make a judgment about the immediacy and the reasonableness of a threat? And an ISP employee at 2 o'clock in the morning should be held to a lower standard, law enforcement investigators are the experts on what is an immediate threat and what is a reasonable threat. So I think allowing the ISP toeven a cautious ISP to report a crime or a possible threat toof death or injury should be the purpose of this legislation rather than to inhibit the reporting of such a threat.
Mr. SMITH OF TEXAS. Okay. Thank you, Mr. Smith.
Ms. KOEPPEN. Yes. I would like to add, too, that the scenario that Mr. Davidson described, I mean, we are one of the larger ISPs in the United States, and it is just not consistent with what our experience has been. We treat requests as requests. We recognize we have the right to say no if we are not satisfied that the statutory conditions are met, and we do require law enforcement to give us a factual basis for the request so that we can make a determination as to whether it is an emergency and meets the requirements of the standard.
And I wouldI would echo Mr. Smith's comments about the good faith standard. We believe that is a workable one for providers, and we believe that there is existing precedent in other case law and
Mr. SMITH OF TEXAS. I just was going to ask you, isn't there precedent as far as a good faith standard goes with some activities by law enforcement?
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Ms. KOEPPEN. There is. A law enforcement agent is allowed to act in good faith on a search warrant, even if it later turns out that that search warrant was, in fact, invalid. The evidence collected as a result of that is not subject to suppression. So there is a workable standard that exists in current law today.
Mr. SMITH OF TEXAS. Now, Ms. Koeppen, let me go to another subject, and the same question will be directed toward Mr. Smith, and that is, what is the extent of the problem at Microsoft? What is the extent of the problem, Mr. Smith, with your association members as far as computer crime goes, you know, if you can put a figure on the cost fine. If you can't, we know in general that the problem has doubled in the last year, just from the number of incidences of security breaches, but give us sort of a real-life description of the extent of the problem.
Ms. KOEPPEN. Well, we expend enormous resources in combatting this problem. We have to maintain the security of all of the networks that we run. We have a full-time dedicated security incident response center, and when there is an incident, those folks work around the clock to try to determine the source of the problem and come up with a solution, both for our network security and also for customers using our products. So we have to devote tremendous resources to this effort, and we have seen the problem growing. One of the reasons that it is growing so much is that it doesn't take all that much technical expertise anymore to attack a network. Many of these exploits are widely available on Web sites, available for download, you know, point and click and run an exploit against a network. And so the problem has increased tremendously.
Page 66 PREV PAGE TOP OF DOC Mr. SMITH OF TEXAS. Okay. Mr. Smith, what about your members?
Mr. SMITH. I cannot quantify the problem, but I can say that it is constant and it is not abating. I would also point out that it often originates outside the United States, and in that respect, I would commend the computer crime and intellectual property section's leadership, working with the G8 and with other countries, to improve the investigation and prosecution of cross border cyber crime, because that is the trend of the future.
Mr. SMITH OF TEXAS. Okay. Thank you. My time is up. I do have a couple more questions which I will get to in a second, but I want to recognize the gentleman from Ohio, Mr. Chabot, for his questions first.
Mr. CHABOT. Thank you, Mr. Chairman. I want to, first of all, thank you for holding this hearing and then secondly, to apologize for being here a little late. I had some other duties which called. And some of the questions that I was going to ask have already been asked at this point, so I just have one. And I think it is very important to enhance penalties for cyber crimes, especially with heightened awareness of terrorist activities conducted in cyberspace. Not only should we increase the penalties for these crimes, but we should take steps to prevent them from happening to begin with, to the extent possible. I knowand I would ask this question of Ms. Koeppen and Mr. Smith. I know you are going to great lengths to protect your networks, but with technology evolving every day, what steps need to be taken now and in the future? What can be done to upgrade security measures to prevent these crimes from occurring and to protect the private information of consumers?
Page 67 PREV PAGE TOP OF DOC Ms. KOEPPEN. Well, I think that important thing is the renewed emphasis on security and an understanding that everyone has to secure their connection to the network. We are trying to make that easier to do through our products. We are trying to make it easier for consumers and end users to be able to automatically update the latest security patch and know that they are running the most secure version. But it is really a problem across all networks, because any vulnerability introduced into one network introduces it into all networks, and so I think it is a renewed emphasis by businesses and by consumers on computer security.
Mr. CHABOT. Thank you. Mr. Smith, would you like to comment?
Mr. SMITH. I think you are seeing strong signs of private sector prioritization of this issue at Microsoft and at other companies, including the member companies of the USISPA. I think the Federal Government has an important role to play in being an intelligent consumer of secure products and secure services, and to include as part of its procurement exercises requirements for enhanced security features and enhanced security services. Many of our companies provide top-rate security services, but find it hard in the marketplace to be compensated for that, and we would like that to change.
Mr. CHABOT. Yes, sir.
Mr. DAVIDSON. I just might add, I think that what you are hearing and I think appropriately is that this is an area where the private sector is going to have to lead and appropriately. So there is a role for Government, but it is relatively limited and I think what we are hearing is the market signal from consumers which is extremely important, which is, that consumers won't be able to trust the network and realize the promise of the Internet if their security and privacy isn't protected. I think you are hearing from companies which understand that, which is good.
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Mr. CHABOT. Thank you very much. Once again, I would like to commend the Chairman for taking up this very important issue and trying to address it. I yield back the balance of my time.
Mr. SMITH OF TEXAS. Thank you, Mr. Chabot. We are going to give Mr. Goodlatte a chance to get oriented here and recognize Mr. Scott for another question or two, and then go to Mr. Goodlatte.
Mr. SCOTT. Thank you. Ms. Koeppen, if you are asked by law enforcement to provide information, what would you like to do?
Ms. KOEPPEN. I am sorry?
Mr. SCOTT. What would you like to do? What would you like the law to do? Would you like the responsibility of investigating to determine whether or not the request is appropriate, or would you rather, just if the Government asksjust like to complymy sense is that most ISPs would just like to comply, unless the law requires them to do something else.
Ms. KOEPPEN. Well, Congressman, I think that, first of all, as an ISP, we have privacy to our end customers is a very important part of the service that we provide. Were we not to protect their personal information, people wouldn't be signing up for our service. So we take that commitment to privacy very seriously. This provision is intended to address what we believe are the very rare circumstances where we either come across information or law enforcement comes across information where there is an immediate threat to life or limb and we are able to disclose this information, without delay, to prevent potential deadly harm from happening.
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In the case of law enforcement, I imagine law enforcement may come to us one day when they believe we have information. In the case of other Government agencies, though, I think it is more a circumstance where we will go to them, because we have stumbled across something that directly affects their employees or their interests, and they are best situated to respond immediately to the danger or the threat.
Mr. SCOTT. I think we have two different questions. One, if you trip across some information, can you act on it? And another is how you respond to a Government agency asking you for information. I view those as two different questions.
Mr. DAVIDSON. I think that they very much are and I think that it is companies like Microsoft who are really in a good position to have excellent attorneys and are able to do exactly what we are hearing described, which is to evaluate the requests. I think Mr. Smith, in some ways, has made your point, which is to say the ISPs aren't going to bedon't want to be the ones to have to make that determination all the time that the 2 o'clock networkthe network operator at 2 o'clock in the morning who gets this request shouldn't have to, doesn't want to try to evaluate it, and I think probably won't.
And it is not that the good faith exception is the issue here. I think the issue is really what the circumstances are and also who the entities are that can request this information and have it revealed to them. I haven't really heard anything today to say that it really needs to be as broad as the statute reads right now, which is any governmental entity.
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Mr. SCOTT. Well, Mr. Malcolm, let me ask you a question and then you can answer. This is just limited to emergencies.
Mr. MALCOLM. That's correct.
Mr. SCOTT. If it were not an emergency, what would you have to do to get the information and what standard would be used?
Mr. MALCOLM. Unless there were another exception that would permit voluntary disclosure, say, such as hacker trespass, then in order to get the information that we are talking about, presuming it is content, one would need to go get a search warrant. Law enforcement would have to go get a search warrant, and if we were talking about a real-time intercept, you would have to get a title III order. But there would be
Mr. SCOTT. And that would require probable cause?
Mr. MALCOLM. Yes.
Mr. SCOTT. Okay. Did you have another comment?
Mr. MALCOLM. Yes. You know, I guess what strikes me about Mr. Davidson's comment is that these are rare circumstances and that law enforcement is not going to be going about calling ISPs willy nilly in nonemergency situations unless they have a genuine belief that it is an emergency; the information is required immediately, i.e., not enough time to go to a judge for process, and involves a threat to life or limb. And in that circumstance, an ISP will review the information to see to it that the statute is complied with and once they have access to the information, law enforcement doesn't have access to that information, they are in the best position to independently determine whether this threat exists. And so long as they are acting in good faith, there is no problem. They are not going to simply roll over. It is certainly not the experience of law enforcement that they roll over, and we are talking about situations in which urgency is of the utmost importance.
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Mr. DAVIDSON. I don't think anybody is disputing that there should be emergency. There should be emergency disclosure provisions. It is a question of how broad they should be. When Congress is faced with this kind of he said/she said situation, there is a thing that I think Congress can do, which is to put a reporting requirement in and try and find outwe have no idea how many requests there are out there. Anecdotal evidence that we have been accumulating, which we would be happy to share as much as we can, indicates that it is happening a lot more. We would urge the Committee to put a reporting requirement
Mr. SCOTT. Well, there isMr. Chairman, there is one safeguard here. If the suggestion is it is an emergency and they get the information that there really wasn't an emergency, I mean, the exclusionary rule would help us out a little bit because you wouldn't be able to use the information in court, I would imagine.
Mr. MALCOLM. Congressman Scott, first of all, if there were not truly an emergency, or at least it did not appear as if there was an emergency, there would be no goodthere would be no good faith under those circumstances to justify that.
Mr. DAVIDSON. I am sorry. Nobody would know about it. That is the problem. The subscriber would never know that their sensitive communications, their communications with their doctor or their banker were revealed. No one would ever know. It just disappears into the ether.
Mr. MALCOLM. I would like to stress one more thing, Congressman Scott, which is, the ISPs who are aware of this provision know that this is a voluntary provision. So there is nothing that requires them, when getting a request from law enforcement, to turn over the information. They are not entitledthey are not required to police for the information, and if it turns out that they don't think that the statute applies or they don't feel like giving the information, law enforcement is stuck getting the process. This is a purely voluntary process.
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Mr. SMITH OF TEXAS. Mr. Scott, you have generated a good discussion.
Mr. SCOTT. Thank you, Mr. Chairman.
Mr. SMITH OF TEXAS. We will go to the gentleman from Virginia, Mr. Goodlatte, for his questions.
Mr. GOODLATTE. Mr. Chairman, thank you very much, for recognizing me. I apologize for my late arrival. Unfortunately, I had to be in more than one place today, but I do want to strongly commend you for introducing this important legislation, which I am very pleased to cosponsor, and for holding this hearing on the legislation that would increase penalties for cyber crimes, enhanced law enforcement coordination and increase the resources to fight cyber crime. I do have a statement that I would ask be made a part of the record, and I won't
Mr. SMITH OF TEXAS. Without objection.
Mr. GOODLATTE [continuing]. Read the whole thing. But I will say that as the Chairman of the Congressional Internet Caucus and the House Republican high-tech working group, we have seen an explosion in cyber crime in recent years. Everything from computer hacking to child pornography to Internet gambling, and the Internet has increasingly been used to perpetrate fraud. That seems to be the most prolific thing in terms of criminal activity on the Internet. It becomes a seemingly anonymous vehicle with which people can perpetrate various types of crime, and while we have to be very concerned about promoting the growth of the Internet and protecting the freedoms that the Internet brings to everybody, we have, at the same time, to not allow it to turn into the wild, wild west of the 21st century.
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Mr. Chairman, today I am introducing legislation that deals with the problem of creating a uniform standard limiting service provider's liability for content that third parties have stored or placed on their systems. This has become an increasing problem for Internet service providers because of the ubiquitous nature of the Internet and the fact that many States are concerned about the proliferation of crime on the Internet and are passing their own laws to address this problem.
This creates a problem for Internet service providers, because it has the effect of requiring Internet service providers to comply with conflicting and varying legal standards, and it therefore has become increasingly apparent that we need to have one uniform standard dealing with the liability of the online service providers for activities that take place by other people, but on their services. And it is my hope that we canI am sure this legislation will be referred to your Subcommittee, and it is my hope that we can take a very close look at this issue, perhaps even consider whether or not it can be included in the legislation you have, whether at the Subcommittee or the full Committee level or whatever your desire would be, I would very much like to work with the Committee to see whether there is a place for this type of provision to set a standard that will help us to better enforce our criminal laws, because we will know who is liable and who is not.
And in that regard, I would just like to ask one question, and that would be of Mr. Smith, who represents an Internet service provider and ask him if he can tell us what kind of difficulties his company has encountered and whether he thinks such a uniform standard would be helpful?
Page 74 PREV PAGE TOP OF DOC Mr. SMITH. Yes. I am here today on behalf of the U.S. ISP Association, and I can say that our Members would be very interested in reviewing the legislation you have introduced. We know that cooperation between ISPs and law enforcement is absolutely essential to fighting cyber crime, but an impediment to cooperation is ISP's concern about liability for messages or content crossing their networks and stored on their networks.
A secondary concern of ISPs is how to administer slightly different laws. If there is one framework for child pornography and another for fake IDs and a third for cyber gambling, trying to administer that inside the company is very difficult if the standard for intermediary responsibility differs from crime to crime. So a uniform standard would appear to be of great benefit to the ISP industry and provide some uniformity in our practices and further cooperation.
Mr. GOODLATTE. Are you saying it would actually further the cooperation with law enforcement, because you know where you stand, and it is not a matter of trying to avoid your own liability but simply knowing where you stand in that regard and then being free to cooperate with law enforcement with regard to those who are actually perpetrating these crimes?
Mr. SMITH. Clarity in the legal framework will enhance cooperation and enhance the concerns of privacy groups who want to know the precise legal framework in which ISPs and law enforcement interact.
Mr. GOODLATTE. Thank you, Mr. Chairman.
Page 75 PREV PAGE TOP OF DOC Mr. SMITH OF TEXAS. Thank you, Mr. Goodlatte. Let me follow up on a question that Mr. Coble asked Mr. Malcolm and direct it toward you. He asked you what suggestions you had for improving the legislation. I think I have only got two questions left. They only deal with emergencies, though of different kinds. One to direct to you and one to Mr. Davidson.
The question really that I had is that as you know under current law, you can use trap and trace devices, pen registered devices when there is an emergency situation for up to, I think, 48 hours without getting the requisite court order. Is it my understanding that you think that that should be changed for purposes of this legislation or not?
Mr. MALCOLM. Yes, Mr. Chairman. The trap and trace device, as you know, is an indispensable tool of law enforcement. It also happens to be the least intrusive means of assisting law enforcement in an emergency. In an emergency, the ability to install a pen register or trap and trace device can make the difference between whether or not you avert a disaster or whether or not you actually catch a criminal. The emergency pen register statute, as it is currently constituted, while quite good, there have been matters brought up since September 11th have shown that there are occasions when it can prove a hindrance and the Department would actually recommend expanding the emergency pen register or pen trap statute, which is section 3125, in two ways: By adding immediate threats to a national security interest, and also ongoing cyber attacks of protected computers. The reason this is needed, Mr. Chairman, is because not all threats to a national security interest are going to involve an immediate threat of danger of death or serious bodily injury, yet attacks on critical infrastructure, such as attacks on computers used by the finance markets, the banking networks, parts of transportation may be of the utmost importance and require preceding with alacrity.
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Similarly, Mr. Chairman, it is often impossible to discern at the outset of a cyber attack whether that attack is going to involve a threat to life and limb or a threat to a critical infrastructure; nonetheless, the ability to get up a trap and trace device can make the difference in determining what the intent of that hacker is and whether or not you catch that hacker.
Mr. SMITH OF TEXAS. Okay. Thank you, Mr. Malcolm. Mr. Davidson, I have a question about emergencies, though of a different kind for you. If you don't give the right answer, I am going to ask Mr. Malcolm to respond.
Mr. DAVIDSON. An incentive to get
Mr. SMITH OF TEXAS. You seemed to object in your testimony a few minutes ago to disseminating information to other Government agencies to the expanded list of agencies that we have in the bill itself. But in the case, say, of a biological attack, why wouldn't we want to as quickly as possible get to, say, the Centers for Disease Control? In the case of an anthrax, real or imagined attack, why wouldn't we want to be able to contact the Post Office as quickly as possible? Why wouldn't we support expanding the agencies that we would want to share information with as soon as we were aware of the nature of the emergency?
Mr. DAVIDSON. Well, I think as a baseline, these are very sensitive communications we are talking about, people's e-mail, the content of communications, not just the transactional data like pen register. So this can be very sensitive information, and I think that there issomewhere in between the notion of just law enforcement and the notion of any governmental entity, there may be the right answer that you are looking for. But the problem is that as crafted right now, any governmental entityreally it includes a schoolteacher. It includes librarians potentially. It could include the local dogcatcher. It could include Congressional staffers and we know they will, but it is not clear that in this situation ISPs should be able, upon a request that they believe in good faith says that there is a danger out there of threat to life or limb, should be able to turn that information over to all of those people.
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Our belief has been that the currentthe way the current law is crafted is the sense that the first place that you should go, if you believe that there is a threat of serious injury or death, is law enforcement. That is the right answer, and I think that Mr. Smith's ISP operator at 2 o'clock in the morning, if he believes that there is a problem, should be going to law enforcement and let law enforcement, who is trained to do this, figure out whether the next person to call is the CDC or somebody else, and we would be happy to work with the Committee to try and find a way to narrow this, but as drafted right now, really you are talking about literally thousands, perhaps hundreds of thousands, of Government employees who could be shown this sensitive information.
Mr. SMITH OF TEXAS. Okay. Thank you, Mr. Davidson.
Mr. DAVIDSON. I don't know if that was the right answer.
Mr. SMITH OF TEXAS. Mr. Smith, do you want to comment?
Mr. SMITH. Yes. I would like to go back to the starting point, which is this is an emergency. Timing is critical. How much time do you want an ISP to be researching the facts to establish that their position is reasonable? How much time do you want the ISP to be thumbing through a directory, finding a qualified Government agency to report this to as opposed to one that would not be qualified? What you want is a good-faith assessment by the ISP that this is an emergency, that someone's life is in danger, and then get the word out to the Government.
Page 78 PREV PAGE TOP OF DOC Mr. SMITH OF TEXAS. Mr. Malcolm, we will give you the last word.
Mr. MALCOLM. Well, Mr. Davidson's fear that somehow if an emergency comes up, that the ISP is going to be contacting the local librarian is I believe apocryphal. I believe that, Mr. Chairman, you hit the nail on the head. In a situation of an emergency, law enforcement is going to have an awful lot of scrambling to do. And, for instance, in the case of a bioterrorism attack, it is perfectly reasonable, it is eminently efficient and can be life saving for that ISP to be able to contact FEMA or the CDC or some appropriate law enforcement official. ISP are responsible corporate citizens, and they are going to know who to contact in the event of an emergency. And that is what we are talking about here, emergencies.
Mr. SMITH OF TEXAS. Okay. Thank you, Mr. Malcolm. Thank you all for your excellent testimony. It has been very helpful, very useful, and we will take all of that in consideration as we move forward. Appreciate your being here. And we stand adjourned.
[Whereupon, at 5:15 p.m., the Subcommittee was adjourned.]
A P P E N D I X
Material Submitted for the Hearing Record
PREPARED STATEMENT OF THE HONORABLE SHEILA JACKSON LEE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS
Page 79 PREV PAGE TOP OF DOC Good afternoon. I would like to thank Mr. Chairman and the Ranking Member for convening this hearing today.
The Internet is a social, cultural, commercial, educational, and entertainment global communications system whose purpose legitimately benefits and empowers online users. It lowers the barriers to the creation and the distribution of expressions throughout the world.
Throughout history, governments have overreacted to all forms of communications technologies including the printing press, the telegraph, telephone, post, cinema, radio, television, satellite, and video. Now, the Internet is receiving the same kind of treatment.
But this time, after the tragic events of September 11, government must assure that terrorist acts are not performed via the Internet.
Cyber crime, or computer crime, has become increasingly prevalent in our society, as well as around the world. But in order to effectively combat this we, as lawmakers, must keep in mind our civil liberties.
Among other things, H.R. 3428 would expand law enforcement's arm in fighting cyber crime. It would lower the standard for information sharing in emergencies from ''reasonably believes'' to a ''good faith'' standard. The Patriot Act has already included in its body many of the provisions we will hear about today.
Page 80 PREV PAGE TOP OF DOC The reasons behind this bill focuses on public safety. However, giving up freedom will not give us security.
Secret surveillance and interception of all forms of communications including Internet communications cannot be acceptable in democratic societies. Democratic values are strengths, not weaknesses. We cannot infringe on our rights guaranteed by our Constitution.
Congress must balance the competing interests of law enforcement in detecting and prosecuting terrorists against individual rights to privacy, and not to be subject to unreasonable searches and seizures. However, the events of September 11 have shifted the balance towards law enforcement.
I look forward to the testimony today so we can work together to combat Internet crime, while maintaining our rights to privacy.
PREPARED STATEMENT OF THE HONORABLE BOB GOODLATTE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF VIRGINIA
I would like to thank the Chairman for introducing this important legislation and for holding today's hearing. I am pleased to be a cosponsor of this comprehensive legislation to increase penalties for cyber crimes, enhance law enforcement coordination and increase resources to combat cyber crime.
Page 81 PREV PAGE TOP OF DOC Continued growth in the information technology industry is the key to maintaining and strengthening the competitiveness of the American economy in the 21st century. However, that growth could be stymied by the use of technology mediums, such as the Internet, for criminal activity.
Cyber crime has exploded in recent years. From computer hacking to child pornography and Internet gambling, the Internet has increasingly been used to perpetrate fraud and circumvent the law.
Even more troublesome is the threat of cyber terrorism. Today, the United States is dependent on private sector information and computer networks that make up the critical information infrastructure. A future terrorist attack won't have to use planes or bombsit could use keystrokes to target the cyber-systems at the heart of operation and control of our nation's critical infrastructures. Computer networks control our air traffic, telecommunications, the New York Stock Exchange, power grids and hospitals.
Now more than ever, we must promote our national security and prevent crime by ensuring the security, confidentiality and authenticity of electronic networks, information and users. That is why I fully support legislation, such as that introduced by Chairman Smith, to crack down on those individuals who engage in criminal activity in the cyber world.
However, while we must increase the penalties for engaging in cyber crime and increase the resources needed to combat such illegal activity, we must be careful not to extend criminal liability to any Internet service provider based on content supplied or controlled by a third party.
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No single issue will have a greater impact on the future of the Internet than the resolution of how the government will regulate conduct and content on the Internet. That is why I am introducing today legislation that would create a uniform standard limiting service providers' liability for content that third parties have stored or placed on their systems.
Criminal statutes regulating online criminal activity have taken varied approaches to the liability of service providers. This has created uncertainty for service providers as they wade through the myriad of criminal statutes and the various standards to which they are held liable. Service providers are expected to choose the correct law, from among many competing jurisdictions, and apply it to each of the millions of activities that occurs daily on their networks.
Instead of focusing on those who initiate or profit from illegal activity, some proposals would hold service providers criminally liable for the conduct, activities, and decisions of third parties who use their services. Under many of these proposals, culpability would arise regardless of whether a service provider has any relationship with the user or the offending site, or intends to facilitate the illegal activity. These approaches will not work. There are more effective and responsible ways to combat illegal conduct on the Internet. Instead of targeting service providers, solutions should focus on those who engage in unlawful activity.
As we move forward in consideration of the Cyber Security Enhancement Act, I look forward to the opportunity to work with the Chairman to obtain his support for the legislation I am introducing today, both on its own merits and in the context of this comprehensive cyber crime legislation.
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Thank you again Mr. Chairman for holding this important hearing and for your sponsorship of this much needed legislation to combat cyber crime.
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PREPARED STATEMENT OF STEPHEN E. CROSS
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