Entries Tagged "incentives"

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Software Liabilities and Free Software

Whenever I write about software liabilities, many people ask about free and open source software. If people who write free software, like Password Safe, are forced to assume liabilities, they will simply not be able to and free software would disappear.

Don’t worry, they won’t be.

The key to understanding this is that this sort of contractual liability is part of a contract, and with free software—or free anything—there’s no contract. Free software wouldn’t fall under a liability regime because the writer and the user have no business relationship; they are not seller and buyer. I would hope the courts would realize this without any prompting, but we could always pass a Good Samaritan-like law that would protect people who distribute free software. (The opposite would be an Attractive Nuisance-like law—that would be bad.)

There would be an industry of companies who provide liabilities for free software. If Red Hat, for example, sold free Linux, they would have to provide some liability protection. Yes, this would mean that they would charge more for Linux; that extra would go to the insurance premiums. That same sort of insurance protection would be available to companies who use other free software packages.

The insurance industry is key to making this work. Luckily, they’re good at protecting people against liabilities. There’s no reason to think they won’t be able to do it here.

I’ve written more about liabilities and the insurance industry here.

Posted on July 28, 2008 at 2:42 PM • View Comments

Information Security and Liabilities

In my fourth column for the Guardian last Thursday, I talk about information security and liabilities:

Last summer, the House of Lords Science and Technology Committee issued a report on “Personal Internet Security.” I was invited to give testimony for that report, and one of my recommendations was that software vendors be held liable when they are at fault. Their final report included that recommendation. The government rejected the recommendations in that report last autumn, and last week the committee issued a report on their follow-up inquiry, which still recommends software liabilities.

Good for them.

I’m not implying that liabilities are easy, or that all the liability for security vulnerabilities should fall on the vendor. But the courts are good at partial liability. Any automobile liability suit has many potential responsible parties: the car, the driver, the road, the weather, possibly another driver and another car, and so on. Similarly, a computer failure has several parties who may be partially responsible: the software vendor, the computer vendor, the network vendor, the user, possibly another hacker, and so on. But we’re never going to get there until we start. Software liability is the market force that will incentivise companies to improve their software quality—and everyone’s security.

Posted on July 23, 2008 at 3:09 PM • View Comments

The Feeling and Reality of Security

Security is both a feeling and a reality, and they’re different. You can feel secure even though you’re not, and you can be secure even though you don’t feel it. There are two different concepts mapped onto the same word—the English language isn’t working very well for us here—and it can be hard to know which one we’re talking about when we use the word.

There is considerable value in separating out the two concepts: in explaining how the two are different, and understanding when we’re referring to one and when the other. There is value as well in recognizing when the two converge, understanding why they diverge, and knowing how they can be made to converge again.

Some fundamentals first. Viewed from the perspective of economics, security is a trade-off. There’s no such thing as absolute security, and any security you get has some cost: in money, in convenience, in capabilities, in insecurities somewhere else, whatever. Every time someone makes a decision about security—computer security, community security, national security—he makes a trade-off.

People make these trade-offs as individuals. We all get to decide, individually, if the expense and inconvenience of having a home burglar alarm is worth the security. We all get to decide if wearing a bulletproof vest is worth the cost and tacky appearance. We all get to decide if we’re getting our money’s worth from the billions of dollars we’re spending combating terrorism, and if invading Iraq was the best use of our counterterrorism resources. We might not have the power to implement our opinion, but we get to decide if we think it’s worth it.

Now we may or may not have the expertise to make those trade-offs intelligently, but we make them anyway. All of us. People have a natural intuition about security trade-offs, and we make them, large and small, dozens of times throughout the day. We can’t help it: It’s part of being alive.

Imagine a rabbit, sitting in a field eating grass. And he sees a fox. He’s going to make a security trade-off: Should he stay or should he flee? Over time, the rabbits that are good at making that trade-off will tend to reproduce, while the rabbits that are bad at it will tend to get eaten or starve.

So, as a successful species on the planet, you’d expect that human beings would be really good at making security trade-offs. Yet, at the same time, we can be hopelessly bad at it. We spend more money on terrorism than the data warrants. We fear flying and choose to drive instead. Why?

The short answer is that people make most trade-offs based on the feeling of security and not the reality.

I’ve written a lot about how people get security trade-offs wrong, and the cognitive biases that cause us to make mistakes. Humans have developed these biases because they make evolutionary sense. And most of the time, they work.

Most of the time—and this is important—our feeling of security matches the reality of security. Certainly, this is true of prehistory. Modern times are harder. Blame technology, blame the media, blame whatever. Our brains are much better optimized for the security trade-offs endemic to living in small family groups in the East African highlands in 100,000 B.C. than to those endemic to living in 2008 New York.

If we make security trade-offs based on the feeling of security rather than the reality, we choose security that makes us feel more secure over security that actually makes us more secure. And that’s what governments, companies, family members and everyone else provide. Of course, there are two ways to make people feel more secure. The first is to make people actually more secure and hope they notice. The second is to make people feel more secure without making them actually more secure, and hope they don’t notice.

The key here is whether we notice. The feeling and reality of security tend to converge when we take notice, and diverge when we don’t. People notice when 1) there are enough positive and negative examples to draw a conclusion, and 2) there isn’t too much emotion clouding the issue.

Both elements are important. If someone tries to convince us to spend money on a new type of home burglar alarm, we as society will know pretty quickly if he’s got a clever security device or if he’s a charlatan; we can monitor crime rates. But if that same person advocates a new national antiterrorism system, and there weren’t any terrorist attacks before it was implemented, and there weren’t any after it was implemented, how do we know if his system was effective?

People are more likely to realistically assess these incidents if they don’t contradict preconceived notions about how the world works. For example: It’s obvious that a wall keeps people out, so arguing against building a wall across America’s southern border to keep illegal immigrants out is harder to do.

The other thing that matters is agenda. There are lots of people, politicians, companies and so on who deliberately try to manipulate your feeling of security for their own gain. They try to cause fear. They invent threats. They take minor threats and make them major. And when they talk about rare risks with only a few incidents to base an assessment on—terrorism is the big example here—they are more likely to succeed.

Unfortunately, there’s no obvious antidote. Information is important. We can’t understand security unless we understand it. But that’s not enough: Few of us really understand cancer, yet we regularly make security decisions based on its risk. What we do is accept that there are experts who understand the risks of cancer, and trust them to make the security trade-offs for us.

There are some complex feedback loops going on here, between emotion and reason, between reality and our knowledge of it, between feeling and familiarity, and between the understanding of how we reason and feel about security and our analyses and feelings. We’re never going to stop making security trade-offs based on the feeling of security, and we’re never going to completely prevent those with specific agendas from trying to take care of us. But the more we know, the better trade-offs we’ll make.

This article originally appeared on Wired.com.

Posted on April 8, 2008 at 5:50 AM • View Comments

Spammers Using Porn to Break Captchas

Clever:

Spammers have created a Windows game which shows a woman in a state of undress when people correctly type in text shown in an accompanying image.

The scrambled text images come from sites which use them to stop computers automatically signing up for accounts that can be put to illegal use.

By getting people to type in the text the spammers can take over the accounts and use them to send junk mail.

I’ve been saying that spammers would start doing this for years. I’m actually surprised it took this long.

Posted on November 1, 2007 at 2:37 PM • View Comments

Chemical Plant Security and Externalities

It’s not true that no one worries about terrorists attacking chemical plants, it’s just that our politics seem to leave us unable to deal with the threat.

Toxins such as ammonia, chlorine, propane and flammable mixtures are constantly being produced or stored in the United States as a result of legitimate industrial processes. Chlorine gas is particularly toxic; in addition to bombing a plant, someone could hijack a chlorine truck or blow up a railcar. Phosgene is even more dangerous. According to the Environmental Protection Agency, there are 7,728 chemical plants in the United States where an act of sabotage—or an accident—could threaten more than 1,000 people. Of those, 106 facilities could threaten more than a million people.

The problem of securing chemical plants against terrorism—or even accidents—is actually simple once you understand the underlying economics. Normally, we leave the security of something up to its owner. The basic idea is that the owner of each chemical plant 1) best understands the risks, and 2) is the one who loses out if security fails. Any outsider—i.e., regulatory agency—is just going to get it wrong. It’s the basic free-market argument, and in most instances it makes a lot of sense.

And chemical plants do have security. They have fences and guards (which might or might not be effective). They have fail-safe mechanisms built into their operations. For example, many large chemical companies use hazardous substances like phosgene, methyl isocyanate and ethylene oxide in their plants, but don’t ship them between locations. They minimize the amounts that are stored as process intermediates. In rare cases of extremely hazardous materials, no significant amounts are stored; instead they are only present in pipes connecting the reactors that make them with the reactors that consume them.

This is all good and right, and what free-market capitalism dictates. The problem is, that isn’t enough.

Any rational chemical plant owner will only secure the plant up to its value to him. That is, if the plant is worth $100 million, then it makes no sense to spend $200 million on securing it. If the odds of it being attacked are less than 1 percent, it doesn’t even make sense to spend $1 million on securing it. The math is more complicated than this, because you have to factor in such things as the reputational cost of having your name splashed all over the media after an incident, but that’s the basic idea.

But to society, the cost of an actual attack can be much, much greater. If a terrorist blows up a particularly toxic plant in the middle of a densely populated area, deaths could be in the tens of thousands and damage could be in the hundreds of millions. Indirect economic damage could be in the billions. The owner of the chlorine plant would pay none of these potential costs.

Sure, the owner could be sued. But he’s not at risk for more than the value of his company, and—in any case—he’d probably be smarter to take the chance. Expensive lawyers can work wonders, courts can be fickle, and the government could step in and bail him out (as it did with airlines after Sept. 11). And a smart company can often protect itself by spinning off the risky asset in a subsidiary company, or selling it off completely. The overall result is that our nation’s chemical plants are secured to a much smaller degree than the risk warrants.

In economics, this is called an externality: an effect of a decision not borne by the decision maker. The decision maker in this case, the chemical plant owner, makes a rational economic decision based on the risks and costs to him.

If we—whether we’re the community living near the chemical plant or the nation as a whole—expect the owner of that plant to spend money for increased security to account for those externalities, we’re going to have to pay for it. And we have three basic ways of doing that. One, we can do it ourselves, stationing government police or military or contractors around the chemical plants. Two, we can pay the owners to do it, subsidizing some sort of security standard.

Or three, we could regulate security and force the companies to pay for it themselves. There’s no free lunch, of course. “We,” as in society, still pay for it in increased prices for whatever the chemical plants are producing, but the cost is paid for by the product’s consumers rather than by taxpayers in general.

Personally, I don’t care very much which method is chosen: that’s politics, not security. But I do know we’ll have to pick one, or some combination of the three. Asking nicely just isn’t going to work. It can’t; not in a free-market economy.

We taxpayers pay for airport security, and not the airlines, because the overall effects of a terrorist attack against an airline are far greater than their effects to the particular airline targeted. We pay for port security because the effects of bringing a large weapon into the country are far greater than the concerns of the port’s owners. And we should pay for chemical plant, train and truck security for exactly the same reasons.

Thankfully, after years of hoping the chemical industry would do it on its own, this April the Department of Homeland Security started regulating chemical plant security. Some complain that the regulations don’t go far enough, but at least it’s a start.

This essay previously appeared on Wired.com.

Posted on October 18, 2007 at 7:26 AM • View Comments

Conversation with Kip Hawley, TSA Administrator (Part 2)

This is Part 2 of a five-part series. Link to whole thing.

BS: I hope you’re telling the truth; screening is a difficult problem, and it’s hard to discount all of those published tests and reports. But a lot of the security around these checkpoints is about perception—we want potential terrorists to think there’s a significant chance they won’t get through the checkpoints—so you’re better off maintaining that the screeners are better than reports indicate, even if they’re not.

Backscatter X-ray is another technology that is causing privacy concerns, since it basically allows you to see people naked. Can you explain the benefits of the technology, and what you are doing to protect privacy? Although the machines can distort the images, we know that they can store raw, unfiltered images; the manufacturer Rapiscan is quite proud of the fact. Are the machines you’re using routinely storing images? Can they store images at the screener’s discretion, or is that capability turned off at installation?

KH: We’re still evaluating backscatter and are in the process of running millimeter wave portals right alongside backscatter to compare their effectiveness and the privacy issues. We do not now store images for the test phase (function disabled), and although we haven’t officially resolved the issue, I fully understand the privacy argument and don’t assume that we will store them if and when they’re widely deployed.

BS: When can we keep our shoes on?

KH: Any time after you clear security. Sorry, Bruce, I don’t like it either, but this is not just something leftover from 2002. It is a real, current concern. We’re looking at shoe scanners and ways of using millimeter wave and/or backscatter to get there, but until the technology catches up to the risk, the shoes have to go in the bin.

BS: This feels so much like “cover your ass” security: you’re screening our shoes because everyone knows Richard Reid hid explosives in them, and you’ll be raked over the coals if that particular plot ever happens again. But there are literally thousands of possible plots.

So when does it end? The terrorists invented a particular tactic, and you’re defending against it. But you’re playing a game you can’t win. You ban guns and bombs, so the terrorists use box cutters. You ban small blades and knitting needles, and they hide explosives in their shoes. You screen shoes, so they invent a liquid explosive. You restrict liquids, and they’re going to do something else. The terrorists are going to look at what you’re confiscating, and they’re going to design a plot to bypass your security.

That’s the real lesson of the liquid bombers. Assuming you’re right and the explosive was real, it was an explosive that none of the security measures at the time would have detected. So why play this slow game of whittling down what people can bring onto airplanes? When do you say: “Enough. It’s not about the details of the tactic; it’s about the broad threat”?

KH: In late 2005, I made a big deal about focusing on Improvised Explosives Devices (IEDs) and not chasing all the things that could be used as weapons. Until the liquids plot this summer, we were defending our decision to let scissors and small tools back on planes and trying to add layers like behavior detection and document checking, so it is ironic that you ask this question—I am in vehement agreement with your premise. We’d rather focus on things that can do catastrophic harm (bombs!) and add layers to get people with hostile intent to highlight themselves. We have a responsibility, though, to address known continued active attack methods like shoes and liquids and, unfortunately, have to use our somewhat clunky process for now.

BS: You don’t have a responsibility to screen shoes; you have one to protect air travel from terrorism to the best of your ability. You’re picking and choosing. We know the Chechnyan terrorists who downed two Russian planes in 2004 got through security partly because different people carried the explosive and the detonator. Why doesn’t this count as a continued, active attack method?

I don’t want to even think about how much C4 I can strap to my legs and walk through your magnetometers. Or search the Internet for “BeerBelly.” It’s a device you can strap to your chest to smuggle beer into stadiums, but you can also use it smuggle 40 ounces of dangerous liquid explosive onto planes. The magnetometer won’t detect it. Your secondary screening wandings won’t detect it. Why aren’t you making us all take our shirts off? Will you have to find a printout of the webpage in some terrorist safe house? Or will someone actually have to try it? If that doesn’t bother you, search the Internet for “cell phone gun.”

It’s “cover your ass” security. If someone tries to blow up a plane with a shoe or a liquid, you’ll take a lot of blame for not catching it. But if someone uses any of these other, equally known, attack methods, you’ll be blamed less because they’re less public.

KH: Dead wrong! Our security strategy assumes an adaptive terrorist, and that looking backwards is not a reliable predictor of the next type of attack. Yes, we screen for shoe bombs and liquids, because it would be stupid not to directly address attack methods that we believe to be active. Overall, we are getting away from trying to predict what the object looks like and looking more for the other markers of a terrorist. (Don’t forget, we see two million people a day, so we know what normal looks like.) What he/she does; the way they behave. That way we don’t put all our eggs in the basket of catching them in the act. We can’t give them free rein to surveil or do dry-runs; we need to put up obstacles for them at every turn. Working backwards, what do you need to do to be successful in an attack? Find the decision points that show the difference between normal action and action needed for an attack. Our odds are better with this approach than by trying to take away methods, annoying object by annoying object. Bruce, as for blame, that’s nothing compared to what all of us would carry inside if we failed to prevent an attack.

Part 3: The no-fly list

Posted on July 31, 2007 at 6:12 AM • View Comments

The TSA and the Case of the Strange Battery Charger

A TSA screener doesn’t like the look of a homemade battery charger, and refuses to let it on an airplane. Interesting story, both for the escalation procedure the TSA screener followed, and this final observation:

But these are the times we live in. A handful of people with no knowledge of physics, engineering, or pyrotechnics are responsible for determining what is and what is not safe to bring on a plane. They’re paid minimum wage and told to panic if they see something they don’t recognize. Does this make me feel safer? It doesn’t really matter. Implementing real security would bring the cost of flying up, which would likely cause a collapse of the airborne transportation network this country has worked so hard to build up.

The UK banned laptop computers in carry-on luggage for a few days and quickly reversed the idea. The lack of laptops would make the option unattractive to business professionals. Security would cost more than money and many passengers wouldn’t have accepted it.

So the TSA finally let me onto my flight with the two devices they told me they weren’t going to let me take on my flight. They told me the device looked like an I.E.D., then let me on the plane with it.

Does that mean I can bring them on my flight next week?

And that’s the problem: the TSA is both arbitrary and capricious, and it’s impossible to follow the rules because no one knows how they will be applied.

Posted on July 19, 2007 at 6:53 AM • View Comments

Cocktail Condoms

They’re protective covers that go over your drink and “protect” against someone trying to slip a Mickey Finn (or whatever they’re called these days):

The concept behind the cocktail cover is fairly simply. About the size of a coaster, it can be used to cap a drink that goes unattended. When a person returns to a beverage, there is a layer that can be pulled back, leaving a thin sheath protecting the cocktail. That can be punctured with a straw or pulled off entirely—either way the drinker will know that the cocktail has not been tampered with.

I’m sure there are many ways to defeat this security device if you’re so inclined: a syringe, affixing a new cover after you tamper with the drink, and so on. And this is exactly the sort of rare risk we’re likely to overreact to. But to me, the most interesting aspect of this story is the agenda. If these things become common, it won’t be because of security. It will be because of advertising:

Barry said that companies could advertise on the cocktail covers, likely covering the cost of production. Each cover, he said, costs less than 10 cents to make.

Posted on June 25, 2007 at 6:25 AM • View Comments

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Sidebar photo of Bruce Schneier by Joe MacInnis.