Cyber Scene #31 - We're Number One!

Cyber Scene #31

We're Number One!

The award-of-the-year, as chosen by the Department of Homeland Security (DHS) Secretary Kirstjen Nielsen, goes to cyberwarfare as the nation's leading threat, as reported in the New York Times. She went on to say that "on top of my list of threats...the word "cyber" is circled, highlighted and underlined. The cyberdomain is a target, a weapon and a threat vector all at the same time."Secretary Nielsen "assailed" Putin "...for a concerted effort to undermine our elections and our democratic process using cyberenabled means." She did praise her department for defending the integrity of the 2018 midterm elections, but noted that an individual American was no match for Russia, China, North Korea and Iran who threaten US infrastructure, finances, secrets and even democracy itself.

It is no surprise that the budget follows the greatest threat. DNI Dan Coats' proposed budget, on the rise since 2016, is up to $86 billion. The budget details are classified. However, given the administration's emphasis on cyber, it is most probable that both the IC (NIP, or National Intelligence Program) of $62.8 billion and the MIP (you guessed it: the Military Intelligence Program) of $22.95 billion all “...reflect the increased costs of focusing less on counterterrorism and more on espionage and cyberthreats from other nations."
 
Of course, terrorists also use cyber (think New Zealand), so just as there is serious interface across NIP and MIP programs, so too are cyberwarfare and terrorism joined at the hip (as in the MIP and NIP).

Also Number One: Our Old Friend, Russia (konechno)

Russia, in a class by itself like Mozart (sort of), wins the "cyber-hacker-of-the-year" award. Reported in the Economist, a US company, CrowdStrike, published its annual cybersecurity report with a first-ever ranking of the West's cyber enemies. With such a wide selection of criteria, the company chose not sophistication but "breakout time." Russia finished 2018 head and shoulders above the also-rans--Iran, North Korea and China in order of their "time to target." The race does not address the scope or damage of the attacks, but rather how fast the hackers have been: "Russian spies ...were blisteringly fast at breaking out into their enemies' networks, taking an average of just 18 minutes to do so." As for the competition, North Korea took 2 hrs, China 4 hrs. and Iran 5 hrs. Criminal groups were last with 10 hrs. However, China won in quantity with 100 serious cyberattacks since 2006, as reported by the US Center for Strategic and International Studies think tank. Don't be surprised if Russia vies for another category next year, and China is certainly here for the long term.

Why is Huawei an Ever-Present Big Deal?

The Huawei debate continues across continents. The Chinese company is recently seen as regenerating support from European nations who have earlier seems to side with the US in keeping Huawei out of North America. The Economist editorialist Chaguan addresses this in "When giants battle" citing both China and the US as bullies, with China being the more dangerous. But the reason the stakes are so high is the following: "This is a fight bigger than Huawei. The West is really debating whether China can be trusted as a pillar of high-tech globalisation."(sic) It is this that has spawned global trade conflict. The stakes are enormous.

A particularly strategic inflection point in the Sino-US trade and cyber debate occurred when Canada placed Huawei's Meng Wanzhou under a manner of house arrest at the US's behest. Fur began to fly, and Canada is now dealing with a variation of tit for tat with three tricky detainments of quasi-diplomatic "hostages" waylaid in China.

An earlier Economist article, "Crossed wires" spells out the nature of the dissent among and between Western nations. It first looks at the "Five Eyes" community--the US, UK, Canada, Australia and New Zealand--and notes that there is concern among some about Chinese "back doors" as well as the 2017 Chinese legislation that requires firms to operate with Chinese intelligence services.

The UK disagrees with the US back door claim. It notes that GCHQ, speaking in Brussels, sees no back doors but does acknowledge a weak "spaghettified mess" of codes which is full of holes and weak security, ergo, breachable. Germany and Italy have apparently also stalled in banning Huawei. New Zealand has blocked an application but has not blacklisted Huawei outright. Poland is asking for "Western unity."

New York Times journalists Julian E. Barnes and Adam Satariano report that China is keeping its foot in Europe and India's door.All of this is related to the proliferation of 5G by Huawei ultimately "...allowing Beijing to spy on companies, individuals and governments--an accusation Huawei has vehemently denied. Barnes and Satariano report that the UK, Germany, India and the UAE are unlikely to back off from Huawei installing their 5G network. Former HPSCI Chair Mike Rogers notes that "...we are running out of runway." Well, the Chinese are good with building airports too. With the stakes huge, the tech war continues with its corollary trade war.

Regulation Redux

The leitmotiv, regulation, makes a return performance as both Europeans and Americans--legislators and former directors--clamor for more oversight and restrictions for Big Tech.

Enter the new Federal Trade Commission Chairman Joseph J. Simons, a Republican lawyer in a deregulatory administration who is "...a rare voice for strengthening the government's hand," per NYT reporter Cecilia Kang. He is an antitrust expert, dealing with Facebook, Google, Uber and other tech leaders on the issue of privacy. NYT journalist Katie Robertson writes, as part of an entire special report on A.I., that the FTC announced the creation of a task force to "scrutinize tech giants...and is considering a multi-billion dollar fine for Facebook over privacy issues." And this against the backdrop of one of the biggest trade wars spinning off of the US-Chinese cyber issue.

As for Facebook, while Huawei has learned how to monetize by "being there," Facebook is stepping back from some missteps and dealing with old complaints regarding privacy issues and ads. It seeks to monetize privacy.

A former Chair of the Federal Communications Commission (2013-2017), Tom Wheeler, also weighs in on regulation in an interview in Wired with Klint Finley. The Chairman oversaw the drafting of net neutrality rules (ignoring John Oliver's quip about having a dingo babysit your children) and penned a work, From Gutenberg to Google: The History of Our Future reflecting his own extensive experience as the CEO of a tech startup and of a wireless industry group and national cable company looking to the future of the internet. So he echoes the calls for the need of internet regulation.

In the UK, the British Chancellor of the Exchequer, equivalent to the US Treasury Secretary, ordered a 150-page report released mid-March 2019 that calls for stricter regulations in Big Tech. The country believes that Big Tech has harmed innovation and reduced consumer choice, per New York Times reporter Adam Satariano.

On the US home front, two US Democratic presidential candidates are on the same wavelength as the Brits: Senators Elizabeth Warren and Amy Klobuchar, per the Economist, are both calling for antitrust legislation to break up the largest tech companies. Their statements occurred on the one-year anniversary of the New York Times and Observer exposés regarding Facebook's Cambridge Analytica leak. Senator Ted Cruz (R-TX) says this is the first time he has ever agreed with Senator Warren "about anything."

This scenario harkens back to a century-old liberal Republican trust buster from New York who made two successful bids for president. Regulation may just draw other political enemies together.

Meanwhile, Barrons' Reshma Kapadia writes in "Cold War in Tech" that, as the US-Chinese engagement heats up, investments can take a big hit. The article looks at the impact on US companies that this tech war and its trade war partner are making, and how the US stock market is reacting to the US-Chinese volleys. The author does not expect this to end anytime soon, citing that US officials have been concerned for years about Chinese infiltration of US networks regarding both espionage and intellectual property theft. For inventors and investors among this readership, the article goes on to look particularly at chip manufacturing, micron technology semiconductors, China's "BATs" (like US FAANGS)--Baidu, Alibaba, and Tencent as well as Huawei's competition.

For Congressional curiosity seekers, the SSCI has had no open hearings in March but four closed ones. The HPSCI will hold only one open hearing, on March 28, but it may be a blockbuster: to Putin's Playbook: The Kremlin's Use of Oligarchs, Money and Intelligence in 2016 and Beyond. Tune in at 9:00.

And Wired says "Happy Birthday, World Wide Web!" 30 years young.