December 2013

[Commentary] A remarkably thorough and well-reasoned report calling on the government to end its bulk phone-data collection program and to increase both the transparency and accountability of surveillance programs going forward was released Dec 18.

The 300-plus-page report was written by a five-member advisory panel of intelligence and legal experts that was commissioned by the President himself and made 46 recommendations for reform. The recommendations demonstrate how far afield the National Security Agency has wandered in its zeal to vacuum up the phone and Internet data of virtually every American, not to mention world leaders and other non-American citizens. They also show the lack of regard for the Constitution that has led those efforts, and the virtual absence of supervision and restraint by President Barack Obama and his predecessor, President George W. Bush. The surveillance programs began before Obama’s presidency, but he allowed them to continue and grow in unprecedented ways. Lately, he has expressed an openness to reforming the programs themselves and the operations of the intelligence court. One important step would be to support legislation in Congress that would achieve many of the panel’s goals, and codify them to restrain future presidents. But President Obama need not wait for Congress to act to implement the reforms he said he wants. He can quickly adopt his panel’s recommendation and end the ineffective and constitutionally dangerous dragnet surveillance.

Cloud application vendor NetSuite is accelerating its construction of data centers in Europe as a result of the National Security Agency's eavesdropping activities.

Zach Nelson, the company's chief executive, said that prospective customers in Europe have grown more concerned about whether the US government could access proprietary information stored in data centers around the world. "There's now a higher level of concern about keeping data in Europe," he said. Edward Snowden’s revelations are particularly thorny for companies like NetSuite, which store data and applications used by businesses on remote servers around the world, which their customers can access via the Internet. Businesses, particularly outside the US, are loath to let the government pry into their activities. According to Nelson, NetSuite will add two new data centers in 2014, picking two from among prospective locations in Germany, the Netherlands and Ireland. NetSuite would have built the new data centers regardless, said Nelson, but has sped up its expansion as a result of concerns about the NSA. Nelson said he believes the company "will have the same issue in Asia."

If Bitcoin is a bubble, as its critics contend, it is showing signs of deflating.

A rapid succession of moves by governments around the world has cast doubts on the legitimacy of the virtual currency, and its price fell about 60 percent at one point on Dec 18 from its high earlier this month. It recovered some as the day went on. The price volatility is underscoring Bitcoin’s sensitivity to decisions by government officials despite its promised status as the first global currency free of government intervention and oversight. Money, it turns out, is still a government prerogative. “This tight regulation is really counter to what a lot of folks thought was going to happen,” said Mark T. Williams, a finance professor at Boston University who has been tracking Bitcoin. “Regulation is the future of e-currency, not decentralization as many had hoped.”

A panel of presidential advisers who reviewed the National Security Agency’s surveillance practices urged President Barack Obama to end the government’s systematic collection of logs of all Americans’ phone calls, and to keep those in private hands, “for queries and data mining” only by court order.

In a more than 300-page report made public by the White House, the group of five intelligence and legal experts also strongly recommended that any operation to spy on foreign leaders would have to pass a rigorous test that weighs the potential economic or diplomatic costs if the operation becomes public. The decision to monitor those communications, it said, should be made by the president and his advisers, not the intelligence agencies. It also recommends new limits on surveillance of ordinary non-Americans. It argues for applying to foreign targets of intelligence the protections accorded to Americans under the Privacy Act of 1974, meaning the government could release very little information about them. The panel also declared that the NSA should cease efforts to undermine work to create secure encryption standards to protect confidential communications and data stored on remote “cloud” servers, and make clear that “it will not in any way subvert, undermine, weaken or make vulnerable generally available commercial encryption.” It also said the United States should get out of the business of secretly collecting flaws in common computer programs and using them for mounting cyberattacks, because the technique undermines confidence in American products. That technique, using what are called “zero day” flaws that have never been discovered before, were critical to the cyberattacks that the United States and Israel launched on Iran in an effort to slow its nuclear program. Taken together, the recommendations would remove from the NSA's hands the authority to conduct many of its operations without review by the president, Congress or the courts. But by themselves, they would terminate few programs.