FC: CSIS' James Lewis replies to Politech on WH cybersecurity report

From: Declan McCullagh (declanat_private)
Date: Fri Sep 20 2002 - 07:33:14 PDT

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    Previous Politech message:
    
    "Defense hawks bash White House report, want new laws, regulations"
    http://www.politechbot.com/p-03999.html
    
    James Lewis was one of the two CSISers I quoted in that article as wanting 
    more laws. He had said: "Cybersecurity is too tough a problem for a solely 
    voluntary approach to fix. Companies will only change their behavior when 
    there are both market forces and legislation that cover security failures. 
    Until the U.S. has more than just voluntary solutions, we'll continue to 
    see slow progress in improving cybersecurity."
    
    -Declan
    
    ---
    
    Date: Fri, 20 Sep 2002 10:16:33 -0400
    From: "James Lewis" <JALewisat_private>
    To: <declanat_private>
    Subject: Defense Hawks bash, etc
    
    Declan: I actually think the National Strategy is very strong, but I
    question the heavy reliance on voluntary action and self-regulation.
    Politech readers might want to look at the section (460 words) from a
    draft report that I pasted below.  It outlines ideas on regulation as an
    incentive for cybersecurity. Thanks, Jim Lewis
    
    ***
    In a perfect market, the private sector would purchase adequate
    security and firms would offer the products needed for it.  This has not
    been the case.  While some industry sectors (such as financial services)
    have moved to increase security, other sectors may not improve absent
    increased incentives.  Despite arguments that market forces and the
    evolution of the IT industry will improve security voluntarily, we must
    ask if cybersecurity, as with health, environmental, or safety issues,
    requires further government intervention.
    
    Government intervention could include direct or indirect subsidies for
    cybersecurity spending, i.e. tax relief, R&D funding, or the use of
    Federal purchases to promote more secure products.  It could also
    include reinsurance subsidies (the U.S. provides reinsurance for natural
    catastrophes) in exchange for insurers' adherence to cybersecurity
    standard such as ISO 17799.  Continued exhortation by government
    officials for the private sector to voluntarily take action is a form of
    intervention that occasionally is effective.
    
    Governments can also use law and regulation as incentives to encourage
    certain behaviors.  Legislation and regulation (or even the threat of
    legislation and regulation) will energize the private sector to move
    faster in cybersecurity.  Regulation should avoid a heavy-handed,
    prescriptive approach and instead aim to increase transparency and
    assign responsibility, leaving it up to individuals as to how best to
    meet  requirements.  The Health Insurance Portability and Accountability
    Act of 1996 and the Gramm-Leach-Bliley Financial Reform Act, by creating
    responsibility for privacy (and consequently security), worked to
    increase awareness and demand for security products and are useful (but
    not perfect) models of this.
    
    While security is an ongoing problem and Y2K was a single event, Y2K
    may also be a model on how regulation can energize private sector
    behavior for cybersecurity.  The primary function of government in Y2K
    was as an organizer and educator.  The Y2K effort gathered and
    disseminated information, organized multinational networks, shared
    information on best practices and worked through public-private
    partnerships to raise awareness.  However, regulatory action by the
    Securities and Exchange Commission and by banking regulators also played
    a galvanizing role in Y2K preparations.  Companies had to show publicly
    and to their regulators that they had taken adequate steps to protect
    against Y2K disruption.  Similar SEC requirements for companies to
    report the steps they are taking to protect themselves from cyber attack
    would improve network security.
    
    Internet policy problems challenge governments' ability to carry out
    their functions.  Traditional governmental responses, such as
    prescriptive regulation, will not create cybersecurity, but neither will
    a reliance on self-regulation and voluntary action.  One solution may be
    a new style of governance built on explicit public-private partnerships.
      Defining the scope of these partnerships and the responsibilities of
    each partner requires that we identifying places where the market
    response is weak as candidates for government action, and which
    government actions (if any) would be an appropriate response.  
    
    
    
    
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