April 2011

Lawmakers Say Sony Data Breach Underscores Need For Legislation

Members of Congress say they are very worried about news that someone hacked the accounts of 77 million Sony PlayStation users and say the issue shows Congress needs to do something more about cybersecurity.

"I am deeply troubled by this latest data breach. It reinforces my long-held belief that much more needs to be done to protect sensitive consumer information," said Rep. Mary Bono Mack (R-CA), chairwoman of the House Subcommittee on Commerce, Manufacturing and Trade. "Most importantly, Americans should be quickly informed when their personal information has been hacked, especially in instances like this where there is an obvious potential for large scale identity theft." Rep Bono Mack said she will be introducing legislation, possibly as soon as next week, that would provide consumers with additional safeguards to protect against such data breaches.

Rep. Bobby Rush (D-IL), who also sits on the House Commerce Committee, said he plans to reintroduce a data breach bill he offered before. The bill, which passed the House, would have required for-profit entities that hold personal information about consumers to adequately secure the data and notify the Federal Trade Commission and the affected consumers when a breach occurs. "Sony touts its PlayStation platform's real-time and networking capabilities to consumers," Rep Rush said. "The laws of this country should call, similarly, for consumers to be notified in as close to real-time as possible--not according to Sony time--whenever their sensitive information falls into the hands of intruders, hackers, thieves and information resellers."

White House Official: Cyber Attacks Are Risk of Doing Business

The White House official tasked with coordinating the country’s response to cyber threats said that the risk of such attacks is often overblown.

Howard Schmidt, the White House cybersecurity coordinator, said that a few sensational events make the overall cyber threat seem worse than it really is. “It’s still a situation where specific incidents make it something it’s not,” he said. “Things make headlines that are just the risk of doing business in many cases.” But, Schmidt said, compared to other, more traditional crimes, attacks in cyberspace remain rare. He said there had been some successes, although he gave no details.
That being said, Schmidt added, the relatively low risk doesn't mean the problem should be ignored.

Holding Companies Accountable for Privacy Breaches

It’s become almost a weekly occurrence: Another online company letting customers personal and private information leak because of an Internet breach.

Sometimes this sensitive data is stolen by hackers who gain access through holes in a network that customers unwittingly trust companies to protect. Lately, there are more instances of companies procuring data without customers’ knowledge and using it for — well, who knows what they’re using it for? People hand over their names, addresses, passwords, birth dates and sometimes credit card information in exchange for access to online services and technologies that they hope will better their lives or business. In many instances these services do that, but increasingly the companies tend to disregard the importance of protecting personal and sensitive information. Yet there seems to be no real repercussions for these companies when a person’s information stored online is exposed. “Today the only real hit a company takes when these data breaches happen is to the company’s image,” said Alex Halderman, an assistant professor at the University of Michigan who specializes in data privacy. “It seems that with the frequency these events happen, a simple P.R. hit is not working to force these companies to protect people’s privacy.”

Marc Rotenberg, executive director of the Electronic Privacy Information Center, an advocacy group in Washington, said the continual flurry of breaches shows that companies are collecting too much personal information about customers that can too easily fall into the wrong hands. Rotenberg said that he tells companies, “If you can't protect it, don't collect it.”

Rep Markey: Apple response to iPhone-gate raises new questions

Rep Ed Markey (D-MA) said Apple's response to public concern over the revelation that iPhones track location data raises more questions for the tech giant. Rep Markey was generally pleased with the response, including Apple's decision to begin encrypting the location data it stores when the iPhone is synced with a computer. The company also pledged to reduce the amount of time location data is stored on a device from nearly a year to a week. "By providing these additional consumer controls, using an Apple every day should help keep the predators away," Rep Markey said.

Group Owners: FCC's Spectrum Reclamation Plan Would Be Unlawful

State broadcaster associations oppose the Federal Communications Commission's plan to reclaim spectrum for wireless broadband without enforceable guarantee broadcasters will be held harmless in all respects. A Who's Who of owners representing hundreds of TV stations have asked the FCC to withdraw its proposal, saying there is no spectrum crisis and that the move would be against the public interest and against the law. Representatives of state broadcast associations said they were equally unconvinced by the FCC's plan, despite a personal pitch from FCC Chairman Julius Genachowski during the National Association of Broadcasters convention in Las Vegas earlier this month. They stopped short of asking the petition to be withdrawn, but want an ironclad guarantee of "voluntary." In reply comments on various FCC proposals, Allbritton, Tribune, Meredith, Gray, McGraw-Hill, Nexstar, Granite and almost two dozen more station groups said flatly the FCC proposal to reclaim and auction broadcast spectrum was the wrong way to go and asked it to terminate the proceeding. The groups filed collectively as Local Television Broadcasters. The groups said that if the FCC pursues its present course, it would be "arbitrary, capricious, and contrary to the public interest." According to the Administrative Procedure Act, "arbitrary and capricious" agency decisions are unlawful.

NCTA On Spectrum: FCC Needs To Hold Cable Harmless, Too

The National Cable & Telecommunications Association told the Federal Communications Commission that it is OK with TV stations being repacked or sharing channels, so long as that does not mean cable must carry obligations are increased in the process.

NCTA says that must carry is already an intrusion on the First Amendment that hurts customers, but is not fighting that fight in this proceeding. "So long as the Commission remains mindful of the constitutional, statutory and policy limitations of must carry rules, NCTA's interests in this proceeding will be adequately addressed," the association said, the "adequate" making the point that it was no concession on the basic point. But what would be far from adequate, NCTA made clear, was any extension of must carry as part of a spectrum reclamation process. "NCTA does not oppose the channel-sharing proposal so long as it does not result directly or indirectly in the expansion of cable operators' ‘must carry' obligations" to high-powered or low-powered stations, said NCTA.

"[H]olding cable operators harmless means, at a minimum, that the Commission must make absolutely clear in any rules that it may adopt that, as proposed in the Notice, any channel sharing will be limited 'to television stations with existing applications, construction permits or licenses as of the date of the adoption of this Notice.' Moreover, in no event should any licensee's carriage rights be any greater than they are today. Finally, holding cable operators harmless also means ensuring that cable operators are compensated for any costs that they incur due to the implementation of channel-sharing."

Streamlining Service Delivery and Improving Customer Service

By Executive Order, President Barack Obama has ordered all Federal agencies to develop, in consultation with the Office of Management and Budget (OMB), a Customer Service Plan (plan) to address how the agency will provide services in a manner that seeks to streamline service delivery and improve the experience of its customers.

The plan shall set forth the agency's approach, intended benefits, and an implementation timeline for the following actions:
(a) establishing one major initiative (signature initiative) that will use technology to improve the customer experience;
(b) establishing mechanisms to solicit customer feedback on Government services and using such feedback regularly to make service improvements;
(c) setting clear customer service standards and expectations, including, where appropriate, performance goals for customer service required by the GPRA (Government Performance and Results) Modernization Act of 2010 (Public Law 111-352);
(d) improving the customer experience by adopting proven customer service best practices and coordinating across service channels (such as online, phone, in-person, and mail services);
(e) streamlining agency processes to reduce costs and accelerate delivery, while reducing the need for customer calls and inquiries; and
(f) identifying ways to use innovative technologies to accomplish the customer service activities above, thereby lowering costs, decreasing service delivery times, and improving the customer experience.

The plans are due in six months.

Feds to Close 137 Data Centers by 2012

The government has closed 39 federal data centers in the past five months and is on track to close nearly 100 more before the end of the year, federal Chief Information Officer Vivek Kundra said. One data center in Rockville (MD) alone was costing the government about $1.2 million a year in electricity costs before it was close.

FCC's Kenny Leaves For PR Firm

Acting Federal Communications Commission Press Secretary Robert Kenny has left the agency to take a job with Washington-based public relation's firm Mercury Public Affairs.

He will provide media relations services and primarily focus on technology, telecommunications and health care issues, Mercury Managing Director Peter Barden said. Kenny has been filling in since January as FCC Chairman Julius Genachowski's spokesman after the departure of Jen Howard in December. Kenny had been working as the lead spokesman for the agency's Public Safety and Homeland Security bureau.

Credit Card Companies: Who’s Doing What in Mobile Payments?

Visa is making a strategic investment in mobile payment provider Square, providing the start-up with an undisclosed sum of money as well as a new advisory board member. It’s a nice boost for Square, which is on a roll as it tries to ramp up payments via a smartphone. But it also highlights the growing role of credit card companies as they try to prepare for the growing mobile payments boom. As more and more transactions flow through a mobile phone, Visa, Mastercard and American Express have been making moves to position themselves in different ways to take advantage of this trend. It’s not just a passing interest for these companies. In many ways, they need to be actively involved in the rise of mobile payments, which can threaten to cut them and their cards out of the process. Here’s a look at what some of the biggest players are doing in the field:

Mastercard: Mastercard has been an early believer in near field communication and has been working on contactless payments all the way back to 2002 with its PayPass system. It now has 88 million PayPass cards and devices in use at 276,000 merchant locations. And it’s rolling out worldwide deployments of near field communication, a short-range wireless technology that is being used for contactless payments. Mastercard is also working with Gemalto, which will include Mastercard’s PayPass authentication and credentials in Gemalto’s SIM cards. When paired with an NFC-enabled phone, it will mean easier use of PayPass NFC transactions.
Visa: Visa is also working on the NFC front and is working as well on microSD solutions with banks. Visa also announced it was teaming with Samsung to bring NFC payments to the Olympics in London next year. The company is also looking to take on Paypal with its own personal payments system that builds off its VisaNet global payments network. The move takes Visa beyond its traditional strength of point of sales and into the world of electronic payments. With the investment in Square, Visa is also showing that it’s looking to tap mobile card readers to help grow the number of merchants who can tap into its global payment network.
American Express: AmEx recently threw its hat into the personal payments ring with Serve, a new payment network that allows people to pay each other online, through mobile phones and through American Express’ merchant locations. Funds can be added to Serve accounts from a variety of sources including debit cards, bank accounts and credits cards including American Express rivals. Users can manage their accounts and make payments through a smartphone app or using a prepaid card linked to Serve, which is good at all American Express locations. Serve also plans on delivering marketing offers to users, which could be a lucrative business for payment processors.

Benton

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