CRYPTO-GRAM, August 15, 2001

[InfoSec News <isn () c4i org>]

                  CRYPTO-GRAM

                August 15, 2001

               by Bruce Schneier
                Founder and CTO
       Counterpane Internet Security, Inc.
            schneier () counterpane com
          <http://www.counterpane.com>


A free monthly newsletter providing summaries, analyses, insights, and 
commentaries on computer security and cryptography.

Back issues are available at 
<http://www.counterpane.com/crypto-gram.html>.  To subscribe or 
unsubscribe, see below.


Copyright (c) 2001 by Counterpane Internet Security, Inc.


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In this issue:
      Code Red Worm
      Crypto-Gram Reprints
      News
      Counterpane Internet Security News
      The Doghouse: Chantilley Data Security
      Adobe, Elcomsoft, and the DMCA
      Protecting Copyright in the Digital World
      Europe's Cybercrime Treaty
      Comments from Readers


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                 Code Red Worm




There has been a lot written about Code Red and its variants in the past 
month.  There are lessons in both the specifics of the original infection, 
and the general threats these worms exemplify.  So, first the trees and 
then the forest.

The trees:  On 19 July 2001, the White House narrowly averted a terrorist 
attack when security personnel were able to exploit a flaw in a bomb's 
trigger mechanism and evacuate key personnel to a remote location, causing 
the bomb to fizzle.  The attack was a denial-of-service attack, the target 
was the White House Web site, and the flaw was in malicious code, but other 
than that the sensationalist story is basically correct.  And this tale of 
attack and defense in cyberspace contains security lessons for us all.

In June, eEye Digital Security discovered a serious vulnerability in 
Microsoft's Information Internet Server (IIS) that would allow a hacker to 
take control of the victim's computer.  Microsoft hastily patched the 
software to eliminate the vulnerability, as they are generally good about 
doing these days.

By now, everyone realizes that it is impossible for system administrators 
to keep their patches up to date, so it came as no surprise that hacker 
tools developed to exploit the vulnerability were able to break into 
unpatched systems.  The Code Red worm exploited this vulnerability.  This 
worm, estimated to have affected over 300,000 computers in the first week, 
spread automatically without any user intervention (no attachments to open).

Even during the first week there were several variants of the original 
worm, and most early articles underestimated its virulence -- both in terms 
of what it does and how well it succeeded.  When the original Code Red 
infected a computer, it defaced any Web site on the server with the words: 
"Welcome to http://www.worm.com!  Hacked by Chinese!"  (One variant only 
defaced the site for ten hours.)  Simultaneously, the worm attacked 99 
hosts at a time, as quickly as possible.  The original variant spread 
slowly, both because the Web site defacement called attention to itself, 
and because it had a buggy random number generator.  (It's important to use 
a different seed each time.)  A corrected variant, with a correct random 
number generator and no defacement, spread at a much faster rate.  Peak 
infection rates were estimated at 6,000 hosts a minute.

So far, this is a normal, if virulent, worm.  But there was an additional 
feature.  The Code Red worm was programmed to flood www.whitehouse.gov in a 
massively coordinated distributed denial-of-service attack at 8:00 PM on 
July 19.  The attack failed because of some programming errors in the 
worm.  One, the attack was against a specific IP address, and not a 
URL.  So whitehouse.gov moved from one IP address to another to avoid the 
attack.  And two, the worm was programmed to check for a valid connection 
before flooding its target.  With whitehouse.gov at a different IP address, 
there was no valid connection.  No connection, no flooding.

The worm was programmed to continue to spread until July 20, and try to 
attack the former IP address of whitehouse.gov until July 28.  Then, on 
August 1, it was to go back to spreading.  At least some variants are still 
spreading today, albeit at a much slower rate than many of the Internet 
doomsayers predicted.

At first glance, this looked to be a politically motivated attack: 
hactivism, as it has come to be called.  The worm's defacement message 
implied that it was Chinese, and it was programmed to attack only 
English-language versions of Windows NT or 2000.  If it encountered a 
foreign version, it went into hibernation, neither spreading nor attacking 
the White House.  But it's hard to know for sure; many random hackers take 
on mantles of political activism because it gives them a cool cover 
story.  Honestly, I don't believe the political connection.

The White House got lucky.  The next worm writer won't make the same 
programming mistakes.  The White House could have alerted their ISP and the 
upstream network nodes to block the offending packets, but only because 
they knew what the attack looked like and had enough warning.  We can't 
count on that next time, either.

Since the original Code Red attack, there have been several new (and 
nastier) variants of the worm discovered, predictions of the entire 
Internet clogging, admonitions for system administrators to patch their IIS 
systems to prevent the worm's spreading, and reams of columnists trying to 
make sense of it all.  The result, predictably, is apathy.  A CNN online 
poll showed that 84% of Americans were no longer worried about Code 
Red.  Cry wolf too often, and the public just stops listening.

Now, the forest: The truth is that we all got lucky.  Code Red could have 
been much worse.  It had full control of every machine it took over; it 
could have been programmed to do anything the author imagined, including 
dropping the entire Internet.  It could have spread faster and smarter.  It 
could have exploited several vulnerabilities, and not just one.  It could 
have been stealthier.  It could have been polymorphic.  Code Red II 
installs a back door in infected computers.  Code Red III is further 
improved.  What will Code Red IV do?  What will Code Red XXVII do?

I have long said that the Internet is too complex to secure.  One of the 
reasons is that it is too complex to understand.  The swath of erroneous 
predictions about Code Red's effects illustrates this: we don't know how 
the Internet really works.  We know how it should work, but we are 
constantly surprised.  It's no wonder we can't adequately secure the Internet.

The hundreds of thousands of infected networks could have had better 
security, but I have long argued that expecting users to keep their patches 
current is blaming the victim.  Even so, I would have expected most people 
to install *this* patch.  But as late as 1 August, after Code Red had been 
in the headlines for weeks, the best estimates show that only 50% of IIS 
systems had been patched.  Even Microsoft, the company that continually 
admonishes us all to install patches quickly, was infected by Code Red in 
unpatched systems.

The Internet moves too fast for static defenses.  You can't install every 
possible patch, and you don't know beforehand which ones are going to be 
important.  New viruses and worms appear all the time, and you don't know 
beforehand which ones are the ones to worry about.  If we are going to make 
security work on the Internet, we need to think differently.  I have put my 
effort into detection and response, instead of protection, because 
detection and response can be resilient.  I have put my effort into people 
instead of software because people can be resilient.

But even if you can secure your particular network, what about the millions 
of other networks out there that aren't secure?  One of the great security 
lessons of the past few years is that we're all connected.  The security of 
your network depends on the security of others, and you have no control 
over their security.

We shouldn't lose sight of who is really to blame for this problem.  It's 
not the system administrators who didn't install the patch in time, or the 
firewall and IDS vendors whose products didn't catch the problem.  It's the 
authors of the worm and its variants, eEye for publicizing the 
vulnerability, and especially Microsoft for selling a product with this 
security problem.  You can argue that eEye did the right thing by 
publicizing this vulnerability, but I personally am getting a little tired 
of them adding weapons to hackers' arsenals.  I support full disclosure and 
believe that it has done a lot to improve security, but eEye is going too 
far.  As for Microsoft, you can argue that the marketplace won't pay for 
secure and reliable software, but the fact remains that this is a software 
problem.  If software companies were held liable for systematic problems in 
its products, just like other industries (remember Firestone tires), we'd 
see a whole lot less of this kind of thing.

There are two other lessons of Code Red that I haven't seen talked 
about.  One: Code Red's infection mechanism causes insecure computers to 
identify themselves to the Internet, and this feature can be profitably 
exploited.  My network is regularly probed by Code Red-infected computers, 
trying to infect me.  I can easily generate a list of those computers and 
their IP addresses.  This is a list of computers vulnerable to the 
particular IIS exploit that Code Red uses.  If I wanted to, I could attack 
every computer on that list and install whatever Trojan or back door I 
wanted.  I don't have to scan the network; vulnerable computers are 
continuously coming to me and identifying themselves.  How many hackers are 
piggybacking on Code Red in this manner?

Two: Code Red's collateral damage illustrates the dangers of relying on 
HTTP as the Internet's communications medium.  Cisco has admitted that DSL 
routers with older firmware were susceptible to a denial-of-service attack 
when attacked by Code Red.  HP print servers and 3Com LANmodems also seem 
to have been similarly affected, and it is likely that other network 
infrastructure hardware fell over as well.  These devices were not 
specifically targeted by Code Red.  Instead, their Web interface couldn't 
handle the Code Red attack.  There has been an enormous proliferation of 
random devices with a Web interface: listening on Port 80.  This is a large 
single-point-of-failure that Code Red has illustrated, and no one seems to 
be talking about.

Hacking is a way of life on the Internet.  Remember a few years ago, when 
defacing a Web site made the newspaper?  Remember two years ago, when 
distributed denial-of-service attacks and credit card thefts made the 
newspaper?  Or last year, when fast-spreading worms and viruses made the 
newspaper?  Now these all go unreported because they are so common.  Code 
Red ushers in a new form of attack: a preprogrammed worm that unleashes a 
distributed attack against a predetermined target.  After a couple of dozen 
Code Red variants and other worms designed along similar lines, we'll think 
of them too as business as usual on the Internet.  And oddly enough, the 
Internet will survive.

Code Red Worm (the news story as it unfolded):
<http://news.cnet.com/news/0-1003-200-6604515.html>
<http://news.cnet.com/news/0-1003-202-6616583.html>
<http://news.cnet.com/news/0-1003-202-6617292.html>
<http://news.cnet.com/news/0-1003-202-6625470.html>
<http://news.cnet.com/news/0-1003-200-6792918.html>
<http://news.cnet.com/news/0-1003-200-6814221.html>

Advisories:
<http://www.cert.org/advisories/CA-2001-19.html>
<http://www.cert.org/advisories/CA-2001-23.html>
<http://www.ciac.org/ciac/bulletins/l-117.shtml>

Good commentary:
<http://www.time.com/time/columnist/taylor/article/0,9565,169678,00.html>

Code Red hype:
<http://www.theregister.co.uk/content/55/20908.html>

Even Microsoft can't keep its patches up to date:
<http://www.eastsidejournal.com/sited/story/html/60582>
<http://www.theregister.co.uk/content/4/20937.html>

Excellent mathematical analyses of the worm:
<http://www.silicondefense.com/cr/>
<http://www.caida.org/analysis/security/code-red/>

Original flaw in IIS:
<http://news.cnet.com/news/0-1003-200-6312870.html>
<http://www.eeye.com/html/Research/Advisories/AD20010618.html>

Editorial on the wisdom of disclosing this vulnerability:
<http://www.theregister.co.uk/content/4/20546.html>

Microsoft's patch:
<http://www.microsoft.com/technet/security/bulletin/MS01-033.asp>

Editorial on the dangers of Port 80:
<http://www.zdnet.com/filters/printerfriendly/0,6061,2792689-2,00.html>

How others can piggyback on Code Red to attack computers:
<http://braddock.com/cr2.html>


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            Crypto-Gram Reprints



Vulnerabilities, Publicity, and Virus-Based Fixes:
<http://www.counterpane.com/crypto-gram-0008.html#2>

Bluetooth:
<http://www.counterpane.com/crypto-gram-0008.html#8>

A Hardware DES Cracker:
<http://www.counterpane.com/crypto-gram-9808.html#descracker>

Biometrics: Truths and Fictions:
<http://www.counterpane.com/crypto-gram-9808.html#biometrics>

Back Orifice 2000:
<http://www.counterpane.com/crypto-gram-9908.html#BackOrifice2000>

Web-Based Encrypted E-Mail:
<http://www.counterpane.com/crypto-gram-9908.html#Web-BasedEncryptedE-Mail>


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                      News



Log analysis e-mail list!  This list is for system administrators who are 
building and using a centralized logging infrastructure in their 
networks.  Tina Bird moderates.  To subscribe, send an e-mail to:
loganalysis-subscribe () securityfocus com

The problem of IDS false positives:
<http://www.computerworld.com/cwi/story/0,1199,NAV47_STO61973,00.html>
My follow-up letter to the editor:
<http://www.computerworld.com/cwi/story/0,1199,NAV47_STO62618,00.html>

Vendor incompetence as a security problem:
<http://cgi.zdnet.com/slink?118523:8469234>

Russian Mafia is hacking for profit:
<http://www.zdnet.com/intweek/stories/news/0,4164,2784950,00.html>
This is a big deal.  The Soviet Union had some excellent programmers, some 
of whom are certainly willing to work for organized crime.

The NIT Computer Security Division's ICAT project team is now giving away 
copies of the its vulnerability database for public use (in Microsoft 
Access form).  The database currently contains 2628 vulnerabilities:
<http://icat.nist.gov>

Hackers are cheating on their SETI@home scores.  I've written about this 
previously: people cheating about the amount of work they do on the 
SETI@Home project to inflate their standings.  This is another article on 
the same topic, describing an even nastier attack.  This is interesting 
primarily because it shows that there are often non-financial motivations 
for computer hacking.  There's no money involved here; only bragging 
rights.  And look at the effort some people put into cheating.
<http://webserv.vnunet.com/News/1124058>

Good essay on the unfortunate synergies between DMCA and UCITA:
<http://www.osopinion.com/perl/story/12143.html>

The Center for Internet Security is launching a campaign to pressure 
software companies to improve security and ship software with security 
features enabled.  In a Reuters article, I was quoted as saying: "It will 
help, but not that much."  That comment was printed out of context, and 
needs clarification.  What CIS is doing is trying to establish minimum 
security standards for various products.  Their first attempt is for the 
Solaris OS: a document detailing the steps necessary to implement a level 
of security in the operating system, and a program to test how far an 
existing implementation deviates from that standard.  It's free, and 
versions for Windows and Linux are coming.  Near as I can tell, the idea is 
to establish a security benchmark and then to ratchet it up slowly.  Given 
all of my talk about insurance and risk management, this kind of thing is 
exactly what we need.  By itself it won't improve security, but if 
insurance companies start writing policies based on compliance, if software 
companies start touting compliance as a selling point...then it will help a 
lot.  When the CIS first formed, I worried that it would become an 
"extort-a-standard" body, charging people for a seal of approval.  So far 
there are no signs of them doing that.
<http://www.cisecurity.org/>
<http://www.cisecurity.org/bench_solaris.html>
<http://dailynews.yahoo.com/h/nm/20010720/tc/tech_standards_dc_1.html>
<http://www.counterpane.com/crypto-gram-0101.html#1>

The U.S. government has successfully pressured the Danish government to 
change its laws, to make searching for copyright violators easier.
<http://www.cluebot.com/article.pl?sid=01/06/26/042210>

Companies don't care about identity theft:
<http://www.washingtonpost.com/wp-dyn/articles/A27475-2001Jul20.html>

Death to virus writers!
<http://www.zdnet.com/anchordesk/stories/story/0,10738,2795678,00.html>
The only reason I am listing this article is because of the extreme 
sentiment.  The Internet is a new and strange place to lawmakers.  The 
risks are complex, considerable, and not well-understood.  It's easy to 
overreact.  We've seen this overreaction in the prosecutions, convictions, 
and sentencing of early hackers -- Kevin Poulsen, Kevin Mitnick, etc. -- 
and we've seen it in some of the government's large-scale Internet 
surveillance initiatives.  The punishments do not fit the crimes.  In the 
1800s in the American West, stealing horses was often punished by 
death.  The extreme punishment was because horses were so important to 
society, and people would not tolerate the disruption.  The Internet is 
becoming increasingly important to industrialized society, and I worry that 
this kind of extreme punishment will continue.
<http://www.zdnet.com/enterprise/stories/security/0,12379,2797879,00.html>

An interesting spin on something I've been saying for a long time: the 
interconnectedness of systems increases their vulnerability:
<http://www.nytimes.com/2001/07/27/opinion/27FRIE.html>

Here's a hacker who knows how to make money.  Someone broke into the Web 
site of a company called JDS and gained early access to a press release 
announcing its fourth-quarter financial results.  The company asked both 
NASDAQ and the Toronto Stock Exchange to halt trading it its stock.
<http://dailynews.yahoo.com/h/nm/20010726/wr/tech_jds_hacker_dc_1.html>

I'm not sure if I want to write about the SirCam worm.  On one hand, it's 
just another Windows e-mail worm that automatically sends itself to people 
in an infected computer's address book.  But it has some clever 
features.  One, it hides in the trash, where most anti-virus programs don't 
bother checking.  Two, it e-mails random data files from the victim's "My 
Documents" folder to other people.  This is probably the cleverest payload 
I've seen.  Many people I know are posting the documents they've received 
via this worm: personal letters, recipes, business plans, financial 
documents, and one case of "personal pornography."  I read one story about 
sensitive FBI documents being mailed to people by this worm.  I've received 
51 copies of this worm so far; more than any other.
<http://news.cnet.com/news/0-1003-200-6671080.html?tag=mn_hd>
<http://cgi.zdnet.com/slink?122010:8469234>
And another about secret Ukrainian documents being leaked:
<http://news.cnet.com/news/0-1003-200-6763200.html>
Malware authors are certainly getting more clever.

Way back in 1984, John Gordon gave an after-dinner speech at a coding 
theory and cryptography conference.  The story of this speech has been 
passed down through the years, as perhaps the funniest speech about 
cryptography ever given.  It's the story of Alice and Bob, of coding theory 
and cryptography.  And it's available online for you to read.
<http://www.conceptlabs.co.uk/alicebob.html>

NIST has posted two new crypto standards for comment.  The first is a new 
version of FIPS 186-2, the Digital Signature Standard (DSS):
<http://csrc.nist.gov/186-2.pdf>
And there's the "Recommendation for Block Cipher Modes of Operation," 
associated with AES.  Especially notice Dual Counter Mode, by Mike Boyle 
and Chris Salter of the National Security Agency.
<http://csrc.nist.gov/publications/drafts/Modes01.pdf>

Most hacking and cracking contests are nothing more than self-serving 
nonsense.  It's nice to be able to point to an exception: the RSA factoring 
contest.  It has a real objective, fair rules, and a good prize.
<http://www.theregister.co.uk/content/55/20638.html>

Iris recognition will be used to identify passengers at Heathrow 
Airport.  I've written a lot about bad biometric applications.  This is 
actually a good one.
<http://www.msnbc.com/news/605612.asp?pne=msn>

Security problems with Microsoft's Passport protocol.  It's a long article 
and worth reading.  From the conclusion: "The bulk of Passport's flaws 
arise directly from its reliance on systems that are either not trustworthy 
(such as HTTP referrals and the DNS) or assume too much about user 
awareness (such as SSL).  Another flaw arises out of interactions with a 
particular browser (Netscape).  Passport's attempt to retrofit the complex 
process of single sign-on to fit the limitations of existing browser 
technology leads to compromises that create real risks."
<http://avirubin.com/passport.html>

More details on the FBI's bugging of a suspect's computer without a 
wiretap.  Soon we'll find out whether this is constitutional or not.
<http://news.cnet.com/news/0-1003-200-6719544.html>
<http://www.wired.com/news/privacy/0,1848,45684,00.html>
<http://www.wired.com/news/politics/0,1283,45730,00.html>
The FBI says the technology is secret, but the judge asks the FBI for it 
anyway:
<http://www.wired.com/news/politics/0,1283,45851,00.html>
<http://www.wired.com/news/politics/0,1283,45925,00.html>

Risks of spyware.  Some software packages monitor the customers using the 
software.  But what if the servers that the spyware talks to are infected 
by viruses and Trojans?
<http://www.kuro5hin.org/?op=displaystory;sid=2001/6/28/235018/395>

Update on the sentencing of the convicted author of the Melissa virus:
<http://www.securityfocus.com/news/230>

We'll soon have software capable of copying any human voice.  In a world 
where voice is a prevalent means of authentication, this will have serious 
ramifications.
<http://www.nytimes.com/2001/07/31/technology/31VOIC.html>

This story is too weird for words.  Microsoft adds PGP signatures at the 
bottom of its security bulletins, for verification.  But if you try to 
verify the signatures, they fail.  Already there has been at least one 
forged security bulletin, urging people to install a "patch" with a Trojan 
Horse.  Microsoft's reaction to this all simply makes no sense; it's like 
there's no one thinking there.
<http://www.newsbytes.com/news/01/168397.html>

PDF files can contain viruses.  This is 1) another example of the dangers 
of mixing code and data, and 2) a potential rat's nest if Adobe keeps using 
the DMCA to restrict people from reverse-engineering its security.
<http://computerworld.com/nlt/1%2C3590%2CNAV65-663_STO62902_NLTSEC%2C00.html>

If you thought Code Red's infection speed was bad, read about Warhol Worms: 
malware capable of infecting the Internet in 15 minutes.
<http://www.cs.berkeley.edu/~nweaver/warhol.html>


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       Counterpane Internet Security News



Schneier is speaking at ISSA events in Wilmington on 8/17, and in Portland, 
OR, on 9/13.
<http://www.issa-dv.org/>
<http://www.issa.org/Portland/>

A couple of months ago, I gave the URL for my white paper on the state of 
security and the value of network monitoring.  Here's a review of the white 
paper:
<http://www.nwfusion.com/newsletters/sec/2001/00898092.html>
The white paper itself:
<http://www.counterpane.com/msm.html>

Along with Vint Cerf, Schneier testified before a U.S. Senate Subcommittee 
on the subject of Internet security:
<http://www.counterpane.com/commerce-testimony.html>
News reports:
<http://www.cnn.com/2001/TECH/internet/07/16/internet.security/index.html>
<http://www.newsbytes.com/news/01/167998.html>
<http://www.thestandard.com/article/0,1902,27996,00.html>
<http://www.computerworld.com/itresources/rcstory/0,4167,KEY73_STO62309,00.h 
tml>


** *** ***** ******* *********** *************

     The Doghouse: Chantilley Data Security



This column hasn't appeared recently.  Things that two years ago deserved 
"doghouse" treatment -- badly configured Web sites, ineffectual security 
standards, lousy product security -- are commonplace today; exposing them 
feels like shooting fish in a barrel.  But once in a while I stumble on a 
company so bizarre that it just screams for ridicule.

Let's all welcome Chantilley Data Security to the world of 
encryption.  From their Web site:  "Until five years ago, encryption 
technology was the province of state security, diplomacy, banking and 
multinational corporations.  Now it is the concern of everyone who sends 
information by e-mail, who trades on the web, who uses a credit card or 
who, for any reason, needs to authenticate himself/herself or preserve the 
integrity of information.  Incredible as it may appear, this huge explosion 
in demand has not been matched by any improvement in encryption 
technology.   Until now."  Five years ago?  What happened in 1996?  Could 
they possibly be referring to the publication of the second edition of 
"Applied Cryptography"?

It gets *much* better.  On another page they describe "Ciphers:XES the new 
European Encryption Standard?"  "A Solar Cipher is an idea unique to 
Chantilley.  It uses a PRIMARY ENCRYPTION STREAM to 'fire up' a system of 
SUN WHEELS and PLANET WHEELS providing high encryption strength and using 
only a small number of simple logical on-line operations.  In a Solar 
Cipher, each new key is a set of primitives which generate 
cryptographically strong pseudo-random streams, which in turn scramble the 
wiring of three 256-position rotors as in a rotary cipher."  When I first 
read this page, I thought it was a joke.

"The theoretical maximum entropy of the algorithm is therefore ... 
equivalent to a 100818 bit key."  "There are very sound reasons for 
claiming that XES1152 may be the best combination of strength and speed of 
any software cipher in the world."  "XES-36 is 30,000 times stronger than 
DES with similar key strength (if that were possible)."  What in the world 
does that last quote mean?

Their Web site rings all the snake-oil warning bells.  They give their 
stuff weird fancy names: e.g. "expert encryption standard."  There are 
claims about breakthrough technology and totally new cryptography and the 
like.  There are unsubstantiated accolades from nameless experts.  There's 
scientific mumbo-jumbo (that "solar cipher" stuff had me rolling on the 
floor, and they invoke something called "Multiple Fermat Sequencing"): 
comparisons with a one-time pad, ridiculous key lengths (they have a 
symmetric 1152-bit cipher), and claims that conventional ciphers are too 
slow for real-time data encryption.  (Here's a representative 
quote:  "XES-1152 is the fastest and strongest cipher of its kind in the 
world.")  And they clearly don't know what's going on in the cryptography 
world; they have a product called "Automatic E-Mail Security" that they 
refer to as "AES."

There's more, but I can't reprint it all.  These guys are too much, and 
their Web site is great entertainment.

<http://www.chantilley.com>

Generic snake-oil information:
<http://www.counterpane.com/crypto-gram-9902.html#snakeoil>
<http://www.interhack.net/people/cmcurtin/snake-oil-faq.html>


** *** ***** ******* *********** *************

        Adobe, Elcomsoft, and the DMCA



In July, after DefCon in Las Vegas, the FBI arrested a Russian computer 
security researcher who had presented a paper on the strengths and 
weaknesses of software used to protect electronic books.  Dmitry Sklyarov 
(age 27) landed in jail because the Digital Millennium Copyright Act (DMCA) 
makes publishing critical research on this technology a more serious 
offense than publishing nuclear weapon designs.  Just how did the United 
States of America end up with a law protecting the entertainment industry 
at the expense of freedom of speech?  And How did the entertainment 
industry end up with stronger laws protecting their content than the 
information on constructing nuclear weapons?

I've already written about the DMCA, and the ultimate futility of employing 
technical solutions to prevent digital copying.  The specific DMCA 
provision at work here is the one that explicitly forbids the invention and 
distribution of "circumvention devices" and "reverse engineering of 
document protection."  Basically, it is illegal to break -- or explain how 
to break -- technology used to protect digital copyright.  If you do, you 
go to jail (see above).

Technically, the law only protects "effective" copy-protection 
technology.  This is a wonderful piece of circular logic: surely if it has 
been broken, it wasn't effective.  The complaint against Sklyarov 
sidestepped this problem: "Nevertheless, because the book sold in encrypted 
form and only accessible through the eBook Reader and is not duplicatable, 
the copyright holder's interest in the book is protected."  But if that 
were true, then there would no grounds for the case.

There are also provisions in the DMCA to allow for security research, 
provisions that I and others fought hard to have included.  But these 
provisions are being ignored, as we've seen in the DeCSS case against 2600 
Magazine, the RIAA case against Ed Felten, and this arrest.

What the DMCA has done is create a new controlled technology.  In the 
United States there are several technologies that normal citizens are 
prohibited from owning: lock picks, fighter aircraft, pharmaceuticals, 
explosives.  (Ignore guns, since the 2nd Amendment makes it impossible to 
generalize from their example.)  In each of these cases, only people with 
the proper credentials can legally buy and sell these technologies.  (Every 
participant in the commerce of these items -- buying, selling, or even 
possessing -- must be registered with some governmental 
agency.  Registration is a mandatory requirement for commerce.)  The DMCA 
goes one step further, though.  Not only are circumvention tools 
controlled, but information about them is also controlled.  2600 Magazine 
merely described, and linked to implementations of, DeCSS.  Ed Felten 
wanted to present a paper on the deficiencies of the RIAA's various 
watermark schemes.

I attended Dmitry Sklyarov's talk at DefCon.  What he did was legitimate 
security research.  He determined the security of several popular e-book 
reader products and then notified the respective firms of his 
findings.  His company Elcomsoft published, in Russia, software that 
circumvented these ineffectual security systems.  His DefCon talk was a 
clear and evenhanded presentation of the facts.  He said, in effect: "This 
security is weak, and here's why."  (One particular company he mentioned 
stored the password in plaintext inside the executable.  So anyone with 
Notepad could have the book modified for easy distribution.)

The FBI nabbed him at the request of Adobe Systems, Inc. for breaking the 
security on Acrobat's E-Reader API, and held him for weeks without 
bail.  (He's currently out on bail.)  The arrest was not because of his 
presentation, but because of the work his company did while in 
Russia.  This is even more confusing.  Elcomsoft created and marketed a 
product that circumvented Adobe's product.  This kind of software is often 
required in Russia, where people have a legal right to make personal 
backups.  Sklyarov was one of the programmers working on this project, 
which was completed entirely in Russia.  The FBI seems to be claiming that 
they can arrest you for breaking U.S. law while not in the 
U.S.  Additionally, they can arrest you if your company breaks U.S. law 
while not in the U.S.  Computer scientists have long viewed 
reverse-engineering as legitimate security research.  Fair use allows the 
owner of a copyrighted work to make copies for his personal use.  The DMCA 
assumes that the only reason to do any of this work is to pirate 
copyrighted works.  Writing software, publishing technical details, even 
giving a technical talk is illegal under the DMCA.

In 1979, "The Progressive" magazine tried to publish an article containing 
technical information on H-bomb design.  The government claimed publication 
of the would result in "grave, direct, immediate and irreparable harm to 
the national security of the United States."  After six months of legal 
maneuvering, the magazine published it.  In 1971, the government tried to 
prevent "The New York Times" from publishing "The Pentagon Papers."  The 
Supreme Court promptly voted 6-3 to reject the government's censorship 
attempt, with Chief Justice Warren Burger declaring that "prior restraints 
on speech and publication are the most serious and least tolerable 
infringement on First Amendment rights."

Welcome to 21st century America, where the profits of the major record 
labels, movie houses, and publishing companies are more important than 
First Amendment rights or nuclear weapons information.  (The more you look 
at the problem, the weirder it becomes.  "The New York Times" has the legal 
right to publish secret government documents, unless they are protected by 
a digital copy-protection scheme, in which case publishing them would lead 
to an FBI raid.)

In many ways, the entertainment industry's tactics are similar to the NSA's 
during their long war against cryptography and cryptographic 
information.  Until the late 1990s, the NSA used the threat of national 
security to prevent the dissemination of encryption technologies.  When 
they could, they blocked the publication and dissemination of cryptographic 
information.  When that failed, they concentrated on products, using both 
legal and illegal methods to block encryption software.  Many people 
believe the NSA's primary rubric, export controls, would not stand up to a 
constitutional challenge, but it was never tested.  It wasn't until the 
Internet made cryptography ubiquitous that the NSA eventually gave up.

During those years I was often asked about the NSA's strategy.  Wasn't it 
doomed to fail?  Yes, eventually.  But for the NSA, every day they could 
delay the failure was another day of victory.  Maybe the export control 
regulations (they were never laws) were unconstitutional.  Maybe preventing 
publication of this and that was prior restraint.  Maybe pressuring 
companies to install back doors into their software was illegal.  But if it 
worked for a while, who cares?  The NSA was fighting a holding action, and 
they knew it.

The entertainment industry is behaving the same way.  The DMCA is 
unconstitutional, but they don't care.  Until it's ruled unconstitutional, 
they've won.  The charges against Sklyarov won't stick, but the chilling 
effect it will have on other researchers will.  If they can scare software 
companies, ISPs, programmers, and T-shirt manufacturers (Hollywood has sued 
CopyLeft for publishing the DeCSS code on a T-shirt) into submission, 
they've won for another day.  The entertainment industry is fighting a 
holding action, and fear, uncertainty, and doubt are their weapons.  We 
need to win this, and we need to win it quickly.  Please support those who 
are fighting these cases in the courts: the EFF and others.  Every day we 
don't win is a loss.

Elcomsoft's products:
<http://www.elcomsoft.com/>
Government document:
<http://www.eff.org/IP/DMCA/US_v_Sklyarov/20010707_complaint.html>

A description of Sklyarov's talk, including a link to the slides:
<http://www.zdnet.com/zdnn/stories/comment/0,5859,2800985,00.html>

EFF support:
<http://www.eff.org/IP/DMCA/US_v_Sklyarov/20010717_eff_sklyarov_pr.html>
<http://www.eff.org/IP/DMCA/US_v_Sklyarov/20010718_eff_sklyarov_statement.html>

News articles:
<http://www.nytimes.com/2001/07/18/technology/18CRYP.html>
<http://dailynews.yahoo.com/h/nm/20010717/wr/tech_hacker_arrest_dc_1.html>
<http://www.wired.com/news/politics/0,1283,45298,00.html>
<http://news.cnet.com/news/0-1003-202-6651535.html>
<http://news.cnet.com/news/0-1005-200-6699001.html>
<http://news.cnet.com/news/0-1005-200-6794178.html>

Thoughtful analyses:
<http://www.osopinion.com/perl/story/12143.html>
<http://securitygeeks.shmoo.com/article.php?story=20010719141720141>
<http://www.nytimes.com/2001/07/30/opinion/30LESS.html>
<http://www.zdnet.com/anchordesk/stories/story/0,10738,2802199,00.html>

Other DMCA cases:
<http://www.eff.org/IP/DMCA/>

Essays about the dangers of the DMCA:
<http://www.privacyfoundation.org/commentary/tipsheet.asp?id=47&action=0>
<http://www.infowarrior.org/articles/2001-05.html>
<http://www.cs.cmu.edu/~dst/DeCSS/Gallery/cacm-viewpoint.html>

Poignant satire of the DMCA:
<http://www.linuxplanet.com/linuxplanet/opinions/3642/1/>

Article about this essay:
<http://www.theregister.co.uk/content/4/20932.html>


** *** ***** ******* *********** *************

   Protecting Copyright in the Digital World



Every time I write about the impossibility of effectively protecting 
digital files on a general-purpose computer, I get responses from people 
decrying the death of copyright.  "How will authors and artists get paid 
for their work?" they ask me.  Truth be told, I don't know.  I feel rather 
like the physicist who just explained relativity to a group of would-be 
interstellar travelers, only to be asked: "How do you expect us to get to 
the stars, then?"  I'm sorry, but I don't know that, either.

I am a scientist, and I explain the realities of the science.  I apologize 
if you don't like the truth, but the truth doesn't change because people 
wish it would be something else.  I don't know how authors and artists will 
make money in a world of easy copyability.  I'm an author myself, 
personally concerned about protecting my own copyright, but I still don't 
know.  I can tell you what will and won't work, technically.  You can argue 
about whether my technical analysis is correct, but it just doesn't make 
sense to bring social arguments into the technical discussion.

If I had to guess, I believe companies will find a way to make money 
despite the prevalence of digital copying.  Television stations figured out 
how to make money despite having to broadcast their programming to 
everyone.  There are lots of financial models that don't require selling 
individual units to make money: advertising, patronage, 
pay-for-performance, pay-for-timeliness, pay-for-interaction, public 
funding.  I started Crypto-Gram when I was a consultant; I gave the 
newsletter away and charged for my time.  The newsletter was free 
advertising.  The Grateful Dead gave away concert recordings but charged 
for live performances.  Stephen King kept writing chapters of his 
electronic book as long as a sufficient percentage of his readers paid him to.

I don't know what model will become the prevalent one in the digital 
world.  But I do know that technical methods to prevent digital copying are 
doomed to fail.  (This is not to say that social methods, or legal methods, 
won't work.)  Those companies that have business models that accept this 
reality are more likely to succeed than those that have business models 
that reject it.  Complain all you like, but reality is reality.

My original analysis:
<http://www.counterpane.com/crypto-gram-0105.html#3>


** *** ***** ******* *********** *************

            Europe's Cybercrime Treaty



About a year ago, around eighty of us computer-security people signed a 
letter to the Council of Europe expressing grave concerns with the 
Council's draft of the Crime in Cyberspace Treaty.  Basically, we were 
concerned about provisions that would criminalize legitimate security 
research in the same way the DMCA does.

Surprise, surprise: it seems like they listened.  Here's the new treaty 
language:

Article 6: Misuse of devices

1. Each Party shall adopt such legislative and other measures as may be 
necessary to establish as criminal offences under its domestic law, when 
committed intentionally and without right:

a. the production, sale, procurement for use, import, distribution or 
otherwise making available of:
        1. a device, including a computer program, designed or adapted primarily 
for the purpose of committing any of the offences established in accordance 
with Article 2 -5;
        2. a computer password, access code, or similar data by which the whole or 
any part of a computer system is capable of being accessed with intent that 
it be used for the purpose of committing any of the offences established in 
Articles 2 - 5; and

b. the possession of an item referred to in paragraphs (a)(1) or (2) above, 
with intent that it be used for the purpose of committing any of the 
offences established in Articles 2 - 5.  A Party may require by law that a 
number of such items be possessed before criminal liability attaches.

2. This article shall not be interpreted as imposing criminal liability 
where the production, sale, procurement for use, import, distribution or 
otherwise making available or possession referred to in paragraph 1 of this 
Article is not for the purpose of committing an offence established in 
accordance with articles 2 through 5 of this Convention, such as for the 
authorized testing or protection of a computer system.

3. Each Party may reserve the right not to apply paragraph 1 of this 
Article, provided that the reservation does not concern the sale, 
distribution or otherwise making available of the items referred to in 
paragraph 1 (a) (2).

Not bad.  Not perfect, but not bad.  It's rare in this business that 
governments actually listen and do the right thing.  Kudos to the European 
governments who drafted the treaty.  This is kind of neat, really.

Let's hope the Americans don't muck it all up.

The entire treaty:
<http://conventions.coe.int/Treaty/EN/projets/FinalCybercrime.htm>

Our letter:
<http://www.cerias.purdue.edu/homes/spaf/coe/TREATY_LETTER.html>

My original analysis of the treaty:
<http://www.counterpane.com/crypto-gram-0008.html#6>


** *** ***** ******* *********** *************

             Comments from Readers



From: Bill_Royds () pch gc ca
Subject:  Monitoring

One important thing modern control theory works on is error modeling.  As 
well as controlling the process, you also monitor the changes in process 
error to know when processes are getting too many errors.  In systems 
administration we often are so concerned about getting the thing to work, 
that we don't also watch our processes and improve them as well.  This 
attitude (if it ain't broke, don't fix it) works with static systems, but 
is absolutely dangerous in the dynamic world of IT security.  The real 
slogan should be "if it ain't broke now, it will be soon."



From: "Dmitry Streblechenko" <dmitry () dimastr com>
Subject: Outlook Redemption

You mention one of my products (Outlook Redemption) in your Crypto-Gram 
newsletter on July 15, and I strongly believe that you are missing the 
point.  Redemption bypasses the Outlook security patch (aka HELL) only when 
it comes to executing the code already downloaded to a local machine.  It 
does *not* bypass the Outlook security when Outlook disables scripting in 
HTML e-mails or hides executable attachments.  Big difference.

Outlook provides two layers of API: object model (which can be accessed by 
any language, including any scripting language) and Extended MAPI, which 
Outlook itself (and Redemption!) uses and which is only accessible to 
C/C++/Delphi.  No scripting languages or VB.  Extended MAPI cannot possibly 
be crippled because Outlook itself will simply stop working.  So instead of 
only blocking the means of receiving and executing the malicious code, MS 
created an annoyance for those using Outlook Object Model from their 
legitimate (local) applications.  Being an Outlook MVP, I witnessed people 
who built their businesses using Visual Basic screaming for help when the 
security patch was released.

For all practical reasons, one can write a virus that uses Extended MAPI 
instead of the Outlook object model (it just takes more time and a little 
knowledge of the relevant API); there will be no way to block it short of 
uninstalling Outlook.  Which is fine, since once the code is downloaded and 
run in the current user security context it can do anything it wants 
whether Outlook or any other application is installed.

The only way to stop spreading such code is to block it from executing 
automatically (e.g. script in an HTML e-mail) or to make a user think twice 
before executing it.  Blocking the code which is already installed and 
assumed to come from a trusted source is outright stupid.  That's where 
Redemption comes into play.


** *** ***** ******* *********** *************


CRYPTO-GRAM is a free monthly newsletter providing summaries, analyses, 
insights, and commentaries on computer security and cryptography.

To subscribe, visit <http://www.counterpane.com/crypto-gram.html> or send a 
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Please feel free to forward CRYPTO-GRAM to colleagues and friends who will 
find it valuable.  Permission is granted to reprint CRYPTO-GRAM, as long as 
it is reprinted in its entirety.

CRYPTO-GRAM is written by Bruce Schneier.  Schneier is founder and CTO of 
Counterpane Internet Security Inc., the author of "Secrets and Lies" and 
"Applied Cryptography," and an inventor of the Blowfish, Twofish, and 
Yarrow algorithms.  He served on the board of the International Association 
for Cryptologic Research, EPIC, and VTW.  He is a frequent writer and 
lecturer on computer security and cryptography.

Counterpane Internet Security, Inc. is the world leader in Managed Security 
Monitoring.  Counterpane's expert security analysts protect networks for 
Fortune 2000 companies world-wide.

<http://www.counterpane.com/>

Copyright (c) 2001 by Counterpane Internet Security, Inc.

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