Report Says Backlash From NSA's Surveillance Programs Will Cost Private Sector Billions Of Dollars

from the screwed-by-the-government-even-as-it-screws-itself dept

Tue, Jul 29th 2014 12:34am — Tim Cushing

The Open Technology Institute has put together a thorough paper detailing the many adverse effects the NSA disclosures have had, both on American businesses inside and outside of the tech sector, as well as on Americans themselves.

The Open Technology Institute is no stranger to the adverse side effects of the NSA's pervasive surveillance. Its own open-source mesh network project (Commotion) was accompanied by this warning, prompted by the revelations of the Snowden leaks.

Commotion

Cannot hide your identity
Does not prevent monitoring of internet traffic
Does not provide strong security against monitoring over the mesh
Can be jammed with radio/data-interference

So, how much will the NSA leaks cost American businesses? It's tough to say. Although the OTI has done an incredible amount of research, it's difficult to pin down exact losses. Any time an American company has its bid denied by a foreign country, the NSA's actions have likely played some role. But this will very rarely be stated explicitly. This leads to a rather open-ended estimate of lost sales.

Nearly 50 percent of worldwide cloud computing revenue comes from the United States, and the domestic market more than tripled in value from 2008 to 2014. However, within weeks of the first revelation, reports began to emerge that American cloud computing companies like Dropbox and Amazon Web Services were losing business to overseas competitors. The NSA’s PRISM program is predicted to cost the cloud computing industry from $22 to $180 billion over the next three years.

Cloud services aren't the only victims of NSA overreach. Hardware manufacturers are also seeing losses. Cisco, one of the first to complain about sales losses due to NSA leaks, was also the only company to have its logo splashed all over the internet when a leaked presentation contained a photo of NSA agents opening one of its boxes from an intercepted shipment. The NSA's Tailored Access Operations (TAO) has subverted any number of companies' products and Qualcomm, Microsoft and Hewlett-Packard have all reported dropping sales, according to OTI's research.

Other direct effects are being felt as well. Germany is ending its long-running contract with Verizon and German companies are specifically excluding American businesses when seeking bids. The blowback from the NSA's spying on Brazilian president Dilma Roussef cost Boeing a $4.5 billion contract for new jet fighters. (The contract went to Saab.)

Also directly affecting US companies is a future full of increased compliance costs as countries move towards data sovereignty. This means tech companies like Facebook and Google will need to build local data centers if they wish to keep citizens in affected countries as users. The European Parliament's new data protection law could easily result in massive fines for US companies.

In March 2014, members of the European Parliament passed the Data Protection Regulation and Directive, which imposes strict limitations on the handling of EU citizens’ data. The rules, which apply to the processing of EU citizens’ data no matter where it is located, require individuals to consent to having their personal data processed, and retain the right to withdraw their consent once given. The deterrent fines are significant: violators face a maximum penalty of up to five percent of revenues, which could translate to billions of dollars for large tech companies.

Companies from outside of the tech sector are also facing downturns, thanks to the NSA's activities. The cheapest and most convenient way for companies to reach customers (and vice versa) is taking a hit as wary citizens take steps to avoid leaving as large a digital footprint.

According to an April 2014 Harris poll, nearly half of the 2000 respondents (47 percent) have changed their online behavior since the NSA leaks, paying closer attention not only to the sites they visit but also to what they say and do on the Internet. In particular, 26 percent indicated that they are now doing less online shopping and banking since learning the extent of government surveillance programs.

The most harmful indirect side effect of the NSA leaks is a move towards Balkanization of the internet, an outcome that threatens both the structural integrity of the web as well as the public itself.

Data localization proposals also threaten the functioning of the Internet, which was built on protocols that send packets over the fastest and most efficient route possible, regardless of physical location. Finally, the localization of Internet traffic may have significant ancillary impacts on privacy and human rights by making it easier for countries to engage in national surveillance, censorship, and persecution of online dissidents.

It's not just tech companies that are the collateral damage of the NSA's programs. It's also the American government itself. The entity that gave its official blessing for widespread, untargeted surveillance in the wake of the 9/11 attacks is now paying the price for its audacity. Not only did this negatively affect the US's nominal position as the "head" of the open internet, but it's also completely eroded the high ground on human rights the country held for so many years.

The damaged perception of the United States as a leader on Internet Freedom and its diminished ability to legitimately criticize other countries for censorship and surveillance allows foreign leaders to justify and even expand their own efforts. The long-term implications of destroying trust in the Internet through the hypocrisy of its greatest champion are detrimental to the interests of all democratic nations. Foreign governments and their populations are now wary not just of the United States government and companies, but of technology more generally.

It is apparent that the negative side effects of the NSA's power and reach were never considered by anyone with the power to rein it in. Now that these programs have been exposed, the damage control has backfired, relying both on "it's completely legal" (which implicates the US government and its oversight policies) and the always-vaguely-stated "terrorism threat" (which paints the agency and its supporters as disconnected fearmongerers). Now, the US is paying the price, with most of it being paid by those outside of any government.

The OTI suggests several remedies, most of which the NSA (and the administration) would likely fight every step of the way. Strengthening data protections (and extending those protections to foreign citizens) would be portrayed as allowing terrorists to escape detection and surveillance. Increased transparency is also suggested, but that hasn't been welcomed by anyone at the administration level for the past 13 years. There's no reason to believe a sea change is just over the horizon.

Also suggested is restoring trust in the NIST's encryption standards and forbidding the NSA from installing hardware and software backdoors. The former is a long shot, but doable. Restoring trust always takes much, much longer than destroying it. On the latter, there's no way the NSA will give up this surveillance tool without a (long) fight and there's hardly any reason to believe it will ever give it up completely. After all, despite all the forced transparency, it still operates mostly in the dark.

OTI also calls for the NSA to stop making internet use more dangerous than it already is.

Secret stockpiling of previously unknown flaws irresponsibly leaves users open to attack from anyone who discovers the weakness. Consistent with the Review Group’s Recommendation, the U.S. government should establish and adhere to a clear policy to disclose vulnerabilities to vendors by default, and only withhold that information in the narrowest circumstances and for the shortest period of time possible—if at all.

As has been noted, this is a worldwide problem, greatly exacerbated by a number of private security firms which stockpile vulnerabilities to sell to intelligence and law enforcement entities (while at the same time selling protection against their stockpile of undisclosed exploits to other private companies). Stopping the NSA from doing this is only a small part of the problem. Governing the actions of private companies worldwide will be a much more difficult task.

The repercussions of the NSA's programs will be felt for years. The cost to the United States' reputation is already being felt. It can't be quantified, but it is very noticeable. The final cost to American companies will undoubtedly be in the hundreds of billions. Destroyed trust takes a long time to rebuild and every day that passes without the NSA being seriously reined in (the USA Freedom Act, Dianne Feinstein's Fake Fix) just makes it longer. Lost sales are hard to quantify, but there can be no doubt this will harm the US -- on both a private and public level -- for years to come.

Surveilance Costs Final (PDF)Surveilance Costs Final (Text)

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Filed Under: costs, nsa, private sector, surveillance
Companies: open technology institute, oti

57 Comments

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Reader Comments

The First Word

“

Not small damages

The NSA’s PRISM program is predicted to cost the cloud computing industry from $22 to $180 billion over the next three years.

Just let those numbers sink in for a bit. Billions predicted to be lost, in cloud computing alone, because no-one in the NSA ever thought 'Hey, I wonder what could happen if people ever found out what we are doing?', and actually followed through on that train of thought.

On top of the monetary losses, you've got to account for the complete and utter loss of trust. If other countries can't trust US tech(and, to be blunt, they can't, since any company in the US is one NSL away from being compromised, if it isn't already), then they're going to look elsewhere, and getting them back is going to be incredibly difficult, and cause serious long-term damages to US company profits, and the economy as a whole.

The NSA, and other similar agencies, have done more damage to the US, it's reputation, and it's economy, than even the most diehard terrorist could ever dream of hoping to manage, and all in the name of 'protecting' the government(because they sure as hell don't care about protecting the people).

—That One Guy

”

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Anonymous Coward, 29 Jul 2014 @ 12:51am

Going dark
Have you seen this:

http://www.lawfareblog.com/2014/07/on-going-dark/
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Whatever (profile), 29 Jul 2014 @ 1:13am

The funny part here is just that many will drop US companies, and deal with others - who will likely do the same thing for other governments.

We know that the Chinese were apparently doing this. The US revealed it, likely because they were trying to figure out how to subvert the Chinese networking equipment and discovered they were late, that the Chinese has pre-installed something of their own.

There are only so many suppliers, and the choices are not going to get any better. They are choosing the devil they don't know over the devil they know... that doesn't sound like a very good solution.

As for the Commotion project, they should really know that any network that is adhoc pretty much invites people to come get in the middle of things and suck down as much of what is doing on as they can. It's a hacker's wet dream to have a nice open network that will allow them to get to all these mobile and wireless devices easily.
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PaulT (profile), 29 Jul 2014 @ 1:23am

Re:
"They are choosing the devil they don't know over the devil they know... that doesn't sound like a very good solution."

So... do you have a solution to suggest, or are you just doing your smug proselytizing as always, without ever trying to address a real point made by anyone else?

Plus, that's actually not true. Many of these companies have long-term existing relationships with providers in countries around the world, they've just chosen to eliminate a country that's been openly hostile to their interests. They already know some of these "devils" quite well, they've just chosen not to deal with the one that pretended to be an angel before betraying them (simplistic analogy I know, but you get the point).

Pretending this is "do everything in the US" vs. "do everything in another country" is one of your usual oversimplifications of situations that makes your conclusions laughable.
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Beech, 29 Jul 2014 @ 1:27am

I think you forgot to mention that this is all Snowden's fault, and the NSA is a bunch of God-fearing patriots above all reproach. It's not their fault for spying on every-damn-thing, it's Snowden's fault for letting the people know what their country is up to.

/sarc
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That One Guy (profile), 29 Jul 2014 @ 2:07am

Not small damages
The NSA’s PRISM program is predicted to cost the cloud computing industry from $22 to $180 billion over the next three years.

Just let those numbers sink in for a bit. Billions predicted to be lost, in cloud computing alone, because no-one in the NSA ever thought 'Hey, I wonder what could happen if people ever found out what we are doing?', and actually followed through on that train of thought.

On top of the monetary losses, you've got to account for the complete and utter loss of trust. If other countries can't trust US tech(and, to be blunt, they can't, since any company in the US is one NSL away from being compromised, if it isn't already), then they're going to look elsewhere, and getting them back is going to be incredibly difficult, and cause serious long-term damages to US company profits, and the economy as a whole.

The NSA, and other similar agencies, have done more damage to the US, it's reputation, and it's economy, than even the most diehard terrorist could ever dream of hoping to manage, and all in the name of 'protecting' the government(because they sure as hell don't care about protecting the people).
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Gothenem, 29 Jul 2014 @ 2:45am

Seeing as how the US has ISDS clauses in several FTA's, would this give these companies a way of suing the US government for loss of revenue?
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That One Guy (profile), 29 Jul 2014 @ 2:52am

Re:
On the one hand, that would very much be a case of 'biting the hand that feeds you', given how eager the USG is to slip those little clauses in every 'agreement' they can get their hands on, but on the other hand, large companies are pretty lousy at long-term thinking, so they just might be stupid enough to try something like that.
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Richard (profile), 29 Jul 2014 @ 2:53am

Re:
The funny part here is just that many will drop US companies, and deal with others - who will likely do the same thing for other governments.
That isn't funny - it is rather the whole point. The NSA's action has done serious damage to the cause of freedom worldwide.

Of course many who drop US companies will be government organisations and major companies - who are in bed with their own security agencies and therefore have nothing to fear from them.
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David, 29 Jul 2014 @ 2:53am

The sad thing
The sad thing is that economic losses of $22 billion to $180 billion make Americans apprehensive. That's at most about $500 per person. Over three years.

Why does this worry people so much more than it worries them to be living in the Land of the Unfree and the Home of the Cowards?

Where "Boo, terrorists!" is enough to give the Secret Police a free pass into their drawers?

It was worth giving their life to their ancestors. It's less important than $500 tops in three years to them.

Is this really going to boil down to "We want our constitutionally guaranteed liberties back since it might put as much as 50¢ more in our pockets per day over the next three years"?

One "Boo, terrorists!" and 50¢ per day will be enough to willingly give the Secret Police permanent and continuous access to their drawers?

For shame.
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Anonymous Coward, 29 Jul 2014 @ 2:57am

Carbon Offsets
Well obvious NSA is becoming more energy efficient reducing climate change and deserves carbon offset dollars as a new stream of revenue.
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Anonymous Coward, 29 Jul 2014 @ 3:22am

This is, finally, a great day for the rest of the world.
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That One Guy (profile), 29 Jul 2014 @ 3:22am

Re: The sad thing
Oh the ones worrying about those losses are less the public, and more the private companies. Before, they had no real reason to push back against USG/NSA demands, as it would take more time and money than it would be worth, not to mention several of them were quite happy with the relationship.

However, start hitting their profits, and suddenly they care quite a bit, and have plenty of motivation to fight back.
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me, 29 Jul 2014 @ 4:15am

come the next election
Someone should take a good hard look into the potentially treasonous implications of this. Deliberately and willfuly effecting the US economy in a negative way by rogue elements of the country's own government is in that neighborhood.
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Anonymous Coward, 29 Jul 2014 @ 4:17am

Re: come the next election
Lol good one. Ask the pope to renounce God.
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Anonymous Coward, 29 Jul 2014 @ 4:22am

Re:
The funny part here is just that many will drop US companies, and deal with others - who will likely do the same thing for other governments.
Russia is actually moving to design and fabricate their own electronics now. While it will allow them to prevent US eavesdropping, I'm sure it will have plenty of backdoors for FSB, hint hint
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DaveHowe (profile), 29 Jul 2014 @ 4:36am

PR Offensive has already long since started, now in full swing
It is being made plain that the apparatus of other countries (UK to a great extreme, but also Germany etc, plus the constant accusations against Chinese companies) is just as untrustworthy; fold in some obvious staged "victories" like *one* NSL being withdrawn when Microsoft challenged it (out of the dozens they no doubt get) and statements like Microsoft's declaration recently that they have *never* been even asked to add backdoors to their products (which was later debunked by statements from staff familiar with, for example, Bitlocker) and there is a blatant attempt to wash away the stigmata of being under the US Intel thumb by misdirection and outright lies...
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Anonymous Coward, 29 Jul 2014 @ 4:41am

Re:
How is that?

Welcome to the global economy.
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Anonymous Coward, 29 Jul 2014 @ 4:42am

Re: come the next election
Yeah, that will fix everything.
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Anonymous Coward, 29 Jul 2014 @ 4:45am

Hope the private sector is enjoying their Double Irish With A Dutch Sandwich because the taxpayers are sick of bailing their asses out the messes they create.
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Anonymous Coward, 29 Jul 2014 @ 4:51am

Maybe this is what the NSA is actually hoping for?
Maybe the NSA is actually hoping to ruin this country? Once ruined, nobody will care about us anymore and they will leave us alone. The whole terrorism problem will be solved. Of course we will have lots more problems by then, but hey, terrorism!
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David, 29 Jul 2014 @ 5:02am

Re: come the next election
You have to take a look at the total picture. It will harm the cashflow of some internet companies, sure. But think of all the increased revenue in drone sales "necessitated" by the U.S.A. successfully projecting the "Axis of Evil Incarnate" image.
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Whatever (profile), 29 Jul 2014 @ 5:20am

Re: Re:
Pretending this is "do everything in the US" vs. "do everything in another country" is one of your usual oversimplifications of situations that makes your conclusions laughable.

Nice to see you again. You can't resist an insult, can you?

The simplification is the basic portrayal of the situation in the report, that US companies are suffering and will suffer these huge losses as a result of the NSA (I wonder if they hired the MPAA to calculate out the numbers for them...).

When it comes to networking as an example, there aren't very many choices. Cisco and Huawei are two of the biggest players, and they are basically the two sides of the great divide. The NSA supposedly has implemented the whole ball of wax in Cisco products, and it's been suggested that the Chinese government has done the same with Huawei. So if the choice is to go away from the US company, the other next obvious choice outside the US is the Chinese company. Is it any better?

So... do you have a solution to suggest, or are you just doing your smug proselytizing as always, without ever trying to address a real point made by anyone else?

So you are saying that having and expressing an opinion isn't allowed here? Damn you free speech, go sit in the back of the bus and be quiet!

Seriously though, why do you think every comment has to lead to a solution? I personally don't think for the moment that there is a real solution. Some business will move, other business will become available, and the world will keep on turning.

I also think that the reports are MPAA quality hogwash. I don't know why nobody is wondering how they get to those huge numbers... do you have any input Paul?
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Anonymous Coward, 29 Jul 2014 @ 5:22am

Re: Maybe this is what the NSA is actually hoping for?
Yeah, that's the ticket. Brilliant!
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Anonymous Coward, 29 Jul 2014 @ 5:28am

Corporate Sovereignty
With Corporate Sovereignty in place, could these companies sue the government for their lost business?
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Anonymous Coward, 29 Jul 2014 @ 5:39am

Re: Corporate Sovereignty
The flip side of that coin is that with ISDS provisions foreign companies are open to sue the US government for the abuses of the NSA as well.
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Michael, 29 Jul 2014 @ 5:39am

Re: Re: Re:
The simplification is the basic portrayal of the situation in the report

I think you have over-simplified a bit. In addition to possibly sending say, networking traffic to Huawei, a fracture caused by a lack of trust in a company opens up the market to additional competition. It would not surprise me to see a German or Indian company jump into the networking equipment market to fill the need for a non-US company. This kind of thing could be even more crippling to Cisco if, in a few years, a new competitor begins producing better products.

While I am certainly not against free market forces and competition is good, it is bad for these kinds of things to be caused by unnatural forces like government intervention.
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AJ, 29 Jul 2014 @ 5:59am

So basically it looks like the NSA have caused incalculable damage to the U.S. economy by destroying the trust of the American people and it's Allies in our private companies. Seems to me they've done more damage than the terrorists could have ever hoped for. I think we've already lost this one.
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PaulT (profile), 29 Jul 2014 @ 6:19am

Re: Re: Re:
"Nice to see you again. You can't resist an insult, can you?"

You rarely make a comment worth anything else. Hey, at least you're not lying your ass off completely in this thread and have the balls to answer instead of hiding away once someone responds to you. That's different so far this week.

"When it comes to networking as an example, there aren't very many choices. Cisco and Huawei are two of the biggest players"

Yes, you did cherry-pick a single area with a few current big players (ignoring all the other sectors discussed), pretend they were all that mattered (ignoring competition elsewhere that will benefit from Cisco's lost customers), pretended that the only competition was therefore between the US and China and then based your entire argument on that.

Like I said, oversimplification to the point where you conveniently leave out most of the discussion points and variables, and make an argument that doesn't even begin to address the points raised. Try again.

"So you are saying that having and expressing an opinion isn't allowed here?"

Your reading comprehension is as poor as ever, I see. Stop debating the fictions in your head, and start addressing the words people type for once in your pathetic existence.

"Seriously though, why do you think every comment has to lead to a solution?"

I don't. But, when you say something like "that doesn't sound like a very good solution", I expect someone who is intellectually honest to at least have a suggestion as to what does constitute a good solution. But, being intellectually honest? Not one of your strengths I'm afraid.

"I also think that the reports are MPAA quality hogwash."

Why? Oh, you're not going to say, just demand I have an answer for you instead? How typical. At least if you wanted to discuss the MPAA's figures, I can quantify why they're misleading. What's your problem here, apart from "I don't like what they say, so they're not true"?

The answer is that nobody will ever know the full figure. It's not possible. If a company was in the process of looking at expending operations into US-based infrastructure, but then opted to go elsewhere as a direct result of the NSA revelations, only that company knows how much was lost, and even that depends on other factors that cannot be quantified (e.g. how much the company would have decided to invest in US-based infrastructure following their initial purchase). But, just because these are not directly quantifiable, that doesn't mean the impact should be ignored, even if you disagree with the estimated figures.

You CAN, however, quantify other impacts. For example, we know how much Cisco's sales have dived and can make reasonable assessments as to how much of that was due to the NSA. We know exactly how much the contract with the German government was worth before they pulled out, giving the NSA revelations as their direct reasoning to do so. We know that the Brazilians have given this as the reason for giving their contract to Saab instead of Boeing. And so on... It's a long way more toward hard data than the MPAA's "every download must be a lost sale at full retail price" bullshit.

So, want an honest discussion for once, or are you still looking for the best way to reject everyone else's points because you have a pathological need to feel superior to everyone here, even if you have to avoid everyone else's argument to do it, or reconstruct reality into something easier for you to dismiss?
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Anonymous Coward, 29 Jul 2014 @ 6:26am

Re: Re: Re:
Every time the RIAA/MPAA fucks up and people point it out, chucklenuts like you whine about how no one is proposing solutions.

So yeah, the whole "whining about solutions" thing started with your side, so deal with it.
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Anonymous Coward, 29 Jul 2014 @ 6:31am

The thing is do we really care ,about the companies that gave up our data get shutdown or lose money , I don't get rid of them ,as for the others who didn't they sure didn't
jump besides Lavabit and US west and a few others maybe , Shut them all down and maybe the next batch will understand the importance of it's customer base, As for our government we allowed this to happen , every single one of us by sitting in our chairs trying to protest by internet proxy , change will come with a million plus protesters marching in Washington.
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PaulT (profile), 29 Jul 2014 @ 6:38am

Re: Re: Re: Re:
They also usually do it after a long run of articles that highlight actual solutions. They just find convenient reasons to reject those out of hand before they whine that nobody's suggesting anything.
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Whatever (profile), 29 Jul 2014 @ 7:19am

Re: Re: Re: Re:
Honestly, tl;dr

I got to the opening insult and gave up. You want a fight, pick it with someone else.
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Anonymous Coward, 29 Jul 2014 @ 7:28am

Re:
You have just scored -100 in Intelligence
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Anonymous Coward, 29 Jul 2014 @ 7:41am

Re: Re: Re:
"I also think that the reports are MPAA quality hogwash."

This is probably not so far fetched.
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Anonymous Coward, 29 Jul 2014 @ 7:45am

Re: Re: Re: Re:
"
You CAN, however, quantify other impacts. For example, we know how much Cisco's sales have dived and can make reasonable assessments as to how much of that was due to the NSA. We know exactly how much the contract with the German government was worth before they pulled out, giving the NSA revelations as their direct reasoning to do so. We know that the Brazilians have given this as the reason for giving their contract to Saab instead of Boeing. And so on... It's a long way more toward hard data than the MPAA's "every download must be a lost sale at full retail price" bullshit."

Good points. Thanks.
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PaulT (profile), 29 Jul 2014 @ 7:47am

Re: Re: Re: Re: Re:
What a surprise, the liar and disingenuous proclamator whines when someone asks him to back up his own words with something approaching an honest argument.

As ever, I'm not after a "fight", I'm after a stop to the posts that either deliberately avoid the subjects you're supposedly commenting upon and/or outright distort the truth. I'm sorry if you can't provide such a thing, but I'll continue to call you out every time you do it.

It is funny that someone who posts paragraphs of meaningless drivel every time they post is taking the tl;dr approach, though.
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Ninja (profile), 29 Jul 2014 @ 7:56am

Re:
Well, if such reports hit those places/companies I'm sure the backlash will be the same. Maybe we will even see new competitors being born out of the espionage madness? So far the US accusations agaisnt Hwauei aren't as factual as what's happening in their own backyard...
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Anonymous Coward, 29 Jul 2014 @ 10:03am

Re: Re: Re: Re: Re:
The problem is they want to find a 'solution' that allows them to continue to make money off of the work of others without doing any actual work of their own.
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Austin (profile), 29 Jul 2014 @ 10:17am

China isn't looking so bad right now...
I mean sure, they put backdoors in half their systems too, but here's the thing: I have no valuable corporate data for them to steal, and I'm not Chinese, so they don't care if I rant about their rampant human rights violations.

So really, when you think about it, my data is safer on a system with a backdoor to China than a backdoor to America.

And as to the economic impact of all this, herein lies the true cost. I now have a good reason to buy Chinese knockoff products, specifically BECAUSE I support actual freedom, instead of the USA-made versions.

Now isn't THAT a hilarious turn of events?
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Mike Shore (profile), 29 Jul 2014 @ 10:42am

They have won
This is exactly what the terrorists wanted to accomplish. Why try to destroy a country when you can simply induce enough fear and paranoia so that they destroy themselves from the inside?
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Anonymous Coward, 29 Jul 2014 @ 11:03am

It sucks not being able to trust your cellphone. It's like a spy in my pocket.
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Anonymous Coward, 29 Jul 2014 @ 11:56am

You're hearing a lot about corporations jumping to other countries to have their headquarters outside the US. The majority of is laid at the feet of high corporate taxes and they magically pull this 33% figure out of their asses. That's without all the tax breaks though. Some corporations like GE don't pay taxes, they get paid in refunds.

You can bet in the board rooms, this business over spying is part of it. It's a two way fork. If they stay their systems are already corrupted before they start. If they go, they still have no protection being outside the US. Damned if you do, damned if you don't. It's perception that is everything. To their global customers, they left the US and that will say directly or indirectly they didn't care for the business atmosphere of the US. Being located in a foreign country different from the one they started in, is going to say something for that corporation, whether it's true or not. It has the appearance they didn't agree with the US.
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John Fenderson (profile), 29 Jul 2014 @ 1:14pm

Re: China isn't looking so bad right now...
Precisely. Very well-said.

If I have to choose between being spied on by China and being spied on by the US, I'll choose China, thank you. The US can actually harm me. China cannot.

However, I do suspect that's not exactly the choice before us. I think the choice is more likely to be between being spied on by the US or being spied on by the US and China. In which case, it doesn't really matter -- I have to treat all hardware as subverted no matter what.
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Padpaw (profile), 29 Jul 2014 @ 2:24pm

One would almost think the current government organizations are trying to destroy their country just so they can take control of the ashes.
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M. Alan Thomas II (profile), 29 Jul 2014 @ 4:33pm

How about we also make it illegal to sell vulnerabilities to anyone other than the manufacturer?
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John Fenderson (profile), 29 Jul 2014 @ 5:05pm

Re:
Or illegal to sell them to anybody at all. The manufacturer should be notified immediately of security problems at no charge.
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Anonymous Coward, 29 Jul 2014 @ 5:18pm

Re:
Yeah, blame your tax evasion upon anything but your own petty greed - brilliant!
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Eldakka (profile), 29 Jul 2014 @ 11:24pm

Re: Re: Re:
So if the choice is to go away from the US company, the other next obvious choice outside the US is the Chinese company. Is it any better?

Abso-fscking-lutely it is.

I'd rather an adversarial, foreign government "over there" who has no impact on my day-to-day life to have that sort of data on me.

First, it is their job to spy on their foreigners, i.e. me.

Second, unless I'm in some sensitive post that they could leverage to gain advantage from, then they won't give a flock about me.

Third, they have no impact on my day-to-day life.

Fourth, being foreigners to them, they are unlikely to ever take a personal interest in me, it's highly unlikely I could be dating one of their ex's, or got into a drunken brawl with their brother, or stepped on their foot in the elevator or some such.

Fifthly, what they are doing is illegal in my country, so I can take legal measures to deal with it. It's not likely any local ISP will receive an NSL from the Chinese to say "You can't talk about this backdoor we've installed in your backbone."

However, with respect to my own local/national government,it is NOT their job to spy on their own citizenry. Since they could be my neighbour, or we could have attended the same school, same clubs or some sort of other social interaction, the chances of some moron taking a personal interest in me is exponentially higher. Maybe I AM dating their ex. Maybe I did step on their foot. So now they have all this data that in their hands, does matter.

Maybe the local government is short of funds? So it starts trawling speed camera's (that record and store ALL vehicles passing them, not just ones speeding), APNR records from police cars, street cameras, cell phone location information trying to find misdemeanour crimes (hey, he passed this speed camera at 10:05am, and his cell phone location puts him 70 miles away at 11am, no way he could have got that far without speeding!) they can generate revenue from. Hell, in the UK there have been reports of RIPA powers (supposedly for terrorists) to find people who let their dogs poop on the sidewalk. I doubt the Chinese could be bothered to use data collected on foreigners for that sort of thing.

The government CAN give the local ISP an NSL to say "you can't reveal this backdoor we've put in your backbone". Measures that might be legal to stop the Chinese hacking/eavesdropping on me might be illegal against the local government, if it's not they can make it illegal by passing laws.

The local government has rule over my day-to-day life. They can make it hard for me if I do something they don't like, that they found by spying on me, but isn't actually illegal. Say the government culture was to hate people who use spray tan. Because they can see me order spray tan online, order a spray-tan machine, and the cameras pervading our cities show me as dark coloured now when 2 years ago I was sickly-pale white. OMG he's using a spray-tan machine. Flag the IRS to audit him. Flag the police to always pull him over and harrass him. Target him for 'enhanced' searches by the TSA at the airport.

All things a foreign government with the same information/culture couldn't do, even if I had offended some random moron from that nation who has a personal vendetta against me.
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GEMont (profile), 30 Jul 2014 @ 3:30pm

Re: Going dark
Since the article is written by someone who fully supports the government's "rights" to spy on the public, the article is hardly worth the read.

He starts off with this -

"What follows is my assessment of the operational harms that have resulted from the Snowden disclosures...",

...showing immediately that the author considers Snowden's Expose, not the actions of the NSA that comprise the Expose, to be the problem. No bias there eh.

In other words, had Snowden just kept his mouth shut, nobody would have learned that everyone was being spied on and as long as nobody knew, then no harm was being done.

Sound familiar?

His four points almost mimic the basic NSA Apologists' standard talking points exactly.

"First, there are the actions taken by terrorists, other nations and/or organizations or groups"

...because they were all so stupid that they were totally unaware that they were being targeted by the world's Biggest Anti-Terrorist Organization - the US Federal Government - and Snowden's Expose let them all know for the very first time ever, that they were indeed targets.

Since it has already been reported that Terrorist Groups world-wide had already long ago changed their activities because of US surveillance, this comment is simply for those who get their news from TV only, and those suffering from brain damage.

"Second, there are the actions taken by the U.S. Government in the past year to scale back collection."

Oh please! What country is this idiot living in. Romania??

The Most Transparent Administration In American History has done everything in its power to prevent even the smallest reduction in its hay-stacking ability, rewriting every bill presented to make it useless and give itself even more power to spy on Americans and everyone else. Worse still, the executive order that backbone's the whole process is immune to all of the so-called limitations being proposed and ignored concerning the rulings that let the NSA steal everyone's private data.

Again this comment is also for those who only watch TV to learn what the world is up to.

"Third, there is the coming legislative action. It now seems that Congress is close to passing a revised USA Freedom Act."

The day that Act becomes something that actually causes the NSA and the Feds to stop spying on Americans is the day that Wall Street becomes The Street of Honest Businessmen.

Not gonna happen, but this jerk acts as if its a done deal and that the congress will actually do something to limit the global over-reach of their spy agencies through this legislation, even though TMTAIAH wants the opposite.

"Finally, operational degradation may also be a downstream effect of the increasingly adversarial relationship between the Executive Branch and the private sector, such as communications providers"

Well no shit Sherlock! NSLs have a tendency to make any private sector business, such as communications providers, an adversary of the government since they are forced to lie to their customers and suffer the consequences of lost revenue should the truth come out - as it has.

Opening the packages of mail order hardware to install spyware without the consent of the private sector company who sold the hardware is also going to make no friends among those who deal with the public for a living.

What this author has done is taken all the criminal activities, pseudo-legalized through secret interpretations and quiet Go-Aheads from The Most Transparent Administration In American History, and blamed them all on Snowden because he made everyone aware they were being spied on and lied to.

All of this is entirely due to the activity of the NSA, CIA, FBI and other Federal Agencies of TMTAIAH, who thought they could get away with anything.

This article is the largest crock of shit I have seen all day.

Then again, the day is young.
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GEMont (profile), 30 Jul 2014 @ 3:54pm

Re: come the next election
:Someone should take a good hard look into the potentially treasonous implications of this..."

Yeah, like they did about 9/11 and the implications that it was entirely US manufactured.

Not gonna happen.

You see, first of all you need some honest folks in government to bring the dishonest folks in government to task on their behavior.

Just so happens the total number of honest folks in American Politics this year is the same as the number of fingers on the standard hand.

And steps are already being taken to insure that those five are soon to be the victims of staged accidents that cause grievous bodily harm or death.

There is no escaping The Grand Aquisition.
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GEMont (profile), 30 Jul 2014 @ 4:00pm

Re:
Hate to break this too ya, but the folks at the top of the food chain in America could not give a rat's ass whether the taxpayer is sick of bailing their asses out of the messes they create, or not, because the taxpayer has absolutely no say in whether or not the Federal Government continues to bail their asses out of the messes they make, using taxpayer's money.

Unless of course you have recently received a letter from the USG asking your approval for the use of your tax dollars to fund the ongoing surveillance of the US public, or something similar...
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GEMont (profile), 30 Jul 2014 @ 4:07pm

Re: They have won
Now all we need to do is find us some real terrorists and give them the terrorism of the year award.

Damn, but the US effort to create some terrorists is having so little luck these days. Its just so hard to find good excuses to bomb another third world muslim country into the stone age anymore. Looks like we'll have to make do with the US and British Special Ops "terrorists", until we can figure out some way to make poor third world peasants appear to be more threatening.

Maybe more Hollywood Terrorist Movies will do the trick...
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GEMont (profile), 30 Jul 2014 @ 4:21pm

Re: Re:
Actually, by withholding communications vulnerabilities from the US public and from US businesses, regardless of their reasons, these companies are weakening the security of the United States, by creating the opportunity for criminals and foreign governments to use these same vulnerabilities for various nefarious purposes.

There has to be some law against doing that sort of thing, already on the books.

I assume that the NSA, perhaps through some still secret executive order written by The Most Transparent Administration In American History, has wrangled some form of immunity from such laws for the companies that do this in return for the service, but they must be in some sense, breaking the law big time.

Any armchair lawyers out there care to look into this??

....for the children!

Because.... terrorists!
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John Fenderson (profile), 31 Jul 2014 @ 9:39am

Re: Re: Re:
"There has to be some law against doing that sort of thing, already on the books"

I'm not aware of one, but that doesn't mean one doesn't exist. I can see some difficulties with such a law, though.
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GEMont (profile), 31 Jul 2014 @ 3:15pm

Re: Re: Re: Re:
"I can see some difficulties with such a law, though."

Please elucidate.
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Anonymous Coward, 14 Mar 2015 @ 8:57am

Re: The sad thing
Well, seeing the debt and deficit the USA is currently working under, tell me how $500 a head for a whole country might 'cause some trouble'.

Oh but hey! Its only $500 bucks a person. Its not like the US economy will find that hard to replace in an age where US companies are facing the brunt of GLOBAL shunning. Why not just raise taxes? Americans >LOVE.>
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