Also: CIA holds mock Internet attack; Qwest abandons MCI buy; European lawmakers reject data retention proposal; Treasury Department cancels $1 billion AT&T deal
The U.S. House of Representatives last week passed two pieces of legislation aimed at getting tough on anyone who uses spyware to commit a crime. The House voted to establish a fine of up to $3 million and jail sentences of up to two years for those engaging in certain types of activities that involve use of spyware to steal credit card numbers and commit other crimes. The bills also prohibit practices such as restarting the page on a user’s browser, logging keystrokes to capture passwords and other sensitive data, or launching pop-up ads that can’t be closed without shutting down a computer. The legislation awaits action in the Senate.
The CIA last week held a top-secret, three-day war exercise called Silent Horizon designed to test the nation’s ability to respond to a cyberterrorism barrage of the same scope as the Sept. 11 terrorist attacks, according to sources who spoke to the Associated Press on the condition that their names not be revealed. The exercise was set five years in the future and featured an attack by a fictional alliance of organizations, including hackers. The CIA’s little-known Information Operations Center, which evaluates threats to U.S. computer systems from foreign governments, criminal organizations and hackers, was running the war game. About 75 people gathered in conference rooms and reacted to signs of mock computer attacks.
Qwest has abandoned its pursuit of MCI, Qwest CEO Richard Notebaert told shareholders last week. The concession appears to end a bidding war between Qwest and Verizon, which on May 2 announced it would acquire MCI for at least $26 per share. As with several earlier bids, MCI’s board preferred Verizon’s to a $30-per-share offer from Qwest, in part because of Verizon’s perceived greater financial stability. The company said in a statement that it was no longer in its best interests to pursue the global long-distance and data carrier. However, some large MCI shareholders have expressed disappointment with the Verizon deal. Notebaert was unequivocal in his comments. Qwest believes it could have created more value for MCI shareholders, “but it became more and more apparent . . . that there really wasn’t an effort to negotiate in good faith. And so, we did what we always do. After an extraordinary effort by scores of Qwest people, we stayed with our disciplined approach and we halted our efforts,” he said.
European lawmakers have rejected legislation designed to fight terrorism that would force telephone operators and ISPs to store sensitive call data for up to three years. Members of the European Parliament’s civil liberties committee last week voted to approve a report that rejected the plans for data retention rules as “disproportionate and ineffective.” The member of Parliament who drafted the report, Alexander Alvaro, said the data-retention proposal does “not comply with the fundamental principle of the presumption of innocence.” He added that to date there was “no evidence that the information being collected would give legal authorities an advantage in the fight against terrorism.” Under the proposal, drafted by the U.K., Ireland, Sweden and France, operators would have to keep for at least 12 months all data containing the source, routing, destination, time, date and duration of communications, as well as the location of the telecom device used in making the call. The rules would apply to providers of fixed-line services, mobile-phone short messaging service operators and ISPs, including VoIP providers.
The Department of the Treasury last week canceled a 10-year, $1 billion telecom services deal with AT&T. The move had been expected by AT&T competitors, whose protests against the award were upheld by the Government Accountability Office (GAO). Last December, AT&T Government Solutions won the Treasury Communications Enterprise (TCE) deal to build a secure, high-speed IP VPN to handle the Treasury Department’s voice, video and data traffic. Protests were filed by rival bidders, including Broadwing and MCI. In March, the GAO recommended the Treasury Department reopen negotiations with all bidders. The department now says it will purchase telecommunications services through current contracts held by the General Services Administration. The TCE contract would have provided telecom services and support to more than 1,000 domestic locations and tens of thousands of agency users in the U.S. and overseas.
