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Robert Cattanach: AT&T Settles with FCC for $25 Million in Landmark Privacy and Data Breach Agreement

Cattanach_Robert (640x427)Editor’s Note: On Wednesday, the Federal Communications Commission announced a $25 million settlement with AT&T for data breaches including  the releasing of thousands of customer records, including names, phone numbers and some Social Security numbers.

BroadbandBreakfast.com welcomes commentaries and opinions on this and other subjects from a multitude of viewpoints.

WASHINGTON, April 8, 2015 – The FCC’s settlement with AT&T sets another benchmark for data breach enforcement, with several important developments.

First, it demonstrates the continuing encroachment of the FCC into areas once thought to be the exclusive domain of the FTC.  This is a classic data breach enforcement action that typically would have been prosecuted by the FTC until most recently. […]

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Cattanach_Robert (640x427)Editor’s Note: On Wednesday, the Federal Communications Commission announced a $25 million settlement with AT&T for data breaches including  the releasing of thousands of customer records, including names, phone numbers and some Social Security numbers.

BroadbandBreakfast.com welcomes commentaries and opinions on this and other subjects from a multitude of viewpoints.

WASHINGTON, April 8, 2015 – The FCC’s settlement with AT&T sets another benchmark for data breach enforcement, with several important developments.

First, it demonstrates the continuing encroachment of the FCC into areas once thought to be the exclusive domain of the FTC.  This is a classic data breach enforcement action that typically would have been prosecuted by the FTC until most recently.

Second, it “ups the ante” for such breaches, with a fine two and a half times the previous largest penalty imposed.

Third, it calls into question the integrity of call centers outside of the U.S.  The fact that an initial breach was discovered in Mexico, followed by subsequent discoveries in Columbia and the Philippines, suggests AT&T may have a more serious systemic vulnerability rather than a one-off hack.

Forth, and most importantly, it once again calls the question of which agency has enforcement priority: the FCC or the FTC?  Will the FTC accept a subsidiary role in enforcement maters where telcos are involved?  One could surmise that the FTC could assert a claim against AT&T under Section 5.  Given the increasingly frosty relationship between the FTC and FCC on enforcement of incidents triggering dual jurisdiction, its difficult to imagine that there was any significant coordination between the two agencies.  This raises a number of potential issues, not the least of which might be potential double jeopardy.

Robert Cattanach is a partner at the international law firm Dorsey & Whitney. He has previously worked as a trial attorney for the United States Department of Justice and was also special counsel to the Secretary of the Navy. Today he practices in the areas of regulatory litigation, including cybersecurity, privacy and telecommunications, civil and criminal enforcement proceedings and international Regulatory Compliance.

Editor’s Note: BroadbandBreakfast.com accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@broadbandcensus.com. The views reflected in Expert Opinion pieces do not necessarily reflect the views of BroadbandBreakfast.com and Breakfast Media LLC.

Robert Cattanach is a partner at the international law firm Dorsey & Whitney. He has previously worked as a trial attorney for the United States Department of Justice and was also special counsel to the Secretary of the Navy. Today he practices in the areas of regulatory litigation, including cybersecurity, privacy and telecommunications, civil and criminal enforcement proceedings and international Regulatory Compliance.

Cybersecurity

House Oversight Reveals Details of Investigation into Colonial Pipeline, Other Company Hacks

The committee released a memo stating that “small lapses” led to many prominent cyberattacks this year.

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Oversight and Reform Committee Chairwoman Carolyn Maloney, D-New York

WASHINGTON, November 17, 2021 – A House Oversight and Reform Committee investigation concluded in a staff memo that “small lapses” in cyber security led to hacks of Colonial Pipeline, meat producer JBS USA, and insurance group CNA Financial Corporation that occurred earlier this year.

Additionally, in Tuesday’s memo, the committee stated that the companies’ lack of “clear points of contact with the federal government” hampered response efforts to the attacks and that the companies faced a “huge” amount of pressure to pay hackers. Cyber security officials on Tuesday asked Congress to push legislation that would force companies to notify the government about cyber breaches.

The CNA hack occurred after an employee accepted a fake browser update and hackers gained access to JBS through an old account with a weak password that had not been deactivated. Colonial Pipeline was hacked as a result of just one stolen password linked to a profile, leading to gas shortages in several states.

Employees at JBS and Colonial Pipeline may have been operating on Internet of Things devices, which often only make use of mass-produced factory password settings due to limited processing power. This makes such devices extremely vulnerable to cyberattacks.

“Even large organizations with seemingly robust security systems fell victim to simple initial attacks, highlighting the need to increase security education and take other security measures prior to an attack,” reads Oversight’s memo.

Security issues for schools and libraries

Experts say that similar issues with IoT and password security are increasingly threatening cybersecurity in schools and libraries as well. During a School, Health and Libraries Broadband Coalition event Wednesday, leaders in education emphasized data that shows attacks on the educational sector to continue increasing in frequency from a rate that already ranks second among all professional sectors.

Amy McLaughlin, executive director of technical and solutions architecture for Oregon State University, suggested during the event that schools and libraries expand their security beyond basic firewall that is paid for by E-rate funding and change default passwords when possible, avoiding using an administrator login, patch systems, as well as use anti-malware software on all devices.

Similarly, Bob Turner, field chief information security officer for higher education at Fortinet, stated that his organization recommends schools use multi-factor authentication.

The recently signed Infrastructure Investment and Jobs Act specifically allocates funding to be used for the implementation of improved cybersecurity practices in institutions including libraries, cyber security officials said Tuesday.

National security concerns

In June, Oversight and Reform Committee Chairwoman Carolyn Maloney, D-New York, told CNA, JBS USA and Colonial Pipeline via letters that she was “extremely concerned that the decision to pay international criminal actors sets a dangerous precedent that will put an even bigger target on the back of critical infrastructure going forward.”

During an Oversight and Reform panel Tuesday, committee members questioned witnesses on the efforts by President Joe Biden’s administration to push back on recent ransomware attacks by Russian-based cybercriminals.

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Cybersecurity

Cyber Officials Reiterate Need for Private-Public Sector Cyber Threat Information Sharing

Calls are growing louder for mandatory breach reporting for cybersecurity incidents.

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Brandon Wales, executive director of the Cybersecurity and Infrastructure Security Agency

WASHINGTON, November 16, 2021 – Cybersecurity officials from the federal government told the House Committee on Oversight and Reform Tuesday that Congress needs to press forward on legislation that would force companies to share information on cyber attacks with the federal government.

In July, Sens. Mark Warner, D-Virginia, Marco Rubio, R-Florida, and Susan Collins, R-Maine, introduced the Cyber Incident Notification Act of 2021, which requires federal and private sector cybersecurity intrusions to be reported to the government within 24 hours.

On Tuesday, the oversight and reform committee, which is studying how the government can crack down on ransomware, heard from three cyber security witnesses that a priority of Congress should be to pass such legislation to force that information sharing so the government is better prepared to respond, and prevent, attacks.

“Passing cyber threat notification legislation is a top priority,” said Brandon Wales, executive director of the Cybersecurity and Infrastructure Security Agency. “We need the information because that enables CISA and the FBI to both engage with that victim, offer our assistance, understand what’s happening on their networks, and protect other victims as well as all the threat response and going after the actor and following the money.”

The comments and the calls for legislation come against the backdrop of high-profile cyberattacks, including against oil transport company Colonial Pipeline and software company SolarWinds, which prompted a Senate hearing on the matter. Recently, investment app Robinhood suffered its own data breach.

The attacks also raise even more alarm as the pandemic has made remote work more commonplace.

Wales noted that there have been improvements in terms of public-private partnerships to better deal with cyberattacks, including the launch of the Joint Cyber Defense Collaborative, which will lead development of cyber defense plans and executive plans in coordination with the federal, state, local and tribal governments, as well as the private sector.

Those companies Wales specified were those that have the most “visibility” on these attacks, including major cloud companies, internet service providers and cyber security firms.

“As we work together to spot threat activity, we are able to provide more protection than anyone can do individually,” Wales said.

Last month, Secretary of State Antony Blinken announced the department intends to create a new cyber bureau to help tackle the growing challenge of cyber warfare.

Other legislation before Congress

The signing into law Monday of the Infrastructure Investment and Jobs Act includes cybersecurity grants to state and local governments, which Wales said he is hopeful will help

The House recently passed the Small Business Administration Cyber Awareness Act, which would require only small businesses of their cybersecurity capabilities and notify Congress about cyber breaches.

Before that, Senator Angus King, I-Maine, called for the crafting of legislation that would require all companies to report cyber breaches to the federal government, which backed by a Department of Justice official in further testimony before the Senate judiciary committee earlier this year.

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Cybersecurity

A Unified Framework for Security of the Software Supply Chain Can Prevent Disruptions, Event Hears

Discussion has emerged about the pandemic’s impact on the physical supply, but software is important, too.

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Tom Quillin of Intel

WASHINGTON, November 2, 2021 – The conversation on the security of the global supply chain should include the integrity of the software used to drive those products to market, and that will require leaders to align incentives to minimize risks of disruptions, an event heard Friday.

The supply chain is normally associated with the physical aspects of bringing products to consumers, including the facility, employees and management.

But panelists at an event held by the Commerce Department’s Bureau of Industry and Security Friday said there needs to be a security framework for the digital software supply chain as well.

Tom Quillin, who leads security and trust policy at Intel, said he supports a proposal by Google for a digital software supply chain security framework as a model for increasing the cohesiveness of the chain. Google’s proposal addresses risks to software systems that threaten the chain’s integrity and formalizes the criteria for its security, Quillin said.

Supply chain resiliency is critical to the Joe Biden Administration’s Build Back Better agenda. Aimed in part on improving U.S. economic competitiveness, structural weakness in the supply chain threatens national security, experts say.

The pandemic has wrought havoc on the global supply chain, which has seen shortages in things including routers, chips, and materials for fiber builds.

Aligning incentives to produce greater innovation

When asked about what the U.S. can do to promote wider adoption of integrity-boosting supply chain practices, Quillin said aligning incentives across the supply chain will help clarify the most important areas for future research and development. “Ensuring schedules and cost targets are met can lead to tradeoffs between security and trust,” Quillin said.

He said he thinks the U.S. should have a stronger focus on building incentives to ensuring security and trustworthiness amongst the supply chain. “With improved trust comes increased value to the consumer,” he said. “There are additional costs associated with transparency efforts, but the value added to the customer can cover the cost of added transparency.” Quillin believes that as the benefit of these solutions get built out, they become easier to implement and maintain over time.

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