Telecommunications (A Special Report): Strategies
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Porous Lines:
Few Companies Bother to Protect
Their Voice and Data Transmissions
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By Eileen White
A LOS ANGELES photographer says he can "read Bank of
America account-transfer information virtually at will" on
his television screen as he scans satellite frequencies.
Chris Schultheiss, editor of STV Magazine, says his
satellite dish regularly picks up video teleconferences of
Chrysler Corp., International Business Machines Corp. and
Amway Corp. "You can see and hear everything," he says.
Ross Engineering Associates, an Adamstown, Md., firm that
investigates possible high-tech security leaks, found
evidence that some telephones of a large service company --
including the chairman's cellular mobile phone -- might be
under electronic surveillance. But the company, which was
beaten out of $200 million of contracts by a competitor with
an uncanny knack for besting contract bids, fired its
security chief rather than take extensive electronic
countermeasures.
With more voice and data traffic being sent over the
airwaves rather than through conventional cables, the privacy
of telecommunications is increasingly being breached. It is
often impossible to know when vital information is being
intercepted. Some companies find it hard to believe that
competitors have the expertise or equipment to eavesdrop on
their advanced communications, and others find it even harder
to publicly acknowledge the theft of proprietary information
when they find out about it.
Whatever the reasons, industry and government experts say,
few companies have taken any steps to guard their secrets
from eavesdroppers.
"About 90% of electronic communications is in a perilous
state," says Lilia Rudesyle, an analyst with the National
Security Agency, which maintains the government's most
sophisticated electronic intelligence-gathering operations.
Although the agency won't cite specific examples, it says
long-distance phone conversations are routinely monitored by
foreign governments and corporations searching for American
technology. Similar monitoring is done by organized crime and
for domestic industrial espionage, the NSA contends.
Most U.S. companies "don't feel there's anybody
sophisticated enough to go after their communications," says
Robert P. Campbell, a Washington industrial security
consultant. But he warns that electronic snoopers, using
nothing more complex than a $100 scanner available in most
electronics stores, "can have instant technology transfer
faster than by stealing out of a safe."
Some companies, such as Chrysler and IBM, say they
scramble or encode important data, but see no problem in
transmitting nonconfidential programs to their sales staffs
over teleconferencing networks. Amway says STV Magazine's Mr.
Schultheiss probably picked up one of the company's marketing
programs on the Lifeline cable network. A Bank of America
spokesman said it isn't possible to pick up the bank's data
transmissions using ordinary satellite-television equipment.
But the spokesman was uncertain about the possibilities of
using more complex receivers.
Satellite and microwave transmission, the most popular
methods for corporations' private voice and data networks,
probably present the greatest security challenge. Information
can be picked up by satellite dishes, microwave receivers and
other equipment that is widely available.
Such equipment isn't cheap. "There are much easier and
less costly ways of going about industrial espionage," says a
spokesman for American Telephone & Telegraph Co. A study by
the congressional Office of Technology Assessment determined
that facilities to intercept and sort through microwave
telephone circuits would cost $40,000. "But it can be done
relatively easily and without the awareness of the network
owner," the study warned.
The federal government, believing that many foreign
governments and companies already have made that investment,
has launched a campaign to encourage U.S. corporations to
guard their secrets.
Eavesdropping isn't the only concern of satellite users.
Last fall, two cable-television broadcasters experienced
separate incidents of signal jamming, each lasting longer
than 12 hours. The source of the interference is still a
mystery.
Although federal law specifically prohibits satellite
tampering, other intrusions might not be covered by existing
laws that were written years ago to deter old-fashioned
wiretapping. A bill sponsored by Sen. Patrick Leahy (D., Vt.)
would give new technologies, including "digitized phone
calls, cellular and cordless calls and private-carrier
calls," the same legal protection as conventional telephone
conversations.
That may not help much. Last year, California passed a law
making it illegal to eavesdrop on cellular telephone calls or
to sell the necessary eavesdropping devices. But the law is
"virtually unenforceable" because eavesdropping can be done
with almost any type of scanning device and can't be traced,
says Stuart Crump, editor of Personal Communications, a trade
magazine.
The NSA is trying another approach. For many years, the
agency has provided "secure," or encoded, telephones for the
Pentagon and its contractors, and the agency has worked with
companies that make encoding equipment for industry. The
devices haven't been popular with companies outside the
defense, oil and international banking businesses, in part
because they are expensive and difficult to use.
So last year, the NSA spent about $50 million to
underwrite development costs of a third generation of
less-expensive secure telephones. AT&T, Motorola Inc., and
RCA Corp. are making the phones, known as "secure telephone
unit 3," or STU 3. Motorola also is making a cellular
version.
Nicholas Piazzola, who heads the STU 3 project for the
NSA, says the agency expects the phones to be available in
1987 at a cost of about $2,000 each, compared with a current
price of about $10,000. A market study projects
private-sector demand of one million to two million phones.
NSA officials acknowledge that they would retain the
technical ability to break the STU 3 codes, although doing so
would be illegal in the U.S. without a court order.
Though some in the industry doubt that encoded phones will
* catch on, others say that growing concern over computer crime
and surveillance is creating more demand for relatively
inexpensive security products. "It's typical to use passwords
to protect computers," says an industrial security manager
for a large high-tech company. "But you could lose the whole
show if you don't protect the telecommunications."
