Executive Order Begins Process Of Strengthening Nation’s Cybersecurity And Critical Infrastructure

by Pepper Hamilton LLP
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During his State of the Union address on February 12, 2013, President Barack Obama announced his signing of a long-anticipated Executive Order on cybersecurity.1 After months of discussions with technology companies the Executive Order proposes a cybersecurity framework to “enhance the security and resilience of the Nation’s critical infrastructure and to maintain a cyber environment that encourages efficiency, innovation, and economic prosperity while promoting safety, security, business confidentiality, privacy, and civil liberties.” While this framework is generally viewed as an encouraging step by industry and information security groups, some measures recommended by information security experts, such as mandates or minimum requirements, were not included, since any new law would require legislative action, and the standards called for in the Executive Order will be voluntary. Nonetheless, it is likely that the forthcoming information security framework will come to be viewed by the industry as something close to mandatory, since companies that fail to participate could face lawsuits following a breach.

The Executive Order is meant to encourage increased information sharing between the government and industry regarding cyberthreats, focusing especially on threats to “critical infrastructure,” a term defined by the Executive Order to include systems “so vital to the United States that the incapacity or destruction of such systems and assets would have a debilitating impact on security, national economic security, national public health or safety, or any combination of those matters.” The Executive Order appears to exclude commercial Internet technology companies such as Facebook from this definition by stating that the Order “shall not identify any commercial information technology products or consumer information technology services under this [definition].”

While not made explicit, the Executive Order’s definition of critical infrastructure could be interpreted to include telecommunication networks, the national energy grid, and companies involved in the infrastructure behind running the economy, such as cloud computing providers, critical financial services providers, and companies providing infrastructure and services to government agencies. The Order directs the Secretary of Homeland Security to “use a risk-based approach to identify critical infrastructure where a cybersecurity incident could reasonably result in catastrophic regional or national effects” within 150 days from the signing of the Order. This list will be reviewed on an annual basis, and may be adjusted to include additional industries and companies in the future, as the government and economy increase dependence on larger and more complex networks.

Although the Executive Order directs the Attorney General, the Secretary of Homeland Security, and the Director of National Intelligence to “ensure the timely production of unclassified reports of cyber threats,” hopes by some information security experts for a more robust framework for sharing of threat information between private industry and government are generally unrealized in the Order. The Order does not require threat reporting to government agencies by private industry, and instead directs the National Institute of Standards and Technology (NIST) to work with companies that fall under the critical infrastructure definition to develop a cybersecurity best practices framework. A preliminary version of this framework is due 240 days from the Order’s signing, with a final version to be published within one year.

This baseline framework to reduce cyber risk articulates the need to develop “voluntary consensus standards and industry best practices” that align “policy, business, and technological approaches to cyber risks.” There is no language within the Executive Order, however, that requires industry compliance with any provisions published as part of this framework. Rather, the Order asks the government agencies involved to “provide guidance” and to “establish a voluntary program to support the adoption” of the framework. Provisions within the Order direct government agencies to determine whether to issue stronger standards, but these reviews will take time. Further, the Order requires these agencies to identify “any critical infrastructure subject to ineffective, conflicting, or excessively burdensome cybersecurity requirements” within two years after publication of the final framework.

This Executive Order may reduce congressional enthusiasm for new cybersecurity laws, but House Intelligence Committee Chairman Mike Rogers has reintroduced the Cyber Intelligence Sharing and Protection Act (CISPA),2 a controversial bill that, in a version introduced last year, raised concerns among many privacy groups, with the White House threatening a veto if left in its original form. Without additional legislation, the critical infrastructure companies identified by the Executive Order are not required to take action as part of its framework. Recent allegations of intrusions into the private networks of U.S. corporations and infrastructure providers by a Chinese military intelligence unit may increase pressure upon both Congress and the White House to act sooner rather than later.3 Until there is such legislation, however, the Order may only provide incentives to industry to engage in its voluntary program. What is clear is that the Obama administration is making information security a priority in this term, and it is likely to aggressively pursue its goals in this area, despite the lack of bipartisan support for new legislation by Congress.

Endnotes

1 Available at http://www.whitehouse.gov/the-press-office/2013/02/12/executive-order-improving-critical-infrastructure-cybersecurity.

2 See http://thomas.loc.gov/cgi-bin/query/z?c112:H.R.3523:.

3 See David E. Sanger, David Barboza, and Nicole Perlroth, “Chinese Army Unit Is Seen as Tied to Hacking Against U.S.,” NY Times, February 18, 2013, available at http://www.nytimes.com/2013/02/19/technology/chinas-army-is-seen-as-tied-to-hacking-against-us.html?pagewanted=all&_r=0.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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