Voluntary cyber code needed for online businesses

A Commerce Department task force on Wednesday recommended the creation of a voluntary code of conduct to improve the cybersecurity of companies doing online businesses, along with incentives for adopting the code.

The recommendations respond to growing threats to an increasingly important segment of the nation’s economy, and are directed at companies that fall outside the critical infrastructure sector. Although the practices would be voluntary, incentives could include implementing legislation such as the proposed national data-breach notification law, as well as financial incentives such as reduced insurance premiums.

The report, Cybersecurity, Innovation and the Internet Economy, is the latest in a series of proposals from the Obama administration in response to the 2010 Cyberspace Policy Review. These include the National Strategy for Trusted Identities in Cyberspace released in April, a proposal for comprehensive cybersecurity legislation and an International Strategy for Cyberspace, both released in May.

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The current proposal is the product of an IT policy task force created in 2010 to address threats outside the scope of other initiatives.

“Despite increasing awareness of the associated risks, broad swaths of the economy and individual actors, ranging from consumers to large businesses, still do not take advantage of available technology and processes to secure their systems, nor are protective measures evolving as quickly as the threats,” the report states. “This general lack of investment puts firms and consumers at greater risk, leading to economic loss at the individual and aggregate level and poses a threat to national security.”

Under proposed cybersecurity legislation, the Homeland Security Department would have primary responsibility for the cybersecurity of the nation’s privately owned critical infrastructure. DHS, with the help of sector-specific agencies, would identify critical infrastructure companies and develop a framework for cybersecurity. The Commerce Department has focused on companies outside the critical designation.

These companies have not received the same attention but also face risks if they do not adequately secure their networks and services. But because they are a diverse group, the task force has identified and focused on a segment that it calls the Internet and information innovation sector, which is focused on online activities. The sector includes small and mid-sized businesses with online services, as well as large social networking sites, Internet-only businesses and cloud computing companies.

The task force recommended creating nationally recognized but voluntary codes of conduct that include adoption of standards and best practices for cybersecurity, developed by industries with the help, when needed, of the National Institute of Standards and Technology. These would include the adoption of automated security technology, the use of standards such as the federal Common Criteria, and employment of Domain Name System Security Extensions.

“Where consensus emerges that a particular standard or practice will markedly improve the nation’s collective security, the government should consider more proactively promoting their implementation and use,” the report states.

A national data-breach notification law "may encourage firms to take more care to avoid breaches in the first place,” the report states. Other incentives would include better public/private sector cooperation in information sharing.

The report also recommends education and research programs to develop better business cases for cybersecurity investment and to increase awareness of risks and available defenses. Improved international cooperation also is needed for shared research and development and for establishing consistent national policies.