Cybersecurity Issues and Challenges In Brief Eric A Fischer Senior Specialist in Science and Technology August 12 2016 Congressional Research Service 7-5700 www crs gov R43831 Cybersecurity Issues and Challenges In Brief Summary The information and communications technology ICT industry has evolved greatly over the last half century The technology is ubiquitous and increasingly integral to almost every facet of modern society ICT devices and components are generally interdependent and disruption of one may affect many others Over the past several years experts and policymakers have expressed increasing concerns about protecting ICT systems from cyberattacks which many experts expect to increase in frequency and severity over the next several years The act of protecting ICT systems and their contents has come to be known as cybersecurity A broad and arguably somewhat fuzzy concept cybersecurity can be a useful term but tends to defy precise definition It is also sometimes inappropriately conflated with other concepts such as privacy information sharing intelligence gathering and surveillance However cybersecurity can be an important tool in protecting privacy and preventing unauthorized surveillance and information sharing and intelligence gathering can be useful tools for effecting cybersecurity The management of risk to information systems is considered fundamental to effective cybersecurity The risks associated with any attack depend on three factors threats who is attacking vulnerabilities the weaknesses they are attacking and impacts what the attack does Most cyberattacks have limited impacts but a successful attack on some components of critical infrastructure CI —most of which is held by the private sector—could have significant effects on national security the economy and the livelihood and safety of individual citizens Reducing such risks usually involves removing threat sources addressing vulnerabilities and lessening impacts The federal role in cybersecurity involves both securing federal systems and assisting in protecting nonfederal systems Under current law all federal agencies have cybersecurity responsibilities relating to their own systems and many have sector-specific responsibilities for CI On average federal agencies spend more than 10% of their annual ICT budgets on cybersecurity More than 50 statutes address various aspects of cybersecurity Five bills enacted in the 113th Congress and another in the 114th address the security of federal ICT and U S CI the federal cybersecurity workforce cybersecurity research and development information sharing in both the public and private sectors and international aspects of cybersecurity Other bills considered by Congress have addressed a range of additional issues including data breach prevention and response cybercrime and law enforcement and the Internet of Things among others Among actions taken by the Obama Administration during the 114th Congress are promotion and expansion of nonfederal information sharing and analysis organizations announcement of an action plan to improve cybersecurity nationwide proposed increases in cybersecurity funding for federal agencies of more than 30% including establishment of a revolving fund for modernizing federal ICT and a directive laying out how the federal government will respond to both government and private-sector cybersecurity incidents Those recent legislative and executive-branch actions are largely designed to address several well-established needs in cybersecurity However those needs exist in the context of difficult long-term challenges relating to design incentives consensus and environment Legislation and executive actions in the 114th and future Congresses could have significant impacts on those challenges Congressional Research Service Cybersecurity Issues and Challenges In Brief Contents The Concept of Cybersecurity 1 Management of Cybersecurity Risks 2 What Are the Threats 2 What Are the Vulnerabilities 2 What Are the Impacts 2 Federal Role 3 Federal Spending 5 Legislative Proposals and Actions 5 Executive Branch Actions 8 Long-Term Challenges 9 Figures Figure 1 Simplified Schematic Diagram of Federal Agency Cybersecurity Roles 4 Tables Table 1 Federal FISMA and IT Spending 5 Table 2 Cybersecurity Bills Enacted in the 113th and 114th Congresses 6 Contacts Author Contact Information 9 Congressional Research Service Cybersecurity Issues and Challenges In Brief T he information technology IT industry has evolved greatly over the last half century Continued exponential progress in processing power and memory capacity has made IT hardware not only faster but also smaller lighter cheaper and easier to use The original IT industry has also increasingly converged with the communications industry into a combined sector commonly called information and communications technology ICT This technology is ubiquitous and increasingly integral to almost every facet of modern society ICT devices and components are generally interdependent and disruption of one may affect many others The Concept of Cybersecurity Over the past several years experts and policymakers have expressed increasing concerns about protecting ICT systems from cyberattacks—deliberate attempts by unauthorized persons to access ICT systems usually with the goal of theft disruption damage or other unlawful actions Many experts expect the number and severity of cyberattacks to increase over the next several years 1 The act of protecting ICT systems and their contents has come to be known as cybersecurity A broad and arguably somewhat fuzzy concept cybersecurity can be a useful term but tends to defy precise definition It usually refers to one or more of three things    A set of activities and other measures intended to protect—from attack disruption or other threats—computers computer networks related hardware and devices software and the information they contain and communicate including software and data as well as other elements of cyberspace 2 The state or quality of being protected from such threats The broad field of endeavor aimed at implementing and improving those activities and quality 3 It is related to but not generally regarded as identical to the concept of information security which is defined in federal law 44 U S C §3552 b 3 as protecting information and information systems from unauthorized access use disclosure disruption modification or destruction in order to provide A integrity which means guarding against improper information modification or destruction and includes ensuring information nonrepudiation and authenticity B confidentiality which means preserving authorized restrictions on access and disclosure including means for protecting personal privacy and proprietary information and C availability which means ensuring timely and reliable access to and use of information Cybersecurity is also sometimes conflated inappropriately in public discussion with other concepts such as privacy information sharing intelligence gathering and surveillance Privacy is associated with the ability of an individual person to control access by others to information about 1 See for example Lee Rainie Janna Anderson and Jennifer Connolly Cyber Attacks Likely to Increase Pew Research Internet Project October 2014 http www pewInternet org 2014 10 29 cyber-attacks-likely-to-increase 2 The term cyberspace usually refers to the worldwide collection of connected ICT components the information that is stored in and flows through those components and the ways that information is structured and processed 3 For a more in-depth discussion of this concept see CRS Report RL32777 Creating a National Framework for Cybersecurity An Analysis of Issues and Options by Eric A Fischer Congressional Research Service 1 Cybersecurity Issues and Challenges In Brief that person Thus good cybersecurity can help protect privacy in an electronic environment but information that is shared to assist in cybersecurity efforts might sometimes contain personal information that at least some observers would regard as private Cybersecurity can be a means of protecting against undesired surveillance of and gathering of intelligence from an information system However when aimed at potential sources of cyberattacks such activities can also be useful to help effect cybersecurity In addition surveillance in the form of monitoring of information flow within a system can be an important component of cybersecurity 4 Management of Cybersecurity Risks The risks associated with any attack depend on three factors threats who is attacking vulnerabilities the weaknesses they are attacking and impacts what the attack does The management of risk to information systems is considered fundamental to effective cybersecurity 5 What Are the Threats People who actually or potentially perform cyberattacks are widely cited as falling into one or more of five categories criminals intent on monetary gain from crimes such as theft or extortion spies intent on stealing classified or proprietary information used by government or private entities nation-state warriors who develop capabilities and undertake cyberattacks in support of a country’s strategic objectives “hacktivists” who perform cyberattacks for nonmonetary reasons and terrorists who engage in cyberattacks as a form of non-state or state-sponsored warfare What Are the Vulnerabilities Cybersecurity is in many ways an arms race between attackers and defenders ICT systems are very complex and attackers are constantly probing for weaknesses which can occur at many points Defenders can often protect against weaknesses but three are particularly challenging inadvertent or intentional acts by insiders with access to a system supply chain vulnerabilities which can permit the insertion of malicious software or hardware during the acquisition process and previously unknown or zero-day vulnerabilities with no established fix Even for vulnerabilities where remedies are known they may not be implemented in many cases because of budgetary or operational constraints What Are the Impacts A successful attack can compromise the confidentiality integrity and availability of an ICT system and the information it handles Cybertheft or cyberespionage can result in exfiltration of financial proprietary or personal information from which the attacker can benefit often without the knowledge of the victim Denial-of-service attacks can slow or prevent legitimate users from accessing a system Botnet malware can give an attacker command of a system for use in cyberattacks on other systems Attacks on industrial control systems can result in the destruction or disruption of the equipment they control such as generators pumps and centrifuges 4 See for example Department of Homeland Security “Continuous Diagnostics and Mitigation CDM ” June 24 2014 http www dhs gov cdm 5 See for example National Institute of Standards and Technology Managing Information Security Risk Organization Mission and Information System View March 2011 http csrc nist gov publications nistpubs 800-39 SP800-39-final pdf Congressional Research Service 2 Cybersecurity Issues and Challenges In Brief Most cyberattacks have limited impacts but a successful attack on some components of critical infrastructure CI —most of which is held by the private sector—could have significant effects on national security the economy and the livelihood and safety of individual citizens Thus a rare successful attack with high impact can pose a larger risk than a common successful attack with low impact While it is widely recognized that cyberattacks can be costly to individuals and organizations economic impacts can be difficult to measure and estimates of those impacts vary widely An often cited figure for annual cost to the global economy from cybercrime is $400 billion with some observers arguing that costs are increasing substantially especially with the continued expansion of ICT infrastructure through the Internet of Things and other new and emerging platforms 6 The costs of cyberespionage can be even more difficult to quantify but are considered to be substantial 7 Managing the risks from cyberattacks usually involves 1 removing the threat source e g by closing down botnets or reducing incentives for cybercriminals 2 addressing vulnerabilities by hardening ICT assets e g by patching software and training employees and 3 lessening impacts by mitigating damage and restoring functions e g by having back-up resources available for continuity of operations in response to an attack The optimal level of risk reduction will vary among sectors and organizations For example the level of cybersecurity that customers expect may be lower for a company in the entertainment sector than for a bank a hospital or a government agency Federal Role The federal role in cybersecurity involves both securing federal systems and assisting in protecting nonfederal systems Under current law all federal agencies have cybersecurity responsibilities relating to their own systems and many have sector-specific responsibilities for CI More than 50 statutes address various aspects of cybersecurity Figure 1 is a simplified schematic diagram of major agency responsibilities in cybersecurity In general the National Institute of Standards and Technology NIST develops standards that apply to federal civilian ICT under the Federal Information Security Modernization Act FISMA and the Office of Management and Budget OMB is responsible for overseeing their implementation The Department of Defense DOD is responsible for military ICT defense of the nation in cyberspace and through the National Security Agency NSA security of national security systems NSS which handle classified information NSA is also part of the Intelligence Community IC The Department of Homeland Security DHS has operational responsibility for protection of federal civilian systems and is the lead agency coordinating federal efforts assisting the private sector in protecting CI assets It is also the main federal focus of information sharing for civilian systems through its National Cybersecurity and Communications Integration Center NCCIC The Department of Justice DOJ is the lead agency for enforcement of relevant laws 6 See for example Center for Strategic and International Studies “Net Losses Estimating the Global Cost of Cybercrime” McAfee June 2014 http www mcafee com us resources reports rp-economic-impactcybercrime2 pdf cid BHP028 Cybersecurity Ventures “Cybersecurity Market Report Q2 2016 ” 2016 http cybersecurityventures com cybersecurity-market-report For more information on the Internet of Things see CRS Report R44227 The Internet of Things Frequently Asked Questions by Eric A Fischer 7 Office of the National Counterintelligence Executive “Foreign Spies Stealing U S Economic Secrets in Cyberspace Report to Congress on Foreign Economic Collection and Industrial Espionage 2009-2011 ” October 2011 https www dni gov files documents Newsroom Reports%20and%20Pubs 20111103_report_fecie pdf Congressional Research Service 3 Cybersecurity Issues and Challenges In Brief Figure 1 Simplified Schematic Diagram of Federal Agency Cybersecurity Roles Source CRS Notes DHS Department of Homeland Security DOD Department of Defense DOJ Department of Justice FISMA Federal Information Security Management Act IC Intelligence Community NIST National Institute of Standards and Technology NSA National Security Agency OMB Office of Management and Budget R D Research and development In February 2015 the Obama Administration also established via presidential memorandum the Cyber Threat Intelligence Integration Center CTIIC under the Director of National Intelligence DNI Its purposes are to provide integrated analysis on cybersecurity threats and incidents affecting national interests across the federal government and to support relevant government entities including the NCCIC and others at DOD and DOJ Congressional Research Service 4 Cybersecurity Issues and Challenges In Brief Federal Spending Federal agencies spend a significant part of their annual IT funding on cybersecurity which currently constitutes 16-17% about one in every seven dollars of agency IT budgets overall Table 1 However DOD spending accounts for a large proportion of that expenditure ranging from 22-30% of the DOD IT budget from FY2010 to FY2015 The median proportion for other agencies has been 6-7% during that period That is roughly equivalent to spending patterns for businesses of 4-9% reported in a recent survey 8 The FY2017 budget request includes over $19 billion altogether for cybersecurity With a total requested IT investment of $81 6 billion that would amount to a proportion of 23 3% or about one in every four dollars to be spent on cybersecurity For more information on federal cybersecurity spending see CRS Report R44404 Perspectives on Federal Cybersecurity Spending by William L Painter and Chris Jaikaran Table 1 Federal FISMA and IT Spending Billions of Dollars FY2006 to FY2015 Fiscal Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 5 5 5 9 6 2 6 8 12 0 13 3 14 6 10 3 12 7 13 1 66 2 68 2 72 8 76 1 80 7 76 0 75 0 73 2 75 6 80 4 8 3 8 7 8 5 8 9 14 9 17 5 19 3 14 1 16 8 16 3 FISMA Spending Total IT Spending FISMA Proportion of Total IT Spending % Source Data on FISMA spending are from annual reports on implementation of FISMA from the Office of Management and Budget OMB many of which are available at http www whitehouse gov omb e-gov docs Data on total IT spending are from OMB Exhibit 53 spreadsheets see Office of Management and Budget “Exhibit 53 Archive ” Federal IT Dashboard August 31 2014 https itdashboard gov exhibit53report for recent documents Notes FISMA data for FY2006-FY2009 are not comparable to later data and data from 2013-2015 are not comparable to earlier data because of changes in how OMB collected the information implemented in 2010 and again in 2013 Amounts for both FISMA and IT spending are reported in the documents as “actual” expenditures and therefore probably consist mostly of obligated funds Federal documents provide data as IT not ICT spending but include investments in activities such as telecommunications Office of Management and Budget “Guidance on Exhibit 53—Information Technology and E-Government ” August 5 2011 http www whitehouse gov sites default files omb assets egov_docs fy13_guidance_for_exhibit_53-ab_20110805 pdf FISMA spending may not fully account for all agency investment in cybersecurity Agencies might not report funds spent on cybersecurity beyond what FISMA requires in their submissions that are summarized in the annual FISMA reports Therefore the total amounts spent on cybersecurity might exceed the amounts presented in the table Legislative Proposals and Actions Since at least the 111th Congress many bills have been introduced that would address a range of cybersecurity issues  Cybercrime Laws—updating criminal statutes and law-enforcement authorities relating to cybersecurity 8 Barbara Filkins “IT Security Spending Trends” SANS Institute February 2016 https www sans org readingroom whitepapers analyst security-spending-trends-36697 The results are from a survey of 169 organizations across several sectors that found median proportions of 4-6% for FY2014 and 7-9% for FY2016 Congressional Research Service 5 Cybersecurity Issues and Challenges In Brief        Data-Breach Notification—requiring notification to victims and other responses after data breaches involving personal or financial information of individuals FISMA Reform—updating the law to reflect changes in ICT and the threat landscape Information Sharing—easing access of the private sector to classified and unclassified threat information and removing barriers to sharing within the private sector and with the federal government Internet of Things—addressing a range of cybersecurity issues arising from the proliferation of devices and objects such as home appliances automobiles medical devices factories and infrastructure connected to the Internet Privately Held CI—improving protection of private sector CI from attacks with major impacts R D—updating agency authorizations and strategic planning requirements Workforce—improving the size skills and preparation of the federal and private sector cybersecurity workforce Table 2 Cybersecurity Bills Enacted in the 113th and 114th Congresses Public Law Bill No Title P L 113-246 H R 2952 Cybersecurity Workforce Assessment Act P L 113-274 S 1353 Cybersecurity Enhancement Act of 2014 P L 113-277 S 1691 Border Patrol Agent Pay Reform Act of 2014 P L 113-282 S 2519 National Cybersecurity Protection Act of 2014 P L 113-283 S 2521 P L 114-113 H R 2029 Federal Information Security Modernization Act of 2014 Cybersecurity Act of 2015 Division N including Cybersecurity Information Sharing Act Title I National Cybersecurity Protection Advancement Act of 2015 Subtitle A of Title II Federal Cybersecurity Enhancement Act of 2015 Subtitle B of Title II Federal Cybersecurity Workforce Assessment Act of 2015 Title III Title IV—Other Cyber Matters Source CRS Note The Cybersecurity Act of 2015 is Division N of P L 114-113 the Consolidated Appropriations Act 2016 Laws enacted in the 113th and 114th Congresses Table 2 have focused on all of those issues to varying degrees  Critical Infrastructure P L 113-274 established a process led by the National Institute of Standards and Technology NIST similar to one created in Executive Order 13636 to develop a cybersecurity framework a common set of practices for protection of CI P L 113-282 requires DHS to develop and exercise incident-response plans for cybersecurity risks to CI P L 114-113 Title IV requires DHS and NIST to assist states in improving cybersecurity for emergency response networks It also requires the Department of Health and Human Services to establish a taskforce and collaboration mechanisms to assist the healthcare sector in reducing cybersecurity risks Congressional Research Service 6 Cybersecurity Issues and Challenges In Brief  Data-Breach Notification P L 113-283 requires OMB to establish procedures for notification and other responses to federal agency data breaches of personal information  Federal Information Systems P L 113-283 retains with some amendments most provisions of FISMA which was originally enacted in 2002 Changes include providing statutory authority to DHS for overseeing operational cybersecurity of federal civilian information systems and requiring agencies to implement DHS directives P L 114-113 Title II Subtitle B establishes in statute the DHS intrusionprotection program known as EINSTEIN requires agencies to adopt it and implement additional cybersecurity measures gives DHS additional authority in the event of an imminent threat or emergency and establishes additional reporting requirements P L 114-113 Title IV also requires reports to Congress from DHS on the security of mobile devices used by federal agencies and from agency inspectors general on the cybersecurity of NSS and systems providing access to personally identifiable information Information Sharing P L 113-282 provided statutory authority for NCCIC which had been created by DHS in 2009 under existing statutory authority to provide and facilitate information sharing and incident response among public and private-sector CI entities Title I facilitates public- and private-sector sharing of information on cyberthreats and defensive measures and permits private-sector entities to monitor and operate defenses on their information systems P L 114-113 Title II Subtitle A expands the functions and modifies the responsibilities of the NCCIC and establishes additional reporting requirements     International and Cybercrime P L 114-113 Title IV requires from the Department of State an international cyberspace policy and international consultations on measures against cybercriminals It also broadens cybercrime penalties to cover specified offenses occurring outside U S territory R D P L 113-274 requires a multiagency strategic plan for cybersecurity R D and specifies areas of research for NSF Workforce P L 113-246 requires an assessment by DHS of its cybersecurity workforce and development of a workforce strategy P L 113-274 provides statutory authority for an existing NSF scholarship and recruitment program to build the federal cybersecurity workforce as well as competitions and a study of existing education and certification programs P L 113-277 provides additional DHS hiring and compensation authorities and requires a DHS assessment of workforce needs P L 114-113 Title III requires the Office of Personnel Management OPM to establish and implement an employment-code structure for federal cybersecurity personnel and it sets reporting requirements With respect to cybercrime and data-breach notification more comprehensive legislation has been introduced in recent congresses but has not been enacted Ongoing controversies relating to Congressional Research Service 7 Cybersecurity Issues and Challenges In Brief cybercrime include the balance between providing adequate penalties and authorities on the one hand and ensuring protection of privacy and civil liberties on the other for more information see CRS Report R44481 Encryption and the “Going Dark” Debate by Kristin Finklea CRS Report R44036 Stored Communications Act Reform of the Electronic Communications Privacy Act ECPA by Richard M Thompson II and Jared P Cole With respect to data-breach notification much of the debate involves how best to harmonize federal and state standards and what precautions and responses should be required from organizations holding sensitive information such as financial or personal data of customers see CRS Report R44326 Data Security and Breach Notification Legislation Selected Legal Issues by Alissa M Dolan Debate about the cybersecurity of the Internet of Things involves a broad range of issues that vary among sectors and applications see CRS Report R44227 The Internet of Things Frequently Asked Questions by Eric A Fischer Other legislation with more limited cybersecurity provisions has also been enacted in the 114th Congress Notably the annual defense reauthorization act P L 114-92 contains cybersecurity provisions relating to DOD Altogether more than 150 bills have been introduced in the 114th Congress that would address various cybersecurity issues with more than a dozen receiving committee or floor action For two of the issues discussed above—data-breach notification and revision of cybercrime laws—in addition to the bills that have been introduced the Obama Administration has also released legislative proposals Executive Branch Actions Some notable actions have been taken by the Obama Administration during the 114th Congress Some of the provisions in the enacted legislation provided statutory authority for programs or activities previously established through executive action In addition to the NCCIC P L 113282 examples include the Scholarship for Service program and the NIST cybersecurity framework process P L 113-274 as well as the EINSTEIN intrusion-protection program for federal agencies P L 114-113 The Administration has also taken steps to implement enacted provisions Additional actions include the following    Executive Order 13691 set up mechanisms to promote the widespread use of information sharing and analysis organizations and the development of standards for their establishment and operation Subsequent to significant data breaches such as the 2015 exfiltration of records from the Office of Personnel Management see CRS Report R44111 Cyber Intrusion into U S Office of Personnel Management In Brief coordinated by Kristin Finklea and other concerns the Administration announced a cybersecurity national action plan to implement strategies to enhance U S cybersecurity nationwide Initiatives in the plan include a proposed revolving fund for modernizing federal IT see H R 4897 and H R 5792 and the appointment of a federal chief information security officer among other actions Presidential Policy Directive 41 describes how the federal government will respond to cybersecurity incidents affecting government and private-sector entities including principles kinds of response a framework of roles and responsibilities and coordination Congressional Research Service 8 Cybersecurity Issues and Challenges In Brief Long-Term Challenges The legislative and executive-branch actions discussed above are largely designed to address several well-established near-term needs in cybersecurity preventing cyber-based disasters and espionage reducing impacts of successful attacks improving inter- and intrasector collaboration clarifying federal agency roles and responsibilities and fighting cybercrime However those needs exist in the context of more difficult long-term challenges relating to design incentives consensus and environment DICE Design Experts often say that effective security needs to be an integral part of ICT design Yet developers have traditionally focused more on features than security for economic reasons Also many future security needs cannot be predicted posing a difficult challenge for designers Incentives The structure of economic incentives for cybersecurity has been called distorted or even perverse Cybercrime is regarded as cheap profitable and comparatively safe for the criminals In contrast cybersecurity can be expensive is by its nature imperfect and the economic returns on investments are often unsure Consensus Cybersecurity means different things to different stakeholders often with little common agreement on meaning implementation and risks Substantial cultural impediments to consensus also exist not only between sectors but within sectors and even within organizations Traditional approaches to security may be insufficient in the hyperconnected environment of cyberspace but consensus on alternatives has proven elusive Environment Cyberspace has been called the fastest evolving technology space in human history both in scale and properties New and emerging properties and applications—especially social media mobile computing big data cloud computing and the Internet of Things—further complicate the evolving threat environment but they can also pose potential opportunities for improving cybersecurity for example through the economies of scale provided by cloud computing and big data analytics Legislation and executive actions in the 114th and future Congresses could have significant impacts on those challenges For example cybersecurity R D may affect the design of ICT cybercrime penalties may influence the structure of incentives the NIST framework may facilitate achievement of a consensus on cybersecurity and federal initiatives in cloud computing and other new components of cyberspace may help shape the evolution of cybersecurity Author Contact Information Eric A Fischer Senior Specialist in Science and Technology efischer@crs loc gov 7-7071 Congressional Research Service 9