What to Expect From Surveillance Politics in 2014 (Hint: It's Not Reform)

By Chris Finan, Wired

21 December 13

ne would think that a federal judge calling an NSA program "almost Orwellian" would be a good sign for surveillance and privacy in 2014. Especially when coupled with his observation that the founding fathers would be "aghast" at the NSA's bulk warrantless collection of telephone metadata, and his view that it's therefore likely unconstitutional under the Fourth Amendment…

And even though the findings released by President Obama's surveillance review panel this week were more "a set of guidelines than a set of restrictions", the more than 40 recommendations will no doubt compel major changes to the nation's surveillance apparatus, right?

Well, hold on. None of these things necessarily signals a turning point in the debate about surveillance. If you're holding out hope for an act of political courage to end bulk surveillance and improve transparency, such as passage of the Leahy-Sensenbrenner USA Freedom Act to curb the NSA: Abandon hope, all ye whose data is indiscriminately collected here. Instead, here are some things to expect from the government, tech companies, and investors regarding surveillance and privacy this coming year.

Don't Put Your Hope in Politicians. Only Judges Can Help

Although Judge Leon sent a powerful message this week with his rejection of the government's bulk warrantless metadata collection program, 2014 is an election year. That means few lawmakers will be inclined to curtail the NSA's surveillance authority despite vigorous lobbying by privacy advocates and the tech sector.

Even though there has not been "a single instance in which analysis of the NSA's bulk metadata collection actually stopped an imminent attack, or otherwise aided the government in achieving any objective that was time-sensitive," members of Congress will not take a controversial vote on a security issue in an election year.

It doesn't matter how theoretical or marginal the security benefits are compared to the increasingly apparent constitutional and economic costs of surveillance. Look for the courts to be the only ones willing to take up the legality of indiscriminate data collection in 2014.

The Tech Sector May Not Overtly Fight Back, But It Will Use Other Tools At Its Disposal

I think it's safe to say that American tech executives are angry. And they have good reason to be: U.S. companies' association - via cooperation, coercion, or simply unwitting victimization - with government surveillance programs have cost them huge shares of the IT services market internationally.

Forrester Research has projected that the overall impact to the U.S. cloud computing industry could be as high as $180 billion, or 25% of IT service provider revenues over three years. While many companies will try to convince policymakers of the the significant costs of intrusive surveillance and the need for reform - as a group of tech execs tried to do this week in a meeting with President Obama - expect companies to take matters into their own hands.

They may not go to war with the government publicly over surveillance, but they will use regular transparency reports (about government requests for data), "warrant canary" provisions (to signal whether there have been particular law enforcement requests), and other tools to convince consumers of their commitment to data protection and transparency. In fact, these will become common.

Shareholders Will Be Fighting Back Too

It's not just company execs who are angry; company shareholders are, too. The reputational impact of surveillance has been felt by investors across the tech sector and resulted in shareholder calls for greater transparency.

The New York State Common Retirement Fund, a major institutional investor in AT&T, recently called for the company to disclose the customer information it shares with the U.S. and foreign governments, emphasizing that failure to disclose such information presents significant risk to shareholder value. Likewise, an IBM shareholder filed a lawsuit against the company last week for concealing risks to its investors about its perceived association with the NSA, as well as the company's vigorous lobbying for CISPA (a piece of legislation opposed by privacy advocates that would have given the NSA greater access to online data).

Expect more such shareholder activism in 2014 to promote transparency and timely disclosure of material risks associated with government data collection.

The Gulf Between Legacy vs. Internet Tech Will Grow

The way firms have responded to public and shareholder calls for greater transparency has exposed a widening rift between "legacy" companies such as AT&T, Verizon, and IBM, and internet ones such as Google, Yahoo, Twitter, Apple, Facebook, LinkedIn, and Microsoft.

While the internet set of companies launched a surveillance reform campaign last week with an open letter to policymakers, the legacy set has been conspicuously silent on reform and resisted calls for transparency. Fundamentally, this rift is due to the substantial share of revenue the big telecoms receive from government contracts. It's also due to the difference in business models between legacy service providers, who rely on contractual control over users, and internet service providers, who must respond to user demands for transparency and data protection - or risk losing them to competitors.

Expect this divergence to continue in 2014. It is also likely to have interesting political implications in 2014, both in terms of policy advocacy and campaign contributions.

Investors Will Put More Money Into Cloud Security and Encryption

Market research firms are already predicting significant growth in demand for cloud security and encryption products in 2014.

Both consumers and enterprises recognize that in lieu of policy reforms, they must invest in more secure architectures and services to avoid becoming unwitting targets of surveillance and theft. Yes, it's obvious, but we can definitely expect greater investment and new cloud encryption innovations to emerge this coming year in response to public and enterprise demands for stronger data protection.

Whether you're part of the surveillorati who longs to return to the pre-disclosure halcyon days, or a civil libertarian who feels its time to rein in Big Brother and require specific warrants as Madison envisioned, there will be plenty left to debate in 2014.

Just don't expect much reform.