Message-Id: <9302041043.AA01571@mv.MV.COM>
Date:    Thu, 04 Feb 93 00:39 CST
To: TK0JUT1@NIU.BITNET
From: Cu-Digest (tk0jut2@mvs.cso.niu.edu)              <TK0JUT2%NIU.BITNET@UICVM.UIC.EDU>
Subject: Cu Digest, #5.10


Computer underground Digest    Wed Feb 3, 1993   Volume 5 : Issue 10
                           ISSN  1004-042X

       Editors: Jim Thomas and Gordon Meyer (TK0JUT2@NIU.BITNET)
       Archivist: Brendan Kehoe
       Shadow-Archivists: Dan Carosone / Paul Southworth
                          Ralph Sims / Jyrki Kuoppala
       Copy Editor: Etaion Shrdlu, Junoir

CONTENTS, #5.10 (Feb 3, 1993)
File 1--Steve Jackson Games Trial Summary
File 2--More Background on SJG Trial
File 3--Steve Jackson Games case (Day 1)
File 4--Steve Jackson Games Update 1/28/93 Day 2)
File 5--Houston Chron's View of Abernathy Trial (Reprint)
File 6--the most wonderful thing happened at the trial
File 7--Cell-phone encryption and tapping
File 8--Clever Tactics Against Piracy
File 9--Rusty and Edie's BBS raided by FBI

Cu-Digest is a weekly electronic journal/newsletter. Subscriptions are
available at no cost from tk0jut2@mvs.cso.niu.edu. The editors may be
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Jim Thomas, Department of Sociology, NIU, DeKalb, IL 60115.

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----------------------------------------------------------------------

Date: Sat, 30 Jan 93 22:01:33 CST
From: CuD Moderators <tk0jut2@mvs.cso.niu.edu>
Subject: File 1--Steve Jackson Games Trial Summary

The Steve Jackson Games federal trial ended last Thursday in U.S.
District Court in Austin.  Participants are now waiting for Judge Sam
Sparks' decision.  For those not familiar with the case, here's a
summary excerpted from EFFector Online #1.04 (May 1, 1991).

    On March 1, 1990, the United States Secret Service nearly
    destroyed Steve Jackson Games (SJG), an award-winning publishing
    business in Austin, Texas.

    In an early morning raid with an unlawful and unconstitutional
    warrant, agents of the Secret Service conducted a search of the
    SJG office.  When they left they took a manuscript being prepared
    for publication, private electronic mail, and several computers,
    including the hardware and software of the SJG Computer Bulletin
    Board System.  Yet Jackson and his business were not only
    innocent of any crime, but never suspects in the first place.
    The raid had been staged on the unfounded suspicion that
    somewhere in Jackson's office there "might be" a document
    compromising the security of the 911 telephone system.

    In the months that followed, Jackson saw the business he had
    built up over many years dragged to the edge of bankruptcy. SJG
    was a successful and prestigious publisher of books and other
    materials used in adventure role-playing games.  Jackson also
    operated a computer bulletin board system (BBS) to communicate
    with his customers and writers and obtain feedback and
    suggestions on new gaming ideas.  The bulletin board was also the
    repository of private electronic mail belonging to several of its
    users.  This private mail was seized in the raid.  Despite
    repeated requests for the return of his manuscripts and
    equipment, the Secret Service has refused to comply fully.

    Today, more than a year after that raid, The Electronic Frontier
    Foundation, acting with SJG owner Steve Jackson, has filed a
    precedent setting civil suit against the United States Secret
    Service, Secret Service Agents Timothy Foley and Barbara Golden,
    Assistant United States Attorney William Cook, and Henry
    Kluepfel.

    "This is the most important case brought to date," said EFF
    general counsel Mike Godwin, "to vindicate the Constitutional
    rights of the users of computer-based communications technology.
    It will establish the Constitutional dimension of electronic
    expression.  It also will be one of the first cases that invokes
    the Electronic Communications and Privacy Act as a shield and not
    as a sword -- an act that guarantees users of this digital medium
    the same privacy protections enjoyed by those who use the
    telephone and the U.S. Mail."

------------------------------

Date: Wed, 20 Jan 1993 04:26:54 GMT
From: knight@eff.org (Craig Neidorf)
Subject: File 2--More Background on SJG Trial

     Today, January 19, 1993 was to be the first day in the trial of
Steve Jackson Games, et al. v. United States Secret Service.  Because
of predictable courtroom legal games, it has been delayed, but I
wanted to remind you all of some of the history behind it.

     Three years ago in 1990, January 19 was a Friday.  It was 4 days
after AT&T shut down for 9 hours during Martin Luther King's birthday,
and with reference to its significance to the SJGames proceedings, it
was the day the USSS served a Federal search warrant at the Zeta Beta
Tau fraternity house at the University of Missouri-Columbia.  I was
the intended and actual victim as Special Agents Tim Foley and Barbara
Golden, accompanied by Reed Newlin (Southwestern Bell security), and
officers from the University police and the University's
administrative office tore through my room with a legal license
written so broad that they could have walked off with tv, vcr, and
refrigerator.

     Desperately searching for traces of the public 911 information
and copies of Phrack Magazine, the SS came up empty, but not before
they had completely harassed and intimidated me.

     As the raid began, the University police physically restrained me
even though I made no attempt to stop them nor did they have any
reason to believe I would respond violently.  I asked to see their
warrant and they went inside.

     Unlike other USSS raids in 1990 there were no guns were drawn...
but I suppose that the presence of some 30+ witnesses cramming the
halls watching them, probably helped the agents keep it holstered as
well.

     Eventually, I was allowed to seat myself on the floor outside my
room where I could partially see and hear what the agents were doing
and saying (diagram of my room is at end of posting).

     They went right to work, starting with jotting down the serial
numbers of every electrical device in the room to check and see if it
was stolen property.  I wasn't worried about that.

     All of my school books and notebooks for class were checked for
illegal information.

     After noticing a book about law schools on my shelf, the agents
had themselves a good laugh about how I would never have that option
when they were through with me.

     Agent Foley was prepared to remove my entire audio compact disc
collection as evidence (of what I have no idea), until Agent Golden
informed him that I could not use them in my Apple IIc 5 1/4 inch
floppy drive (instead she told him I could have used them in a 3 1/2
inch drive).

     Copies of the Phrack subscriber list were taken along with a
notebook containing newspaper clippings about Robert Morris and other
noteworthy people and incidents relating to computers.  The SS decided
that reading the Wall Street Journal and saving some articles was at
the least suspicious, if not a felony.  (Among hundreds of other names
and Internet addresses, the subscriber list contained an entry for an
individual who was an employee for Steve Jackson Games.)

     And then the telephone rang...

     I began to get up when the police forced me back down.  Agent
Foley noticed the commotion and remarked "They'll call back!"  And
that is when the answering machine clicked on.  The agents chuckled
since they knew they were about to hear a private message being
delivered to me.  It was like they were wiretapping without a warrant.
The caller didn't identify himself.  He didn't need to.  It was my
co-editor, desperately trying to find out what was happening and
letting me know his intention to drive to Columbia that evening.

     After the ceiling tiles had been lifted, the furniture moved away
from the walls, the mattress flipped, and the carpet pulled up, the
agents decided to leave (believe it or not they completely ignored the
bottle of Barcardi that was sitting in there).

     As I plead with them not to take my Apple computer, Agent Foley
declined to speak with me unless I was Mirandized again.  I decided a
Q&A session would be inappropriate at this time so I declined.  But
before he left, Foley informed me that I was not under arrest, but I
was going to jail for violating the Computer Fraud & Abuse Act of
1986, for the illegal Interstate Transportation of Stolen Property,
and for Wire Fraud.

     On February 6, 1990 (18 days later) I was indicted.

     As most of you should be familiar with, the First
Amendment/intellectual property law battle concerning Phrack's
publication of the public 911 information ended with the government
dropping the case after 7 months of putting me through hell and 5 days
in Federal court in Chicago.

     The legal battle that followed cost me over $109,000 before it
was completely over.  My family and I are still making payments on a
monthly basis and we are far from finished.

 ++++++++++
     Diagram is not to scale (i.e., my room was really tiny):


       ____________________________________  WINDOW  ________
      |           |      |                                   |
      s  dresser  |      |              bed                  |
      h           |      |                                   |
      e __________|      |___________________________________|
      l desk  |                                       _______|
      v w/    |                                      |night  |<--phone
      e Apple | chair                                |table  |<--ans.
      s comp. |                                      |_______| machine
      |_______|                           _____     _________|
      s stand |                          |  t  |   |         |
      h for   |                          |  a  |   |         |
      e tv/vcr|                          |  b  |   |         |
      l refrig|                          |  l  |   |  sofa   |
      v_______|                          |  e  |   |         |
      e                                  |_____|   |         |
      s                                            |_________|
      |                                                      |
      |             ______  CLOSET  _________  CLOSET  ______|
      |            |                                         |
      |            |                                         |
      |            |                                         |
      |            |                                         |
      |            |                                         |
      |            |                                         |
      |__  DOOR  __|_________________________________________|

      H A L L W A Y  of fraternity house

------------------------------

Date: Wed, 27 Jan 93 12:49:07 EST
From: Mike Godwin <mnemonic@EFF.ORG>
Subject: File 3--Steve Jackson Games case (Day 1)

EFF Staff Attorney Shari Steele writes the following from Austin, Texas.

From ssteele Tue Jan 26 18:59:17 1993
Date--Tue, 26 Jan 1993 18:58:54 -0500
To--eff-board, eff-staff
From--ssteele (Shari Steele)

The Steve Jackson Games case finally got underway a little after 1:00
pm today.  There were settlement efforts up until the end, but it
turned out the attorneys for the government could not get approval
from DC for the terms necessary.  Jim George and Pete Kennedy did a
terrific job of representing our plaintiffs in the case.  First they
sequestered all witnesses so they couldn't hear each others' stories
in attempts to make them match.  Then they called Tim Foley (Secret
Service) as the first witness.  They asked him lots of questions about
his knowledge at the time of the raid.  He testified that he did not
know whether Phrack, with the evil E-911 document, had been sent to
SJG.  He also said that he knew that e-mail was on the menu of the
BBS, implying that there was e-mail on the system at the time of the
seizure (although he denied actually knowing if there was e-mail on
the system.  He denied ever making the statement that GURPS Cyberpunk
was a handbook for computer crime.  He wouldn't give Steve copies of
anything from the machine that ran the BBS because he was afraid it
might have been "booby-trapped."  He also didn't know Congress had
passed any laws giving special protection during searches to
publishers.

They next called Larry Coutorie, police officer at the University of
Texas.  The original affidavit filed by Foley to support the search
warrant stated that Coutorie provided the Secret Service with
Blankenship's (SJG employee suspected of evil-doing) address and place
of business.  Coutorie insisted that he didn't remember doing that,
and agreed with Pete Kennedy as he proved that he couldn't have known
anything about Blankenship to pass on.  It was a good moment!

Barbara Golden, Secret Service in charge of search on-site (Foley was
not on-site at the time of the search) was next called.  She started
out by admitting that she didn't know anything about computers -- that
she had telco people conducting the search under her supervision.  She
also didn't know there was a special law for publishers regarding
searches.  She was the one who decided to take the entire BBS, but she
didn't even check to see what the system contained.  Once she
completed the inventory of what was taken, she was no longer involved
with the case.

Steve Jackson was called next.  He gave a demo of the BBS as it was
returned to him by the Secret Service that the judge seemed to really
enjoy.  He testified that the Secret Service took 3 computers (1 was
completely disassembled - they took the parts), 2 hard disks, and more
than 300 floppies.  Steve's testimony will continue tomorrow morning.

All in all, I think the trial is going quite well.  The judge has a
very dry sense of humor and is very down-to-earth -- he's left his
robe unzipped the whole trial.  He's not a technoid, but he seems to
be trying to understand.  I'll report again tomorrow.  Shari

------------------------------

From: Mike Godwin <mnemonic@EFF.ORG>
Subject: File 4--Steve Jackson Games Update 1/28/93 Day 2)
Date: Thu, 28 Jan 93 0:15:02 EST

Day Two of the Steve Jackson Games trial, from
Shari Steele.

Hi everyone.

Well, day two of the Steve Jackson Games trial was a long one -- the
judge heard plaintiffs' case from 8:30 a.m. until 6:30 p.m.  By the
end of the day, the plaintiffs had finished.

The day started off with Steve Jackson back on the stand.  Steve
talked about how all copies of the slated-to-be-released-soon fantasy
game GURPS Cyberpunk had been seized.  He went to the Secret Service
office in Austin the next day with a box of formatted floppies to copy
all of the seized disks, accompanied by a local attorney.  When he
arrived, Agent Foley set the ground rules.  Steve would only be
permitted to copy files from the one computer that had been sitting on
Loyd Blankenship's desk (which did not contain the BBS).  He was not
permitted to physically touch the computer.  He was to state which
files he wanted to copy, and Secret Service agents would read the text
of the files first and then determine if he could have a copy.
Sitting down next to an agent at the computer, Steve asked for a
directory listing to determine which files to request.  The agent did
not know how to call up a directory list.  (For those of you
unfamiliar with Cc: eff-austin-directors@tic.com, these groups@tic.com
DOS, this is VERY BASIC stuff.)

Steve further testified that agents reading the files made derogatory
comments.  (At one point, reading a file from GURPS Cyberpunk that
Steve had requested to copy, Agent Foley asked if Steve realized he
was writing a handbook for computer crime.)  After less than two
hours, and with only nine files out of several hundred copied, Agent
Foley called an end to the copying.  One week later, Steve laid off
eight out of his 18 employees.  As Steve described, this whole
incident has "made me grouchier, angrier and harder to get along
with."  The Secret Service never told him why they were investigating
him.  If they had asked, he would have given them access to the
materials they wanted.

Cross examination on Steve revealed that SJG had had two bad years
financially before the Secret Service raid -- in fact, Steve admitted
about looking into chapter 11 bankruptcy at the end of 1989.  In
addition, there was evidence that GURPS Cyberpunk was not going to
make deadline days before the raid took place.  The defense then tried
to imply that the company, which made profits in 1991 and 1992, may
have been *helped* by the publicity of the raid.  The judge did not
seem to buy it.

The three other plaintiffs were each called in turn.  They each
testified about personal e-mail that had been deleted from the system
and how they had expected their communications to be as private as
telephone calls.  They described fearing the Secret Service would
investigate them personally, since there was no comforting explanation
for why the raid took place.  One plaintiff told how he never could
solicit feedback on a manuscript he had written for SJG, since
feedback was generally given on the seized BBS.

The next witness called was Wayne Bell, the programmer who developed
the WWIV software that ran the BBS.  Wayne testified that he looked at
the backup disk Steve had made when the files were returned from the
Secret Service.  According to that file, all electronic mail had been
deleted from the system.  Some of it, at least, had been deleted on
March 20, 1993 (almost 3 weeks after the Secret Service had seized the
computer), since that was the last day the mail file had been
accessed.  The mail file itself had not been deleted, and some
fragments of files could be recovered using Norton's utilities.  These
facts indicated that the mail had been deleted one message at a time
after it had been displayed on a user's screen, implying that the
Secret Service had read all of the mail on the system.  This testimony
was very technical, and I'm not sure the judge really understood what
was going on.

Our old friend Henry Kluepfel, Director of Network Security Technology
at Belcore, was next to take the stand.  He advanced a new theory.
The application for the search warrant contained facts supplied in
large part by Hank.  Yet the facts of the case indicated that the BBS
running out of Loyd Blankenship's home, called the Phoenix Project,
was the one that contained the evil 911 document, not the Illuminati
BBS running out of SJG.
 Hank testified that after February 7, he couldn't figure out where
the Phoenix Project resided -- there was no answer at its old number.
Since Loyd Blankenship also had sysop privileges at the Illuminati
BBS, and both BBSs ran on the same software (WWIV), Hank concluded
that it was possible that Illuminati was actually the Phoenix Project,
or that the Phoenix Project BBS was hidden behind a door on
Illuminati.  Hank testified that it was quite common to hide BBSs
within other BBSs. (?)  Anyway, during cross, Pete Kennedy asked how
many users the two BBSs had in common according to the user lists Hank
had printed out from both boards.  Loyd was the only mutual user!
Hank also went into a lengthy (and boring) description of an evil
password decryption scheme Erik Bloodaxe and Loyd were plotting on the
Phoenix Project.  (BTW, Hank's handle during his investigation was
rot.doc.)

Next up was William Cook, retired US Attorney out of Chicago.
Cook's testimony was the most helpful of the day.  He put together
the warrant, and claimed the evil E-911 document was worth the same
$79,000 that was shot down in Craig Neidorf's trial.  So Cook got to
go through a bit of the expenditure breakdown, until the judge put an
end to it and warned Pete Kennedy to move on.  Cook testified that he
did not know SJG was a publisher and had made no efforts to determine
what type of a business it was.  He did not advise the Secret Service
of the Privacy Protection Act, which protects publishers from having
their works-in-progress seized.  He didn't advise the SS that there
was e-mail involved.  And he never advised the SS of the wiretap
statute.  He next said two things that I found extremely interesting.
First, he told of the Computer Emergency Response Team (C.E.R.T.), an
arm of the defense department that is "responsible for policing the
Internet."  Gulp!  (They apparently were the group that visited Craig
in Missouri.)  The other interesting thing to me was, when Pete
Kennedy said, "Isn't it true that no charges have been brought against
Loyd Blankenship?", Cook replied, "There is still an ongoing
investigation.  No charges have yet been filed."  They don't usually
admit that stuff!  One victorious moment worth mentioning:  Cook said
that if the Secret Service had been told that SJG was a publishing
company, they should have ceased doing the search.  Yesterday we saw
part of a homemade video courtesy of the SS themselves that clearly
had an SJG employee telling an SS agent that they were a publishing
company.  Cook also interpreted ECPA (Electronic Communications
Privacy Act) as not applying here, since these were stored
communications, not in transit.  The judge made a big deal of asking
him if this conclusion of unread e-mail not being in transit was his
own interpretation of the statute, or if he was getting it from
somewhere.  Cook admitted it was his own interpretation.

The final person to testify was an accountant who explained why SJG is
seeking over $2 million in damages and Steve Jackson is seeking over
$150,000 in lost royalties.

Tomorrow . . . the government begins its case.
Shari

------------------------------

Date: Sat, 30 Jan 93 22:41:33 CST
From: CuD Moderators <tk0jut2@mvs.cso.niu.edu>
Subject: File 5--Houston Chron's View of Abernathy Trial (Reprint)

(Reposted from: TELECOM Digest Fri, 29 Jan 93 Volume 13 : Issue 51)

From-- pacoid@wixer.cactus.org (Paco Xander Nathan)
Subject-- Steve Jackson Games - Day 2
Organization-- Houston Chronicle
Date-- Fri, 29 Jan 1993 06--59--06 GMT

[Moderator's Note: This is the second part in a group of messages
received here discussing the trial. A third part will be published
later today, and followups will appear as they are recieved.  PAT]

Steve Jackson Games/Secret Service Trial -- Day Two

By JOE ABERNATHY
Copyright 1993, Houston Chronicle

AUSTIN -- A young woman read aloud a deeply personal friendship
letter Wednesday in a federal civil lawsuit intended to establish the
human dimension and constitutional guarantees of electronic assembly
and communication.

Testimony indicated that the letter read by Elizabeth Cayce-McCoy
previously had been seized, printed and reviewed by the Secret
Service.

Her correspondence was among 162 undelivered personal letters
testimony indicated were taken by the government in March 1990 during
a raid on Steve JaCkson Games, which ran an electronic bulletin board
system as a service to its customers.

Attorneys for the Austin game publisher contend that the seizure of
the bulletin board represents a violation of the Electronic
Communications Privacy Act, which is based on Fourth Amendment
protections against unreasonable search and seizure.

"Because you bring such joy to my friend Walter's life, and also
because I liked you when I met you, though I wish I could have seen
your lovely face a little more, I'll send you an autographed copy of
Bestiary," said McCoy, reading in part from a letter penned by Steffan
O'Sullivan, the author of the GURPS Bestiary, a fantasy treatise on
mythical creatures large and small.

Although the correspondence entered the public record upon McCoy's
reading, the Chronicle obtained explicit permission from the
principles before excerpting from it.

The electronic mail was contained on the game publisher's public
bulletin board system, Illuminati, which allowed game-players, authors
and others to exchange public and personal documents. After agents
seized the BBS during a raid staged as part of a nationwide crackdown
on computer crime, Secret Service analysts reviewed, printed and
deleted the 162 pieces of undelivered mail, testimony indicated.

When the BBS computer was returned to its owner several months later,
a computer expert was able to resurrect many of the deleted
communications, including McCoy's friendship letter.

"I never thought anyone would read my mail," she testified. "I was
very shocked and embarrassed.

"When I told my father that the Secret Service had taken the Steve
Jackson bulletin board for some reason, he became very upset. He
thought that I had been linked to some computer crime investigation,
and that now our computers would be taken."

O'Sullivan, who is a free-lance game writer employed by Steve
Jackson, followed McCoy to the stand, where he testified that agents
intercepted -- via the Illuminati seizure -- a critical piece of
electronic mail seeking to establish when a quarterly royalty check
would arrive.

"That letter never arrived, and I had to borrow money to pay the
rent," he said.

No charges were ever filed in connection with the raid on Steve
Jackson Games or the simultaneous raid of the Austin home of Jackson
employee Loyd Blankenship, whose reputed membership in the Legion of
Doom hackers' group triggered the raids.

Plaintiffs contend that the government's search-and-seizure policies
have cast a chill over a constitutionally protected form of public
assembly carried out on bulletin boards, which serve as community
centers often used by hundreds of people. More than 300 people were
denied use of Jackson's bulletin board, called Illuminati, for several
months after the raid, and documents filed with the court claim that a
broader, continuing chill has been cast over the online community at
large.

The lawsuit against the Secret Service seeks to establish that the
Electronic Communications Privacy Act guarantees the privacy of
electronic mail. If U.S. District Court Judge Sam Sparks accepts this
contention, it would become necessary for the government to obtain
warrants for each caller to a bulletin board before seizing it.

The Justice Department contends that users of electronic mail do not
have a reasonable expectation to privacy, because they are voluntarily
"disclosing" their mail to a third party -- the owner of the bulletin
board system.

"We weren't going to intercept electronic mail. We were going to
access stored information," said William J. Cook, a former assistant
U.S. Attorney in Chicago who wrote the affidavit for the search
warrant used in the Steve Jackson raid.

The Justice Department attorneys did not substantially challenge
testimony by any of the several witnesses who were denied use of
Illuminati. They did, however, seek to prevent those witnesses from
testifying -- by conceding their interests -- after Cayce's compelling
appearance led off the series of witnesses.

Most of the Justice Department's energies were directed toward
countering damage claims made by Steve Jackson, whose testimony opened
the second day of the trial. Most of the day's testimony was devoted
to a complex give-and-take on accounting issues. Some $2 million is
being sought in damages.

Justice sought to counter the widely repeated assertion that Steve
Jackson Games was nearly put out of business by the raid by showing
that the company was already struggling financially when the raid was
conducted. An accountant called by the plaintiffs countered that all
of Jackson's financial problems had been corrected by a reorganization
in late 1989.

------------------------------

Date: Thu, 28 Jan 1993 19:09:08 GMT

From: ssteele (Shari Steele)
Subject: File 6--the most wonderful thing happened at the trial

I really don't have much time to write, but I just witnessed one of
the most dramatic courtroom events.  The judge in the Steve Jackson
Games trial just spent 15 minutes straight reprimanding Agent Timothy
Foley of the United States Secret Service for the behavior of the
United States regarding the raid and subsequent investigation of Steve
Jackson Games.  He asked Foley,  in random order (some of this is
quotes, some is paraphrasing because I couldn't write fast enough):

How long would it have taken you to find out what type of business
Steve Jackson Games does?  One hour?  In any investigation prior to
March 1st (the day of the raid) was there any evidence that implicated
Steve Jackson or Steve Jackson Games, other than Blankenship's
presence?  You had a request from the owner to give the computers and
disks back.  You knew a lawyer was called.  Why couldn't a copy of the
information contained on the disks be given within a matter of days?
How long would it have taken to copy all disks?  24 hours?  Who
indicated that Steve Jackson was running some kind of illegal
activity?  Since the equipment was not accessed at the Secret Service
office in Chicago after March 27, 1990, why wasn't the equipment
released on March 28th?  Did you or anyone else do any investigation
after March 1st into the nature of Mr. Jackson and his business?  You
say that Coutorie told you it was a game company.  You had the owner
standing right in front of you on March 2nd.  Is it your testimony
that the first time that you realized that he was a publisher and had
business records on the machine was when this suit was filed?

The government was so shaken, they rested their case, never even
calling Barbara Golden or any of their other witnesses to the stand.
Closing arguments are set for this afternoon.  It truly was a day that
every lawyer dreams about.  The judge told the Secret Service that
they had been very wrong.  I'll try to give a full report later.
Shari

------------------------------

Date: Sat, 30 Jan 93 13:19:38 +0000
From: "G.R.L. Walker" <grlw1@CUS.CAM.AC.UK>
Subject: File 7--Cell-phone encryption and tapping

        Transcript of an article in New Scientist, 30 Jan 1993

Spymasters fear bug-proof cellphones
(Barry Fox, Bahrain)

One of the jewels of Europe's electronics industry, the new
all-digital cellular phone system GSM, may be blocked from export to
other countries around the world by Britain's Department of Trade and
Industry. The DTI objects to the exports because it believes the
encryption system that GSM uses to code its messages is too good.
Sources say this is because the security services and military
establishment in Britain and the US fear they will no longer be able
[to] eavesdrop on telephone conversations. Few people believe GSM
needs such powerful encryption, but the makers of GSM complain that
the DTI has woken to the problem five years too late.

At MECOM 93, a conference on developing Arab communications held in
Bahrain last week, many Gulf and Middle Eastern countries sought
tenders for GSM systems, but the companies selling them could not
agree terms without the go-ahead of the DTI. Qatar and the United Arab
Emirates want to be first with GSM in the Gulf, with Bahrain next. GSM
manufacturers are worried that the business will be lost to rival
digital systems already on offer from the US and Japan.

The Finnish electronics company Nokia, which is tendering for
Bahrain's GSM contract, says "There is no logic. We don't know what is
happening or why." A DTI spokeswoman would only say that exports
outside Europe would need a licence and each case would be treated on
its own merits.

The GSM system was developed in the mid-1980s by the Groupe Special
Mobile, a consortium of European manufacturers and telecommunications
authorities. The technology was supported by European Commission and
the GSM standard has now been agreed officially by 27 operators in 18
European
 countries.

GSM was designed to allow business travellers to use the same
portable phone anywhere in Europe and be billed back home. This is
impossible with the existing cellphone services because different
countries use different analogue technology.

The plan was for GSM to be in use across Europe by 1991, but the
existing analogue services have been too successful. No cellphone
operator wants to invest in a second network when the first is still
making profits. So GSM manufacturers have been offering the technology
for export.

Whereas all existing cellular phone systems transmit speech as
analogue waves, GSM converts speech into digital code. Foreseeing that
users would want secure communications, the GSM designers built an
encryption system called A5 into the standard; it is similar to the US
government's Data Encryption Standard. British Telecom was involved in
developing A5, so the British government has special rights to control
its use.

To crack the DES and A5 codes needs huge amounts of computer power.
This is what alarmed the FBI in the US, which wants to be able to
listen in to criminals who are using mobile phones. It also alarmed
GCHQ, the British government's listening post at Cheltenham which
monitors radio traffic round the world using satellites and sensitive
ground-based receivers.

The DTI has now asked for the GSM standard to be changed, either by
watering down the encryption system, or by removing encryption
altogether. This means that GSM manufacturers must redesign their
microchips. But they cannot start until a new standard is set and the
earliest hope of that is May.

Any change will inevitably lead to two different GSM standards, so
robbing GSM of its major selling point -- freedom to roam between
countries with the same phone. Manufacturing costs will also rise as
new chips are put into production.

------------------------------

Date: Wed, 3 Feb 1993 14:50:24 GMT
From: kadie@EFF.ORG(Carl M. Kadie)
Subject: File 8--Clever Tactics Against Piracy

A repost from: : comp-academic-freedom-talk-request@EFF.ORG

Date--Fri, 29 Jan 93 14:16:11 +0100
From--Jay Rolls <jrolls@frg.bbn.com>
Subject--Clever Tactics Against Piracy

I thought the info-mac readers would find this article
interesting..... Jay Rolls, Stuttgart, Germany  <jrolls@bbn.com>

  ((sent to RISKS by gio@DARPA.MIL (Gio Wiederhold) via many others))

COMPUTER CHEATS TAKE CADSOFT'S BAIT

Employees of IBM, Philips, the German federal interior ministry and
the federal office for the protection of the constitution are among
those who unwittingly 'turned themselves in' when a German computer
software company resorted to an undercover strategy to find out who
was using illegal copies of one of its programs.

Hundreds of customers accepted Cadsoft's offer of a free demonstration
program that, unknown to them, searched their computer hard disks for
illegal copies.  Where the search was successful, a message appeared
on the monitor screen inviting the customer to print out and return a
voucher for a free handbook of the latest version of the program.
However, instead of a handbook the users received a letter from the
Bavarian-based software company's lawyers.

Since the demonstration program was distributed last June about 400
people have returned the voucher, which contained coded information
about the type of computer and the version of the illegally copied
Cadsoft program being used.  Cadsoft is now seeking damages of at
least DM6,000 (ECU3,06E2) each from the illegal users.

Cadsoft's tactics are justified by manager Rudolf Hofer as a necessary
defence against pirate copying. The company had experienced a 30% drop
since 1991 in sales of its successful Eagle design program, which
retails at DM2,998. In contrast, demand for a DM25 demo version, which
Cadsoft offered with the handbook of the full version, had jumped,
indicating that people were acquiring the program from other sources.

Although Cadsoft devised its plan with the help of lawyers, doubts
have been raised about the legal acceptability of this type of
computer detective work.  In the case of government offices there is
concern about data protection and official secrets. The search program
may also have had side-effects that caused other files to be damaged
or lost.  Cadsoft is therefore preparing itself for what could be a
long legal battle with some customers.  So far it has reached
out-of-court agreement with only about a quarter of those who
incriminated themselves.

------------------------------

Date: Tue, 2 Feb 1993 18:09:59 GMT
From: ssteele@eff.org (Shari Steele)
Subject: File 9--Rusty and Edie's BBS raided by FBI

((Comp.org.eff.talk repost))

Hi everyone. I just received this wire from a Netfriend.  I am so
disappointed -- Rusty and Edie's was one of the most popular BBSs in
the country.  It was one of the few boards that turned a hefty profit
as a business.  I'm disappointed that 1) the board may have been
engaging in illegal activities, 2) one of the BBS community's real
success stories has been seized (and may not have been such a success
story after all), and 3) the SPA is doing a lot of damage to the
reputation of BBSs through its coordinated witch hunts of late.  I've
tried calling the folks at Rusty and Edie's all day to see if I can
get their side of the story, but the board line just rings and rings,
and the voice line has been constantly busy.  I'll keep you posted as
I learn more.  If anyone out there knows more, please pass that on to
me, too.  Thanks. Shari


 WASHINGTON--(BUSINESS WIRE)--The Federation [sic] Bureau of
Investigation on Saturday, Jan. 30, 1993, raided "Rusty & Edie's," a
computer bulletin board located in Boardman, [sic -- it's really in
Youngstown, I think] Ohio, which has allegedly been illegally
distributing copyrighted software programs.

 Seized in the raid on the Rusty & Edie's bulletin board were
computers, hard disk drives and telecommunications equipment, as well
as financial and subscriber records.

 For the past several months, the Software Publishers Association
("SPA") has been working with the FBI in investigating the Rusty &
Edie's bulletin board, and as part of that investigation has
downloaded numerous copyrighted business and entertainment programs
from the board.

 The SPA investigation was initiated following the receipt of
complaints from a number of SPA members that their software was being
illegally distributed on the Rusty & Edie's BBS.

 The Rusty & Edie's bulletin board was one of the largest private
bulletin boards in the country.  It had 124 nodes available to callers
and over 14,000 subscribers throughout the United States and several
foreign countries.  To date, the board has logged in excess of 3.4
million phone calls, with new calls coming in at the rate of over
4,000 per day.  It was established in 1987 and had expanded to include
over 19 gigabytes of storage housing over 100,000 files available to
subscribers for downloading.  It had paid subscribers throughout the
United States and several foreign countries, including Canada,
Luxembourg, France, Germany, Finland, the Netherlands, Spain, Sweden
and the United Kingdom.

 A computer bulletin board allows personal computer users to access a
host computer by a modem-equipped telephone to exchange information,
including messages, files, and computer programs.  The systems
operator (Sysop) is generally responsible for the operation of the
bulletin board and determines who is allowed to access the bulletin
board and under what conditions.

 For a fee of $89.00 per year, subscribers to the Rusty & Edie's
bulletin board were given access to the board's contents including
many popular copyrighted business and entertainment packages.
Subscribers could "download" or receive these files for use on their
own computers without having to pay the copyrighted owner anything for
them.

 "The SPA applauds the FBI's action today," said Ilene Rosenthal,
general counsel for the SPA.  "This shows that the FBI recognizes the
harm that theft of intellectual property causes to one of the U.S.'s
most vibrant industries. It clearly demonstrates a trend that the
government understands the seriousness of software piracy." The SPA is
actively working with the FBI in the investigation of computer
bulletin boards, and similar raids on other boards are...(??). It
clearly demonstrates a trend that the government understands the
seriousness of software piracy."  The SPA is actively working with the
FBI in the investigation expected shortly.

 Whether it's copied from a program purchased at a neighborhood
computer store or downloaded from a bulletin board thousands of miles
away, pirated software adds to the cost of computing.  According to
the SPA, in 1991, the software industry lost $1.2 billion in the U.S.
alone.  Losses internationally are several billion dollars more. "Many
people may not realize that software pirates cause prices to be
higher, in part, to make up for publisher losses from piracy,"  says
Ken Wasch, executive director of the SPA.  In addition, they ruin the
reputation of the hundreds of legitimate bulletin boards that serve an
important function for computer users."

 The Software Publishers Association is the principal trade
association of the personal computer software industry.  It's over
1,000 members represent the leading publishers in the business,
consumer and education software markets. The
SPA has offices in Washington DC, and Paris, France.
          CONTACT: Software Publishers Association, Washington
            Ilene Rosenthal, 202/452-1600 Ext. 318
            Terri Childs, 202/452-1600 Ext. 320

------------------------------

End of Computer Underground Digest #5.10
************************************