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A Rare Glimpse Inside the Life of a Spy


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The Real Danger in a Quiet Escalation of Tensions Between China and India


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NATO Imagines Future Warfare


Innovation is a key component of readiness when it comes to future threats. NATO’s Innovation Hub recently commissioned a short story from author August Cole, asking him to draw upon his writing and imaginative abilities to create a picture of what NATO operations could be like in the year 2040. The Cipher Brief is pleased to be able to bring you 2040: KNOWN ENEMIES, with permission from NATO.

CHAMPS-ÉLYSÉES — PARIS, FRANCE

The protestors’ braying air horns reminded Alain Durand of the feel of his father’s hand squeezing his as they watched the Tour de France peloton speed by on a verdant hill outside Chambéry, half a lifetime ago. Tonight on the Champs Elysees it meant drones. It meant gas.

He carefully pushed aside two old fashioned white cloth banners — “PAX MACHINA” and “NON AUX ARMEES, NON A LA GUERRE,” written in thick red brush strokes to better see. In a field of view populated with synthetic representations of the real world, the banners were anachronistic but also enduring. They spoke to the necessary spirit of dissent in one of Europe’s more temperamental democracies, Alain thought. Yet it was time to change again: France was the last NATO member, other than the United States, to maintain conventional combat forces. The other members had already robotized.

“A matter of not just tradition but national survival,” his father, a colonel in France’s 3e Régiment de Parachutistes d’Infanterie de Marine, always insisted.

The horns stopped. The crowd of thousands hushed to better hear the whine of the oncoming Compagnies Républicaines de Sécurité riot-police crowd-control drones, a sound like a frantically played piccolo. It was a child’s sound — that was why it intimidated. The flight of a dozen drones hovered in a picket formation in front of the crowd of more than 10,000 marching along the cobbled stones toward the Arc de Triomphe. On Alain’s augmented reality glasses, the bots were bright orange dots, tagged with comments from around the world guiding him on everything from how to download apps to jam their controllers to offers of legal representation. Alain reached into his satchel and cursed, as an ad for gas mask replacement filters popped into view.

A protestor’s drone, bright yellow and the size of an espresso cup, darted past him, then returned to hover in front of his face. It was filming. He could see the live feed it broadcast on his own glasses, identifying him as the son of a senior army officer. He looked around, feeling a need to disappear in the crowd even though that was impossible. He swatted at the yellow drone, and it darted off.

Was that a Catalyst design?, he wondered. The mysterious informal global network emerged on the public stage about three years ago, fomenting dissent and countergovernment action in the virtual realm. It started with what was essentially algo-busting or AI-enabled augmented-reality pranks to make a point about excessive Chinese and American influence around the world. But in the last six months, something had changed, and they were now moving from the online to the real world, supplying not only plans for printable grenades or swarm drones but also the fabs to make them. They had never tried to operate in Europe before, or the U.S. Was this drone a sign something was changing, literally before his own eyes?

Those same eyes began to itch. He had other things to worry about for the moment.

“Juliet, I don’t have my mask,” he said to his sister. She already had hers, a translucent model with a bubble-like faceplate that made her look like a snorkeler.

“And?” she said.

“I am certain I put it in there, but …” he trailed off.

She sighed angrily, condensation briefly fogging her mask. Four years younger, his 15-year-old sister could judge him harshly. She got that from their father.

“We stay,” she said, passing him a bandana and bottle of water. “Parliament votes tomorrow. Father is already deployed. If we leave now, when will we ever stand?”

“Ok, ok,” Alain muttered. He wet the bandana and braced himself for the gas.

Drones dashed just a few feet overhead, a disorienting swirl of straining electric motors and the machines’ childlike tone. The crowd sighed all at once and then individual shouting erupted around him. A moment later his eyes began to sting. Fumbling with the bandana he quickly wrapped the wet cloth around his mouth. But, eyes now burning, he struggled to tie it around his neck. With so much gas in the air, no one without a mask would be able any more to continue watching the eruption of digital dissent. He felt Juliet’s fingers on his neck, helping secure the bandana’s knot. Hands now free, he angrily pumped his fists in the air and blindly grasped to help hold his cloth banners aloft.

JULIUS NYERERE INTERNATIONAL AIRPORT — DAR-ES-SALAAM, TANZANIA

It was so hot, when the convoy stopped at the main gate to the joint United Nations-African Union compound, that the German and Italian battle bots broke formation. The NATO task force’s hundreds of small armored wheeled and tracked machines jerked and shimmied like ants as they fought over the shade beneath the bright blue revetments — towering stacks of shipping containers reinforced with blast-foam. That left the French para forces, what NATO classified as a light-effects company due to its mostly non-robotic composition under, in the crushing heat with nowhere to go. That was fine for the French unit’s commander, Luc Durand. His men and women could handle the heat; the bots were another story.

Captain Monika Toonce hopped off one of the oversized German Jaeger crawlers and jogged over to Durand’s open scout car. The French convoy included the jeep, six-wheeled troop carriers (each carrying 12 paratroopers as well as external racks of offensive and defensive smallbots), and four mules loaded with ammunition, spare parts, and assorted spider-like fixers.

“Colonel, we are still waiting for the clear codes before the task force can enter the compound,” Toonce said. She paused to wipe sweat from her nose. “Headquarters said they sent them. But they are not yet authenticated here …”

Durand cursed. The bots would not yet be cleared for self-defense, let alone offensive use. He forced himself to ease back and put his boot up on his jeep’s wheel well, a pose he could hold for hours on a high-speed cross-desert dash or pulling security at a vital intersection. This is an old problem in a new form, he thought. This is why the French army trains to fight with or without machines. “La victoire ne se donne pas!” was the motto adopted four years ago.

Deconflicting the newly arrived German and Italian anti-armor/aircraft and counter-personnel bots with the existing UN-AU peacekeeping forces — so that they didn’t automatically attack one another — was just another form of confusion and complexity. For all the advantage the machines offered, they also brought the onset of the fog of war forward that much earlier in a conflict. Ignoring Toonce, Durand drew with his finger on the dusty screen he wore at his waist, a series of arrows to sketch out a concept. He snapped a picture of the tracings with his glasses; it was something he would write up when he got back from deployment. You never know where inspiration will come from.

“Ok, you want to ride with us then? We are heading in. The machines can handle themselves, no?” Durand said.

Toonce looked torn between waiting with the disabled bots or accompanying Durand. Her responsibility for the German armored forces was a significant one, given the expense and competition for deployment-likely slots in the Bundeswehr. There were fewer soldiers in the German army today than there were postal carriers in Bavaria. Why they kept so many of the latter and so few of the former us was not something Toonce allowed herself to weigh too deeply. She loved the army, loved her comrades and their machines.

Toonce nodded. The maintenance techs were still on the way. She was the sole German representative, and she told herself she needed to be present when the NATO task force leaders finally presented themselves.

The two soldiers were in a narrow pause, a lull — in what had been fevered fighting — that the NATO task force had taken advantage of to deploy by air from a staging area outside Nairobi.

“Good choice,” Durand said. Toonce hopped on. Durand smiled at the master sergeant in the seat next to him, who tapped the jeep’s dash twice with the sort of gentle encouragement one might give a beloved horse. The vehicle advanced on its own at the gentle command.

They proceeded inside the compound under the watching guns of a pair of stork-legged Nigerian sentry turrets, each armed with a trio of four-barreled Gatling guns mounted on the mottled-grey fuselage pod.

Serge Martelle, the para master sergeant, handed Durand a palm-sized screen, a phone that used the local civilian networks.

“Seen this, sir?” Martelle asked.

A sigh. An image appeared of Alain’s face, jaw clenched and wide eyed, in the midst of a Paris protest. Again.

“No, not now, Martelle,” Durand said. A nod and he withdrew the screen. But Durand pulled up footage on his glasses, already tagged to his own and his son’s social media accounts. The final image was a bleary-eyed and red-faced Alain holding aloft the “PAX MACHINA.” It is Bastille Day after all, isn’t it. Durand smiled as they pulled up to a Kenyan general and his staff, standing at attention.

AU-UN HEADQUARTERS — DAR-ES-SALAAM, TANZANIA

“It’s not a mystery, as such, but we are not yet certain who is supplying the rogue Tanzanian army elements, as well as other local elements. But we can ascertain that they are currently involved in a rapid-equipping cycle using established and improvised fabrication sites that …”

“It’s Catalyst,” Durand barked. “Just call it out!” It was too easy to be rude to the UN Peacekeeping Office AIs; they were atrocious. Indecisive. Burdened with a politeness programmed to appease too many sensibilities. And that accent, unattached to any country’s native tongue, is an affront, he thought.

“Colonel Durand, analysis indicates a probability of certainty of—” the machine responded, now using a careful ethereal cadence to mollify Durand.

“General Kimani, with respect, how might we begin to engage an adversary that we refuse to identify?” Durand pressed the point. If the AU UN force acknowledged an “outbreak” of Catalyst coercive technologies, it would require an escalation of military presence that neither organization wanted to endorse at this point in the crisis.

“The last twenty-seven hours have seen no fighting,” Kimani responded. “We are hoping to use this window for dialogue.” He was the senior officer of the AUMIT, or African Union Mission in Tanzania. His charge included the military aspects of the peacekeeping mission, as well as coordinating with UN and quasi-governmental conflict-resolution groups trying to cool the conflict. “Right now, we’re running a Blue Zone dialogue with the dissident Tanzanian army, UN negotiators, Front Civil, and others. An invitation was extended to Catalyst, but no response.”

Durand nodded. Why would this highly disruptive and increasingly dangerous movement join in? It had no leaders. No clear strategy. He viewed French military intelligence’s take as sound: Catalyst sought to undermine US or Chinese economic, political, and military blocs of strategic influence to enable sub-national movements of self-determination.

The Blue Zones were private virtual environments managed by UN AIs to facilitate non-confrontational negotiations with machine-speed modelling and data. Some even talked of the platform’s AIs themselves being nominated for the Nobel Peace Prize. If Kimani really believed the UN could speed that diplomatic cycle up before the rearming of the Tanzanian coup forces then there was a chance this could resolve without further violence. Durand knew him by reputation and instinctively trusted him. Then he ground his teeth. He was being too optimistic. But what were the odds some Catalyst algos weren’t already spoofing that whole thing? It happened before, in Venezuela, in ’38. They never joined these kinds of hand-holding sims.

His watch buzzed. Toonce reported the clearance codes were finally being transmitted and would be uploaded shortly. Having the NATO mech forces inside the base would make him feel better as they could be re-checked, zeroed, and synched with the UN and AU bots already in the area of operations. NATO-reinforced UN and AU patrols could begin the next morning, he hoped. Leave the conciliation and negotiation to the UN. He had his mission.

On his glasses, Durand cued up his task force’s status reports, and began watching the downloading of the clearance codes. Details mattered, even more so with machines. As a leader you had to stay on top of it. He focused on the data and half-listened as Kimani spoke for another minute. A Rwandan officer began discussing the Belgian food fab facility near the port about to be brought online.

Blasting horns brought conversation to an abrupt stop. Half of the attendees around the table jolted upright, standing and holding the conference table with white-knuckled grips as if bracing for a bodily impact. Durand remained seated and sighed. He locked eyes with Kimani, who shook his head. An attack with a warning was one you would survive, they both knew. It’s the strikes that come without any heads up that get you.

His glasses blinked, a scratching and pixelated green snow, then returned to showing the download progress of the clear codes. Stuck at seventy-six percent. Martelle was already on his notepad, ensuring the French paras inside the compound were ready for what came next. Of course they would be, he knew. That also gave him calm.

The door burst open and Toonce paused to catch her breath. She wiped dust from her mouth and began to speak.

“The clear codes were hijacked,” she said. “Catalyst payload rode the packets, but it’s not a Tanzanian Army attack. They got partially hit, too — at least their Chinese systems, from what I can tell already. One of the local groups it looks like, based on analytics. Took the task force bots and mechs down. Same with the AU and UN already deployed here. They’re trying to bring the whole country to a stop, they say, to start real negotiations.”

“How did they attack, exactly?”“They used the clear codes to target our bots’ firmware, forcing a factory reset that requires hard keys that only exist back with the civilians at the defense ministries. We, as the deployed German army, don’t even hold those. Same with the Italians. As for the Tanzanian army systems they got from the PLA, I don’t know anything for sure, but seem to be down, too.”

That might seem fortuitous, but Durand immediately looked at it another way: If Catalyst elements could wipe out the Tanzanian army’s reliance on Chinese platforms, that would be a blank slate for a new dependence on easily downloadable and fabbable Catalyst systems. Tanzania would probably acquire the Doktor anti-armor system, a simple self-firing short-barreled launcher that could be concealed in a backpack or mounted with suction-grips to a driverless vehicle, and maybe Viper launchers, a short-range 64-shot swarm weapon about the size of a concrete block that could be held and aimed by two handles or prepositioned to strike on its own.

Nearby explosions — one, two, three — rocked the room and knocked out the lights. Sounds like mortars. In the darkness, as Durand began to taste dust in the air, he conferred with Martelle about what to do next. His paras might be the only truly friendly combat-capable force in the area right now.

CHAMPS-ÉLYSÉES — PARIS, FRANCE

Wringing out the handkerchief for a third time into the café’s brown-stained sink, Alain finally had the courage to look into the cracked mirror. Black splotches beneath the edges of the glass stained the edges of the reflective surface, framing a specter’s raw, red eyes peering back from an inky cloud.

“Oof,” he sighed. The neck of his black shirt was torn, by whom he could not remember. Claw-like scratches ran along his neck from his left ear down to his opposite clavicle. The blond girl who was shot in the legs? Or was it the CRS trooper who hit him with the mace?

A gentle knock on the door. “Everything Ok?”

That was his sister.

“A moment,” he said. He wiped his face with a coarse paper towel one more time, then put his augmented reality glasses back on. He tinted the lenses light blue. “I’m coming.”

Back out into the café, he rejoined his sister. A coffee waited, and he carefully touched its side with shaking fingers. Still warm. He closed his eyes and sipped the bitter espresso, grateful for the company of his sister and the tranquility of the café. Police drones raced by every few minutes, but no police were going to stop in here. They had other concerns right now responding to the attacks on the Champs-Élysées.

AU-UN HEADQUARTERS — DAR-ES-SALAAM, TANZANIA

Through thick black smoke, one of the tall two-legged defense turrets spun its gun mounts in lazy circles like a pinwheel. It did not fire as a swarm of bird-sized winged drones flew past in a corkscrew formation toward a far corner of the compound used for medevac flights. A series of blue strobe-like flashes followed by a sound like tearing paper meant that part of the camp would no longer be usable, Durand knew.

“Whose drones?” he asked aloud, looking around for Martelle.

“TA,” Martelle shouted, meaning “Tanzanian Army.” Normally, Martelle could look up with his glasses and get a read-out of the environment, seeing detailed information on everything from bandwidth to physical objects just as if he were going shopping. But since he had been on the base network during the attack, he saw nothing except fingerprint smudges and dust.

Yet after emerging from the bunker, the French officer knew where to find his soldiers. He sprinted at a low crouch toward a dispersed arrangement of vehicles set up in defensive positions. He greeted a soldier crouched near the rear flank of an AMX-3 armored vehicle. The paratrooper had set up a camoflage brown pop-up ballistic shield and was aiming a 10-year-old portable defense weapon skyward. These double-barreled shoulder-fired kinetic and microwave weapons were not connected to the base network or even the vehicles they were carried on, and so were still able to autonomously shoot down incoming shells and drones.

“Getting started a bit earlier than we wanted,” Durand said.

“Always ready, no?” said the soldier, whose chest armor name-plate read Orbach.

Durand held up the tablet he wore at his waist, and tapped it against the soldier’s forearm-mounted screen. Between the hastily broken up meeting and this physical connection, the mission-management AIs hosted on Durand’s tablet had created a plan of action based on years of training and real-world operations led by the colonel.

“There you go, Orbach. You have everything you need? Maybe I can fire up a fab for a nice coffee for you?”

Orbach smiled and nodded.

“Now get ready,” Durand said. “Let’s get out of this mess here and go start some trouble.”

Orders given, the information would spread rapidly from soldier to soldier, vehicle to vehicle, by direct or indirect laser transmission. Reliable, tightband, and perfect for a situation like this. Somebody might intercept it, but that was true with everything, wasn’t it?

At once, half the French paras moved to their vehicles, as the other half began climbing the shipping containers. Thanks to the task force’s own orbital sensors, unaffected by the attack so far, Durand had targets. Conventional doctrine emphasized machine vs. machine engagements, but he was going to be doing something far riskier. And more important: targeting the individuals who were the contacts, or nodes, for the Catalyst technologies. There was no time to waste staying inside the protection the base afforded. The Catalyst systems were learning and improving, from the first wave of attacks. Iterative warfare required ferocious speed and more initiative than most leaders were comfortable with.

A text message from Toonce appeared on Durand’s glasses. The UN base’s network was back up. Wait. Based on the auburn-colored text and the blue triangle icon, this was a message being sent via an encrypted consumer messaging app.

“I’m printing new logic cores for the defensive bots first, then the offensive systems. We have 213,” Toonce said.

“Of course,” Durand responded, a subvocal command converted to text. “How long?”

“Six hours.”

“And if you alternate printing, say, one defensive then one offensive, so there is … balance in our capability? I will not wait for the AU forces to regenerate. There is a window here we have to take before another round of upgrades by Tanzanian Army forces, or whoever else is equipping with Catalyst systems. We are moving out now.”

He closed out the conversation. Six hours would become 12, which would become a day delaying until the machines were ready. Durand’s paras were primed to fight now. La Victoire ne se donne pas.

Inside and atop the trucks and jeeps, the soldiers began cueing up virtual representations of their targets. The drivers took manual control, the safest option at a time like this. Less than a minute later, Durand and Martell were back in the scout car, with the commander buckling on his armor. The convoy rolled forward at a walking pace toward the base’s main gate. Some of the paras cast wary glances at the glitching Nigerian defense bots, which swayed back and forth atop their stork-like legs. Other soldiers looked for the two para sniper teams protectively watching from atop the shipping containers. As the vehicles advanced, the snipers flew a quartet of Aigle reconnaissance drones to scout routes established by Durand’s AIs.

The French soldiers were not the only ones rushing to action. Holding a water bottle in his lap, Martelle watched a squad of Kenyan infantry worked carefully to clear the medevac flight pad, guiding a pair of eight-legged explosive ordnance disposal bots as they cleared the area of micro-munitions left behind by the Catalyst swarm. The “confetti mines” were the size of an old postage stamp, paper-like explosives that detonated when their millimeters-thin bodies were bent or cracked. Coiled tight around titanium spools stored inside the bird-like drones, the mines fluttered to the ground by the hundreds, arming as they fell. One mine alone might not be enough to injure a person or even a machine. But if one detonated, it triggered other nearby mines.

“Martelle, hey,” Durand said.

“Sir,” Martelle responded, nodding. He took a drink of water.

“They have their job. We have ours.”

“Always ready. Onward,” Martelle said.

A tap on the pad at his waist and Durand urged the column forward. The base’s thick-plasticrete barrier-gates at its main entrance swung outward like arms extending for an embrace. Durand held his breath as his jeep was the first through, out into the open area beyond the base. With a feeling of regret, he passed intricate human-sized pyramids of dust-covered German and Italian bots, looking like cairns on a forgotten desert trail. It was as if in their final moments they sought to join together out of fear. He did not need those machines to complete this mission, but he would be lying to himself if he did not admit that they could make a life-or-death difference for his soldiers.

“Faster now,” said Durand. “We have our objectives, now we—”

His glasses vibrated painfully.

“MISSION ABORT,” read the message, a bright red scrawl of flashing characters.

This was no time to stop. He swiped it aside, and motioned for Martelle to keep driving.

Then General Kimani broke through with a direct audio feed.

“Colonel, you need to return to base. Mission abort. Confirm?”

There was no way to lock the officer out. Unlike with a fully autonomous formation, there was no “kill switch” for Durand’s troops. He led them, fully.

“We are en route to the objectives, general. You can see our target set; it has been approved by the task force command.”

The jeep slewed to the right, around a broken-down Tanzanian Army T-99X tank, a self-driving Chinese model that was exported throughout Africa, complete with stock PLA green-and-brown digital camo.

“No longer. PKO and AU leadership just made the call. They do not want your troops hunting down individuals in the city. Their models say it will just worsen the situation for civilians, everybody.”

Worsen? Durand thought. Isn’t it already bad enough?

“So,” said Durand. “That’s it?”

“I am going to propose another target set. Only bots, fabs, and cyber targets. No humans. We can deploy the task forces systems in six hours, I understand. Your paras can be on standby.”

Machines targeting machines, said Durand. That’s all they want any more.

He braced his leg and leaned back in his seat as his vehicle accelerated onto a deserted artery flanked by half a kilometer of torched and roofless four-story buildings. He looked back over his shoulder at the trailing convoy. His troops were there, following.

August Cole is co-author of Burn-In: A Novel of the Real Robotic Revolution

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John Brennan Suppressed Intel Saying Russia Wanted Hillary Clinton to Win



Fox News’ Ed Henry reported Tuesday evening that Acting Director of National Intelligence Richard Grenell has declassified information calling into question the conclusion that Russia interfered in the 2016 election to help Donald Trump.

Henry told Tucker Carlson on Tucker Carlson Tonight that the new information would suggested John Brennan, who headed the Central Intelligence Agency under President Barack Obama, “also had intel saying, actually, Russia wanted Hillary Clinton to win because she was a known quantity, she had been secretary of state, and Vladimir Putin’s team thought she was more malleable, while candidate Donald Trump was unpredictable.”

Former National Security Council chief of staff Fred Fleitz made a similar claim in an article on FoxNews.com April 22:

House Intelligence Committee staff told me that after an exhaustive investigation reviewing intelligence and interviewing intelligence officers, they found that Brennan suppressed high-quality intelligence suggesting that Putin actually wanted the more predictable and malleable Clinton to win the 2016 election.

Instead, the Brennan team included low-quality intelligence that failed to meet intelligence community standards to support the political claim that Russian officials wanted Trump to win, House Intelligence Committee staff revealed. They said that CIA analysts also objected to including that flawed, substandard information in the assessment.

On Tuesday, Henry said that he had obtained independent confirmation of the claims made by Fleitz in that report.

For three years, the received wisdom in Washington has been that 17 intelligence agencies concluded that Russia had interfered in the election to help Trump win. It then transpired that only four agencies had actually been involved.

The Senate Intelligence Committee, chaired by embattled Republican Sen. Richard Burr (R-NC), issued a report last month that appeared to confirm the work of the intelligence agencies.

However, that conclusion may soon be contradicted.

President Trump has accepted the claim that Russia interfered in the election — though he does not believe Russia actually helped him win, and he has publicly cast doubt on the idea that Russia preferred him over Clinton, his Democratic rival.

Breitbart News noted in 2017: “[T]he Russians may just as well have preferred Hillary Clinton, who had given Russia everything it wanted while serving as President Barack Obama’s Secretary of State — from the ill-fated “reset,” to a surrender of U.S. missile defenses in Eastern Europe, to the sale of 20% of America’s uranium reserves to a Russian company closely tied to the Russian state.”

“This could be a bombshell,” Henry told Carlson on Tuesday.

Joel B. Pollak is Senior Editor-at-Large at Breitbart News and the host of Breitbart News Sunday on Sirius XM Patriot on Sunday evenings from 7 p.m. to 10 p.m. ET (4 p.m. to 7 p.m. PT). His new book, RED NOVEMBER, is available for pre-order. He is a winner of the 2018 Robert Novak Journalism Alumni Fellowship. Follow him on Twitter at @joelpollak.





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OSINT Global Trendline Report: Asia


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Our Collective Mission on Groundhog Day


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Afghanistan’s Hard Lessons. A British Perspective.


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Xi Jinping’s Coronavirus Challenge


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The Worst Possible Day: US Telecommunications and Huawei


Thomas Donahue is a Cipher Brief expert and former Senior Director for Cyber Operations on the U.S. National Security Council Staff.  His article was originally published by National Defense University Press PRISM. 

In case you missed it, you can read The Worst Possible Day: US Telecommunication and Huawei – Pt. 1 here 

Pt. 2

Options for the Nation

Given the shortfalls of a “just say no” policy, the United States will need to compete in the telecommunications equipment integration sector, both in terms of products and trade strategy. The U.S. Government typically seeks to use procurement for federal networks and research and development investment as the primary levers for influencing high technology. U.S. industry already leads in component and subsystem technologies (notably in optics); however, that advantage has not overcome the boom and bust cycles of the equipment integration market. Thus, a new element will be required that will involve some combination of direct investment, subsidies, loans, and tax incentives as has been done for other industries, either for national security purposes or to preserve national economic or industrial capabilities. In addition, the USG could include preferred telecommunications equipment manufacturers (no matter where they are from) in U.S. trade, defense, and foreign policy packages that the United States seeks to implement with other nations that are upgrading their telecommunications infrastructure.

Similar ideas have been raised before, including by this author and by James Lewis of the Center for Strategic and International Studies. Lewis cited three options: build networks from insecure components, build a national champion, or subsidize European producers. According to Lewis, the Obama Administration considered funding a national champion using the Defense Production Act, “but it could at most allocate 1 percent of what China spent. The discussion of how to respond to the telecom problem made it as far as a Deputies Committee meeting, but none of the major information technology companies wanted to reenter this field. Though a few medium-size companies could have been candidates for investment, the administration ultimately decided to rely on Google and Silicon Valley to innovate our way out of the problem without the need for the government to spend anything.”

The U.S. Defense Science Board’s June 2019 report on “Defense Applications of 5G Network Technology” notes that “the lack of a U.S. integrator and Radio Access Network vendor industrial base” creates challenges. The report recommends that the Department of Defense “should provide seed funding for western industrial base alternatives of key system components, e.g., Radio Access Networks.”

The scale of investment required—as can be seen from the size of the European companies—would require the U.S. Congress to appropriate additional funds, even if implemented under existing authorities, such as Title III of the Defense Production Act (annual appropriations typically range only in the 10s to 100s of millions of dollars). Ericsson and Nokia each employ about 100,000 or more workers (although not just for telecommunications integrated equipment manufacturing), and each as of 2018 had net equities in the range of $10-20 billion and net assets in the range of $25–45 billion. Nokia spent $16.6 billion acquiring Alcatel–Lucent in 2016.

Maintaining leadership requires huge research investments. Huawei is participating comprehensively in the international standards process and makes large investments in research and development, now increasing to $15–20 billion per year from levels of $13–15 billion in 2017–18. European firms lag significantly. Nokia has increased investment in research and development to about 20 percent of its revenue or roughly $5 billion per year after a significant decline during 2013–15. In addition, the European Investment Bank in August 2018 provided a $583 million five-year loan to Nokia in 2018, and Canada in January 2019 provided Nokia with a $40 million research grant. Ericsson in 2017 increased investments to at least 15 percent of its revenue—a bit more than $4 billion per year—despite concurrent net income losses.

The major U.S. telecommunications service providers with operations in the United States and abroad would need to be included at least in the planning process for such an investment policy given that they would be the ultimate customers for most of the equipment, have expertise on the markets and systems and, most likely, would serve as the final systems integrators and operators during implementation and deployment. Indeed, the service providers could be provided incentives to participate directly in the investment strategy; however, they are also burdened with high levels of debt from capital expenditures. Other operators of critical infrastructure (financial systems, electric power, oil and gas distribution, transportation, etc.) also might benefit by participating in the planning and investments.

The following three options are not mutually exclusive. 

Option 1: Champion the European and South Korean Companies

U.S. telecommunications infrastructure already depends on Ericsson and Nokia (and to a much lesser degree on Samsung), each of which have a significant economic presence through their U.S. subsidiaries. As noted previously, these companies include some of the residual capabilities that once belonged to now-defunct U.S. integrated telecommunications equipment companies. The USG, perhaps working primarily through the U.S. subsidiaries, might be able support these companies with stock investments, tax policies, debt guarantees, loans, and procurements, particularly to stabilize their finances and to boost their research and development investments that lag significantly behind those of Huawei. Both companies have undergone significant adjustments in management and business portfolios to stabilize their financial situation while investing for future growth. Both companies expect global demand to grow as most countries seek to take advantage of the benefits of 5G. In the unlikely event that the two Nordic companies merged to gain economies of scale relative to Huawei (despite potential EU, Chinese, and U.S. anti-monopoly concerns and challenges merging product lines), the USG could support the new merged entity in the same way.

As a sign of the Samsung’s commitment to diversifying its product line, press reports in July 2019 indicated that Samsung plans to invest more than $100 billion over the next 10 years to gain prominence in global chip processors. Samsung, however, in November 2019 announced the closure of its US-based research lab for mobile phone chips after failing to win market share from Qualcomm from external customers.

Option 2: U.S. Entities Acquire Either or Both European Companies

If the United States needs to have a home-based champion for 5G and beyond, the fastest approach might involve working with the private sector to acquire a controlling interest in parts of one of the existing European companies, possibly using authorities under the Defense Production Act Title III or else with a separate Congressional authorization. Nokia Networks would be the primary division of interest from Nokia along with Bell Labs, and Business Area Networks would be the key division within Ericsson. Samsung’s 5G segment may not be a good target for acquisition because it has much less market share and is part of a growth strategy for the otherwise very large vertically integrated South Korean conglomerate.

  • The USG could use past models of loan guarantees, tax incentives, and direct investment. Either of these companies would benefit from significant U.S.-based investment and more innovative and agile management to help them stabilize their finances and close the gap in research and development that these companies have with Huawei.
  • Both companies have significant presence in the United States and recently have sought to expand their U.S. research and production. For example, Ericsson plans to open a fully automated factory for advanced antenna systems in the United States by 2020 and previously set up a design center in Texas for 5G-related application specific integrated circuits (ASICs). Nokia is expanding its operations in Texas and operates the original Bell Labs facilities in New Jersey.
  • These companies, however, are major contributors to the economies of their home countries, suggesting a major acquisition might be resisted by those governments and the European Union.
  • For example, Nokia owns Alcatel Submarine (undersea cables) that competes with the U.S. company now known as Subcom, as well as the optical networking capabilities of Alcatel–Lucent, and is likely to be seen by the Europeans (particularly Paris) as an asset that needs to remain European. Meanwhile, Ericsson is not a major player in optical networks and depends more on microwave for backhaul communications.
  • In addition, these companies have facets unrelated to integrated telecommunications equipment manufacturing that are, in part, artifacts of prior mergers and acquisitions. Culling out the equipment manufacturing alone, however, might leave behind unsustainable business organizations. Also, as Lucent experienced, the equipment manufacturing by itself may not be sustainable through demand cycles. These companies also have existing business arrangements and obligations, in some cases with China, that may create complications for U.S. trade policy.

Option 3: Create a U.S.-Based Consortium

The USG could seek to create business conditions through a combination of procurement, investment, and financing to bring together the robust, diverse capabilities of existing U.S. private sector capabilities and patent rights that foreign integrated telecommunications equipment manufacturers already depend on under an integrated corporate management. Private equity could supplement USG funds, leading over time to an eventual reduction in the share of government investment while maintaining U.S. financial guarantees and trade support in the background.

Over time, this “consortium” could be led by a “prime” company comparable to the big integration companies that dominate U.S. defense contracting. Such an entity could add or even subtract “sub-prime” capabilities as needed in accordance with changes in technology, fluctuating demand, and maturation of national infrastructures. Again, the USG could use combinations of past strategies to drive the formation of this consortium, with the ultimate goal of leaving the private sector in control.

  • Rather than be treated as direct competitors, Nokia and Ericsson could contribute subsystems (particularly for radio access networks)—as might other companies from trusted international partners, notably the Five Eyes, Germany, France, Japan, and South Korea.
  • Such an approach could in effect create a single, trusted U.S.-based, international consortium with the financial backing of the USG for use by U.S. allies and any nation that would trust such an alliance more than Chinese providers.
  • Success would depend on a competitive pricing strategy in combination with U.S. and allied incentives to participate. Such a consortium also would benefit from strong relationships with the U.S. and allied defense departments and ministries.

A Bottom Line Comparison of Options

Each option involves positive and negative tradeoffs. All of them face potential resistance from overseas, including the Nordic countries, the EU (especially France), and possibly China. The resistance could be regulatory or through the WTO.

  • Support to an existing foreign firm would involve the least commitment from either the USG or private sector; however, this option offers the least influence or certainty of a useful result.
  • Buying one of the two Nordic firms would be easier than creating a new corporate entity and the fastest way back into the telecommunications equipment integration business but would require greater investment than simply supporting a firm with its current ownership. The United States would not have as much leverage on the outcome as would occur with the purchase of both firms.
  • Creating a new consortium would be the hardest to implement in terms of creating product lines, gaining market share, and licensing patents but would offer the greatest control of the outcome and thus the best opportunity to invest for longer-term technologies. As a result, this option potentially would require the greatest investment but also has the potential for the greatest return in terms of U.S. jobs and stimulating the U.S. high-technology sector.

Economic success of the strategy would depend on international trust of the equipment provider. In some parts of the world, U.S. ownership would provide comfort; however, in other parts of the world even some friendly countries might prefer “neutral” European products, a potentially useful outcome if the U.S. policy goals include not undermining a viable European competitor. In any case, western entities will need to persuade potential customers that the reliability and quality of products combined with transparent security policies is an attractive feature in comparison to what is offered by Chinese alternatives.

The final implementation of 5G will represent more than an upgrade to 4G technology components; the new systems over many years will evolve to a fundamentally different architecture and drive massive changes in the infrastructures and businesses that will benefit from 5G. With this longer perspective in mind, the best U.S. strategy might involve a combination of the options. In the near-term, the United States needs to “get in the game,” perhaps through options 1 or 2, to avoid surrendering future incumbent advantages to China and to gain experience in working with the new systems. For the long run, however, the United States as a second step might need to focus on the broader U.S. high-technology industry with Option 3 to drive innovation and to be in the best position for future generations.

The deployment of 5G technology across all of the infrastructure will take at least 10 years; however, discussion of 6G technology has already begun. In November 2018 a Chinese official claimed that the Ministry of Information and Industry Technology had already begun work on 6G with a view toward initial commercial deployments as early as 2030. Finland’s Oulu University’s 6Genesis Project seeks to develop communication networks with bandwidths over 1 terabit per second with a grant of more than $250 million. As the Finnish researchers note, 6G will build on 5G infrastructure and applications, and thus any investment in 6G will need to build on a prior investment in 5G.

Find a USG Champion

Justification for the amount of resources needed to reboot the nation’s supply chain for integrated telecommunications systems would need to be framed in terms of ongoing U.S. strategies for resilient global command and control systems for national security and for maintaining control of critical infrastructure functions under the most stressful circumstances of a war with a peer adversary, such as Russia or China. This level of demand is a unique national-level governmental requirement and thus must be met at least in part by the USG. The measure of success would be determined by whether U.S. defense and critical infrastructure planners could demonstrate greater resilience against the full spectrum of threats. The U.S. military already is seeking to improve the resilience of critical systems, including for nuclear command, control and communications (NC3).

The biggest player within the USG, and the most likely center point for a successful effort, would have to be DOD. This is the only department with the global reach and mission requirements, technical depth, procurement and large-scale integration experience, budgetary capacity, and existing authorities to handle such a large project. The Office of the Secretary of Defense would need to work with the Joint Chiefs of Staff to incorporate military strategic requirements and with the Department of Homeland Security and other government agencies that work with private sector critical infrastructure.

Conclusion: Resiliency Strategy Must Determine Way Forward

As noted by West Point authors Borghard and Lonergan, the United States needs to examine its policies toward the next generation of telecommunications in the context of strategic requirements for resilient global command and control of U.S. military forces and other U.S. interests, to include how the U.S. military depends on commercial communications.   This discussion must consider the worst possible day, not the routine day. The challenge is primarily one of availability on that worst day, not espionage. These requirements abroad and for critical infrastructure at home are uniquely the purview of government, and thus the government must step up and make the strategic investment in what is essentially the central nervous system of the nation. An effort of this magnitude will require a unified approach across the Executive Branch and broad bipartisan support from the U.S. Congress.

Trade policy alone, particularly one given to broader compromise, will not allow the United States to define how other nations choose to implement infrastructure that U.S. national security communications may need to pass through. The United States needs a unified vision of how to compete in terms of technology and closing deals for U.S. advantage. As with the defense industrial base, the USG in the long run should seek to have the private sector operate any new manufacturing capability and thus would need to work in partnership with the industries that best understand the technology and customer needs. The USG would need to stand behind industry efforts to gain deals with other nations—just as it has for other vital industries with national security implications, notably aviation.

The USG, as it has with most national security efforts abroad, would need assistance from traditional national security allies and countries located at what already are or should be key communications junctures. For example, new pathways might be needed that are less vulnerable to disruption as compared to the ones now passing where they are vulnerable to adversary disruption, through areas of dense commercial activities, or in regions of longstanding conflicts. As has been done for some military systems, the United States would need to work with trusted nations that can provide useful technology and manufacturing capacity, in part to gain their support for a new player in the integrated telecommunications marketplace.

It will not be enough for the private sector with government support just to create a company to manufacture and integrate telecommunications systems. The USG, in partnership with the private sector, will need to consider how it will remain competitive over the long term.

  • This may require financial support to help industry get through demand lulls, including if demand lags expectations, as occurred from 2000 to 2010, because of slower than expected implementation of applications elsewhere in U.S. infrastructure and businesses.
  • In addition, a long-term strategy would require reinvigoration of investment in the hardware elements all across the U.S. high-technology sector that have either moved to Asia or been too long dependent on investments made years ago. A telecommunications equipment integrator based in the United States would provide an anchor for investment in all of the component technologies and their associated supply chains, including future generations of semiconductors. The success of innovation in the U.S. high technology sector will depend on preserving homeland-based manufacturing and supply chain ecosystems.

Key challenges going forward include mobilizing the USG to act and then drawing in the right elements of the private sector as investors or participants in product development. Then the real work would begin with developing a product line that can compete in terms of the best combination of technology, pricing, and financing. Additional incentives from U.S. and allied governments might be needed to overcome incumbent advantages or to walk back some past infrastructure decisions in key, strategic locations.

This will be a “long march” (as China’s President Xi would say). But better to start now than repeat this conversation in 10 years.

In case you missed it, here’s part one of The Worst Possible Day: U.S. Communications and Huawei, by Cipher Brief expert and former Senior Director for Cyber Operations on the U.S. National Security Council Staff.  Thomas Donahue.

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