Congress considers cybersecurity legislation

As the U.S. Congress reconvenes this week after a month-long break, legislation imposing cybersecurity requirements on private industry, including a proposal that would require public companies to report their cybersecurity efforts, may be on the way.

No bill has been introduced yet, but one proposal being considered would require companies to fill out a cybersecurity checklist in their filings with the U.S. Securities and Exchange Commission (SEC). Representative Adam Putnam, chairman of the House Government Reform Committee’s Subcommittee on Technology, Information Policy, Intergovernmental Relations and the Census, will consider introducing such a bill late this year, according to Bob Dix, the subcommittee’s staff director.

While antispam legislation will continue to be the major technology focus in Congress this fall, Putnam’s subcommittee is looking at the “pluses and minuses” of a cybersecurity reporting requirement, similar to SEC accounting reporting requirements mandated in the Sarbanes-Oxley Act of 2002, Dix said.

Such a law would raise awareness of cybersecurity issues above the chief information officer level to chief executive officers, while likely avoiding specific cybersecurity requirements that may not fit all businesses, said Daniel Burton, vice president of government affairs for security vendor Entrust Inc.

“It does not mandate you must do X, which we all realize is a false start,” Burton said of an SEC cybersecurity reporting requirement. “Different companies have different security needs and different risks. So it’s impossible to set up a mandate for everyone.”

Stockholders and boards of directors could then judge for themselves whether a company is adequately dealing with cybersecurity, Burton said. “Everyone from the board level on down is really going to be focused on what (the cybersecurity reports) are saying,” he added.

The bill Putnam is considering wouldn’t require companies to lay out specifics about their cybersecurity efforts, Dix said. Instead, it could take the form of a checklist, asking such questions as, “Do you have an up-to-date IT assets list?”

The bill would be intended to raise cybersecurity awareness among top-level executives at companies, Dix added.

If such a bill is introduced, the subcommittee would expect some opposition, Dix said. “My guess is there will be some who say anything that the government proposes is a great burden,” he said.

But Congress may feel the need to act on cybersecurity legislation if more viruses or worms are unleashed onto the Internet, said Robert Housman, a lawyer in the homeland security practice of the law firm Bracewell & Patterson LLP in Washington, D.C. In the past month, the Sobig and Blaster worms infected computers worldwide, causing millions of dollars in damage, and Congress may be compelled to take some action, Housman predicted.

“There are a number of things that are working together that are going to result in some form of legislation on cybersecurity,” Housman said.

In addition to viruses and worms, the number of attacks on company networks continue to climb, Housman said.

“On top of all that, there is a perception, right or wrong, among a lot of the regulators and congressional members I’ve talked to, that not enough is happening on the cyber front, that companies still remain vulnerable,” Housman added. “Because of that, there is a growing impetus to legislate or regulate.”

Legislation headed toward incentives or reporting requirements may be more well received by industry than a list of must-do actions, Housman said. “If we have (another) cyber incident, who knows what will happen?” he said. “I have to think that sooner or later, someone is going to cause fairly significant dislocation/chaos. If that happens, all bets go off.”

Housman expects to see some sort of cybersecurity legislation getting serious attention in Congress this year. A reporting requirement, like one Putnam’s subcommittee is considering, would hold companies accountable with their cybersecurity efforts, he added. But such a requirement, if it also includes reporting of penetration attempts, could make investors and executives nervous, Housman said.

“If you run a major business … you’re getting attempts to break into your system on a fairly regular basis,” Housman said. “When you start having to report those numbers, if that’s one of the things (the legislation) does, wow, that could make some of your shareholders a little queasy.”