This Internet provider pledges to put your privacy first. Always.

Wed Apr 11 08:18:31 PDT 2012

http://news.cnet.com/8301-31921_3-57412225-281/this-internet-provider-pledges-to-put-your-privacy-first-always/

Step aside, AT&T and Verizon. A new privacy-protecting Internet service and
telephone provider still in the planning stages could become the ACLU's dream
and the FBI's worst nightmare.

Declan McCullagh by Declan McCullagh April 11, 2012 4:00 AM PDT Follow
@declanm

Nick Merrill, who challenged a demand from the FBI for user data, wants to
create the world's first Internet provider designed to be
surveillance-resistant.

Nick Merrill, who challenged a demand from the FBI for user data, wants to
create the world's first Internet provider designed to be
surveillance-resistant.  (Credit: Sarah Tew/CNET)

Nicholas Merrill is planning to revolutionize online privacy with a concept
as simple as it is ingenious: a telecommunications provider designed from its
inception to shield its customers from surveillance.

Merrill, 39, who previously ran a New York-based Internet provider, told CNET
that he's raising funds to launch a national "non-profit telecommunications
provider dedicated to privacy, using ubiquitous encryption" that will sell
mobile phone service, for as little as $20 a month, and Internet
connectivity.

The ISP would not merely employ every technological means at its disposal,
including encryption and limited logging, to protect its customers. It would
also -- and in practice this is likely more important -- challenge government
surveillance demands of dubious legality or constitutionality.

A decade of revelations has underlined the intimate relationship between many
telecommunications companies and Washington officialdom. Leading providers
including AT&T and Verizon handed billions of customer telephone records to
the National Security Agency; only Qwest refused to participate. Verizon
turned over customer data to the FBI without court orders. An AT&T
whistleblower accused the company of illegally opening its network to the
NSA, a practice that the U.S. Congress retroactively made legal in 2008.

By contrast, Merrill says his ISP, to be run by a non-profit called the Calyx
Institute with for-profit subsidiaries, will put customers first. "Calyx will
use all legal and technical means available to protect the privacy and
integrity of user data," he says.

Merrill is in the unique position of being the first ISP exec to fight back
against the Patriot Act's expanded police powers -- and win.  Nick Merrill,
who once challenged a demand from the FBI for user data, is planning to
create the world's first privacy-protective Internet and mobile phone
provider.

Nick Merrill says that "we will use all legal and technical means to resist
having to hand over information, and aspire to be the partner in the
telecommunications industry that ACLU and EFF have always needed but never
had." (Credit: Sarah Tew/CNET)

In February 2004, the FBI sent Merrill a secret "national security letter"
(not an actual court order signed by a judge) asking for confidential
information about his customers and forbidding him from disclosing the
letter's existence. He enlisted the ACLU to fight the gag order, and won. A
federal judge barred the FBI from invoking that portion of the law, ruling it
was "an "unconstitutional prior restraint of speech in violation of the First
Amendment."

Merrill's identity was kept confidential for years as the litigation
continued. In 2007, the Washington Post published his anonymous op-ed which
said: "I resent being conscripted as a secret informer for the government,"
especially because "I have doubts about the legitimacy of the underlying
investigation." He wasn't able to discuss his case publicly until 2010.

His recipe for Calyx was inspired by those six years of interminable legal
wrangling with the Feds: Take wireless service like that offered by Clear,
which began selling 4G WiMAX broadband in 2009. Inject end-to-end encryption
for Web browsing. Add e-mail that's stored in encrypted form, so even Calyx
can't read it after it arrives. Wrap all of this up into an easy-to-use
package and sell it for competitive prices, ideally around $20 a month
without data caps, though perhaps prepaid for a full year.

"The idea that we are working on is to not be capable of complying" with
requests from the FBI for stored e-mail and similar demands, Merrill says.

A 1994 federal law called the Communications Assistance for Law Enforcement
Act was highly controversial when it was enacted because it required
telecommunications carriers to configure their networks for easy
wiretappability by the FBI. But even CALEA says that ISPs "shall not be
responsible for decrypting" communications if they don't possess "the
information necessary to decrypt."

Translation: make sure your customers own their data and only they can
decrypt it.

Merrill has formed an advisory board with members including Sascha Meinrath
from the New America Foundation; former NSA technical director Brian Snow;
and Jacob Appelbaum from the Tor Project.

"I have no doubt that such an organization would be extremely useful," ACLU
deputy legal director Jameel Jaffer wrote in a letter last month. "Our
ability to protect individual privacy in the realm of telecommunications
depends on the availability of phone companies and ISPs willing to work with
us, and unfortunately the number of companies willing to publicly challenge
the government is exceedingly small."

The next step for Merrill is to raise about $2 million and then, if all goes
well, launch the service later this year. Right now Calyx is largely
self-funded. Thanks to a travel grant from the Ford Foundation, Merrill is
heading to the San Francisco Bay area later this month to meet with venture
capitalists and individual angel investors.

"I am getting a lot of stuff for free since everyone I've talked to is crazy
about the idea," Merrill says. "I am getting all the back-end software
written for free by Riseup using a grant they just got."

While the intimacy of the relationship between Washington and
telecommunications companies varies over time, it's existed in one form or
another for decades. In his 2006 book titled "State of War," New York Times
reporter James Risen wrote: "The NSA has extremely close relationships with
both the telecommunications and computer industries, according to several
government officials. Only a very few top executives in each corporation are
aware of such relationships."

Louis Tordella, the longest-serving deputy director of the NSA, acknowledged
overseeing a project to intercept telegrams in the 1970s. Called Project
Shamrock, it relied on the major telegraph companies including Western Union
secretly turning over copies of all messages sent to or from the United
States.

"All of the big international carriers were involved, but none of 'em ever
got a nickel for what they did," Tordella said before his death in 1996,
according to a history written by L. Britt Snider, a Senate aide who became
the CIA's inspector general.

Like the eavesdropping system that President George W. Bush secretly
authorized, Project Shamrock had a "watch list" of people whose conversations
would be identified and plucked out of the ether by NSA computers. It was
initially intended to be used for foreign intelligence purposes, but at its
peak, 600 American citizens appeared on the list, including singer Joan Baez,
pediatrician Benjamin Spock, actress Jane Fonda and the Rev. Martin Luther
King Jr.  Nick Merrill says that "if we were given any orders that were
questionable, we wouldn't hesitate to challenge them in court."

Nick Merrill says that "if we were given any orders that were questionable,
we wouldn't hesitate to challenge them in court." (Credit: Sarah Tew/CNET)

Even if Calyx encrypts everything, the surveillance arms of the FBI and the
bureau's lesser-known counterparts will still have other legal means to
eavesdrop on Americans, of course. Police can remotely install spyware on a
suspect's computer. Or install keyloggers by breaking into a home or office.
Or, as the Secret Service outlined at last year's RSA conference, they can
try to guess passwords and conduct physical surveillance.

That prospect doesn't exactly please the FBI. Last year, CNET was the first
to report that the FBI warned Congress about what it dubbed the "Going Dark"
problem, meaning when police are thwarted in conducting court-authorized
eavesdropping because Internet companies aren't required to build in back
doors in advance, or because the technology doesn't permit it. FBI general
counsel Valerie Caproni said at the time that agents armed with wiretap
orders need to be able to conduct surveillance of "Web-based e-mail, social
networking sites, and peer-to-peer communications technology."

But until Congress changes the law, a privacy-first ISP like Calyx will
remain perfectly legal.

"It's a really urgent problem that is crying out for a solution," Merrill
says.

Topics: Policy 

Tags: fbi, nsa, nicholas merrill, calyx institute, encryption, privacy 

Declan McCullagh

Declan McCullagh is the chief political correspondent for CNET. Declan
previously was a reporter for Time and the Washington bureau chief for Wired
and wrote the Taking Liberties section and Other People's Money column for
CBS News' Web site.

Follow @declanm