NSA wiretaps Skype video calls

In 2008, Skype told that the service could not be wiretapped. Microsoft no longer stands by that claim, and a National Security Agency document shows analysts can eavesdrop on video calls.

Skype now has a backdoor that permits government surveillance of users' video and audio calls, according to a new report in the Guardian.

The report, based on leaked slides from the National Security Agency, appears to confirm growing suspicions about the popular video chat service -- and indicates calls may be able to be monitored as easily as an old-fashioned phone call.

One document quoted by the newspaper says intelligence analysts began to be able to monitor Skype video calls in July 2012: "The audio portions of these sessions have been processed correctly all along, but without the accompanying video. Now, analysts will have the complete 'picture.'"

This is a dramatic change from Skype's previous apparent resistance to eavesdropping.

In 2008, when the company was owned by eBay instead of Microsoft, a Skype spokeswoman told CNET that: "We have not received any subpoenas or court orders asking us to perform a live interception or wiretap of Skype-to-Skype communications. In any event, because of Skype's peer-to-peer architecture and encryption techniques, Skype would not be able to comply with such a request."

CNET asked Microsoft yesterday morning whether that statement was still correct. Microsoft did not respond.

It's possible for companies to create communications systems using strong end-to-end encryption believed to be proof against government snoops. Silent Circle, Off-the-Record Messaging for instant messages, and e-mail messages encrypted with PGP do precisely that.

But few companies take that step, which can be a significant engineering expense and complicated for customers to use. Another classified document, citing collaboration between NSA and FBI, said: "Feedback indicated that a collected Skype call was very clear and the metadata looked complete. Collaborative teamwork was the key to the successful addition of another provider to the PRISM system."

After buying Skype, Microsoft dramatically overhauled its architecture, replacing peer-to-peer "super nodes" with thousands of servers run by Microsoft -- a more centralized approach that may have made it easier for government eavesdroppers. Around the same time, Microsoft would no longer stand by Skype's earlier claim to be wiretap-unfriendly.

Matthew Kaufman, Skype's principal architect, said in a message on an e-mail list last month that the server change was due to the increasing use of mobile apps, which interact with Skype differently than desktop machines and often run in the background or get evicted from memory:

 How do we solve that for our users? Servers. Lots of them, and more and more often in the Windows Azure cloud infrastructure. In the case of instant messaging, we have merged the Skype and Windows Messenger message delivery backend services, and this now gets you delivery of messages even when the recipient is offline, and other nice features like spam filtering and malicious URL removal. For calling, we have the dedicated supernodes already, and additional services to help calls succeed when the receiving client is asleep and needs a push notification to wake up. And over time you will see more and more services move to the Skype cloud, offloading memory and CPU requirements from the mobile devices everyone wants to enjoy to their fullest and with maximum battery life.

There is no evidence that encrypted Skype calls can be passively monitored by the NSA or FBI without the assistance of Microsoft. In other words, the intelligence agency's vast eavesdropping apparatus can't vacuum up and use Skype calls in the same way it reportedly can intercept unencrypted e-mail or Web traffic by using fiber taps.

Instead, the federal government would serve an order on Microsoft, using a Title III wiretap order or a Foreign Intelligence Surveillance Act order, requiring it to divulge the contents of a Skype call.

Microsoft's most recent transparency report says the company did not divulge any Skype audio or video content to police in 2012. But the report refers only to "law enforcement requests," and does not appear to include requests made under FISA's separate procedures.

Mobile internet demand boosts

Allot Communications (ALLT.TA) (ALLT.O), which supplies technology that allows telecoms operators to monitor and allocate bandwidth, posted a forecast-beating rise in quarterly profit as revenues rose more than 40 percent, helped by surging demand for fast internet on mobile devices.
However, the initial positive reaction that sent Allot's Tel Aviv shares 2.7 per cent higher by the close was tempered by concern over deal flow and the company's simultaneous announcement of its second acquisition in four months.
Allot's Nasdaq-listed shares slid 7 percent to $22.96 in early trading after Chief Executive Rami Hadar told a conference call that while deal flow was healthy, the deal-closing process is taking longer because of pricing issues in a challenging economic environment.
"They had a great quarter," said Northland Capital Markets analyst Catharine Trebnick, who rates Allot as "market perform" with a $28 target. "But investors are confused."
She cited worries over longer contract negotiations as well as the announcement that it plans to buy Israeli start-up Oversi Networks for $16 million in cash.
Traditional telcos and mobile operators are experiencing high demand for bandwidth because of strong sales of iPhones, iPads and Android-based mobile phones and devices, but providers are seeing revenue declining as unlimited data plans have grown more popular.
"Allot is benefiting from growth in mobile data and growth in data traffic in general," Nachum Falek, Allot's chief financial officer, told Reuters on Tuesday, adding that much of the rise in investment in expanding networks' bandwidth comes from streaming movies and video clips.
Video, Falek said, is likely to account for 60 to 70 percent of traffic in the next few years, up from 42 percent currently.
Allot's equipment allows telecoms providers to monitor data traffic and allocate bandwidth to where it's needed most - users streaming video at the expense of a slightly longer wait for another customer expecting a large file via email, for example.
"You want to see streaming video without buffering, but you don't mind getting an email a second later," Falek said.
Europe is Allot's largest market, and it also sells to Asia and Latin America. However, the company sees the United States as a key growth driver after a U.S. court ruling two years ago that allowed Internet service providers to slow traffic to sites such as YouTube or Hulu.
"The United States is a huge market in terms of opportunity," Falek said.
Allot earned 15 cents per diluted share excluding one-off items in the second quarter, compared with 10 cents a year earlier. Revenue rose 43 percent to $26.4 million.
The Israeli company was forecast to earn 14 cents a share on revenue of $25 million, according to Thomson Reuters IBES estimates.
Its planned purchase of Oversi, a provider of media caching for Internet video, follows its acquisition of Ortiva Wireless in May and is expected to close in the third quarter.
In addition to cash, Allot will pay up to $5 million based on Oversi's performance in 2012. Oversi is expected to contribute $2 million to Allot's quarterly revenue and reduce earnings per share by 2 cents in the fourth quarter before breaking even by the first quarter of 2013, Allot said.

Facebook Exec Fears Too Much Technology Will Ruin Our Lives

Some Silicon Valley executives are realizing the social harms of being too plugged in.
A Facebook executive, Stuart Crabb, says that while Facebook's goal is to keep people online, it's good to disconnect from devices.
“If you put a frog in cold water and slowly turn up the heat, it’ll boil to death — it’s a nice analogy,” he tells the New York Times. "[People] need to notice the effect that time online has on your performance and relationships."
Other Silicon Valley execs say blaming technology companies for Internet addiction is like saying McDonald's causes obesity.
“They’d say: ‘Do we have any responsibility for the fact people are getting fat?’ Most people would say ‘no,’ ” Zynga's cofounder Eric Schiermeyer says.
(Actually, most people would probably say "yes.")
Here's the full debate over at New York Times