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[DotGNU]Here It Is: Microsoft's Palladium

From: Seth Johnson
Subject: [DotGNU]Here It Is: Microsoft's Palladium
Date: Sun, 23 Jun 2002 17:12:57 -0400

(Link from Jay Sulzberger of the New Yorkers for Fair Use
Discussion list, address@hidden  Note that
this specifically corroborates the bit about Intel endorsing
content control.  Don't know if this is or is not TCPA, but
it's the same general idea.  -- Seth)


The Big Secret    An exclusive first look at Microsoft’s
ambitious-and risky-plan to remake the personal computer to
ensure security, privacy and intellectual property rights.
Will you buy it?   By Steven Levy NEWSWEEK

HERE’S SOMETHING THAT cries for a safeguard: the world of
computer bits. An endless roster of security holes allows
cyber-thieves to fill up their buffers with credit-card
numbers and corporate secrets. It’s easier to vandalize a
Web site than to program a remote control. Entertainment
moguls boil in their hot tubs as movies and music are
swapped, gratis, on the Internet. Consumers fret about the
loss of privacy. And computer viruses proliferate and mutate
faster than they can be named.

Computer security is enough of a worry that the software
colossus Microsoft views it as a threat to its continued
success: thus the apocalyptic Bill Gates memo in January
calling for a “Trustworthy Computing” jihad. What Gates did
not specifically mention was Microsoft’s hyperambitious
long-range plan to literally change the architecture of PCs
in order to address the concerns of security, privacy and
intellectual property. The plan, revealed for the first time
to NEWSWEEK, is... Palladium, and it’s one of the riskiest
ventures the company has ever attempted. Though Microsoft
does not claim a panacea, the system is designed to
dramatically improve our ability to control and protect
personal and corporate information. Even more important,
Palladium is intended to become a new platform for a host of
yet-unimagined services to enable privacy, commerce and
entertainment in the coming decades. “This isn’t just about
solving problems, but expanding new realms of possibilities
in the way people live and work with computers,” says
product manager Mario Juarez. 

Because its ultimate success depends on ubiquity, Palladium
is either going to be a home run or a mortifying whiff. “We
have to ship 100 million of these before it really makes a
difference,” says Microsoft vice president Will Poole.
That’s why the company can’t do it without heavyweight
partners. Chipmakers Intel and Advanced Micro Devices have
signed on to produce special security chips that are
integral to the system. “It’s a groundswell change,” says
AMD’s Geoffrey Strongin. “A whole new class of processors
not differentiated by speed, but security.” The next step is
getting the likes of Dell, HP and IBM to remake their PCs to
accommodate the system.

“It’s one of the most technically complex things ever
attempted on the PC,” says Gartner analyst Martin Reynolds.
And the new additions will make your next computer a little
more expensive. Will the added cost—or a potential
earlier-than-otherwise upgrade—be worth it? Spend a day or
two with the geeks implementing Palladium—thrilled to be
talking to a reporter about the project—and you’ll hear an
enticing litany of potential uses.

* Tells you who you’re dealing with—and what they’re doing.
Palladium is all about deciding what’s trustworthy. It not
only lets your computer know that you’re you , but also can
limit what arrives (and runs on) your computer, verifying
where it comes from and who created it.

* Protects information. The system uses high-level
encryption to “seal” data so that snoops and thieves are
thwarted. It also can protect the integrity of documents so
that they can’t be altered without your knowledge.

* Stops viruses and worms. Palladium won’t run unauthorized
programs, so viruses can’t trash protected parts of your

* Cans spam. Eventually, commercial pitches for recycled
printer cartridges and barnyard porn can be stopped before
they hit your inbox—while unsolicited mail that you might
want to see can arrive if it has credentials that meet your

* Safeguards privacy. With Palladium, it’s possible not only
to seal data on your own computer, but also to send it out
to “agents” who can distribute just the discreet pieces you
want released to the proper people. Microsofties have
nicknamed these services “My Man.” If you apply for a loan,
you’d say to the lender, “Get my details from My Man,”
which, upon your authorization, would then provide your bank
information, etc. Best part: Da Man can’t read the
information himself, and neither can a hacker who breaks
into his system.

* Controls your information after you send it . Palladium is
being offered to the studios and record labels as a way to
distribute music and film with “digital rights management”
(DRM). This could allow users to exercise “fair use” (like
making personal copies of a CD) and publishers could at
least start releasing works that cut a compromise between
free and locked-down. But a more interesting possibility is
that Palladium could help introduce DRM to business and just
plain people. “It’s a funny thing,” says Bill Gates. “We
came at this thinking about music, but then we realized that
e-mail and documents were far more interesting domains.” For
instance, Palladium might allow you to send out e-mail so
that no one (or only certain people) can copy it or forward
it to others. Or you could create Word documents that could
be read only in the next week. In all cases, it would be the
user, not Microsoft, who sets these policies.

Some of these ideas aren’t new—they’re part of the promise
of public key cryptography, discovered 25 years back.
Palladium is a dead-serious attempt to finally make it
happen, with a secure basis and critical mass. But it didn’t
start that way. In 1997, Peter Biddle, a Microsoft manager
who used to run a paintball arena, was the company’s liason
to the DVD-drive world. Naturally, he began to think of ways
to address Hollywood’s fear of digital copying. He hooked up
with ’ Softie researchers Paul England and John Manferdelli,
and they set up a skunkworks operation, stealing time from
their regular jobs to pursue a preposterously ambitious
idea—creating virtual vaults in Windows to protect
information. They quickly understood that the problems of
intellectual property were linked to problems of security
and privacy.

They also realized that if they wanted to foil hackers and
intruders, at least part of the system had to be embedded in
silicon, not software. This made their task incredibly
daunting. Not only would they have to build new secrecy
functions into Windows (without messing up any programs that
run on the current versions), but then they’d have to
convince the entire industry to, in effect, update the basic
hardware setup of the PC.

Intel originally turned down the idea before eventually
embracing it. AMD had already been thinking along similar
lines, and eagerly signed on. Biddle’s virtual team kept
working, and in October 2001, it became a formal
green-lighted project.  

As now envisioned, Palladium will ship “in a future version
of Windows.” (Perhaps in the next big revision, due around
2004.) By then the special security chips will be rolling
out of the fabs, and the computer makers—salivating at an
opportunity to sell more boxes—will have motherboards to
accommodate them. There will also be components that encrypt
information as it moves from keyboard to computer (to
prevent someone from wiretapping or altering what you type)
and from computer to screen (to prevent someone from
generating a phony output to your monitor that can trick you
into OKing something you hadn’t intended to). Only certain
applications will access the part of Windows (nicknamed “the
nub”) that performs Palladium’s functions with the help of
the security chip—everything else will work exactly the

The first adopters will probably be in financial services,
health care and government—places where security and privacy
are mandated. Then will come big corporations, where
information-technology managers will find it easier to
control and protect their networks. (Some employees may
bridle at the system’s ability to ineluctably log their
e-mail, Web browsing and even instant messages.) “I have a
hard time imagining that businesses wouldn’t want this,”
says Windows czar Jim Allchin.

Finally, when tens of millions of the units are in
circulation, Microsoft expects a flood of Palladium-savvy
applications and services to spring up—that’s when consumers
will join the game.

None of this is a cinch. One hurdle is getting people to
trust Microsoft . To diffuse the inevitable skepticism, the
Redmondites have begun educational briefings of industry
groups, security experts, government agencies and
civil-liberties watchdogs. Early opinion makers are giving
them the benefit of the doubt. “I’m willing to take a chance
that the benefits are more than the potential downside,”
says Dave Farber, a renowned Internet guru. “But if they
screw up, I’ll squeal like a bloody pig.” Microsoft is also
publishing the system’s source code. “We are trying to be
transparent in all this,” says Allchin.   

Others will note that the Windows-only Palladium will, at
least in the short run, further bolster the Windows
monopoly. In time, says Microsoft, Palladium will spread
out. “We don’t blink at the thought of putting Palladium on
your Palm... on the telephone, on your wristwatch,” says
software architect Brian Willman.

And what if some government thinks that Palladium protects
information too much? So far, the United States doesn’t seem
to have a problem, but less tolerant nations might insist on
a “back door” that would allow it to wiretap and search
people’s data. There would be problems in implementing this,
um, feature.

Other potential snags: will Microsoft make it easy enough
for people to use? Will someone make a well-publicized crack
and destroy confidence off the bat? “I firmly believe we
will be shipping with bugs,” says Paul England. Don’t expect
wonders until version 2.0. Or 3.0. Ultimately, Palladium’s
future defies prediction. Boosting privacy, increasing
control of one’s own information and making computers more
secure are obviously a plus. But there could be unintended
consequences. What might be lost if billions of pieces of
personal information were forever hidden? Would our ability
to communicate or engage in free commerce be restrained if
we have to prove our identity first? When Microsoft manages
to get Palladium in our computers, the effects could indeed
be profound. Let’s hope that in setting the policies for its
use, we keep in mind the key attribute of the woman embodied
in the first Palladium. Athena was the goddess of wisdom.

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