cybersecurity

In late December 2023, the Federal Communications Commission (“FCC”) published a Report and Order (“Order”) expanding the scope of the data breach notification rules (“Rules”) applicable to telecommunications carriers and interconnected VoIP (“iVoIP”) providers.  The Order makes several notable changes to the prior rules, including broadening the definitions of a…

Continue Reading The FCC Expands Scope of Data Breach Notification Rules

Yesterday, the European Commission, Council and Parliament announced that they had reached an agreement on the text of the Cyber Resilience Act (“CRA”). As a result, the CRA now looks set to finish its journey through the EU legislative process early next year. As we explained in our prior…

Continue Reading The EU’s Cyber Resilience Act Has Now Been Agreed

Updated August 8, 2023.  Originally posted May 1, 2023.

Last week, comment deadlines were announced for a Federal Communications Commission (“FCC”) Order and Notice of Proposed Rulemaking (“NPRM”) that could have significant compliance implications for all holders of international Section 214 authority (i.e., authorization to provide telecommunications services from points in the U.S. to points abroad).  The rule changes on which the FCC seeks comment are far-reaching and, if adopted as written, could result in significant future compliance burdens, both for entities holding international Section 214 authority, as well as the parties holding ownership interests in these entities.  Comments on these rule changes are due Thursday, August 31, with reply comments due October 2.

Adopted in April, the FCC’s item proposing the new rules also includes an Order requiring all holders of international Section 214 authority to respond to a one-time information request concerning their foreign ownership. Although last week’s Federal Register publication sets a comment deadline for the proposed rules, the reporting deadline for the one-time information request has not yet been established.  However, because the FCC has fulfilled its statutory obligations regarding the new information collection presented by the one-time reporting requirement, carriers — as well as entities holding an ownership interest in these carriers — should prepare for the announcement of the reporting deadline.

The FCC’s latest actions underscore the agency’s ongoing desire to closely scrutinize foreign ownership and involvement in telecommunications carriers serving the U.S. market, as well as to play a more active role in cybersecurity policy. These developments should be of interest to any carrier that serves the U.S. market and any financial or strategic investor focused on the telecommunications space, as well as other parties interested in national security developments affecting telecommunications infrastructure.

Proposed Rule Changes for International Section 214 Authority

The FCC’s proposed changes to its regulation of international Section 214 authorizations generally concern additional compliance, disclosure, and reporting requirements. The FCC’s proposed rule changes are far-reaching, but the most notable of the proposals concern the following:

Continue Reading Comments Due August 31 on FCC’s Proposal to Step Up Review of Foreign Ownership in Telecom Carriers and Establish Cybersecurity Requirements

This is the twenty-sixth in a series of Covington blogs on implementation of Executive Order 14028, “Improving the Nation’s Cybersecurity,” issued by President Biden on May 12, 2021 (the “Cyber EO”).  The first blog summarized the Cyber EO’s key provisions and timelines, and the subsequent blogs described the actions taken…

Continue Reading June 2023 Developments Under President Biden’s Cybersecurity Executive Order and National Cybersecurity Strategy

This is the twenty-fourth in a series of Covington blogs on implementation of Executive Order 14028, “Improving the Nation’s Cybersecurity,” issued by President Biden on May 12, 2021 (the “Cyber EO”).  The first blog summarized the Cyber EO’s key provisions and timelines, and the subsequent blogs described the actions taken by various government agencies to implement the Cyber EO from June 2021 through March 2023.  This blog describes key actions taken to implement the Cyber EO, as well as the U.S. National Cybersecurity Strategy, during April 2023. 

CISA Requests Comment on Secure Software Self-Attestation Common Form

On April 27, 2023, the U.S. Cybersecurity and Infrastructure Security Agency (“CISA”) released a 60-day Request for Comment on a draft secure software self-attestation common form.  Comments will be accepted through June 26, 2023 and may be submitted through Regulations.gov.  The draft common form, developed in close consultation with the U.S. Office of Management and Budget (“OMB”), is a key step in implementation of OMB Memorandum M-22-18, which was issued pursuant to Section 4 of the Cyber EO and directs agencies to only use software that complies with Government-specified secure software development practices (the “OMB Memorandum”).  Specifically, and among other requirements, the OMB Memorandum directs that software providers self-attest that the software developer follows the secure development processes described by NIST Secure Software Development Framework (SP 800-218) and the NIST Software Supply Chain Security Guidance.  The key provisions of the OMB Memorandum are discussed in more detail in our prior blog. 

Scope.  The OMB Memorandum applies to all software (other than agency-developed software) developed or experiencing major version changes to be operated “on the agency’s information systems or otherwise affecting the agency’s information.”  CISA’s draft common form further specifies that the “following software requires self-attestation:

  1. Software developed after September 14, 2022;
  2. Existing software that is modified by major version changes […] after September 14, 2022; and
  3. Software to which the producer delivers continuous changes to the software code (such as software-as-a-service products or other products using continuous delivery/continuous deployment).”
Continue Reading April 2023 Developments Under President Biden’s Cybersecurity Executive Order and National Cybersecurity Strategy

This is the twenty-first in a series of Covington blogs on implementation of Executive Order 14028, “Improving the Nation’s Cybersecurity,” issued by President Biden on May 12, 2021 (the “Cyber EO”).  The first blog summarized the Cyber EO’s key provisions and timelines, and the subsequent blogs described the actions taken by various Government agencies to implement the Cyber EO from June 2021 through December 2022.  This blog describes key actions taken to implement the Cyber EO during January 2023.

GSA Announces That It Will Require Software Vendors to Submit Letters of Attestation Beginning in June 2023.

            On January 11, 2023, the General Services Administration (“GSA”) Senior Procurement Executive and Chief Information Officer jointly issued Acquisition letter MV-23-02, “Ensuring Only Approved Software Is Acquired and Used at GSA” (the “GSA letter”).  The GSA letter establishes a June 12, 2023 effective date for implementing the secure software acquisition requirements of Office of Management and Budget (“OMB”) Memorandum M-22-18, issued pursuant to Section 4 of the Cyber EO.  That OMB memorandum directs that agencies must only use software that complies with Government-specified secure software development practices.  These practices include obtaining self-attestations of conformity with secure software development practices and in certain cases as determined by agencies, artifacts such as Software Bills of Materials (SBOMs) from software vendors to verify that the acquired software[1] was developed and produced according to NIST security guidelines and best practices.

            The GSA letter directs GSA’s IT officials to update GSA’s policies by June 12, 2023 to reflect the process for collecting, renewing, retaining, and monitoring the self-attestation information mandated by OMB M-22-18.  For existing contracts that include the use of software, the GSA letter directs GSA IT to provide an internally accessible list of the software used for each contract and to collect vendor attestations by June 12, 2023.  For new contracts that include the use of software, the GSA letter directs the relevant acquisition teams to modify the acquisition planning process to ensure that performance of such contracts begins only after the requisite attestations have been collected and considered.  Finally, with respect to GSA-administered Government-wide indefinite delivery vehicles (e.g., Federal Supply Schedule contracts, Government-Wide Acquisition Contracts, and Multi-Agency Contracts), the GSA letter directs GSA contracting activities to allow, but not require, contractors to provide attestations at the base contract level rather than the task or delivery order level, and to make those attestations available to ordering activities to the extent possible.  With this said, the GSA letter specifies that ordering agencies will ultimately be responsible for complying with OMB M-22-18.

Continue Reading January 2023 Developments Under President Biden’s Cybersecurity Executive Order

The Federal Energy Regulatory Commission (“FERC”) issued a final rule (Order No. 887) directing the North American Electric Reliability Corporation (“NERC”) to develop new or modified Reliability Standards that require internal network security monitoring (“INSM”) within Critical Infrastructure Protection (“CIP”) networked environments.  This Order may be of interest to entities that develop, implement, or maintain hardware or software for operational technologies associated with bulk electric systems (“BES”).

The forthcoming standards will only apply to certain high- and medium-impact BES Cyber Systems.  The final rule also requires NERC to conduct a feasibility study for implementing similar standards across all other types of BES Cyber Systems.  NERC must propose the new or modified standards within 15 months of the effective date of the final rule, which is 60 days after the date of publication in the Federal Register.  

Background

According to the FERC news release, the 2020 global supply chain attack involving the SolarWinds Orion software demonstrated how attackers can “bypass all network perimeter-based security controls traditionally used to identify malicious activity and compromise the networks of public and private organizations.”  Thus, FERC determined that current CIP Reliability Standards focus on prevention of unauthorized access at the electronic security perimeter and that CIP-networked environments are thus vulnerable to attacks that bypass perimeter-based security controls.  The new or modified Reliability Standards (“INSM Standards”) are intended to address this gap by requiring responsible entities to employ INSM in certain BES Cyber Systems.  INSM is a subset of network security monitoring that enables continuing visibility over communications between networked devices that are in the so-called “trust zone,” a term which generally describes a discrete and secure computing environment.  For purposes of the rule, the trust zone is any CIP-networked environment.  In addition to continuous visibility, INSM facilitates the detection of malicious and anomalous network activity to identify and prevent attacks in progress.  Examples provided by FERC of tools that may support INSM include anti-malware, intrusion detection systems, intrusion prevention systems, and firewalls.   

Continue Reading FERC Orders Development of New Internal Network Security Monitoring Standards

This is the nineteenth in a series of Covington blogs on implementation of Executive Order 14028, “Improving the Nation’s Cybersecurity,” issued by President Biden on May 12, 2021 (the “Cyber EO”).  The first blog summarized the Cyber EO’s key provisions and timelines, and the subsequent blogs described the actions taken by various Government agencies to implement the Cyber EO from June 2021 through October 2022.  This blog describes key actions taken to implement the Cyber EO during November 2022.

I. CISA, NSA, and ODNI Release Software Supply Chain Security Guide for Customers 

On November 17, 2022, the Cybersecurity and Infrastructure Security Agency (CISA), the National Security Agency (NSA), and the Office of the Director of National Intelligence (ODNI) released the third in a series of recommended practice guides for securing the software supply chain (the “Customer Guide”).  The first practice guide in this series – published in September 2022 – was for software developers, and the second – published in October 2022 – was for software suppliers.  Each of the three guides is intended to supplement the Secure Software Development Framework (SSDF) published by the National Institute of Standards and Technology (NIST) pursuant to Section 4 of the Cyber EO.

The Customer Guide identifies key supply chain security objectives for software customers (acquirers) and recommends several broad categories of practices to achieve those objectives including security requirements planning, secure software architecture, and maintaining the security of software and the underlying infrastructure (e.g., environment, source code review, test).  For each of these practice categories, the guide identifies examples of scenarios that could be exploited (threat scenarios) and examples of controls that could be implemented to mitigate those threat scenarios. 

Continue Reading November 2022 Developments Under President Biden’s Cybersecurity Executive Order

The UK Government’s (UKG) proposals for new, sector-specific cybersecurity rules continue to take shape. Following the announcement of a Product Security and Telecommunications Infrastructure Bill and a consultation on the security of apps and app stores in the Queen’s Speech (which we briefly discuss here), the UKG issued a call for views on whether action is needed to ensure cyber security in data centres and cloud services (described here).

In recent weeks, the UKG has made two further announcements:

  • On 30 August 2022, it issued a response to its public consultation on the draft Electronic Communications (Security measures) Regulations 2022 (Draft Regulations) and a draft Telecommunications Security code of practice (COP), before laying a revised version of the Draft Regulations before Parliament on 5 September.
  • On 1 September 2022, it issued a call for information on the risks associated with unauthorized access to individuals’ online accounts and personal data, and measures that could be taken to limit that risk.

We set out below further detail on these latest developments.

*****

Continue Reading A packed end to the UK’s cyber summer: Government moves forward with telecoms cybersecurity proposals and consults on a Cyber Duty to Protect

This past week, co-defendants in a class action related to the theft of cryptocurrency engaged in their own lawsuit over alleged security failures.  IRA Financial Trust, a retirement account provider offering crypto-assets, sued class action co-defendant Gemini Trust Company, LLC, a crypto-asset exchange owned by the Winklevoss twins, following a…

Continue Reading Litigation Between FinTech Companies Follows Class Action Over Cryptocurrency Theft