Order Code RL30153
Report for Congress
Received through the CRS Web
Critical Infrastructures:
Background, Policy,
and Implementation
Updated May 6, 2003
John D. Moteff
Specialist in Science and Technology Policy
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

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Critical Infrastructures:
Background, Policy and Implementation
Summary
The nation’s health, wealth, and security rely on the production and distribution
of certain goods and services. The array of physical assets, processes and
organizations across which these goods and services move are called critical
infrastructures (e.g. electricity, the power plants that generate it, and the electric grid
upon which it is distributed). Computers and communications, themselves critical
infrastructures, are increasingly tying these infrastructures together. There has been
growing concern that this reliance on computers and computer networks raises the
vulnerability of the nation’s critical infrastructures to “cyber” attacks.
In May 1998, President Clinton released Presidential Decision Directive No. 63.
The Directive set up groups within the federal government to develop and implement
plans that would protect government-operated infrastructures and called for a
dialogue between government and the private sector to develop a National
Infrastructure Assurance Plan that would protect all of the nation’s critical
infrastructures by the year 2003. While the Directive called for both physical and
cyber protection from both man-made and natural events, implementation focused
on cyber protection against man-made cyber events (i.e. computer hackers).
However, given the physical damage caused by the September 11 attacks and the
subsequent impact on the communications, finance, and transportation services,
physical protections of critical infrastructures is receiving greater attention.
Following the events of September 11, the Bush Administration released two
relevant Executive Orders (EOs). EO 13228, signed October 8, 2001 established the
Office of Homeland Security. Among its duties, the Office shall “coordinate efforts
to protect the United States and its critical infrastructure from the consequences of
terrorist attacks.” EO 13231, signed October 16, stated the Bush Administration’s
policy and objectives for protecting the nation’s information infrastructure. These
are similar to those stated in PDD-63 and assumed continuation of many PDD-63
activities. E.O. 13231, also established the President’s Critical Infrastructure
Protection Board which was chaired by a Special Advisor for Cybersecurity. E.O.
13231 was amended in February 2003. While retaining the same policy-related
statements, the Board and Special Advisor position was eliminated.
On November 22, 2002, Congress passed legislation creating a Department of
Homeland Security. The Department consolidates into a single department a number
of offices and agencies responsible for implementing various aspects of homeland
security. One of the directorates created by the legislation is responsible for
Information Analysis and Infrastructure Protection.
Issues include whether to segregate cyber protection from physical protection
organizationally, mechanisms for sharing information shared between the
government and the private sector, costs, the need to set priorities, and whether or not
the federal government will need to employ more direct incentives to achieve an
adequate level of protection by the private sector and states, and privacy versus
protection. This report will be updated as warranted.

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Contents
Latest Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The President’s Commission on Critical Infrastructure Protection . . . . . . . . 3
Presidential Decision Directive No. 63 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Restructuring by the Bush Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Pre-September 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Post-September 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
National Strategy for Homeland Security . . . . . . . . . . . . . . . . . . . . . . 11
Department of Homeland Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Policy Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Lead Agencies and Selection of Sector Liaison Officials and
Functional Coordinators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Identifying and Selecting Sector Coordinators . . . . . . . . . . . . . . . . . . 15
Appointment of the National Infrastructure Assurance Council . . . . . 16
Internal Agency Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
National Critical Infrastructure Plan . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Information Sharing and Analysis Center (ISAC) . . . . . . . . . . . . . . . . 19
Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Cyber vs. Physical Vulnerabilities and Protection . . . . . . . . . . . . . . . . 21
What is Critical and Needs Protection and How Do We Decide? . . . . 22
How Much Will It Cost and Who Pays? . . . . . . . . . . . . . . . . . . . . . . . 23
Information Sharing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Privacy/Civil Liberties? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
For Additional Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Federal Funding for Critical Infrastructure Protection . . . . . . . . . . . . . . . . . 32
National Strategy to Secure Cyberspace . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
National Strategy for the Physical Protection of Critical Infrastructures
and Key Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
List of Tables
Table 1. Lead Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Table 2. Lead Agencies as Proposed in the National Strategy for
Homeland Defense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Table 3. Sector Coordinators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Table A.1. Critical Infrastructure Protection Funding by Department . . . . . . . . . 32

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Critical Infrastructures: Background, Policy,
and Implementation
Latest Developments
On April 15, 2003 the Department of Homeland Security released draft
procedures for the securing and handling of Critical Infrastructure Information (CII).
CII, voluntarily submitted to the Department of Homeland Security, was given a
variety of protections (including being exempt from the Freedom of Information Act)
in Section 214 of the Homeland Security Act. A brief discussion regarding CII and
elements of the draft procedures can be found later in this report under Information
Sharing in the Issues section.
Introduction
Certain socio-economic activities are vital to the day-to-day functioning and
security of the country; for example, transportation of goods and people,
communications, banking and finance, and the supply and distribution of electricity
and water. Domestic security and our ability to monitor, deter, and respond to
outside hostile acts also depend on some of these activities as well as other more
specialized activities like intelligence gathering and command and control of police
and military forces. A serious disruption in these activities and capabilities could
have a major impact on the country’s well-being.1
These activities and capabilities are supported by an array of physical assets,
processes, information, and organizations forming what has been called the nation’s
critical infrastructures. The country’s critical infrastructures are growing increasingly
complex, relying on computers and, now, computer networks to operate efficiently
and reliably. The growing complexity, and the interconnectedness resulting from
networking, means that a disruption in one may lead to disruptions in others.
Disruptions can be caused by any number of factors: poor design, operator error,
physical destruction due to natural causes, (earthquakes, lightening strikes, etc.) or
physical destruction due to intentional human actions (theft, arson, terrorist attack,
etc.). Over the years, operators of these infrastructures have taken measures to guard
against, and to quickly respond to, many of these risks.2 However, the growing
1 As a reminder of how dependent society is on its infrastructure, in May 1998, PanAmSat’s
Galaxy IV satellite’s on-board controller malfunctioned, disrupting service to an estimated
80-90% of the nation’s pagers, causing problems for hospitals trying to reach doctors on
call, emergency workers, and people trying to use their credit cards at gas pumps, to name
but a few.
2 Following September 11, these protections will undoubtedly be reexamined.

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CRS-2
dependency of these systems on information technologies and computer networks
introduces a new vector by which problems can be introduced.3
Of particular concern is the threat posed by “hackers” who can gain
unauthorized access to a system and who could destroy, corrupt, steal, or monitor
information vital to the operation of the system. Unlike someone setting off a bomb,
hackers can gain access to a critical site from a remote location. To date, the ability
to detect and deter unauthorized access to computer systems is limited. While
infrastructure operators are also taking measures to guard against and respond to
cyber attacks, there is concern that the number of “on-line” operations is growing
faster than security awareness and the use of sound security measures.
Hackers range from mischievous teenagers, to disgruntled employees, to
criminals, to spies, to foreign military organizations. While the more commonly
reported incidents involve mischievous teenagers (or adults), self-proclaimed
“electronic anarchists”, or disgruntled (former) employees, the primary concern are
criminals, spies, military personnel, or terrorists from around the world who appear
to be perfecting their hacking skills and who may pose a potential strategic threat to
the reliable operations of our critical infrastructures.4
Prior to September 11, critical infrastructure protection was synonymous with
cyber security to many people. Initial policies, and implementation of those policies,
focused on cyber security. However, the terrorist attacks of September 11, and the
subsequent anthrax attacks, demonstrated the need to reexamine physical protections
and to integrate physical protections into an overall critical infrastructure policy.5
This report provides an historical background and tracks the evolution of such an
overall policy and its implementation. However, specific protections, physical or
cyber, associated with individual infrastructures is beyond the scope of this report.
For CRS products related to specific infrastructure protection efforts, see For
Additional Reading.
3 Efforts to integrate the computer systems of Norfolk Southern and Conrail after their
merger in June, 1999 caused a series of mishaps leaving trains misrouted, crews
misscheduled, and products lost. See, “Merged Railroads Still Plagued by IT Snafus,”
Computerworld, January 17, 2000,pp 20-21. More recently, the so-called Slammer worm,
which attacked a known vulnerability in Microsoft’s SQL Server Service, and resulted in
tying up infected servers, led to disruptions in ATM machines, airline online ticketing
systems, and newspaper publishing. See [http://www.washingtonpost.com/wp-dyn/articles
/A46928-2003Jan26.html].
4 The Director of the Central Intelligence Agency testified before the Senate Committee on
Governmental Affairs (June 24, 1998) that a number of countries are incorporating
information warfare into their military doctrine and training and developing operational
capability. It should be noted that the U.S. military is probably the leader in developing
both offensive and defensive computer warfare techniques and doctrine.
5 Besides loss of life, the terrorist attacks of September 11 disrupted the services of a number
of critical infrastructures (including telecommunications, the internet, financial markets, and
air transportation). In some cases, protections already in place (like off-site storage of data,
mirror capacity, etc.) allowed for relatively quick reconstitution of services. In other cases,
service was disrupted for much longer periods of time.

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CRS-3
The President’s Commission on Critical Infrastructure
Protection
This report takes as its starting point the establishment of the President’s
Commission on Critical Infrastructure Protection (PCCIP) in July 1996.6 Its tasks
were to: report to the President the scope and nature of the vulnerabilities and threats
to the nation’s critical infrastructures (focusing primarily on cyber threats);
recommend a comprehensive national policy and implementation plan for protecting
critical infrastructures; determine legal and policy issues raised by proposals to
increase protections; and propose statutory and regulatory changes necessary to effect
recommendations.
The PCCIP released its report to President Clinton in October 1997.7
Examining both the physical and cyber vulnerabilities, the Commission found no
immediate crisis threatening the nation’s infrastructures. However, it did find reason
to take action, especially in the area of cyber security. The rapid growth of a
computer-literate population (implying a greater pool of potential hackers), the
inherent vulnerabilities of common protocols in computer networks, the easy
availability of hacker “tools” (available on many websites), and the fact that the basic
tools of the hacker (computer, modem, telephone line) are the same essential
technologies used by the general population indicated to the Commission that both
the threat and vulnerability exist.
The Commission’s general recommendation was that greater cooperation and
communication between the private sector and government was needed. Much of the
nation’s critical infrastructure is owned and operated by the private sector. As seen
by the Commission, the government’s primary role (aside from protecting its own
infrastructures) is to collect and disseminate the latest information on intrusion
techniques, threat analysis, and ways to defend against hackers.
The Commission also proposed a strategy for action:
! facilitate greater cooperation and communication between the
private sector and appropriate government agencies by: setting a top
level policy-making office in the White House; establishing a
council that includes corporate executives, state and local
government officials, and cabinet secretaries; and setting up
information clearinghouses;
! develop a real-time capability of attack warning;
! establish and promote a comprehensive awareness and education
program;
6 Executive Order 13010.Critical Infrastructure Protection. Federal Register. Vol 61. No.
138. July 17, 1996. pp. 3747-3750. Concern about the security of the nation’s information
infrastructure and the nation’s dependence on it preceded the establishment of the
Commission.
7 President’s Commission on Critical Infrastructure Protection, Critical Foundations:
Protecting America’s Infrastructures, October 1997.

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CRS-4
! streamline and clarify elements of the legal structure to support
assurance measures (including clearing jurisdictional barriers to
pursuing hackers electronically); and,
! expand research and development in technologies and techniques,
especially technologies that allow for greater detection of intrusions.
The Commission’s report underwent interagency review to determine how to
respond. That review led to a Presidential Decision Directive released in May 1998.
Presidential Decision Directive No. 63
Presidential Decision Directive No. 63 (PDD-63)8 set as a national goal the
ability to protect the nation’s critical infrastructure from intentional attacks (both
physical and cyber) by the year 2003. According to the PDD, any interruptions in the
ability of these infrastructures to provide their goods and services must be “brief,
infrequent, manageable, geographically isolated, and minimally detrimental to the
welfare of the United States.”9
PDD-63 identified the following activities whose critical infrastructures should
be protected: information and communications; banking and finance; water supply;
aviation, highways, mass transit, pipelines, rail, and waterborne commerce;
emergency and law enforcement services; emergency, fire, and continuity of
government services; public health services; electric power, oil and gas production,
and storage.10 In addition, the PDD identified four activities where the federal
government controls the critical infrastructure: internal security and federal law
enforcement; foreign intelligence; foreign affairs; and national defense.
A lead agency was assigned to each of these “sectors” (see Table 1). Each lead
agency was directed to appoint a Sector Liaison Official to interact with appropriate
private sector organizations. The private sector was encouraged to select a Sector
Coordinator to work with the agency’s sector liaison official. Together, the liaison
official, sector coordinator, and all affected parties were to contribute to a sectoral
security plan which will be integrated into a National Infrastructure Assurance
Plan. Each of the activities performed primarily by the federal government also were
assigned a lead agency who was to appoint a Functional Coordinator to coordinate
efforts similar to those made by the Sector Liaisons.
8 See, The Clinton’s Administration’s Policy on Critical Infrastructure Protection:
Presidential Decision Directive 63, White Paper, May 22, 1998, which can be found on
[http://www.ciao.gov/ciao_document_library/paper598.html].
9 Ibid.
10 The National Strategy on Homeland Security has expanded the list of critical
infrastructures identified.

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CRS-5
Table 1. Lead Agencies
Department/Agency
Sector/Function
Commerce
Information and Communications
Treasury
Banking and Finance
EPA
Water
Transportation
Transportation
Justice
Emergency Law Enforcement
Federal Emergency Management
Emergency Fire Service
Agency
Health and Human Services
Emergency Medicine
Energy
Electric Power, Gas, and Oil
Justice
Law Enforcement and International
Security
Director of Central Intelligence
Intelligence
State
Foreign Affairs
Defense
National Defense
The PDD also assigned duties to the National Coordinator for Security,
Infrastructure Protection, and Counter-terrorism.11 The National Coordinator
reported to the President through the Assistant to the President for National Security
Affairs.12 Among his many duties outlined in PDD-63, the National Coordinator
chaired the Critical Infrastructure Coordination Group. This Group was the
primary interagency working group for developing and implementing policy and for
coordinating the federal government’s own internal security measures. The Group
included high level representatives from the lead agencies (including the Sector
Liaisons), the National Economic Council, and all other relevant agencies.
Each federal agency was made responsible for securing its own critical
infrastructure and was to designate a Critical Infrastructure Assurance Officer
(CIAO) to assume that responsibility. The agency’s current Chief Information
11 The National Coordinator position was created by Presidential Decision Directive 62,
“Combating Terrorism.” PDD-62, which is classified, codifies and clarifies the roles and
missions of various agencies engaged in counter-terrorism activities. The Office of the
National Coordinator was established to integrate and coordinate these activities. The
White House released a fact sheet on PDD-62 on May 22, 1998.
12 President Clinton designated Richard Clarke (Special Assistant to the President for Global
Affairs, National Security Council) as National Coordinator.

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CRS-6
Officer (CIO) could double in that capacity. In those cases where the CIO and the
CIAO were different, the CIO was responsible for assuring the agency’s information
assets (databases, software, computers), while the CIAO was responsible for any
other assets that make up that agency’s critical infrastructure. Agencies were given
180 days from the signing of the Directive to develop their plans. Those plans were
to be fully implemented within 2 years and updated every 2 years.
The PDD set up a National Infrastructure Assurance Council. The Council
was to be a panel that included private operators of infrastructure assets and officials
from state and local government officials and relevant federal agencies. The Council
was to meet periodically and provide reports to the President as appropriate. The
National Coordinator was to act as the Executive Director of the Council.
The PDD also called for a National Infrastructure Assurance Plan. The Plan
was to integrate the plans from each of the sectors mentioned above and should
consider the following: a vulnerability assessment, including the minimum essential
capability required of the sector’s infrastructure to meet its purpose; remedial plans
to reduce the sector’s vulnerability; warning requirements and procedures; response
strategies; reconstitution of services; education and awareness programs; research
and development needs; intelligence strategies; needs and opportunities for
international cooperation; and legislative and budgetary requirements.
The PDD also set up a National Plan Coordination Staff to support the plan’s
development. Subsequently, the Critical Infrastructure Assurance Office (CIAO,
not to be confused with the agencies’ Critical Infrastructure Assurance Officers) was
established to serve this function and was placed in the Department of Commerce’s
Export Administration. CIAO supported the National Coordinator’s efforts to
integrate the sectoral plans into a National Plan, supported individual agencies in
developing their internal plans, helped coordinate a national education and awareness
programs, and provided legislative and public affairs support.
In addition to the above activities, the PDD called for studies on specific topics.
These included issues of: liability that might arise from private firms participating in
an information sharing process; legal impediments to information sharing;
classification of information and granting of clearances (efforts to share threat and
vulnerability information with private sector CEOs has been hampered by the need
to convey that information in a classified manner); information sharing with foreign
entities; and the merits of mandating, subsidizing or otherwise assisting in the
provision of insurance for selected infrastructure providers.
Most of the Directive established policy-making and oversight bodies making
use of existing agency authorities and expertise. However, the PDD also addressed
operational concerns. The Directive called for a national capability to detect and
respond to cyber attacks while they are in progress. Although not specifically
identified in the Directive, the Clinton Administration proposed establishing a
Federal Instruction Detection Network (FIDNET) that would, together with the
Federal Computer Intrusion Response Capability (FedCIRC) begun just prior
to PDD-63, meet this goal. The Directive explicitly gave the Federal Bureau of
Investigation the authority to expand its existing computer crime capabilities into a
National Infrastructure Protection Center (NIPC). The Directive called for the

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CRS-7
NIPC to be the focal point for federal threat assessment, vulnerability analysis, early
warning capability, law enforcement investigations, and response coordination. All
agencies were required to forward to the NIPC information about threats and actual
attacks on their infrastructure as well as attacks made on private sector infrastructures
of which they become aware. Presumably, FIDNET13 and FedCIRC would feed into
the NIPC. According to the Directive, the NIPC would be linked electronically to the
rest of the federal government and use warning and response expertise located
throughout the federal government. The Directive also made the NIPC the conduit
for information sharing with the private sector through an equivalent Information
Sharing and Analysis Center(s) operated by the private sector, which PDD-63
encouraged the private sector to establish.
While the FBI was given the lead, the NIPC also included the Department of
Defense, the Intelligence Community, and a representative from all lead agencies.
Depending on the level of threat or the character of the intrusion, the NIPC was to
have been placed in direct support of either the Department of Defense or the
Intelligence Community.
Quite independent of PDD-63 in its origin, but clearly complimentary in its
purpose, the FBI offers a program called INFRAGARD to private sector firms. The
program includes an Alert Network. Participants in the program agree to supply the
FBI with two reports when they suspect an intrusion of their systems has occurred.
One report is “sanitized” of sensitive information and the other provides more
detailed description of the intrusion. The FBI will help the participant respond to the
intrusion. In addition, all participants are sent periodic updates on what is known
about recent intrusion techniques. The FBI has set up local INFRAGARD chapters
that can work with each other and regional FBI field offices. In January, 2001, the
FBI announced it had finished establishing INFRAGARD chapters in each of its 56
field offices. Rather than sector-oriented, INFRAGARD is geographically-oriented.
It should also be noted that the FBI had, since the 1980s, a program called the
Key Assets Initiative (KAI). The objective of the KAI is to develop a database of
information on “key assets” within the jurisdiction of each FBI field office, establish
lines of communications with asset owners and operators to improve physical and
cyber protection, and to coordinate with other federal, state, and local authorities to
ensure their involvement in the protection of those assets. The program was initially
begun to allow for contingency planning against physical terrorist attacks. According
to testimony by a former Director of the NIPC, the program was “reinvigorated” by
the NIPC and expanded to included the cyber dimension.14
13 From the beginning FIDNET generated controversy both inside and outside the
government. Privacy concerns, cost and technical feasibility were at issue. By the end of
the Clinton Administration, FIDNET as a distributed intrusion detection system feeding into
a centralized analysis and warning capability was abandoned. Each agency, however, is
allowed and encouraged to use intrusion detection technology to monitor and secure their
own systems.
14 Testimony by Michael Vatis before the Senate Judiciary Committee, Subcommittee on
Technology and Terrorism. Oct. 6, 1999. This programs has since been transferred to the
(continued...)

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CRS-8
Restructuring by the Bush Administration
Pre-September 11. As part of its overall redesign of White House
organization and assignment of responsibilities, the in-coming Bush Administration
spent the first 8 months reviewing its options for coordinating and overseeing critical
infrastructure protection. During this time, the Bush Administration continued to
support the activities begun by the Clinton Administration.
The Bush Administration review was influenced by three parallel debates. First,
the National Security Council (NSC) underwent a major streamlining. All groups
within the Council established during previous Administrations were abolished.
Their responsibilities and functions were consolidated into 17 Policy Coordination
Committees (PCCs). The activities associated with critical infrastructure protection
were assumed by the Counter-Terrorism and National Preparedness PCC. At the
time, whether, or to what extent, the NSC should remain the focal point for
coordinating critical infrastructure protection (i.e. the National Coordinator came
from the NSC) was unclear. Richard Clarke, himself, wrote a memorandum to the
incoming Bush Administration that the function should be transferred directly to the
White House.15
Second, there was a continuing debate about the merits of establishing a
government-wide Chief Information Officer (CIO), whose responsibilities would
include protection of all federal non-national security-related computer systems and
coordination with the private sector on the protection of privately owned computer
systems. The Bush Administration announced mid-year its desire not to create a
separate federal CIO position, but to recruit a Deputy Director of the Office of
Management and Budget that would assume an oversight role of agency CIOs. One
of the reason’s cited for this was a desire to keep agencies responsible for their own
computer security.16
Third, there was the continuing debate about how best to defend the country
against terrorism, in general. Some include in the terrorist threat cyber attacks on
critical infrastructure. The U.S. Commission on National Security/21st Century (the
Hart-Rudman Commission) proposed a new National Homeland Security Agency.
The recommendation built upon the current Federal Emergency Management Agency
(FEMA) by adding to it the Coast Guard, the Border Patrol, Customs Service, and
other agencies. The Commission recommended that the new organization include
a directorate responsible for critical infrastructure protection. While both the Clinton
and Bush Administration remained cool to this idea, bills were introduced in
Congress to establish such an agency. As discussed below, the Bush Administration
14 (...continued)
Department of Homeland Security.
15 Senior NSC Official Pitches Cyber-Security Czar Concept in Memo to Rice. Inside the
Pentagon. January 11, 2001. p 2-3.
16 For a discussion of this and the status of federal CIO legislation, see CRS Report
RL30914, Federal Chief Information Officer (CIO): Opportunities and Challenges, by
Jeffery Seifert.

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CRS-9
changed its position in June 2002, and proposed a new department along the lines of
that proposed by the Hart/Rudman Commission and Congress.
Post-September 11. Soon after the September 11 terrorist attacks, President
Bush signed two Executive Orders relevant to critical infrastructure protection.
These have since been amended to reflect changes brought about by the
establishment of the Department of Homeland Security (see below). The following
is brief discussion of the original E.O.s and how they have changed.
E.O. 13228, signed October 8, 2001 established the Office of Homeland
Security, headed by the Assistant to the President for Homeland Security.17 Its
mission is to “develop and coordinate the implementation of a comprehensive
national strategy to secure the United States from terrorist threats and attacks.”
Among its functions is the coordination of efforts to protect the United States and its
critical infrastructure from the consequences of terrorist attacks. This includes
strengthening measures for protecting energy production, transmission, and
distribution; telecommunications; public and privately owned information systems;
transportation systems; and, the provision of food and water for human use. Another
function of the Office is to coordinate efforts to ensure rapid restoration of these
critical infrastructures after a disruption by a terrorist threat or attack.
The EO also established the Homeland Security Council. The Council, made
up of the President, Vice-President, Secretaries of Treasury, Defense, Health and
Human Services, and Transportation, the Attorney General, the Directors of FEMA,
FBI, and CIA and the Assistant to the President for Homeland Security. Other White
House and departmental officials could be invited to attend Council meetings.18 The
Council advises and assists the President with respect to all aspects of homeland
security. The agenda for those meetings shall be set by the Assistant to President for
Homeland Security, at the direction of the President. The Assistant is also the
official recorder of Council actions and Presidential decisions.
In January and February 2003, this E.O. was amended (by Executive Orders
13284 and 13286, respectively). The Office of Homeland Security, the Assistant to
the President, and the Homeland Security Council were all retained. However, the
Secretary of Homeland Security was added to the Council. The duties of the
Assistant to the President for Homeland Security remain the same, recognizing the
statutory duties assigned to the Secretary of Homeland Security as a result of the
Homeland Security Act of 2002 (see below).
The second Executive Order (E.O. 13231) signed October 16, 2001, stated that
it is U.S. policy “to protect against the disruption of the operation of information
systems for critical infrastructure...and to ensure that any disruptions that occur are
infrequent, of minimal duration, and manageable, and cause the least damage
17 President Bush selected Tom Ridge to head the new Office.
18 For more information on the structure of the Homeland Security Council and the Office
of Homeland Security, see CRS Report RL31148. Homeland Security: The Presidential
Coordination Office, by Harold Relyea.

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CRS-10
possible.”19 This Order also established the President’s Critical Infrastructure
Protection Board. The Board’s responsibility was to “recommend policies and
coordinate programs for protecting information systems for critical infrastructure...”
The Order also established a number of standing committees of the Board that
includes Research and Development (chaired by a designee of the Director of the
Office of Science and Technology), Incident Response (chaired by the designees of
the Attorney General and the Secretary of Defense), and Physical Security (also
chaired by designees of the Attorney General and the Secretary of Defense). The
Board was directed to propose a National Plan on issues within its purview on a
periodic basis, and, in coordination with the Office of Homeland Security, review and
make recommendations on that part of agency budgets that fall within the purview
of the Board.
The Board was chaired by a Special Advisor to the President for Cyberspace
Security.20 The Special Advisor reported to both the Assistant to the President for
National Security and the Assistant to the President for Homeland Security. Besides
presiding over Board meetings, the Special Advisor may, in consultation with the
Board, was to propose policies and programs to appropriate officials to ensure
protection of the nation’s information infrastructure and to coordinate with the
Director of OMB on issues relating to budgets and the security of computer networks.
The Order also established the National Infrastructure Advisory Council.
The Council is to provide advice to the President on the security of information
systems for critical infrastructure. The Council’s functions include enhancing
public-private partnerships, monitoring the development of ISACs, and encouraging
the private sector to perform periodic vulnerability assessments of critical
information and telecommunication systems.
Subsequent amendments to this E.O. (by E.O. 13286) abolished the President’s
Board and the position of Special Advisor. The Advisory Council was retained, but
now reports to the President through the Secretary of Homeland Security.
In many respects, the Bush Administration policy and approach regarding
critical infrastructure protection represents a continuation of PDD-63. The
fundamental policy statements were the essentially the same: the protection of
infrastructures critical to the people, economy, essential government services, and
national security. Also, the stated goal of the government’s efforts is to ensure that
any disruption of the services provided by these infrastructures be infrequent, of
minimal duration, and manageable. The infrastructures identified as critical were
essentially the same (although expanded). A Council made up of private sector
executives, academics, and State and local officials was established to advise the
President. The Critical Infrastructure Assurance Office (CIAO) and the National
Infrastructure Protection Center (at the FBI) were left in place (and later moved to the
Department of Homeland Security), as were the liaison efforts between lead agencies
19 Executive Order 13231—Critical Infrastructure Protection in the Information Age. Federal
Register. Vol. 86. No. 202. Oct. 18, 2001.
20 President Bush designated Richard Clarke.

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CRS-11
and the private sector and State and local governments, and the structures set up for
information sharing.
The primary difference, at first at least, was the segregation of cyber security
from the rest of the critical infrastructure protection function. As stated, earlier, prior
to September 11, the focus of critical infrastructure protection was cyber security.
Following September 11, physical security became more of and issue, and cyber
security now appears to be integrated into an overall critical infrastructure protection
organizational structure.
National Strategy for Homeland Security. In July 2002, the Office of
Homeland Security released a National Strategy for Homeland Security. The
Strategy covers all government efforts to protect the nation against terrorist attacks
of all kinds. It identifies protecting the nation’s critical infrastructures and key assets
(a new term, different as implied above by the FBI’s key asset program) as one of
six critical mission areas. The Strategy expanded upon the list of infrastructure
considered to be critical to include the chemical industry, postal and shipping
services, and the defense industrial base. It also introduced a new class of assets,
called key assets, which are potential targets whose destruction may not endanger
vital systems, but could create local disaster or profoundly affect national morale.
Such assets could include schools, court houses, individual bridges, or state and
national monuments.
The Strategy reiterates many of the same policy-related activities as mentioned
above: working with the private sector and other non-federal entities, naming those
agencies that should act as liaison with the private sector, assessing vulnerabilities,
and developing a national plan to deal with those vulnerabilities. The Strategy did
not create any new organizations, but assumed that a Department of Homeland
Security would be established.
Department of Homeland Security
On November 22, Congress passed the Homeland Security Act (P.L. 107-296),
establishing a Department of Homeland Security. The Act assigned to the new
Department the mission of preventing terrorist attacks, reducing the vulnerability of
the nation to such attacks, and responding rapidly should such and attack occur. The
Act essentially consolidated within one department a number of agencies that have
had, as part of their mission, homeland security-like functions (e.g. Border Patrol,
Customs, Transportation Security Agency). The full impact of the Act is beyond the
scope of this report. The following discussion focuses on those provisions relating
to critical infrastructure protection.
In regard to critical infrastructure protection the Act transferred the following
agencies and offices to the new department: the NIPC (except for the Computer
Investigations and Operations Section), CIAO, FedCIRC, the National Simulation
and Analysis Center (NISAC),21 other energy security and assurance activities
21 The NISAC was established in the USA PATRIOT Act (P.L. 107-56), Section 1062. The
(continued...)

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CRS-12
within DOE, and the National Communication System (NCS).22 These agencies
and offices shall be integrated within the Directorate of Information Analysis and
Infrastructure Protection (one of four Directorates established by the Act).23
Notably, the Transportation Security Administration (TSA), who is responsible for
securing all modes of the nation’s transportation system, is not part of this
Directorate (it has been placed within the Border and Transportation Security
Directorate). The Directorates shall be headed by someone of Undersecretary rank.
Furthermore, the Act designated that within the Directorate of Information Analysis
and Infrastructure Protection, there shall be both an Assistant Secretary for
Information Analysis, and an Assistant Secretary for Infrastructure Protection.24
Among the responsibilities assigned the Directorate of Information Analysis and
Infrastructure Protection were:
•
to access, receive, analyze, and integrate information from a variety
of sources in order to identify and assess the nature and scope of the
terrorist threat;
•
to carry out comprehensive assessments of the vulnerabilities of key
resources and critical infrastructure of the United States;
•
to integrate relevant information, analyses, and vulnerability
assessments in order to identify priorities for protective and support
measures;
21 (...continued)
Center builds upon expertise at Sandia National Laboratory and Los Alamos National
Laboratory in modeling and simulating infrastructures (namely energy infrastructures) and
the interdependencies between them.
22 The NCS is not a single communication system but more a capability that ensures that
disparate government agencies can communication with each other in times of emergencies.
To make sure this capability exists and to assure that it is available when needed, an
interagency group meets regularly to discuss issues and solve problems. The NCS was
initially established in 1963 by the Kennedy Administration to ensure communications
between military, diplomatic, intelligence, and civilian leaders, following the Cuban Missile
Crisis. Those activities were expanded by the Reagan Administration to include emergency
preparedness and response, including natural disaster response. The current interagency
group includes 22 departments and agencies. The private sector, who own a significant
share of the assets needed to ensure the necessary connectivity, is involved through the
National Security Telecommunication Advisory Committee (NSTAC). The National
Coordinating Center, mentioned later in this report, and which serves as the
telecommunications ISAC, is an operational entity within the NCS.
23 The other directorates included: Science and Technology, Border and Transportation
Security and Emergency Preparedness and Response.
24 In a more detailed discussion of the Administration’s original reorganization proposal
(The Department Of Homeland Security, June 2002), the Administration provided an
organization chart showing what it then called the Information Analysis and Infrastructure
Protection Division further divided into an Threat Analysis Section and an Infrastructure
Protection Section, with the latter being divided again into Physical Assets and
Telecommunications and Cybersecurity. How this Directorate eventually gets organized
remains to be seen.

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CRS-13
•
to develop a comprehensive national plan for securing key resources
and critical infrastructures;
•
to administer the Homeland Security Advisory System;
•
to work with the intelligence community to establish collection
priorities; and,
•
to establish a secure communication system for receiving and
disseminating information.
In addition, the Act provided a number of protections for certain information
(defined as critical infrastructure information) that non-federal entities, especially
private firms or ISACs formed by the private sector, voluntarily provide the
Department. Those protections included exempting it from the Freedom of
Information Act, precluding the information from being used in any civil action,
exempting it from any agency rules regarding ex parte communication, and
exempting it from requirements of the Federal Advisory Committee Act.
The Act basically built upon existing policy and activities. Many of the policies,
objectives, missions, and responsibilities complement those already established (e.g.
vulnerability assessments, national planning, communication between government
and private sector, and improving protections).
The Act represented a major reorganization. Many entities, some with multiple
missions, were transferred or were split apart, raising issues of how these functions
will be reintegrated (including physical relocation), the integrity of functions left
behind, and how constituencies will react. However, the transfers associated with
infrastructure protection perhaps were less disruptive as others (such as Coast Guard,
or U.S. Customs). CIAO, FedCIRC, and NIASC are all relatively new organizations,
with relatively narrow missions, and were transferred fully to the new organization.
While they are not likely to maintain their current identities as separate offices, the
functions they have been performing are likely to continue.
The NIPC, however, was not transferred intact. The transfer leaves the
Computer Investigations and Operations unit within NIPC at the FBI, while moving
the Analysis and Warning Section and the Training, Outreach, and Strategy Section
function to the Department. The FBI had received some criticism for its management
of NIPC. In the press, the FBI had been accused of being reluctant to share
information with other agencies. According to a General Accounting Office (GAO)
report, the FBI had trouble recruiting people from other agencies. The GAO report
stated that the Threat Analysis and Warning function had not been well-developed
(although the GAO noted that the analysis function is a difficult problem). The GAO
report also stated that NIPC, through its Investigations and Operations unit, had
provided valuable support to FBI field investigations.
Although not specified in Homeland Security Act legislation, the NIPC’s role
in managing the FBI’s Key Asset Initiative was also transferred to the Department
of Homeland Security. The program had been implemented primarily through FBI
Field Offices. The Department of Homeland Security will take over and standardized
the information collection process and management of the database.

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Splitting the functions of the NIPC should not have an adverse impact on the
FBI. The Investigations function left behind has been a traditional mission area for
the FBI, while those transferred represented relatively new missions. From the
Department of Homeland Security’s perspective, however, the transfer of functions
came without the transfer of many human resources which will have to be
reconstituted.25
The NCS is essentially an interagency organization and assuming that its
interagency character (and its close connection to the private sector through the
NSTAC) is maintained, the impact of changing Managers from DOD to the
Department of Homeland Security (which is the immediate impact of the transfer)
is expected to be minimal. Whether a physical relocation will be called for has not
been addressed yet by the Administration. DOD does feel that its other
communications and computer organizations with complementary functions benefit
by being in close physical proximity.
Policy Implementation
There is an element of continuity in the policies and activities undertaken by the
Clinton and Bush Administrations. For example, the Bush Administration maintains
the effort to communicate with infrastructure operators through ISACs, and, although
it made some changes to accommodate the existence of the Department of Homeland
Security, maintains certain lead agencies as the main liaison with certain sectors. The
following discusses the implementation of major elements of PDD-63 and the Bush
Administration’s policy as policy and action continue to evolve.
Lead Agencies and Selection of Sector Liaison Officials and
Functional Coordinators. The National Strategy for Homeland Security, released
by the Bush Administration in July 2002, maintained the role of lead agencies as
outlined in PDD-63, with the then proposed Department of Homeland Security acting
as coordinator of their efforts. However, the Strategy did shift liaison responsibilities
for some sectors to the new Department.26 The liaison responsibilities outlined in the
National Strategy are noted in Table 2 below.
25 Testimony of Michael Vatis before the House Committee on Government Reform,
Subcommittee on Technology, Information Policy, Intergovernmental Relations and the
Census, April 8, 2003. Vatis’s testimony notes that while the transfer of the NIPC functions
involved the transfer of over 300 positions, only 10 to 20 people actually transferred. What
is not clear is if the number of positions transferred from NIPC include the Investigations
people that stayed at FBI. If so, then the loss in analytical capacity may not be as great as
it sounds. In any event, in its budget justification, the Directorate for Information Analysis
and Infrastructure Protection is asking for funds to fill 226 positions for intelligence and
analysis and vulnerability assessments.
26 There was some debate on how many sectors should be transferred to the new department.
See, Ridge Says EPA Should Lose Authority to Evaluate Vulnerability of Industrial
Facilities, Inside EPA, June 25, 2002.

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Table 2. Lead Agencies as Proposed in the National Strategy for
Homeland Defense
Department/Agency (PDD-63 liaison)
Sector/Function
Agriculture
Agriculture
Food
Agriculture
Meat/Poultry
Health and Human Services
All other
Homeland Security (Commerce)
Information and Communications
Treasury
Banking and Finance
EPA
Water
Homeland Security (Transportation)
Transportation
Homeland Security (Federal Emergency
Emergency Services
Management Agency, Justice, Health and
Human Services)
Health and Human Services
Public Health
Government
Homeland Security
Continuity of Government
Individual departments and agencies
Continuity of Operations
Energy
Electric Power, Gas, and Oil
Environmental Protection Agency
Chemical Industry and Hazardous
Materials
Defense
Defense Industrial Base
Homeland Defense
Postal and Shipping
Interior
National Monuments and Icons
Identifying and Selecting Sector Coordinators. The identification of
sector coordinators has proceeded with mixed results. Table 3 below shows those
individuals or groups that have agreed to act as Coordinators.
Different sectors present different challenges to identifying a coordinator. Some
sectors are more diverse than others (e.g. transportation includes rail, air, waterways,
and highways; information and communications include computers, software, wire
and wireless communications) and raises the issue of how to have all the relevant
players represented. Other sectors are fragmented, consisting of small or local
entities. Some sectors, such as banking, telecommunications, and energy have more
experience than others in working with the federal government and/or working
collectively to assure the performance of their systems.
Besides such structural issues are ones related to competition. Inherent in the
exercise is asking competitors to cooperate. In some cases it is asking competing
industries to cooperate. This cooperation not only raises issues of trust among firms,
but also concerns regarding anti-trust rules.

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CRS-16
Sector coordinators have been identified for most of the major privately
operated sectors: banking and finance, energy, information, and communications. In
the public sector, EPA early on identified the Association of Metropolitan Water
Agency as sector coordinator. In the area of transportation, the Association of
American Railroads has been identified as the coordinator for the rail sector. The
Department of Transportation would like to also find coordinators for air and water
transportation. FEMA has not identified a single coordinator to represent the
country’s emergency fire service providers. However, through the U.S. Fire
Administration, a component of FEMA, they have an established communication
network with the nation’s fire associations, the 50 State Fire Marshals, and other law
enforcement groups. FEMA is also responsible for continuity of government.
Again, no single coordinator has been identified, but FEMA had discussed continuity
of government issues with state and local governments in the context of the Y2K.27
Nor has the Department of Health and Human Services identified a central
coordinator for the emergency medical community. The Department of Justice,
through the NIPC, has helped to create the Emergency Law Enforcement Services
(ELES) Forum. The Forum is a group of senior law enforcement executives from
state, local, and non-FBI federal agencies.
Appointment of the National Infrastructure Assurance Council. The
Clinton Administration released an Executive Order (13130) in July, 1999, formally
establishing the council. Just prior to leaving office, President Clinton put forward
the names of 18 appointees.28 The Order was rescinded by the Bush Administration
before the Council could meet. In Executive Order 13231,29 President Bush
established a National Infrastructure Advisory Council (with the same acronym,
NIAC) whose functions are similar to those of the Clinton Council. On September
18, 2002, President Bush announced his appointment of 24 individuals to serve on
Council.30 The E.O. amending 13231 makes some minor modifications to NIAC.
Primarily, the Council now reports to the President through the Secretary of
Homeland Security
27 The New Mexico Critical Infrastructure Assurance Council, an offshoot of the FBI’s
InfraGard efforts in the state, include the state government and other state and local
agencies. The Council was referenced in the National Plan for Information Systems
Protection. See, National Critical Infrastructure Plan, below.
28 White House Press Release, dated January 18, 2000.
29 Executive Order 13231—Critical Infrastructure Protection in the Information Age. Federal
Register. Vol. 66. No. 202. October 18, 2001. pp53063-53071. The NIAC is established on
page 53069.
30 See White House Press Release, September 18, 2002.

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Table 3. Sector Coordinators
Lead Agency
Identified Sector Coordinators
Commerce
A consortium of 3 associations:
Information Technology Assn. of
America; Telecommunications
Industry Assn.; U.S. Telephone Assn.
Treasury
Rhonda McLane - BankAmerica
EPA
Assn. of Metropolitan Water Agencies
Energy
North American Electric Reliability
Council and National Petroleum
Council
Transportation
Association of American Railroads
International Airport Councils of
North America (inactive)
Health and Human Services
FEMA
U.S. Fire Administration
Justice
Emergency Law Enforcement
Services Forum
Internal Agency Plans. There had been some confusion about which
agencies were required to submit critical infrastructure plans. PDD-63 directed every
agency to develop and implement such a plan. A subsequent Informational Seminar
on PDD-63 held on October 13, 1998 identified two tiers of agencies. The first tier
included lead agencies and other “primary” agencies like the Central Intelligence
Agency and Veteran’s Affairs. These agencies were held to the 180 day deadline.
A second tier of agencies were identified by the National Coordinator and required
to submit plans by the end of February, 1999. The “secondary” agencies were
Agriculture, Education, Housing and Urban Development, Labor, Interior, General
Services Administration, National Aeronautics and Space Administration and the
Nuclear Regulatory Commission. All of these “primary” and “secondary” agencies
met their initial deadlines for submitting their internal plans for protecting their own
critical infrastructures from attacks and for responding to intrusions. The Critical
Infrastructure Assurance Office assembled an expert team to review the plans. The
plans were assessed in 12 areas including schedule/milestone planning, resource
requirements, and knowledge of existing authorities and guidance. The assessment
team handed back the initial plans with comments. Agencies were given 90 days to
respond to these comments. Of the 22 “primary” and “secondary” agencies that
submitted plans, 16 modified and resubmitted them in response to first round
comments.
Initially the process of reviewing these agency plans was to continue until all
concerns were addressed. Over the summer of 1999, however, review efforts slowed

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CRS-18
and subsequent reviews were put on hold as the efficacy of the reviews was debated.
Some within the CIAO felt that the plans were too general and lacked a clear
understanding of what constituted a “critical asset” and the interdependencies of
those assets. As a result of that internal debate, the CIAO redirected its resources to
institute a new program called Project Matrix. Project Matrix is a three step process
by which an agency can identify and assess its most critical assets, identify the
dependencies of those assets on other systems, including those beyond the direct
control of the agency, and prioritize. CIAO has offered this analysis to agencies,
including some not designated as “primary” or “secondary” agencies, such as the
Social Security Administration and the Securities and Exchange Commission.
Participation by the agencies has been voluntary. Project Matrix continues.
In the meantime, other agencies (i.e. those not designated as primary and
secondary) apparently did not develop critical infrastructure plans. In a much later
report by the President’s Council on Integrity and Efficiency (dated March 21, 2001),
the Council, which was charged with reviewing agencies’ implementation of PDD-
63, stated that there was a misunderstanding as to the applicability of PDD-63 to all
agencies. The Council asserted that all agencies were required to develop a critical
infrastructure plan and that many had not, because they felt they were not covered by
the Directive. Also, the Council found that of the agency plans that had been
submitted, many were incomplete, had not identified their mission-critical assets, and
that almost none had completed vulnerability assessments. Two years later, the
General Accounting Office reported that four of the agencies they reviewed for the
House Committee on Energy and Commerce (HHS, Energy, Commerce, and EPA)
had still not yet identified their critical assets and operational dependencies, nor have
they set any deadlines for doing so.31
According to the National Plan for Information Systems Protection, released in
January 2000 (see below), all “Phase One” and “Phase Two” agencies (presumably
this refers to the “primary” and “secondary” agencies mentioned above) were to have
completed preliminary vulnerability analyses and to have outlined proposed remedial
actions. Again, according to the National Plan, those remedial actions were to have
been budgeted for and submitted as part of the agencies’ FY2001 budgets
submissions to the Office of Management and Budget and every year thereafter.
As another indication that infrastructure protection and cyber protection are
sometimes considered synonymous, the agencies’ internal critical infrastructure
planning process has been melded with the agencies’ computer security planning
process (as reauthorized by the Federal Information Security Management Act of
2002, included in Title III of E-Government Act of 2002, P.L. 107-347) and their
continuity of operations planning.
National Critical Infrastructure Plan. PDD-63, the National Strategy for
Homeland Security, and the Homeland Security Act each have called for the
development of a comprehensive national infrastructure protection plan. However,
31 U.S. General Accounting Office, Critical Infrastructure Protection: Challenges for
Selected Agencies and Industry Sectors. Report to the Committee on Energy and Commerce,
House of Representatives. GAO-03-233. February 2003. pp4-5.

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reflecting the initial emphasis on addressing vulnerabilities associated with
information networks, the first two national strategies focused primarily on protecting
information systems. In 2000, the Clinton Administration released Version 1.0 of a
National Plan for Information Systems Protection in January 2000.32 The Plan
focused primarily on cyber-related efforts within the federal government. In
September 2002, the Bush Administration, through the President’s Critical
Infrastructure Protection Board, released a draft of The National Strategy to Secure
Cyberspace. The latter was released in its final form in February 2003, and could be
considered Version 2.0 of the Clinton-released Plan. It addressed all stakeholders in
the nation’s information infrastructure, from home users to the international
community, and included input from the private sector, the academic community, and
state and local governments. Also in February 2003, the Office of Homeland
Security released the National Strategy for the Physical Protection of Critical
Infrastructures and Key Assets. A short synopsis of the two Strategies released in
2003 is given in the Appendix. The Department of Homeland Security plays a
predominant role in implementing both of these strategies.
Information Sharing and Analysis Center (ISAC). PDD-63 envisaged
an ISAC to be the private sector counterpart to the FBI’s National Infrastructure
Protection Center (NIPC), collecting and sharing incident and response information
among its members and facilitating information exchange between government and
the private sector. While the Directive conceived of a single center serving the entire
private sector, the idea evolved into each sector having its own center. Progress in
forming sector ISACs has been mixed.
A number of the nation’s largest banks, securities firms, insurance companies
and investment companies have joined together to form a banking and finance
industry ISAC. The group has contracted with an internet service provider33 (ISP)
to design and operate the ISAC. Individual firms feed raw computer network traffic
data to the ISAC. The ISP maintains a database of network traffic and analyzes it for
suspicious behavior and provides its customers with summary reports. If suspicious
behavior is detected, the analysis may be forwarded to the federal government.
Anonymity is maintained between participants and outside the ISAC. The ISP will
forward to its customers alerts and other information provided by the federal
government. The ISAC became operational in October, 1999.
The telecommunications industry agreed to establish an ISAC through the
National Coordinating Center (NCC). The NCC is a government-industry
partnership that coordinates responses to disruptions in the National Communications
System. Unlike the banking and finance ISAC that uses a third party for centralized
monitoring and analysis, each member firm of the NCC will monitor and analyze its
own networks. If a firm suspects its network(s) have been breached, it will discuss
the incident(s) within the NCC’s normal forum. The NCC members will decide
whether the suspected behavior is serious enough to report to the appropriate federal
32 Defending America’s Cyberspace. National Plan for Information Systems Protection.
Version 1.0. An Invitation to a Dialogue. The White House. 2000.
33 The ISP is Global Integrity, a subsidiary of Science Applications International Corp.
(SAIC).

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CRS-20
authorities. Anonymity will be maintained outside the NCC. Any communication
between federal authorities and member firms will take place through the NCC, this
includes incident response and requests for additional information.34
The electric power sector, too, has established a decentralized ISAC through its
North American Electricity Reliability Council (NAERC). Much like the NCC,
NAERC already monitors and coordinates responses to disruptions in the nation’s
supply of electricity. It is in this forum that information security issues and incidents
will be shared. The oil and gas industry established a separate ISAC in 2001,
choosing a model more like the banking and finance sector (i.e. managed by Global
Integrity).
In January, 2001, the information technology industry announced its plans to
form an ISAC. Members include 19 major hardware, software, and e-commerce
firms, including AT&T, IBM, Cisco, Microsoft, Intel, and Oracle. The ISAC will be
overseen by a board made up of members and operated by Internet Security Systems.
The country’s water authorities, with help from an EPA grant, officially
launched the WaterISAC in December 2002. The ISAC is run by a Board of water
utility managers appointed by 8 national drinking water and waste water associations.
Much like the communications and the electric power sectors, the emergency
fire services sector ISAC will be integrated into the responsibilities of an existing
organizational body; FEMA’s U.S. Fire Administration, headquartered in
Emmitsburg, MD. The ISAC will staffed by leading fire experts who will assess
NIPC threat intelligence and help prepare warnings for distribution to the nation’s
fire fighting community. In turn, local fire departments, as first responders in many
instances, can provide information through the U.S. Fire Administration that may be
helpful to NIPC in its intelligence analysis function.
As well as those mentioned above, a number of other sectors, not originally
included in PDD-63, but subsequently mentioned by the Bush Administration as
infrastructures in need of protection to counter-terrorism, have formed ISACs. These
include the food and chemical industries.
In addition to these individual sectors setting up or contemplating ISACs, the
private sector, in December 1999, formed a Partnership for Critical Infrastructure
Security to share information and strategies and to identify interdependencies across
sectoral lines. The Partnership is a private sector initiative. Five working groups
were established (Interdependencies/Vulnerability Assessment, Cross-Sector
Information Sharing, Legislation and Policy, Research and Development, and
Organization). The federal government is not officially part of the Partnership, but
the CIAO acts as a liaison and has provided administrative support for meetings.
Sector Liaison from lead agencies are considered ex officio members. Some entities
not yet part of their own industry group (e.g. some hospitals and pharmaceutical
34 Federal agencies sit on the NCC, including the NSA. One could assume that knowledge
of incidents discussed in the NCC could find its way to federal investigatory authorities
without formally being reported.

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CRS-21
firms) or not specifically designated as belonging to a critical infrastructure (the
chemical industry) are participating in the Partnership. The Partnership helped
coordinate the private sector’s input to the National Strategy to Secure Cyberspace.
Issues

Cyber vs. Physical Vulnerabilities and Protection. The issue is not
cyber protection or physical protection of the nation’s critical infrastructure. The
issue that has arisen recently is how best to organize to ensure that both are
adequately covered. Both the President’s Commission on Critical Infrastructure
Protection and PDD-63 addressed both the physical and cyber vulnerabilities of the
nation’s critical infrastructures. However, in the recommendations made, the
organizational structures developed, and the early planning required, emphasis was
given to cyber vulnerabilities and protection. This was because, at the time, there
was a consensus that the cyber area was a new vector of vulnerability and one that
was not being adequately addressed. Many spoke of critical infrastructure protection
and cyber protection synonymously. While physical threats and protections were not
dismissed, it was stated that these were better understood and processes already in
place to address them. This changed after September 11, 2001, when the physical
threat of and vulnerability to physical attacks was made apparent.
In E.O. 13228 and E.O. 13231, both released in October 2001, the
responsibilities for physical protection and cyber protection of the nation’s critical
infrastructure was split. The Office of Homeland Security, the Assistant to the
President for Homeland Security, and the Homeland Security Council were given
responsibility for physical protection. The President’s Board on Critical
Infrastructure Protection and the Assistant to the President for Cybersecurity was
given cyber protection (including the physical protection of information network
assets). Each developed a National Strategy to cover their area of responsibility.
When the Bush Administration decided to support the establishment of a
Department of Homeland Security, in June 2002, it retained this split organizationally
by proposing that the office responsible for Infrastructure Protection be further
divided with someone responsible for Physical Assets and someone responsible for
Telecommunications and Cybersecurity. The National Strategy for Homeland
Security, released in July 2002, stated that “securing cyberspace poses unique
challenges...” and that “the Department of Homeland Security will place an
especially high priority on protecting our cyber infrastructure.”
However, in February 2003, while working to stand up the Department of
Homeland Security, the Bush Administration released E.O. 13286, which amended
E.O. 13231 and effectively abolished both the President’s Board on Critical
Infrastructure and the position of Assistant to the President for Cybersecurity. This
has some in the cyber security realm concerned that cyber security will be absorbed
within the effort to provide physical protections for the nation’s critical infrastructure
and not receive the special attention they think it requires.35 It is not yet clear how
35 Testimony of Michael Vatis before the Committee on Government Reform, Subcommittee
(continued...)

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the Department’s Directorate of Information Analysis and Infrastructure Protection
will eventually be structured.
What is Critical and Needs Protection and How Do We Decide? The
term critical infrastructure has been defined in most of the official documents
mentioned in this report. The definition has changed somewhat over time.36 The
USA PATRIOT Act provided the following definition:
The term “critical infrastructure” means systems and assets, whether
physical or virtual, so vital to the United States that the incapacity or
destruction of such systems and assets would have a debilitating impact on
security, national economic security, national public health and safety, or
any combination of those matters.
The list of infrastructures that have been selected as fitting this definition has
grown as well, from seven in the Commission report to thirteen (where it has
currently stabilized) in the National Strategy for Homeland Security. These thirteen
are
•
Agriculture
•
Energy
•
Food
•
Transportation
•
Water
•
Banking and Finance
•
Public Health
•
Chemicals and Hazardous
•
Emergency Services
Materials
•
Government
•
Postal and Shipping
•
Defense Industrial Base
In addition, the National Strategy for Homeland Security raised the issues of key
assets and national morale. Key assets are those “whose destruction would not
endanger vital systems, but could create local disaster or profoundly damage our
Nation’s morale.” These could include prominent national, state, or local
monuments and icons. These could also include nuclear power plants or other
“localized” facilities that deserve protection because of their destructive potential or
their value to the local community.
The National Strategy for Homeland Security also commits the federal
government to work closely with state and local governments to develop and apply
compatible approaches to ensure protection for critical assets...at all levels of society.
For example, schools, courthouses, and bridges are critical to the communities they
serve.
35 (...continued)
on Technology, Information Policy, Intergovernmental Relations and the Census. April 8,
2003. See page 4 of his testimony.
36 For a discussion of how the definition has changed slightly over time, see CRS Report
RL31556, Critical Infrastructures: What Makes An Infrastructure Critical?.

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CRS-23
However, it is not practical to try and protect all of these assets to the same
degree. So how will priorities be set and protective measures allocated? According
to the National Strategy for Homeland Security, a consistent methodology will be
developed and applied to focus the federal government’s efforts. The National
Strategy for the Physical Protection of Critical Infrastructures and Key Assets makes
mention of developing a uniform methodology for identifying facilities, systems and
functions with national-level criticality to help establish federal, state, local, and
private sector protection priorities. Such a methodology has not yet been articulated
(although the Office of Management and Budget does apply criteria in its combating
terrorism budget analysis, see below).
How Much Will It Cost and Who Pays? An estimate of the amount of
money the Federal government spends on critical infrastructure protection is included
in the President’s Annual Report to Congress on Combating Terrorism.37 Funding
for Critical Infrastructure Protection was estimated at $3.2 billion for FY2002 and
the Administration request for FY2003 was $3.9 billion (see Table A.1. in the
Appendix). Most of this is associated with cyber security within the federal
government. It also includes funding of research and development, training (e.g.
Scholarship for Service)38, outreach, etc.
The report makes a distinction between critical infrastructure protection and
other infrastructure-related protection that may be confusing. The Report aggregates
funds for three different programs—Combating Terrorism, Critical Infrastructure
Protection, and Continuity of Operations. The Combating Terrorism program
includes activities in 5 categories/mission areas, two of which are physical security
of government facilities and workers, and physical protection of the national
populace and national infrastructure. OMB does not consider the activities supported
in these latter two categories as critical infrastructure protection, although the
description of the activities might imply that it should. For example, included in the
physical protection of the national populace and infrastructure category are activities
taken to help protect banking and finance, water, telecommunications, transportation,
and energy production and distribution. Much of what is spent on new airport
security is aggregated in this category. So, too, according to the report, are activities
by the Department of Energy to protect the supply and transmission of all forms of
energy. The distinction between these activities and critical infrastructure protection
is that to be considered as a critical infrastructure protection activity, the asset being
protected must be critical at the national level (i.e. incapacitation would require
restoration within 72 hours, disruption would have serious consequences on critical
government operations and/or society’s quality of life, or outage would interrupt
37 OMB aggregates these numbers based on input from relevant agencies. In most cases,
activities associated with critical infrastructure protection are funded as part of larger
accounts and are not readily visible in either agency budgets or in congressional
appropriations.
38 Scholarship for Service is a program initiated during the Clinton Administration to
support the development of computer security expertise within the federal government.
Funds are made available to institutions of higher learning to develop computer security
programs and to support students, who pledge to work a stint in the federal government.
The program also supports continuing education for federal workers in computer security.

---

CRS-24
information flows or service provision essential to government operations or the
public at large). A public telephone switch or the electric power grid would be
considered critical.39 An inventory control system would not. The provision of
fences or surveillance cameras at tunnels or bridges, or at nuclear power plants,
would apparently fall within the physical protection category of Combating
Terrorism. According to the FY2002 report, funding for the Combating Terrorism
activities related to the physical protection of the government and national populace
totaled $9.6 billion in FY2002 and the request for FY2003 was $14. 6 billion.
It is not known how much money states and localities are spending on what they
consider to be critical infrastructure protection. According to the National Strategy
on Homeland Security, the National Governors Association estimated that states had
spent $6 billion between September 11, 2001 and the end of 2002 on all homeland
security-related activities. States have made it clear that their budgets, especially in
the current economic environment, make these expenditures difficult. The National
Strategy for Homeland Security and the National Strategy for the Physical Protection
of Critical Infrastructures and Key Assets recognize that while the federal
government must focus on protecting assets that have a national importance, states
may need help in protecting their assets as well. Much of the federal assistance to
states so far have been for preparedness activities focused mostly on first responders
and dealing with weapons of mass destruction. The USA PATRIOT Act established
a federal grant program specifically for this purpose. The grant program, called the
State Homeland Security Grant Program is managed by the Office for Domestic
Preparedness (now part of the Department of Homeland Security). The grant will
support, among many other items, the purchase of equipment, including equipment
used for enhancing the physical protection of critical infrastructure.

Potential private sector costs are unknown at this time.40 Some sectors are
already at the forefront in both physical and computer security and are sufficiently
protected or need only marginal investments. Others are not and will have to devote
more resources. The ability of certain sectors to raise the necessary capital may be
limited, such as metropolitan water authorities which may be limited by regulation,
or emergency fire which may function in a small community with a limited resources.
Even sectors made up of large well capitalized firms are likely to make additional
expenditures only if they can identify a net positive return on investment. Affecting
these business decisions will be issues of risk and liability.
As part of its outreach efforts, the CIAO has helped the auditing, accounting,
and corporate directors communities identify and present to their memberships the
39 The report mentions that the government’s Critical Infrastructure Program (CIP) focuses
on information infrastructure and the physical assets that support it. The implication is that
the CIP activities counted in the report also focus on the protection of the information
infrastructure. However, an OMB official has clarified (per phone conversation, November
7, 2002) that the CIP also includes the protection of assets other than information assets.
40 The cyber security market is estimated at $10 billion in products and services (see
“Picking the Locks on the Internet Security Market.” Redherring.com. July 24, 2001). This
probably includes, however, some government expenditures. It also does not include
physical security measures.

---

CRS-25
responsibilities governing board of directors and corporate officers have, as part of
their fiduciary responsibilities, to manage the risk to their corporation’s information
assets. The Institute of Internal Auditors, the American Institute of Certified Public
Accountants, the Information Systems Audit and Control Association and the
National Association of Corporate Directors have formed a consortium and held
“summits” around the country in an outreach effort. The main point of their
discussion can best be summed up by the following expert from a paper presented at
these summits:
“The consensus opinion from our analysts is that all industries and companies
should be equally concerned about information technology security issues
because it is an issue that has an enormous potential to negatively impact the
valuation of a company’s stock...it must be the responsibility of corporate leaders
to ensure these threats are actually being addressed on an ongoing basis. At the
same time, the investment community must keep the issue front and center of
management.”41
There is also the question of downstream liability, or third party liability. In the
denial-of-service attacks that occurred in early 2000, the attacks were launched from
“zombie” computers; computers upon which had been placed malicious code that
was subsequently activated. What responsibility do the owners of those “zombie”
computers have to protect their systems from being used to launch attacks elsewhere?
What responsibility do service providers have to protect their customers? According
to some, it is only a matter of time before the courts will hear cases on these
questions.42
Costs to the private sector may also depend on the extent to which the private
sector is compelled to protect their critical infrastructure versus their ability to set
their own security standards. The current thinking is the private sector should
voluntarily join the effort. However, given the events of September 11, the private
sector may be compelled politically, if not legally, to increase physical protections.
But, what happens if a sector does not take actions the federal government feels are
necessary? The National Strategy for Homeland Security stated that private firms
will still bear the primary responsibility for addressing public safety risks posed by
their industries. The Strategy goes on to state that in some cases, the federal
government may have to offer incentives for the private sector to adopt security
measures. In other cases, the federal government may need to rely on regulation.
Information Sharing. The information sharing—internal to the federal
government, between the federal government and the private sector, and between
private firms—considered necessary for critical infrastructure protection raises a
number of issues.
41 From an paper entitled Information Security Impacting Securities Valuations, by A.
Marshall Acuff, Jr., Salomon Smith Barney Inc.
42 See, “IT Security Destined for the Courtroom.” Computer World.. May 21,2001. Vol 35.
No. 21.

---

CRS-26
In the past, information flow between agencies has been restrained for at least
three reasons: a natural bureaucratic reluctance to share, technological difficulties
associated with compatibility, and legal restraints to prevent the misuse of
information for unintended purposes. However, in the wake of September 11, given
the apparent lack of information sharing that was exposed in reviewing events
leading up to that day, many of these restraints are being reexamined and there
appears to be a general consensus to change them. Some changes have been as a
result of the USA PATRIOT Act (including easing the restrictions limiting the
sharing of information between national law enforcement agencies and those
agencies tasked with gaining intelligence of foreign agents). The legislation
establishing the Department of Homeland Security also authorizes efforts to improve
the ability of agencies within the federal government to share information.
Since much of what is considered to be critical infrastructure is owned and
operated by the private sector, critical infrastructure protection relies to a large extent
on the ability of the private sector and the federal government to share information.
However, it is unclear how open the private sector and the government will be in
sharing information. The private sector primarily wants from the government
information on specific threats which the government may want to protect in order
not to compromise sources or investigations. In fact, much of the threat assessment
done by the federal government is considered classified. For its part, the government
wants specific information on vulnerabilities and incidents which companies may
want to protect to prevent adverse publicity or revealing company practices. Success
will depend on the ability of each side to demonstrate it can hold in confidence the
information exchanged. According to the GAO testimony cited earlier, there is little
or no formalized flow of information yet from the private sector to the federal
government, in general, or the NIPC specifically.43
This issue is made more complex by the question of how the information
exchanged will be handled within the context of the Freedom of Information Act
(FOIA). The private sector is reluctant to share the kind of information the
government wants without an exempting it from public disclosure under the existing
FOIA statute.
The Homeland Security Act protects information, defined as critical
infrastructure information, voluntarily provided the Department of Homeland
Security not only from FOIA, but also prohibits from being used in any civil action
against the provider, exempts from any agency rules regarding ex parte
communications, and exempts it from following under the requirements of the
Federal Advisory Committee Act. It only can be shared with other entities in
fulfillment of their responsibilities in homeland security, and any unauthorized
disclosure by a federal government official can lead to imprisonment. Also, these
disclosure rules take precedent over any State rules.
The Act defines critical infrastructure information to include:
43 Op. Cit. General Accounting Office, Critical Infrastructure Protection.

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CRS-27
•
actual, potential, or threatened interference with, attack on, compromise of, or
incapacitation of critical infrastructure by either physical or computer-based
attack that violates federal or state law, harms interstate commerce, or threatens
public health and safety;
•
the ability of critical infrastructures to resist such attacks;
•
any planned or past operational problem or solution regarding critical
infrastructure including repair, recovery, reconstruction, insurance, or continuity
to the extent it relates to such interference, compromise, or incapacitation.
The submittal is considered voluntary if it was done in the absence of an
agency’s exercise of legal authority to compel access to or submission of such
information.
The FOIA exemption is not without its critics. The non-government-
organizations that actively oppose government secrecy are reluctant to expand the
government’s ability to to hold more information as classified or sensitive.44 These
critics feel that language agreed upon in the final legislation is too broad (covers too
much material and offers too many protections) and is unnecessary given current
restrictions on the disclosure of information contained in the FOIA statute and case
law. More recently, the environmental community has become concerned that the
language could allow firms to shield from disclosure information they would
otherwise be obliged to disclose to the public, or worse, be able to prevent the
information from being used in any legal proceedings, by claiming it to be related to
critical infrastructure protection. This has become a particular issue within the right-
to-know community concerned with risks associated with toxic releases from plants
using or producing toxic chemicals, which are now being considered as a critical
infrastructure.45 It is not clear if this is the case, since the Act also states that other
agencies or third parties may receive similar information by other lawful means and
may use it any appropriate legal manner.
On April 15, 2003, the Department of Homeland Security released draft
procedures for receiving, marking, and handling of critical infrastructure
information,46 implementing the provisions stated above. The proposed rule states
that the Secretary of Homeland Security shall name the Undersecretary of
Information Analysis and Infrastructure Protection (IA/IP) as the senior official
responsible for directing and administering a Critical Infrastructure Information (CII)
Program. The Undersecretary is to appoint a CII Program Manager. Only the CII
Program Manager may acknowledge the receipt of, validate, and mark information
received as CII. Such information may be submitted directly to CII Program
Manager or it may be forwarded to the CII Program Manager by other agencies.
While the submitter of the information may designate it as CII, it is up to the CII
Program Manager to validate it as such. The information, however, shall be
44 Op. cit. EPIC
45 For more discussion of these issues, see CRS Report, RL31547, Critical Infrastructure
Information Disclosure and Homeland Security, by John D. Moteff and Gina Stevens.
46 Procedures for Handling Critical Infrastructure Information. Federal Register. Vol. 68.
No. 72. pp.18524-18529.

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CRS-28
protected, until the Manager has had a chance to rule. The Manager has 30 days to
inform the submitter that the information does not meet the standards for CII. These
standards, however, are not defined beyond the relatively broad definition of CII
provided in the Act. Furthermore, if the CII Program Manager finds that the
information was submitted in bad faith, the Manager is not required to notify the
submitter that the information does not qualify.
The draft procedures states that these procedures do not apply to or affect any
requirement pertaining to information that must be submitted to a federal agency or
pertaining to the obligation of any federal agency to disclose such information under
the Freedom of Information Act. The procedure goes on to state that information
required to be submitted to satisfy a provision of law may not be marked as CII by
the submitter, the Department of Homeland Security, or any other federal agency.
Also, while the Act specifies penalties associated with unauthorized disclosure
of this information by federal employees, the draft procedures specifies “whistle-
blowing” disclosures that are exempt from these penalties.
The draft provisions, in some ways, address some of the concerns expressed by
those who opposed this provision of the Act, but also raises some more questions.
For example, while the procedures allow entities to submit information they think is
CII to the CII Program Manager indirectly through other officials or agencies, the
information is not validated as CII until the Manager designates as such. However,
as pointed out by critics47, the presumption is that the information shall be protected
until the Manager makes such a ruling. There is not time frame for the Manager to
receive the information or to make a ruling. However, the Manager has 30 days to
inform the submitter that the information does not qualify as CII. Will the Manager
have the time and resources to validate the amount of information coming in?
The information exchanged between private firms within the context of the
Sector Coordinators and the ISACS also raises some antitrust concerns, as well as
concerns about sharing information that might unduly benefit competitors.
There is also a technical dimension to all of this information sharing that is
suppose to occur. Once collected, the information is stored in different databases,
utilizing different technologies. Integrating these databases while controlling access
will not be a trivial technical and managerial task.
Privacy/Civil Liberties? The PPCIP made a number of recommendations
that raised concerns within the privacy and civil liberty communities. These included
allowing employers to administer polygraph tests to their computer security
personnel, and requiring background checks for computer security personnel. The
PPCIP also recommended allowing investigators to get a single trap and trace court
order to expedite the tracking of hacker communications across jurisdictions, if
possible. Another area of concern is the monitoring network traffic in order to detect
intrusions. Traffic monitoring has the potential to collect vast amount of information
47 See, DHS Broadens CII in Proposed Rule. OMB Watch, published April 21, 2003.
[http://www.ombwatch.org/article/articleprint/1475] .

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CRS-29
on who is doing what on the network. What, if any, of that information should be
treated as private and subject to privacy laws? While recognizing a need for some
of these actions, the privacy and civil liberty communities have questioned whether
proper oversight mechanisms can be instituted to insure against abuse.
The USA Patriot Act (i.e. the anti-terrorism bill passed October 26, 2001 as P.L.
107-56), passed in the wake of the September 11 attacks, contained a number of
expansions in government surveillance, investigatory, and prosecutorial authority
about which the privacy and civil liberties communities have had concern. Most of
these issue are beyond the scope of this report.48 However, some of the provisions
impact directly the ability to track, in real time or after the fact, computer hackers.
This includes provisions giving investigators the authority to seek a single court order
to authorize the installation and use of a pen register or a trap and trace device
anywhere in the country in order to “record or decode electronic or other impulses
to the dialing, routing, addressing, or signaling information used in the processing or
transmitting of wire or electronic communications...”49 The law also defines a
“computer trespasser” as one who accesses a “protected computer” without
authorization and, thus, has no reasonable expectation to privacy of communications
to, through, or from the protected computer.50 The law goes on to stipulate the
conditions under which someone under the color of law may intercept such
communications.
The issue of allowing firms to conduct background checks, polygraph tests, and
monitor personnel who have access to critical infrastructure facilities or systems lay
dormant during the Clinton Administration. The National Strategy for Homeland
Security resurrects it. The Strategy tasks the Attorney General to convene a panel
with appropriate representatives from federal, state, and local government, in
consultation with the private sector, to examine whether employer liability statutes
and privacy concerns hinder necessary precautions. It is not clear if the
Administration meant to include in the private sector representation labor and civil
liberty groups. The National Strategy for the Physical Protection of Critical
Infrastructures and Key Assets also mentions exploring the possibility of establishing
national standards by which to check the backgrounds of personnel with access to
critical infrastructures.
Another issue is to what extent will monitoring and responding to cyber attacks
permit the government to get involved in the day-to-day operations of private
infrastructures? The PCCIP suggested possibly modifying the Defense Production
Act (50 USC Appendix, 2061 et seq) to provide the federal government with the
authority to direct private resources to help reconstitute critical infrastructures
suffering from a cyber attack. This authority exists now regarding the supply and
distribution of energy and critical materials in an emergency. Suppose that the
48 See CRS Report RS21051. Terrorism Legislation: Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
PATRIOT) Act of 2001,by Charles Doyle and Terrorism and Civil Liberties, by Charles
Doyle in the Legal Issues/Law Enforcement section of the CRS Terrorism Briefing Book.
49 See Section 216 of P.L. 107-56.
50 See Section 217 of P.L. 107-56.

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CRS-30
computer networks managing the nation’s railroads were to “go down” for unknown
but suspicious reasons. What role would the federal government play in allocating
resources and reconstituting rail service?
In a related matter, the National Strategy for Homeland Security and the
National Strategy for the Physical Protection of Critical Infrastructure and Key Assets
also mentions that the Department of Homeland Security will undertake a study to
evaluate mechanisms through which suspicious purchases of dual-use equipment and
materials can reported and analyzed. Examples of dual-use equipment and materials
included fermenters, aerosol generators, and protective gear. To some extent, this
type of monitoring has been going in the area of explosives, fertilizer purchases, etc.
The government also maintains a list of equipment that requires export licenses that
include some of these same articles. This study would imply the possibility of
expanding the monitoring of these transactions.
Congressional Action
Congress’ interest in protecting the nation’s critical infrastructure spans its
oversight, legislative, and appropriating responsibilities. Because the scope of
critical infrastructure protection extends across many committee jurisdictions, many
hearings, bills, and appropriations have dealt with only certain elements of the issue.
Since much of the nation’s infrastructure is owned or operated by the private sector,
much of its activity has focused on oversight of the governments efforts to coordinate
with the private sector.
After September 11, Congress passed legislation that touched upon some
elements of critical infrastructure. For example, it clarified the monetary threshold
that triggers prosecution for computer crimes and increases penalties for those
crimes. Congress also gave more flexibility to investigators to track computer
hackers, and in those cases where the federal government has some authority,
provided for increased protections (e.g. drinking water, nuclear power plants, ports).
Also, because much of the infrastructure is owned and operated by the private
sector, Congress has not had to appropriate large amounts of resources to
infrastructure protection to date. For the most part appropriations are directed at
protecting critical federal assets. The FY2003 Consolidate Appropriations
Resolutions (P.L. 108-7) included grant money for states to help protect
infrastructures in their jurisdictions. There have also been appropriations directed
at improving the nation’s expertise in computer security. At some point Congress
may have to consider whether the private sector, or other non-federal entities, require
more than market incentives to affect an appropriate level of protection.
The 108th Congress, exercising its oversight responsibility to monitor the
establishment of the new Department of Homeland Security, could use the two
National Strategies released in February as a roadmap for overseeing federal efforts
in critical infrastructure protection.

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CRS-31
For Additional Reading
CRS Report RL31556, Critical Infrastructures: What Makes an Infrastructure
Critical?, by John Moteff, Claudia Copeland, and John Fischer
CRS Report RS21026, Terrorism and Security: Issue Facing the Water
Infrastructure Sector, by Claudia Copeland and Betsy Cody.
CRS Report RL30861, Capitol Hill Security: Capabilities and Planning, by Paul
Dwyer and Stephen Stathis.
CRS Report RL31148, Homeland Security: The Presidential Coordination Office,
by Harold Relyea.
CRS Report RL31202, Federal Research and Development for Counter Terrorism:
Organization, Funding, and Options, by Genevieve J. Knezo.
CRS Report RL31466, Homeland Security Department: U.S. Department of
Agriculture Issues, by Jean Rawson.
CRS Report RL31530, Chemical Plant Security, by Linda-Jo Schierow.
CRS Report RL31542, Homeland Security–Reducing the Vulnerability of Public and
Private Information Infrastructures to Terrorism: An Overview, by Jeffrey
Seifert.
CRS Report RS21131, Nuclear Power Plants: Vulnerability to Terrorist Attack, by
Carl Behrens.
CRS Report RL31534, Critical Infrastructure Remote Control Systems and the
Terrorist Threat, by Dana Shea (Consultant).
CRS Report RL31294, Safeguarding the Nation’s Drinking Water: EPA and
Congressional Actions, by Mary Tiemann.
CRS Report RL31375, Meeting Public Spectrum Needs, by Linda Moore.
CRS Electronic Briefing Book, Terrorism, “Electric Utility Infrastructure,” by Amy
Abel and Mark Holt.
CRS Report RL31787, Information Warfare and Cyberwar: Capabilities and
Related Policy Issues, by Clay Wilson.
CRS Report RL31733, Port and Maritime Security: Background and Issue for
Congress, by John Frittelli.
CRS Electronic Briefing Book, Terrorism, “Aviation Security,” by Bartholomew
Elias and Daniel Morgan.

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CRS-32
Appendix
Federal Funding for Critical Infrastructure Protection
Table A.1. Critical Infrastructure Protection Funding by
Department
(millions$)
Department
FY98
FY99
FY00
FY01
FY02
ERF**
FY03
actual
actual
actual
actual
enacted
request
Agriculture
5.20
9.90
8.20
21.22
49.01
90.08
12.78
Commerce
9.10
21.81
14.40
27.94
30.10
10.25
50.69
Education
3.59
4.45
6.70
Energy
3.80
11.90
28.10
48.41
46.25
0.00
71.79
EOP
0.05
0.58
0.48
0.16
1.80
123.00
42.50
EPA
0.00
0.24
0.70
2.15
3.35
121.00
41.67
FEMA
0.00
0.00
0.40
1.55
1.47
0.00
1.47
GSA
0.00
3.00
1.00
7.98
13.48
0.00
19.58
HHS
37.00
44.50
69.60
84.34
96.75
0.00
87.19
Interior
1.29
1.60
2.10
2.60
3.79
0.00
0.38
Justice
25.80
55.30
42.20
72.29
80.41
73.83
153.87
Labor
3.80
5.40
7.90
13.37
16.58
5.88
23.80
NASA
40.00
42.00
66.00
116.00
112.00
108.50
133.00
NSF*
19.15
21.42
26.65
205.15
209.69
0.00
203.73
National
926.40
1217.70
1404.10
1824.13
2254.49
514.27
2343.38
Security
NRC
0.00
0.20
0.00
OPM
0.00
0.00
0.90
0.85
0.00
0.00
0.00
Social Security
60.70
57.10
48.90
73.83
105.60
7.50
129.16
State
6.00
19.00
40.00
Transportation
21.50
24.40
44.50
78.24
89.44
107.70
487.85
Treasury
31.50
50.10
47.40
55.45
34.95
16.19
42.72
Corps of
0.00
0.00
138.60
65.00
Engineers
Veterans Affairs
0.00
0.00
2.00
17.54
23.02
0.00
28.58
Grand Total
1194.88
1590.60
1862.23
2653.20
3172.18
1316.80
3939.14
Sources: For FY2001 - FY2003 request, OMB, Annual Report to Congress on Combating Terrorism,
June 24, 2002. For FY1998-FY2000, OMB, Annual Report to Congress on Combating Terrorism,
July 2001. *NSF figures for FY1998-FY2000 come from May 2000 report.**ERF is the Emergency
Response Fund, the supplemental passed after 9/11.

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CRS-33
National Strategy to Secure Cyberspace
This Strategy identified five priority areas:
•
National Cyberspace Security Response System
•
National Cyberspace Security Threat and Vulnerability Program
•
National Cyberspace Security Awareness and Training Program
•
Securing Government’s Cyberspace
•
National Security and International Cyberspace Security Cooperation
Within each of these priorities are a set of actions or recommendations for action.
A few of these are highlighted below.
National Cyberspace Security Response System: Such a system would be an
informal collaborative network of public and private organizations that would detect
potentially damaging activity in cyberspace, analyze exploits and warn potential
victims, coordinate a national response if necessary, and restore essential services.
The Strategy uses the air defense system over North America as an analogy.
Participants in such a system would include existing government and private
computer incident response teams, private information sharing and analysis centers,
and state and local entities. To some extent this capability exists in bits and pieces
all over the country, and works informally relatively well when vulnerabilities are
found and incidents occur. What is lacking most is a strategic view of the Internet
as a whole and a plan for determining when a cyber attack reaches a level that
threatens national or economic security and how to respond to such an attack. The
Department of Homeland Security has been given the lead to coordinate efforts to
establish such a capability.
National Cybersecurity Threat and Vulnerability Awareness Program: This
priority area envisions a number of activities to ensure that information on threat and
vulnerabilities is widely disseminated and that those threats and vulnerabilities be
reduced.
In regard to facilitating a broad dissemination of information, the Strategy
recommends that the government, academia, and the private sector work together to
make it easier for all users of cyberspace, whether a home user, a large conglomerate,
or a federal agency, to stay abreast of and take action to protect against known
vulnerabilities in software. Most cyber attacks exploit known vulnerabilities for
which “patches” exist. However, to stay abreast of and employ these “patches,”
some of which may affect the function of an individual computer system, is difficult
job. Failure to fix vulnerabilities can have an impact beyond the individual system
since the “affected” computers can be used to launch attacks on other computers. In
addition to recommending that the federal government and the private sector work
together to establish a one-stop clearinghouse for identifying vulnerabilities and
patches, the Strategy also recommends that the government and the private work
together to find ways to encourage software and computer vendors to improve the
security of their products.
To reduce the threat, the Strategy recommends improving the forensic
capabilities of both federal and state/local investigators and makes the Office of

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Science and Technology Policy responsible, with support from the Department of
Homeland Security, for developing a cybersecurity research and development agenda.
National Cyberspace Security Awareness and Training Program: The
Strategy envisions the Department of Homeland Security going beyond current
efforts at cybersecurity awareness and working with the Department of Education and
other agencies to develop a cybersecurity curriculum for primary and secondary
school students. The Strategy also calls for building upon existing education and
training programs such as the Cyber Corps Scholarship for Service program, the new
programs initiated under the Cyber Security Research and Development Act (both
managed by the National Science Foundation), and the National Security Agency’s
Centers of Excellence in Information Security. The Strategy also encourages the
development of certification programs for cybersecurity specialists that will be
broadly accepted in the public and private sector.
Securing Government’s Cyberspace: The Strategy recommends a number of
activities where the federal and state governments can improve their cybersecurity.
These include increased use of automated security assessment and security policy
enforcement tools, strong access control and authentication tools, and systems that
check for unauthorized connections to networks. Federal agencies are bound by
statute to secure their cyberspace. Most recently, the E-Government Act of 2002
(P.L. 107-347) included the Federal Information Security Management Act of 2003
(Title III), which states that federal agencies must have cybersecurity plans, that these
plans must regularly reviewed, audited, and updated.
National Security and International Cyberspace Security Cooperation: The
Strategy calls for the ability to quickly determine the source of a cyber attack that
threatens the nation’s security. It also reserves the right of the United States to
respond to threatening attacks in ways that go beyond law enforcement. In the area
of international cooperation, the Strategy recommends that nations sign on to the
Council of Europe’s Convention on Cybercrime, which commits signatories to
cooperate with each other in investigating and prosecuting cybercrimes. It also calls
for a Safe Cyber Zone between Mexico, the U.S. and Canada. It also calls for
countries to appoint central points-of-contact to work with their counterparts in other
countries. It also calls for the establishment of an international network of incident
response teams.
National Strategy for the Physical Protection of Critical
Infrastructures and Key Assets
This Strategy gives a strategic overview of how the federal government plans
to address critical infrastructure protection. It acknowledges that the primary
responsibility for protecting critical infrastructure lies with the owners and operators,
whether they are the federal government, the private sector, or state and local entities.
In addition to protecting its own infrastructure, the federal government will also
assume the responsibility for cooperating and coordinating the overall effort. In this
regard, the Strategy identified five areas that cut across all infrastructures and for
which a national approach seems appropriate. Those five areas are

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•
Planning and Resource Allocation
•
Information Sharing and Indications and Warnings
•
Personnel Surety, Building Human Capital, and Awareness
•
Technology and Research and Development
•
Modeling, Simulation, and Analysis
Within each of these are set of initiatives that have been identified. A few of
these are highlighted below.
Planning and Resource Allocation: This includes an initiative to develop a
uniform methodology for identifying assets that are critical at a national-level. This
will help all stakeholders to set priorities and allocate their resources in a cost-
effective manner. Such a uniform methodology would also help states and the
private sector make a case for federal assistance when their own resources are not
adequate or market forces do not support additional protection efforts. The federal
government will also maintain a comprehensive up-to-date assessment of
vulnerabilities and preparedness across critical sectors. This will include an
integrated geospatial database of critical and key assets.
Information Sharing and Indications and Warning: The Department of
Homeland Security is to act as a major conduit of information. The Department is
tasked with defining protection-related information sharing requirements and
establishing effective and efficient information sharing processes that preserve
confidentiality or classification. Another initiative is directed at finding ways to
integrate threat information from state and local law enforcement entities and the
private sector with that from the intelligence community, and then disseminate the
integrated threat information to all stakeholders. The Department of Homeland
Security is also tasked with refining the Homeland Security Alert System.
Personnel Surety, Building Human Capital, and Awareness: Initiatives in
this area include coordinating a task force to explore the possibility of developing
national standards for background checks, screenings, etc. for occupants of critical
job categories. Similarly, the federal government will explore standards for
certifying companies to do such background checks. The government will also
explore establishing a certification regime or model security training program to train
private security officers.
Technology and Research and Development: The Department of Homeland
Security will coordinate with other agencies to support the development of security
related technologies. These include communications equipment that allow for
interoperability, techniques for verifying and authenticating peoples’ identities, and
improved technologies for surveillance, monitoring, and detection of chemical,
biological, and radiological substances.
Modeling, Simulation and Analysis: The Department of Homeland Security
will study ways to integrate modeling, simulation and analysis, of infrastructure
behavior. These models, etc. should examine interdependencies and economic
impacts of terrorist attacks. Models should also be developed for the Alert system
to improve its effectiveness. Models should also examine the interaction between
physical and cyber systems

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