[Infowarrior] - Phone Taps in Italy Spur Rush Toward Encryption

[Richard Forno]

April 29, 2007
Phone Taps in Italy Spur Rush Toward Encryption
By PETER KIEFER
http://www.nytimes.com/2007/04/29/technology/29cnd-encrypt.html?hp=&pagewant
ed=print

ROME, April 29 ‹ Drumming up business would seem to be an easy task for
those who sell encrypted cellphones in Italy. All they have to do is browse
the major newspapers for likely customers.

Piero Fassino, national secretary of the Democratic Left Party, could have
benefited from an encrypted phone before comments he made regarding a
sensitive bank takeover made the front pages.

Luciano Moggi, the former head of the Juventus soccer club, could have used
one, too. His phone conversations, intercepted by investigators and then
leaked to the media, led to Italy¹s soccer game-fixing scandal.

And Prince Victor Emmanuel might wish he¹d had a secure cellphone before his
conversations, made public, resulted in his arrest last year on charges that
he provided prostitutes and dealt in illegal slot machines.

Not even Nicolo Pollari, the former head of Italy¹s top spy agency, was
immune; transcripts of some of his conversations found their way into the
newspapers.

³Initially, we thought we would market to the big businesses, to lawyers and
the government,² said Ferdinando Peroglio, commercial director of
Caspertech, a four-year-old Turin company that sells encrypted cellphone
software. ³But after the Juventus soccer scandal, we had so many clients
that we had never thought to contact.²

Three years ago, the company¹s only clients were the government and the
military; last year 60 percent of sales were to ordinary civilians.

Mr. Peroglio refused to provide exact sales numbers but said Caspertech¹s
sales increased 100 percent from 2005 to 2006.

Enrico Comana, chief executive of Snapcom Italia, the Italian unit of an
Israeli company that offers a similar product, sees the same trend.

³There is about 700 to 800 percent more interest now than at the same time
last year,² he said.

What has spurred encryption sales is not so much the legal wiretapping
authorized by Italian magistrates ‹ though information about those calls is
also frequently leaked to the press ‹ but the widespread availability of
wiretapping technology over the Internet, which has created a growing pool
of amateur eavesdroppers. Those snoops have a ready market in the Italian
media for filched celebrity conversations.

When it comes to phone tapping, Brazil, Greece and Spain are other desirable
markets, the encryption companies say, but in Western Europe, Italy remains
peerless.

³No one is ever going to discuss sensitive issues with you on the phone,²
said Carlo Bonini, an investigative reporter for La Repubblica, the Rome
daily.

Earlier this year, Mr. Bonini¹s name was among thousands that surfaced in an
illegal wiretapping scandal involving employees of Telecom Italia, the
Italian phone company.

Twenty people were arrested, including the former chief of Telecom Italia
security, in what investigators say was an attempt to use the intercepted
phone conversations to blackmail Italian public figures.

A proposal that would impose stiffer fines and longer jail terms for
journalists and others who make public the contents of illegally monitored
conversations has passed the lower house of the Italian Parliament and now
needs Senate approval.

Mr. Bonini said he understood the need to curb the publication of some of
these transcripts but argued that the issue was less about privacy and more
about Italy¹s notoriously slow judicial system.

³I don¹t think that we don¹t need a stricter privacy law ‹ we already have
it,² Mr. Bonini said. ³We need consequences. We need to see sanctions. If no
one is ever held accountable, then there is no way to stop the phenomenon.²

The phone encryption companies sell a range of products ‹ all legal, they
insist ‹ that they say can protect both cellphone text messages and actual
voice conversations.

The high-end package, which runs about $2,200 at both companies, includes a
phone, which must be a model capable of using the encryption software.
Caspertech¹s software can be used only on phones running the Windows Mobile
operating system, while Snapcom offers software that can be used on other
platforms as well.

On the lower end is software that can encrypt your SMS text messages for
about $410. In the midrange, you can scramble your faxes or mask the content
of your fixed-line calls for $1,500 and up.

For full secrecy, however, the phones on both ends of a voice conversation
must carry the software in advance of the call.

Peter van der Arend, chairman of the European Telecommunications Standards
Institute¹s lawful interception committee, said in an e-mail message that
the technology appeared to be legal.

But does the over-the-counter encryption technology actually work?

Rolando Rosas, the United States development director for Snapcom, which
operates in 40 countries, said he believed that its software was 90 percent
reliable. ³Nothing is 100 percent fool-proof ‹ nothing, nothing, nothing,²
he added.