US agencies explore cybersecurity incentives for the private sector

Three government agencies will look for ways to entice companies to use best practices, the White House says

U.S. government agencies are exploring new ways to provide incentives for private companies to invest more money in cybersecurity, President Barack Obama's administration has announced.

The Departments of Homeland Security, the Treasury and Commerce have identified several potential incentives, including cybersecurity insurance, federal grants and legal protections for companies that invest additional money in cybersecurity efforts, Michael Daniel, Obama's cybersecurity coordinator, wrote in a blog post Tuesday.

In the coming months, the agencies will further examine the proposed incentives to determine which ones to adopt, Daniel wrote. The agencies will also look for input from operators of critical infrastructure, he said. The focus on incentives builds on a cybersecurity order Obama issued in February.

Incentives can be an important part of cybersecurity efforts, Daniel said. "While the set of core [security] practices have been known for years, barriers to adoption exist, such as the challenge of clearly identifying the benefits of making certain cybersecurity investments," he wrote.

The Internet Security Alliance (ISA), a cybersecurity advocacy group, praised the Obama administration's push on cybersecurity incentives. The ISA, in a 2008 paper, called on the government to move beyond regulations and provide incentives for businesses to invest in cybersecurity.

"We have finally moved from simply making people aware of the criticality of our nation's cyber security problem to doing something about it," ISA President Larry Clinton said in an email.

A recent controversy over government surveillance and "ongoing reports of sophisticated nation state cyber attacks against critical infrastructure have demonstrated that we need a new approach to how government and industry work together to protect our infrastructure and our freedoms," he added.

The incentives will "provide the sustainable fuel to power the engine of enhanced standards and practices being developed" through the Obama cybersecurity order, Clinton said.

Obama, in the executive order, appointed the U.S. National Institute of Standards and Technology (NIST) to coordinate an effort to develop cybersecurity standards and practices, with help from private companies. The order also required agencies to report on incentives that could be used to entice companies to adopt the standards and practices.

Among the potential incentives the agencies are considering are expedited government assistance during cyberattacks, streamlined regulations, and public recognition programs. The agencies could help research "the most pressing cybersecurity challenges where commercial solutions are not currently available," Daniel wrote.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is

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Tags regulationsecurityU.S. Department of CommerceU.S. Department of Homeland SecuritygovernmentBarack ObamaU.S. Department of the TreasuryU.S. National Institute of Standards and TechnologyInternet Security AllianceMichael DanielLarry Clinton

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