Interesting essay by Bruce Schneier (who’s been on great form recently). He starts by observing that, once upon a time, there was no downside for Internet companies if they cooperated with the NSA — because nobody (least of all their users) would know. But Snowden changed all that.

The Snowden documents made it clear how much the NSA relies on corporations to eavesdrop on the Internet. The NSA didn’t build a massive Internet eavesdropping system from scratch. It noticed that the corporate world was already eavesdropping on every Internet user — surveillance is the business model of the Internet, after all — and simply got copies for itself.

Now, that secret ecosystem is breaking down.

Over the past few months, writes Schneier, the companies have woken up to the fact that the NSA is basically treating them as adversaries, and are responding as such.

In mid-October, it became public that the NSA was collecting e-mail address books and buddy lists from Internet users logging into different service providers. Yahoo, which didn’t encrypt those user connections by default, allowed the NSA to collect much more of its data than Google, which did. That same day, Yahoo announced that it would implement SSL encryption by default for all of its users. Two weeks later, when it became public that the NSA was collecting data on Google users by eavesdropping on the company’s trunk connections between its data centers, Google announced that it would encrypt those connections.

We recently learned that Yahoo fought a government order to turn over data. Lavabit fought its order as well. Apple is now tweaking the government. And we think better of those companies because of it.

Now Lavabit, which closed down its e-mail service rather than comply with the NSA’s request for the master keys that would compromise all of its customers, has teamed with Silent Circle to develop a secure e-mail standard that is resistant to these kinds of tactics.

All this is evidence of a promising start. But the real question is whether the Snowden revelations just point to a scandal, or represent a crisis (to use David Runciman’s distinction). Scandals happen all the time, and generally make little difference in the grand scheme of things. (Think of the phone-hacking business in the UK: it looked for a time like a crisis, but little significant change will result from it, despite all the hoo-hah, so it was really just a scandal.) Crises, on the other hand, lead to real changes. Is the realisation of the scale of comprehensive surveillance a crisis? Only time will tell.

A slide from an NSA briefing, courtesy of Edward Snowden.

Then, an explanation from the Washington Post.

The operation to infiltrate data links exploits a fundamental weakness in systems architecture. To guard against data loss and system slowdowns, Google and Yahoo maintain fortresslike data centers across four continents and connect them with thousands of miles of fiber-optic cable. Data move seamlessly around these globe-spanning “cloud” networks, which represent billions of dollars of investment.

For the data centers to operate effectively, they synchronize large volumes of information about account holders. Yahoo’s internal network, for example, sometimes transmits entire e-mail archives — years of messages and attachments — from one data center to another.

Tapping the Google and Yahoo clouds allows the NSA to intercept communications in real time and to take “a retrospective look at target activity,” according to one internal NSA document.

Note the smiley under the dotted arrow pointing at the GFE interface.

So, remind me again: why would you trust an American Internet company?

Very good FT column by Edward Luce. Behind a paywall, but this extract gives a flavour.

Mr Snowden has also forced us to confront the larger question of US power in a changing world. For all America’s military weight, hard power gets fewer bangs for its buck nowadays. The fate of a US-led world in the coming decades will probably not be decided by a military clash with another large power. It is more likely to be settled by the quality of America’s economy and democracy. For most people around the world who are older than 30, the US is still chiefly seen through those prisms. But, for a whole generation beneath them, it is coming to stand for Big Brother – and not necessarily a benign one. The damage to US soft power – and the weight it lends to those who want to nationalise data storage and balkanise the internet – should not be overlooked.

Why, then, does Mr Obama want to put Mr Snowden behind bars?

The question of Mr Snowden’s motives is secondary. He may be a criminal, or a saint. I suspect he had good reasons. At minimum he will pay for his sins with a lifetime of looking over his shoulder. In the meantime, the rest of us are far more educated than before about how much privacy we have lost and how rapidly. We are all Angela Merkel now.

Mr Obama is enraged and embarrassed by the hammer blows of one giant disclosure after another. But the fallout has given him the possibility of answering his own plea for greater accountability. Back in May, he issued a thinly coded cry for help to rein in the growing US shadow state. We should be grateful that Mr Snowden came forward.

An illuminating excerpt from the ‘justification’ used by the Metropolitan police when detaining David Miranda at Heathrow.

“We assess that Miranda is knowingly carrying material, the release of which would endanger people’s lives. Additionally the disclosure or threat of disclosure is designed to influence a government, and is made for the purpose of promoting a political or ideological cause. This therefore falls within the definition of terrorism and as such we request that the subject is examined under schedule 7.”

Welcome to Britain, home of the free. And to the laws framed by New Labour btw.

The Economist has a rather good Leader about the NSA mess. Excerpt:

For a start, it turns out that some of Mr Snowden’s evidence was radically misinterpreted: much of the hoovering has in fact been undertaken by European spies on non-Europeans and then passed to the NSA. This was to protect the West from Islamist terror, which the Americans are often best-placed to investigate. That European leaders did not know of this before complaining to Mr Obama suggests that their lack of intelligence oversight is at least as bad as his.

Second, spying on allies is not inherently wrong. Germany and France have broad overlapping national interests with America—but they occasionally clash. Before the war in Iraq Jacques Chirac, then France’s president, and Gerhard Schröder, Mrs Merkel’s predecessor, sought to frustrate America’s attempts to win over the UN Security Council. Europeans spy on Americans, too, as Madeleine Albright found when she was secretary of state. Politicians think inside information gives them an edge, even when negotiating with friends. After today’s outcry has died away, that will remain true.

But the promised gains from espionage need to be measured against the costs and likelihood of being caught. In the past, electronic spying was seen as remote and almost risk-free. In an era of endemic leaks, however, the risks of intrusive eavesdropping are higher. Relations between America and its allies have suffered. The row may get in the way of international agreements, such as a transatlantic free-trade deal. It could lead to the fragmentation of the internet, enabling more government control by countries such as China and Russia. Bugging someone as vital to America as the German chancellor is too important a decision to be left to a spymaster. It is a political choice—and, without a specific aim in mind, it will usually be a no-no.

America should make it clear that it takes abuse of intelligence-gathering seriously. Officials who lie to Congress should be fired. James Clapper, the director of national intelligence, who flatly denied that the NSA collected dossiers on “millions of Americans”, is damaged goods. NSA employees who break the law should be prosecuted, not (as in cases of those caught spying on their personal love interests) simply disciplined. America should also reaffirm that for the NSA to pass secrets to American firms for commercial advantage is illegal. Anyone concerned by Chinese state-sponsored commercial espionage cannot complain if they are thought no better.