By Robert G. Scott, Jr. and Daniel P. Reing

On October 22, 2013, the National Institute of Standards and Technologies (NIST) released its “Preliminary Cybersecurity Framework,” with comments due 45 days after publication in the Federal Register. NIST expects the window for comments to open expeditiously so that it may comply with the deadlines established in President Obama’s Executive Order 13636 (the “EO”). Under the EO, NIST must evaluate comments, revise the Preliminary Framework, and issue a final version by February 12, 2014 (see our earlier posts found here and here). The Administration seeks to encourage private sector adoption of the Framework through potential incentives, and given the increasing volume of and risk from hacking and data loss, private entities should be reviewing their cybersecurity and data protection practices as a matter of ongoing operations. NIST’s Framework. The Preliminary Framework generally follows NIST’s earlier drafts with some increased shift in emphasis of industry flexibility to implement its proposals. It continues to be organized into three parts: the Framework Core, the Framework Profile, and the Framework Implementation Tiers.

The Framework Core is a list of five functions – Identify, Protect, Detect, Respond, Recover – that provide a high-level strategic view of an organization’s management of cybersecurity risk. These Functions are subdivided further into key Categories and Subcategories, which in turn correspond to examples of existing detailed standards, guidelines and practices.

A Framework Profile is essentially a way to measure how well an organization is meeting its current implementation profiles and to identify how it can strategically target areas for cybersecurity improvement by Function or by Category. An organization will develop a profile of its current cybersecurity status, assess what it would like its profile to be in the future, and identify the gaps for action in reaching that target profile. The organization will create and follow its own unique action plan to fill those gaps.

The third main element is the “Framework Implementation Tiers,” which NIST envisions as a way for an organization to methodically grade its current and desired levels of cybersecurity risk and define the state of readiness it desires to achieve in light of costs and risks. The tiers range from 1 (sporadic implementation of the Framework) to 4 (organization-wide management of cybersecurity risk).

Some earlier comments urged NIST to take additional steps to incorporate Fair Information Practice Principles (FIPPs) as required by the Executive Order. The Preliminary Framework thus adds more detail to the last draft’s “Methodology to Protect Privacy and Civil Liberties.” Specifically, Appendix B of the Preliminary Draft has been updated to add detailed standards that address privacy concerns (i.e., NIST SP 800-53 Rev. 4 App. J) as organizations implement the Core Framework categories. The added standards cover functions such as taking inventory of personal data, privacy training for organizations, transparency, notice, and data minimization practices.

Flexible, Voluntary Standards and Potential Incentives for Adoption. The Preliminary Framework builds on the theme of flexibility for owners and operators of “critical infrastructure” in the private sector by implementing eventual voluntary standards and processes. NIST hopes “to encourage organizations to consider cybersecurity risk as a priority similar to financial, safety, and operational risk while factoring in larger systemic risks inherent to critical infrastructure,” but it has no enforcement authority over private companies; that would require legislative action. The Preliminary Framework recognizes that different organizations within each sector should use the Framework to determine their desired levels of protection against cyber intrusions or attacks in light of identifiable risks and organizational goals. NIST also recognizes that each organization should determine which measures “are feasible and cost-effective to implement.”

Although NIST emphasizes the need for individual organizations to make their own cost-benefit analyses in implementing the Framework, the Administration recognized the problem of NIST issuing a framework that would only be mandatory for federal departments and agencies under the Executive Order and thus identified potential incentives earlier this year to promote eventual adoption of the Framework by companies in the private sector. Some of the identified potential incentives include:

  • Incentives in cybersecurity insurance underwriting practices (e.g., better rates, expanded coverage);
  • Imposing the Framework as a criteria for eligibility for federal infrastructure grants;
  • Streamlined regulatory obligations; and
  • Cost recovery for regulated industries.

The incentive most likely to attract industry interest -- as well as opposition by civil liberties and other activist groups -- is a potential proposal to limit the liability of owners and operators of critical infrastructure that adopt the Framework, or to preempt state-imposed cyber obligations such as disclosures of security incidents. Liability protections are of course critical because operators of infrastructure must share threat and response information with government and other operators to effectively keep up with the relentless cyber threat posed by state-sponsored and criminal enterprises. Yet that kind of information sharing in many cases could lead to allegations of liability for violation of federal laws, state laws, and/or consumer privacy policies. Implementing any such limitations on liability would likely require legislation, which has drawn the attention of interest groups in the past.

With or without incentives, the final Framework could be used later as a de facto standard of care in litigation, or as the basis for legislative proposals.  And given the tremendous increase in hacking, cybercrime, and potential liability for cyber incidents, every private organization has ample incentive to analyze its existing cybersecurity practices and risks, and identify steps for potential reduction of that risk, whether through the Framework or otherwise.

Next Steps. NIST will begin accepting comments after the Preliminary Framework is published in the Federal Register, expected to be within a few days. NIST will also hold another workshop to discuss the Preliminary Framework, including implementation and further governance, on November 14 & 15 at North Carolina State University.

DWT regularly assists clients implementing cybersecurity practices and managing incidents of data breach, data loss and hacking. We would be happy to discuss your organization’s data security issues, provide further information about NIST’s Preliminary Cybersecurity Framework, or assist in writing or filing comments with NIST.