Intel To Embed ID Numbers In Chips

Intel Corp. will unveil plans to embed identification numbers in its PC processors on Thursday, according to industry insiders and cryptographers familiar with the company's efforts.

In doing so, the Santa Clara, Calif., chip maker could be sounding the death knell for anonymity on the Internet.

"The application is a double-edged sword. On the one hand it offers more security -- for e-commerce and information security," said Barry Steinhardt, associate director and privacy expert at the American Civil Liberties Union. "As a pure privacy issue, it allows for a means of tracking individuals on the Net."

Intel briefed the ACLU and others on the details of its new identification scheme in hopes of heading off any protest by privacy advocates about the initiative.

The plan calls for Intel to put a machine-specific ID and a random number generator in every processor, said sources familiar with the plans. The random-number generator will aid e-commerce by allowing PCs to encrypt data more securely, while the ID numbers will allow merchants to verify a user's identity and prevent stolen PCs from getting on the Internet.

What about privacy?

In fact, the plan is sort of a cross between vehicle identification numbers and caller ID.

Users who buy a PC will have the ID number feature turned on automatically. Merchants and other "trusted" parties will be able to verify a user's identity.

For those users who want to remain private, Intel (INTC) will provide a software patch to turn off the function. This sort of scheme, which is referred to as "opt out" because consumers have to opt out of participating, mimics the current state of the industry.

That bodes ill for privacy. "We would rather that Intel have the patch installed as the default," said the ACLU's Steinhart, who stated that such a policy would let consumers choose whether they wanted to enhance their PC for e-commerce.

More significantly, if the technology is seen as enabling e-commerce, then users may effectively have no choice of opting in or out -- the feature may be required by companies to do business with them on the Internet.

Such worries also run to the collection of identification information.

"Intel says they're not keeping a database matching users to their ID numbers," said Steinhart, "but the temptation down the road for someone to keep a database will, most likely, be too great. It will happen."

Stronger security

Still, even with such concerns, there is no denying the benefits of the scheme.

"It's a matter of pros and cons," said Michael Slater, principal analyst for chip watcher Micro Design Resources Inc. "There is a lot of benefit for e-commerce with [Intel's] method."

The identification numbers could act like their vehicular counterparts -- essentially, blacklisting stolen PCs from the Internet. "This kills theft," said one cryptographer at the RSA Data Security Conference who had been briefed by Intel on its plans. "As soon as you go on the Internet, you will be detected."

For merchants on the Internet, having proof-positive of their customers will end consumer fraud and cut the cost of doing business with customers you can't see.

End of overclocking

And for Intel, the ID scheme takes care of a problem that has been plaguing it for years: illegal "overclocking."

Overclocking is the act of running the processor at higher than registered speeds, usually an act of the hardware hacker. Nevertheless, Intel has repeatedly run into companies that buy, say, a 300MHz Celeron processor, overclock it to 400MHz, and then sell it as a 400MHz processor.

Not only does this result in lost profits for Intel, but if the processor has problems running at the higher speed, Intel gets blamed -- not the PC maker.

With an electronic ID attached to each processor, consumers will be able to check their processor against Intel's database of products and find out at what speed the processor was sold. This would still allow hobbyists who want to overclock their PCs to do so, but it would crack down on fraud.

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