United States: Cybersecurity: President Obama’s Executive Order Is Only the Beginning

This On the Subject outlines why hospitals and financial services and communications companies should pay attention to the recent executive order entitled "Improving Critical Infrastructure Cybersecurity."

On February 12, 2013, shortly before he delivered his annual State of the Union address, President Obama signed an executive order entitled "Improving Critical Infrastructure Cybersecurity."  Anyone who believes this executive order answers the most important questions regarding its implementation vis-à-vis private-sector entities is mistaken.  In many ways, the executive order raises more questions than it answers:  How precisely will the administration designate "critical infrastructure"?  Will the administration cast a wide or narrow net?  Will participation in the Critical Infrastructure Cybersecurity Program truly be "voluntary"?  Or, as some suggest, will private-sector entities that choose not to participate in such a program be susceptible to a "name and shame" process by the federal government?

The one thing that is certainly clear from the executive order is that it is not the last word in the area of cybersecurity.  In fact, the executive order explicitly invites Congress to pass cybersecurity legislation that could affect a wide range of industries.  And, not to be outdone, Congress is already considering cybersecurity legislation, which is described more fully below. 

"I Run a Hospital/Financial Services Company/IT Company.  Are We Critical Infrastructure?"

Under the administration's executive order, the answer to this question is "yes, maybe."  Section 9 (Identification of Critical Infrastructure at Greatest Risk) directs the secretary of the U.S. Department of Homeland Security (DHS) within 150 days of the executive order "to use a risk-based approach to identify critical infrastructure where a cybersecurity incident could reasonably result in catastrophic regional or national effects on public health or safety, economic security, or national security."

The executive order does not define "catastrophic regional or national effects."  However, Section 2 defines "critical infrastructure" as "systems and assets, whether physical or virtual, so vital to the United States that the incapacity or destruction of such systems and assets would have a debilitating impact on security, national economic security, national public health or safety, or any combination of those matters."

Among other things, the secretary of DHS is directed to apply consistent, objective criteria in identifying critical infrastructure, and to notify owners and operators of critical infrastructure confidentially.

At present, it is unclear whether the federal government will cast a wide net in designating "critical infrastructure" under this executive order.  It is not inconceivable, however, that an owner or operator of a medical facility or financial services or communications company whose importance to public health and safety or economic or national security is critical to its region could be designated "critical infrastructure" under this executive order.

"What Does It Mean If My Private-Sector Company Is Designated Critical Infrastructure?"

The executive order directs the director of the National Institute of Standards and Technology (NIST) to develop a framework to reduce cyber risks to critical infrastructure, and to publish a preliminary version of this framework within 240 days and a final version within one year of the date of the executive order.  This framework "shall incorporate voluntary consensus standards and industry best practices to the fullest extent possible."  NIST is accepting public comment on this framework until April 8, 2013.

Thereafter, the secretary of DHS is directed to establish a "voluntary program" to support the adoption of the final cybersecurity framework by owners and operators of critical infrastructure and other interested entities.  Some in the business community believe that this program will in fact not be voluntary, but rather is an effort by the federal government to impose onerous regulation on private-sector entities.  In particular, some point to Section 8(c), which requires sector-specific agencies to "report annually to the President on the extent to which owners and operators notified under section 9 of this order are participating in the Program."  Furthermore, Section 8(d) directs the secretary to "coordinate establishment of a set of incentives designed to promote participation in the Program."  The secretaries of DHS, the U.S Department of the Treasury and the U.S. Department of Commerce also are directed to make recommendations to the president regarding the benefits and effectiveness of such incentives, and whether the incentives would require legislation or could be provided under existing law.

Other Key Provisions of the Executive Order

Two other provisions of the executive order deserve mention.  First, the order calls for the "timely production of unclassified reports of cyber threats . . . that identify a specific targeted entity."  The order also calls for a process to disseminate "classified reports to critical infrastructure entities authorized to receive them."  This provision is intended to address a key concern of industry—that it does not always have access to important threat intelligence.

Second, the executive order directs agencies to "ensure that privacy and civil liberties protections are incorporated" in their cybersecurity activities.  The chief privacy officer and officer of civil rights and civil liberties of DHS are directed to assess the privacy and civil liberties risks of the functions and programs undertaken by DHS, and to recommend ways to minimize and mitigate such risks.  The executive order does not include liability protections for private-sector entities that share information with the government.  Such protections would require an act of Congress.

Congress Welcomes the Open Invitation to Legislate on Cybersecurity

It would be a mistake to believe the administration's executive order on cybersecurity to be the last word on this topic.  Rather, it appears to be the opening salvo in a more protracted debate.  Several bills on cybersecurity have been introduced during the first three months of the 113th Congress, the most important of which are the following:

  • Cyber Intelligence Sharing and Protection Act (H.R. 624):  This legislation, which was introduced by the chair and ranking Democrat on the House Select Committee on Intelligence (Reps. Mike Rogers (R-MI) and Dutch Ruppersberger (D-MD), respectively), is expected to be on the House floor in mid-April 2013.  A similar version passed the House in 2012 by a vote of 248–168.  This bill is specifically intended to facilitate information-sharing by and between the federal government and private-sector entities.  Among other things, the bill would permit the federal government to share cyber threat information (including classified intelligence) with private-sector entities if they are "certified entities" or have the appropriate security clearance to receive such information.  The bill also provides liability protection for those who, in good faith, use cybersecurity systems to identify or obtain cyber threat information or share such information.
  • Cybersecurity Enhancement Act of 2013 (H.R. 756):  This bipartisan bill was introduced by Rep. Mike McCaul (R-TX), the chair of the Homeland Security Committee.  In general, the thrust of this bill is to enhance national cybersecurity research and development.
  • Cybersecurity and American Cyber Competitiveness Act (S. 21):  This legislation, which was introduced by Sen. Jay Rockefeller (D-WV), the chairman of the Senate Commerce Committee, appears mostly to be a placeholder for future legislation.  The bill itself contains findings and "sense of the Congress" provisions but no substantive proposals.  Sen. Tom Carper (D-DE), the chairman of the Senate Homeland Security Committee, is one of seven co-sponsors.  Sens. Rockefeller and Carper were deeply involved in cybersecurity legislation in the last Congress and held a joint Committee hearing on March 7, 2013.


The administration's executive order on cybersecurity was triggered by Congress' failure to act in this area in 2011–12.  This failure to act on cybersecurity is largely attributable to disagreement over whether the federal government should attempt to regulate private-sector entities and whether it should provide them with liability protections if they share cyber threat information with the federal government.

Furthermore, there has been no explicit acknowledgement by members of Congress that the designation "critical infrastructure" may (and perhaps should) carry concomitant benefits and burdens.  This is mostly because members of Congress (particularly Democrats) do not want to acknowledge that cybersecurity legislation may lead to additional regulatory requirements.  Thus, for now, they favor "voluntary" programs and standards.  One political path forward, however, may require critical infrastructure to accept some regulatory burden while also receiving some benefit (e.g., the certainty that critical infrastructure will receive the electricity or fuel it needs to operate in an emergency).

Private-sector entities—particularly those in the health care, financial/banking or communications industries—should pay very close attention to this evolving debate, because they could be designated "critical infrastructure."  Private-sector entities also should pay very close attention to any attempt by the federal government, under either the executive order or subsequent legislation, to impose regulatory burdens upon them.

Finally, private-sector entities should be mindful that in the event of a serious cyber attack on the United States (e.g., disruptions to the electrical grid or to the banking or communications systems), partisan disagreement in Congress is likely to dissipate and give way to bipartisan consensus, including a possible consensus on regulatory requirements that today are politically infeasible.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions