Working Paper No. 12-35:
Regulating Cybersecurity

Author(s):

Nathan Sales

Date Posted: April 2012

Availability:
Abstract (below) | Full text (most recent) on SSRN

Abstract:

The conventional wisdom is that this country’s privately owned critical infrastructure – banks, telecommunications networks, the power grid, and so on – is vulnerable to catastrophic cyberattacks.  The existing academic literature does not adequately grapple with this problem, however, because it conceives of cybersecurity in unduly narrow terms:  Most scholars understand cyberattacks as a problem of either the criminal law or the law of armed conflict.  Cybersecurity scholarship need not run in such established channels.  This article argues that, rather than thinking of private companies merely as potential victims of cyber crimes or as possible targets in cyber conflicts, we should think of them in administrative law terms.  Firms that operate critical infrastructure tend to underinvest in cyberdefense because of problems associated with negative externalities, positive externalities, free riding, and public goods – the same sorts of challenges the modern administrative state faces in fields like environmental law, antitrust law, products liability law, and public health law.  These disciplines do not just yield a richer analytical framework for thinking about cybersecurity; they also expand the range of possible responses.  Understanding the problem in regulatory terms allows us to adapt various regulatory solutions for the cybersecurity context, such as monitoring and surveillance to detect malicious code, hardening vulnerable targets, and building resilient and recoverable systems.  In short, an entirely new conceptual approach to cybersecurity is needed.