Tackling the Palladium dichotomy

TR reader Zoolooman sends in two stories on the new Palladium security initiative being backed by industry giants like Microsoft, Intel, and AMD. The first article is over at MSNBC, and paints quite an impressive picture of Palladium's potential benefits. They even pre-empt the critics:
None of this is a cinch. One hurdle is getting people to trust Microsoft . To diffuse the inevitable skepticism, the Redmondites have begun educational briefings of industry groups, security experts, government agencies and civil-liberties watchdogs. Early opinion makers are giving them the benefit of the doubt. “I’m willing to take a chance that the benefits are more than the potential downside,” says Dave Farber, a renowned Internet guru. “But if they screw up, I’ll squeal like a bloody pig.” Microsoft is also publishing the system’s source code. “We are trying to be transparent in all this,” says Allchin.
Published source code from Microsoft is a novel idea, but it's not going to silence all the critics. This FAQ answers a lot of hypothetical questions concerning Palladium, and just to be fair, it covers a few less attractive consequences that MSNBC failed to mention.
A lot of companies stand to lose out. For example, the European smartcard industry may be hurt, as the functions now provided by their products migrate into the Fritz chips in peoples' laptops, PDAs and third generation mobile phones. In fact, much of the information security industry may be upset if TCPA takes off.

But there are much deeper problems. The fundamental issue is that whoever controls the Fritz chips will acquire a huge amount of power. There are many ways in which this power could be abused, and Intel has refused to answer questions on the governance of the TCPA consortium.

Palladium does come with a lot of potentially unattractive baggage, but I have to applaud the enthusiasm with which it's being pursued. There will always be a delicate balance between security and freedom. Palladium might not have that balance right, but at least the giants are taking interest in the scale.
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