San Diego’s biztech news was tilted heavily toward the Internet last week, anchored by two in-depth stories about the Internet and Larry Smarr, the director of the California Institute for Information Technology and Communications. You can get that and more below—and you don’t need to listen for the Internet dial tone to get it either.

—Larry Smarr’s career has led him from astrophysics to supercomputing and protocols—Internet protocols, that is. Smarr told me, “I didn’t invent anything to do with the World Wide Web, but I did create an environment in which it could flourish.” He estimates that a trillion dollars’ worth of technology innovation came out of the University of Illinois at Urbana-Champaign during the 1990s while he was director of the National Center for Supercomputing Applications.  Smarr, who in 2000 was named director of the Calit2, the California Institute for Telecommunications and Information Technology, also talked with me about four big ideas for the future of the Internet.

—You could say it’s a marriage made in the heavens: Carlsbad, CA-based satellite equipment maker ViaSat announced an agreement to acquire the satellite-based Internet service provider WildBlue Communications of Greenwood Village, CO; the deal is valued at $568 million. WildBlue sells its high-speed broadband service to about 400,000 mostly rural households, which gives ViaSat customers for the satellite it plans to launch in 2011.

—SAIC’s retired founder, J. Robert Beyster, told me the government contractor’s recent decision to move its headquarters to Washington D.C. from San Diego was probably “inevitable.” Beyster, 85, remains active in San Diego, and is writing a three-part series on his blog about the nation’s energy future.

—San Clemente, CA-based LifeModeler’s founding CEO Shawn McGuan told me he adapted the company’s visualization software to help scientists understand how to assemble the puzzle pieces of a fossilized hominid that lived 4.4 million years ago. The seven-year-old startup’s software is used mostly by orthopedic surgeons to plan and practice surgeries that replace knees, hips, and other joints.

—San Diego entrepreneur and investor Neil Senturia, who heads local online news venture San Diego News Network, told Forbes he plans to raise $40 million and to launch 40 similar websites throughout the U.S. and Canada over the next 30 months. Senturia told Paid Content he expects the SDNN website to start breaking even by this time next year.

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The timing of my lunch yesterday with SAIC founder J. Robert Beyster was pretty close to impeccable, since it came just four days after the defense contractor formally announced the relocation of its corporate headquarters from San Diego to McLean, VA.

The departure of a Fortune 500 headquarters with a 40-year history in one city used to be the stuff of wounded civic pride—and great newspaper copy. I expected to hear at least some wailing and gnashing of teeth among San Diego’s economic development leaders, municipal elders, and other community kingpins. Big companies with established roots are often a crucial source of corporate philanthropy and financial support for symphonies, museums, and other cultural centers—so the loss of a Fortune 500 company headquarters is not just about bragging rights, either.

Yet San Diego heard barely a discouraging word about the announcement last week, while the governor of Virginia was crowing about SAIC’s arrival as the state’s fourth-largest company. So I was curious to hear what Beyster had to say.

“I felt it was inevitable that the move would occur because so much business is done in Washington,” Beyster tells me. He adds, “I’m not sure I would have done it if I was in charge,” and says the reason SAIC kept its headquarters in San Diego is because this is where he and his wife wanted to live. But he also notes matter-of-factly that he no longer has much say in the matter. “The important thing is that something stupid isn’t being done,” Beyster says. “It’s not at all a bad thing.”

Beyster, who is now 85, retired five years ago from the company also known as Science Applications International Corp. He was working as a nuclear physicist at San Diego’s General Atomics when he founded his own company in 1969 to provide government agencies with highly specialized services—such as calculating the yields of nuclear weapons. He’s told me previously the business was so specialized at first that he expected it to remain small. But he expanded SAIC by recruiting other prominent scientists, enticing them with offers of stock and leadership roles in an employee-owned company. Beyster went to extraordinary lengths to maintain SAIC’s culture of employee-ownership and entrepreneurship, creating a federation of high-tech business units that nuclear scientist Harold Agnew once described as “a farmer’s market with central heating.”

In many cases, the scientists Beyster recruited came with the government-funded projects they were already working on. So the company, which generated $250,000 in sales in its first year, has expanded over the past 40 years into a $10 billion-a-year juggernaut of government contracts.

Most of that business is conducted with government agencies in and around Washington, D.C., where SAIC now has …Next Page »

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Tadayoshi Kohno spends his career looking at life through the eyes of a criminal, and he’s teaching University of Washington students to do the same. The UW computer science and engineering assistant professor studies computer security and privacy, which to Kohno means anticipating the bad guy’s moves before he does. I chatted with him recently to find out more about the “security mindset,” how you teach it, and what this mysterious bad guy could do using ingenious technology hacks.

“We’re seeing computers in all aspects of our lives, in medical devices, exercise equipment, cars, airplanes, utility systems, power lines, everywhere,” Kohno said. “One of my main concerns is that while we’ve thought a lot about security for our desktop computers, computing is much broader than that, and we need to address security for all of it.”

Kohno’s interest in security goes back to his teenage years, when as a 10th grader he won the Colorado History Day competition with an essay about the history of cryptography. During his doctoral work, Kohno revealed security flaws in the software of electronic voting machines. The machines, which were rising in popularity following the 2000 presidential election, could easily be hacked to manipulate votes or reveal people’s voting choices, Kohno said.

Since then, he and his graduate students at the UW have pointed out security holes in technologies such as implantable cardiac defibrillators, pacemakers, radio frequency identification tags (which are used, among other places, on many credit cards and Washington state’s new enhanced driver licenses), and the Nike + iPod sport kit (the workout tracker that fits inside running shoes). His group has also recently developed software that causes messages or data to self-destruct after a set period of time. The program, Vanish, is one step towards a security answer to the problem of putting all your information into the “cloud” of sites such as Facebook or Google, Kohno said, where it might be backed up and never fully deleted.

I found his group’s revelations about implantable medical devices especially chilling. Right now, devices such as cardiac defibrillators signal wirelessly only over short distances, to allow doctors to adjust them without surgery. But in the future, Kohno said, he can see technology advancing to the point where those wireless signals have a longer range, and that’s where the real danger to the patient comes in. Beyond just gleaning a patient’s medical and other personal information, a defibrillator hacker could send signals to shut off the device or send electric shocks to the patient’s heart. In 2008, Kohno’s group managed to perform these potentially fatal hacks on a real defibrillator (not in a person).

“This is a wake-up call for the industry and the FDA that these are serious issues, or could become serious in the future,” Kohno said. “I believe that providing the first concrete evidence is the first step toward having a broader impact.”

To figure out which piece of technology he’s going to hack into next, Kohno asks what the next big thing in technology is going to be over the next five to 10 years, that people might not have examined for security gaps. Then he tries to think of every damaging thing a devious person could do with that technology, if they hacked into it. “I think I have always liked to play the game of looking for holes in the system,” Kohno said, when I asked him how he first got interested in security.

Kohno, who is kicking off the Technology’s Alliance’s Science and Technology Discovery Series with a lecture this morning, also teaches undergraduate and graduate classes on computer security at UW, and is planning a security lecture or event for middle school and high school students sometime in the next year. Even though most of his students won’t go on to become security professionals, Kohno sees his courses on the “security mindset,” or how to think one step ahead of the hackers, as valuable for the computer industry, so that those working on new technologies will know when to call in the experts. “I want students have the habit of saying ‘what if’ when they see a new system,” he said. “The gritty details are much less important than having the mentality of asking, ‘What if something bad happens?’”

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In an informal discussion with technology leaders from industry and academia this morning at Microsoft’s New England Research and Development Center in Cambridge, Massachusetts Attorney General Martha Coakley and staff members from her office covered a range of issues affecting technology businesses and consumers, from cybercrime to the need to overhaul the state’s laws regarding noncompete agreements. Overregulation and outdated regulations were a major theme, with Coakley acknowledging in jest that “we love statutes and regulations in Massachusetts” and saying that in a time of severe budgetary constraints, changing and updating the law is one thing the state government can do to help businesses and entrepreneurs.

The meeting, the first of its kind between representatives of the technology community and the state’s top law enforcement officer, was intended to start a discussion about what sorts of changes to put on the agenda. “We can’t make decisions in the abstract,” Coakley told the gathering of about 30 people from Massachusetts companies and universities. “In a variety of areas where we’ve approached these issues—what technology means for government, for public safety, for privacy—part of what I want to do is get some feedback from you. What are we doing and not doing, and how can we be more helpful?”

Coakley poked a bit of fun at herself, confessing that as late as the mid-1990s, when she was chief of the Child Abuse Prosecution Unit of the Middlesex District Attorney’s Office, she did not know how to turn on her computer to retrieve her e-mail. But after she became DA herself, she said, she got a crash course in computers and the Internet during the prosecution of Michael McDermott, who killed seven colleagues at Edgewater Technology in December 2000 and was convicted of murder after it was revealed that he had used Google to search for information on how to fake mental illness. As Massachusetts attorney general, she led settlement negotiations with Framingham, MA-based TJX to resolve claims around its massive data breach in 2007, and to make sure adequate safeguards are in place to protect consumer data in the future.

“I really like being attorney general, somewhat to my surprise,” Coakley said, “because it’s a great opportunity to learn about a whole range of issues, like where we should be going and how we can help businesses do well in Massachusetts, and how to protect consumers and protect the environment.”

The first issue raised by technology community members was whether Massachusetts should be doing more to make sure that some federal stimulus money reaches small businesses, rather than going exclusively to large corporations and public works projects. “From where I sit it’s been very disappointing to see the [slow] pace of the stimulus money and to see how restricted it is,” Coakley responded. “My focus on the stimulus money is to make sure it goes where it should” and to see that distribution of the funds isn’t mired in paperwork and graft. “It’s an example of big government trying to do big things and not necessarily being effective,” she said, but added, “I don’t know how much discretion we have” to channel the funds to small businesses or players other than those identified in stimulus legislation.

Early into the discussion, attendees raised the controversial issue of noncompete agreements in employment contracts in Massachusetts. Noncompetes (as we’ve written) are seen by many local companies as an essential way to protect trade secrets, but they’re seen by many entrepreneurs and investors as an impediment to employee mobility and innovation. Coakley said …Next Page »

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Last week President Obama tapped Melissa Hathaway, a former Booz Allen Hamilton consultant and top aide to President Bush, to undertake a sweeping 60-day review of the country’s computer security posture. Once that review is complete, the 40-year-old Hathaway could be in line to be named the nation’s first assistant to the president for cyberspace—or, in short, the cyber czar. Her main job would be to battle cyberattacks against government computer networks, which are on the rise. Attempts to penetrate government systems increased by 40 percent in 2008, according to data released yesterday by the U.S. Computer Emergency Readiness Team.

Creating the organization Hathaway may head, the National Office for Cyberspace, is just one of several ways in which the Obama Administration is implementing the recommendations of the Commission on Cybersecurity for the 44th Presidency. Before Obama even announced his run for the White House, this nonpartisan roundtable was formed at Congress’s behest by the Center for Strategic and International Studies (CSIS) in Washington, D.C. One member of that commission—and the chair of its Threats Working Group—was Tom Kellermann, vice president of security awareness at Boston-based Core Security Technologies.

Essentially, Kellermann is Core Security’s man in Washington. I met with him yesterday during one of his brief visits to Boston, and we had a long conversation about Hathaway and the challenges she and the broader security community face.

The picture that Kellermann painted is, in many ways, frightening. If terrorists or other enemies exploited existing vulnerabilities in the nation’s energy, financial, or telecommunications infrastructure, they could deal out physical destruction and economic damage on a scale that would make the fictional Fox TV show “24″ look tame, Kellermann says. But at the same time, Kellermann says he is encouraged for the first time in many years about the prospects for improvement in the nation’s readiness for such attacks. Whereas the Bush Administration wanted to rely on free-market solutions to the problem, Kellermann says, the Obama Administration understands the need for broad regulatory changes that would impose much stricter computer security standards on both government agencies and private companies.

Of course, Core Security wouldn’t station someone like Kellermann in Washington unless the company had a big stake in how those changes play out. The company’s main product is an automated “penetration testing” package called Core Impact. Penetration testing is the practice of attacking networks and software from the outside, just as hackers do, but with the goal of seeing which attacks sneak past defenses, then closing the gaps. And as it turns out, the commission’s report is full of calls for “performance-based measurements” and “risk-based standards” for security.

Those are code words for learning how to prove that the nation’s networks are secure against attackers—which means, in part, conducting proactive penetration testing, or what Kellermann calls “red-team exercises.”

It’s clear that Kellermann himself is not in this for the money—he has unimpeachable white-hat credentials, as a former security official at the World Bank, chair of the Technology Working Group for the Financial Coalition Against Child Pornography, and a member of the American Bar Association’s working group on Cyber-crime. But his employer could certainly benefit from a new emphasis on proactive defense in cybersecurity. As he puts it, “I don’t think you need to convince people to buy a sword on the battlefield, if you can convince them that the battlefield is real.”

Hathaway is the right general for that battlefield, Kellermann believes. Like the revered Chinese military strategist Sun-Tzu, she “respects the adversary,” he says. “The way she grasps this problem, she sees it as a long-term game of chess. I’m confident that if, after her 60-day review, they give her the position of cyber czar, she will make huge inroads into stemming the tide that we’re dealing with.”

An edited version of my conversation with Kellermann follows.

Xconomy: What brought you to Core Security, and what’s your job here?

Tom Kellermann: At the World Bank, I was deputy security officer for the Treasury Security Team. I was there for almost eight years and I became very familiar with the need for penetration testing, because of the various networks I’m connected with. I have a very Sun Tzu approach to cybersecurity: continually scrimmage your defenses; “know yourself, know your enemy, win 1,000 battles.” I was tired of the bureaucracy of the World Bank and I was told there was a fantastic outfit in Boston that didn’t have any real representation in Washington, that truly believed in the attackers’ perspective and in being cutting-edge when it came to developing that perspective for organizations that are serious about protecting their assets.

In my role at Core, I wear four hats, not in any order. I do advisory services to the intelligence community. I participate in things like the CSIS Commission on Cybersecurity for the 44th Presidency. I do strategic partnerships. And I do a lot of public affairs and public relations, mostly as it relates to going to events, trade shows, and various industry groups such as the American Bankers Association, building awareness of how you manage risk in a digital landscape.

X: How did the CSIS commission report come together?

TK: Congress created a commission on cybersecurity after hearings held two and half years ago on homeland security and why the Department of Commerce, the State Department, the Department of Defense, and the Department of Homeland Security were breached hundreds of times, in part by organized Chinese hackers. After the hearings, Congress said, let’s create a commission—because that’s what they like to do—and bring together some of the world’s authorities and analyze what we should be doing to protect economic and national security as it relates to cyberspace. So we sat around and pontificated for two years and came up with this report.

X: You sound a little jaded about the process. What about the product?

TK: No, the process was good. The product is great. The Obama Administration, from its first day in office, declared they were going to champion six out of the eight principles established in the report. The commission was a typical Washington roundtable discussion that became very politicized, but we operated on majority rule, not consensus, which was unique, because the standard in these groups that talk about security is to want to hold hands and sing “Kumbaya.” The final result was on the cutting edge on many tough decisions.

Some of the notable things that came out of the commission’s report were, first and foremost, an acknowledgement that this is an economic, not just a national security, issue, and that to deal with it we need to …Next Page »

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Virus-Built Battery Nothing to Sneeze At

A new type of microbattery could power implantable drug delivery devices or run tiny labs-on-a-chip, thanks to a technique that uses a virus to build the battery’s components. Nature News reports that scientists from the Massachusetts Institute of Technology used a genetically engineered virus as part of a template that gathered cobalt ions into a series of nanostructures that formed an electrode. The researchers say this is a quick and simple way to build much smaller batteries than have been possible.

Experts Warn of Coming Cyber Attacks

Last week’s military incursion into Georgia by Russian troops was preceded by an attack on government computers, and the same thing could happen here, experts warn. According to CNN, computer security experts say no one has devised a way to protect against online attacks on government systems. The fact that the U.S. is so dependent on the Internet makes us all the more vulnerable, they say.

Menstrual Blood May be Valuable Source of Stem Cells

Stem cells harvested from human menstrual blood have helped heal damaged limbs in mice, say scientists from MediStem Laboratories, of San Diego, CA. The researchers published a study showing that mice with low blood flow to their legs had those legs protected from withering if they were injected with the stem cells. The scientists say the stem cells come from the lining of the uterus, which is shed during menstruation, New Scientist reports.

Biometrics May Lower Identity Theft

More powerful and inexpensive microprocessors are leading to increased use of biometrics—the use of individual physical characteristics as identifiers. Scientific American says that fingerprinting, face recognition, and iris scans are becoming more popular methods to fight identity theft, because it’s not as easy to fake an eye scan as it is to steal a PIN. One issue, though, is that the error rates in some systems are still too high.

A Look at the Tools of Cyber Crooks

The Internet makes a lot of things easier, including crime. At the Security Fix blog of the Washington Post, writer Brian Krebs takes a look at some of the trends and tools popular with cyber crooks. First up, programs that mask your Internet address.

Google Digs In to Geothermal Energy

The investment arm of Google, which has been putting money into green energy companies, now has invested nearly $11 million in the development of enhanced geothermal systems to extract energy from the heat of the Earth’s crust. Tech Crunch reports the company is giving $6.25 million to AltaRock Energy of Sausalito, CA; $4 million to Potter Drilling, of Redwood City, CA; and $500,000 to a geothermal lab at Southern Methodist University.

Hitting the Road for Low-Cost Energy

Why spend money on new solar energy systems when we’ve already installed millions of miles of low-cost solar collectors across the country? That’s the question from researchers at Worcester Polytechnic Institute, who want to use water-filled pipes to collect the heat energy collected by the asphalt on roadways and parking lots, according to CNET News. The hot water could be used in nearby buildings, or thermoelectrics could convert it to electricity.

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No Honor Among Internet Thieves

Even phishers—people who fake legitimate-seeming sites to trick people out of their financial information—are subject to phishing attacks, according to the Wall Street Journal. Apparently more seasoned scam artists are targeting newbie hackers and stealing the same credit card numbers they steal. For instance, they’ll sell would-be criminals software to set up a fake bank website, and then get their own copy of all the information the website collects.

Homeland Security Chief Talks of Cyber Threats

Fearing online attacks that could compromise intelligence information or shut down utilities, the government is taking an increased interest in cybersecurity, head of Homeland Security Michael Chertoff says. Wired has a long and varied interview with Chertoff that also touches on the issue, currently percolating in the blogosphere, of border guards seizing laptops from travelers.

Group Promotes Cybersecurity for Next President

A private organization is looking for ways the government can make cyberspace more secure. The Commission on Cyber Security for the 44th Presidency, a group organized by a Washington think tank, is working on recommendations it can make to the next president. CNET News reports that four members of the commission discussed some of their work at the Black Hat security conference in Las Vegas this week.

Ethanol Demand May Pose Health Risk

In a somewhat round-about way, the increasing demand for ethanol from corn may be leading to an increased risk of lead poisoning in children, some researchers warn. An article in the American Chemical Society’s journal Environmental Science and Technology points out that ethanol demand, as well as increasing demands for food from emerging economies, are driving the demand for phosphates used in fertilizers. Those same phosphates are added to water supplies to prevent lead pipes from corroding, and a shortage could mean more of the metal in drinking water, where it can harm children’s cognitive development.

California Company Captures Carbon for Concrete

A California company, Calera, has developed a process in which it captures the carbon dioxide emitted by a natural-gas-burning power plant, pumps it through seawater, and produces the materials needed to make cement. Normally the process of making cement releases at least a ton of carbon dioxide for every ton of cement, but the company says it captures half a ton of C02 for each ton of cement it makes, according to Scientific American. Since cement and its sister material, concrete, are widely used in buildings all over the world, such a change could have a significant impact on global warming.

UN Wants to Tighten Carbon Offset Rules

The United Nations wants to make sure its system of trading carbon credits actually results in a reduction of the greenhouse gas. Under the UN’s Clean Development Mechanism, companies can buy the right to emit more carbon into the atmosphere by purchasing carbon offsets, which fund projects that reduce carbon emissions elsewhere. The International Herald Tribune reports that the UN wants to make sure any reductions are a direct result of the purchasing system, and aren’t just from projects that would have gone ahead without the incentive.

Computer Giants Have Their Heads in the Cloud

The current high-tech flavor of the month is cloud computing, in which applications and computing power run on remote machines that don’t necessarily belong to the user, saving time and expense. Technology Review tells us that Intel, Yahoo, and HP, along with research groups in Illinois, Germany, and Singapore, have formed a cloud computing initiative. The aim is to develop an Internet-based infrastructure that is stable enough to host companies’ more critical data processing tasks.

IKEA to Offer Cleantech Products

It’s not just bookcases and build-it-yourself credenzas for Swedish furniture store IKEA anymore. As the Cleantech Group reports, IKEA plans to invest in clean energy startups over the next five years to the tune of 50 million euros (about $77 million). Its goal is to eventually start selling cleantech technology, including smart meters and solar panels, in its stores. No word on whether solar panel installation requires more than that little wrench thingie.

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