Two short, practical examples, which are gleaned from reality (though
I am not at liberty to state of what organizations I speak):

One, educational institution.  Due to compliance issues with student
data being improperly smuggled out of the administration area (in
reaction to an audit that found substantial lack of compliance with
the educational record privacy laws), a comprehensive "there is no way
that anything can leave without our knowing and tracing it" policy was
put in place.  USB memory sticks and cards were prohibited, and all
outbound traffic was routed through a proxy.  This proxy would behave
normally in HTTP, and any HTTP CONNECT request was MITM'ed for
recording purposes.  Employees were notified that all of their machine
and network activity were subject to logging, and were explicitly told
that there was no expectation of privacy on the network.  The MITMed
connections were all given the same wildcarded security certificate,
signed by an organizational CA which certificate was loaded into all
browsers.

(Technically, Nelson's proposal wouldn't cause a complete breakage, as
long as there was sufficient horsepower and sufficient lack of
controls available for the organizational CA to issue certificates at
the request of the proxy server -- it could generate a key or use one
of a pregenerated set of keys, send off the CSR with the name of the
site that the client is sending the CONNECT request for, get an
immediate return of the certificate signed by the organizational CA,
load it, and then return that to the client.  However, this goes very
much against security best practices [a security-related operation
performed automatically and without supervision by a CA with
organization-wide trust at the request of an entity which is subject
to attack from both internal and external threats].)


Two, hospital.  Due to HIPAA compliance issues, they must monitor all
communications originating within their network, and as such they've
put a proxy in place.  One of their employees figured out how to to
perform SSH over HTTP CONNECT; since this isn't appreciated by their
MIS department, they broke any protocol negotiation other than SSL and
TLS.  Said employee didn't stop, though, and figured out a way to do
an stunnel through which he ssh'es.  This tunnel is unmonitored and
completely opaque to the hospital MIS department.  (He currently uses
it to gain access to IRC and various talkers.  While that employee is
ethical and won't use it for anything which is expressly illegal...
the fact that he can do what he's doing without detection means that
others can do what /they/ want to do without detection.  Including
transmit "personally identifiable health information" without proper
consent.)


You'll run into the same issue in financial environments (fiduciary
laws), public corporations (Sarbanes-Oxley and GLBA, aka the
"Victoria's Secret" Law), health care providers (HIPAA), and all sorts
of other places that need to ensure that communications are compliant
with the law.  MITM is unfortunately often necessary in these
environments.

-Kyle H

On Dec 4, 2007 5:57 PM, Eddy Nigg (StartCom Ltd.)
<[EMAIL PROTECTED]> wrote:
>
>  Hi Kyle,
>
>  I'm reading your mail now for the third time, but somehow I fail to
> understand....Specially the thing about "Businesses/organizations need to be
> able to enforce their policies". Could you give me a short, practical
> example how the proposal from Nelson would break things and make it
> impossible to enforce certain policies? I guess there might be minor
> adjustments needed here and there, but not something which can't be overcome
> in a sane amount of time...I really want to understand which use cases there
> are which would support the current behavior.
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