Intel won't back down on chip ID feature

Indeed, if Intel has learned anything, it is the value of patience.

"The issue is what will be acceptable and when," said Paul Otellini, executive vice president of Intel's architecture business group during an interview at the Intel Developers Forum here.

While surprised at the level of public outcry at Intel's (Nasdaq:INTC) decision to add electronically identifiable serial numbers in its next generation of processors, Otellini has no doubt that the Santa Clara, Calif. company's security scheme will eventually gain acceptance in the market.

He pointed to the 500,000-plus people who signed up for FreePC.com's giveaway of computers. To get one of the 30,000 PCs, each customer would be subject to constant advertisements and give up a great deal of personal information.

"The people who are willing to give up their privacy for a free PC are our market," he said.

Intel announced it had added a 64-bit serial number to its processors that, along with a previous 32-bit CPU ID, identifies every processor, acting like a vehicle ID number. While Intel will not collect the serial numbers, the company expects e-commerce companies and corporations to use the identifiers to enhance security.

After outraged privacy advocates called for a boycott of Intel products, the company backed off somewhat: Although it preferred computer makers to keep the chip 'on" by default, it gave them the option of turning it off. On Monday, a report from a German computer magazine that the serial number could be turned on by hackers -- even when the consumer had turned it off -- has left the status of the ID number at shipping in doubt.

What's the problem?
In the wake of the debate, Intel is having trouble reconciling a public worried about privacy with consumers who are willing to give it up for a free product.

"Why does adding 64 fuses to a chip raise such a brouhaha?" said Pat Gelsinger, vice president and general manager of Intel's desktop products group. "You have no less than three ID numbers on your computer that can be used to identify you."

But to one online privacy advocate, Junkbusters Corp. CEO Jason Catlett, the Intel executive's argument leaves out an important point.

"Gelsinger is right when he says that there are several numbers on parts of a PC that could be used to identify people, but none of the manufacturers of those parts has proposed the numbers be used as an ID in an e-commerce transaction," Catlett said.

Since the Pentium III ID number is included for the express purpose of identifying consumers to marketers, he predicted it would usher in privacy problems similar to those that have arisen with Social Security numbers.

"We all know what happened with Social Security numbers -- we didn't get much security, but we did get a whole lot of privacy problems, theft of identity, and thousands of databases full of personal profiles," Catlett said.

Gelsinger believes that the actual debate is less about Intel's plans and more about privacy-conscious consumers becoming accustomed to the current lack of privacy on the Internet. "I think there is a bubbling concern about developing relationships on the Internet," he said. "In our Internet society, the mores and procedures for privacy and social norms have yet to be developed. The Pentium III just released the tension."

Intel had tried to avoid the controversy by polling privacy advocates and the industry alike. "We had the discussion -- whether to have it on or off -- and there was no clear consensus," said Otellini. "Our belief is that as long as people had informed choice there would be no problem."

Shouldn't be regulated
Privacy advocates argue that there would be little choice left to the consumers. Instead, key features -- such as financial transactions at banks and stock trading at online services -- may require the consumer to turn the processor on.

Still, Intel has taken a firm stance against regulating privacy online. "The technology industry -- just like we don't want the Internet regulated -- we don't want to be regulated by privacy policies," said Pat Gelsinger. "You will never hear Intel say they need regulation."

David Sobel, general counsel for the Electronic Privacy Information Center, called Otellini's and Gelsinger's comments at the conference "disappointing and a little bit surprising" given the outcry over the chip ID number.

"We have never been satisfied with the so-called fix they have proposed," which involved asking OEMs to turn the ID feature off before shipping systems equipped with the chip, Sobel said. "For them to claim they have made a concession on this is disingenuous," particularly in light of reports that the feature is vulnerable to hacking, he said.

ZDNN's Maria Seminerio contributed to this story.