U.S. Plans 'Smart-Chip' Passports

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    - AP

    Despite ongoing privacy concerns and legal disputes involving
    companies bidding on the project, the U.S. State Department plans
    to begin issuing smart chip-embedded passports to Americans as
    planned Monday.

    Not even the foiled terror plot that heightened security checks at
    airports nationwide threatens to delay the rollout, the agency said.
    Any hitches in getting the technology to work properly could add
    even longer waits to travelers already facing lengthy security lines
    at airports.

    The new U.S. passports will include a chip that contains all the
    data contained in the paper version - name, birthdate, gender, for
    example - and can be read by electronic scanners at equipped
    airports. The State Department says they will speed up going
    through customs and help enhance border security.

    Privacy groups continue to raise concerns about the security of the
    electronic information and a German computer security expert earlier
    this month demonstrated in Las Vegas how personal information stored
    on the documents could be copied and transferred to another device.

    But electronic cloning does not constitute a threat because the
    information on the chips, including the photograph, is encrypted and
    cannot be changed, according to the Smart Card Alliance, a New
    Jersey-based not-for-profit made up of government agencies and
    industry players.

    "It's no different than someone stealing your passport and trying to
    use it," Randy Vanderhoof, executive director of the alliance, said
    in a statement. "No one else can use it because your photo is on
    the chip and they're not you."

    Yet the ability to clone the information on the chips may not be the
    sole threat, privacy advocates argue. A major concern is that
    hackers could pick up the electronic signal when the passport is
    being scanned, said Sherwin Siy, staff counsel at the
    Washington-based Electronic Privacy Information Center, a leading
    privacy group.

    "Many of the advantages the industry is touting are eliminated by
    security concerns," Siy said.

    After testing the passports in a pilot project over the past year,
    the government insists they're safe.

    Numerous companies competed the last two years to provide the
    technology. One winner was San Jose-based Infineon Technologies
    North America Corp., a subsidiary of Germany's Infineon AG. Another
    was French firm Gemalto, which earlier this month announced that it
    had received its first production order from the Government Printing
    Office. It is producing the passports for the State Department,
    using the Infineon technology.

    Another company, On Track Innovations Ltd. (OTIV), was notified
    July 31 that it had been eliminated from consideration and is
    appealing the decision, a spokeswoman for the Fort Lee, N.J.
    company said this week. On Track previously had been eliminated but
    appealed that decision in the U.S. Court of Federal Claims in
    Washington, D.C., which found in favor of the company and ordered it
    be reinstated.

    Infineon has been approved for production-quantity orders but hasn't
    received any because of the unresolved legal dispute, said Veronica
    Meter, a spokeswoman for the Government Printing Office. The
    rollout that begins Monday will use technology built up during the
    pilot project.

    Neville Pattinson, director of technology and government affairs for
    Gemalto in Austin, Texas, would not discuss financial terms of the
    contract. He acknowledged the economic potential is massive, noting
    that the State Department issued 10 million passports in 2005 and
    expects that to increase to 13 million this year.

    Citizens who get new passports can expect to pay a lot more. New
    ones issued under this program will cost $97, which includes a $12
    security surcharge added last year. Not all new passports will
    contain the technology until it's fully rolled out - a process
    expected to take a year. Existing passports without the electronic
    chips will remain valid until their normal expiration date.

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