Whatever happened to Microsoft's DRM plan?

From DRM to disk encryption--the sordid tale of how Microsoft's plans to appease Hollywood were derailed.

Updated 12:00 p.m. Thursday with additional Trusted computing Group comment.

Early this decade, Microsoft weathered unrelenting criticism over a controversial set of technologies known as Palladium, which the company envisioned as creating a kind of secure vault to store passwords or medical records.

Academics warned it could "support remote censorship" and blacklists, likening Palladium to the Soviet Union's efforts to register typewriters and fax machines. Privacy activists predicted it would hand Microsoft "an unprecedented level of control" over the world, and free software doyen Richard Stallman solemnly dubbed it "treacherous computing."

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It worked, kind of. Microsoft retreated by doing what any large bureaucracy tends to do in response to such a kerfuffle: it gave its problem a new name. Palladium became the awkwardly-titled Next-Generation Secure Computing Base, or NGSCB, (and the group Microsoft coalesced around the initiative changed its name from Trusted Computing Platform Alliance to Trusted Computing Group) and critics mostly moved on to worry about the recording industry and other threats to digital liberties instead.

Since then, the NGSCB--once derided as "nagscab"--has existed in an odd kind of technological purgatory. One report in 2004 said that Microsoft has "killed" NGSCB, which the company quickly denied later the same day. CNET published a story in 2005 quoting Microsoft as saying NGSCB was "still coming."

After six years, the supposed world-striding colossus of a technology that once sparked so much fuss (one reviewer said it might become "either Santa or Satan") is much diminished. NGSCB never did live up to its early promise--or what critics would have said was its early threat as a digital rights management tool that would restrict how people consume content on their PCs and lock them into one vendor.

"It has changed from something that was very revolutionary and grandiose into something much more modest," said Andrew Jaquith, a senior analyst at Yankee Group.

And then came BitLocker
NGSCB does live on, manifesting itself in a Microsoft technology called BitLocker, a Microsoft spokesman confirmed.

BitLocker, Microsoft's only product to come from the Trusted Computing effort, is a feature in Windows Vista Enterprise, Vista Ultimate, and Windows Server 2008 that encrypts the disk drive to protect against data theft or exposure if the computer is lost or stolen. (Trusted Computing should not be confused with Trustworthy Computing, which is Microsoft's effort to improve the security of its own products and is largely considered to be successful.)

While it is useful, BitLocker hasn't taken the computing world by storm yet, or even been enough to justify upgrades to Vista, said Rob Helm of Directions on Microsoft.

"BitLocker hasn't been the rage anybody expected, although there is a strong case for using that feature on laptops," he said. In addition, plenty of third-party products--many offering whole disk encryption--exist.

Bruce Schneier, crypto researcher, author, and chief security technology officer of BT, was one of the more vocal critics when Microsoft first unveiled its Trusted Computing plans in 2002. In 2005, he was still beating the drum, writing that Microsoft was attempting to stall, and possibly get Vista exempted from a best practices document for the Trusted Computing Group that addressed many of the critics' concerns.

The Best Practices Principles (PDF), which was written in 2003 and eventually published in 2005, gives consumers some control over disabling the functionality, allows devices to support multiple users, adds privacy protections, and calls for interoperability and portability of data.

"We were concerned that users were able to opt in and not be controlled from above," said Susan Landau, a distinguished engineer at Sun Microsystems who worked on the Best Practices document after Sun joined the Trusted Computing Group. Sun was not a member of the Trusted Computing Platform Alliance.

"The public criticism certainly created pressure," especially when it conflicted with consumer privacy guidelines in Europe and elsewhere, she said.

"I think it's interesting that the (Trusted Computing Group) technology is continuing, but the big DRM push, so far, has not happened," Landau said.

Putting trust in a module
The centerpiece of the Trusted Computing Group is the Trusted Platform Module, a microcontroller that stores keys, passwords, and digital certificates in a secure, isolated area. They are widely distributed in computers from Dell, Fujitsu, Gateway, Hewlett-Packard, Intel, Lenovo, Toshiba, and others, but most people don't even know they are there. BitLocker makes use of the Trusted Platform Module.

Microsoft has "convinced a lot of hardware manufacturers to put the chips in computers and they're in a lot of computers, but they're not doing anything," Schneier said. "The question is what are they going to do with the chips? How is Dell feeling these days?"

A Dell spokesman did not return a call seeking comment. Even Scott Rotondo, president of the Trusted Computing Group, acknowledges that the Trusted Platform Modules need more applications.

"A lot of them haven't been utilized fully and in some cases not at all," said Rotondo, who works as a senior staff engineer in Solaris Security Technologies at Sun. "The supporting infrastructure has been slow to materialize."

"It stands to reason that there might be frustration on the part of hardware manufacturers," Rotondo said, likening it to a "chicken and egg situation."

"We need to really make use of these things before the hardware manufacturers get tired and take them away," he added.

Trusted Platform Modules "have not yet fulfilled their potential, but Microsoft and other companies are working on it," the Microsoft representative said.

A Trusted Computing Group spokeswoman said on Wednesday that the organization is not focused on DRM and that applications that use the TPM include secure e-mail, multifactor authentication, password management, and single sign-on. The group is also working to extend the concepts of hardware-based security to storage, network security, and mobile devices, she said.

While initial concerns about misuse of the technologies slowed down the group's efforts, people see legitimate uses for the technology, and digital rights management could be among them, Rotondo said. However, any digital rights management systems would have to maintain a proper balance between the rights of the content owner and the rights of the consumer, he said.

Where Microsoft failed in doing that, Apple has succeeded, according to Paul Saffo, a Silicon Valley-based technology forecaster.

"The biggest thing that has changed in the last five years is iTunes and the iPhone," he said. "The companies got their protection and the consumers got the right to purchase individual songs at a price that was less than the cost of the album."

Don't discount Microsoft just yet, warns Ross Anderson, a security engineering professor at the University of Cambridge's Computer Lab and an early critic of the Trusted Computing Platform Alliance.

Asked if the world has been spared a Microsoft digital rights management machine, Anderson responded in an e-mail: "Wrong--WMP (Windows Media Player) and the surrounding stuff that MS hopes will enable it to do to the HDTV market what Apple did for MP3s."

Saffo joked: "It's like a horror movie; they'll be back."

(CNET's Declan McCullagh contributed to this report.)