On Oct 21, 2007, at 12:01 AM, RECMGMT-L automatic digest system wrote:

Peter's RAIN Posting:

> Schwarzenegger Kills Stringent Data-Protection Bill
>
> The bill would have barred merchants from storing even encrypted  
> payment
> information without a data-retention and -disposal policy, and
> prohibited sending ...    <http://www.itbusinessedge.com/blogs/hdw/? 
> p=1034>

There is definitely a trend at the Federal and State level to develop  
a method to punish those who lose data. This is clearly a case of the  
government trying to involve itself in something that should be left  
to a free market decision.

Punishing a small insurance company, or travel agency or a community  
hospital, or a University that loses information, when that loss may  
occur due their offsite storage vendor losing the tape, or a break  
in; or, a dishonest employee will do nothing to fix the problem.

The largest of the offsite records storage companies have created a  
lobbying arm that is spending millions in Washington to make sure  
they specifically are not accountable in these new laws.  This group  
of companies is ironically named "Association of Information  
Protection" or is it the "Information Protection Association"  (???)  
and they seek to make sure that the cost for lost data or data  
breaches does not come home to roost for them. Therefore the end  
result is that the government will seek to punish 500 to 1,000  
companies who are not in the big headlines for the actions of the  
ones who actually were the newsmakers.

It will be the smaller offsite storage companies, who are NOT in the  
news repeatedly for losing tapes, that will see their insurance costs  
go up with no relation to their security and efficiency. Forget money  
and gold, the world has come to realize that information is the most  
precious asset.  With it the money and gold follow.

So Arnold was totally right in trying to prevent government  
interference in this case.  But if the free market does not act to  
punish those who repeatedly lose data then the government will not be  
able to contain itself. If RM's and IT Managers act to select their  
vendors on performance, then this would fix itself.

The line from a popular movie on the TV Industry that went "I am mad  
as Hell, and I am not going to take it anymore!!" rings in my mind on  
this issue.  Maybe one day the RM's will rise up and strike the  
Hostage Fees clause from their contracts.  Maybe one day they will  
put in a "Service Level Agreement" (SLA) that simply states ........  
"these failures constitute breach of contract and the client has the  
ability to seek a responsive vendor by notification of such breach."

If RM's and IT Managers act responsibly, then the Government doesn't  
need laws which will surely increase the cost of offsite records  
storage for everyone.


Hugh Smith


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