because of the level of attacks, first the chinese ttack and then later the n.s.a., gchq, whatever you want to call it attack. so it has affected our relations and in particular conversations in europe where people are sensitive to this. it's also caused us to tighten every procedure within our

. >> as best we can tell, what happened was the gchq, which was the british arm of the five eyes , had the equivalent of sniffers on traffic between the data centers of google. google has a very large private data network that moves the data around and complicated, powerful ways. that is why google works so well. it is a massive technical achievement. i read it in "the washington post." i was shocked because jerry: i had written a book that talks about this being possible and people have hinted that it was possible by monitoring light fiber, although i think the mechanisms did not apply. we did not know. the fact it had been so directly and documented in the documents that was leaked was really a shock to the company. here we are. we are more than a year later from that day. the morgan stanley high-tech 35 index, about 25 percent. google remains one of the most massively profitable companies in the world. >> has there been real damage to you or the industry or to us more broadly? >> there is damage at many levels. let's start by saying that if you are a european right now you are less

chinese attack and then later the n.s.a., gchq, whatever you want to call it attack.o it has affected our relations conversations in europe where people are very sensitive to this. us to tightened every procedure within our system. a lot safer. >> so assuming there is a moral cost,st or who do you blame for that? to offer a rule, of sort of surveillance life, which you can doe something doesn't mean that you something. and the fact of the matter is that all of the technologies that we're describing are capable of massive, in the hand the wrong person, violations against privacy. everyone here has a mobile phone, they're all on a data network, the phone knows where is. all of that information could be misused. the snowden set of incidents including your the othernd all things have essentially sort of theed people to maybe nontechies, understand that data's a pretty deal of beg collected about you that's benign, but nevertheless could the wrong hands' as an example i would offer a rule for governments which is you collect da acin a data base, you better be sure to beow

scope and the sort of -- the way it's been executed, wolf, does not look to me like it is an nsa or gchqent. that's where you expect they have very sophisticated capability and tools. much as we wish that this would be it, i don't think -- although we don't know, and the american government isn't commenting right now. >> brew, what do you think? >> i think this could be north korea taking themselves off the net. they may be trying to prevent us from gaining access to hit them in places in response. so it's really hard to tell at this stage who's doing what and to what extent. it could even be the chinese. they're pretty angry at north korea for a lot of their provocations in recent years. and they may have concluded that this was -- this sony attack was a violation of their major objectives in northeast asia of stability and peace. >> bruce bennett, fran townsend. thanks to both of you. thanks very much. >> thanks, wolf. >>> just ahead, we'll shift gears. something to make you smile. anderson has been asking you to vote online for your favorite ridiculist of 2014. tonight we start counti

because of the level of attacks, first the chinese ttack and then later the n.s.a., gchq, whatever you want to call it attack. so it has affected our relations and in particular conversations in europe where people are sensitive to this. it's also caused us to tighten every procedure within our systems. so we're just a lot safer. >> assuming there is a cost, a financial cost or moral cost, who do you blame for that, the u.s. government or edward snowden? >> i'd like to offer a rule of sort of surveillance life, which just because you can do something doesn't mean that you should do something. the fact is all of the technologies we're describing are capable of massive, in the hands of the wrong person, violations of people's privacy. everyone here has a mobile phone. everyone with those phones are on a data network. the phone bs where it is. the fact is all of that information could be misused. so i think the snowden sort of set of incidents including your coverage and all of the things have essentially sort of caused people, maybe the nontechnical people, to understand there is a great

our camables and also advantage or adversaries, including nonstate actors, as you saw the head of gchq said that twitter and facebook-being used by isis as not only command and control but recruitment and propaganda tools. so that's a different universe in which you're living living ad that's one of he reasons why the work of secretary hagel -- they're working on the strategy, but the fundamental reality of national security decisionmaking is the necessity to make choices and america has always faced crises, always been -- you look at the history, you see how many have dealt with the cavalcade of problems while struggling with resources, and the -- in this effort to try to make better choices we have adopted, if it's the cold war, the defense review as a way to help us do this, a bottom-up review, and then there were criticismed that it wasn't good enough and so bill cohen convened the national defense panel in 1997 to review the qdr and then a dozen years later was mandated there be an official relook at american strategy on a regular basis and hence the panel to achieve this goal of

we're foreigners as to the gchq, the uk's counter part.if we sort of just take for granted, well, privacy protection should only protect people in the united states and not anyone out the u.s., we're opening ourselves up. so i do think that's kind of an emerging area. i certainly think there's great international concern about this. it's going to have to be dealt with in one way or another or we will have lost our privacy regardless of what domestic rules we create, by virtue of not having treaties or other kinds of greemt agreements with foreign governments that similarly constrain them. >> so, david, just to push back a little bit, the chief justice says the people, the people refers to citizens. so the people not of the united states do not enjoy the protections of the fourth amendment. so how do you deal with that? how would you approach that from a doctrinal perspective? >> the deciding vote was a concurring opinion. the people in the fourth amendment means us, note them. i think we have to make a case-by-case determination whether it

>> just to confirm that report in terms of what we have written, gchq our secret service calculates 18% companies, computers are down to someone not putting on a password or something like that. are you absolutely right. it's the elementary orors. it means the company versus got to work with security agencies, they need to work with employees to make sure they're not doing silly things like using a password that's 123456. it sound silly a. lot of that is ending up in the hand of chinese or russian governments. >> explain to us, really, what's happening on the offense and the defense? it certainly seems like the lackers have the advantage here and that many of these companies, private companies as well as the government are really quite behind. >> absolutely. the advantage the hackers have is these are small cells. a little bit like terrorist cells, really, they often operate within the countries they are attacking. they keep themself distanced from the government. they are obviously supporting them. they don't operate, of course, by any kind of rules, what soemplt we know what they do o