By DAN CATERINICCHIA, AP Business Writer
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
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
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
"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., 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
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.
American Depository Shares of Infineon fell 12 cents to $10.65 Friday
on the New York Stock Exchange.
Copyright 2006 The Associated Press.
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