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This is a fundamental problem for nations that aren't interested in exposing their traffic to American observation, whether they're engaged in nefarious activities or not. Long term, the problem could lead to the construction of digital firewalls, in which the United States is effectively isolated behind protective nodes built by local governments to scrub and redirect traffic away from potential capture points. This is directly in opposition to the central concept of the Internet, which is a dynamic structure capable of responding to outages or damage by routing around the problem.

Documents leaked by former NSA contractor Edward Snowden show that the NSA created and promulgated a flawed formula for generating random numbers to create a "back door" in encryption products, the New York Times reported in September. Reuters later reported that RSA became the most important distributor of that formula by rolling it into a software tool called Bsafe that is used to enhance security in personal computers and many other products.Undisclosed until now was that RSA received $10 million in a deal that set the NSA formula as the preferred, or default, method for number generation in the BSafe software, according to two sources familiar with the contract. Although that sum might seem paltry, it represented more than a third of the revenue that the relevant division at RSA had taken in during the entire previous year, securities filings show.

RSA, meanwhile, was changing. Bidzos stepped down as CEO in 1999 to concentrate on VeriSign, a security certificate company that had been spun out of RSA. The elite lab Bidzos had founded in Silicon Valley moved east to Massachusetts, and many top engineers left the company, several former employees said.And the BSafe toolkit was becoming a much smaller part of the company. By 2005, BSafe and other tools for developers brought in just $27.5 million of RSA's revenue, less than 9% of the $310 million total."When I joined there were 10 people in the labs, and we were fighting the NSA," said Victor Chan, who rose to lead engineering and the Australian operation before he left in 2005. "It became a very different company later on."By the first half of 2006, RSA was among the many technology companies seeing the U.S. government as a partner against overseas hackers.New RSA Chief Executive Art Coviello and his team still wanted to be seen as part of the technological vanguard, former employees say, and the NSA had just the right pitch. Coviello declined an interview request.An algorithm called Dual Elliptic Curve, developed inside the agency, was on the road to approval by the National Institutes of Standards and Technology as one of four acceptable methods for generating random numbers. NIST's blessing is required for many products sold to the government and often sets a broader de facto standard.RSA adopted the algorithm even before NIST approved it. The NSA then cited the early use of Dual Elliptic Curve inside the government to argue successfully for NIST approval, according to an official familiar with the proceedings.RSA's contract made Dual Elliptic Curve the default option for producing random numbers in the RSA toolkit. No alarms were raised, former employees said, because the deal was handled by business leaders rather than pure technologists.

According to internal NSA documents viewed by SPIEGEL, these on-call digital plumbers are involved in many sensitive operations conducted by American intelligence agencies. TAO's area of operations ranges from counterterrorism to cyber attacks to traditional espionage. The documents reveal just how diversified the tools at TAO's disposal have become -- and also how it exploits the technical weaknesses of the IT industry, from Microsoft to Cisco and Huawei, to carry out its discreet and efficient attacks. The unit is "akin to the wunderkind of the US intelligence community," says Matthew Aid, a historian who specializes in the history of the NSA. "Getting the ungettable" is the NSA's own description of its duties. "It is not about the quantity produced but the quality of intelligence that is important," one former TAO chief wrote, describing her work in a document. The paper seen by SPIEGEL quotes the former unit head stating that TAO has contributed "some of the most significant intelligence our country has ever seen." The unit, it goes on, has "access to our very hardest targets."

The Kim Dotcom "big reveal" is out - and has almost immediately been dismissed as a fake. The "reveal" is an email which purports to show Prime Minister John Key involved in a plan to get the internet entrepreneur into New Zealand so he could be extradited to the United States.

It is is dated October 27, 2010 and is purported to be from Warner Brothers chairman and chief executive Kevin Tsujihara to a senior executive at the Motion Picture Association of America - the lobby group for the Hollywood studios. However, Warner Bros told the Herald the email was a fake. Paul McGuire, the movie studio's senior vice president for worldwide communications, told the Herald: "Kevin Tsujihara did not write or send the alleged email, and he never had any such conversation with Prime Minister Key." Mr McGuire said: "The alleged email is a fabrication."