Vancouver, B.C.—Proposed radio frequency identification technology for passports will not be rolled out until privacy and security issues are addressed and identity theft vulnerabilities are overcome, U.S. State Department deputy assistant secretary for passport services Frank Moss asserted to attendees of the Association of Corporate Travel Executives conference here this month.
During the opening general session via telephone, Moss said that information contained in a 64-kilobyte chip installed in passports would be encrypted and accessible only when passport booklets are open. Additionally, Moss said passports would contain "anti-skimming technology," which he said would keep information safe from theft. "No U.S. passport will be issued until we've addressed the potential risks," he said.
Contrary to previous statements, the State Department last month acknowledged that information contained in passports, including name, photo, passport number and date of birth, could be read from beyond a distance of 10 centimeters. Some sources, according to an ACTE statement released during the conference, said RFID chips could be read from as far as 30 feet. Moss said the State Department is developing means to resolve such issues.
"We will include anti-skimming technology into the passport so that the passport cannot be read unless the book is open or partially open," he said. "The idea that you can have the book laying on your night table at night, let alone be in your pocket, and be read, we think we can conclusively demonstrate that will not happen. However, we know this is as much an issue of public opinion and public concern as it is of physics."
ACTE president Greeley Koch said association members have been nearly unanimously against the passport modifications and still have concerns about what value RFID passports provide over their currently used counterparts. While the State Department has claimed new passport technology could speed travelers through customs and combat fraud, Koch said such assertions have not been proven.
"Until the technology is proven, we're skeptical," Koch said. "We've heard the conflicting statements. Now we need the proof that the technology can be secured and made foolproof. Many of our members are simply asking, 'Why?' "
During a panel presentation on privacy and security, American Civil Liberties Union director of technology and liberty program Barry Steinhardt expressed fears that the State Department would use RFID passports to overshoot its stated purpose. "Expansion is inevitable," he told attendees, noting that the 64-KB chip has the capacity to hold much more information than is currently included in passports, including other biometrics such as fingerprints and iris scans. IJet CEO and session moderator Bruce McIndoe echoed such concerns of mission creep. Moss during his telephonic address asserted that the State Department plans only to store the same information currently held in passports on the chip.
Seated next to Steinhardt during the panel entitled "The Fine Balance between Privacy and Security," Randy Vanderhoof, executive director of the Smart Card Alliance, championed the RFID passport enhancements, sharing State Department claims that it would be nearly impossible to forge or alter passports that contain a chip.
Vanderhoof said that since April 2002, about 300,000 U.S. passports have been reported lost or stolen, giving a ripe opportunity for criminals or terrorists to falsify documents. By storing the information electronically in a chip, he argued, passport identifiers can be verified more quickly and "provide higher assurance that the document is not a fake."
IJet released a white paper during the conference that said RFID devices were designed to manage inventory, not provide security.
"The biggest issue with RFID technology is that anyone with an appropriately equipped scanner who can get near enough to the chip can 'wake it up' and read its contents." Vanderhoof countered such claims, saying that if the State Department follows through with Moss' assertions, data privacy and passport security would be addressed.
"A number of organizations, in particular those representing the travel industry, have expressed concern that an electronic passport without access controls or encryption could potentially be used as a way to identify Americans traveling abroad," Vanderhoof said. "The use of basic access control and encryption, coupled with protective shielding in the passport cover to prevent activation of an unopened passport by a high-power radio frequency reader, overcomes this concern while maintaining all of the added security features that the new passport is intended to have."
Although the State Department has modified its plans for the RFID-enabled passports, it has yet to modify the schedule for rolling them out. As the State Department explores more secure RFID technology, it is maintaining its tentative launch of the passports slated for this summer. ACTE officials said the timeframe was unrealistic. "I don't see how the State Department can possibly get all this accomplished for a summer launch," ACTE's Koch said.
* * *In a session dissecting the search for content, panelists representing entities on both sides of the distribution debate—the legacy global distribution systems and new entrant systems—furthered their arguments. In the middle, corporate clients and travel management companies said they are scrambling to patch together systems that aggregate content from as many suppliers as possible.
"Suppliers are indicating to us that they need alternate channels," said Dee Runyan, executive vice president of mega agency WorldTravel BTI. "Because of fragmented content, to get all of those options, I need to be open to those channels." WorldTravel is one of the first two agency users identified by G2 SwitchWorks
(see story, page 1), which along with ITA Software, is among the more heavily discussed new entrants in the corporate travel distribution space.
"You can't plug all holes contractually," added Derek Lewitton, ITA vice president of sales. "We still will see content fragmentation, but airlines want to deploy fragmented content in a way that is easy for you to access."
Nevertheless, operators of existing GDSs said they stand ready to work with travel management companies by continuing to provide comprehensive content and lowering supplier costs. "GDSs have shown a desire and wherewithal to help agents out financially," according to Jeff Kinder, senior vice president of supplier development for Cendant Corp., operator of the Galileo GDS. Kinder noted Galileo's Momentum program
(BTNonline, Jan. 22, 2003) and subsequent content-for-discount agreements now in place between the four legacy GDS operators and many major carriers.
"Should you do anything? Surely the GDSs will come to their senses once there is some competition introduced. They will bring their prices down and airlines will sign DCA-4, as it has been colloquially called. So why go through the effort of plugging in ITA, et al, at all?" Lewitton rhetorically asked. "The reason is that the GDS cost structures only give them so much room. Their costs create a floor which they cannot drop below in any substantial way."
Kinder countered that such a floor is "driven by account management, support, etc. Otherwise, how do you support thousands of agencies and corporate clients?"
* * *ACTE announced it is resuming its international contagion containment initiative, through which the association will work with the Centers for Disease Control and Prevention and "open new channels of communication with the World Health Organization" as a means to educating its members of containing health crises. During his opening address, ACTE's Koch—citing the SARS epidemic in 2003 and its impact on the travel industry—discussed the perils of waiting too long to respond to global medical emergencies. "Disease spread by international business travel remains one of the greatest threats to every industrialized nation," he said. "SARS cost the business travel industry $8 billion in 2003." Koch added: "There is never a good time to lose $8 billion, but the economic havoc wreaked by an unchecked flu pandemic today would have disastrous effects on the global transportation network." Meanwhile, during the last day of the conference ACTE pushed a new agenda, promoting corporate responsibility and encouraging travel executives to lead ethically and "be aware of the resources we consume." ACTE said it will dedicate task forces to promote its contagion containment and corporate responsibility initiatives.
* * *As procurement techniques and professionals gain increasing prominence in the travel space, the ever-evolving role of the travel manager came to the forefront of a discussion about outsourcing travel functions and processes.
"An interesting trend we're seeing now is that companies are putting more emphasis on having the TMC manage policy, in terms of tools and reporting," said Mike Premo, senior vice president of TQ3 Latin America. "From there its not a far leap to 'well, what is our policy and can you help us with that?'"
Tony D'Astolfo, vice president of travel services at California-based e-commerce firm Rearden Commerce, added that, in addition to streamlining operations and achieving cost savings, outsourcing day-to-day, transactional functions can help travel managers align themselves with upper-level management or "C-level employees."
"Outsourcing some of the more tactical functions helps your company execute to its goals and then you become a strategic partner," said D'Astolfo. "It takes you away from the almost wholly tactical role you may have now and moves you more toward the strategic, so you have time to work on the issues that are really important to your company's CEO or CFO."
* * *Straight talk from Scott Gillespie, founder and CEO of Travel Analytics, shook up some attendees of the session he presented entitled, "Travel Management Validation: What's More Important Than Savings?"
The answer to the titular question is value, and Gillespie challenged buyers see how airline pricing reform has changed the value equation for them as professionals and for many of their travel management company deals. The good news for travel management professionals is that the business is becoming more complex, Gillespie said, and those who tackle the tough problems and communicate the results properly can create job security. The reduction in negotiated savings from the lowering of airfares will translate into intense pressure to source agencies to reduce agency fees, which Travel Analytics' Gillespie predicted would result in more business for online-originating travel management companies and less for legacy TMCs. "The challenge for travel managers is to be sure that they are getting the best value from their TMCs," Gillespie said. "It's not just about price, but any TMC that gets defensive about its price either isn't delivering good value or isn't doing a very good job of selling the value behind the price. The challenge is for the buyers to understand the full value they are getting."
He also told travel buyers to consider the impact of travel policy on the human capital cost of a trip, which provides some justification for companies that have tiered travel policies.
"Old-school procurement methods of tightening a travel policy are counterproductive after a point," Gillespie said. "The challenge is for travel and procurement managers to recognize the total cost to the organization, not just the price paid for a trip."
Gillespie also challenged travel suppliers to do a far better job of selling the non-price value of their products and services. "If you do not want to be pigeonholed as a commodity, you have to differentiate yourself."
* * *While average U.S. online booking adoption rates have reached almost 40 percent, according to American Express Global Business Travel vice president, Doug Wright, the rest of the world is just beginning to embrace the online booking experience.
At a discussion dedicated to "Going Global Online," panel moderator Wright noted that, besides Canada, the U.K. and Australia, most global markets hover between 5 and 10 percent online adoption.
Panelists agreed that penetrating the global online market remains a tricky proposition.
"Make sure whatever program you're rolling out in that market is tailored to that market," according to Scott Gutz, president and CEO of online booking provider E-Travel North America. "For instance, in Asia/Pacific, field training is extremely important, credit card usage is extremely low, and the tool has to function in multiple languages, dialects and countries."
Gutz also advised corporate travel managers to approach an international online booking rollout with a level of cultural sensitivity and an appreciation for the importance of hands-on, interpersonal relationships in most other parts of the world. "You have to partner with people, especially in Scandinavia," Gutz said, "or you're not going to get anything done." Citigroup vice president Mary Kay Bellersen agreed, noting, "The people around the technology are important. Don't underestimate the human touch in Europe."