From: Ray Van De Walker [rgvandewalker@yahoo.com]
Sent: Saturday, September 21, 2002 8:38 PM
To: rule-comments@sec.gov
Subject: Comment on draft: Release No. 34-46432; File No. S7-32-02

My name is Ray Van De Walker.  I'm a consulting
software, systems and safety engineer with experience
in medical and aircraft equipment and systems.

With respect, the proposed policies in the Draft (SEC
file No. S7-32-02) are well-intended, but not
sufficient to produce a reliable financial
infrastructure.

The policy should specify that a primary and alternate
service site should not share infrastructure needed to
record and propagate transactions.
  
Here's why: Merely regional isolation (specified in
the draft) is vulnerable to a dispersed infrastructure
attack, i.e. an attack on a shared power grid, or an
attack on shared internet or telecommunications
services (parts of the internet are centralized,
notably the root domain name servers, and assignment
of addresses).

Telecommunications providers do a good job of
providing alternate routes and equipment to cope with
equipment failures and disasters.  However, to ease
administration they tend to have homogenous systems,
vulnerable to intentional sabotage dispersed by the
network, or accidentally propagated by engineering
mistakes.

I believe it would be prudent to establish a tertiary
dispersed credit subscription and transaction network
not dependent on telecommunications networks.  Banks
did this for many years, so the techniques are
available.  

A modern version could operate on personal computers
(widely available, and easy to power from portable
generators) in association with messengers carrying
write-once digital media (such as DVD-Rs), and a few
long-distance encrypted digital radios (as already
used by the military) at regional banking centers.

A messenger carrying a small case of DVDs is faster
than many land-lines, and the radios could carry
transaction summaries and urgent notices.


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