Schneier attacked the NSA for its behaviour in a public blog post, arguing that it is using laws to forcibly turn tech companies into mass surveillance tools. "If there's any confirmation that the US government has commandeered the internet for worldwide surveillance, it is what happened with Lavabit earlier this month," he wrote.
The renowned cryptographer said the NSA's treatment of Lavabit's founder Ladar Levison after he chose to shut down the service in a bid to protect his customers from the agency, is proof it is going too far in its efforts to monitor the internet.
"So far, we just have an extreme moral act in the face of government pressure. It's what happened next that is the most chilling. The government threatened him with arrest, arguing that shutting down this email service was a violation of the order," he wrote.
Schneier said the threat of arrest shows the US government's behaviour proves it believes it has sovereignty over private industry.
"There it is. If you run a business, and the FBI or NSA want to turn it into a mass surveillance tool, they believe they can do so, solely on their own initiative. They can force you to modify your system. They can do it all in secret and then force your business to keep that secret. Once they do that, you no longer control that part of your business," he wrote.
"You can't shut it down. You can't terminate part of your service. In a very real sense, it is not your business anymore. It is an arm of the vast US surveillance apparatus, and if your interest conflicts with theirs then they win. Your business has been commandeered."
He added that while it is unclear if law enforcement would actually be able to make good on its threats to arrest non-compliant businesses, the very fact the NSA made the threat proves the need for legislative change.
"Protection rackets are easier when you have the law backing you up. As the Snowden whistleblowing documents continue to be made public, we're getting further glimpses into the surveillance state that has been secretly growing around us," he wrote.
"The collusion of corporate and government surveillance interests is a big part of this, but so is the government's resorting to intimidation. Every Lavabit-like service that shuts down – and there have been several – gives us consumers less choice, and pushes us into the large services that co-operate with the NSA. It's past time we demanded that Congress repeal National Security Letters, give us privacy rights in this new information age, and force meaningful oversight on this rogue agency."
Schneier is one of many members of the security community to call for change following the PRISM revelation and Lavabit shutdown. Silent Circle chief executive Mike Janke made a similar claim after shutting down the company's own secure email service.
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