Lessons for Sacramento from San Francisco’s high-tech heist

For nine days last month, San Francisco’s state-of-the-art new computer network was held hostage by a convicted felon. Even a team of Silicon Valley’s best and brightest engineers working around the clock could not crack his code. Finally, in a secret midnight meeting at the Hall of Justice, the mayor himself convinced the perpetrator to relinquish control.

The entire episode sounds like a Hollywood thriller, complete with a shocking twist. The hacker didn’t steal access to the network; the city gave it to him. In fact, taxpayers even paid him to take it. The man in question, Terry Childs, is not a criminal mastermind, but rather the city engineer, who for more than five years single-handedly designed and managed San Francisco’s internal network.

This multimillion dollar government investment consolidated 60 percent of all data into a single city-run system, handling everything from e-mail to law enforcement. Since it serves as a critical resource for nearly every municipal service, why did one man possess so much power over it? Terry Childs ruled the network because he was the only employee capable of understanding how it worked.

This is not surprising given the complex nature of rapidly evolving technologies. Managing such technologies requires immense expert knowledge, and Childs earned an elite certification held by only 16,000 people worldwide. In the private sector, firms staffed with trained engineers specialize in helping clients run networks. Instead of hiring one of these firms, however, San Francisco decided to build and manage a network completely on its own.

Unlike water pipes and roads, advanced networks must constantly adapt to new technologies and threats. The slow and deliberative pace of government is simply inadequate to keep up with these changes. As a result, government-driven technology initiatives nearly always end in failure. San Francisco is no stranger to these challenges.

For three years, Mayor Gavin Newsom stubbornly pushed forward plans to blanket the city with free municipal Wi-Fi access. After a seemingly endless string of setbacks, miscalculations and squabbles, the project finally collapsed in August 2007. Recognizing that private firms can far more effectively implement his vision, Newsom in June embraced “Wi-Fi 2.0,” referring to a thriving new private wireless venture that operates without any government funding or oversight.

In taking control of the city’s internal network, Terry Childs believed he was protecting it from incompetent bureaucrats. The abysmal track record of government-run networks suggests that his fears were well-founded. Even though Childs abused his authority when he locked down the network, it turns out he may have been the only safeguard keeping it from complete deterioration.

After Childs’ arrest, officials revealed they had failed to back up the network properly. If not for this simple and preventable mistake, the city could have easily restored access. Instead, taxpayers faced a restoration that could have taken months and cost millions of dollars. The follies continued when the district attorney prosecuting Childs accidentally compromised the network by releasing 150 sensitive names and passwords in open court. When the city rushed to change these passwords, it caused the entire system to fail.

Unlike the government, private firms are far less likely to commit such careless errors. Companies must protect their reputations or face the wrath of investors and the loss of customers. By operating its network as a government-run monopoly, San Francisco precludes competition, and eliminates a key incentive to succeed.

The lessons from San Francisco should resonate in Sacramento, where the long-term effects of government-controlled technology are all too clear. After years of government mismanagement, for example, the state’s e-mail system has grown into a chaotic and fragmented patchwork of 359 e-mail servers across 31 departments. Other vital services fare no better. Though the governor recently ordered the pay of state workers reduced to minimum wage, technological limitations render this an empty threat. The state’s payroll system runs on such antiquated code that only retirees are trained to modify it.

The San Francisco network fiasco was foreseeable and preventable. With convenient access to the world’s highest concentration of high-tech prowess, why must bureaucrats insist on reinventing the wheel? By leaving complex technologies to the experts, California cities can guarantee residents a more reliable, competent and efficient government.

Daniel R. Ballon is a public policy fellow in technology studies at the Pacific Research Institute.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

Subscribe to our newsletter:

This field is for validation purposes and should be left unchanged.
Scroll to Top