Spies' Battleground Turns Virtual

A businessman avatar in Second Life, an online role-playing game. Intelligence officials caution that such games offer novel opportunities for terrorist and criminal activity. (Photo: Linden Research)

Dempsey said the national security fears are overblown, in part because the country already has legal and technical mechanisms in place to give the government access to digital records it needs.

"They want to control this technology and make it even easier to tap than it already is," Dempsey said. "When the government is finished, every new technology becomes a more powerful surveillance tool than the technology before it."

Questions about the impact of innovations in communications technology are nothing new. Criminals, terrorists and others have used Web sites for more than a decade to recruit, operate scams and trade pornography. Law enforcement and intelligence authorities responded to new technologies by repeatedly seeking out new surveillance authorities.

Intelligence officials said, however, that the spread of virtual worlds has created additional challenges because commercial services do not keep records of communication among avatars. Because of the nature of the systems, the companies also have almost no way of monitoring the creation and use of virtual buildings and training centers, some of them protected by nearly unbreakable passwords.

"Virtual environments provide many opportunities to exchange messages in the clear without drawing unnecessary attention," the IARPA paper said. "Additionally, there are many private channels that can be employed to exchange secret messages."

And there are the numbers. Some marketers and technology observers are predicting explosive growth in the use of virtual worlds in coming years. As more people create avatars, it will become harder to identify bad guys, intelligence officials said. As in the real world, one of the central difficulties is establishing the identity of individuals.

"The challenge that we face is to be able to distinguish the fanatics from the average person looking for some simple enjoyment," said the IARPA paper.

One intelligence official, who spoke on condition of anonymity, said he had no evidence of activity by terrorist cells or widespread organized crime in virtual worlds. There have been numerous instances of fraud, harassment and other virtual crimes. Some computer users have used their avatars to destroy virtual buildings.

Last month, Second Life operators shut down a dozen online banks holding virtual currency worth an undetermined amount of actual dollars, after computer users raised questions about whether the banks were paying promised interest.

National security officials have begun working informally to take stock of virtual worlds. That research likely will take on more urgency this year, as companies in other countries prepare to unveil their own virtual worlds.

One such world, called HiPiHi, is being created in China. HiPiHi founders said they want to create ways for avatars to be able to travel freely between its virtual world, Second Life and other systems -- a development that intelligence officials say make it doubly hard to track down the identity of avatars.

In promotional material, HiPiHi officials said that they believe that virtual worlds "are the next phase of the Internet."