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tv   60 Minutes on CNBC  CNBC  December 25, 2013 7:00pm-8:01pm EST

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reassure his audience about china's sovereign wealth fund. that's this edition of 60 minutes on cnbc. i'm steve kroft. thanks for joining us. captioning by captionmax www.captionmax.com [ticking] >> we know that cyber intruders have probed our electrical grid, and that in other countries, cyber attacks have plunged entire cities into darkness. >> president obama didn't say which country had been plunged into darkness by computer hackers, but we found out. it was brazil. we also found out that hackers have been infiltrating everything from our defense networks to the financial systems. bank robbers are now stealing more money with computers than they are with guns. >> this map is showing a visual representation of where all of the known infections of conficker are across the world.
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>> computer analysts say it's like a sleeper cell, and it may be poised to suck sensitive data out of millions and millions of computers. >> it takes time to read the manuals. i'm gonna save you that time. 'cause i stay home on saturday nights and read them for you. >> you and the rest of the geeks? >> there's millions of us out there. >> everybody, let's hear it! geek squad! [cheering] >> welcome to 60 minutes on cnbc. i'm steve kroft. in this edition, we take a look at technology. we examine how breaches in digital security threaten everything from weapons systems to bank accounts. plus, we meet the mr. fix-its of the geek world. we begin with electronic sabotage. nothing has ever changed the world as quickly as the internet. in less than a decade, the pentagon's warning that it might be possible for a computer hacker to disable critical infrastructure in a major city and disrupt essential services
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has actually happened. other online attacks have seen millions of dollars stolen from banks and defense systems infiltrated. it's why, as we first reported in november of 2009, some people are already saying that the next big war is less likely to begin with a bang than a blackout. >> can you imagine your life without electric power? >> until february 2009, retired admiral mike mcconnell was the nation's top spy. as chief of national intelligence, he oversaw the central intelligence agency, the defense intelligence agency and the national security agency. few people know as much about cyber warfare, and our dependency on the power grid, and the computer networks that deliver our oil and gas, pump and purify our water, keep track of our money, and operate our transportation systems. >> if i were an attacker and i wanted to do strategic damage to the united states, i would
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either take the cold of winter or the heat of summer, i probably would sack electric power on the u.s. east cost, maybe the west coast, and attempt to cause a cascading effect. all of those things are in the art of the possible from a sophisticated attacker. >> do you believe our adversaries have the capability of bringing down a power grid? >> i do. >> is the u.s. prepared for such an attack? >> no, the united states is not prepared for such an attack. >> it's now clear this cyber threat is one of the most serious economic and national security challenges we face as a nation. >> four months after taking office, president obama made those concerns part of our national defense policy, declaring the country's digital infrastructure a strategic asset, and confirming that cyber warfare had moved beyond theory. >> we know that cyber intruders have probed our electrical grid, and that in other countries cyber attacks have plunged entire cities into darkness. >> president obama didn't say
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which country had been plunged into darkness, but a half a dozen sources in the military, intelligence, and private security communities have told us the president was referring to brazil. several prominent intelligence sources confirmed that there were a series of cyber attacks in brazil: one north of rio de janeiro in january of 2005 that affected three cities and tens of thousands of people, and another, much larger event beginning on september 26, 2007. that one, in the state of espirito santo, affected more than 3 million people in dozens of cities over a two-day period, causing major disruptions. in vitoria, the world's largest iron ore producer had seven plants knocked offline, costing the company $7 million. it is not clear who did it or what the motive was. but the people who do these sorts of things are no longer teenagers making mischief. they're now likely to be highly
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trained soldiers with the chinese army or part of an organized crime group in russia, europe or the americas. >> they can disrupt critical infrastructure, wipe databases. we know they can rob banks. so it's a much bigger and more serious threat. >> jim lewis is a director at the center for strategic and international studies, and he led a group that prepared a major report on cyber security for president obama. what was it that made the government begin to take this seriously? >> in 2007 we probably had our electronic pearl harbor. it was an espionage pearl harbor. some unknown foreign power-- and honestly, we don't know who it is--broke into the department of defense, to the department of state, the department of commerce, probably the department of energy, probably nasa. they broke into all of the high-tech agencies, all of the military agencies, and downloaded terabytes of information. >> terabytes? >> a terabyte is-- it's hard to say. the library of congress, which has millions of volumes, is
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about 12 terabytes. so, we probably lost the equivalent of a library of congress worth of government information in 2007. >> all stolen by foreign countries? >> yeah. this was a serious attack. and that's really what made people wake up and say, "hey, we've got to get a grip on this." >> but since then, there has been an even more serious breach of computer security, which lewis called the most significant incident ever publically acknowledged by the pentagon. in november 2008, someone was able to get past the firewalls and encryption devices of one of the most sensitive u.s. military computer systems and to stay inside for several days. >> this was the centcom network, the command that's fighting our two wars, and some foreign power was able to get into their networks and sit there and see everything they did. >> what do you mean, sit there? >> they could see what the traffic was. they could read documents. they could interfere with things. it was like they were part of the american military command. >> lewis believes it was done
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by foreign spies who left corrupted thumbnail drives or memory sticks lying around in places where u.s. military personnel were likely to pick them up. as soon as someone inserted one into a centcom computer, a malicious code opened a backdoor for the foreign power to get into the system. >> so presumably, nobody at the pentagon is plugging in-- >> they've banned them. >> my impression is most people understand that there is a threat out there. i don't think most people understand that there are incidents that are happening. >> you know, i've been trying to figure out why that is, and some of it is the previous administration didn't want to admit that they had been rolled in 2007. there's a disincentive to tell people, 'hey, things are going badly.' but it doesn't seem to be sinking in. and some of us call it 'the death of a thousand cuts.' every day, a little bit more of our intellectual property, our innovative skills, our military technology is stolen by somebody, and it's like little drops. eventually we'll drown.
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>> even the country's most powerful weapons are targets, so technicians at the sandia national laboratories make their own microchips for nuclear weapons and other sophisticated systems. jim gosler, one of the fathers of cyber war, says most commercial chips are now made abroad and there are concerns that someone overseas could tamper with them. so you're worried about somebody being able to get in and reprogram a nuclear weapon, or get inside and put something in there that would make it-- >> well, certainly alter its functionality. >> what do you mean by "alter its functionality?" >> such that when the weapon needed to be to go operational, it wouldn't work. >> have you found microchips that have been altered? >> we have found microelectronics and electronics embedded in applications that they shouldn't be there. and it's very clear that a foreign intelligence service put them there. >> coming up:
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how to take out an oil refinery from cyber space. >> the first thing we had to do was actually gain access to the network. and that's--we've just got that as launch attack, and then we turn up the btus. and then we're turning off the recirculator pump. there we go. >> that's ahead, when 60 minutes on cnbc returns. [ticking] ♪ hmm.
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>> sean henry's job is to police potential targets all over the united states. he is an assistant director of the fbi in charge of the bureau's cyber division. he told us that criminals have used the internet to steal more than $100 million from u.s. banks so far in 2009, and they did it without ever having to draw a gun or pass a note to a teller. the fbi became famous stopping bank robberies. are there more bank robberies in terms of the amount of money stolen on the internet than there are guys walking into
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branches with guns? >> absolutely. >> really? >> yes. i've seen attacks where there's been $10 million lost in one 24-hour period. if that had happened in a bank robbery where people walked in with guns blazing, that would've been headline news all over the world. >> and the bank probably didn't want it known. >> certainly when there's a network breach, the owners of the network are not keen to have it known that their network was breached because of their concern that it might impact their business. >> the case henry mentioned didn't involve just one bank, it involved 130, all of them victimized through an international network of atms, an international caper that required dozens of participants on three different continents. how did they do it? >> it was a sophisticated operation, clearly organized, where adversaries accessed a computer network, were able to gain information from multiple accounts. they were able to decrypt pin numbers and then taking that data, able to manufacture white
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plastic that enabled them access to get into atm accounts. >> what's white plastic? >> take a piece of plastic that's similar in size and shape and weight to an atm card. >> they've got the card, they've got the pin number, and they just drained the accounts? >> almost $10 million in 24-hour period. >> what cities? 49 cities around the world, in europe, in north america, south america, asia. all over the world. >> do you have any idea what country these people were from? >> yes. >> you care to share that with me? >> i would not. >> you would not care to share it? >> no. >> have you caught any of them? >> working on it. >> one top u.s. intelligence official is on record saying that the chinese have already aggressively infiltrated the computer networks of some u.s. banks and are operating inside u.s. electrical grids, mapping out our networks and presumably leaving behind malicious software that could be used to sabotage the system. can a penetrator or a
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perpetrator leave behind-- >> yes. >> little things that will allow them to be there and watch and look and listen? >> any successful penetration has the potential for leaving behind a capability. >> do we believe that there are--that governments have planted code in the power grid? >> steve, i would be shocked if we were in a situation where tools and capabilities and techniques have not been left in u.s. computer and information systems. >> of all the critical components in the u.s. infrastructure, the power grid is one of the most vulnerable to cyber attack. that's because the power grid is run and regulated by private utilities, which are unbeholden to government security decrees. >> i'll walk through the steps an attacker might take. >> here at the sandia national laboratories, department of energy security specialists like john mulder try to hack into the computer systems of power and water companies and other sensitive targets in order
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to figure out the best way to sabotage them. it's all done with the companies' permission in order to identify their vulnerabilities, and this is a graphic demonstration of how they could have destroyed an oil refinery by sending out code that caused a crucial component to overheat. >> the first thing you would do is turn it to manual controls so that your automatic controls aren't protecting you. >> what would be your main target here? >> the heating element and the re-circulator pump. if we could malfunction both of those, we could cause an explosion. >> how would you do that? >> the first thing we had to do was actually gain access to the network, and that's--we just got that as launch attack. and then we turn up the btus, and then we're turning off the re-circulator pump. there we go. >> how realistic is this? >> it's very realistic. >> but the companies are under no obligation to fix the vulnerabilities, which was graphically demonstrated in a much more realistic fashion at the idaho national labs in 2007 in a project called aurora. a group of scientists and
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engineers at the department of energy facility wanted to see if they could physically blow up and permanently disable a 27-ton power generator using the internet. >> if you can hack into that control system, you can instruct the machine to tear itself apart, and that's what the aurora test was. and if you've seen the video, it's kind of interesting, 'cause the machine starts to shudder, you know, it's clearly shaking, and smoke starts to come out. it destroys itself. >> and what would be the real-world consequences of this? >> the big generators that we depend on for electrical power are, one, expensive, two, no longer made in the u.s., and, three, require a lead time of three or four months to order them. so it's not like if we break one, we can go down to the hardware store and get a replacement. if somebody really thought about this, they could knock a generator out, they could knock a power plant out for months.
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and that's the real consequence. >> this was the leap from theory to reality. >> when congressman jim langevin, who chaired a subcommittee on cyber security heard about it, he called representatives of the nation's electric utilities to washington to find out what they were doing to fix the vulnerability. the committee was told that the problem was being addressed, but that turned out not to be the case. at a subsequent hearing seven months later, langevin's committee members discovered that almost nothing had been done. >> what do you think we are, a bunch of jerks? >> they--basically, they lied to congress, and i was outraged. >> and they admitted lying to congress? >> that's right. they admit that they misled congress, that they did not give accurate testimony, and they subsequently had to retract the testimony. >> have they made any progress since you caught them out in this lie? >> no, not sufficiently. the private sector has different priorities than we do in providing security. their, in a sense, bottom line is about profits, and we need to change that. we need to change their motivation so that when we see
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a vulnerability like this, we can require them to fix it. >> langevin and others have introduced legislation that would do just that. >> i look at this as, like, a pre-9/11 moment where we identify a problem, we identify a threat, we know it exists, we know it's real, and we don't move quickly enough to fix the problem. >> and what i'm worried about is, because of so many competing priorities, and so many issues that we have to deal with, we won't get-- we will not get focused on this problem until we have some catastrophic event. if the power grid was taken off-line in the middle of winter, and it caused people to suffer and die, that would galvanize the nation. i hope we don't get there. but it's possible that we will. >> cyber war defense remains a top priority for president obama. in october of 2010, the newly formed u.s. cyber command, led by general keith alexander, became fully operational. it's mission is to safeguard u.s. military networks. it has no jurisdiction over computer networks in the
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civilian sector such as power grids or electronic banking systems. their security continues to be the responsibility of the companies and the industries that operate them. [ticking] coming up: a very secret agent. >> imagine a network of spies that has infiltrated a country, and every day, all of the spies are calling in for their instructions on what to do next. >> a serious case of worms, next on 60 minutes on cnbc. [ticking] ♪ i want to spread a little love this year ♪ [ male announcer ] this december,
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[ male announcer ] this december, experience the gift of true artistry and some of the best offers of the year at the lexus december to remember sales event. this is the pursuit of perfection. [ticking] >> the internet is infected, the work of malicious computer hackers and the weapons they
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release, known as viruses and worms. they are toxic software that's planted within a network to contaminate our computers without us ever knowing about it. and the problem is growing exponentially. an entire industry of computer security professionals is in a race to block hackers from their disruptive goals. in march 2009, leslie stahl reported on the furious efforts to stop the then-rapidly spreading computer worm known as conficker. >> at symantec, the company that makes norton anti-virus software, engineers have been tracking conficker as it worms its way across the globe. >> this map is showing a visual representation of where all of the known infections of conficker are across the world. >> this is conficker. >> vice president steve trilling says the worm is now living on millions of computers, mainly in corporations. so far, the bad guys who created it haven't triggered conficker. it's just sitting out there
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like a sleeper cell. >> imagine a network of spies that has infiltrated a country, and every day, all of the spies are calling in for their instructions on what to do next. >> what's the worm being asked to do? >> that's the interesting thing. the only thing the worm is being asked to do is to ask for further instructions. >> so we're talking several months? >> that's right. >> several months, it's just been sitting there. >> that's exactly right. >> i don't know. i'm hearing jaws music. it's that ominous, because once the hackers issue instructions, conficker could turn menacing in an instant. with one click, the worm's creator can instruct it to suck sensitive data like bank passwords and account numbers out of millions of computers, or launch a massive spam attack to clog up the works. the newest targets of worms are social networking sites. trilling showed us how it might work. so is this a real facebook page? >> this is a real facebook page. and we added your friend and
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colleague, morley safer. you can see down there in the left. >> he says a worm can crack into a facebook account like morley's and send a message to anyone on his friend's list. we have a message from morley. a message i'm sure to open, since it comes from a trusted friend. click there, it says, "ha, ha, ha, check-- check out this hilarious video of you." >> that's right, so-- >> well, i would do that. i took the bait. and by clicking on the video link... >> something looks a little off. >> very off. am i already infected just by that? >> you're already infected. >> that quickly? >> that quickly. >> as trilling demonstrated on the second screen, the hacker owned me. >> from here on out, as we'll see, everything you do, gonna show up on the hacker's machine. >> so when i typed my username and password into a bank website, it appeared instantly on the hacker's screen, along with my bank account details. >> everything i type shows up here. >> every single keystroke you hit. in fact, if you make a mistake
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and hit a backspace, that shows up in the window. >> the hacker then followed me around as i browsed the internet. from cbs news... >> take a look at what the hacker sees, right? exactly where you are. >> to amazon.com. >> so if i buy something, they're gonna have my credit card. >> everything you type in: your address, your credit card. it's all gonna show up in that window. >> the internet has become a minefield. trilling says too few people have top-notch, up-to-date security software. >> there is something that would've prevented me from answering morley's message or i would never have gotten morley's message? >> as soon as you clicked on that link and you had security software, you would immediately get an alert, "this is a bad website," and it would've blocked the attack. you would've never been hit. putting on that software, you're preventing yourself from becoming a victim. >> how do i know you're not just saying, "go out and get this," 'cause you sell it? i mean, you know, there's a sort of conflict of interest here. >> well look, leslie, in 60 minutes, we are blocking
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nearly 400,000 threats around the world. if you're going out on the internet and you're not protected, it's like walking out of your house and leaving the door open. >> but mary rappaport says all the doors on her home computer were locked tight. she had anti-virus software and a firewall, and so she thought she was safe to do her banking online. but then she noticed something odd going on and called the bank. >> they told me that three charges in the last three days had been made to my account. one for $3,000, one for $4,000 and one for $1,200. >> were you having a heart attack? >> well, you know, i had the sense that time was of the essence. >> the bank replaced the stolen money and suggested that she merely change her password. that was to be the end of it. but the next day, she was checking her balance... >> and i saw $1,000 being moved from my son's savings account into my checking account.
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>> you saw it? >> right before my eyes. i saw my money being moved. >> a hacker was trying to move all her money into one account, her checking account, to make it easier to transfer overseas. luckily, the bank was able to freeze her accounts before she lost any more money. >> i had what i thought were adequate protections. you know, i had anti-spyware software and anti-virus, and i thought i had a good enough firewall. wrong. [ticking] >> coming up: tracking the hackers. >> how do you track them down? >> well, they're like any other business. they have to advertise to get clients. >> you're saying that the hackers have ads? >> yes. >> that's next, when 60 minutes on cnbc returns. [ticking] (vo) you are a business pro.
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>> because google's search engine is what most people use to surf the net, we went to talk to vint cerf, one of the founding fathers of the internet, and now a vice president at google. the company itself says that one in every 100 google searches brings up an infected site. >> people are blaming google, 'cause if you do the search, they say, you know, "google should be responsible if we get infected." and you've heard that. >> i think that--i have heard that, and i think that's a very bizarre way of looking at things. >> google's position is that it's not the police men of the internet, but its engineers do scour the web and issue warnings about malicious infections, or malware. >> if we happen to see what we
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believe as malware on that website, then when you go there, we will pop up a web page and it says, "we think we found malware on this site; maybe you don't wanna go there." >> now, i understand that if you go there anyway, google sends you a second warning saying, "are you serious? we just told you not to go there." something like that. >> of course, people still go, and at that point, it's their problem. >> you know, the more you hear about this, the more you feel that if you bank online, shop online, open some--open an email, i mean, that almost anything you do puts you in jeopardy. >> actually that's a true statement, that there are things, bad things can happen. on the other hand, i've been on the net ever since the net started, and i haven't had any of the bad problems that you've described. >> but tens of millions of people have. one in four americans, according to recent reports, as the hackers get more and more
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sophisticated. >> i'm told that you're a hacker hunter. is that correct? >> that's a good way to put it. >> don jackson is director of threat intelligence at secure works in atlanta, which protects corporations against cyber-attacks and tracks the hackers who launch them. >> part of my job is to know the enemy, to know our adversaries. >> so the enemy is a hacker? >> that's right. the enemy is somebody that wants to use computers to hurt somebody else or to make money for themselves. >> using an assumed name, "gozi", jackson infiltrates chat rooms where hackers sell their worms and viruses to their clients, other hackers. he asks for a demo so his company can create software to disable the malware. the hackers, he says, are typically young, male, and often from russia. >> how do you track them down? >> well, they're like any other business. they have to advertise to get clients. >> you're saying that the hackers have ads?
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>> yes. >> on the internet? >> on the internet, publically available. >> no. >> unfortunately, they're all to easy to find. >> on websites like this one. he says many russian hackers are in cyber gangs that display fascist symbols like swastikas and anti-american artwork. and they boast about all the dollars they've stolen from the rich americans. a single hacker can make $30,000 a month and be championed in local newspapers. >> there was an example recently where two boys were arrested actually and then let go the next day. but the article in the newspaper wasn't that they were arrested, that they'd committed a crime, but saying, "look at our two local boys made good. they've cheated some greedy westerners out of so much money." >> they're heroes. >> they are. >> it's not known who's behind the computer worm, conficker, whether it's a gang of russian hackers or some solitary evil genius. this worm is wily. it keeps mutating.
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security software companies have been kept very busy. >> you're locked out, eh? >> but conficker can jump over protections. while we were reporting this story, we were stunned to learn that the wily worm had struck us, right here at cbs news. >> people were having problems with their blackberries, their log-ons. >> louis pelaez, a network engineer, says conficker is so aggressive, it took technicians here 24/7 over ten days to hunt down and quarantine the affected computers. >> do you actually know where it started? do you--can you pinpoint it? >> we really will probably never know exactly how it infected the network. we just know that, you know, once it hit, it began to propagate. >> cbs news has now contained the infection, but pelaez says conficker could still be hiding undetected somewhere within the network. did you think cbs was safe?
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was that in your head? "we're safe?" or did you think this could happen? >> "no, i pretty much thought that we were pretty solid. you try to secure a network, but there's no guarantee that somebody can't come up with something that will, you know, wreak havoc." >> since our story first aired, at least five variants of the conficker worm have been released, infecting millions of computers worldwide. many cyber security experts claim that conficker was created to form a huge botnet, a large collection of computers controlled remotely by cyber criminals to steal, among other things, financial and identity data. software technology companies and government agencies regarded the threat as being so great that they collaborated to form the conficker working group, a unique effort to neutralize the botnet and closely track its movements. [ticking] coming up: the new american heroes.
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>> if you look at, like, the focus groups or whatever, people say, "savior," and "they saved me," and "they saved my data." "this stuff's irreplaceable." >> hi. >> the geek squad makes a house call, next on 60 minutes on cnbc. [ticking] ♪ [ male announcer ] how could switchgrass in argentina, change engineering in dubai, aluminum production in south africa, and the aerospace industry in the u.s.?
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>> it's hard to say exactly when it happened, but sometime during the past 15 years or so, most of us involuntarily surrendered a big chunk of our
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lives to computers other devices that contain computer chips. we're talking laptops, cell phones, blackberries, and remote controls-- anything that needs to be programmed, requires technical support, and can crash, die, or merely freeze. as i first reported in january of 2007, that always seems to happen at the worst possible time, and for most of us, there's only one solution: get me the geeks. we are becoming slaves to our own technology, addicted to and dependent upon all sorts of beeping, flashing gadgetry that's supposed to make our lives easier. >> so how do you turn the thing off? >> but it's become so complicated to set up, program, and fix, most of us don't know how to do it, giving rise to a multi-billion dollar service industry populated by the very people who used to be shunned in the high school cafeteria: geeks, like robert stephens.
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>> it takes time to read the manuals. i'm gonna save you that time 'cause i stay home on saturday nights and read them for you. >> you and the rest of the geeks. >> there's millions of us out there across the country. everybody, let's hear it! geek squad! [cheering] >> and 12,000 of them work for robert stephens, the founder and chief inspector of the geek squad, the tech support company he founded 12 years ago while he was still in college and sold in 2002 to best buy. whether his geeks are making service calls in their volkswagen beetles or toiling over the 4,000 frozen, infected computers that pass through this facility near louisville every day, they all wear the same uniform: white shirts, white socks, and black clip-on ties, a look stephens borrowed from nasa engineers. >> it looks a little weird walking down the street, 'cause people think we're gonna hand out bibles. but when you see, like, 20 of us walk into a bar and start, you know, ordering beers, it looks like an fbi raid.
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>> he says the biggest complaint about tech support people is rude, egotistical behavior; and the uniform is designed to impart a dose of humility as they work their wizardry. >> there's usually some frantic civilian at the door, pointing at some device in the corner that will not obey, and we've gotta make sense of it. and, you know, hygiene provides bonus points if i don't smell bad. i mean, literally, that was my business plan. just be nice and fix it. >> are people grateful? >> oh, of course. if you look at, like, the focus groups or whatever, people will say, "savior," and, "they saved me," and, "they saved my data." this stuff's irreplaceable. your master's thesis that you've been working on for six years that you--that you promised yourself you'll back up next week-- we have saved more mba degrees in this country than anybody. >> you've become indispensable. >> yeah, because i don't think that the pace of innovation is going to slow. i don't think people realize the internet revolution hasn't even really started yet.
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>> when stephens started the geek squad, most people used ibm computers and primitive microsoft software. the internet was still a novelty. today, thousands of products and providers allow you to watch tv shows, make phone calls, download music, print color photos, and dictate letters without ever leaving your desktop, if you have the time, the patience, the aptitude, and the available brain cells to master yet another software protocol. just the thought of learning anything new makes my head hurt. >> well, that's it. >> david pogue, who has authored computer books and writes a weekly technology column for the new york times, says the revolution is still a work in progress. >> microsoft made the operating system, some company in taiwan made the equipment, you're running software from a company in california, and now you're installing the driver for a digital camera from a fourth company. you know, what are the odds that all of these are going to work flawlessly together for all 400 million
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people who have pcs? zip. >> so what do you do? >> you get unhappy. you develop software rage. >> yes, you need to reboot your system. >> anyone who has ever called a toll-free help line knows what david pogue is talking about, and it doesn't seem to make any difference whether you are talking to someone in delhi or dallas. >> i have spent three hours on the phones on this today, so my temper's a little bit short right now. >> okay, i do apologize for your inconvenience on this, bill. >> software companies will try to convince you it's a hardware problem, and hardware companies will do the reverse. according to one survey, 29% of all callers swear at their customer service representative, 21% just scream. the rest presumably are too exhausted to do either. >> if, after our troubleshooting, we determine that there's hardware failure, then we ship the part to you, and then we will contact our field service team, set up an appointment for the technician to come out, and they will install that part for you. >> oh, my god.
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how long does that take? >> all the inconvenience and stress are a hidden tax on the low, low price you initially paid for the computer. the profit margin doesn't allow for customer service. >> honestly, where do you go if you can't get it work? people buy this stuff and then they're dropped. where do they go for help? >> it is this market niche that the geeks have filled. with more and more households discovering a need for tech support, they've become as valuable as a good plumber or electrician. on the low end, there are teenagers like brandon von koschembahr, who will be happy to come over and bail you out as long as it doesn't conflict with his shift at starbucks. he does it all, lives right down the street, and his rates are reasonable-- small market share. >> well, we work with a lot of celebrities. we work with a lot of people in the music industry. >> on the high end, there is paul austi, geek to the stars. he'll buy and install all your electronics, integrate tv, cable, dvds, music, climate control and lighting onto a
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single custom-built remote that even i could operate. all of this for just a few hundred thousand dollars. how hard is it for an average person to go into a store and buy a high def tv set and come back and work it? >> i would say, in my client base, it would probably be less than 5%. [ticking] >> coming up: is the tv remote out of control? >> someone complained to me, "you'd need a degree, an engineering degree from m.i.t. to work this damn thing." well, i have an engineering degree from m.i.t., and i couldn't work it. >> more geeks ahead on 60 minutes on cnbc. [ticking]
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[ticking] >> robert stephens of the geek squad says more than a 1/3 of the wireless routers and modems purchased at best buy are returned because people think they are just too complicated. >> you know, there's the do-it-yourselfers. there's the do-it-for-me. and what we're discovering is the even bigger market of i-thought-i-could-it-myself crowd. >> new york school teacher david barkhymer, who considers himself a bit of geek, fell into the last category: he spent three days trying to hook up his new 32-inch hdtv,
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plodding through menus and a manual that was almost certainly written by korean engineers. >> the more i look at the manual, the more complex it seems. >> he finally gave up and sought profession help. it's complicated. >> it is complicated, more than it needs to be. >> dr. donald norman is an uber geek, one of the preeminent engineers in the country. he helped set up the technical standards for high def television in the united states, but he had to hire a geek to set up his own tv. >> when people call up geeks to come and fix something or install it, a lot of them seem very apologetic for not being able to do it. should they be apologetic? >> absolutely not. no, it's not their fault. it's the damned designers of this stuff who have no understanding of real people, everyday people. >> dr. norman says the technology changes so fast and the competitive pressures are so great that products are pushed into the marketplace before engineers have had a chance to simplify them. >> someone complained to me, "you'd need a degree, an engineering degree from m.i.t.
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to work this damn thing." well, i have an engineering degree from m.i.t., and i couldn't work it. >> norman says one of the problems is function creep, adding all sorts of features that people don't want, don't need, can't use, and don't even know they have, like in this sketch from south park. >> menu. function. >> dude, put it back, chef. more commercials might come on soon. >> let's see... menu--ah, damn it! >> get it back to normal, chef! >> i'm trying, children! menu, back, function, enter... no, no, back--h.e.m.? >> human eradication mode active. [blasters firing] >> for every new feature, there has to be a new button, and they keep getting smaller and smaller and harder to read. 48 buttons on this remote. >> yeah, and 48 buttons all the same size and shape. now, you're not a technology designer, but let me just ask you, intuitively, which buttons on a dvd television should be
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the most important and large? >> off and play. >> right. and beyond off and play, perhaps channel and volume. find the volume buttons on this remote. go. [chuckles] it's blaring, your wife is screaming; find the volume buttons. >> i don't know. there's a seek up and seek down. no, that's not it. >> no! they're buried in there. >> oh, over here, on the corner. >> yeah, right, the same-- >> right in the middle. over to the side. you might get used to it if you only had one remote, but... >> this is, i suspect, the situation most people have on their coffee tables. >> that's my situation. >> well, for a small fee, this can be arranged for you. >> where does it say play tv? you can buy a universal remote now for a few hundred dollars, but you don't even want to know how complicated it is to set up. almost everything has a computer chip in it now, including toasters. >> this one, too, actually has a dial on here with some l.e.d. lights. you can actually see the countdown of your toasting
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cycle. >> then there's ipods, cell phones, and digital cameras, even dishwashers and refrigerators need to be programmed. why do i need a computer in my refrigerator? >> [laughs] well, you don't. but you bought one that does have a chip, so you're on the cutting-edge. just be glad that you didn't get the one that requires an internet connection. there are three of those now. >> really? what do they do? >> it's absolutely amazing. when you run out of something, it knows, and it creates a list for you, a shopping list. so you can even hook it up to, let's say, one of the online grocery store delivery systems, and you're in business. >> so what's really gonna happen in 10 years is all these things are getting smart. the kitchen appliances will talk to each other. can you imagine? you go to the refrigerator, and it says, "no. i've been talking to your scale. that's not on your diet." >> it's enough to make you want get in your car and drive as far away as you can get from all this advancing technology,
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providing you're not doing it in a mercedes, audi or bmw: all have elaborate onboard computer systems that may require you to navigate a number of different menus just to turn up the temperature or tune the radio, not something that's recommended while you are driving along at 65 miles an hour. >> hello, you're on car talk. >> tom and ray magliozzi, a.k.a. click and clack, the tappet brothers, review automobiles on national public radio's car talk. why have the manufacturers made these cars so complicated? >> because the technology was there. >> well, if you're buying a $50,000 or $60,000--or more-- car, you don't want pedestrian-looking buttons. you want something sophisticated, and something that the average car thief maybe can't figure out. if have a 7 series bmw, you just can't hand someone the keys and say, "oh, take my car." they're not going anywhere with it. "take my car. but, oh, you have to come to the tutorial first. it's every tuesday night from 7:00 to 10:00." >> three tuesday nights consecutively.
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>> this is a source of great comfort for tech support people who teach, install, program or upgrade software and operating systems and make their living on crashing technology. right now, there is plenty of job security. every two months, something new comes out, and their whole job changes. you could call it the revenge of the geeks. the geeks are ruling the universe. >> yes, but it's like the greeks used to talk about the philosopher kings. geeks have no interest in power. the only power we're interested in is low-power consumption and longer battery life and low prices so we can stay up later at night. geeks may inherit the earth, but they have no desire to rule it. >> in a poll reported by harris interactive in december of 2010, 45% of the people surveyed said that they would rather do household chores than to try and fix their computer or digital devices on their own. in the electronic age,
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it continues to be good to be a geek. that's this edition of 60 minutes on cnbc. i'm steve kroft. thank you for joining us. captioning by captionmax www.captionmax.com >> imagine a store with no signs in the aisles, a store that doesn't bag your purchases, one that never advertises, where you have to pay a fee just to walk in the door. who in the world would shop here? as it turns out, about 3 million fanatically loyal customers every day. it's called costco... >> i love costco. >> i bought ground beef. >> lawn furniture. >> a television. >> i bought my engagement ring here. >> ...a chain of stripped-down warehouses that's become a sensation at home and abroad. >> [ speaking chinese ]

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