Feds fund secure ID project

The federal government has signed a deal with security company Digimarc for a pilot program to study hacker-resistant digital authentication for state driver's licenses.

The National Highway Traffic Safety Administration, part of the U.S. Department of Transportation, will give Digimarc a $1 million grant to collaborate on the study with states, the company said on Thursday. The program will examine the possibility of creating licenses with embedded digital watermarks that can be read by machines operated by police officers, retailers and other people.

"Part of the value is that this shows good cooperation between federal and state governments, a number of which are already deploying the technology," said Reed Stager, a Digimarc vice president. "This can be used to increase highway safety; it can reduce underage drinking...and also has potential to help reduce ID theft and fraud."

Although driver's licenses are ordinarily overseen by each state, the federal government is exploring ways to make such identification more secure, as part of an effort to improve highway safety and reduce counterfeiting. The federal drive for more secure ID has also been given impetus by concerns about homeland security.

Many state driver's licenses already have magnetic strips containing data, such as age, about their holders. This technology is built to commonly available specifications and is relatively easy to counterfeit, however.

Digimarc says its "covert watermarking" technology would provide an additional layer of security, since it would be harder to mimic.

The Beaverton, Ore.-based company said it plans to use the $1 million grant to help fund state implementations of the watermarking technology, as well as to help establishments such as state-owned liquor stores to purchase card readers.

The pilot program is expected to be completed in late 2005, the company said.

A National Highway Traffic Safety Administration spokesman declined to comment on the issue.