The people trying to break into computers these days aren't just kids hacking for kicks. They are nosy competitors, disgruntled former employees, and electronic bank robbers -- and maybe, just maybe, spies.

That's what you might think, anyway, after a chat with the folks at Computer Security Systems Inc. Some hush-hush, unidentified "government agencies" are buying enough computer protection to give the Melville, N.Y., company sales of $5 million this year and projected sales of $12 million next year.

The company sprouted from the pages of Time magazine. After reading an article about computer break-ins, three Stevens Institute of Technology students -- all immigrants and engineers; one an MBA candidate -- decided they could build a better security system than those Time had mentioned. Within six months, they had built a prototype and raised $1.2 million through a private placement.

The company's Arbiter security system aspires to be the Rolls Royce of computer protection: top of the line and priced accordingly. Special circuit boards protect the central computer and a black box about the size of a two-inch stack of typing paper guards each telephone line that connects the terminals. In a system with many terminals, all those boxes add up to big bucks. Customers usually buy a system with 50 boxes at a time, which may cover 300 terminals or more, costing at least $150,000.

When hackers try to access the computer, Arbiter checks whether their terminals have clearance. If they don't, the intruders see nothing but blank screens; if they type anything, the system cuts them off. If an intruder pierces this safe-guard and tries to call up a computer file, the screen fills with gobbledygook because Arbiter randomly encrypts the transmission, using a different set of encrypted characters for each line of text. Only another Arbiter box with the same code can get into the system, or so the company claims. "We're pretty confident of its ability to repel a determined attack," says Allen Riehl, Computer Security Systems's president.

Published on: Dec 1, 1984