The Sept. 11 Commission (search) report reaffirmed the importance of protecting individual identities from theft or unauthorized use by criminals or terrorists — and the costs of failing to do so.

The panel said "fraud in identification is no longer just a problem of theft ... sources of identification are the last opportunity to ensure that people are who they say they are and to check whether they are terrorists."

Identity authentication is the single most important possible measure to deny criminals or terrorists access to property, bank accounts, the commercial transportation infrastructure and similar crucial institutions of a modern state. This applies to both foreign visitors and U.S. citizens.

Identity authentication is becoming a widespread technique for preventing identity theft that could otherwise facilitate criminal or terrorist exploitation. For example, terrorists have taken advantage of diminished scrutiny of low-balance bank accounts to move funds for support of terrorist operations. As a result, Congress approved legislation requiring that financial institutions verify the identities of all new customers.

Nearly three years after Sept. 11, 2001, we have failed to close the most conspicuous gap in identity authentication (search) in our greatest vulnerability: commercial air travel. The existing system of crude and easily foiled passenger profiling has failed catastrophically as the commission's detailed report on the Sept. 11 aircraft hijackings confirms.

Setting up a modern information-based process to confirm individual identities is indispensable for any security system. This includes using advanced technologies that rely on unique physical (biometric) (search) identifiers such as retinal patterns, facial images, fingerprints or other characteristics. Biometric identifiers (search) are reliable only if these unique data are securely tied to a specific individual with a positively established identity. Biometric checks are just part of a broad strategy including information-based and token identity validation.

Biometric identification systems will increase our security significantly. However, identification systems based on unique biometric characteristics will probably be costly and require many years to complete.

Identity authentication techniques can be implemented now and can mitigate the air transport system vulnerabilities identified by the Sept. 11 panel report. By compiling basic information from individuals in an information-based identity authentication system (search), the airport screener can ask the passenger for information to compare with personally identifying data already available to the screener, such as date of birth, first residence and mother's maiden name.

The strength of the system is that a terrorist or criminal trying to steal another's identity probably cannot know every bit of information about the person whose identity is in question.

Moreover, statistical modeling and scoring techniques developed for the financial services industry to prevent credit card fraud can be applied to identify authentication. Doing so can provide high confidence about identity authentication in near-real time, reducing airport screening delays. Because commercial modeling and scoring techniques are applied via software, overall costs to both passengers and the government can be reduced.

Alas, the Transportation Security Administration (search) plans to set up a modern information-based identity authentication system for air travel has been delayed by disputes based on misunderstandings about such a system's nature.

Some critics fear authenticating individual identities will compromise privacy. In fact, the reverse is true. Authenticating an individual identity is one of the most important ways to assure privacy where technologies to compromise that privacy are growing rapidly. Only by authenticating individual identities can we effectively protect the constitutional privacy rights of U.S. citizens, and the ability of visitors to travel freely.

William Schneider Jr. is president of International Planning Services Inc., a trade and finance advisory firm, and is an adjunct fellow of the Hudson Institute. He is a former undersecretary of state for security assistance, science and technology (1982-1986) and earlier was associate director for national security and international affairs in the Office of Management and Budget (1981-82).