The Pentagon’s top civilian cyber policy official said Tuesday her single priority is expanding the cyber options available to the president and the defense secretary, describing a gap between what commanders are asking for and what the force can deliver.

“I’m focused on one single priority, and that is building a more robust set of capabilities for the secretary and the president,” said Katie Sutton, assistant secretary of defense for cyber policy, at DefenseTalks, hosted by DefenseScoop. “The demand far exceeds the supply we have.”

Sutton traced the department’s posture to 2018, when the military gained authorities to run cyber operations as a traditional military activity. “In those last eight years, we’ve learned a lot, but I feel like the last year has really been the year that cyber has sort of entered the limelight,” she said. “We’ve built up the capabilities, we’ve built up our force, we have the operational experience.”

One particular instance of that limelight are previous reports from an operation in Venezuela to apprehend the country’s former president Nicolás Maduro. Various public statements, including those made by President Donald Trump, stated that power outages during the operation were the result of a cyberattack. Experts told CyberScoop in the aftermath that cyber ops may have been involved, but the visible physical attacks that were also part of the operation alone could plausibly explain the outages.

Sutton further described the shift as rooted in how cyber is used, “not just to counter other malicious cyber actors as a cyber-on-cyber tool, but actually as an integrated tool of cyber warfare.” 

Sutton put data at the center of that argument. “Data is fundamental to every battle that we fight going forward,” she said. “Being able to use our cyber tools to deny that to our adversaries as we go into a kinetic fight will ensure our mission success and provide greater safety for our troops.” 

She also described cyber as a tool leaders can use “below the level of armed conflict to provide options before having to move forward to our kinetic options.”

How AI fits in

Sutton also spoke about how she sees artificial intelligence being integrated into the military’s cyber operations, casting it as a natural fit. “Cyber is a digital domain; it’s all based on zeros and ones,” she said, further arguing the department needs to be “an AI-first organization.” 

However, she highlights AI-specific risks—like data poisoning and weakened guardrails—that demand the Pentagon adopt a fundamentally different approach to cyber operations.”

“We’ve spent a long time chasing cybersecurity and dealing with decisions that we made in moving quickly to creating an internet,” she said, adding that security came second in that era. “We’re going to need to fundamentally think about that differently from AI.”

The remarks were similar to Gen. Randall Reed, head of U.S. Transportation Command, who extended this concern to logistics, warning that the military’s predictable supply chains have become vulnerable to AI-enabled adversaries. 

At the conference, Reed suggested AI itself may be the solution, helping Transcom become less predictable and illustrating how military officials are leveraging the technology across multiple operational domains.

The post Pentagon cyber chief: The demand far exceeds supply appeared first on CyberScoop.

Editor’s note: Waco bought the network segmentation technology described here from Elisity while Mike Searight was the city’s chief information officer. He is now a senior adviser to Elisity, a cybersecurity company.

I stood in front of a network cabinet at one of Waco’s water treatment plants, tracing what systems could reach which. The plant’s controls were on that network. So was the branch library. So was the register at the municipal golf course. During my time as chief information officer of a city with 145,000 residents, nobody had ever been asked to inventory what was on that network.

In July, intruders compromised water and wastewater treatment equipment.  Most of that equipment was reachable over public cellular networks, which means they were outside the boundary most utilities thought they were defending. None of the asset lists I have reviewed would have caught it.

Two decisions stand between a small utility and that equipment: who is accountable for the whole network, and where the funding comes from. Neither is technical. Both rest with city manager and councils. Both can be resolved this fiscal year with money already in a budget request.

What the July reports actually say

Three accounts tell different stories. CISA identified over 100 compromised systems in the water and wastewater sector during July, typically through controllers connected directly to cellular modems. The FBI and the EPA reported on July 30 that utilities in at least seven states had reported incidents to the FBI since July 27. Press accounts citing unnamed officials put the number of affected states at a dozen or more.

No federal agency has attributed the late-July water incidents to anyone, and neither will I. A joint advisory does name Iranian-affiliated actors, but for the broader campaign, which is linked to a separate set of intrusions. The advisory was revised July 22, five days before utilities began reporting. That revision expanded the known targeting from Rockwell Allen-Bradley to Schneider Electric, Siemens and potentially others., So the controller brand on the panel no longer settles anything.

The reported effects were operational: a loss of visibility and, in some cases, function. In Clayton County, Georgia, a pump station failed around 1 a.m. on July 27. The boil-water advisory lifted the next day. In early August, the authority serving more than260,000 people said unauthorized cyber activity may have caused or contributed to the disruption. That hedge is deliberate.

The exposure nobody scanned for

The standard answer: they separated the plant network years ago. That’s legitimate work. But it doesn’t matter. The vulnerable controllers never were on the city network—they ran on public cellular links. A modem installed years ago exists nowhere in the asset list and nowhere on network scans. But every carrier invoice lists every SIM the city pays for. Only accounts payable tracks them. Matching those invoices to actual devices costs nothing and can start Monday. The FBI and the EPA also tell utilities to consider isolated architectures for that equipment, and a private access point name tops their list.

Nobody owns the whole network

Most of these systems sit outside the IT department on the org chart, each with its own budget, vendors, and boss. The plant answers to public works. Cameras and card readers arrived with a building project, and most cities treat them like light fixtures. In every city I’ve worked in, exactly one person in IT understands the whole picture. When that engineer leaves, the security posture leaves with them. And nobody owns accountability for the network they all share.

Reporting rules also miss the point. Texas—my example—requires local governments to report security incidents within 48 hours, but only if they involve personal-information breaches or ransomware. An intrusion that seizes control of a controller while touching either sits outside that trigger., That’s exactly what happened in July.

The federal rule requiring a covered cyber incident to be reported within 72 hours was supposed to be finalized in October 2025; CISA is now targeting this month. But nothing determines who owns the network.

Money the utility already applies for

The second answer is there is no budget. Wrong. The fund mechanics matter more than the size of the check.

For State Fiscal Year 2026, the Texas Water Development Board added cybersecurity to the scoring criteria in its Intended Use Plan for the Drinking Water State Revolving Fund. Two questions on the Project Information Form now carry five priority points between them: Oone asks if the governing body adopted a cybersecurity awareness plan in the last five years; the other asks if a project fixes a deficiency found in a cybersecurity assessment. Five points is modest– I won’t oversell it– but this fund is a ranked competition decided at the margins.

Waco segmented five treatment plants—four drinking water and one wastewater—in 43 days against the 90 I’d promised City Council. No bond. No capital request. The utility director funded it from operating accounts using a contract already on the city’s books, rather than an RFP. They carried it to Council because the network was theirs to own.

Those were budget choices ahead of anything else. An operating line competes with a maintenance contract and can be approved this quarter, while the same money in the capital plan waits for a bond cycle. A smaller city without a CIO will not repeat that schedule. The funding mechanics are the same ones.

Every CIO knows how to segment a network. Almost nobody does it, because they are afraid of taking a plant down. Simulate before you enforce. One operating rule came out of it: being on the network allows a device nothing. Plant controls talk only to their SCADA server. Everything else is denied unless explicitly allowed.

City managers, university presidents, superintendents and chief executives are willing to invest in cybersecurity when they trust the investment will make a measurable difference. These leaders spend taxpayer dollars in public view, and the public’s trust rides on every line item as much as the money does. What earns their approval is transparency: a complete picture of what they are protecting, and evidence that critical infrastructure is defended against threats from the open internet and from inside their own network. That standard—full visibility, provable protection—is what every organization should be working toward.

Microsegmentation protects critical systems without the need for rip-and-replace. It isolates water treatment plants, 911 dispatch, public safety alerts, and traffic management from internal and external threats—all on networks cities already own. Modern platforms deploy in weeks rather than budget cycles, making this control finally achievable. Every CIO and CISO should evaluate it now. Microsegmentation is zero-trust’s foundation and the most direct defense of infrastructure residents depend on.

Somebody to call

None of this reaches a two-person utility that can’t write competitive applications. That’s where states must lean in. New York adopted what it calls the first-in-the-nation water cybersecurity rules in March with grants and free technical support. Texas has stood up a Cyber Command with an explicit water and wastewater mandate. A small city needs a number to call and people who answer.

That number now exists. On Monday, Texas Gov. Greg Abbott and National Cyber Director Sean Cairncross launched Project Watershed 250 in San Antonio — a six-month pilot that puts Texas Cyber Command, the National Cyber Director’s office, the EPA and CISA, and a dozen private cybersecurity and technology companies behind Texas water utilities. Participating systems get red-team testing, vulnerability assessments and help hardening what the assessments find, at no cost, with plans to take the model nationwide after the pilot. If you run a Texas water system, you should be reaching out immediately.

For the smallest systems, DEF CON Franklin and the National Rural Water Association have put volunteers and five managed detection providers behind them.

Where to start

Here are three things CIOs and CISO can do that do not have to wait for a grant or a budget cycle: Name one position accountable for every device on the utility network and put it in writing. Match twelve months of carrier invoices to actual devices and sites. Read your state’s Intended Use Plan scoring criteria before the next application.

Nothing in Waco moved until the first of those was settled. The other two cost nothing more than somebody’s afternoon. Most cities haven’t even put someone in the that position.

The post In most cities, nobody owns the whole network appeared first on CyberScoop.