AMSS Advisory: While Microsoft propagated this security liability to allow for compatibility with legacy Windows 95/98 clients, it's time you remove this default vulnerability from your network. LanManager authentication is enabled by default on Windows 2000 and Windows XP. Below you'll find the procedures to follow to eliminate this vulnberability, as well as the original Q147706 Knowledge Base article regarding Windows NT 4.0 Service Pack 4.

To disable this ability and better secure your workstations, follow these steps:

Configure the system to use only NTLMv2, and set the REG_DWORD to Level 3. This forces the clients to send NTLMv2 authentication only.

Set your servers to Level 5, and your client-server communication is now secure.

After you make this change, you'll still need to force the systems to remove the LM hash from their SAM database. To disable the storage of LM hashes of a user's passwords using Active Directory (Windows 2000 Server or Windows Server 2003) and Group Policy, follow these steps:

To disable the storage of LM hashes of a user's passwords in the local computer's SAM database by using Local Group Policy (Windows XP or Windows 2000), make the following change locally. Follow these steps:

Keep in mind that these changes won't take effect until the user changes his or her password and Windows creates a new hash. This is a good time to force a domain-wide password change, specifically for all users with elevated privileges.

IMPORTANT: This article contains information about modifying the registry. Before you modify the registry, make sure to back it up and make sure that you understand how to restore the registry if a problem occurs. For information about how to back up, restore, and edit the registry, click the following article number to view the article in the Microsoft Knowledge Base:

SUMMARY

Windows NT also supported session security mechanisms that provided for message confidentiality and integrity.

To allow access to servers that only support LM authentication, Windows NT clients prior to SP4 always use both, even to Windows NT servers that supported NTLM authentication.

LM authentication is not as strong as Windows NT authentication so some customers may want to disable its use, because an attacker eavesdropping on network traffic will attack the weaker protocol. A successful attack can compromise the user's password.

Microsoft has developed an enhancement to NTLM called NTLMv2 that significantly improves both the authentication and session security mechanisms.

In addition, the implementation of the NTLM Security Service Provider (SSP) has been enhanced to allow clients to control which variants of NTLM are used, and to allow servers to control which variants they will accept, by setting a new registry key appropriately. It also allows clients and servers to require the negotiation of message confidentiality (encryption), message integrity, 128-bit encryption, and NTLMv2 session security.

These changes affect the following Windows NT components: Any application that uses Microsoft remote procedure call (RPC) or that uses the NTLM SSP, use the authentication and session security described herein. The Workstation and Server services use authentication but support their own session security.

Background

LM authentication is not as strong as NTLM or NTLMv2 because the algorithm allows passwords longer than 7 characters to be attacked in 7 character chunks. This limits the effective password strength to 7 characters drawn from the set of uppercase alphabetic, numeric, and punctuation characters, plus 32 special ALT characters. Users often do not even avail themselves of anything more than alphabetic characters.

In contrast, NTLM authentication takes advantage of all 14 characters in the password and allows lowercase letters. Thus, even though an attacker eavesdropping on the Windows NT authentication protocol can attack it in the same way as the LM authentication protocol, it will take far longer for the attack to succeed. If the password is strong enough, it will take a single 200 MHz Pentium Pro computer an average of 2,200 years to find the keys derived from it and 5,500 years to find the password itself (or 2.2 years and 5.5 years with 1,000 such computers, and so forth).

NOTE: This estimate is based on the rate at which the recent RSA Labs "DES Challenge" code tests DES keys on a 200 MHz Pentium Pro: 1,000,000/second; and the number of DES keys: 2**56 or 7.2*10**16. For more information about the "DES Challenge", please see the following Web site:

On the other hand, if a password is not strong enough, a dictionary lookup can find it in seconds.

One possible way of getting a "strong enough" password is to have it be at least 11 characters in length, with at least 4 of those characters uppercase, numbers, or punctuation. Even if the remaining 7 characters are lowercase low randomness text with (say) 3 bits of randomness per character, this will give more than DES's key space of 7.2*10**16 possible combinations, and the password will not be in dictionaries.

However, hardware accelerators costing $250,000 have been built that can find either the LM or NTLM password-derived key in 3-6 days no matter how long the password is. These numbers change as technology gets better. For current statistics and details please see the following Web site:

Having the password-derived key of a user does not allow an attacker to log on interactively but, with special software, it is sufficient to access network resources as that user.

For NTLMv2, the key space for password-derived keys is 128 bits. This makes a brute force search infeasible, even with hardware accelerators, if the password is strong enough.

If both client and server are using SP4, the enhanced NTLMv2 session security is negotiated. It provides separate keys for message integrity and confidentiality, and client input into the challenge to prevent chosen plain text attacks, and makes use of the HMAC-MD5 algorithm (see RFC 2104) for message integrity checking.

Because the datagram variant of NTLM does not have a negotiation step, use of otherwise negotiated options, such as NTLMv2 session security and 128- bit encryption for message confidentiality, has to be configured.

MORE INFORMATION

WARNING: If you use Registry Editor incorrectly, you may cause serious problems that may require you to reinstall your operating system. Microsoft cannot guarantee that you can solve problems that result from using Registry Editor incorrectly. Use Registry Editor at your own risk.

Control of NTLM security is through the following registry key:

NOTE: On Win9x, the valid registry key is LMCompatibility while on Windows NT it is LMCompatibilityLevel.

Choice of the authentication protocol variants used and accepted is through the following value of that key:

   Value: LMCompatibilityLevel
   Value Type: REG_DWORD - Number
   Valid Range: 0-5
   Default: 0
   Description: This parameter specifies the type of authentication to be
   used.

   Level 0 - Send LM response and NTLM response; never use NTLMv2 session
             security
   Level 1 - Use NTLMv2 session security if negotiated
   Level 2 - Send NTLM authenication only
   Level 3 - Send NTLMv2 authentication  only
   Level 4 - DC refuses LM authentication
   Level 5 - DC refuses LM and NTLM authenication (accepts only NTLMv2)

NOTE: Authentication is used to establish a session (username/password). Session security is used once a session is established using the apropriate type of authenication. Also system times should be within 30 mins of one another. Authenication can fail because the server will think the challenge from the client has expired.

Control over the minimum security negotiated for applications using NTLMSSP is through the following key:

The following values are for this key:

   Value: NtlmMinClientSec
   Value Type: REG_DWORD - Number
   Valid Range: the logical 'or' of any of the following values:
      0x00000010
      0x00000020
      0x00080000
      0x20000000
   Default: 0

   Value: NtlmMinServerSec
   Value Type: REG_DWORD - Number
   Valid Range: same as NtlmMinClientSec
   Default: 0
   Description: This parameter specifies the minimum security to be used.
      0x00000010  Message integrity
      0x00000020  Message confidentiality
      0x00080000  NTLMv2 session security
      0x20000000  128 bit encryption

LMCompatibilityLevel - Clients

IMPORTANT: For an SP4 client to choose level 3 or greater, the domain controllers for the user's account domains for all users who will use the client (hereafter, "the users' domain controllers") MUST have been upgraded to SP4.

If an SP4 client chooses level 0, which is the default, it will interoperate with earlier servers exactly as it did with Service Pack 3 (SP3).

If an SP4 client chooses level 1, it will interoperate with earlier servers exactly as it did at Service Pack 3 (SP3). In addition, it will negotiate NTLMv2 session security with SP4 servers.

IMPORTANT: When using level 1 or greater, if the last password change came from a Windows for Workgroups or MS-DOS LanManager 2.x client or earlier, the data needed for NTLM and NTLMv2 authentication will not be available on the domain controller, and SP4 clients will not be able to connect to SP4 servers. The workaround is to use level 0, or always change passwords from a Windows NT, Windows 95, or Windows 98 client.

If an SP4 client chooses level 2, it will not be able to connect to servers that only support LM authentication, such as Windows 95, Windows 98, Windows for Workgroups and earlier (hereafter called "downlevel LM clients/servers"), unless the users' domain controllers have been upgraded.

If an SP4 client chooses level 3 or greater, it will always send the new NTLMv2 response. This response can pass through downlevel LM servers and SP3 or earlier Windows NT servers and their domain controllers as long as the users' domain controllers have been upgraded to SP4. For example, if an SP4 client chooses level 3 or greater, the users' domain controllers MUST have been upgraded to SP4 as well. However, this response will not work with downlevel LM servers in Share Level security mode with non-null passwords. The workaround is to configure them to use User Level security.

LMCompatibilityLevel - Servers/DCs

If an SP4 server chooses level 4 or greater, a user with a local account on that server will not be able to connect to it from a downlevel LM client using that local account.

If an SP4 domain controller chooses level 4 or greater, a user with an account in that domain will not be able to connect to any member server from a downlevel LM client using their domain account. Thus, level 4 means that all users with accounts on a server or domain have to be using Windows NT to connect.

If an SP4 server chooses level 5 or greater, a user with a local account on that server will not be able to connect to it from an SP3 or earlier Windows NT client using that local account.

SP4 clients choosing level 0 or 1 will still be able to connect to SP4 servers, even with levels 1 or 3 configured, but will be using both the Windows NT protocol and the weaker LM protocol. They will also be able to connect to downlevel LM servers, even if the users' domain controllers have not been upgraded.

Deployment

Because of the above considerations, if it is preferred to deploy NTLMv2, the following steps should be taken:

Upgrade the domain controllers where the accounts for all users that are to use NTLMv2 are stored.
Even before the upgrade of the domain controllers is completed, clients and servers can be upgraded to SP4 and will obtain enhanced security when connecting SP4 to SP4 by setting level 1.
When step 1 is completed, individual systems that have already been upgraded to SP4 can start setting level 3 or greater.
If users in some account domain never need to access resources from downlevel LM clients, that domain's domain controllers can have their level set to 4, and after all of those users' systems have been upgraded to SP4, that domain's domain controllers can have their level set to 5.

NtlmMinClientSec and NtlmMinServerSec

If the bit with value 0x00000010 is set in the NtlmMinClientSec or NtlmMinServerSec value, the connection will fail if message integrity is not negotiated.

If the bit with value 0x00000020 is set in the NtlmMinClientSec or NtlmMinServerSec value, the connection will fail if message confidentiality is not negotiated.

If the bit with value 0x00080000 is set in the NtlmMinClientSec or NtlmMinServerSec value, the connection will fail if NTLMv2 session security is not negotiated.

If the bit with value 0x20000000 is set in the NtlmMinClientSec or NtlmMinServerSec value, the connection will fail if 128-bit encryption is not negotiated.

NOTE: These settings will not guarantee that the NTLM SSP is actually used by every application, or that message integrity or confidentiality will actually be used by an application even when they are negotiated.

RESOLUTION

Run Registry Editor (Regedt32.exe).
From the HKEY_LOCAL_MACHINE subtree, go to the following key:
HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Lsa\
Click Add Value on the Edit menu.

Add the following values:

      Value Name: LMCompatibilityLevel
      Data Type: REG_DWORD
      Data:  0 (default) to 5 as defined above

From the HKEY_LOCAL_MACHINE subtree, go to the following key:
HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Lsa\MSV1_0
Click Add Value on the Edit menu.