The US tech scene has been shaken with allegations that authorities are monitoring US and international Internet users on Facebook, Google, YouTube and countless other services from the likes of Yahoo, Apple, Skype, AOL, Microsoft and more.

The news broke via reports from the Washington Post and the Guardian, and has rightly garnered coverage across many news websites (TNW included) but the sudden rush of news has left many people unsure of all the details, or confused by the onslaught of details.

Here’s our essential guide to understanding what PRISM is, why it is important and other details that you need to know.

The basics

PRISM is the code name for the data collection program which was born out of the Protect America Act. The legislation was approved by Congress in 2007 that allowed warrantless interception of foreign-to-foreign communications.

The program is intended for use as a counter-terrorism tool that allows US authorities to access data and information belonging to suspects that they believe pose a threat to US national security.

Both the Washington Post and Guardian claim that the NSA has “direct” access to the systems belonging to nine Internet companies, in order to monitor data. That information was required in order to “effectively plan, direct and conduct detection and monitoring of illegal narcoterrorist activities”, as highlighted in a past job opening.

The companies from which data is gathered include: Microsoft, Yahoo, Google, Facebook, PalTalk, YouTube, Skype, AOL and Apple. Other services including — Dropbox — were reportedly set to be added to the roster.

Controversy around the program circles around whether the tech firms were silently complicit with the monitoring, and whether PRISM monitored US citizens illegally (without warrants.)

The Guardian states that the method of monitoring traffic “opens the possibility” of collecting US data without warrants.

The Post looks at that issue in more detail, concluding that the data capturers are “at least 51 percent confident” that a target is foreign. That, it concludes, means substantial amounts of “incidental” US data could be captured — but the issue is dismissed in NSA training manuals dismiss as being “nothing to worry about”.

The Post says that “a career intelligence officer” leaked the slides because he believes the agency’s role to be a “gross intrusion on privacy”. The anonymous source added: “They quite literally can watch your ideas form as you type.”

Unanswered questions

There are numerous questions remaining unanswered at this point, chiefly:

All but two firms have denied actively participating in the program, suggesting that the NSA may be filtering and monitoring traffic independently. Both the Guardian and Post implicated the firms as willingly co-operating and opting into the program, so any fact that disproves that would be hugely significant.

Microsoft, Yahoo, Google, Facebook, YouTube, Skype and Apple have all refuted their involvement in the program, and denied knowledge of it.

A number of the companies stipulated that they don’t provide “direct” access to their systems, which raises the possibility that the NSA may have ‘indirect’ access, perhaps via an API, which would suggest the firms cooperated.

The Washington Post has since backed down on its initial claim that tech companies “participate knowingly” in PRISM data collection.

Despite these denials it is important to consider that the NSA would not have released details of the program name to Internet companies, as ACLU analyst Christopher Soghoian points out. Furthermore, those who receive national security letters are prevented by law from discussing their existence in public.

A statement from James R. Clapper, Director of National Intelligence, claimed the Guardian and Post reports both “contained numerous inaccuracies”. Clapper categorically denied that PRISM spies on US citizens, but he did not elaborate on the other alleged details that were misreported. That leaves the same questions unanswered.

You can keep up with our coverage of Prism here.