How seriously you ask?
"Act of War" seriously.
They are kicking around the notion of "equivalence" - say a cyber attack hits the US Power Grid (which is pretty rickety already) and takes it down. Usually when this happens, at least on a broad scale on or near the east coast, things go off for some time. And when they do people are usually injured, harmed or killed - for example a hospital where a surgery fails or the traffic light goes off and there is an accident.
This is "equivalent" to some terrorist or foreign national showing up and cutting the wires themselves. So, in the case of the terrorist or foreign national the US could declare this as an act of aggression and retaliate.
Now on the one hand I can see their point - times are changing and it seems unlikely that any country is likely to physically attack the US outright - so in one way it makes sense to make today's type of cyber "attack" an "equivalent" to physical one.
It allows us to formally tell our allies what we consider aggression and it allows us to create policy related to such things.
The report goes on to discuss alternate notions of "equivalent" - was the attack actual or was it just an attempt, and, if it was an attempt, what would have been the amount of damage.
No doubt "outsiders", e.g., China let's say, will take this declaration as a reason to create their own version of this - replete with rules for counterattack and "damage assessment".
You get the idea.
So let's imagine that this gets all set up and in place.
We have the NATO Cyber Warfare center monitoring various countries and so on. We also have foreign countries, i.e., Iran or China, on the outside. Both sides have extensive cyber attack and defense capabilities.
Now let's image those clever folks who hacked the Sony PS/3 sites set about creating a cyber war.
With all this in place it shouldn't be to hard... Pretend to be from China (hack into China's cyber war facilities and launch an attack on the US) or vice versa.
Targeting is easy - defense contractors, the Pentagon, whatever - these have all been hacked before.
Except now it starts a war.
Sure each side will deny any involvement but that won't matter - their IP addresses will be all over the attack.
To prevent this from happening each side will develop a "Dr. Strangelove" type approach to monitoring the "cyber gap" between countries. Country A might get ahead of suspect country B by developing some clever software.
Soon enough there will be issues over the "cyber gap" - just like nuclear weapons in the old days.
Each side plotting the destruction of the other sides servers, switches, etc.
So where does it all end?
Perhaps where Episode #23 of Star Trek ended (see this). A sort of cyber war is conducted (in this case between two planets). Instead of real bombs the inhabitants simply allow computers to conduct the war with a simulation. There are simulated attacks and defenses - and actual deaths. If you're a causality in one of the attacks then you have to report to the "disintegration tube" to get zapped into nothing.
Sort of like the old 1964 movie "Fail Safe" where an accidental US attack on Moscow is made "better" with the Russians by the US bombing New York City - both sides lose about the same - one equivalent nuke per equivalent city - and the balance of power is the same.
An what about little Jr. in the basement or at the kitchen table - what if he hacks into some Chinese computer - could he start a war?
As if parents don't already have enough to worry about.
And then there will be cyber "war damages" (real or imagined) followed closely by ambulance chasing cyber lawyers. It won't matter if there are any actual damages - I am sure the cyber lawyers will find a way to sue anyway. Such treaties will no doubt open the way for international copyright attacks - say Microsoft declaring that Chinese Windows piracy is an act of war or some movie studio claiming excessive BitTorrenting from a foreign country of some movie is an act of war.
And what does this mean for the rest of us...
More taxes, more cost, more nonsense, more expense, more trouble.
Soon enough we'll see old Mom, Dad and little Jr. sitting before the Senate Armed Services Committee explaining how little Jr. started a war with China from the kitchen table.
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