Inside North Korea's elite cyberwarfare unit

As Sony Pictures looks for a possible North Korea link to a cyberattack, there's a nagging question. Does the poor country even have advanced technology capabilities to infiltrate a large corporation?

The answer is yes. The isolated, communist nation has been pursuing cyber-strategies as far back as the 1980s. North Korea more recently has targeted a bank, university and media websites, according to prosecutors. The rogue state possesses drones and electronic warfare tools to create digital quiet zones. The regime also nurtures and trains its brightest to become cyberterrorists—based in North Korea and possibly even China.

"North Korea has the capabilities to penetrate the computers of an organization like Sony Pictures," said Bruce Bennett, senior defense analyst at the Rand Corp.

Sony Pictures, a unit of Sony, is investigating whether North Korea is behind a cyberattack that knocked out the studio's computer network last week. The breach leaked several new movies online including the upcoming "Annie."

The cyberattack comes about a month before Sony Pictures was scheduled to release "The Interview." The comedy is about two journalists who secure an interview with North Korean leader Kim Jong Un, and the CIA, in turn, tasks the duo with assassinating Kim.

There has been no response yet from North Korea on the Sony Pictures hack. However, in comments attributed to the state-run Korean Central News Agency in June, North Koreans threatened a "merciless" response against the U.S. unless it bans "The Interview." Officials called the film an "act of war."

North Korea itself—a Pennsylvania-sized country that's managed a three-generation lineage—can read like a surreal Hollywood script.

But over the last decade or so, the country has experienced quite dramatic technological and economic changes. More North Koreans, for example, are coming of age amid unprecedented exposure to grassroots market forces and foreign technology, often smuggled through the porous Chinese-North Korean border.

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Average citizens—hungry for unfiltered outside information—are discreetly accessing shortwave radio reports and data-filled USB thumb drives. The North Korean regime is well aware of this growing threat of outside information. Authorities conduct periodic tech raids on homes and buildings. Getting caught with foreign media and technology is a punishable offense.

Democratic South Korea, meanwhile, has advanced to become one of the most wired countries with widespread broadband access.

And savvy North Korea has countered by turning to cyberterrorism as a more effective, cheaper method of gathering intelligence on perceived enemies than dispatching foot soldiers, according to an August security briefing on North Korea's cyber-landscape. The research was compiled by U.S.-based tech giant Hewlett-Packard.

Some basics about North Korea's technology infrastructure: The country has a regime-controlled intranet, and outward-facing Internet, available to select citizens whose activities are monitored. But the country's electrical grid can't support consistent amounts of technology. Electricity is unreliable, and nighttime often is black. If anyone is enjoying regular Internet access and technology, it's North Korea's dedicated cybercrime unit.

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The country's brightest are culled and trained in North Korea's capital, according to Heung Kwang Kim, a North Korean defector and former computer science professor. Kim spent nearly 20 years in the regime educating promising students.

There are at least 3,000 North Korean cyberwarriors, though some reports peg that number higher.

North Korea also has a drone program, as noted in the HP report. Drones are part of the regime's intelligence program and primarily used for surveillance.

North Korea's electronic warfare arsenal includes the ability to jam GPS signals and inject false GPS coordinates. The state can also generate outbursts of atmospheric electricity to create magnetic fields that burnout electrical equipment, according to the HP security report.

Last year, the regime bought Israeli jamming equipment, said Song Il Choi, a North Korean defector. The jamming devices help block communication and create digital quiet zones.

In 2010, Choi joined the Seoul-based North Korean Strategy Center. He leads perilous field operations in which Wikimedia files, DVDs and radios are smuggled on foot through the highly monitored corridor between North Korea and China. "It has to be taken in by hand, across the border, which creates much danger for those involved," Choi said.

Meanwhile, the purchase of jamming supplies from Israel, according to Choi, raises an interesting detail about the North Korean elite's not-so isolated status.

In addition to the country's cyber warfare capabilities, North Korea has strategic partnerships with various countries—including some known to deal in illegal weapons trade with the regime, according to the HP report.

North Korea has political and military ties with China, Russia, Iran, Syria and Cuba.

As a separate United Nations report released this March pointed out, North Korea is far from a bumpkin state run by "two persons and a fax machine." The regime is quite stealth at using foreign-based individuals and shell companies—involved in legitimate business—to mask illicit activities linked to sourcing weapons of mass destruction.

And North Korea's international backyard, meanwhile, offers a unique backdrop for the Sony hacking case.

Again, while the Sony Pictures investigation is ongoing, it's anyone's guess if potential perpetrator North Korea even acted solo given their international ties.

According to some press reports, North Korean hackers are believed to be based in China, though estimates on the number vary widely. Some North Korea watchers even speculate that North Korean hackers sometimes use Chinese IP addresses.

"This is not to say that the North Koreans did this alone," said Bennett in an email to CNBC.com. "For all we know, they may have sought help from Chinese and/or Russian hackers."

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