The threats exist, he said, because there aren't mechanisms in place to protect against them.
"The protocol that enables seamless [Internet] connection does not have mechanisms to protect against cyber-attacks," Genachowski said during a recent speech in Washington.
Though thousands of cases exist, only a small percentage of IP theft crimes are investigated each year. That's because of a lack of resources and privacy laws under the Electronic Communications Privacy Act, according to Jim Butterworth, a security expert who provides training for the Association of Certified Fraud Examiners.
Butterworth said his Sacramento-based security company, HBGary, identifies roughly three to six cases of Internet service fraud each year. He suspects many more cases go undetected.
Federal prosecutors are still finding high-profile cases. In March, a federal jury in Boston convicted Ryan Harris, an Oregon man, of making and selling Internet hijacking tools — including one called "Coax Thief." The product intercepted Internet traffic so users could access their neighbors' cable modems and avoid paying the monthly service fees to an Internet provider.
"Since cable modems are sold at your local Best Buy , it would be possible to buy a $50 router, hack and reprogram the internal settings to look like your neighbor's router, and then connect in," Butterworth said.
A rogue neighbor who hijacks your Internet connection could cause more than just a minor inconvenience. Police investigations will trace any illegal activity to its source — namely, your router or modem.
"When [law enforcement officers] get a warrant, they'll see the logs with the same IP address," Butterworth said. "Then they'll go knocking on two doors."
Since cable providers assign a limited amount of bandwidth to a neighborhood, Butterworth said, such crimes could also result in slower Internet for an entire neighborhood.
Harris, who prosecutors say built a million-dollar business, was convicted March 1 on seven counts of wire fraud. The charges could carry a maximum penalty of 20 years in prison and a fine of up to $250,000 on each count. Harris awaits sentencing May 23.
Last year, Ivan Castro Robles, aka "Modems Wiz," was convicted in Los Angeles for selling "cloned" modems to 63 customers, enabling them to gain free Internet access by using a paying customer's identification credentials.
Spokesmen from several ISP companies agree that preventing Internet service theft is an industrywide issue.
Butterworth said Internet service providers need to crack down on the problem. "If you're going to provide a service … there's a responsibility to ensure that service is secure," he said.