Understanding Microsoft Proxy Server 2.0

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Understanding Microsoft Proxy Server 2.0


This documented was not made for people who have been working with Microsoft
Proxy Server since its beta (catapult) days. It is made for individuals who
are curious about the product and security professionals that are curious as
to what Microsoft Proxy Server has to offer. This document is also being
written for individuals have a general idea of what a Proxy Server does, but
wants to know more. This paper goes into discussion of Proxy Server Features
and Architecture, Access Control, Encryption, and Firewall Strategies (which
I have been getting a lot of requests for).

The second part of the documentation goes into Firewall types and
strategies, so if that's the reason you downloaded the documentation, go
straight to page 8 I believe.

What is Microsoft Proxy Server?

Microsoft Proxy Server is a "firewall" and cache server. It provides
additional Internet security and can improve network response issues
depending on its configuration. The reason I put the word firewall in quotes
is because Proxy Server should not be considered as a stand-alone solution
to a firewall need. When you are done reading this document, you will have
an advanced understanding of the Proxy Server product and also understand
firewall techniques and topologies.

Proxy Server can be used as an inexpensive means to connect an entire
business through only one valid IP address. It can also be used to allow
more secure inbound connections to your internal network from the Internet.
By using Proxy Server, you are able to better secure your network against
intrusion. It can be configured to allow your entire internal private
network to access resources on the Internet, at the same time blocking any
inbound access.

Proxy Server can also be used to enhance the performance of your network by
using advanced caching techniques. The can be configured to save local
copies of requested items from the Internet. The next time that item is
requested, it can be retrieved from the cache without having to connect to
the original source. This can save an enormous amount of time and network

Unlike Proxy Server 1.0, Proxy Server 2.0 includes packet filtering and many
other features that we will be discussing.

Proxy Server provides it functionality by using three services:

* Web Proxy: The web proxy service supports HTTP, FTP, and Gopher for TCP/IP

* WinSock Proxy: The Winsock proxy supports Windows Sockets client
applications. It provides support for clients running either TCP/IP or
IPX/SPX. This allows for networks that may be running more of a Novell
environment to still take advantage of Proxy Server.

* SOCKS Proxy: The SOCKS Proxy is a cross-platform service that allows for
secure communication in a client/server capacity. This service supports
SOCKS version 4.3a and allows users access to the Internet by means of Proxy
Server. SOCKS extends the functionality provided by the WinSock service to
non-Windows platforms such as Unix or Macintosh.

Proxy Servers Security Features

In conjunction with other products, Proxy Server can provide firewall level
security to prevent access to your internal network.

* Single Contact Point: A Proxy Server will have two network interfaces. One
of these network interfaces will be connected to the external (or
"untrusted") network, the other interface will be connected to your internal
(or "trusted") network. This will better secure your LAN from potential

* Protection of internal IP infrastructure: When IP forwarding is disabled
on the Proxy Server, the only IP address that will be visible to the
external environment will be the IP address of the Proxy Server. This helps
in preventing intruders from finding other potential targets on your

* Packet Layer Filtering: Proxy Server adds dynamic packet filtering to its
list of features. With this feature, you can block or enable reception of
certain packet types. This enables you to have a tremendous amount of
control over your network security.

Beneficial Features of Proxy

* IIS and NT Integration: Proxy Server integrates with Windows NT and
Internet Information Server tighter than any other package available on the
market. Proxy Server actually uses the same administrative interface used by
Internet Information Server.

* Bandwidth Utilization: Proxy Server allows all clients in your network to
share the same link to the external network. In conjunction with Internet
Information Server, you can set aside a certain portion of your bandwidth
for use by your webserver services.

* Caching Mechanisms: Proxy Server supports both active and passive caching.
These concepts will be explained in better detail further into the document.

* Support for Web Publishing: Proxy Server uses a process known as reverse
proxy to provide security while simultaneously allowing your company to
publish on the Internet. Using another method known as reverse hosting, you
can also support virtual servers through Proxy.

Hardware and Software Requirements

Microsoft suggests the following minimum hardware requirements.

* Intel 486 or higher. RISC support is also available.
* 24 MB Ram for Intel chips 32 MB Ram for RISC.
* 10 MB Diskspace needed for installation. 100 MB + .5 MB per client for
Cache space.
* 2 Network interfaces (Adapters, Dial-Up, etc)

Following is the suggested minimum software requirements.

* Windows NT server 4.0
* Internet Information Server 2.0
* Service Pack 3

It is highly recommended that it be installed on an NTFS partition. If an
NTFS partition is not used, not only are you losing NTFS's advanced security
features, but also the caching mechanisms of Proxy Server will not work.

It is also recommended that your two network interfaces be configured prior
to installation. On interface configured to the external network, and one
configured for the internal network. (Note: When configuring your TCP/IP
settings, DO NOT configure a default gateway entry for your internal network

* Be sure that "Enable IP Forwarding" is not checked in your TCP/IP settings. This could seriously compromise your internal security.

What is the LAT?

This is probably one of the most common questions I am asked as a security
professional. The LAT, or Local Address Table, is a series of IP address
pairs that define your internal network. Each pair defines a range of IP
addresses or a single pair.

That LAT is generated upon installation of Proxy Server. It defines the
internal IP addresses. Proxy Server uses the Windows NT Routing Table to
auto-generate the LAT. It is possible that the when the LAT is
auto-generated, that errors in the LATs construction will be found. You
should always manually comb through the LAT and check for errors. It is not
uncommon to find external IP addresses in the LAT, or entire subnets of your
internal IP addresses will not appear on the LAT. It is generally a good
idea to have all of your internal IP addresses in the LAT.


Upon installing the Proxy Server client software, it adds a file named
msplat.txt into the \Mspclnt directory. The msplat.txt file contains the
LAT. This file is regularly updated from the server to ensure that the LAT
the client is using is current.

What is the LAT used for?

Every time a client attempts to use a Winsock application to establish a
connection, the LAT is referenced to determine if the IP address the client
is attempting to reach is internal or external. If the IP address is
internal, Proxy Server is bypassed and the connection is made directly. If
the IP address the client is attempting to connect to DOES NOT appear in the
LAT, it is determined that the IP address is remote and the connection is
made through Proxy Server. By knowing this information, someone on your
internal network could easily edit his or her LAT table to bypass Proxy

Some Administrators may not see this as a problem because the LAT is
regularly updated from the server, so any changes the user made to his or
her LAT will be overwritten. However, if the user saves their LAT with the
filename Locallat.txt, the client machine will reference both the msplat.txt
and the locallat.txt to determine if an IP address is local or remote. So,
by using the locallat.txt method, a user can, in theory, permanently bypass
Proxy Server. The locallat.txt file is never overwritten unless the user
does so manually.

What changes are made when Proxy Server is installed?

Server side changes:

* The Web Proxy, Winsock Proxy, and SOCKS Proxy services are installed and
management items are added into the Internet Service Manager.

* An HTML version of the documentation is added into the
%systemroot%\help\proxy\ directory.

* A cache area is created on an NTFS volume.

* The LAT table is constructed.

* Proxy Server Performance Monitor counters are added.

* Client installation and config files are added to the Msp\Clients folder.
This folder is shared as Mspclnt and by default has the permissions set to
Read for Everyone.

Client side changes:
* The LAT (msplat.txt) file is copied to the clients local hard drive.

* A WSP Client icon is added to control panel on Win3.X, Win95 and WinNT

* A Microsoft Proxy Client Program Group is added

* The winsock.dll file is replace with Remote WinSock for Proxy. The old
winsock file is renamed winsock.dlx.

* Mspclnt.ini file is copied to the client machine.

Proxy Server Architecture

To understand the architecture of Microsoft Proxy Server, you must first
have a basic grasp of how Proxy works for outbound client requests. Here is
a simple example:

Joe opens his browser to visit his favorite news site on the net. He types
in the sites IP address which he has memorized because his visits often,
instead of doing his job. The client compares the IP address Joe entered to
the LAT table. Because the IP address is not found on the LAT, it is
considered external. Since the client has determined that the IP address is
external, it knows it must process the request through Proxy Server. The
client hands Joe's request to Proxy Server. Proxy Server then checks the IP
address against the access control applied by the Administrator. The
Administrator has the ability to stop internal employees from visiting
certain sites. Since Joe's request is not on the forbidden list applied by
the Administrator, Proxy Server executes the request. Proxy contacts the
website and requests the document Joe wanted. After Proxy server has
received the information it requested, it stored a copy in its cache for
later use and hands the request to the client machine. The website pops-up
on Joe's browser.

Proxy Server Services: An Introduction

* WebProxy: Web Proxy normally functions with both clients and servers. As a
server, it receives HTTP requests from internal network clients. As a
client, it responds to internal network clients' requests by issuing their
requests to a server on the Internet. The interface between the client and
server components of the Web Proxy service provides chances to add value to
the connections it services. By performing advanced security checks, the Web
Proxy does more than relay requests between an internal client and a server
on the Internet. The WebProxy service is an extensions of Internet
Information Server 3.0. It consists of two following components: The Proxy
Server ISAPI Filter and the Proxy Server ISAPI Application. The Web Proxy
service is implemented as a DLL (dynamic link library) that uses ISAPI
(Internet Server Application Programming Interface) and therefore runs
within the IIS WWW process. The WWW Service must installed and running in
order for proxy requests to be processed.

* WinSock Proxy: WinSock Proxy provides proxy services for windows sockets
applications. WinSock Proxy allows winsock applications to function on a LAN
and to operate as if it is directly connected to the Internet. The client
app uses Windows Sockets APIs to communicate with another application
running on an Internet computer. WinSock Proxy intercepts the windows
sockets call and establishes a communication path from the internal
application to the Internet application through the proxy server. The
process is totally transparent to the client. The WinSock Proxy consists of
a service running on Proxy Server and a DLL installed on each client. The
DLL it relies on is the Remote Winsock DLL that replaced the normal
winsock.dll. WinSock Proxy uses a control channel between the client and the
server to manage the ability of Windows Sockets messages to be used
remotely. The control channel is set up when the WinSock Proxy client DLL is
first loaded, and it uses the connectionless UDP protocol. The Winsock Proxy
client and the WinSock Proxy service use a simple ack protocol to add
reliability to the control channel. The control channel uses UDP port 1745
on the proxy server and client computers.

* SOCKS Proxy: Proxy Server supports SOCKS Version 4.3a. Almost all SOCKS
V4.0 client applications can run remotely through SOCKS Proxy. SOCKS is a
protocol that functions as a proxy. It enables hosts on one side of a SOCKS
server to gain full access to hosts on the other side of a SOCKS server,
without requiring direct IP access. (To learn more about SOCKS, visit

Understanding components

This area will attempt to better define to the components of the
architecture that we have used, but may not have defined.

ISAPI Filter

The ISAPI Filter interface is one of the components of the web proxy
service. The interface provides an extension that the Web server calls
whenever it receives an HTTP request.

An ISAPI Filter is called for every request, regardless of the identity of
the resource requested in the URL. An ISAPI filter can monitor, log, modify,
redirect and authenticate all requests that are received by the Web server.
The Web service can call an ISAPI filter DLL's entry point at various times
in the processing of a request or response. The Proxy Server ISAPI filter is
contained in the w3proxy.dll file. This filter examines each request to
determine if the request is a standard HTTP request or not.

ISAPI Application

The ISAPI Application is the second of the two web proxy components. ISAPI
applications can create dynamic HTML and integrate the web with other
service applications like databases.

Unlike ISAPI Filters, an ISAPI Application is invoked for a request only if
the request references that specific application. An ISAPI Application does
not initiate a new process for every request. The ISAPI Application is also
contained in the w3proxy.dll file.

Proxy Servers Caching Mechanism

Microsoft Proxy Server handles caching in two different ways, Passive and Active caching.

* Passive Caching: Passive caching is the basic mode of caching. Proxy
Server interposes itself between a client and an internal or external Web
site and then intercepts client requests. Before forwarding the request on
to the Web server, Proxy Server checks to see if it can satisfy the request
from its cache. Normally, in passive caching, Proxy Server places a copy of
retrieved objects in the cache and associates a TTL (time-to-live) with that
object. During this TTL, all requests for that object are satisfied from the
cache. When the TTL is expired, the next client request for that object will
prompt Proxy Server to retrieve a fresh copy from the web. If the disk space
for the cache is too full to hold new data, Proxy Server removes older
objects from the cache using a formula based on age, popularity, and size.

* Active Caching: Active Caching works with passive caching to optimize the
client performance by increasing the likelihood that a popular will be
available in cache, and up to date. Active caching changes the passive
caching mechanism by having the Proxy Server automatically generate requests
for a set of objects. The objects that are chosen are based on popularity,
TTL, and Server Load.

Windows Sockets

Windows Sockets is the mechanism for communication between applications
running on the same computer or those running on different computers which
are connected to a LAN or WAN. Windows Sockets defines a set of standard
API's that an application uses to communicate with one or more other
applications, usually across a network. Windows Sockets supports initiating
an outbound connection, accepting inbound connections, sending and receiving
data on those connections, and terminating a session.

Windows socket is a port of the Berkeley Sockets API that existed on Unix,
with extensions for integration into the Win16 and Win32 application
environments. Windows Sockets also includes support for other transports
such as IPX/SPX and NetBEUI.

Windows Sockets supports point-to-point connection-oriented communications
and point-to-point or multipoint connectionless communications when using
TCP/IP. Windows Socket communication channels are represented by data
structures called sockets. A socket is identified by an address and a port,
for example;

Access Control Using Proxy Server

Controlling Access by Internet Service

Proxy Server can be configured to provide or restrict access based on
Service type. FTP, HTTP, Gopher, and Secure (SSL) are all individually

Controlling Access by IP, Subnet, or Domain

Proxy allows an administrator to control access based on IP Address, Subnet
or Domain. This is done by enabling filtering and specifying the appropriate
parameters. When configuring this security, you need to decide if you want
to grant or deny access to an IP address, subnet, or domain. By configuring
Proxy Server correctly, you can also set it up to use the internet as your
corporate WAN.

Controlling Access by Port

If you are using the WinSock Proxy service, you can control access to the
internet by specifying which port is used by TCP and UDP. You can also grant
or deny, activate or disable certain ports based on your needs.

Controlling Access by Packet Type

Proxy Server can control access of external packets into the internal
network by enabling packet filtering on the external interface. Packet
filtering intercepts and evaluates packets from the Internet before they
reach the proxy server. You can configure packet filtering to accept or deny
specific packet types, datagrams, or packet fragments that can pass through
Proxy Server. In addition, you can block packets originating from a specific
Internet host.

The packet filtering provided by Proxy Server is available in two forms,
Dynamic and Static.

Dynamic packet filtering allows for designed ports to automatically open for
transmission, receive, or both. Ports are then closed immediately after
connection has been terminated, thereby minimizing the number of open ports
and the duration of time that a port is open.

Static packet filtering allows manual configuration of which packets are and
are not allowed.

By default, the following Packet settings are enabled on Proxy Server (by
default, ALL packet types are blocked except the ones listed below, known as

Inbound ICMP ECHO (Ping)
Inbound ICMP RESPONSE (Ping)
Outbound ICMP ANY
Inbound TCP HTTP
In/Outbound UDP ANY (dns)

Logging and Event Alerts

Events that could affect your system may be monitored, and, if they occur,
alerts can be generated. The items listed below are events that will
generate alerts:

Rejected Packets: Watches external adapter for dropped IP packets. Protocol
Violations: Watches for packets that do not follow the allowed protocol
structure. Disk Full: Watches for failures caused by a full disk.

When any of the events above occur, an alert is sent to the system log in
the NT Event Viewer, or can be configured to e-mail a pre-defined person.

When the system logs information concerning Access Control, it does so to a
log file stored in the %systemroot%/system32/msplogs/ directory. The log
file itself is named Pfyymmdd.log (Where yy=Current year / mm= Current Month
/ dd= Current day).

The Packet log records information related to the following areas:

Service Information (Time of Service, Date and Time)

Remote Information (The Source IP Address of a possible Intruder, along with
port and protocol used)

Local Information (Destination IP Address and port)

Filter Information (Action taken and what interface (network adapter) issued
the action)

Packet Information (Raw IP Header in Hex and Raw IP Packet in Hex)

Encryption Issues

Proxy Server can take full advantage of the authentication and security
features of Internet Information Server and SSL tunneling.

SSL supports data encryption and server authentication. All data sent to and
from the client using SSL is encrypted. If HTTP basic authentication is used
in conjunction with SSL, the user name and password are transmitted after
the client's SSL support encrypts them.

If your are wanting to take advantage of PPTP to provide additional
flexibility and security for your clients, you can configure Proxy Server to
allow these packets (GRE) to pass through.

Other Benefits of Proxy Server


Proxy Server can take full advantage of Windows NT Remote Access Service
(RAS). Proxy can be configured to dial on demand when an internal client
makes a request that must be satisfied from the external network. The RAS
feature can be configured to only allow connectivity during certain hours.
The Dial-Up Network Scripting tool can aslo be used to automate certain
process using Proxy Server and RAS. For company's who have a standard
constant connection (ISDN, T1, T3) to the Internet, the RAS ability provided
by Proxy Server can be used as a back-up should your constant connection


Microsoft Proxy Server was developed with support for Internet Packet
Exchange/Sequenced Packet Exchange or IPX/SPX. IPX/SPX is a transport
protocol group somewhat similar to TCP/IP.

There are many situations when a client computer may have both IPX/SPX and
TCP/IP protocols installed although the company's internal network may only
use IPX/SPX. Simply disabling aTCP/IP while on the LAN will not get the
IPX/SPX component of the Proxy client software working. You will need to go
into Control Panel, open the Wsp Client icon and check the box that reads
"Force IPX/SPX protocol". This must be done because even though the TCP/IP
protocol was disabled, the WinSock Proxy Client still detects its presence
and will attempt to create a standard IP socket. By enabling the "Force
IPX/SPX Protocol" option, this problem should disappear.

Firewall Strategies

A firewall is a system that enforces access control policies. The
enforcement is done between an internal, or "trusted" network and an
external, or "untrusted" network. The firewall can be as advanced as your
standards require. Firewalls are commonly used to shield internal networks
from unauthorized access via the Internet or other external network.

Logical Construction

The single basic function of a firewall is to block unauthorized traffic
between a trusted system and an untrusted system. This process is normally
referred to as Filtering. Filtering can be viewed as either permitting or
denying traffic access to a network.

Firewalls know what traffic to block because they are configured with the
proper information. This information is known as an Access Control Policy.
The proper approach to an access control policy will depend on the goals of
the network security policy and the network administrator.

Exploring Firewall Types

In the origins of firewalls, there were two types. These two types have now
grown and overlapped each other to the point where distinction is hard. We
will explore the differences between these two types and discuss Firewall
building topologies.

Network Level Firewalls

Network level firewalls operate at the IP packet level. Most of these have a
network interface to the trusted network and an interface to the untrusted
network. They filter by examining and comparing packets to their access
control policies or ACL's.

Network level firewalls filter traffic based on any combination of Source
and Destination IP, TCP Port assignment and Packet Type. Network Level
firewalls are normally specialized IP routers. They are fast and efficient
and are transparent to network operations. Todays network level firewalls
have become more and more complex. They can hold internal information about
the packets passing through them, including the contents of some of the
data. We will be discussing the following types of network level firewalls:

* Bastion Host
* Screened Host
* Screened Subnet

Bastion Host Firewall

Bastion host are probably one of the most common types of firewalls. The
term bastion refers to the old castle structures used in europe, mainly for
draw bridges.

The Bastion host is a computer with atleast one interface to the trusted
network and one to the untrusted network. When access is granted to a host
from the untrusted network by the bastion host, all traffic from that host
is allowed to pass unbothered. In a physical layout, bastion hosts normally
stand directly between the inside and outside networks, with no other
intervention. They are normally used as part of a larger more sophisticated

The disadvantages to a bastion host are:

- After an Intruder has gained access, he has direct access to the entire
- Protection is not advanced enough for most network applications.

Screened Host Firewall

A more sophisticated network level firewall is the screened host firewall.
This firewall uses a router with at least on connection to trusted network
and one connection to a bastion host. The router serves as a preliminary
screen for the bastion host. The screening router sends all IP traffic to
the bastion host after it filters the packets. The router is set up with
filter rules. These rules dictate which IP addresses are allowed to connect,
and which ones are denied access. All other packet scrutiny is done by the
bastion host. The router decreases the amount of traffic sent to the bastion
host and simplifies the bastions filtering algorithms.

The physical layout of a Screened Host is a router with one connection to
the outside network, and the other connection with a bastion host. The
bastion host has one connection with the router and one connection with the
inside network.

Disadvantages to the Screened Host are:

- The single screen host can become a traffic bottleneck
- If the host system goes down, the entire gateway is down.

Screened Subnet Firewalls

A screened subnet uses on or more addition routers and on more additional
bastion hosts. In a screened subnet, access to and from the inside network
is secured by using a group of screened bastion host computers. Each of the
bastion hosts acts as a drawbridge to the network.

The physical layout of a Screened subnet is somewhat more difficult, but the result is a more secure, robust environment. Normally, there is a router with one connection to the outside network and the other connection to a bastion host. The bastion host has one connection to the outer most router and one connection to another bastion host, with an addressable network in the middle. The inner most bastion host has one connection to the outer most bastion and another connection to an inside router. The inside router has one connection to the inner bastion host and the other connection to the inside network. The result of this configuration is the security components are normally never bogged down with traffic and all internal IP addresses are hidden from the outside, preventing someone from "mapping" your internal network.

Disadvantages to using this type of firewall are:

- The can be two or three times more expensive than other types of firewalls
- Implementation must be done by some type of security professional, as
these types of firewalls are not for the un-initiated.

Application Level Firewalls

Application level firewalls are hosts running proxy server software located
between the protected network and the outside network. Keep in mind that
even though Microsofts product is called Proxy Server 2.0, it is actually a
stand alone Bastion Host type of system. Microsoft Proxy Server can also,
single-handedly, disguise your internal network to prevent mapping.
Microsoft Proxy Server 1.0 did not have many of the advanced features
presented in version 2.0. The 1.0 version can definitely be called a true
proxy server, while the 2.0 version is more of a firewall.

Viewed from the client side, a proxy server is an application that services
network resource requests by pretending to be the target source. Viewed from
the network resource side, the proxy server is accessing network resources
by pretending to be the client. Application level firewalls also do not
allow traffic to pass directly between to the two networks. They are also
able to use elaborate logging and auditing features. They tend to provide
more detailed audit reports, but generally, as stand alone security unites,
do not perform that well. Remember that an Application level firewall is
software running on a machine, and if that machine can be attacked effective
and crashed, in effect, youre crashing the firewall.

You may wish to use an application level firewall in conjunction with
network level firewalls, as they provide the best all around security.

That's it for now.

The Rhino9 Team.
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