Starting today, Microsoft is offering most Windows 7 and Windows 8 users a free upgrade to the software giant’s latest operating system — Windows 10. But there’s a very important security caveat that users should know about before transitioning to the new OS: Unless you opt out, Windows 10 will by default share your Wi-Fi network password with any contacts you may have listed in Outlook and Skype — and, with an opt-in, your Facebook friends.
This brilliant new feature, which Microsoft has dubbed Wi-Fi Sense, doesn’t share your WiFi network password per se — it shares an encrypted version of that password. But it does allow anyone in your Skype or Outlook or Hotmail contacts lists to waltz onto your Wi-Fi network — should they ever wander within range of it or visit your home (or hop onto it secretly from hundreds of yards away with a good ‘ole cantenna!).
I first read about this disaster waiting to happen over at The Register, which noted that Microsoft’s Wi-Fi Sense FAQ seeks to reassure would-be Windows 10 users that the Wi-Fi password will be sent encrypted and stored encrypted — on a Microsoft server. According to PCGamer, if you use Windows 10’s “Express” settings during installation, Wi-Fi Sense is enabled by default.
“For networks you choose to share access to, the password is sent over an encrypted connection and stored in an encrypted file on a Microsoft server, and then sent over a secure connection to your contacts’ phone if they use Wi-Fi Sense and they’re in range of the Wi-Fi network you shared,” the FAQ reads.
The company says your contacts will only be able to share your network access, and that Wi-Fi Sense will block those users from accessing any other shared resources on your network, including computers, file shares or other devices. But these words of assurance probably ring hollow for anyone who’s been paying attention to security trends over the past few years: Given the myriad ways in which social networks and associated applications share and intertwine personal connections and contacts, it’s doubtful that most people are aware of who exactly all of their social network followers really are from one day to the next.
El Reg says it well here:
That sounds wise – but we’re not convinced how it will be practically enforced: if a computer is connected to a protected Wi-Fi network, it must know the key. And if the computer knows the key, a determined user or hacker will be able to find it within the system and use it to log into the network with full access.
In theory, someone who wanted access to your company network could befriend an employee or two, and drive into the office car park to be in range, and then gain access to the wireless network. Some basic protections, specifically ones that safeguard against people sharing their passwords, should prevent this.
I should point out that Wi-Fi networks which use the centralized 802.1x Wi-Fi authentication — and these are generally tech-savvy large organizations — won’t have their Wi-Fi credentials shared by this new feature.
Microsoft’s solution for those concerned requires users to change the name (a.k.a. “SSID“) of their Wi-Fi network to include the text “_optout” somewhere in the network name (for example, “oldnetworknamehere_optout”).
It’s interesting to contrast Microsoft’s approach here with that of Apple, who offer an opt-in service called iCloud Keychain; this service allows users who decide to use the service to sync WiFi access information, email passwords, and other stored credentials amongst their own personal constellation of Apple computers and iDevices via Apple’s iCloud service, but which does not share this information with other users. Apple’s iCloud Keychain service encrypts the credentials prior to sharing them, as does Microsoft’s Wi-Fi Sense service; the difference is that it’s opt-in and that it only shares the credentials with your own devices.
Wi-Fi Sense has of course been a part of the latest Windows Phone for some time, yet it’s been less of a concern previously because Windows Phone has nowhere near the market share of mobile devices powered by Google’s Android or Apple’s iOS. But embedding this feature in an upgrade version of Windows makes it a serious concern for much of the planet.
Why? For starters, despite years of advice to the contrary, many people tend to re-use the same password for everything. Also, lots of people write down their passwords. And, as The Reg notes, if you personally share your Wi-Fi password with a friend — by telling it to them or perhaps accidentally leaving it on a sticky note on your fridge — and your friend enters the password into his phone, the friends of your friend now have access to the network.
Source: How-To Geek
An article in Ars Technica suggests the concern over this new feature is much ado about nothing. That story states: “First, a bit of anti-scaremongering. Despite what you may have read elsewhere, you should not be mortally afraid of Wi-Fi Sense. By default, it will not share Wi-Fi passwords with anyone else. For every network you join, you’ll be asked if you want to share it with your friends/social networks.”
To my way of reading that, if I’m running Windows 10 in the default configuration and a contact of mine connects to my Wi-Fi network and say yes to sharing, Windows shares access to that network: The contact gets access automatically, because I’m running Windows 10 and we’re social media contacts. True, that contact doesn’t get to see my Wi-Fi password, but he can nonetheless connect to my network.
While you’re at it, consider keeping Google off your Wi-Fi network as well. It’s unclear whether the Wi-Fi Sense opt-out kludge will also let users opt-out of having their wireless network name indexed by Google, which requires the inclusion of the phrase “_nomap” in the Wi-Fi network name. The Register seems to think Windows 10 upgraders can avoid each by including both “_nomap” and “_optout” in the Wi-Fi network name, but this article at How-To Geek says users will need to choose the lesser of two evils.
Either way, Wi-Fi Sense combined with integrated Google mapping tells people where you live (and/or where your business is), meaning that they now know where to congregate to jump onto your Wi-Fi network without your permission.
My suggestions:

Prior to upgrade to Windows 10, change your Wi-Fi network name/SSID to something that includes the terms “_nomap_optout”.
After the upgrade is complete, change the privacy settings in Windows to disable Wi-Fi Sense sharing.
If you haven’t already done so, consider additional steps to harden the security of your Wi-Fi network.

Further reading:
What Is Wi-Fi Sense and Why Does it Want Your Facebook Account? 
UH OH: Windows 10 Will Share Your Wi-Fi Key With Your Friends’ Friends
Why Windows 10 Shares Your Wi-Fi Password and How to Stop it
Wi-Fi Sense in Windows 10: Yes, It Shares Your Passkeys, No You Shouldn’t Be Scared
Source: Krebs