--- begin forwarded text
Date: 16 Sep 99 15:09:33 EDT
From: ROBERT HARPER [EMAIL PROTECTED]
To: Ignition Point [EMAIL PROTECTED]
Subject: IP: White House changes crypto policy!
Sender: [EMAIL PROTECTED]
Reply-To: ROBERT HARPER [EMAIL PROTECTED]
http://foxnews.com/
White House bows to pressure from high-tech industry over encryption
2.43 p.m. ET (1848 GMT) September 16, 1999
By Ted Bridis, Associated Press
WASHINGTON (AP) - The White House agreed Thursday to allow U.S.
companies to sell the most powerful data-scrambling technology
overseas with virtually no restrictions, a concession to America's
high-tech industry over law enforcement and national security
objections.
The move was a defeat for the Justice Department, which had forcefully
argued that criminals and terrorists might use the technology to
scramble messages about crimes or deadly plots.
On the other hand, the decision should help U.S. companies in overseas
competition - and help consumers worldwide guarantee the privacy of
their e-mail and online credit-card purchases.
Critics of restrictions on export sales said criminals and terrorists
already could buy or download powerful encryption technology made in
other countries.
"Those who are going to misuse encryption for criminal purchases aren't
going to limit themselves to U.S.-made encryption products,'' said
Ed Gillespie, executive director of Americans for Computer Privacy.
The administration will allow high-tech companies to sell even the
most powerful encryption technology overseas to private and commercial
customers after a one-time technical review of their products.
The White House will still require companies to seek permission to
sell the scrambling technology to a foreign government or military,
and it maintains bans on selling to seven terrorist nations: Iran,
Iraq, Libya, Syria, Sudan, North Korea and Cuba.
Previously, the administration allowed companies to sell the most
powerful scrambling technology only to specific industries overseas;
other foreign customers were generally limited to so-called 56-bit
encryption products, meaning those with 72-quadrillion unlocking
combinations.
"This is a sweeping reform,'' said Dan Scheinman, senior vice
president of legal and government affairs at Cisco Systems Inc. "
Imagine you're banking online - you want to make sure those things are
safe from a hacker. You buy things, you want to make sure your credit
card is secure.''
The export limits never directly affected Americans, who are legally
free to use encryption technology of any strength. But U.S. companies
have been reluctant to develop one version of their technology for
domestic use and a weaker overseas version, so they typically sell
only the most powerful type that's legal for export, even to Americans.
"Forcing U.S. companies to do business under tight export controls was
like asking them to use a black rotary telephone in a cellular, call-
waiting world,'' said Harris Miller, president of the Information
Technology Association of America, a trade group.
Critics cited more than 800 products available worldwide with stronger
scrambling technology than the United States allowed its companies to
sell overseas.
"You can pull it down over the Internet in less than 20 minutes,''
said Gillespie. "Having Japanese and German and Irish companies be at
the forefront of this technology is not in our best interests.''
A non-profit group of researchers demonstrated last summer it can
unscramble a 56-bit coded message in just days using a custom-built
computer worth less than $250,000.
The White House announcement follows its decision exactly one year ago
to relax export restrictions. At the time, Vice President Al Gore
promised the administration would reconsider its limits within the
year.
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The Internet Bearer Underwriting Corporation http://www.ibuc.com/
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