Canadian encryption companies hope that an export licence granted to an American counterpart could help lighten Canadian export restrictions.
The U.S. government recently granted California-based Cylink Corp. the country's first export license for strong encryption, the newest and hardest-to-crack encryption code.
At least one security consultant thinks the U.S. decision could persuade the Canadian government to allow Canadian companies to export strong encryption as well.
"Is it good news for Canadian companies? I would think so", said Gary Marshall, director of the IT Security Lab at Ottawa-based Domus Software. "There's a fair bit of discussion, I think, between the two governments as to what is acceptable."
Cylink's product CIDEC, a networking product for banks, uses strong encryption -- a complex mathematical algorithm with a "key" longer than 128 bits. A hacker would have to figure out a 16-character long password in order to hack into CIDEC.
"I would assume we may see a change on the part of the Canadian government to look at larger key sizes", Marshall said.
Both the American and Canadian governments currently restrict the export of strong encryption to prevent international criminals from encoding data.
Cylink's chief scientist said the new license has opened a new market for his company.
"This opens a big market for Cylink. Now we can provide customers with the help they've been asking for", Charles Williams said in an interview from his Sunnyvale, Ca. office.
Marshall worries that Canadian companies may fall behind in the race for market share should the government continue to restrict the export of strong encryption.
"It gives some U.S. companies advantage in that they can ship some stronger cryptography", Marshall said. "There are other nations that can build strong cryptography and are not subject to the same export restrictions as Canada in terms of selling it."
Ottawa-based Entrust Technologies hasn't yet developed a 168-bit product, but with the recent U.S. decision, company spokesperson Shauna White doesn't anticipate a problem exporting any future product.
"We haven't ever put in a request to do that, but the Canadian government has been generally been very supportive of our efforts", White said.
"I'm sure they'll take a look at this and make their own determination about 168-bit crypto. I don't foresee it being any kind of a long-term problem."
A representative from the Ministry of International Trade told CNET Briefs Canada Friday that the Ministry has yet to receive a formal request for a 168-bit export license.
"It's a bit difficult to comment", said Sophie Legendra. "But it's not apparent that there will be any direct effect here in Canada."
- - -