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CNet News Briefs
Tuesday, March 31, 1998

Clear way for encryption export, Ottawa urged

by Nathan Arnold, n@mhpublishing.com

Any new government regulations on the export of encryption software will cripple an already disadvantaged Canadian software industry, a policy conference was told Tuesday.

"Existing government policy is inconsistent, complicated, and open to interpretation. In spite of good intentions, the result is a time consuming and often barrier-littered bureaucracy", Rob Koblovsky, vice president of marketing at Milky Way Networks, told the Industry Roundtable on GOC Crypto Policy for E-Commerce in Ottawa. "As a result we have found our inability to respond quickly puts us at a competitive disadvantage."

Hosted by Entrust, a security software developer owned by Northern Telecom, the conference was intended to advise the Canadian government on the development of a new policy towards encryption software and electronic commerce.

Encryption is a technology that employs complex mathematical algorithms to encode data. It provides consumers and businesses a level of trust by securing sensitive information, such as credit card numbers and cellular phone transmissions, and is an integral part of electronic commerce.

However, it has also become a major concern for the government and law enforcement officials. They are worried encryption could be used by criminals and terrorists to hide information from authorities.

The federal government is now concerned with how to best balance the interests of consumers, business and law enforcement in its policies towards this emerging technology.

The conference was responding to a document released by Industry Canada on Feb. 23, entitled A Cryptography Policy Framework for Electronic Commerce: Building Canada's Information Economy and Society. The document specifically asked for public input in regards to stored information, information in transit and exporting software.

While there was debate on what rules should be established within Canada, those at the conference generally agreed that Canadian software developers should be able to sell software that meets the needs of foreign buyers.

"The way that cryptography and information is regulated in Canada is completely separate from the way Canadian company have to go out and sell their products around the world", explained Phil Deck, President and chief executive officer of Certicom Corporation. "We should all remember that if were going to have a Canadian cryptography industry, 95 per cent of our product sales will come outside of Canada. We can't build our products in a way that is just for Canada."

Representatives of many of the other software developers present, including Crysalis-ITS, Milky Way Networks, and Hewlett-Packard Canada, agreed. If foreign buyers would have difficulty getting Canadian software, they would simply go somewhere else. Whatever solution was made, it would have to be done soon, they said.

"We're basically starving to death waiting to understand how were going to export this technology, said Ron Walker of KyberPASS Corporation. "Our real concern is that (the rules) are clarified, simplified, we know what they are, and that we can live with it one way or the other."


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