Saturday, July 29, 1998

Encryption Resolution May Be Sector By Sector

by Mary Mosquera, mmosquer@cmp.com

WASHINGTON, D.C. -- Encryption export controls may be relaxed sector by sector, instead of all at once when a general solution is developed, said U.S. Commerce Secretary, William Daley Wednesday.

"Although we want to solve the bigger picture, it is unlikely that will happen soon," said Daley to the House Commerce committee at a hearing on the global electronic marketplace. The administration is debating whether to move forward on certain sectors, such as it did with the financial sector earlier this month.

"Insurance would be the most likely next sector, but no announcement will be made soon on which is the next sector," Daley said.

Encryption, privacy, and global standards are challenges to be resolved for the global electronic marketplace to succeed, Daley said. The administration has avoided regulating the Internet, and prefers industry to lead on policy -- sometimes with federal nudging, he said.

The battle over encryption export controls and key recovery for law enforcement endures. "Progress is slow, and it will continue to be slow but intense. Resolution will only come by intensive negotiations with industry, law enforcement, and security interests, and new technology," said Daley, who praised an industry initiative termed "private doorbells" that allows law enforcement, with a court order, to capture plain-text copies of encrypted data at the router switch.

The government limits export overseas of strong encryption products that scramble secured data. Critics say U.S. businesses are losing global market share as stronger encryption is available in other countries. Daley said European companies were having a negative impact on the market advantage of U.S. companies.

Currently there are no limits on encryption products domestically, but law enforcement wants to be able to gain access to secure data that is being encrypted beyond its capability to decode. Advocacy groups say the government's key-recovery program would be violating Americans' right to privacy.

Copyright © 1998 by CMP Media, Inc. All Rights Reserved. Reprinted with permission.