29 June 1997
Source: http://www.bxa.doc.gov/daleyltr.htm

Letter of Secretary of Commerce William Daley to Senator John McCain

A second letter with identical text was also sent to the Ranking Member of the Committee, Senator Ernest Hollings

June 18, 1997

The Honorable John McCain
Chairman, Committee on Commerce,
Science, and Transportation
United States Senate
Washington, D.C. 20510

Dear Mr. Chairman:

On June 19th, the Commerce Committee has scheduled a markup of S. 909, the "Secure Public Networks Act." The Committee also has before it S. 377, the "Promotion of Commerce On-Line in the Digital Era Act of 1997." This letter provides the views of the Administration on these two bills dealing with the management of encryption technology.

The Clinton Administration's encryption policy is designed to promote the growth of secure international electronic commerce, preserve individual privacy, support the ability of U.S. companies to compete in global markets, and protect the public safety and national security. Our approach balances these objectives by endorsing a market-driven technology approach--key recovery and by encouraging the development of the key management infrastructures needed to make electronic commerce a reality.

The Administration welcomes the recent introduction of S. 909. While we have not yet completed a detailed analysis of all the bill's provisions, we believe it provides a sound basis from which to develop legislation that is acceptable to both the Congress and the Administration. In particular, we appreciate the bill's explicit recognition of the need to balance competing objectives and of the potential for key recovery to become a market-driven mechanism to achieve that balance. Accordingly, we urge the Committee to report S. 909, and look forward to continued discussions with you and your Senate colleagues to address potential concerns.

The approach taken in S. 377 is more narrowly focused. It does not provide a means to support key management infrastructures that also support key recovery. Further, by weakening our ability to manage the proliferation of strong encryption without key recovery worldwide, S. 377 would hamper our efforts to develop a multilateral approach. It does not appropriately take into account or balance the competing objectives described above. Accordingly, the Administration strongly
opposes S. 377.

We look forward to working with the Congress to reach agreement on a satisfactory solution to this important problem.

> > Sincerely,

> > /s/

> > William M. Daley