4 September 1997
Source: The New York Times, CyberTimes

September 4, 1997

## Encryption Tops Wide-Ranging Net Agenda in Congress

##### By JERI CLAUSING

WASHINGTON -- As Congress returns from its summer break this week, it faces a host of legislative initiatives that could shape the future of online privacy, commerce and jurisdiction.

Topping the agenda is encryption, an issue that has pitted President Clinton and his top crime fighters against virtually everybody else.

The word encryption traditionally conjures images of spies and sophisticated international organized crime rings. But with the dawn of the Internet, it is also the key to private communication and secure business transactions.

And while Clinton on July 1 took a very public stand for a tax-free, self-governed Internet, his administration is pushing to create a key-recovery system that would keep encrypted codes on file for law enforcement officials to access.

But the administration is not alone in backing bills that would appear to be contradictory to the principles of a free, self-governed Internet. Some groups are fighting to ban or regulate unsolicited commercial e-mail, or spam. Others want to ban gambling on the Internet and criminalize copyright infringements.

Of the dozen or so Internet or computer-related bills pending in Congress, encryption is among the first orders of business. Subcommittees of both the House and Senate Judiciary committees have scheduled hearings this week.

The House bill, known as the Security and Freedom Through Encryption Act, or SAFE, legislation backed by virtually everyone but the administration, would lift all current export controls on encryption software and prohibit a government key-recovery system. Despite intense lobbying by the administration, which included classified briefings for members of key House committees, the bill has been endorsed by the House Commerce and International Relations committees. And with more than 250 of the House's 435 members cosponsoring the act, sponsoring Representatives Bob Goodlatte, Republican of Virginia, and Zoe Lofgren, a California Democrat, are optimistic about getting the bill through the full House as early as this month.

The Senate, however, has been less inclined to buck the administration. The Senate Commerce Committee passed a bill by Senator Bob Kerrey, Democrat of Nebraska, and the committee's chariman, John McCain, Republican of Arizona, that includes the administration-backed key-recovery plan. But there are two other Senate encryption bills that are closer to the SAFE act in the House and a Judiciary subcommittee hearing is scheduled on the issue Thursday.

Still, at a Judiciary subcommittee hearing on Wednesday, Congress’s first day back, Senator Dianne Feinstein, a Democrat who represents California and its technology-rich Silicon Valley, called for mandatory key recovery of encrypted software. And Louis J. Freeh, the director of the FBI, raised the prospect of also requiring Internet service providers to have keys to the data flowing over their networks.

"Law enforcement needs to have a system for immediate decryption" when a judge determines it is likely that crime is being or is about to be committed, Freeh told the Subcommittee on Technology, Terrorism and Government Information. "We should also look at whether network service providers should have a system for immediate decryption."

Encouraged by the Supreme Court's decision striking down the Communications Decency Act this summer, an unusually broad cross section of advocacy groups, including the American Civil Liberties Union, the Electronic Freedom Foundation, the Business Software Alliance and the National Rifle Association are bent on killing bills that would regulate encryption technology.

And as was the case with the Communications Decency Act, lawmakers backing the administration's call for a key-recovery system are warning of dire consequences if Congress fails to enact such a system in an effort to thwart terrorists, online pedophiles and drug dealers.

"The looming specter of the widespread use of robust, virtually uncrackable encryption is one of the most difficult problems confronting law enforcement as the next century approaches," Freeh told the Senate Judiciary Committee earlier this summer. "At stake are some of our most valuable and reliable investigative techniques and the public safety of our citizens. We believe that unless a balanced approach to encryption is adopted that includes a viable key infrastructure, the ability of law enforcement to investigate and sometimes prevent the most serious crimes and terrorism will be severely impaired. Our national security will also be jeopardized."

Opponents of a key recovery system, on the other hand, insist that terrorists and drug cartels are smart enough not to use encrypted codes to which law enforcement agencies have access. And they argue that the current export restrictions on strong encryption developed in the United States could put the nation at a competitive disadvantage in the fast-growing and fast-changing digital communications industry.

Others say it's a serious threat to civil liberties.

"This is equally as serious as the Communications Decency Act," said Shari Steele of the Electronic Frontier Foundation. While the Communications Dececny Act "was about freedom of speech, making sure that speech was protected online," she said, "encryption is about privacy — making sure we are able to speak privately, and making sure our transactions are private."

In contrast to Clinton's support of proposals like the Internet Tax Freedom Act, which would prohibit states from taxing online commerce, Steele says the administration's encryption policies will stymie Internet development.

"The administration, if anything, is moving in the wrong direction," Steele said. "We are very dissatisfied. When we first voted for Clinton, there was an expectation that Vice President Al Gore was this technologically savvy guy. Instead, he has turned out to be a real enemy of the people when it comes to Internet issues."

Software companies insist that the freedom to develop strong encryption would prove to be the best weapon against online crime because encryption would thwart more thieves and eavesdroppers than it would facilitate organized crime and terrorism.

The issue is also changing the perception of Washington among high-tech companies. In the wake of the Communications Decency Act, and facing a threat on the encryption issue, the computer industry, increasingly wary of what it sees as the technical naïveté of Congress, is moving quickly to improve its clout through campaign donations and lobbying.

According to a recent report by the Center for Responsive Politics, the industry donated $7.3 million through political action committees, "soft money" and individual contributions to federal candidates and parties. That's 52 percent more than was spent in the 1991-1992 election cycle. During calendar year 1996, the industry spent another $19.9 million on lobbying expenses.

Among the Top 10 of Congressional beneficiaries of this new high-tech largesse is Feinstein, who, given her support of the FBI's position, is sure to be feeling some pressure as the Judiciary Committee prepares to take up the issue. During discussion of the Kerrey-McCain bill in July, Feinstein left before her constituents from the software industry in the Silicon Valley testified -- and after telling representatives of the FBI and the National Security Agency that she would defer to their expertise on what was a confusing issue.

At Wednesday’s subcommittee hearing, Feinstein said "The bottom line is, I think nothing short of mandatory key recovery does the job."