[Congressional Record: November 13, 1997 (Extensions)] ON LIFTING THE ENCRYPTION EXPORT BAN ______ HON. ADAM SMITH of washington in the house of representatives Thursday, November 13, 1997 Mr. ADAM SMITH of Washington. Mr. Speaker, I rise today to speak about an issue that is very important to me--lifting unfair export controls on encryption technology. Mr. Speaker, protecting our National Security interests is among my highest priorities. If I thought controlling encryption exports worked toward this end, I would be its strongest proponent. Unfortunately, export controls on encryption software simply disadvantage the United States software industry. Under current law the United States allows only 40 bit encryption codes to be exported, although software companies sell encryption codes of up to 128 bits everywhere in the United States. Forty bit encryption technology is so elementary, it took a graduate student a mere 3\1/2\ hours to break a code last January. Fifty-six bit encryption is 65,000 times more difficult to decode than 10 bit encryption and it only took students three months to break the encryption code. One hundred twenty eight bit encryption has not been broken yet. Naturally, foreign companies do not want to buy 40 bit encryption software, because it is so vulnerable and insecure. The possibilities for ``computer hackers'' to break into the system and wreak havoc are enormous and dangerous. Therefore, foreign companies are purchasing high-level encryption from foreign software providers instead of American ones. The international demand for encryption software is growing exponentially because of the tremendous rise in electronic commerce. For instance, German Economics Minister, Guenter Rexrodt, said, ``Users can only protect themselves against having data manipulated, destroyed, or spied on by strong encryption procedures * * *. That is why we have to use all of our powers to promote such procedures instead of blocking them.'' Our export restraint has not kept the technology from proliferating. It has merely allowed foreign producers of strong encryption technology to fill the vacuum. In fact, American companies are partnering with foreign firms to distribute their software--taking jobs and revenue with them. American-owned Sun Computers has recently joined with a Russian software company to avoid the U.S. export ban and sell to foreign markets. Foreign companies can also purchase American-produced 40 bit encryption technology and upgrade it in their own countries to 128 bit encryption technology. This ``add-on'' industry is among the fastest growing software industries in Europe today. Clearly, if someone wants high-level encryption technology, he or she can easily obtain it. The ability to obtain both powerful and affordable encryption will now become easier with recent developments in Canada. The Canadian Government includes encryption software in decontrolling mass market software under the Generic Software Note. This means any software sold over-the-counter, by mail or on the phone may be exported without limits. Entrust, a Canadian software company, is freely marketing and selling internationally a 128 bit encryption program right now. It sells for less than $50, and Entrust provides a version of the encryption technology free on the Internet. Even our most steadfast ally sees that export controls can no longer help stem the overwhelming demand and spread of unbreakable encryption. Mr. Speaker, if the United States continues to impose these restrictive export bans on its own companies, ``foreign competition could emerge at a level significant enough to damage the present U.S. world leadership'' in the software industry, according to the National Research Council's blue-ribbon panel on encryption policy. If our export ban continues, the United States will not be the worldwide leader on encryption technology for long, and that would be a true risk to our national security. I strongly oppose any unilateral sanctions or regulations that put the United States at an unnecessary disadvantage. Our current export ban on encryption software is a perfect example, and I intend to continue the fight to change our policy and allow the United States to compete in the global software market. ____________________ Archived at: http://jya.com/smith-crypto.txt