The New York Times, November 8, 1995. Industry Group Rebuffs U.S. On Encryption By John Markoff The campaign by the Clinton Administration to create a standard for data encryption acceptable to industry, civil liberties and law enforcement groups broke down yesterday when a group including some of the nation's most powerful technology companies rejected a compromise proposal. The aim is to set a policy that meets the needs of electronic commerce as well as the concerns of the National Security Agency and other Federal offices that are opposed to the proliferation of data-coding software, feeling it will make it impossible for them to gather intelligence overseas. The Administration offered a compromise plan and had been seeking comment from the public. But the industry coalition said yesterday that it found the Government unwilling to compromise. Thus, the group of 37 companies said, it would formulate its own policy proposal to present to the White House and to Congress in the next six months. High-technology industries want a data-coding standard secure enough that both businesses and overseas customers could use it for sensitive financial and business correspondence. They seek a longer and more powerful encryption key than the Government is willing to grant, and object to Government demands that law enforcement agencies have "back-door" access to such transmissions that would allow them to intercept coded messages. The letter is signed by several of the country's leading computer, software and on-line companies, among them America Online, Apple Computer, AT&T, Eastman Kodak I.B.M.'s Lotus Development division, MCI Communications, Microsoft, Novell, Oracle Sybase and Tandem Computers. On Aug. 17, the Administration proposed a liberalization of export-control procedures for "key escrow" software products, or those providing law-enforcement access. "The current policy directive also does not address the need for immediate liberalization of current export restrictions," the letter said "Such liberalization is vital to enable U.S. companies to export state-of-the-art software products during the potentially lengthy process of developing and adopting a comprehensive national cryptography policy." [End] ---------- The Washington Post, November 8, 1995 Encryption Control Plan Sparks Industry Protest High-Tech Groups Say Proposals Unworkable By Elizabeth Corcoran High-technology companies and advocacy groups are writing to Vice President Gore and House Speaker Newt Gingrich to protest what they contend are unworkable federal proposals for controllng the export of data scrambling technology. The letters deepen an industry-government rift that began only days after federal officials unveiled an outline of what they hoped would be a palatable plan at an industry meeting in August. Two separate coalitions are criticizing the administration's draft proposal, which the government circulated on the Internet on Monday. Current export regulations prohibit companies froan sending overseas any encryption, or data-scrambling technology, that exceeds a certain degree of sophistication. The government argues that it needs to be able to peek at messages and files with proper court authorization -- to do its job of protecting U.S. citizens from terrorist groups and other malevolent organizations. In July, some French students demonstrated they could readily break the type of encryption technology that the U.S. government lets companies export. In August, the administration said it would let companies include more complex types of encryption, provided they pledged to entrust to an authorized agent a "spare key," or the means for unscrambling the information. Unlike early proposals in which the government said it would hold such keys, the administration is suggesting that companies and individuals would be able to select private keyholders, much the way people pick their banks. But after a brief honeymoon, industry and civil liberties groups began to find flaws with the details in the new proposals. This week's letters indicate that whatever fragile compromise the government had hoped it had found has grown even weaker. One coalition, pulled together by the Washington advocacy group Center for Democracy and Technology, includes about three dozen high-tech companies and associations. The group has promised to draft an alternative plan within six months. "There is a very serious message here: that national security can't be controlling the Internet," said Jerry Berman, executive director of the center. "There are other issues, global competitiveness and privacy, that need to be placed in the balance -- and the administration's policy doesn't do that." A second coalition of about 10 free-market and libertarian groups, led by another policy group, Americans for Tax Reform, plans to send their letter to Gingrich in the next day or two. The group contends the administration's encryption proposals are an encroachment on citizens' civil rights. The administration's proposals would not restrict tbe encryption technologies that people use within U.S. boundaries. But it would require that if they electronically send an encrypted message to parties outside the United States, a spare key must be stored with an authorized agency. "Even though we recognize [the administration] has worked hard on its proposals, it's not the right direction," said Rebecca Gould, director of policy at the Business Software Alliance, a trade association of software firms. "We've been in this [debate] since July 1994," she added, a long time for companies that churn out a new version of most products every 18 months. "That means lost sales for us and a loss of U.S. industry sales abroad." [End] ---------- Both slipped by gummed eyes, thx gnu.