http://www.news.com/News/Item/0,4,21120,00.html?st.ne.fd.mdh Crypto policy called a failure By Courtney Macavinta Staff Writer, CNET NEWS.COM April 15, 1998, 11:40 a.m. PT URL: http://www.news.com/News/Item/0,4,21120,00.html The government's policy restricting the export of strong encryption products has failed and is boosting the foreign market by hog-tying the U.S. industry, Commerce Department secretary William Daley conceded today. [...] But the software industry and privacy advocates were most intrigued today by Daley's admission that the administration's export limits on encryption (technology that secures digital communication) are hindering U.S. companies' ability to compete with global manufacturers. The export policy went into effect last January, and is overseen by the Commerce Department. Under the rules, software makers that are granted crypto export licenses must submit proof of their plans to build key-recovery features into their products after next year. Key-recovery systems make it possible for law enforcement agents--who have obtained a court order--to access computer users' private key that unscrambles their digital messages or files. "The ultimate result will be foreign dominance of the market," Daley said. "This means a loss of jobs here, and products that do not meet either our law enforcement or national security needs." There has been an ongoing fight to overturn the export limits. But a compromise hasn't been reached with law enforcement officials, who assert that access to keys is needed to combat a new wave of high-tech crime in which suspects can cover their tracks with crypto. [...]