In the Science and Business section, the August 1993 Scientific American has a short, negative article on Clipper, which mentions cypherpunks: Clipper Runs Aground Everyone seems to be listening in these days: tabloids regale readers with the cellular telephone intimacies of the British royal family, and more sober articles on the business pages tell how companies - or governments - devote resources to "signals intelligence" for commercial gain. So the Clinton Administration might have thought it was doing everyone a favor in April when it proposed a new standard for encryption chips, developed with the aid of none other than the National Security Agency (NSA). Instead the administration met with outrage. Along with the message, Clipper, as the chip is named, sends out a string of bits called a law enforcement field. Its purpose is to enable the police and the Federal Bureau of Investigation to decode conversations that they wiretap pursuant to court order. In addition, the chip's encryption algorithm, known as Skipjack, is classified. Thus, only a small cadre of cryptographic experts would be able to study it to determine whether or not it was indeed secure. Early in June the administration abandoned its plan to rush Clipper into the marketplace and extended its internal review of the policy issues raised by the chip until the end of the summer. This decision presumably also delays consideration of outlawing other encoding methods. A peculiar coalition of civil libertarians and large software companies has formed to plead the cause of unregulated cryptography. Self-styled "cypherpunks" argue that the government has no more right to insist on a back door in secure telephones than it does to restrict the language or vocabulary used in telephone conversations on the grounds that dialect might hinder interpretation of wiretaps. Companies such as Microsoft, Lotus Development Corporation, Banker's Trust and Digital Equipment Corporation are worried about the administration's proposal because they believe it will hurt the U.S. in international competition. Ilene Rosenthal, general counsel at the Software Publishers Association, which numbers 1,000 companies among its members, points out that telephones containing the NSA chip would be subject to export controls because cryptographic equipment is considered "munitions" under U.S. law. This bureaucratic restraint could force U.S. manufacturers of secure telephones to develop entirely different product lines for the domestic and international markets. Indeed, she says, even if the State Department did license Clipper for widespread export, it is doubtful whether any foreign government or company would buy a system to which the U.S. literally had the keys. Rosenthal contends that the U.S. has lost control of cryptography, citing more than 100 different brands of strong encoding software sold by non-U.S. companies. Indeed, discussion groups on the Internet computer network have been buzzing with plans for a do-it-yourself secure telephone that requires little more than a personal computer, a $200 modem and a microphone. It is not clear whether the administration will abandon its attempt to stuff the unregulated-cryptography genie back in the bottle. There are already 10,000 Clipper-equipped telephones on order for government use, and Jan Kosko of the National Institute of Science and Technology says the plan for the standard "is being advanced as fast as we can move it." Nine (thus far unidentified) cryptographers have been invited to review the algorithm, and Kosko reports that decoding equipment is in the works for "law enforcement and other government agencies that feel they need it." The Justice Department is busy evaluating proposals for the "key escrow agents" that are supposed to prevent the police and the FBI from listening in on conversations without a warrant. Some companies, however, are less concerned. They hope for enormous sales once privacy issues are resolved. AT&T, for example, announced its intention to sell Clipper-based telephone scramblers the same day that the chip was made public. "What the standard is," says spokesman David Arneke, "is less important than having a standard that all manufacturers can build to." - Paul Wallich