This seems worth posting in full: ---------- The New York Times, August 14, 1995, pp. D1, D8. Rift Emerges Over Computer Data Secrecy Issue By John Markoff Some of biggest names in the computer industry sent separate letters to the White House last week in pre-emptive moves aimed at a proposed regulation originally intended to insure that law-enforcement officials have access to encoded telephone and computer communications. The proposal may be released as soon as this week. But as the Government's task force on the encryption issue prepared to disclose the closely held details of the proposal -- the latest version of a measure revealed more than three years ago but subsequently reconsidered in the face of industry opposition -- unexpected divisions emerged from the last-minute, scattershot lobbying. The splits are developing at a crucial moment, with the Government's interagency task force also apparently divided between those favoring maximum governmental access to communications and those who support a loosening of export restrictions. Most industry executives had hoped to present a united front in favor of the more liberal position -- a goal that now appears to be in jeopardy. The two major groups sending letters to Vice President Al Gore, the Administration's point man on technology issues, were a group of computer hardware manufacturers and a group of the largest makers of software. In a letter sent to the Vice President last Thursday, eight executives, including James Treybig, chairman of Tandem Computers Inc.; Gil F. Amelio, chairman of the National Semiconductor Corporation; Edward McCracken, chairman of Silicon Graphics Inc.; Eugene Shanks Jr. president of the Bankers Trust New York Corporation, which conducts international electronic commerce, and Stephen T. Walker, chairman of Trusted Information Systems, urged that the Government immediately establish a new standard to control the export of technology that is used to encode communications, so that outsiders cannot tap in. A day later, however, a group of software publishers, including William H. Gates, chairman of the Microsoft Corporation; Jim P. Manzi, president of the Lotus Development Corporation and a senior vice president of I.B.M., Robert Frankenberg, chairman of Novell Inc.; Mark B. Hoffman, chairman of Sybase Inc., and Carol Bartz, chairwoman of Autodesk Inc., wrote arguing that the possible restrictive regulations that may soon be offered by the Government would fail to remove the current obstacles that keep American companies from competing in lucrative international markets. Many off-the-shelf programs cannot be marketed abroad without alteration under current regulations. For example, before American publishers can sell the popular Lotus Notes program abroad, they must replace its encoding system with a weakened version so that foreign communications can be monitored by American intelligence agencies. These restrictions date to the 1970's when advanced computer technology was treated as the equivalent of military technology and subject to the same strict controls. The software publishers have been able to sell their highly effective communications encoding products in this country, while sales abroad, they contend, have been hurt. Their letter also said that although the Administration agreed last year to work with industry toward a compromise, "there has been only minimal consultation with the software industry with respect to basic questions." "We're worried the Government is about to announce the son of Clipper," said Robert W. Holleyman 2d, president of the Business Software Alliance, referring to the Government's original proposal for changing the standard. This proposal, released in April 1993, would have replaced the cold war-era restrictions with a coding standard that allowed sales of strong encryption programs, but would have given United States law-enforcement agencies access to all communications through a back door with a numerical key. "The Administration has been trying to resolve how to keep U.S. companies competitive, but there remain individuals in the Government who want to do anything they can to slow the proliferation of new encryption technologies," Mr. Holleyman said. In April 1992, the Administration proposed a hardware-based system for protecting the privacy of telephone calls and computer data transmissions. The standard, known as the Clipper Chip, included a special "backdoor" that would permit law-enforcement officials to listen to conversations and monitor data exchanges. The original Clipper system called for a two-part key for decoding scrambled conversations. The two parts of the key -- actually two large numbers -- were to be held by two independent Government agencies. Under the plan, when a law-enforcement agency had a warrant to listen to a conversation encoded by Clipper, it would obtain the keys from the separate agencies. By merging the keys, it could obtain a key that would unlock the coded conversation. The Clipper proposal met with angry opposition both from advocates for civil liberties, who argued it would undermine the right to privacy, and by high-technology executives who said Clipper would be unacceptable for foreign users who would not want their conversations to be readable by the United States Government. The announcement of the new proposal may be imminent. Two trade associations, the Software Publishers Association and the American Electronic Association, are planning a conference on cryptography policy for Friday. Several people familiar with Administration policy discussions said the Government had until recently remained divided and that the director of the Federal Bureau of Investigation, Louis J. Freeh, has been the most vocal advocate of placing strict limits on any use of unsanctioned encryption technology. After the bombing of the Federal building in Oklahoma City, the F.B.I., circulated a proposed antiterrorism bill on Capitol Hill that would have banned even the domestic use of coding software except for systems approved by the Government. [End]