The New York Times, September 11, 1995, p. D7. Technology / Peter H. Lewis On The Net. Privacy for computers? Clinton sets the stage for a debate on data encryption. In terms of its ability to raise the nation's blood pressure, the debate over data encryption has not yet reached the same levels as gun control. But last week the Clinton Administration appeared to set the stage for an equally divisive debate over the degree to which businesses and individuals have the right to keep secrets when using telephones, computers and other forms of electronic communications. In two days of public hearings last week in Gaithersburg, Md., home of the National Institute of Standards and Technology, the Administration introduced its long-awaited proposals to relax restrictions on the export of cryptographic software. The Administration drew a line in the virtual sands of cyberspace, signaling that it is willing to permit Americans to put stronger cryptographic locks on their electronic data only if a spare key to those locks is made available on demand to law-enforcement agencies. There looms the conflict. Although the debate is about export controls the "export" issue is irrelevant in today's era of global electronic networks. Placing a common privacy program on an Internet computer in Austin, Tex., is effectively no different from sending a shrink-wrapped copy of the program to Moscow. The real issue is how much privacy the Government is willing to allow its own citizens, and the latest word from the Clinton Administration is that the right to electronic privacy, like the right to bear arms, is not absolute. Cryptography is the science of secret writing. In this digital era, it applies not just to notes, but also to telephone calls, money transfers, bank and credit card records, electronic mail, faxes and other computer files. The Clinton Administration's goal is to allow Americans to use the strongest possible cryptographic technology, while at the same time preserving the ability of law-enforcement agencies to perform court-authorized wiretaps as part of the effort to catch drug dealers, terrorists, child pornographers and other miscreants. In other words, it favors strong cryptography, but not too strong. The strength of cryptographic software is measured by the length of the software key necessary to encode and decode a message. The longer the key, the harder it is for an unauthorized user to decipher the message. In recent years, the Government has generally permitted Americans to export cryptographic software with key lengths up to 40 bits. Experts say that 40-bit keys are secure from casual snooping, but will fall quickly to a determined codebreaker. Last week, after more than a year of intense analysis, the Government introduced what it said was the best possible compromise. Under the new policy, companies can export encryption algorithms using 64-bit keys, which are much more secure, but only if spare keys are given to "escrow agents" who would make them available to lawenforcement agents under standard legal procedures, similar to legal wiretaps authorized by a judge. Otherwise, the 40-bit limit continues to apply. Such a "key escrow" scheme is anathema to many privacy advocates who fear Government abuses. The Government first proposed a key escrow system with its so-called Clipper Chip, a technology that failed to win acceptance even as a voluntary standard. The new scheme is somewhat more palatable than Clipper. Key escrow is still unpopular with American computer and software companies, which say it prevents them from competing against foreign companies that have no similar constraints, and with many multinational corporations, which say it prevents them from working with foreign companies that do not especially care for the idea of Uncle Sam holding the keys to their data banks. "If this was intended to be any sort of compromise, I don't think it achieved its end," said Whitfield Diffie, a Sun Microsystems enginePs who attended the meetings. "I didn't see anybody who was enthusiastic." Raymond G. Kammer, deputy director of N.l.S.T., suggested that the hearings last week were intended to elicit public comment, and that the Administration's final position on cryptographic policy were still under analysis. But the emergence of key escrow issues at the N.l.S.T. proceedings suggests that key escrow is emerging as a nonnegotiable demand by some factions of the Clinton Administration, especially the Justice Department and the Federal Bureau of Investigation, led by Louis Freeh. "If this fails," said a figure familiar with the Administration's thinking on the proposed change in cryptographic policy, "it's going to lead to a very divisive debate. And the irony, for libertarians who oppose key escrow, is that if it fails, I am convinced that Louis Freeh cannot be true to his job without proposing domestic controls on data encryption." "He's not going to give up without a fight, and neither is the Justice Department," said the figure, who spoke on the condition he not be identified. Others say they do not think the Clinton Administration has yet arrived at a concrete position, even after more than a year of study and debate. "I don't think it's a final offer," said John Gilmore, an engineer at Cygnus Support, a computer company in Mountain View, Calif. "It looks to me like a weak strawman, a first offer, a proposal to dance." The question is whether American citizens and businesses have the patience to wait for the music to start. And the issue may be moot, anyway because the Internet is no more controlled by the United States than is the United Nations. "The Internet Architecture Board has specifically decided to ignore export controls in designing the security infrastructure for the next generation of Internet protocols," Mr. Gilmore said. "The Internet of 1998 will provide automatic, secure, and fully private communication, without key escrow, internationally." In other words, the Internet community is already planning to jump over the new line in the sand drawn last week by the Administration. Cryptogrophy that is stronger than the Government's proposed system will be built into the Internet by a dozen countries, and American companies and individuals would be foolish not to use it. At that point, millions of Americans will come into direct conflict with Government policy, and the popular gun-control bumper sticker may be replaced by one that says "If cryptography is outlawed, only outlaws will have cryptography." [End]