---------- Forwarded message ---------- Date: Sat, 2 Nov 1996 15:59:04 -0500 (EST) From: v0!d <voidmstr@primenet.com> To: Multiple recipients of list <wwwac@echonyc.com> Subject: Sony/Philips has trouble exporting Web TV's (fwd)

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From Electronic Buyers' News:

October 28, 1996 Issue: 1030 Section: News

CODE LIMIT EXCEEDED

By Jack Robertson

Washington - New Internet-television systems from Sony Corp. and Philips Electronics Co. are technically munitions under U.S. export controls and cannot be shipped to the companies' worldwide sales networks, it was disclosed last week.

Sony officials said the company's TV set-top box designed by WebTV of Palo Alto, Calif., includes a state-of-the-art 128-bit code encryption system for electronic commerce. This far exceeds the 40-bit encryption code permissible for export under the U.S. Munitions Control List.

Philips also makes a WebTV set-top Internet box at its Magnavox TV plant in Knoxville, Tenn., and is similarly barred from shipping the unit to sales channels around the world.

Both global electronic giants face immediate competition in the emerging TV-Internet surfing market from other Japanese, South Korean, and European set-makers that don't face the U.S. encryption controls. They now join the U.S. computer industry, which has long protested that the outmoded encryption export curbs are causing them to forfeit overseas sales of PCs and workstations to foreign rivals.

President Clinton last month proposed lifting the level of encryption export controls from the present 40-bit code word to 56 bits, but only if a trap door is embedded in the cipher to allow law enforcement agencies to decode wiretapped messages. Clinton is expected shortly to sign an executive order putting the new control limits into effect.

The pending 56-bit-code threshold doesn't help the Sony or Philips Web-surfing TV systems - nor most U.S. computer companies that build systems with encryption exceeding even the new control limit. Both Netscape and Microsoft Web-browsing software includes 128-bit code encryption, surpassing export curbs.

Zenith Electronics Co., maker of a Web-surfing TV set, isn't concerned about the encryption controls, since it sells only in the U.S. market where the curbs don't apply.

Divicom Inc., based in Milpitas, Calif., must get an export license from the U.S. State Department for every exported cable TV front-end encoder, which includes 128-bit code word, according to Tom Lookabough, the company's sales manager. He said the license review process can take eight weeks or more, a troublesome delay that foreign competitors don't face.

Divicom and Scientific Atlanta both said their new digital TV set-top boxes include encryption that exceeds allowable export limits - but virtually all sales so far are in the U.S. market. As digital-box production ramps up, the companies would like to sell overseas, but run into the export control ban that puts them at a severe disadvantage against the foreign competitors aggressively entering the set-top market.

President Clinton's encryption export control changes include an industry-favored provision to take the category off the State Department's Munitions Control List and shift responsibility to the Commerce Department.

Dennis Wilen : WWW Design, Production and Consulting voidmstr's law: bandwidth expands to fit the waste available voidmstr@primenet.com http://www.primenet.com/~voidmstr 2385 Roscomare Road, Bel Air CA 90077 voice: 310-471-7849