The New York Times, March 4, 1996, p. D4. Compromise Bills Due on Data Encryption Industry Opponents and Civil Libertarians Are Lukewarm, at Best By John Markoff Legislation will be introduced in the House and the Senate tomorrow in an effort to break the deadlock between the computer industry and the Clinton Administration over the control and export of software and hardware used to scramble electronic data. So far, though, the proposed measures have received only cautious endorsement from industry executives, while civil-liberties and privacy groups say they are worried that the bills would enable the Government to decode scrambled transmissions. Senator Patrick J. Leahy, Democrat of Vermont, and Representative Bob Goodlatte, Republican of Virginia, plan to introduce similar bills that affirm the right of Americans to use any type of data-coding equipment without restriction and prohibit the mandatory use of special keys that would allow law-enforcement agencies to read scrambled data. Their bills would also make it a crime to use encryption technology in committing a crime and would permit the export of data-coding software and hardware if similar technology was available from a foreign supplier. Data-coding, or encryption, technology is based on mathematical formulas that rely on the immense computing challenge inherent in factoring large numbers. Until recently, such technology was largely used by military and intelligence organizations and by some corporations like banks. As electronic mail and commerce have become increasingly accessible, however, the technology has become more controversial. In April 1993, the Clinton Administration proposed a national data-encryption standard known as Clipper, based on a system that would have made it possible for law-enforcement agencies, if authorized by a court, to decode private voice and data communications. The Clipper initiative has been strongly opposed by industry executives and privacy advocates. They argue that reliable coding technology is essential for commerce and privacy protection on the Internet. They also say that strict export rules are increasingly hindering the ability of United States corporations to compete with foreign suppliers. The proposed legislation would ease some current restrictions on the exporting of data-coding systems, but civil libertarians still see areas of concern. "The bills relax export controls, which is clearly a step in the right direction," conceded Marc Rotenberg, director of the Electronic Privacy Information Center, a Washington research and policy organization. But the negatives, he said, were that the bills opened the door to Government access to private transactions "and criminalize the use of cryptography when it is used to perpetrate a crime." Industry officials said they expected the legislation to stir little enthusiasm from corporate users. "Corporate America is absolutely unwilling to give a third party control of their data," said Jim Bidzos, chief executive of RSA Data Security, a maker of encryption software based in Redwood City, Calif. [End]