The Key to Clipper Available to the World

The Clinton administration is pushing ahead with controversial plans to promote worldwide use of key-escrow encryption technology, saying it could win U.S. software and hardware companies billions of dollars in new contracts.

The claim that key-escrow technology can boost U.S. economic strength comes as administration officials bowed to pressure from vociferous opponents of the Clipper chip, which uses escrow (WT, July 14).

However, in a July 20 letter to Rep. Maria Cantwell, D-Wash., Vice President Al Gore said the administration would work with industry to develop an alternative, unclassified key-escrow encryption device for use in data communications.

However, Gore said the government plans to continue to promote widespread non-government use of the telephone-mounted Clipper chip, designed to scramble voice and low-speed data communications. The administration has no plans to make use of Clipper mandatory.

Administration officials have also begun to counterattack the critics of key-escrow technology. Officials have long argued the technology is vital to law enforcement, but claims it can greatly boost exports of U.S. computers and software are relatively new.

Key-escrow technology allows more than one government agency or approved non-government private group to hold portions of an electronic key to encryption devices. When criminal activity such as drug-running is suspected, government law-enforcement officials would seek judicial permission to combine the keys, allowing them to unlock scrambled conversations and data streams.

Skipjack, the encryption algorithm Clipper would have used, was designed by the National Security Agency of Fort Meade, Md., one of the government's most secret agencies and the overseer of U.S. information security. Skipjack data-scrambling software is hardwired into devices such as the phone-mounted Clipper and the Tessera computer-authentication card.

Software-driven key-escrow methods need no hardware, and so are cheaper than Skipjack devices, and also can be carefully examined to check for secret modifications that could divert private data.

Once key-escrow technology is accepted as an international standard by various countries such as the United Kingdom, U.S. leadership in key-escrow technology will boost international sales of American software and hardware by billions of dollars per year, said Mike Nelson, Gore's chief technology guru.

Several foreign governments have already expressed interest in it, he said. Nelson's claims were met with skepticism from analysts and industry officials, who argued that foreign countries and companies will be reluctant to use key-escrow technology backed by the secretive NSA, which among other activities, eavesdrops on electronic communications.

But even if key-escrow technology becomes popular internationally, foreign governments and companies will be suspicious of U.S.-developed key-escrow technology, and will develop their own versions of the technology, said Stuart Schwartzstein, an analyst at the Washington, D.C.-based Center for Strategic and International Studies.

"They are not interested in [encryption with] a Good Housekeeping Seal of Approval from the NSA," he said.

Other industry officials say the NSA has met with little success in its efforts to interest foreign governments in key-escrow technology. When NSA officials traveled to Europe to win support for key-escrow, "they got their hat handed to them," said one industry official.

Even if supported by foreign governments, key-escrow won't win a large market, said James Bidzos, president of RSA Data Security Inc. of Redwood City, Calif. RSA owns a widely used rival encryption system intended to defeat government monitoring.

"The U.S. will have the lead in the tiny, tiny key-escrow market," but foreign encryption companies will take the lead in non-escrow technology, Bidzos said.

But others were not so skeptical. Diane Smiroldo, a spokeswoman for the Washington, D.C.-based Business Software Alliance, a lobbying organization for 10 major U.S. software companies including Microsoft, Aldus and Novell, said the administration's key-escrow policy is workable.

She said Gore's July letter to Cantwell was "a positive resolution," adding that the industry group would cooperate during the next few months with the administration to work out a key-escrow policy that will enhance exports. n