Encryption Bills Arrive in Congress

Industry must lobby hard to overcome likely opposition to new encryption deregulation bills

P> The encryption controversy lurches forward again, following the introduction in Congress of industry-backed bills to remove government controls on data-scrambling technology.

The bills are sponsored by Sen. Conrad Burns, R-Mont., who chairs the Senate Commerce Committee's subcommittee on Science, Technology and Space, and Rep. Robert Goodlatte, R-Va. The bills also have support from other members of Congress, including Sen. Patrick Leahy, D-Vt.

But the bills must pass opposition from officials in the White House, the FBI and the Fort Meade, Md.-based National Security Agency. They argue that the government must control the encryption market to prevent criminals, terrorists and tax evaders from hiding their electronic activities behind impossible-to-crack, data-scrambling technology.

Also, the bills must win support in the judiciary committees, which will try to protect law enforcement efforts, and the intelligence committees, which may try to restrict the export of encryption technology that could hinder the NSA's electronic eavesdropping efforts.

For example, the Senate's judiciary committee is chaired by Sen. Arlen Specter, R-Pa., who also chairs the Senate Select Committee on Intelligence that oversees the NSA's electronic eavesdropping efforts. "We'll see where the ball goes when it is introduced.... It is a very complex matter, and it will require careful scrutiny," said a Senate Judiciary Committee staff member. In contrast, a staff member working to pass Burns' encryption decontrol measure said, "We are looking at this as a commerce issue."

The bills would bar the government from requiring companies to share encryption keys during court-ordered wiretaps, lift restrictions on the overseas use by Americans of advanced encryption products, and lift export controls on encryption products when comparable products are available from foreign competitors.

Also supporting the bill are industry groups such as the Washington-based Business Software Alliance, which includes Microsoft Corp., Redmond, Wash., and Lotus Development Corp., Cambridge, Mass. Industry officials said stringent controls on the export of advanced encryption technology hinder their ability to compete on the international market.

The controls have slowed the worldwide spread of encryption technology, but have not prevented the development of more than 500 foreign software products that include encryption technology, say industry officials. "This legislation will level the playing field for U.S. [infotech] manufacturers, enabling American software companies to compete with foreign producers," according to a statement by Robert Holleyman, BSA president.

The government is not remaining passive. It has granted at least two companies -- Lotus and Trusted Information Systems Inc., Glenwood, Md., -- licenses to export improved data-scrambling technology in return for technical provisions that help the FBI wiretap criminals using the companies' software. The government plans to ease future wiretaps by giving the phone companies $500 million to modify their new digital phone networks.

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