Fighting Over Computer Crime Law

Industry and cyberspace libertarians are rallying to oppose a new computer crime proposal that would restrict the distribution of software, money and encryption on the Internet

The congressional battle to bar porn on the Internet may be grabbing the headlines, but a new Senate crime proposal is grabbing the attention of the online industry and cyberspace proponents.

S. 974, the "Anti-Electronic Racketeering Act of 1995," sponsored by Sen. Charles Grassley, R-Iowa, "is a disaster," because it restricts the distribution and export of encryption technology, said Jerry Berman, director of the Washington-based Center for Democracy and Technology.

"This is a part of the [government's] strategy to restrict cryptography" and support the embattled Clipper chip, said David Banisar, a lawyer with the Washington-based Electronic Privacy Information Center.

"We have some problems" with it, said Bill Burrington, a lobbyist with America Online Inc., based in Vienna, Va. "It does not make sense. It does not mesh with reality," he said.

However, a packed Senate schedule and strong opposition cloud the future of the Grassley proposal. For example, the proposal's effort to bar the distribution of encryption software may be scaled back to mirror the existing government rules that bar the export of high-grade encryption, said a Senate staff member. The bill "is in its infancy," he said.

The proposed act would:

  • Bar the use of computers to transfer unlicensed software, even if the transfer is not performed for economic reasons.

  • Outlaw the distribution of encryption software via electronic networks "that the person distributing the software knows or reasonably should know, is accessible to foreign nationals and foreign governments," unless the software is fitted with a "universal decoding device" that can be used by the Department of Justice.

  • Ban the use of computers and encryption software to transmit or conceal the movement of money gained from racketeering activities.

  • Ease the seizure of computers suspected to contain incriminating evidence, even when the computers are used for federally protected publishing activities, and permit the use in court of electronic information intercepted by non-government officials.

Also, the bill allows U.S. law enforcement officials to treat any of these activities as U.S. crimes if any part of the activity is conducted on a U.S.-based portion of the computer network -- such as an Internet server in Washington.

The online industry's main concern is the proposal's effort to bar the transfer of pirated software. This measure is wanted by law enforcement officials and the software industry, because a federal court in Boston recently excused bulletin-board operators -- such as online providers -- from criminal penalties when pirated software is distributed through their network, providing it is not done for profit.

The government shouldn't try to penalize online companies because "we're merely a conduit.... We should not be included in that liability chain," said Burrington.

An alternative Justice Department proposal would criminalize free distribution of software when the value of the software exceeds a particular dollar threshold.

The Internet community is focused on the proposal's effort to bar the online distribution of encryption software that is used to hide data from eavesdroppers or from legal wiretaps. "It is an abomination," said Philip Dubois, a lawyer with his own firm, Philip L. Dubois PC, Boulder, Colo. The measure follows a 1991 episode when encryption software designed by Dubois' client -- encryption expert Phil Zimmermann -- was illegally distributed worldwide after it was posted on the Internet.

The Department of Justice is still considering whether to charge Zimmermann with violating laws barring export of encryption software, he said.

This export-related issue also involves industry, because major software and hardware firms want the government to promote international infotech sales by relaxing the encryption-export rules.


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