Article from Knight/Ridder Wire

[matt@oc.com (Matthew Lyle)]

I hadn't seen this article fly by yet, so...


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New Scrambler Designed to Protect Privacy, But Allow Police Monitoring By
Christopher Drew, Chicago Tribune 
Knight-Ridder/Tribune Business News 

WASHINGTON--Apr. 19--As a step toward the development of vast new data
"superhighways," the federal government has designed a powerful device that
would protect the privacy of electronic communications by encoding them but
still allow police to eavesdrop. 

Critics say the project, announced Friday by the Clinton administration,
raises serious questions about the protection of civil liberties as more
people use cellular and cordless phones and computer-based communications. 

They also warned that the device is not likely to help law-enforcement
agents foil high-tech criminals unless it becomes the most widely used
commercial encryption system - and drives private competitors out of the
business. 

"'A.k.a. Big Brother,' that's what I call it," said Stephen Bryen, a former
Pentagon official who runs a company developing a rival encryption system. 

Bryen said it was "very disturbing" that the government has gone so far
with the previously classified project "without consulting with experts in
the industry" whose investments could be wiped out. 

One high-ranking federal official, Raymond Kammer, acknowledged that such
concerns are part of an "appropriate debate" that needs to be held over the
project. 

"Maybe it turns out that society, as it debates this, finds it
unacceptable," said Kammer, acting director of the National Institute for
Standards and Technology. "I'm not sure. This is the start of that debate."


Millions of people who exchange information via computers and make calls
from cordless and cellular phones, which are especially vulnerable to
interception, could be affected. Experts say an era is dawning in which
traveling executives exchange electronic memos and negotiate sensitive
deals via hand-held communicators using vulnerable wireless transmitters. 

In endorsing the plan, the White House described it Friday as an outgrowth
of federal efforts to capitalize on advances in telephone and computer
technology while preventing drug dealers and terrorists from finding new
ways to mask their misdeeds. 

In last year's campaign, President Clinton pledged to invest billions of
dollars in faster and more secure data links to enhance the standing of
U.S. firms in the global economy. 

But as the computer industry has developed systems to enable businesses to
scramble data transfers and telephone conversations as a safeguard against
industrial espionage, a growing number of criminals also have begun using
them to foil court-authorized wiretaps. 

Under the new plan, engineers at the National Security Agency invented a
new coding device, called the "Clipper Chip," which is said to be much
harder to crack than encoding systems now on the market. 

The government licensed two California companies - Mykotronx and VLSI
Technology - to make the computer chips. The chips will form the "brains"
inside small scrambling devices that can be attached to individual
telephones. 

To spur the venture, the Justice Department will soon purchase several
thousand of the devices. Military and spy agencies also are expected to use
them. 

Private businesses would not be required to use the technology. But federal
officials hope their sponsorship will establish the Clipper chips as the
new industry standard and crowd out competing systems. 

Indeed, AT&T announced Friday that it will use the new chips in a desktop
device for encrypting telephone conversations that it expects to sell for
$1,195. 

But in return for gaining the extra encoding power built into the new
system, users would have to accept the fact that government code-breakers
would always hold the keys to tap into the information. 

In an effort to prevent abuses of civil liberties, federal officials said, 

they will set up a system in which they would have to match two coding keys
held by different officials to unscramble any communications.
National-security and law-enforcement officials could bring the keys
together only under court- authorized operations. 

But Bryen said it is hard to see how the Clipper chips project will provide
much help to the FBI. Even if the new coding devices drove others off the
U.S. market, Bryen said, sophisticated criminals would simply buy encoding
devices overseas, as many already do. 

Multinational and foreign-based companies also could prove leery of a
system that has a built-in point of entry for U.S. authorities. 

The FBI separately is seeking legislation that would force telephone
companies to modify their equipment to keep other advances in technology
from hampering its ability to perform wiretaps. AT&T and other phone
companies have opposed this idea.  END!B&?TB-SCRAMBLER 



Transmitted:  93-04-18 23:12:00 EDT