San Jose Merc article on s/w industry crypto deal

[strat@uunet.uu.net (Bob Stratton)]

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  Software Industry to cut deal on Clipper


HIGH-TECH FIRMS WON'T OPPOSE DATA-SCRAMBLING CHIP 

  THEY'LL ACCEPT 'CLIPPER' PROPOSAL IF U.S. WILL EASE SOFTWARE EXPORT RULES.


By LEE GOMES 
Mercury News Staff Writer

With some privacy advocates crying foul, a group of prominent high-tech
companies is dropping its opposition to a controversial White House proposal
for a new data-scrambling chip in exchange for a relaxing of the federal
rules restricting the export of scrambling software.

The Digital Privacy and Security Group, a collection of computer companies
and related associations, said Monday that it could accept the
administration's ''Clipper'' chip proposal if the chip's adoption was
voluntary, and if other encryption software were available for sale,
especially overseas.

The White House Clipper proposal would establish a special computer chip
that would be used to scramble digital transmissions, including computer
data and next-generation telephone calls. But the scheme the chip would use
to encode the messages would be kept secret, and the government would have
the right to get a court order to break the code if it wanted to wiretap a
conversation.

As originally conceived by the administration, Clipper would be the only
advanced encryption technology that could be sold by U.S. firms overseas.

Many in the computer industry had opposed the Clipper proposal, both out of
privacy and civil rights concerns, but also because more advanced coding
software is available from private companies.

However, those private coding systems could not, most likely, be broken by
law enforcement or intelligence agencies, and both groups are supporters of
the Clipper proposal.

The switch on Clipper was contained in a letter to President Clinton and
marked what a spokeswoman for one of the groups labeled a ''compromise.''

The groups now say they can accept a voluntary form of Clipper as long as
the administration drops the regulations that prevent U.S. companies from
selling advanced encoding software overseas.

Encryption software is one of the few high-tech products whose foreign sale
is still tightly controlled. The ban originally was ordered for fear that
foreign governments could gain access to advanced U.S. coding software and
then use it to shield their communications from American intelligence
agents.

But the software industry argues that because encryption software identical
to the sort sold by American firms is now available from dozens of overseas
suppliers, the ban doesn't provide any additional security, but simply
prevents U.S. companies from making extra sales.

The ban runs counter to the Clinton administration's demonstrated
willingness to please its high-tech friends by relaxing export control rules
that no longer serve a national security purpose. Most in the software
industry say it survives because of strong support from the National
Security Agency.

However, on Monday, some Clipper critics charged that the industry was
sacrificing a privacy issue to gain a sales boost.

''The entire point of Clipper is wrong,'' said David Banisar of the Computer
Professionals for Social Responsibility, a mostly liberal policy group.
''The premise (of Clipper) is that they have the right to surveil and
nothing should get in the way of that right.''

Banisar said his group, along with such technical associations as the
Association for Computing Machinery and the Institute of Electrical and
Electronic Engineers, would continue to oppose Clipper because ''they are
principled enough not to cut any deals.''

But Bruce Heiman, a Washington attorney working with a group of major U.S.
software firms, said the free availability of alternate encryption software
would make the privacy concerns about Clipper irrelevant.

That's because, he said, individuals and companies could use the software to
encode their transmissions in a way that not even the Clipper chip could
understand.



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