Seeking Clipper/Telephone Cost Estimates

[hanson@hss.caltech.edu (Robin Hanson)]

I've been invited to revise my 3700 word article "Can Wiretaps Remain
Cost-Effective?" (which appeared in the CPSR Sourcebook on Cryptography,
July 1993) into a 2000 word Viewpoint article in CACM (the Communications
of the Association for Computing Machinery), to appear as soon as I'm ready.  

As a first year grad student, I haven't been keeping much track of
Clipper & Digital-Telephony stuff, and am now struggling to catch up.
If any cypherpunks could help, I'd be appreciative.

For example, my paper last year included the sentence 

  The current government contractor claims it will offer the wiretap chips
  for about $26 each in lots of 10,000 [2], over twice the $10 each a
  competing private developer claims it would charge [11] for a chip with
  comparable functionality, minus wiretap support.

as part of an attempt to estimate the direct costs imposed by the
"clipper" chip.  I recall seeing that they are now offering these
wiretap chips for $15 each, but can't seem to find the source for
that.  I'm also told the clipper chips are big VSLI chips, and too big
to fit into cellular phones which are the main current potential
market for encryption chips.  Can anyone offer more technically savvy
and up to date estimates of any of the added costs such wiretap chips
impose over other encryption chips?

The current Edwards/Leahy Digital Telephony Bill appears on the
surface to be a big step in the direction of this proposal from my paper:

  Regarding phone company support for wiretaps, it seems clear that if
  wiretaps are in fact cost-effective, there must be some price per wiretap
  so that police would be willing to pay for wiretaps, and phone companies
  would be willing to support them.  As long as the current law requiring
  police to pay phone company "expenses" is interpreted liberally enough, the
  market should provide wiretaps, if they are valuable.

But there are big differences in reality.  In this new bill,
1) the money to pay phone companies comes out of a different pot, so
police in the field can't really make tradeoffs between paying more
for wiretaps vs. more for other forms of investigation, and 
2) instead of a volentary transaction to ensure that costs are more
than benefits, "costs" reimbursed are estimated by some unclear legal 
process.

What do folks think of the following analogy?  We don't object to
police being able to pay willing informants, but we would certainly
object to requiring everyone to be an informant, even if we were paid
court-determined "costs" for our efforts.  Of better yet, consider
that we don't require companies that make guns, cars, or computers to
sell to the police at some court-determined "cost".

Robin Hanson  hanson@hss.caltech.edu
818-683-9153  2433 Oswego St., Pasadena, CA  91107   FAX: 818-405-9841
818-395-4093  Div. Hum. & Soc. Sci. 228-77 Caltech, Pasadena, CA 91125