Re: Clinton Admin. to announce new Crypto regs

[Will Rodger <rodger@worldnet.att.net>]

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At 10:39 PM 5/8/97 +0000, Rick Smith wrote:
>These "new" regulations "to be issued" are scrambling to catch up with
>previous and current practices. It doesn't change things at all.

I disagree. Here's why:

New regs unquestionably do change things for US banks. Right now banks may export nothing stronger than unescrowed DES. Period. So - what do they use the dirt-cheap, insecure Internet for? Nothing terribly important outside the US. One banker from JP Morgan told me yesterday that this was big news for them since they would soon move tons of stuff onto the Net. JPM, you'll recall, does business with huge, multinational institutions. They don't do retail banking. They aren't interested in small deals.

What do you suppose JP Morgan's bill for proprietary network use is each year? How much will they save by moving to the Internet?

It's worth noting, too, that banks and consumer software companies will soon export things like PC banking software with minimal delay.

>This announcement is simply a public acknowledgment that the BXA will look
>favorably on export requests to banks and that someday they'll try to draft
>specific regulations on the subject. Meanwhile you do it by grinding
>through the bureacracy.

It goes beyond banks. It affects any company that writes financial software for use with the banking infrastructire, including companies like CyberCash and Intuit.

Consider this: Last time Cybercash got approval to export it took them 15 months - count 'em - to get approval. OpenMarket had a similar wait. Regs like those may as well prohibit export. Now DOC says similar deals should be routine and take weeks to complete. Regs are supposed to appear soon - within the month, according to Reinsch's deputy. That's a significant change.

Will Rodger
Washington Bureau Chief
Inter@ctive Week
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