An Executive Order signed by the President on November 15, 1996, claims to be the first step in relaxing current stringent restrictions on encryption technology. Data privacy advocates in Congress, as well as the non-profit and commercial sectors, however, disagree. They contend that the move is a unilateral action in furtherance of an ill-advised stance toward such technology.

Currently, software and hardware for the secure storage and transmission of data are regulated by the Department of State as a category of "munitions" and thus subject to export controls. This is due to their potential use against the United States by hostile governments, terrorists or other groups. The present regulations allow export of encryption technologies with decoding 'keys' of up to 40 bits. Keys are the codes used to 'unscramble' encrypted information. As the number of bits (binary ones or zeroes) in the key gets larger, the protection provided increases exponentially (at least against an intruder trying all possible keys in a "brute force" attack). In a report released earlier this year, seven of the most renowned cryptologists and computer security experts analyzed the effectiveness of varying length encryption methods against brute force attacks. They warned that systems with 40-bit key encryption "offer virtually no protection" because computers are now powerful enough to try all the possible keys in a relatively short time. See "Minimal Key Lengths for Symmetric Ciphers to Provide Adequate Commercial Security: A Report by an Ad Hoc Group of Cryptographers and Computer Scientists," Blaze, Diffie, Rivest, Schneier, Shimomura, Thompson and Wiener, January 1996.

The new order makes two changes in government regulation of encryption technology. These actions are the first steps in implementing the Administration's most recent plan on encryption announced October 1 by Vice President Gore. First, the Executive Order transfers responsibility for regulation and export of encryption products from the State Department to the Commerce Department. The Justice Department will review the Commerce Department's regulations to represent the interests of law enforcement, which has historically resisted the spread of encryption, fearing criminal abuse.

Second, the order appoints an ambassador-level Special Envoy for Cryptography. The Special Envoy, David L. Aaron, is currently the U.S. Permanent Representative to the Organization for Economic Cooperation and Development (OECD). Aaron is no stranger to security and anti-terrorism concerns, having served as Deputy National Security Advisor during the Carter administration.

The October 1 plan, dubbed "Clipper III" by its opponents, has drawn criticism on many fronts. These opponents include the Netscape Corporation, the non-profit Center for Democracy and Technology (CDT), RSA Data Security (one of the country's leading developers of data-scrambling software), and a bipartisan group of U.S. Senators and Representatives. RSA Data Security CEO Jim Bidzos was blunt in a recent New York Times article: "The government announcement is disastrous. We warned IBM [which developed the technology behind the new proposal] that the National Security Agency would try to twist their technology." They claim the new plan is fundamentally similar to the widely criticized Clipper proposals which date from the end of the Bush administration and the first Clinton administration.

The first Clipper proposals were known as "key escrow" encryption. The term denotes that the decoding 'keys' for the various encrypted messages would be held by one or more theoretically independent government or private entities. Ostensibly, the keys would be released to law enforcement agents only upon court order. The opponents of the Clipper plans generally advocate "strong encryption" in which encryption with any length key could be used without a third party holding the key. Opponents argued that key escrow would lead to a centralized record-keeping quagmire. Further, because the escrow agent would hold useable keys, they would be highly vulnerable to covert acquisition by secretive federal entities, or outright theft by outside actors. The Clinton Administration insisted that stronger encryption would not be allowed for export without key escrow techniques for U.S. law enforcement decoding access. This encountered vocal Congressional opposition from, among others, Senator Patrick J. Leahy (D-VT), resulting in an impasse and little subsequent progress toward more robust encryption.

Under the October 1 plan and the new Executive Order, encryption products using keys of up to 56 bits (such as the Data Encryption Standard (DES) which is in wide domestic use by banks and credit card networks) will be allowed for export over the next two years. Export of encryption products using longer keys continues to be prohibited. Export permission for 56-bit encryption products will only be given to vendors that provide and continue to update business plans for the development of "key recovery" encryption products within two years. The new "key recovery" encryption plan is an outgrowth of a technology demonstration by IBM but is similar to "key escrow" methods. The key recovery technique divides the decryption code into portions held by two or more escrow "trusted agents" designated by the user.

In the short term, the ad hoc cryptographers' group has said, "Even the U.S. Data Encryption Standard with 56-bit keys is increasingly inadequate" and recommended keys of at least 75 and preferably 90 bits. See "Minimal Key Lengths..," Blaze, et al., cited above. Moreover, makers of encryption products have been tending toward use of ever longer keys for their products. For example, the version of Netscape Navigator which is sold domestically in computer stores uses a 128-bit key (the version available for anonymous download uses an exportable 40-bit key), as does Sony's consumer oriented "WebTV," a set-top device for receiving email and browsing the internet via television. The State Department has accordingly classified both products as munitions.

Continuing his opposition to such key escrow proposals, Senator Leahy points out that the legal protections against civil rights violations resulting from abuse or theft of the keys are still in the early stages of development; on a basic level the technological proposals do not address this need. "No one is yet clear about who will be legally allowed to break into encrypted messages, and under what circumstances." A group of seventeen Republican and four other Democratic members of Congress also wrote Commerce Secretary Kantor opposing the plan. Said Leahy, objecting to the Administration's tactics in advancing the policy, "Taking unilateral steps will not resolve this issue, but instead could delay building the consensus we so urgently need. This issue simply cannot by resolved by Executive fiat."

©1996 Adam White Scoville. Published by permission of the copyright holder.

The Center for Democracy and Technology's Cryptography Page.

Senator Patrick J. Leahy.