From: Dave Banisar <banisar@washofc.cpsr.org>
Date: Sat, 26 Feb 94 09:59:01 PST
To: Cypherpunks List <cypherpunks@toad.com>
Subject: Clipper and the EU
Message-ID: <00541.2845108734.4007@washofc.cpsr.org>
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  Clipper and the EU
                                The Independent (UK)

                                February 25, 1994
                                             Page 16 


 Super-spooks seek to extend domain to data networks; US agency wants
ability to spy on new superhighways. 

by  Leonard Doyle

    In Roman times conquered peoples and slaves were forced to carry
tesserae or
identity chits and any Gaul or slave who refused to accept one was branded
or
maimed instead. Soon all users of computer networks may be singled out for
the
tessera treatment if the National Security Agency, America's super secret
military intelligence agency, has its way.

    The NSA, with a budget of $ 30bn ( pounds 20.5bn) a year, is responsible
for
intercepting foreign government communications and breaking the codes that
protect such transmissions. America's most exclusive spooks are worried that
advances in encryption technology are about to rob them of their ability to
conduct surveillance on a global scale.

    After nearly 50 years of electronic eavesdropping, the NSA is finding
that
some widely available codes are impossible to crack. The worry is that
hostile
governments, drug barons, terrorists and money launderers will have a field
day
using networks or information highways built and maintained by the US or,
for
that matter, the European Union.

    But here is the rub. Anyone who wants to use government-funded
information
highways in future may be forced to use the lacklustre encryption technology
provided by the intelligence agencies, complete with a backdoor access for
official eavesdropping.

    Simon Davies, of Privacy International, a consultancy, has no doubt this
will happen. ''A Wild West frontier - self-regulated by ethics and culture -
has
evolved in the computer communications business and now that the stakes are
getting higher, government is trying to muscle in.''

    It is widely predicted that by the end of the century about 50 per cent
of
world trade will be in services and that much of this will be carried out
via
computer- linked databases communicating across continents at the speed of
light. It is this lucrative trade which the NSA intends to protect and
oversee.
The Internet system has already been identified by the Clinton
Administration as
the basis of a new information superhighway. If that should happen,
organisations such as Computer Professionals for Social Responsibility and
the
Electronic Freedom Foundation fear that future access to the networks could
be
restricted to users of an encryption product developed by the NSA - which
ironically enough is called Tessera.
           
    The fear is that the freewheeling, anonymous access that hundreds of
thousands of individual network users enjoy at the electronic frontier may
end.
To the outrage of users in the US and elsewhere, the Administration recently
backed the NSA's plans to ensure that the agency will always be able to
intercept and decode messages sent over computer and telephone lines. The
privacy concerns are by no means confined to US computer users. Anyone who
has
every logged onto a bulletin board or computer service like Compuserve or
Internet could be affected.

    The Administration has played up the law and order side of the debate,
arguing that advanced encryption will be used by criminals and terrorists.
Al
Gore, the Vice- president, announcing the new policy at the beginning of
February, said: ''Our policy is designed to provide better encryption to
individuals and businesses, while ensuring that the needs of law enforcement
and
national security are met.''

    However many leading experts in cryptography, computer security and
privacy
in the US do not agree and said so in a letter to President Clinton last
month
asking him to withdraw the NSA's proposal. That appeal failed to avert the
decision to back the Tessera and since then a petition organised by Computer
Professionals for Social Responsibility has been signed by more than 1
million
people who have sent their complaints by electronic mail to the President.

    There is no parallel debate taking place in the European Union, but the
intelligence agencies here are just as busy trying to ensure that the
information highways of the future can be monitored. Jacques Delors,
president
of the EU Commission, sees data highways as being key to future
competitivity
and job creation. Before long individuals will be able to hook up to the
highway
for all sorts of transactions, from renting a movie to view at home to
swiping a
smartcard through a reader at the doctor's surgery to bring up an entire
medical
history.

    The real business will of course be conducted by service companies, from
banks to insurers to market traders. For these companies privacy and
security
are of growing concern, to which the NSA has responded with its relatively
cheap
encryption devices. But Tessera, which fits into the back of a computer,
will
also identify the user and has a special built-in ''trapdoor'' that will
allow
the NSA to eavesdrop on E-mail and other messages.

    Another cryptographic device known as the  Clipper Chip  can be used to
scramble telephone and fax communications while giving the security services
the
same ability to eavesdrop with the help of a special electronic key, held in
''escrow'' by the government agencies. Government agents will be able to
obtain
the ''keys'' upon presentation of what has been vaguely as ''legal
authorisation''.

    These ''keys'' will be held by two ''escrow agents'' and would enable
the
government to access the private voice transmissions. A similar device known
as
Capstone would be used for data sent via computer modem. The Administration
hopes its encryption devices will at some stage have to be universally used
by
US industry.

    However, the outpouring of vehement objections from the computer
industry,
telephone companies and privacy groups in the US may have shaken the
Administration and some computer professionals say that the NSA's encryption
technology has no chance of being accepted in the market place.

    Sharron Webb of the National Computer Security Organisation is one of
those
leading the fight against the spy agency's encroachment into the world of
computer communications. ''If the US government has a hand in setting up the
information superhighways here, they may require users to use Tessera to
participate, it is then only a matter of time before foreign users are
brought
on board as well.''

    Already the signs are that big business will knuckle under in the face
of
fierce pressure from the US Administration. The largest American telephone
company, AT&T, has agreed to buy the NSA's technology and to include it in
scrambling devices which sell for about $ 1,000 ( pounds 680) each. Other
companies are expected to follow suit, especially if they wish to maintain
their
lucrative contracts with the federal government.

    What remains unclear is how the EU and individual European governments
intend to react to the US moves. So far the US is looking only to American
companies and their overseas subsidiaries to use the new encryption
technology.
But sooner or later decisions will have to be made that affect European
users.
The smart money is on the EU adopting the Tessara philosophy, but with
different
electronic keys for each country's eavesdropping agencies.