From: Corey Bridges <corey@netscape.com>
Date: Mon, 15 Jan 96 11:07:00 PST
To: cypherpunks@toad.com
Subject: Commerce Dept Recommends Strong Crypto Export
Message-ID: <199601151906.LAA19362@urchin.netscape.com>
MIME-Version: 1.0
Content-Type: text/plain


Well. Now that the government itself is taking up the charge, I'm sure we
can expect a speedy resolution. 

Yeah, right.


             ***

 Scrambled software gets an OK
 
 -- Exports: Foreign encoding unfair to U.S. firms, Commerce Department
 says.
 
 Bloomberg Business News
 
 WASHINGTON -- The Commerce Department will recommend easing export
 controls on encryption software after a study by the department and
 the National Security Agency found the restrictions are hurting U.S.
 firms, Commerce Secretary Ron Brown said.
 
 Such a move may pit Brown's department against U.S. defense and spy
 agencies, however, setting the stage for a White House battle over one
 of the last computer technologies still covered by export controls.
 
 ``I'm interested in promoting American exports,'' Brown said.
 
 ``If your foreign competitors are exporting products with encryption
 capability and you are not, that puts you at a tremendous competitive
 disadvantage,'' he said.
 
 Encryption software turns information, such as files and credit card
 numbers, into indecipherable material that can be sent across networks
 without fear of tampering to the recipient, who can then unscramble
 it. Under current U.S. law, encryption technology that exceeds certain
 technical thresholds is considered a ``munition.'' Those who would
 export such technology need explicit permission from the government.
 
 The United States justifies the export restrictions by saying
 law-enforcement agencies would be hamstrung in their efforts to stop
 terrorists, spies and criminals without them.
 
 The computer industry counters that encryption software is available
 from other countries, and the restrictions simply rob U.S. companies
 of business.
 
 The Computer Systems Policy Project, a joint effort of 13 top
 technology companies released its own study showing that U.S.
 companies will lose as much as 30 percent of the $200 billion in U.S.
 computer system sales expected in 2000 because of federal laws
 limiting exports of encryption products.
 
 Brown said his department will prepare recommendations for easing
 those controls that should be forwarded to the president ``within a
 few months.''
 
 It's unclear if the NSA endorsed the Commerce Department's conclusions
 in the report it jointly prepared. Representatives of the NSA were
 unavailable for comment.
 
 Brown's assertion comes a day after federal prosecutors dropped a
 three-year investigation of Boulder, Colo., software designer Philip
 Zimmermann, whose encryption program called Pretty Good Privacy was
 posted on the Internet, the worldwide computer network.
 
 Published 1/13/96 in the San Jose Mercury News. Reprinted digitally here
 without permission, and probably illegally.

Corey Bridges
Security Documentation
Netscape Communications Corporation
home.netscape.com/people/corey
415-528-2978