From: thad@hammerhead.com (Thaddeus J. Beier)
Date: Sun, 14 Jan 1996 00:48:43 +0800
To: cypherpunks@toad.com
Subject: Fwd: Scrambled software gets an OK
Message-ID: <199601131630.IAA20078@hammerhead.com>
MIME-Version: 1.0
Content-Type: text/plain



This was printed in the San Jose Mercury News this morning.  I'd have
just posted a pointer to it, except that it was in the "private" part of
their web pages...




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.
-- Thaddeus Beier                     thad@hammerhead.com
   Technology Development                   408) 286-3376
   Hammerhead Productions        http://www.got.net/~thad