From: jya@pipeline.com (John Young)
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UTC Datetime: 1996-06-04 15:50:35 UTC
Raw Date: Tue, 4 Jun 1996 23:50:35 +0800
From: jya@pipeline.com (John Young)
Date: Tue, 4 Jun 1996 23:50:35 +0800
To: cypherpunks@toad.com
Subject: NYT on NTT/RSA Chips
Message-ID: <199606041054.KAA14598@pipe2.t2.usa.pipeline.com>
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Connecting Declan's three dots [...]:
The New York Times, June 4, 1996, pp. D1, D4.
Japanese Chips May Scramble U.S. Export Ban
By John Markoff
Washington, June 3 -- The Nippon Telegraph and Telephone
Corporation has quietly begun selling a powerful data-
scrambling chip set that is likely to undermine the Clinton
Administration's efforts to restrict the export of the
fundamental technology for protecting secrets and commerce
in the information age.
The existence of the two-chip set, which will have broad
potential application for local computer networks, the
Internet and telephone switching networks, was disclosed
here in a speech today at a public policy workshop by the
chief executive of RSA Data Security, a Silicon
Valley-based company that has frequently dueled with the
Administration over its export-control policies.
The executive, Jim Bidzos, said that his company was
negotiating with N.T.T., the giant telecommunications
concern, to resell the chips in the United States. Mr.
Bidzos also said that N.T.T. had already made sales in 15
countries, including in the United States to I.B.M.
"N.T.T. has done a lot of research and development work on
this product" he said. "There is clearly going to be a lot
of demand for their chips."
An executive at NTT America said that although there were
no restrictions on the export of cryptographic hardware or
software from Japan, his company was still anxious to
obtain software from RSA Data to use in its chips. That
software is still controlled by United States export law,
he said.
"We'd like to use this technology," said Junichi Kishigami,
director of NTT America, which is based in Mountain View,
Calif. "It is important to employ good international
standards."
Mr. Bidzos has been a vocal and longtime opponent of United
States export laws that prohibit the sale, without a
special license, of products that have powerful
data-scrambling capabilities. The Government's policy is
directed at limiting the spread of systems that could make
it more difficult for American intelligence and
law-enforcement agencies to conduct electronic
surveillance.
Such restrictions have been bitterly opposed in recent
years by American computer and telecommunications
companies; they have argued that the technology is already
widely available internationally and that manufacturers and
software developers in the United States are in danger of
losing markets to foreign competitors. The N.T.T.
technology would seem to support those contentions.
"The United States export controls are at risk from
Japanese competition," said Stewart Baker, a Washington
lawyer who is the former general counsel for the National
Security Agency.
The N.T.T. device also underscores fundamental differences
that exist between Japan and the United States on the issue
of privacy in the information age.
While United States officials have struggled to maintain
their ability to conduct electronic surveillance, Article
21 of Japan's Constitution specifically forbids
wiretapping.
"It's very interesting that the Japanese regard for privacy
in their Constitution translates into better cryptographic
technology," said Marc Rotenberg, director of the
Electronic Privacy Information Center, a Washington public
policy group and an organizer of today's workshop on data
scrambling.
Mr. Bidzos said that N.T.T.'s chips, which have been
developed and manufactured by a subsidiary, N.T.T.
Electronic Labs, were far more powerful than the so-called
Clipper chip, a data-scrambling system that the Clinton
Administration proposed for the nation's telephone system.
While the Clipper system has a built-in "back door"
intended to permit the F.B.I. to gain wiretap information,
the N.T.T. system has no such surveillance feature, It also
uses much stronger data-encryption algorithms than United
States export laws permit.
Those laws restrict the export of encryption systems which
employ digital "keys" of more than 40 bits in length. The
new N.T.T chips, however, are based on the United States
data encryption standard, which has a 56-bit key, and
actually triples the strength of that standard. Such a
scrambling system is believed to be beyond the capability
of the most powerful code-breaking system.
In addition to the "private" key system for scrambling
data, N.T.T. uses RSA Data's "public" key method to permit
computer users who have not previously exchanged
information to swap-private key information safely. The
N.T.T. system uses the RSA Data key, which is 1,024 bits in
length, also far stronger than the United States export
regulations permit.
"If there is anyone in the Government who hasn't already
seen the writing on the wall, here it is," Mr. Bidzos said.
He said that RSA Data had set up a small subsidiary in
Japan last year and that he was now negotiating with N.T.T.
to make a minority investment in that subsidiary in
exchange for N.T.T.'s gaining access to the RSA Data public
key technology.
The N.T.T. technology is at least partly the result of an
initiative by Japan's Ministry of International Trade and
Industry, which 18 months ago made a $120 million national
commitment to develop products to facilitate electronic
commerce.
"This is a major business opportunity that the Japanese see
clearly," said Deborah Hurley, an official at the
Organization for Economic Cooperation and Development, the
Paris-based international group.
RSA Data was acquired in April by Security Dynamics
Technologies Inc., a computer security company based in
Cambridge, Mass., in a stock deal valued at $250 million.
Mr. Bidzos said that the two companies had continued to
operate relatively independently.
[End]
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1996-06-04 (Tue, 4 Jun 1996 23:50:35 +0800) - NYT on NTT/RSA Chips - jya@pipeline.com (John Young)