From: John Young <jya@pipeline.com>
Date: Thu, 20 Nov 1997 02:16:28 +0800
To: cypherpunks@toad.com
Subject: Rep. Smith on Lifting Crypto Export Ban
Message-ID: <1.5.4.32.19971119174610.00d4dfb8@pop.pipeline.com>
MIME-Version: 1.0
Content-Type: text/plain



[Congressional Record: November 13, 1997 (Extensions)]

                  ON LIFTING THE ENCRYPTION EXPORT BAN

                                 ______

                            HON. ADAM SMITH

                             of washington

                    in the house of representatives

                      Thursday, November 13, 1997

  Mr. ADAM SMITH of Washington. Mr. Speaker, I rise today to speak
about an issue that is very important to me--lifting unfair export
controls on encryption technology.

  Mr. Speaker, protecting our National Security interests is among my
highest priorities. If I thought controlling encryption exports worked
toward this end, I would be its strongest proponent. Unfortunately,
export controls on encryption software simply disadvantage the United
States software industry.

  Under current law the United States allows only 40 bit encryption
codes to be exported, although software companies sell encryption codes
of up to 128 bits everywhere in the United States. Forty bit encryption
technology is so elementary, it took a graduate student a mere 3\1/2\
hours to break a code last January. Fifty-six bit encryption is 65,000
times more difficult to decode than 10 bit encryption and it only took
students three months to break the encryption code. One hundred twenty
eight bit encryption has not been broken yet.

  Naturally, foreign companies do not want to buy 40 bit encryption
software, because it is so vulnerable and insecure. The possibilities
for ``computer hackers'' to break into the system and wreak havoc are
enormous and dangerous. Therefore, foreign companies are purchasing
high-level encryption from foreign software providers instead of
American ones.

  The international demand for encryption software is growing
exponentially because of the tremendous rise in electronic commerce.
For instance, German Economics Minister, Guenter Rexrodt, said, ``Users
can only protect themselves against having data manipulated, destroyed,
or spied on by strong encryption procedures * * *. That is why we have
to use all of our powers to promote such procedures instead of blocking
them.''

  Our export restraint has not kept the technology from proliferating.
It has merely allowed foreign producers of strong encryption technology
to fill the vacuum. In fact, American companies are partnering with
foreign firms to distribute their software--taking jobs and revenue
with them.

  American-owned Sun Computers has recently joined with a Russian
software company to avoid the U.S. export ban and sell to foreign
markets. Foreign companies can also purchase American-produced 40 bit
encryption technology and upgrade it in their own countries to 128 bit
encryption technology. This ``add-on'' industry is among the fastest
growing software industries in Europe today. Clearly, if someone wants
high-level encryption technology, he or she can easily obtain it.

  The ability to obtain both powerful and affordable encryption will
now become easier with recent developments in Canada. The Canadian
Government includes encryption software in decontrolling mass market
software under the Generic Software Note. This means any software sold
over-the-counter, by mail or on the phone may be exported without
limits. Entrust, a Canadian software company, is freely marketing and
selling internationally a 128 bit encryption program right now. It
sells for less than $50, and Entrust provides a version of the
encryption technology free on the Internet. Even our most steadfast
ally sees that export controls can no longer help stem the overwhelming
demand and spread of unbreakable encryption.

  Mr. Speaker, if the United States continues to impose these
restrictive export bans on its own companies, ``foreign competition
could emerge at a level significant enough to damage the present U.S.
world leadership'' in the software industry, according to the National
Research Council's blue-ribbon panel on encryption policy. If our
export ban continues, the United States will not be the worldwide
leader on encryption technology for long, and that would be a true risk
to our national security.

  I strongly oppose any unilateral sanctions or regulations that put
the United States at an unnecessary disadvantage. Our current export
ban on encryption software is a perfect example, and I intend to
continue the fight to change our policy and allow the United States to
compete in the global software market.

                          ____________________

Archived at:

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