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February 26, 1999

Lawmakers Renew Encryption Battle
By JERI CLAUSING Bio
 WASHINGTON - Backed by a new generation of House leaders, Representatives Bob Goodlatte and Zoe Lofgren on Thursday renewed their encryption fight with the White House by refiling legislation to lift the Clinton Administration's export controls on the data scrambling technology.

The bill, the Security and Freedom through Encryption Act (SAFE), was introduced with 205 sponsors, including the Republican Majority Leader, Dick Armey of Texas, the Democratic Whip, David E. Bonior of Michigan, and the new chairman of a key committee that kept the measure from moving to the floor for a vote last year.


The Encryption Debate:
Is It About Privacy or Security?

"All the stars are aligned. We are going to move this very quickly out of the House," said one of the bill's supporters, Representative Thomas A. Davis III, a Virginia Republican.

Much of the optimism about the increased chances for the bill revolve around the support from Representative David Dreier of California, who replaced Gerald Solomon, the retired New York Congressman, as chairman of the powerful Rules Committee, which determines what bills move to the floor.

Solomon was the main obstacle to the House bill in the last Congress, siding with law enforcement officials who fear unlimited exports will threaten national security by making encryption more accessible to terrorists and other criminals.

The new House Speaker, J. Dennis Hastert of Illinois, voted against the bill in committee last year, but the sponsors said they are optimistic of being able to work with him to get it out of the House this time around.

"This legislation I think now is about ready where we can move it forward," Armey said. "This has been I think a difficult juxtaposition, the interest of the Internet against national security. We will resolve that."

Goodlatte, a Virginia Republican, said he has also been working with Senate leaders, some of whom have also expressed concerns about national security. The new version of the bill would give the Clinton Administration the ability to control the exports of encryption to terrorist states or when national security was at stake.

But even if the bill makes it through the House and Senate, the biggest hurdle - the White House - remains.

"While we always welcome additions to the public discussions about encryption, the SAFE bill, as we understand it, continues to have the same problems it had last year," said William A. Reinsch, undersecretary of commerce, who as head of the Bureau of Export Administration carries out the Administration's encryption policies.

"Instead of the balanced approach between commerce, privacy, law enforcement and national security the President is seeking, this bill seeks to tilt the balance in favor of commerce and privacy. In doing so, we believe it would harm our national security and our ability to protect our citizens from drug dealers, terrorist and other criminals."

At issue is the software used to scramble data to keep computer communications like e-mail, credit card numbers and business records private as they move around the Internet.. Although there are no federal controls on the strength of encryption that can be used domestically, the Clinton Administration restricts the export of strong encryption overseas.

The Administration policy has been driven largely by Louis J. Freeh, the director of the Federal Bureau of Investigation , who wants to tie any easing of export controls to mandates for creation of a system that would ensure law enforcers access to the codes needed to unscramble suspect communications. Such a system, called key recovery, is necessary for fighting terrorists and drug cartels in the digital age, he insists.

But opponents of the efforts -- who include a diverse list of groups from the American Civil Liberties Union to the National Rifle Association - say such a policy would jeopardize not only the ability of American companies and consumers to protect their privacy, but also the ability of software developers to compete internationally with foreign company that have no such controls.

Because of the current export restrictions, U.S. companies lost one-third of the international market share for encryption technology last year, according to Lofgren, who represents California's Silicon Valley.

"Since strong encryption is widely available worldwide, efforts to control its spread through export controls will ultimately prove fruitless, benefiting no one but America's competitors," Lofgren said. "If we do not change our encryption policy, the cost could be as high as $60 billion a year and 200,000 jobs by 2000."

After negotiations with key business and privacy groups pushing for passage of the SAFE Act last year, the Administration did lift some of the restrictions on software for large companies. But SAFE Act supporters say those concessions don't go far enough.

"Foreign competition threatens America's leadership in this vital technology," said Jack Quinn, counsel for Americans for Computer Privacy, a coalition of high-tech companies and associations formed a year ago to push for reform of the Administration's encryption policies.

"Some opponents doubt the claim that strong high-quality encryption is truly available abroad. My concern is that by the time it becomes clear that foreign-made encryption is widely available, it will be too late to change our policy, and too late to preserve U.S. leadership in this critical arena."

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Jeri Clausing at jeri@nytimes.com welcomes your comments and suggestions.

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