Trying to find middle ground

NewsHour correspondent Tom Bearden talks with Micheal Vatis of the FBI and Deputy Defense Secretary John Hamre about the government's encryption policy.

The battle over privacy on the Internet versus the needs of law enforcement brought FBI Director Louis Freeh, Attorney General Janet Reno, Microsoft chief Bill Gates and other hi-tech CEOs together on June 9th. For two and a half years law enforcement and the computer industry have been at loggerheads over the issue of encryption, the technology that allows computer users to transmit scrambled data essentially protected from electronic eavesdropping.

Both sides said they hope the meeting in Washington will begin to bridge the gap between them.

"We had a very good sharing of concerns, government and industry," Senator Dianne Feinstein (D-CA), who helped organize the meeting, told reporters after the two-hour session. "I think everybody in the room wants to work cooperatively and we will be talking again in that regard."

Although participants sounded optimistic, analysts say the two sides still have fundamental issues to resolve before a compromise can be reached on how best to secure communications on the Internet.

"There's no serious possibility of an agreement being reached that would satisfy all sides of this," said David Banisar, an attorney for the Electronic Privacy Information Center. "There is no easy solution, no such thing as a win-win on this."

L0pht, a Boston-based hacker group, and Chris Berman of the Center for Democracy & Technology critize the governent's encryption policy in interviews with the NewsHour's Tom Bearden.

Encryption is the technology that allows two users to send information between them that cannot be intercepted by a third party. Stronger encryption makes it more difficult for hackers and would-be thieves to obtain information, such as credit card numbers, while it is being transferred over the Internet. Currently, the United States has banned the export of the higher-end encryption technologies unless the government can access a "key" that would decipher the data. The government has said they fear that the technology would be used by terrorists, hostile nations and international criminals to commit crimes in the U.S.

The debate heated up when President Clinton issued an Executive Order in November of 1996 establishing a ban on the export of strong encryption to other countries. Although the order curtailed the sale of encryption overseas, it took a hands-off approach in controlling encryption inside the U.S.

FBI Director Freeh: "The looming spectre of the widespread use of robust, virtually unbreakable encryption is one of the most difficult problems confronting law enforcement."

The FBI has urged the Clinton administration to keep the ban on encryption exports and to extend the government's ability to decipher encrypted messages sent within the U.S. as well. The bureau argues that it needs the same authority to electronically eavesdrop on e-mail and other computer communications that law enforcement currently has over telephone communications.

Stating that the "looming spectre of the widespread use of robust, virtually unbreakable encryption is one of the most difficult problems confronting law enforcement," FBI Director Louis Freeh has advocated a key escrow system in which a government-sanctioned third party would maintain "keys" to encrypted communications so that investigators could, with a court order, decipher and monitor communications.

Business and libertarians join to fight regulations.

While the FBI and the administration discuss tightening control of domestic encryption, libertarians and Silicon Valley are arguing that not only would extended control of encryption technology harms computer users, but they say current laws have already weakened U.S. security.

"I do know that the problem at the forefront of security and privacy in the cyberspace world is the deployment of strong security, and there the government is preventing it," Chris Berman of the Center for Democracy and Technology told NewsHour correspondent Tom Bearden.

But it is not simply think tanks and cyber-libertarians that are pushing the government to loosen it policy. Big business has also entered the fray. Two months ago, 28 trade associations and over 70 companies formed a new non-profit coalition, Americans for Computer Privacy [ACP], to fight any new regulations and repeal the export ban. The ACP has warned that maintaining current U.S. policy could cost 200,000 jobs in the next decade.

"The administration's restrictive export policy and proposed domestic encryption controls are bad for business -- potentially costing thousands of high-paying U.S. jobs and America's hi-tech lead in the global marketplace," said Gary Shapiro, president of the Consumer Electronics Manufacturers Association, a member of the ACP. "By proposing a flawed, 'big-brother' approach to encryption, the administration will threaten consumers' privacy and security, thus weakening their confidence in using new software and digital technologies."

View a summary of encryption legislation Congress is considering.

Meanwhile Congress is debating its own encryption regulations. Bills moving through the Senate and the House fall all along the spectrum between the FBI and the ACP. The debate there remains as uncertain as the possibility of compromise between Louis Freeh and Bill Gates. But until the federal policy is clarified, law enforcement will have to face more strongly encrypted communications and U.S. firms will continue to lose market share overseas.

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