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16 December 1998

Date: Wed, 16 Dec 1998 12:57:18 +0200 (EET)
From: Jukka E Isosaari <>
Subject: [ISN] Different Algorithms For Different Folks  (fwd)

---------- Forwarded message ----------
Date: Mon, 14 Dec 1998 19:48:39 -0700 (MST)
From: mea culpa <>
To: InfoSec News <>
Subject: [ISN] Different Algorithms For Different Folks 

Forwarded From:


Different Algorithms For Different Folks
14 Dec 1998, 4:27 PM CST
By Robert MacMillan, Newsbytes.

The acting chairman of the President's Export Council Subcommittee on
Encryption today told Newsbytes it soon plans to release recommendations
on lifting strong encryption technology export restrictions for online
commerce purposes. 

Chairman Stewart Baker, a partner at Washington, D.C., law firm Steptoe &
Johnson, said the encryption policies espoused by the Clinton
administration are somewhat confusing, because they are in a state of
flux. Encryption restrictions on online shopping and other types of
electronic commerce soon will grow weaker, he also said. 

"(The administration) announced that they were going to lighten up the
regulations for financial institutions almost a year ago," Baker said. "It
took them nine months to get the regulations out. They were issued just
before another announcement that they were going to lighten up on another
sector, in this case, online merchants." 

As the process for setting encryption policy currently stands, the
administration typically announces changes to the regulations that govern
the export of encryption technology. Those changes are then implemented
some time later. 

In the current setup, official White House policy currently allows private
communications and many non-business functions that span international
borders to be protected with nothing stronger than 56-bit algorithms. 

White House policy also enables protection for international banking,
healthcare and financial transactions with any level of encryption
strength, including 128 bits and above. 

Before last year, a "key escrow" policy with the Department of Commerce
was mandatory, Baker said. This meant the US government would hold a third
key it could use to unscramble highly encrypted communications if it had
sufficient cause. 

By the end of the month, the online commerce industry is expected to
receive the government's blessing to protect their international
transactions with 128-bit and stronger encryption. 

Encryption technology that protects online communications usually is
measured by the number of bits that are contained in the scrambling
algorithm used to protect the communication. The Clinton administration
limits the export of certain stronger types of encryption technology on
the advice of the National Security Agency and other law enforcement
groups, chiefly because of the terrorist threat they consider inherent in
unrestricted scrambling of private communications. 

Baker said that the recent signing of the Wassenaar Arrangement will
change almost nothing in the international encryption export scene for
online business and other industry sectors with the 128-bit blessing. 

"It's as close to irrelevant as you can get," Baker said, although he
added that for international consumers looking for strong encryption for
their personal communications, it will reduce their choices. 

Baker said the Wassenaar Arrangement was Undersecretary of Commerce David
Aaron's attempt, on behalf of the US government, to fill in some legal
loopholes that allowed countries outside the US to trade in strongly
encrypted personal communications software. 

Companies like Microsoft Corp. [NASDAQ:MSFT] had complained that their
inability to export strong encryption technology for personal use would
hurt their and the US software industry's competitive edge in the global

Under the Wassenaar terms, which were signed by 33 countries including the
UK, Germany and Japan, personal communication encryption technology is
restricted to 64 bits. 

The upcoming relaxation in online commerce crypto export controls should,
in spite of the tighter personal restrictions from Wassenaar, provide a
better incentive for the European Union and other countries and trade
groups to pursue electronic commerce opportunities with the US, Baker

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