House panel rejects encryption controls

September 24, 1997
Web posted at: 9:45 p.m. EDT (2145 GMT)

WASHINGTON (Reuter) -- The House Commerce Committee Wednesday rejected a far-reaching proposal requiring all data scrambling products to include a backdoor allowing government access to otherwise secure computer files and communications.

On a vote of 35-16, members of the panel voted against an amendment from Mike Oxley, Republican of Ohio, to impose such controls.

The vote followed several hours of heated debate and weeks of lobbying by the Federal Bureau of Investigation and other law enforcement agencies backing the Oxley amendment and high-tech companies and Internet and civil liberties groups opposing the plan.

The amendment came on a bill by Virginia Republican Bob Goodlatte to relax strict U.S. export controls on encryption products and prohibit mandatory back-door access for government agencies.

The Commerce Committee approved the Goodlatte bill after adding an amendment by Rick White, Republican of Washington, and Edward Markey, Democrat of Massachusetts. The White-Markey amendment proposes the establishment of a technology center to help law enforcement agencies deal with encrypted data they encounter in the course of their investigations.

Prospects for the legislation remain uncertain, with final action unlikely this year. Four other House committees have approved different versions of the bill and the Senate has its version of encryption legislation.

The House variations of the Goodlatte bill next go to the Rules Committee which will decide whether to send the proposal to the full House for a vote, and in what form.

Rules Committee Chairman Gerald Solomon, Republican of New York, said Tuesday he would not send the bill to the House floor unless it contained domestic restrictions on encryption like those in the Oxley amendment.

While the Commerce Committee did not approve such restrictions, the House Select Intelligence Committee attached similar controls to its version of the Goodlatte bill.

After the Commerce Committee vote, Goodlatte said he would try to craft a version of the bill that House leaders would agree to bring to the floor for a vote.

"We are certainly going to be working with the leadership and the Rules Committee to make sure everybody who has an opinion about this gets heard and that we design a bill that will have strong bipartisan support," he told reporters."

The New York Times:

September 25, 1997

House Panel Rejects FBI Plan on Encryption

By JERI CLAUSING

The House Commerce Committee put the brakes on a fast-moving plan to put the first-ever domestic controls on data scrambling technology, rejecting 35 to 16 an Federal Bureau of Investigation-backed proposal to require all American computers users to register the codes to their encrypted software.

The vote — after nearly four hours of emotional debate on the balance between constitutional rights and the need for tools to fight terrorists, pedophiles and drug cartels — was hailed as a victory by software and communications industry groups, civil libertarians, scientists and lawyers who have been scrambling over the past few weeks to reverse the FBI's momentum in gutting the Safety and Freedom Through Encryption act. Know as SAFE.

"Today's vote to preserve the intent of HR-695 [SAFE] is a huge victory for users of communication technology and reaffirms the Fourth Amendment's validity in the information age," said Robert Holleyman, president of the a href=#1>Business Software Alliance.

"Although our forefathers could not have envisioned the technological developments that we have witnessed, even in the last decade, they understood the critical, timeless need for privacy and security."

Jerry Berman, executive director of the Center for Democracy and Technology, said the bill essentially puts the bill in gridlock, but "we have bought time to make a convincing case. ... It's uphill, but we're not being steamrolled about this anymore."

Introduced by Representatives Bob Goodlatte, a Virginia Republican, and Zoe Lofgren, a California Democrat, SAFE was intended to ease current export controls on strong encryption and prohibit and key recovery systems, like a voluntary one that had been proposed by the Clinton administration.

But after an initial groundswell of support and after defeating law enforcement and the administration in the House Judiciary and International Relations Committees, the SAFE act lost ground to a full-court press by the FBI and the National Security Agency. In a series of classified briefings, President Clinton's top crime fighters convinced many House members that they must go even beyond the White House proposal. House members, after the briefings, repeatedly said that they believed the FBI plan was needed to protect the country from terrorists, drug cartels and child pornographers on the Internet.

That theme was echoed repeatedly in Wednesday's Commerce Committee hearing by Representative Michael Oxley, an Ohio Republican, and Thomas Manton, a New York Democrat, who pushed the FBI-backed amendment, which would have required all software sold in the United States after 1999 have a spare key giving law enforcement "immediate access."

"Law abiding citizens have no reason to fear this," Oxley said.

Two other House committees, National Security and Intelligence, backed the administration with amendments that would have strengthened export controls and required that law enforcement be able to, with the proper judicial approval, gain immediate access to all domestic encryption keys.

Though no specific infrastructure or system for keeping the keys was proposed, Edward A. Allen, section chief of the FBI's Engineering Research Facility, said on Wednesday that the system the FBI envisions would require that all individual computer users register their encryption keys with a third party, like a certificate authority. Large companies could keep their own keys, as long as they were readily accessible.

Civil rights groups and law professors around the country assailed such a plan as a clear violation of both First Amendment free speech rights and the Fourth Amendment protections against unlawful search and seizure.

The bill as adopted by the Commerce Committee is essentially the sixth version of the bill. In an attempt to address law enforcement concerns, the panel adopted an amendment by Representatives Edward J. Markey, a Massachusetts Democrat, and Rick White, a Washington Republican, that would establish a "NET Center" under the Department of Justice in which industry and law enforcement scientists would work together to help law enforcement authorities break encrypted codes used in crimes.

The amendment also would require a six-month study by the Department of Commerce's National Telecommunications Information Agency on the ramifications of mandatory key recovery and would double the criminal penalties for anyone who uses encryption to commit a felony.

Another amendment, by Representative W.J. Tauzin, a Louisiana Republican, would require that a five-member panel of government, industry and law enforcement be appointed to study the controversial encryption issues issue and make recommendations to Congress within 180 days after enactment of SAFE.

"This gives us a lot of new momentum," Goodlatte said of the changes to the bill, which still has to go through the House Rules Committee to get to a floor vote.

If the Rules Committee agrees to send the bill to the floor, it must first reconcile the various versions. And the Rules Committee chairman, Gerald H. Solomon, a New York Republican, in a letter to the Commerce Committee this week said he the bill would not move to the House floor without the Oxley amendment.

"I think it makes it clear that we have the opportunity now to go to the floor, to go to the Rules Committee and point out that this is a serious issue not only from the standpoint of the business, but as many of the members in there noted, having strong encryption helps to fight crime and we want the good guys to have it, If the bad guys are already going to have it through other means," Goodlatte said.

"Getting encryption in the hands of businesses and individuals in this country not only protects their privacy but also prevents crime of credit card theft, medical record theft ... keeps terrorists from breaking into the New York Stock Exchange."

Markey said he is convinced that continued debate will only help the SAFE bill.

"I could feel members swinging over towards the position that would offer Americans more privacy protections," he said. "And I think that is going to happen in every single public debate that is held on the issue. As a result we now have reached a new stage where the closed-door political strategizing has to be replaced by a public and honest discussion."

MSNBC:

Rebuffing the FBI, a House committee on Wednesday refused to approve a bill that would give police greater ability to unscramble encrypted computer files. On a vote of 16-35, the House Commerce Committee rejected an attempt to require U.S. software companies to make sure computer programs manufactured or imported into this country have the ability to be decrypted when required under court order.

THE COMMITTEE INSTEAD adopted milder language offering to help law enforcement break complicated computer codes through a new high-tech research center at the Department of Justice.

The Justice Department didn’t ask for such a center, and opponents pointed out that no funding for it has been discussed.

The electronics industry preferred that alternative. Otherwise, said American Electronics Association President William T. Archey, “American citizens and businesses will be the only ones with compromised encryption, leaving them more vulnerable to cybercrimes.”

The vote sets up a showdown over the controversial bill. House Rules Committee Chairman Gerald Solomon, R-N.Y., has pledged not to allow an encryption bill on the House floor without the unscrambling provisions that were rejected Wednesday.

It’s a complicated debate, as Congress struggles to protect the privacy of credit card numbers used in online commerce without making it impossible to catch increasingly sophisticated criminals who communicate via the Internet.

FBI Director Louis Freeh, Drug Enforcement Administrator Thomas Constantine and Treasury Undersecretary Raymond Kelly all unsuccessfully appealed to the committee to adopt language offered by Rep. Mike Oxley, R-Ohio.

Widespread availability of unbreakable encryption products “will ultimately devastate our ability to protect American citizens from violent criminals, international drug lords and prevent acts of terrorism directed at innocent Americans,” the three warned in a joint letter.

But Rep. Ed Markey, D-Mass., successfully argued that the law enforcement approach unnecessarily jeopardized the privacy of every computer user.

“The American people should not have to turn over the keys to their electronic security,” he said.