House Panel Rejects FBI
Plan on Encryption

by Jerri Clausing...September 25, 1997

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 a 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, known 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 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 that the vote essentially threw the bill into gridlock, but added, "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 to prohibit 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 persuaded many House members that they must go even beyond the White House proposal. House members, after the briefings, repeatedly said they believed that the FBI plan was needed to protect the nation 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 would have 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 would also 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 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 believed that the bill would not move to the House floor without the Oxley amendment.

Goodlatte said: "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."

He added: "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 was convinced that continued debate would only help the SAFE bill.

"I could feel members swinging over towards the position that would offer Americans more privacy protections," Markey 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."

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