PublishedFebruary 27, 1997


(Washington, D.C.) — Ed Black, President of the Computer & Communications Industry Association, today endorsed the “Promotion of On-Line Commerce in the Digital Era Act of 1997” or “Pro-CODE” bill introduced by Senators Conrad Burns (R-MT) and Senator Patrick Leahy (D-VT).

“This bill recognizes reality — the reality of the need to ease export restrictions on encryption products and the futility of mandatory key recovery,” Black stated. “Business in every sector, from telecommunications to autos and energy, to financial and agricultural, are coming to realize that their vital systems and information are in danger,” Black explained.

“By requiring key recovery, the Administration’s present policy will render the systems of all companies, large and small, more vulnerable to breaches of security. Any approach that deprives the private sector of the ability to act in self-defense against criminals seeking to steal their most sensitive information is suspect,” Black asserted. The Burns-Leahy “Pro-CODE” bill is an important step in addressing those issues.

“Let no one fool themselves into believing that the Administration’s policy will only affect exports of encryption products. Unless U.S. companies are willing to develop two lines of products, one for domestic sale and one for export, the restrictions will effectively restrict domestic use of security protection tools as well,” Black cautioned.

The Clinton Administration has recently offered a very modest relaxation of export controls on encryption products, but only in exchange for companies developing mandatory key recovery systems. This “choice” is inconsistent with the Administration’s promotion of the Internet as the communications infrastructure for the 21st century. The promise of the Internet rests in its utility as a commercial vehicle. However, unless those who would conduct commercial transactions over the Internet are comfortable that the confidentiality of their communications is protected, they will be reluctant to use it to conduct business.

CCIA advocates a solution which does not compromise the security and privacy concerns of business and individuals nor our national security interests. We support the recommendations of the National Research Council which endorsed sophisticated encryption technology and branded mandatory key recovery/escrow policies as premature and ill-advised.

“Through the legislative process and in consultation with the Administration, it is our industry’s intent to frame a policy solution which meets everyone’s needs,” Black said. “The Pro-CODE bill recognizes the global realities of digital data transfer and is one important vehicle for opening the dialogue between our industry and policymakers. A letter initiated by CCIA and signed by more than a dozen other associations, including the U.S. Chamber of Commerce, the National Association of Manufacturers, Business Software Alliance, and the National Retail Federation, indicates the depth of concern about the current encryption policy and the breadth of that policy’s impact on a variety of business interests.”

CCIA finds the current encryption policy to be riddled with problems:

• Key recovery should not be government driven, it needs to be market driven.

• Key recovery undermines the privacy and security of sensitive information.

• Key recovery enjoys no multilateral consensus. Even proponents of the Administration’s policy agree that it will not work absent international agreement.

• Key recovery is an expensive option, for which there is little or no existing market.

CCIA is an association of computer and communications industry firms, as represented by their chairmen, presidents, chief executive officers, chief operating officers and other senior executives. Small, medium and large in size, these companies represent a broad, cross-section of the industry, including equipment manufacturers, software developers, telecommunications and on-line service providers, re-sellers, systems integrators, third-party vendors and other related business ventures.

CCIA member companies employ over a half million workers and generate annual revenues of nearly 200 billion dollars.

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