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type: NYT (Copyright 1994 The New York Times)
priority: Urgent
date: 07-20-94 2114EDT
category: Financial
title: ADMINISTRATION REVERSES ITSLEF ON WIRETAPPING TECHNOLOGY
author:  JOHN MARKOFF
text: 

       In an abrupt and significant reversal, the Clinton
administration indicated Wednesday that it was willing to consider
alternatives to its Clipper chip wiretapping technology, which has
been widely criticized by industry executives and privacy-rights
groups.
       In a letter Wednesday to a congressional opponent of the
technology, Vice President Al Gore said that the administration was
willing to explore industry alternatives to Clipper, a system
designed in secrecy by National Security Agency scientists.
       Intended as a way to let people scramble their electronic
conversations -- but retain law-enforcement agencies' ability to
conduct court-authorized wiretaps -- the Clipper chip was introduced
by the administration in April 1993 as the government's preferred
method for communicating in secret code in the era of computerized
digital electronics. Such coded communications use hardware and
software known as encryption technology.
       Critics have said that because Clipper is classified, there is
no way to verify whether the nation's intelligence agencies have
embedded a secret electronic ``backdoor'' in the Clipper design
that might allow for unauthorized government spying.
       And software and computer industry executives have worried that
the government would use its Clipper preference as a way to block
exports of hardware and software products using other commercially
available -- and more popular -- encryption methods.
       But Gore's letter is the apparent result of a compromise with
Rep. Maria Cantwell, D-Wash., who recently introduced legislation
that would have significantly relaxed controls on the export of
encryption software.
       Ms. Cantwell said she welcomed the vice president's willingness
to compromise. ``I view this as going down a new path, with a new
set of criteria,'' she said Wednesday. ``This has been driven by
private industry and privacy groups.''
       A number of people in the computer industry and in
privacy-rights groups who had read Gore's letter to Ms. Cantwell
said that it indicated that the Clipper chip plan might now be
abandoned -- at least for anything beyond basic telephone calls.
       As for computer communications and video networks, Gore's letter
said, ``we are working with industry to investigate other
technologies for those applications.''
       
       (STORY CAN END HERE. OPTIONAL MATERIAL FOLLOWS)
       
       Some industry executives hailed the news.
       ``I think this is great,'' said Nathan Myhrvold, vice president
for advanced technology at Microsoft Corp., the nation's largest
software publisher. ``Maria Cantwell has gone head-to-head with the
powers-that-be and they blinked. The Clipper chip is dead at least
for any kind of data stuff.''
       Microsoft has been one of a wide range of U.S. high technology
companies that have been fighting the administration over the
Clipper chip and export control policies. Software publishers have
argued that stiff controls on the export of coding software hamper
them in international competition.
       Still, while the administration is now willing to compromise on
its original proposal that became a de facto national standard, it
is not ready to compromise on a principal Clipper feature, known as
key escrow.
       The original Clipper system called for a two-part key for
decoding scrambled conversations. These two parts of the key --
actually two large numbers -- are to be held by two independent
government agencies.
       Under the plan, when a law enforcement agency had a legally
obtained warrant to listen to a conversation that had been coded by
Clipper, it would obtain the keys from the separate agencies. By
merging the keys, it could obtain a key that would successfully
unlock the coded conversation.
       Gore's letter said that any industry-proposed alternative to
Clipper accepted by the administration would need to have a
key-escrow component. But the escrow agents need not be government
agencies -- a proviso of the Clipper system that had raised concerns
over excessive government intrusion and made it seem unlikely that
foreign customers would want to buy Clipper-based communications
products.
       Other concessions by the administration include a willingness to
consider an encryption system based on nonclassified mathematical
formulas that would be subject to testing and evaluation by
industry experts. The administration is also willing to let
products containing this encryption system be eligible for export.
       The government's National Institute for Standards and Technology
recently licensed such a system from a computer scientist at the
Massachusetts Institute of Technology. It could become the basis
for a Clipper replacement.
       Not all Clipper critics were ready to endorse the new plan. Marc
Rotenberg, director of the Electronic Privacy Information Center in
Washington, said the vice president's letter was a step in the
right direction but still did not resolve a critical concern.
       ``We cannot accept the key-escrow requirement,'' Rotenberg said.
``This will undermine the security of the encrypted messages. The
privacy risks are enormous.''
       But administration officials portrayed the reversal as a fresh
start that indicated their willingness to work with industry and
privacy groups to build a consensus.
       ``This is a clarification of our goals and our willingness to
work with industry,'' said Greg Simon, chief domestic policy
adviser to the vice president. ``There has been a lot of static on
the line between industry and the administration.''