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Computing

High-tech industry, FBI meet over encryption deadlock

GRAPHIC

Senator calls session 'a good first step'

June 9, 1998
Web posted at: 11:45 p.m. EDT (0345 GMT)

WASHINGTON (CNN) -- FBI Director Louis Freeh and Attorney General Janet Reno met Tuesday with high-tech industry executives, including Microsoft's Bill Gates, to talk about regulation of computer data-scrambling products.

The two-hour session came amid negotiations between the computer industry and the Clinton administration over encryption policy, and as Congress considers several bills aimed at relaxing strict U.S. export rules on the technology.

After the meeting, held in the office of Sen. Dianne Feinstein, D-California, industry and law enforcement participants filed out without speaking to reporters.

Although Feinstein declined to comment on the substance of Tuesday's discussions, she said "the seeds for possible approaches" to resolve the deadlock had been discussed.

"We had a very good sharing of concerns, government and industry," she said. "I think everybody in the room wants to work cooperatively and we will be talking again in that regard."

'A very good first step'

"I think this was a very good first step," added Sen. John Kyl, R-Arizona, a meeting participant who chairs a Senate panel studying the issue.

Bill Gates
Bill Gates  

After Tuesday's meeting, a White House official said that it would energize the administration's efforts to find a compromise.

"We recognize that such a solution must include further real relaxation of export controls," the official said. "The presence of industry leaders encourages us to redouble our efforts with industry with the goal of producing agreement by this fall."

In addition to Gates, industry leaders attending the meeting included Jim Barksdale, Netscape Communications Corp.'s chief executive officer; Timothy Price, MCI Communications Corp. president; Steve Case, president of America Online Inc.; Scott McNealy, CEO of Sun Microsystems Inc.; and Eric Schmidt, Novell Inc.'s chairman.

The FBI and the industry have been at odds for several years over proper regulation of encryption programs, which scramble information and render it unreadable without a password or software "key."

The debate

Industry officials argue that encryption has become an increasingly critical component of global commerce and communication over the Internet. They say strict U.S. export limits on encryption products allow companies outside the United States to grab more business.

The FBI, fearing the products will be used by criminals and terrorists to thwart surveillance efforts, favors strict controls on encryption sales abroad.

The agency has asked Congress to require all domestic products to include a feature allowing law enforcers to crack any coded message, insisting it needs the same ability to obtain a search warrant to monitor computer transmissions that it has to tap telephone lines.

The high-tech industry has allied with privacy advocates to fight any such system. Privacy experts fear police agencies could abuse traditional rights to private conversations if given keys to decode computer messages.

Corporate security experts have warned of extraordinary complexities and huge costs associated with a "key management" system that would allow access to encrypted material.

Failure to find a solution

U.S. lawmakers have repeatedly failed to find a solution to the deadlock.

Last year, Kyl called for a "balanced policy" while Feinstein has supported FBI efforts to impose domestic controls on encryption.

The Clinton administration has searched for a compromise, easing some export rules while promoting technical solutions to meet the needs of the FBI and other law enforcement agencies. But in April, Commerce Secretary William Daley conceded the administration had failed to implement its compromise plans.

Tuesday's meeting will be followed on Wednesday by a meeting organized by lawmakers who oppose domestic encryption controls. That meeting will include a broader array of executives and advocacy groups.

Reuters contributed to this report.

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