Technology Panel Rips US Export Policy 6/04/92

WASHINGTON, D.C., U.S.A., 1992 JUN 4 (NB) -- A panel of 
computer industry figures, speaking at the Computer Professionals 
for Social Responsibility (CPSR) Cryptography and Privacy Conference, 
severely criticized the current regulations of the Department of State 
that restrict the export of computer equipment and software containing 
cryptography.

The panel, moderated by Bob Rarog of Digital Equipment and 
composed of: Lee Stanton, GE Information Services; John Byrne, 
American Bankers Association; Karen Casser, Software Publishers 
Association (SPA); John Gilmore, Cygnus Support; and Addison 
Fischer, Fischer International, contended that the policy causes 
American firms to compete at a disadvantage in the world economy.

Rarog traced the history of government restriction, saying that, 
although the licensing is the responsibility of Department of State, 
the National Security Agency (NSA) reviews all requests. The NSA, 
he said, takes the position that the policy is required to protect 
United States security interests. Rarog also referred to a National 
Research Council Report that states that there is over control in this 
area and that the capability of developing encryption software is 
already present throughout the world.

Rarog said that the present policy puts his firm, Digital Equipment, 
at a disadvantage in not being able to provide the same level of security 
on systems distributed internationally that they do on domestic units. 
He said when our competitors in Europe offer a fully featured system 
with security features built-in, we are at a disadvantage. What happens 
now, at times, is that the customer buys the system from us and then 
goes someplace locally to add security features -- the same ones that 
a domestic firm in the United States could buy in the US."

Stanton agreed with Rarog's comments about a competitive 
disadvantage, saying: "Two major European bond trading firms have 
told us that they will be leaving our service because they regard our 
security as inadaquate. I agree with them and would certainly like to 
be able to meet their requirements but, under the existing rules, I 
cannot. Under the present circumstances, we are actually a threat to 
our clients because we cannot provide the proper safeguards against 
their data being read or altered. We must re-examine this policy."

Software Publishing's Casser said: "Export controls do not work; they 
are counter-productive to the interests of our industry. Software 
publishers are losing money because they cannot compete in other 
countries because of the absence of security features. Additionally, 
many companies are now producing two versions of their product: one 
with security features for domestic use and one, without, for export. 
This is wasteful and expensive."

Casser said that an amendment (H.R. 3489) offered by 
Representative Levine of California to the Export Administration Act 
would seemingly solve the problem as it seeks to move the 
responsibility for control of mass market software (including software 
with encryption capabilities) to the provisions of the Export 
Administration Act from the Arms Export Act. Casser said that she 
does not have much hope for its passage in the amended format 
because the President has threatened to veto the bill if the 
amendment is not removed.

Gilmore, a member of the board of the directors of the Electronic
Frontier Foundation (EFF), said: "My concern is of a civil liberties 
nature. The result of export controls is to deny privacy to United 
States citizens. It is not economically feasible for companies to build 
two products - 1 for domestic and 1 for abroad - so the companies do 
not produce software that guarantees privacy. What that means is 
that this technology is not available to ordinary citizens."

Gilmore continued: "Are these controls effective? Not really.We at 
EFF are trying to develop a Unix public domain program with DES -- 
we have applied to the Department of State and are currently in 
limbo. In the meantime, however, I have signed onto systems in 
Finland and France and have downloaded software that does the 
same thing -- I can download it but, under our regulations, I 
couldn't upload it even to the same systems. It doesn't seem to 
make much sense."

Gilmore later told Newsbytes that EFF is in the process of 
attempting to discuss these concerns directly with the NSA.

(Barbara E. McMullen & John F. McMullen/Press Contact:David Banisar, 
Computer Professionals For Social Responsibility, 202-544-9240 (voice); 
banisar@washofc.cpsr.org (e-mail)/19920604)