It is, however, no longer just armies, criminals and terrorists who would like to be able to talk to one another in secret. Without cryptography, international bankers would have to return to paper notes in satchels for confidential money transfers. Industries from cellular phone services to cable television use encryption to ensure correspondents' privacy and to authenticate the identities of trading parties. And America's software makers say they are being hurt by the prohibition on selling this technology abroad-even though similar technology is readily available overseas.
The clash of interests will soon be tested in the courts. Daniel Bernstein , a student at the University of California, says the exporting licensing system is unconstitutional. In 1992 he wanted to put his cryptographic program, "Snuffle", on to the internet computer network, from where it could've been copied by people all over the world. But the State Department told him that he would first need a munitions export license. he has not been able to obtain one. Aided by the Electronic Frontier Foundation, a computer-network pressure group, Mr. Bernstein contends that the export law violates his right of free speech. Mr. Bernstein is not the only cryptographer on a collision course with the state. The federal government is already prosecuting Phil Zimmermann, who in 1991 wrote a powerful encryption program called PGP (Pretty Good Privacy) and handed it out to friends, one of whom put it on the internet. PGP swiftly traveled the world, a stinging affront to the government's power to control the dissemination of cryptography. Within the next few months, another civil suit that shows up the confusions of the cryptography export law is to be filed against the State Department. In 1993 Phil Karn, an electrical engineer from San Diego, successfully petitioned the State Department for a license to export a book called "Applied Cryptography" by Bruce Schneirer. Yet at the same time he was denied a license to export the encryption system set out in the book on a computer disk-even though the data were identical.
The courts will no doubt have a fine old time balancing the contending claims of national security, free speech and the right to privacy. But businesses of every sort are forging ahead regardless with new secrecy software. Bankers, in particular, are no longer satisfied with the level of security offered by the Data Encryption Standard, which was developed in the 1970's, is still the strongest program that can be legally exported , and could probably be beaten by anyone with $1m of computing power at their disposal. Last year the financial-service industry's cryptography standards committee brushed aside the NSC's objections and voted to develop a new standard for financial information.
The federal government has offered a way to reconcile its desires to snoop with the legitimate wish of citizens and companies for secrecy. Its proposed Clipper chip would enable users to encrypt messages , but with the government holding the set of keys so that it could listen if necessary. The banks do not think their international clients would take to such a scheme-unless, perhaps, the keys were entrusted to a third party, to whom the government would have to apply, and whom users could sue for breach of trust.
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property of 'The Economist'� 1995