New Encryption Bill Deprives U.S. Businesses of Ability to Protect and Compete

June 19, 1997

(Washington, DC) — “Today’s vote of the Senate Commerce Committee to advance the McCain-Kerrey encryption bill is a vote for the status quo,” saidJohn Scheibel, CCIA Vice President and General Counsel. “It robs any business seeking to sell encryption products overseas of the ability to compete in today’s marketplace.

“There is no compromise here. This legislation essentially codifies many of the same Clinton Administration encryption proposals which have triggered enormous criticism from both the business community and from lawmakers. The Administration has failed to identify any national security interest in depriving American companies of the ability to export the same products that are being sold by their foreign competition,” he said.

“This bill opens the door to a rash of new problems and vulnerabilities not previously considered in U.S. encryption policy. By linking the so-called voluntary adoption of federal key recovery systems to participation in the secure electronic commerce infrastructure, the bill is now forcing key recovery even in domestic uses of encryption. Previously, U.S. policy has targeted only exports of strong encryption. Implementing key recovery is now the exorbitant price of doing business on the Internet.

“Advancing the McCain-Kerrey bill has only muddied the waters in the encryption debate. CCIA respectfully urges Senators to carefully review the provisions of this bill and consider their ramifications before adopting S. 909 as a panacea,” Scheibel said.

CCIA is an association of computer and communications industry firms, as represented by their most senior executives. Small, medium and large in size, these companies represent a broad, cross-section of the industry, employing over a half million workers and generating annual revenues beyond 200 billion dollars.

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