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The network is the story: News on the latest Internet standards and struggles

March  1998
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U.S. Senate committee airs encryption arguments

Boston (March 17, 1998) -- Stakeholders on the issue of regulating encryption stated their positions at a U.S. Senate Judiciary subcommittee hearing today as part of the ongoing attempt to resolve through laws the tension between law enforcement's desire to get access to people's electronic data and people's right to privacy.

Tim Casey, chief technology counsel at MCI Communications Corp., was among those who spoke in opposition to encryption restriction. Casey called for the lifting of current encryption export controls and the rejection of key recovery plans, citing what he said was their dampening effect on electronic commerce.

Currently, there are no restrictions on U.S. vendors shipping overseas software that uses encryption keys of up to 40 bits in length. Software containing 56-bit encryption may be shipped overseas as long as vendors agree to "backdoor key recovery," whereby the U.S. government is provided with the keys to unlock the software for national security reasons. Export of 128-bit encryption is also sometimes allowed, especially for the banking industry.

The U.S. Justice Department's Robert Litt argued the side of law enforcement, maintaining that restrictions on encryption are necessary for national security and public safety.

This term, Congress will continue to wrestle with several bills pertaining to encryption. Among the bills are, in the Senate, the Secure Public Networks Act, also known as the McCain-Kerrey Act, and, in the House, the reconciliation of the five versions of the Security and Freedom through Encryption (SAFE) Act. The different versions of the SAFE Act are currently before the House Rules Committee, which determines the shape of the final bill which reaches the House floor for debate.

In addition to the legislative activity transpiring in Washington, the Ninth Circuit Court of Appeals in San Francisco is considering whether to let stand a lower court's ruling that the U.S. government's ban on encryption export is unconstitutional. If the Ninth Circuit Court of Appeals rules against the government in the so-called Bernstein case, the next -- and final -- legal stop will be the U.S. Supreme Court.

--Rebecca Sykes, IDG News Service

Coalition plans challenge of U.S. encryption policy

Washington (February 27, 1998) -- The Clinton administration's backing of key recovery and restrictions on the export of strong encryption is hurting American technology companies and should be changed, according to a recently formed coalition representing computer industry companies and privacy groups.

The Washington-based Americans for Computer Privacy, a group that will be launched next week, plans a nationwide campaign to fight the White House policy and start a public debate on encryption issues. It also hopes to drum up support for legislation being debated by Congress that would ease restrictions on foreign sales of encryption products by U.S. companies.

The ACP has scheduled a news conference for Wednesday in Washington, where officials will explain their opposition to White House encryption policies and give details about what a coalition statement said will be a "multitiered media and legislative campaign to ensure that the privacy of confidential files and communications is preserved."

"This is clearly an issue that goes beyond the Beltway," a coalition official who asked not to be named said today. "This is going to be big, grassroots and broad-based. Expect a lot of noise."

ACP officials will be joined at the news conference by members of Congress who are sponsoring legislation that supports the sale of "strong" U.S. encryption products around the world. Among the bills are the Security and Freedom through Encryption (SAFE) Act in the House and the Secure Networks Act in the Senate.

Mark Bohanon, President Clinton's adviser on encryption policy, could not be reached for comment today, and his assistant, Mike Rubin, and the White House press office did not return calls requesting comment on the creation of the ACP and its planned media campaign.

Currently, software manufacturers are allowed to ship software containing 56-bit encryption in foreign countries provided they supply the U.S. government with a key that would unscramble the encrypted data. The policy is currently overseen by the U.S. Commerce Department, which also sometimes grants permission for the export of 128-bit encryption. There currently are no restrictions on export of 40-bit encryption products.

U.S. law enforcement officials support these laws because the government wants the right to break into electronic transmissions in criminal investigations. Louis Freeh, director of the Federal Bureau of Investigation, last year called for mandatory key recovery within the United States, saying unbreakable encryption has stymied criminal investigations in the past.

"The industry recognizes law enforcement's interest, but we can't go along with government mandates for technical solutions," the ACP official said. "We believe any solution that comes out of this process needs to be market driven."

The official confirmed that the Business Software Alliance is one of the organizations in the coalition, but he declined to name any other companies or groups among what he said are nearly 100 backing the coalition.

The ACP has hired Goddard-Claussen Campaigns, the advertising firm that created the controversial "Harry and Louise" television commercials that helped derail the White House's health care reform plans, a spokeswoman for the company's Washington office said.

David Sobel, a lawyer for the Electronic Privacy Information Center, said EPIC consulted closely in the creation of the coalition and supports its goals, but did not join because it believes it's important that EPIC remain an independent voice for civil liberties.

Sobel described ACP as an industry-led coalition that will mount a "very well-funded public education campaign to bring this issue into the mainstream."

--Margret Johnston, IDG News Service



U.S. to set up interagency defense against cyberattacks

Livermore, CA (February 27, 1998) -- U.S. Attorney General Janet Reno announced here today an interagency effort to track and analyze electronic threats to the nation's critical infrastructures, such as communications, transportation and energy networks.

The new National Infrastructure Protection Center (NIPC), headed by Associate Deputy Attorney General Michael Vatis, will include the Computer Investigations and Infrastructure Threat Assessment Center (CITAC) of the U.S. Federal Bureau of Investigation and will add real-time intrusion-detection capabilities for cyberattacks directed at various national, electronic infrastructures.

"Our telecommunications systems are more vulnerable than ever before as we rely on technology more than ever before," she said.

The NIPC will coordinate the efforts of a number of government agencies in setting up and operating defenses against cyberspace intrusions from inside and outside the borders of the U.S. Effective defense will depend on that cooperation, she said.

Reno will ask the U.S. Congress to commit US$64 million for the NIPC in fiscal 1999, a sum that would allow the establishment of six additional computer investigation centers in cities around the nation.

The private sector will also have a vital role to play in the electronic defense, Reno said. She called for direct electronic links between the private sector and law enforcement agencies in what she termed a "significant departure" from established procedures. Those closer links, however, must be set up within the confines of the U.S. Constitution and cannot infringe on individual rights and confidentiality, she said.

The dimensions of the threat also will require international collaboration, given the possibility that someone "can sit in the kitchen in St. Petersburg, Russia, and can steal money from a bank in New York," she said. "Cyberspace crosses borders."

One of the biggest challenges for law enforcement agencies currently, she said, is to understand the origin of a cyberattack. It can be to determine whether an attack is domestic or international, and whether it is the work of a terrorist, a foreign state, a juvenile trying to crack the latest firewall or a disgruntled worker getting back at a supervisor, she said.

For that reason, the NIPC will strive to set up procedures that will best allow government agencies to analyze the nature and origin of the attacks and to assign responsibility to the appropriate agency in a speedy manner. It also will be in charge of developing the means and methods of sharing information and equipment among agencies.

In addition, the NIPC will develop training programs for state and local agencies, which Reno said are on the front line against cyberattacks. "Criminals today have guns," she said. "Soon they will have computers and other weapons of mass destruction."

She also set up special working group at the Department of Justice to streamline R&D efforts aimed at cybercrimes.

Reno made the announcement at the Lawrence Livermore National Laboratory during a workshop on assuring the security of critical national infrastructures.

At the workshop, several speakers from the private sector asked the government to abandon its restrictions on the exportation of encryption technology. A former secretary of defense, William Perry, who was chairman of the workshop, said that although the government has good arguments for the necessity of such restrictions, he no longer agrees with that policy. "On balance, we would be better off" without the restrictions, he said.

Initially the NIPC, which will be housed at FBI headquarters, will employ 85 FBI agents and 40 employees from the Secret Service and the departments of Defense, Transportation and Energy, said Kenneth Geide, the deputy chief of NIPC. Eventually, the center will add employees from other federal agencies and the private sector, he said. Funding mechanisms have not been made final.

In October, the President's Commission on Critical Infrastructure Protection recommended that the government field a real-time warning capability modeled upon the military's air defense and missile-warning system. While the commission found no evidence of an impending cyberattack on the nation's infrastructure, its members warned that the capability to exploit weaknesses in the country's power, telecommunications, transportation and financial segments does exist.

"As incidents or anomalies occur, we want to have the capability for folks to ... communicate with the center," Geide said in an interview with Federal Computer Week. "Then our analytical component will be poised to identify...where seemingly unrelated...anomalies are related."

--Torsten Busse, IDG News Service and Heather Harreld, Federal Computer Week

Clinton endorses tax-free Internet, wants culture online

San Francisco (February 26, 1998) -- U.S. President Bill Clinton here today called on the U.S. Congress to pass proposed legislation which would ban new taxes on electronic commerce, allowing the Internet to develop to its full potential.

While urging similar international agreements to keep the Internet free from new taxes, Clinton also promised more funds for building the next generation Internet and for putting the United States' art and cultural treasures online.

In a speech at the BancAmerica Robertson Stephens Technology '98 investment banker conference here this morning, Clinton heralded electronic commerce and the Internet as a critical economic growth engine and job creator. Already more than four million people in the U.S. work in technology-related industries, with 70 new high-tech companies being launched every week in Northern California alone, according to the president.

"I came today to talk about what we can do to build on this progress, in particular promoting and extending the fastest economic and social community in history -- the Internet," he said.

Compared to five years ago when only about 50 World Wide Web sites existed, the Internet registers explosive growth with one and half million new Web pages being created every day now, Clinton said.

"This phenomenon has absolutely staggering possibilities to democratize, to empower people all over the world," he said, adding that the Internet will make it possible for every child with access to PC to reach every book every written.

"The next big step in economic transformation, it seems to me, is the full development of this remarkable device and the electronic commerce it makes possible," Clinton said.

In order to generate further economic growth, maximize the potentials of the technological revolution and extend the reach of the Internet to rural communities and the economically underprivileged inner city areas, Clinton urged Congress to pass the Internet Tax Freedom Act this year. The bill would establish a moratorium on new Internet taxes.

Under the legislation introduced by Senator Ron Wyden, a Democrat from Oregon, and Representative Chris Cox, a Republican from California, state and local communities would be able to apply existing taxes to e-commerce, as long as they don't discriminate between the Internet and traditional transactions, Clinton said.

"I believe the legislation has the support of both parties," he said. "We can't allow unfair taxes to weigh down the Internet, the most promising new economic opportunity in decades."

A moratorium would allow a bi-partisan committee made up of elected officials, business leaders, consumers and Treasury Department officials to further study the Internet taxation issue and build domestic and international consensus on it to come to a resolution, Clinton said.

He added that he asked the Treasury Department to work with the Organization of Economic Cooperation and Development (OECD) on international agreements to keep the Internet free of new taxes and to streamline tax administration in cyberspace.

Clinton also announced new National Science Foundation grants that will boost to 92 the number of universities connected to the next-generation Internet, which currently has a tally of 63 universities. He pledged to include US$110 million for the project, known as Internet II, in the federal budget for fiscal year 1999.

In addition, the president announced the America's Treasures Online Initiative, which is intended to bring 3 million cultural exhibits, now kept in the National Archives and the Smithsonian Institute, online by 2000. In fiscal 1999 the project will be funded with $23 million.

Although Clinton's two-minute speech was not interrupted by applause, it was warmly received by the crowd of about 600 investment bankers which invest in high-tech stocks. Reactions to the speech were overwhelmingly positive, with many attendees applauding Clinton's support of the Internet Tax Freedom Act.

"I'm completely in favor of the Internet Freedom Tax Act," said Elizabeth Einfeld of BancAmerica Robertson Stephens. "Otherwise new taxes would cripple everything."

"The less taxation the better," said Emeric McDonald, a money manager with Amerindo Investment Advisors Inc. "Allowing business and commerce to proceed unfettered by excessive taxation is clearly in the best interest of a global economy."

McDonald added that he supports Clinton's efforts to put cultural treasures online, too.

"Giving people easy access to all types of information is, as Clinton described it, democratizing and can only be a positive influence worldwide," McDonald said.

Clinton started his speech by thanking the hotel staff for turning the lights on after he took the podium.

"When I first came out you all where in the dark and I thought there was something anomalous about my coming to a high-tech conference and you all being in the dark."

He also said he had to fight with Vice President Al Gore about who should come to the technology conference.

"Here is a guy [Al Gore] who lives and breathes to talk about terabytes and gigaflops. But I pulled rank."

--Torsten Busse, IDG News Service

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