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Software Firms Call U.S. Plan On Encryption 'Unworkable'

By Rajiv Chandrasekaran
Washington Post Staff Writer
Wednesday, December 11, 1996; Page C15

An industry-government deal over new regulations for the export of advanced data-scrambling technology has come under heavy strain, with some of the country's largest software companies saying that draft rules are more stringent than promised.

The Business Software Alliance, an industry group that represents large software companies, said yesterday that a draft plan released by the Commerce Department places too great a burden on the companies to keep information that could be used to decode "encrypted" data.

"This plan is completely unworkable," said Rebecca Gould, the Washington software group's vice president for public policy. "It's a huge step backward . . . to where the administration wants a Big Brother approach."

In October, after a four-year debate with the software and computer industry, the administration said it would move forward with new rules for export of encryption software, which the White House views as potentially useful to terrorists and hostile governments.

The White House took into account some concerns from the industry, which generally favors looser export controls on the grounds that other countries will develop the technology. At the time, many computer companies were optimistic they could live with the new rules.

Now, the software alliance plans to abandon discussions with the administration and focus its efforts on getting Congress to pass legislation that would ease the export rules, Gould said.

An administration official called the regulations fair, but said the White House would be open to additional suggestions from the software industry. "It's a work-in-progress right now," the official said.

The biggest issue is how to handle decoding of scrambled information for law authorities. The administration originally had wanted a copy of a decoding "key" to be kept with a third party, but in October appeared to relent to the software industry's request that companies only be required to keep information that would enable authorities to reconstruct the key.

Software firms now say the new rules lean too heavily toward the government's original policy.

© Copyright 1998 The Washington Post Company

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