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Senate Panel Approves
Bill on Encryption

Developers of computer data-scrambling technology would have incentives to provide law enforcement with ways to crack their codes under a bill approved yesterday by the Senate Commerce Committee.

But a trade group said the bill would be a "significant step backwards" that would endanger U.S. companies' ability to compete with foreign businesses that export their most sophisticated privacy products without restriction.

"Clearly, today's decision by the Senate Commerce Committee is a step in the wrong direction," the Business Software Alliance said in a written statement.

Businesses and law enforcement have been at odds over legislation proposed to relax export restrictions on U.S. encryption software and hardware, technology that allows computer users to scramble their communications into unreadable code that cannot be understood by people not authorized to read it.

Federal law enforcement officials have asked Congress to develop a system that will allow them to de-scramble codes during criminal investigations. The advance of technology is quickly outstripping law enforcement's ability to track the communications of terrorists and child pornographers, they have said.

Under terms of the bill, businesses would get permission to export their most sophisticated products easier and quicker if they make available "keys" -- codes that would allow authorities to crack the encryption. Government investigators wouldn't be able to gain access to keys without subpoenas.

Products without keys would face a more extensive review by the Commerce Department. Exceptions could be granted by the president if similar foreign products are widely available.

The Clinton administration has threatened to veto other bills moving through Congress, including one sponsored by Sen. Conrad Burns (R-Mont.), that don't include a key system, said Sen. John McCain (R-Ariz.), who co-sponsored the bill approved Thursday with Sen. Robert Kerrey (D-Neb.).