Security and Freedom through Encryption (SAFE) Act : hearing before the Committee on the Judiciary, House of Representatives, One Hundred Fourth Congress, second session, on H.R. 3011 ... September 25, 1996

110 Pages·1996·4 MB·English

by  United States. Congress. House. Committee on the Judiciary

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SECURITY AND FREEDOM THROUGH ENCRYPTION
(SAFE) ACT
Y 4. J 89/1: 104/100
Security and Freedon Through Encryp.
.
HEARING
BEFORE THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTH CONGRESS
SECOND SESSION
ON
H.R. 3011
SECURITY AND FREEDOM THROUGH ENCRYPTION (SAFE) ACT
SEPTEMBER 25, 1996
Serial No. 100
^-^/
SS7
Printed for the use of the Committee on the Judiciary
U.S. GOVERNMENT PRINTING OFFICE
3e-300 CC WASHINGTON 1996
:
ForsalebytheU.S.GovernmentPrintingOffice
SuperintendentofDocuments,CongressionalSalesOffice,Washington,DC 20402
ISBN 0-16-053944-7

.
SECURITY AND FREEDOM THROUGH ENCRYPTION
(SAFE) ACT
4. J 89/1:104/100
curity and Freedon Through Encryp.
.
HEARING
BEFORE THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTH CONGRESS
SECOND SESSION
ON
H.R. 3011
SECURITY AND FREEDOM THROUGH ENCRYPTION (SAFE) ACT
SEPTEMBER 25, 1996
Serial No. 100
7
Printed for the use of the Committee on the Judiciary
U.S. GOVERNMENT PRINTING OFFICE
36-300 CC WASHINGTON : 1996
ForsalebytheU.S.GovernmentPrintingOffice
SuperintendentofDocuments,CongressionalSalesOffice,Washington,DC 20402
ISBN 0-16-053944-7
COMMITTEE ON THE JUDICIARY
HENRY J. HYDE, Illinois, Chairman
CARLOS J. MOORHEAD, California JOHN CONYERS, Jr., Michigan
F. JAMES SENSENBRENNER, Jr., PATRICIA SCHROEDER, Colorado
Wisconsin BARNEY FRANK, Massachusetts
BILL McCOLLUM, Florida CHARLES E. SCHUMER, New York
GEORGE W. GEKAS, Pennsylvania HOWARD L. BERMAN, CaUfomia
HOWARD COBLE, North Carolina RICK BOUCHER, Virginia
LAMAR SMITH, Texas JOHN BRYANT, Texas
STEVEN SCHIFF, New Mexico JACK REED, Rhode Island
ELTON GALLEGLY, California JERROLD NADLER, New York
CHARLES T. CANADY, Florida ROBERT C. SCOTT, Virginia
BOB INGLIS, South Carolina MELVIN L. WATT, North Carolina
BOB GOODLATTE, Virginia XAVIER BECERRA, California
STEPHEN E. BUYER, Indiana ZOE LOFGREN, CaUfomia
MARTIN R. HOKE, Ohio SHEILA JACKSON LEE, Texas
SONNY BONO, CaUfomia MAXINE WATERS, CaUfomia
FRED HEINEMAN, North Carolina
ED BRYANT, Tennessee
STEVE CHABOT, Ohio
MICHAEL PATRICK FLANAGAN, IlUnois
BOB BARR, Georgia
Alan F. Coffey, Jr., General Counsel/StaffDirector
Julian Epstein, Minority StaffDirector
(II)
CONTENTS
HEARING DATE
Page
September25, 1996 1
TEXT OF BILL
H.R. 3011 3
OPENING STATEMENT
Hyde, Hon. Henry J., a Representative in Congress from the State ofIlUnois,
and chairman, Committeeon theJudiciary 1
WITNESSES
Brown, Mehnda, vice president and general counsel, Lotus Development
Corp., onbehalfofthe Business SoftwareAlliance 55
Crowell, William P., Deputy Director, National SecurityAgency 31
Deneka, Dr. Charles W., chief technical officer. Coming, Inc., on behalf of
the NationalAssociation ofManufacturers 79
Goodlatte, Hon. Bob, a Representative in Congress from the State ofVirginia 17
Gorelick, Jamie S., DeputyAttorney General, Department ofJustice 24
Katz, Roberta R., senior vice president, general counsel and secretary,
Netscape Communications Corp 61
Reinsch, William A., Under Secretary, Bureau ofExport Administration, De-
partment ofCommerce 40
Ripley, Patricia, managing director. Bear, Steams & Co., Inc 73
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Brown, Melinda, vice president and general counsel, Lotus Development
Corp., on Behalfofthe Business SoftwareAlliance: Prepared statement 57
Crowell, William P., Deputy Director, National Security Agency: Prepared
statement 34
Deneka, Dr. Charles W., chief technical officer, Coming, Inc., on behalf of
the National Association ofManufacturers: Prepared statement 80
Goodlatte, Hon. Bob, a Representative in Congress from the State ofVirginia:
Prepared statement 20
Gorelick, Jamie S., Deputy Attomey General, Department of Justice: Pre-
pared statement 27
Hyde, Hon. Henry J., a Representative in Congress from the State ofIlUnois,
and chairman. Committee on theJudiciary: Opening statement 13
Jackson Lee, Hon. Sheila, a Representative in Congress from the State of
Texas: Prepared statement 16
Katz, Roberta R., senior vice president, general counsel, and secretary,
Netscape CommunicationsCorp.: Prepared statement 64
Lofgren, Hon. Zoe, a Representative in Congress from the State ofCalifornia:
Prepares statement 14
Ripley, Patricia, managing director. Bear, Steams & Co., Inc.: Prepared state-
ment 75
APPENDIX
Material submitted forthe hearing 91
(III)

SECURITY AND FREEDOM THROUGH
ENCRYPTION (SAFE) ACT
WEDNESDAY, SEPTEMBER 25, 1996
House of Representatives,
Committee on the Judiciary,
Washington, DC.
The committee met, pursuant to notice, at 9:44 a.m., in room
2141, Rayburn House Office Building, Hon. Henry J. Hyde (chair-
man ofthe committee) presiding.
Present: Representatives Henry J. Hyde, Charles T. Canady, Bob
Inglis, Bob Goodlatte, Sonny Bono, Ed Bryant of Tennessee, Steve
Chabot, Michael Patrick Flanagan, John Conyers, Jr., John Bryant
ofTexas, Robert C. Scott, Zoe Lofgren, and Sheila Jackson Lee.
Also present: Joseph Gibson, counsel; Kenny Prater, clerk; and
John Flannery, minority special counsel.
OPENING STATEMENT OF CHAIRMAN HYDE
Mr. Hyde. The committee will come to order.
Today the committee considers H.R. 3011, the Security and Free-
dom Through Encryption (SAFE) Act. Encr3rption is the process of
encoding data or communications in a form that only the intended
recipient can understand. Once the exclusive domain of the na-
tional security agencies, encryption has become increasingly impor-
tant to persons and companies in the private sector; for example,
to protect intellectual property and other forms ofproprietary infor-
mation that are stored and transmitted in digital formats.
The encrjrption debate encompasses two main issues. The first is
whether there should be any restrictions on the domestic use and
sale of encryption technology and, in particular, whether domestic
users must place their keys in escrow with the Government or
some neutral third party. Current law does not have any such re-
strictions. The second issue is whether there should be restrictions
on the export of encryption technology. Current law regulates the
export of encryption technology in the same manner as military
technology. To date, the State Department has generally only al-
lowed the export ofrelatively weak encryption technology.
With respect to the domestic use of encryption, the administra-
tion generally favors a key escrow system, and its representatives
will explain more about this proposal shortly. The law enforcement
and national security agencies believe that a key escrow system is
necessary to maintain their ability to perform lawful wiretaps and
to read computer data obtained through lawful means.
The computer industry, the larger business community, and pri-
vacy groups oppose any mandatory key escrow system. They be-
(1)
lieve that a mandatory system would unnecessarily invade the pri-
vacy of users and that law enforcement can solve its problems by
acquiring better technology to decode encrypted materials. They
argue that the benefits of preventing crime through the widespread
use of encryption outweigh any harm to law enforcement caused by
that use.
With respect to the export control issue, the administration has
to date generally opposed the lifting of the current export controls.
It argues that the controls are still effective and that our allies
would be distressed about the damage to law enforcement efforts
ifwe lifted the controls.
The computer industry and the privacy groups argue that the
controls ought to be substantially relaxed, if not eliminated. They
argue that the controls are easily evaded because many encryption
products are already available to anyone over the Internet, and be-
cause it is legal for anyone to come into the United States, buy
encryption products, and take them out of the country. Ifthe situa-
tion does not change, they believe that Americans will no longer
dominate this field.
[The bill, H.R. 3011, follows:]
104th congress H.R.3011
2d Session
To amend title 18, United States Code, to affirm the rights of United
States persons to use and sell encryption and to relax export controls
on encryption.
IN THE HOUSE OF REPRESENTATIVES
March 5, 1996
Mrs. GOODLATTE (for himself, Mr. DeLay, Mr. BOEHKER, Mr. MOORHEAD,
Mrs. SCHROEDER, Mr. Gejdensox, Mr. Manzullo, Mr. Coble, Mr.
BarrofGeorgia, Mr. BoKO, Ms. LOFGREN, Mr. Campbell, Ms. EsHOO,
Mr. DOOLITTLE, Mr. Farr of California, Mr. McKeon, Mr. Engel,
Mrs. Waldholtz, Mr. E^^^^•G, Mr. Mica, Mr. Chahibuss, Mr. Ever-
ett, Mr. Ehlers, Mr. Orton, Mr. Matsui, Mr. BOUCHER, Mr.
Chabot, Mr. MOAKLEY, and Mr. Bartlett ofMaryland) introduced the
foUowng bill; which was referred to the Conunittee on the Judiciary, and
in addition to the Committee on International Relations, for a period to
be subsequently determined by the Speaker, in each case for consider-
ation of such provisions as fall within the jurisdiction of the committee
concerned
A
BILL
To amend title 18, United States Code, to affirm the rights
of United States persons to use and sell encryption and
to relax export controls on encryption.
1 Be it enacted by the Senate and house ofRepresenta-
2 tives ofthe United States ofAmerica in Congress assembled,
—
1
2
1 SECTION 1.SHORTTITLE.
2 This Act may be cited as the "Security and Freedom
3 Through Encryption (SAFE) Act".
4 SEC.2. SALEANDUSEOFENCRYPTION.
—
5 (a) In General. Part I of title 18, United States
6 Code, is amended by inserting after chapter 121 the fol-
7 lowingnew chapter:
"CHAPTER 122—ENCRYPTED WIRE AND
8
ELECTRONIC INFORMATION
9
"2801. Definitions.
"2802. Freedom touseencryption.
"2803. Freedom tosellencryption.
"2804. Prohibitiononmandatorykeyescrow.
"2805. Unlawfuluseofencryption in furtheranceofacriminalact.
10 **§2801. Definitions
1 "As used in this chapter
12 "(1) the terms 'person', 'State', 'wire commu-
13 nication', 'electronic communication', 'investigative
14 or law enforcement officer', 'judge of competent ju-
15 risdiction', and 'electronic storage' have the mean-
16 ings given those terms in section 2510 of this title;
17 "(2) the terms 'encrypt' and 'encryption' refer
18 to the scrambling of wire or electronic information
19 using mathematical formulas or algorithms in order
20 to preserve the confidentiality, integrity, or authen-
21 ticity of, and prevent unauthorized recipients from
22 accessing or altering, such information;
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