Administration Announcement

Actual Regulations

• Introduced a "voluntary program to improve privacy and security of telephone communications" that would unite the Federal Government and industry.

• Introduced controversial key escrow system with government agents acting as third party key holders.

Administration Announcement

Actual Regulations

• Recognized that "the ultimate solution must be market-driven".
• Claimed that "(d)omestic use of key recovery will be voluntary, and any American will remain free to use any encryption system domestically."
• Assured that "(a)ccess to keys would be provided in accordance with destination country policies and bilateral understandings."

• Prohibited export of 56 bit products except by companies making commitment to develop and market key recovery products within 2 years.
• Used government export controls to compel domestic key recovery.
• Failed to recognize that many foreign countries do not provide an equivalent to Fourth Amendment privacy protections.

Administration Announcement

Actual Regulations

• Promised that "(t)he updated export policy will allow U.S. companies new opportunities to sell encryption products to almost 70 percent of the world's economy."
• Hailed the free export of 56 bit products.
• Assured that law enforcement officials would access plaintext only under "strictly defined legal procedures".

• Provided export relief for only certain industry segments, excluding major telecommunications providers and ISPs, and failed to acknowledge that individuals and end-users were left without adequate privacy and security.
• Failed to recognize that 128 bit products have become worldwide standard for security.
• Continued to offer incentives for plaintext access or key recovery without providing adequate privacy protections for law enforcement access.