Encryption is the essential tool for protecting privacy, security, public safety, and free expression online. The Center for Democracy and Technology (CDT) is pleased to have this opportunity to testify about U.S. encryption policy before the House Intelligence Committee. CDT is a public interest group dedicated to promoting civil liberties and democratic values on the Internet. CDT has long supported the Security and Freedom through Encryption (SAFE) Act, which is badly needed to reform a U.S. encryption policy that does not serve the interests of the United States.

1. On balance, the widespread use of strong encryption is in the long term national security interests of the United States.

Encryption is vital to the security of electronic commerce, personal communications, and the increasingly important information infrastructure. While encryption creates new challenges for law enforcement and national security, no U.S. export control or key recovery policy can stop determined criminals, terrorist groups, or rogue governments from getting access to strong encryption. Moreover, the law enforcement problem is narrower than it appears: Even without controls, in many cases the plaintext of encrypted data will be available where it is decrypted or stored, or through lawful access to existing decryption information. Meanwhile, encryption export controls are slowing down the use of strong encryption which would allow us to protect proprietary and personal information and our critical infrastructures.

For all of these reasons, we agree with the conclusion of the National Research Council's 1996 report Cryptography's Role in Securing the Information Society. Its distinguished panel of technology, policy, and national security experts, who received classified briefings, concluded that "On balance, the advantages of more widespread use of cryptography outweigh the disadvantages."

2. Government-mandated key recovery or plaintext access threatens security and privacy

Two years ago, in June 1997, a group of eminent computer security experts and cryptographers issued a damning critique of government proposals to require plaintext access features in encryption systems. Their report, The Risks of Key Recovery, Key Escrow, and Trusted Third Party Encryption concluded that:

"The deployment of key-recovery-based encryption infrastructures to meet law enforcement's stated specifications will result in substantial sacrifices in security and greatly increased costs to the end-user. . . . These basic requirements [for plaintext access by government] make the problem of general key recovery difficult and expensive -- and potentially too insecure and too costly for many applications and many users."

Two years later, the assertions of the experts remain unrebutted. Mandatory government access has been rejected by the marketplace and by policy makers around the world. Mandatory plaintext access raises serious constitutional concerns about non-particularized searches. And the government remains unable to explain how the security of keys will be protected globally when U.S. legal protections stop at the border.

3. The world is rejecting U.S. policy of export controls and key recovery.

Contrary to Administration predictions, foreign governments are not embracing export controls and key recovery. Since November, three major U.S. allies have moved in the opposite direction. France, long held out as a supporter of domestic controls, has abandoned mandatory key recovery and liberalized controls. The U.K., viewed as the Administration's staunchest ally, in May abandoned a domestic key recovery proposal. And just last week Germany announced that it would affirmatively promote the export of strong encryption.

4. This Committee should demand responses to the unanswered questions about U.S. encryption policy.

Two years ago, this committee and four others in the House held hearings and voted on the SAFE Act in the context of a debate on encryption strikingly similar to the one going on today. Privacy advocates and industry representatives testified about the need for new encryption policies, and Administration officials argued that new regulations would allow U.S. policy to satisfy the competing interests at hand. In retrospect, the rapid pace of technical and marketplace developments over the last two years has made it clearer than ever before that the U.S. approach to encryption policy remains fundamentally flawed.

1. Exportable encryption has proven increasingly vulnerable.

Two years ago, the Justice Department disputed arguments by privacy advocates that 56-bit encryption, the maximum strength exportable for consumers without key recovery, was not secure enough for many applications. The Justice Department claimed that "According to the National Security Agency’s estimates, the average time needed to decrypt a single message by means of a brute force cryptoanalytic attack on 56-bit DES — a strength whose export we are now allowing --- would be approximately one year and eighty-seven days using a thirty-million-dollar supercomputer." [ 1 ]

Technical developments have proven these comments wrong. In the Fall of 1998, a group of researchers sponsored by the Electronic Frontier Foundation built a "DES Cracker" system for less than $250,000 that broke a 56-bit key within 56 hours. [ 2 ] Less than six months later, in January 1999, encryption enthusiasts broke a 56-bit code in 22 hours using the DES Cracker and a network of distributed computers. If a non-profit and a group of part-time enthusiasts could develop such a system on a shoestring budget, we are only left to imagine what a foreign government, large corporation, or sophisticated criminal enterprise could do.

The U.S. Government has itself recognized the weakness in 56-bit encryption systems. In a January 1999 draft the National Institute of Standards and Technology (NIST) revised the encryption standard for government use from 56-bit DES to much stronger "Triple DES," citing the vulnerability of DES. [ 3 ] Meanwhile, NIST has been leading efforts to create an Advanced Encryption Standard based on the 128-bit (and higher) algorithms that are becoming the world standard for online security. If the government does not trust 56-bit security, why should everyday computer users and companies be expected to rely on this weaker level of security?

2. Key recovery has not been widely accepted.

Two years ago, Administration witnesses touted key recovery as the compromise that met law enforcement desires and was going to "become the worldwide standard." [ 4 ] In fact, since then government-driven key recovery has been greeted with great skepticism and widely discredited.

Research has revealed the vulnerabilities of key recovery systems, which create backdoors to plaintext without the notice or consent of an encryption user. A 1997 report by a group of encryption experts found that "[t]he deployment of key-recovery-based encryption infrastructures to meet law enforcement’s stated specifications will result in substantial sacrifices in security and greatly increased costs to the end-user." A year later, with no substantive response from within the Administration or the technical community, the same group of experts confirmed its findings still held true in June 1998. [ 5 ] A copy of their report is being submitted to the Committee along with this testimony.

Despite Administration predictions, the marketplace has shown little interest in even stored data recovery, and there is virtually no demand for key recovery for communications. To CDT's knowledge, not one major key recovery encryption product is being widely used by consumers today. [ 6 ]

3. The world is not adopting U.S. encryption control policies.

Encryption controls are ultimately only effective if other countries control encryption products as well. In 1997, the Administration testified, "We have engaged in extensive international discussions on this topic over the last year, and a consensus is now emerging throughout much of the world that the way to achieve this balance is through the use of a ‘key recovery’ or ‘trusted third party’ system. . . We believe that key recovery will become the worldwide standard for users of the GII." [ 7 ]

To date, the opposite has been true. The OECD Cryptography Policy Guidelines and the Ministerial Declaration of the European Union, both released in 1997, failed to embrace key recovery despite lobbying by the U.S. government. In the past year, Canada, Ireland and Finland have announced encryption policies allowing free use and export of strong encryption products without key recovery. Recent Administration claims of a new encryption control regime through the Wassenaar Arrangement have been overstated. In fact, many countries, including Wassenaar signatories, still allow encryption exports consistent with Wassenaar (See below for a greater explanation of the Wassenaar changes.)

Perhaps most importantly, major U.S. trading partners have recently moved away from U.S. policy. The U.K., the staunchest supporter of U.S. key recovery policy, this Spring rejected a major plaintext access proposal. France, long held out as a country with sweeping controls on encryption use in the past, recently liberalized its domestic limits. And this June the German government rejected domestic controls on encryption and committed to affirmatively promote German encryption exports.

4. The Administration has proven unable to engage in comprehensive reform.

Taken together, these developments argue for a more comprehensive change to U.S. encryption policy, away from export controls and key recovery and towards a view where public safety is best protected by giving people the encryption tools they need to protect themselves on line.

Encryption export controls continue to threaten the privacy and security of Internet users and businesses both abroad and within the United States. They also threaten free expression: a Federal appeals court recently held that controls on encryption source code violate the First Amendment, and controls in general keep people from getting the security tools they need to protect free expression and free association. At the same time, the rationale for export controls is increasingly eroding due to the availability of good foreign encryption products. Finally, contrary to some claims, export controls are not required by the Wassenaar Arrangement.

1. Encryption protects privacy

The law enforcement community in general has variously endorsed "key escrow," "key recovery," and other forms of "plaintext access" as its favored approach to encryption policy. These variations on the failed "Clipper Chip" policy seek to guarantee third-party access to the keys for all encrypted communications and stored data without the notice or consent of the key owners. Such proposals have been greeted with much skepticism and concern from the global Internet community.

The attempt to institutionalize key recovery worldwide is a fundamental threat to privacy and security both domestically and abroad:

• Global key access systems are vulnerable and unproven -- Centralized "back-door" access to the billions of keys used by millions of computer users will introduce new vulnerabilities into a medium that is already difficult to secure. In 1997, eleven renowned computer security experts issued a report on key recovery concluding that, "Building the secure infrastructure of the breathtaking scale and complexity demanded . . . is far beyond the experience and current competency of the field. Even if such an infrastructure could be built, the risks and costs of such a system may ultimately prove unacceptable." In 1998 these experts revisited the question and confirmed that their conclusions remained essentially unchallenged. [ 15 ]

• The Fourth Amendment does not adequately protect key recovery systems both outside and inside of the U.S. -- The Administration has been unable to explain what legal standards will internationally protect the communications and data of U.S. individuals and businesses. Moreover, the Administration has indicated that the full Fourth Amendment standards of probable cause and notice would not apply to encryption keys held by third parties, even within the U.S. In a world where personal data is increasingly legally unprotected in the hands of third parties, key recovery systems further erode a person's ability to protect their privacy.

• Recovery does not address national security needs -- The recovery of a key, under lawful authority and with the assistance of a third party, can be of value to domestic law enforcement. It is of little use for national security signals intelligence purposes, where eavesdropping often occurs abroad without seeking local legal authority and where the assistance of third parties may not be possible.

• Recovery will never be appropriate for some applications -- For example, the American Association for the Advancement of Science has commented on the sensitive and increasingly important use of encryption by human rights advocates worldwide. "If keys can be recovered by the U.S. government, why should human rights organizations whose entire function is defined by abusive governments trust that their information will remain secure?" [ 16 ]

Despite these concerns, current encryption regulations continue to give many encryption producers a Hobbesian choice: accept key recovery or be forced to export lower strength encryption. Moreover, proposals backed by the FBI in the past have sought to further force U.S. encryption users to adopt key recovery through a number of coercive regulations, including outright domestic mandates. While we are encouraged that the Administration appears to have backed away from mandatory domestic controls, we are wary that it has not denounced this approach. And even the current U.S. encryption policy based on key recovery and export controls threatens to leave global Internet users without the technical means to secure their communications or the international legal standards needed to protect their privacy.

It is increasingly clear that the benefits of widespread encryption far outweigh the costs. The last two years have seen Americans moving their lives online in unprecedented numbers. A Presidential Commission has highlighted the vulnerability of our nation's critical information infrastructure. Together these developments have underscored the importance of securing the Internet, and deploying strong encryption to do so.

Two years ago the national security community seemed to speak with one voice about the danger of strong encryption. Today there has been an increasing recognition of the cost of U.S. encryption policy. As Sam Nunn, Co-Chair of the Advisory Committee to the President’s Commission on Critical Infrastructure Protection, noted in 1998 Senate testimony, "I do think we are in a different era of technology now and I do not think the nostalgia for the old-fashioned wiretap by law enforcement is going to be realistic in this age we are in now. [ 17 ] " Senator Bob Kerrey, an early proponent of encryption controls, argued in an October 1998 speech that "the encryption debate has hobbled our efforts to write laws that enable our law enforcement and national security agencies to carry out their mission" and argued that it was time to "remove export restrictions on encryption products of any strength." [ 18 ]

The benefits of current U.S. policy to law enforcement are uncertain. U.S. policy will not stop sophisticated criminals from using encryption to evade law enforcement. Strong, non-escrowed encryption is already available both inside and outside of the United States today. Foreign governments and criminals have access to these powerful tools and will be able to encrypt data despite continued export controls or key recovery. Furthermore, nothing in the Administration policies prevents users from "super-encrypting" communications even within a key recovery framework.

The law enforcement problems with encryption are important but more limited than claimed. Law enforcement faces a real, but narrowly focused, problem with encryption. Most encrypted information will still be accessible to law enforcement by legal process even in an encrypted world. For example, businesses will be still be required to produce the plaintext of encrypted business records under proper legal process. Stored information, corporate and business information, and even a great deal of electronic communication will most likely be largely available to law enforcement through legal process similar to that available today.

Important challenges remain for law enforcement interceptions of communications or seizures of data without notice to the party under surveillance. This narrower problem must be put into the context of the benefits provided by encryption and the costs associated with key recovery systems. The information economy presents new and powerful tools and opportunities for law enforcement surveillance. Online interaction leaves a detailed trail of electronic transactions, credit card purchases, online communications, and Web-based clickstream data presenting new traffic analysis opportunities. In fact, law enforcement is operating today in a Golden Age of surveillance, with online collections of personal data offering unprecedented new tools to obtain evidence of criminal activity (and raising important privacy concerns that must be dealt with.)

U.S. policy is creating a deficit of trust around important issues we could all be working on together. U.S. policy stands in the way of a growing urgent need for strong encryption products and better computer security in general. As Sam Nunn testified before the Senate last year, "[I]f the deadlock continues as it is today, building the trust required between the public and private sectors in the broad area of infrastructure protection will be even more difficult." [ 19 ] Nunn went on to note that "limiting the power of encryption over the long-haul is simply not going to be feasible." Current U.S. policy dangerously impedes the deployment of accessible, easy-to-use, global security systems for the Internet that are needed to protect our privacy and our critical infrastructure.

On balance, national security demands strong encryption. CDT agrees with the conclusion of the National Research Council's major study of encryption, which argued in its 1996 encryption study, "On balance, the advantages of more widespread use of cryptography outweigh the disadvantages." [ 20 ]

U.S. policy stands in the way of a growing urgent need for strong encryption products that people trust. The past two years have shown that people and businesses are moving more and more of their lives, economic activities, and sensitive data online. The federal government has identified the vulnerability of our nation's critical information infrastructure. Strong encryption, without built-in backdoors, is an essential part of protecting that sensitive data and critical infrastructure.

That is why the SAFE Act is so important. SAFE would take the common-sense step of allowing export of the mass-market encryption software most difficult to control, and most important to everyday computer users. It is a measured step; it does not remove all export controls, retaining for example restrictions on exports to countries like Iran or Libya. And CDT remains particularly concerned about provisions criminalizing the use of encryption to obstruct law enforcement in the course of a federal felony. While this provision is narrowly crafted, we remain concerned that it not be interpreted broadly enough to chill the routine use of encryption. On balance though, CDT believes SAFE would be a dramatic step forward for the security of computer users.

In the current policy standoff between an unsustainable control policy and the emerging and acute privacy and security needs of the Information Age, Congressional action is needed. Only Congress is in the position today to change U.S. encryption policy and get Americans the privacy and security tools they need. The private sector cannot do it. The Administration will not do it. The courts may do it, but not without a protracted struggle. Congress must act. CDT believes that immediate liberalization of export controls in the SAFE Act will help provide Americans on the Internet with the strong security and privacy they so badly need.

 

Footnotes

1. Security and Freedom Through Encryption (SAFE) Act: Hearing on H.R. 695 Before the Subcomm. on International Economic Policy and Trade of the House Comm. on International Relations, 105th Cong., 2nd Sess, 57-73 (1997) (Statement of Robert S. Litt, Deputy Assistant Attorney General, Department of Justice) (emphasis added).

2. See ELECTRONIC FRONTIER FOUNDATION, CRACKING DES (1998).

3. "With regard to use of single DES, exhaustion of the DES (i.e. breaking a DES encryption ciphertext by trying all possible keys) has become increasingly more feasible with technology advances. Following a recent hardware based DES key exhaustion attack, NIST can no longer support the use of single DES for many applications." 64 FED. REG. 10, 2625-2628 (1999) (proposed January 15, 1999).

4. "[W]e believe that key recovery encryption is going to become the worldwide standard." Security and Freedom Through Encryption (SAFE) Act: Hearing on H.R. 695 Before the Subcomm. on International Economic Policy and Trade of the House Comm. on International Relations, 105th Cong., 2nd Sess, 57-73 (1997) (Statement of Robert S. Litt, Deputy Assistant Attorney General, Department of Justice).

5. AN AD-HOC GROUP CRYPTOGRAPHERS AND COMPUTER SCIENTISTS, THE RISKS OF KEY RECOVERY, KEY ESCROW, & TRUSTED THIRD PARTY ENCRYPTION (1997). (Updated 1998 report available at http://www.cdt.org/crypto/risks98/.)

6. Cost may play a role. A recent study by the Business Software Alliance estimated the cost of key escrow systems at $7.7 billion per year and $38.5 billion over a five year period. BUSINESS SOFTWARE ALLIANCE, THE COST OF GOVERNMENT-DRIVEN KEY ESCROW ENCRYPTION (1998).

7. Security and Freedom Through Encryption (SAFE) Act: Hearing on H.R. 695 Before the Subcomm. on International Economic Policy and Trade of the House Comm. on International Relations, 105th Cong., 2nd Sess, 57-73 (1997) (Statement of Robert S. Litt, Deputy Assistant Attorney General, Department of Justice).

8. Security and Freedom Through Encryption (SAFE) Act: Hearing on H.R. 695 Before the Subcomm. on International Economic Policy and Trade of the House Comm. on International Relations, 106th Cong., 1st Sess. (May 18, 1999) (Statement of Dinah PoKempner, Deputy General Counsel, Human Rights Watch).

9. See Regina Joseph, "The Encryption Imperative", Editor & Publisher, January 1999.

10. Security and Freedom Through Encryption (SAFE) Act: Hearing on H.R. 695 Before the Subcomm. on International Economic Policy and Trade of the House Comm. on International Relations, 106th Cong., 1st Sess. (May 18, 1999) (Statement of Dinah PoKempner, Deputy General Counsel, Human Rights Watch).

11. Encryption software can be purchased from many other countries across the globe, and easily downloaded over the Internet. According to a recent study by the Economic Strategy Institute, 1,601 encryption products were available as of September 1997 from 941 firms in thirty countries. Of this total, 653 are made outside the United States by 472 foreign firms.

12. General Software Note, Wassenaar Arrangement (http://www.wassenaar.org/list/gtngsn.pdf) [Revised version of GSN]

13. Security and Freedom Through Encryption (SAFE) Act: Hearing on H.R. 695 Before the Subcomm. on Courts and Intellectual Property of the House Comm. on the Judiciary, 106th Cong., 1st Sess. (March 4, 1999) (Statement of William A. Reinsch, Under Secretary for Export Administration, Department of Commerce).

14. At a March 1999 meeting of the President's Export Subcommittee on Encryption, Under Secretary Reinsch identified provisions of the SAFE bill that he asserted would violate the Wassenaar Arrangement. Summary of Open Session, President's Export Subcommittee on Encryption (March 12, 1999).

15. AN AD-HOC GROUP CRYPTOGRAPHERS AND COMPUTER SCIENTISTS, THE RISKS OF KEY RECOVERY, KEY ESCROW, & TRUSTED THIRD PARTY ENCRYPTION (1997). (Updated 1998 report available at http://www.cdt.org/crypto/risks98/.)

16. American Association for the Advancement of Science, Comments on Bureau of Export Administration Interim Rule on Encryption Controls (Feb. 7, 1997).

17. Hearing before the Subcommittee on Technology, Terrorism, and Government Information of the Senate Committee on the Judiciary, 105th Cong., 2nd Sess, (March 17. 1998) (Statement of Sam Nunn, Co-Chair, Advisory Committee to the President's Commission on Critical Infrastructure Protection).

18. 144 CONG.REC. S12359 (1998).

19. Hearing before the Subcommittee on Technology, Terrorism, and Government Information of the Senate Committee on the Judiciary, 105th Cong., 2nd Sess, (March 17. 1998) (Statement of Sam Nunn, Co-Chair, Advisory Committee to the President's Commission on Critical Infrastructure Protection).

20. NATIONAL RESEARCH COUNCIL, CRYPTOGRAPHY'S ROLE IN SECURING THE INFORMATION SOCIETY (1996).

About the Center for Democracy and Technology

CDT is an independent, non-profit public interest policy organization in Washington, D.C. The Center's mission is to develop and implement public policies that protect and advance individual liberty and democratic values in new digital communications media. The Center achieves its goals through policy development, public education, and coalition building. CDT also coordinates the Digital Privacy and Security Working Group (DPSWG), an ad hoc coalition of more than 50 computer, communications, and public interest organizations and associations working on information privacy and security issues.

House Rule XI, clause 2(g)(4) disclosures: Neither Alan Davidson nor the Center for Democracy and Technology have received any federal grant, contract, or subcontract in the current or preceding two fiscal years.

 

For more information contact:

Alan B. Davidson, Staff Counsel	abd@cdt.org
James X. Dempsey, Senior Staff Counsel	jdempsey@cdt.org
Center for Democracy and Technology	http://www.cdt.org/
202.637.9800 (v) 202.637.0968 (f) And see CDT's Encryption Policy Resource Page on the World Wide Web: http://www.cdt.org/crypto

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