Trade

Feds, Companies Face Off On Encryption Technology

Computer makers want the U.S. to ease export controls on advanced encryption hardware and software, but law enforcement agencies say rolling back controls could let criminals and terrorists conceal their activities. Encryption scrambles computer data to protect its security and privacy during transmission.

  • U.S. firms could lose out on $9 billion in encryption-product sales over the next five years if export policy isn't revised, according to the Economic Strategy Institute.

  • The group says the overall cost to the economy would be at least $35 billion through 2002.

  • Experts contend the federal government doesn't have a consistent policy in the area -- with the National Security Agency and the Federal Bureau of Investigation leading the effort against relaxing export restrictions.

  • As of the end of last year, an estimated 653 encryption products were being made in 29 countries outside the U.S. -- primarily in Germany, Ireland, Canada, Israel and Great Britain.

U.S. producers fear unless the present stalemate is resolved, foreign competitors will run off with the entire encryption market.

Source: Reinhardt Krause, "The Encryption Export Debate," Investor's Business Daily, May 21, 1998.  


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