HOST: It's Communications World, the Voice of America's weekly digest of what's happening in global telecommunications.   TAPE: "COMMUNICATIONS WORLD" THEME ((up full briefly, then under to host, hold under))   HOST: Hello, I'm Gene Reich in Washington. On this edition of the program we update two important stories: first, the sudden collapse of what would have been a mega-merger between two giants of the communications industry. And next we'll take a long look at where things stand with the U-S government's plan to balance the conflicting issues of communications privacy and the needs of law enforcement agents. Those stories and more on this edition of COMMUNICATIONS WORLD:   [non-pertinent material deleted]   HOST: On Communications World last year we reported on how the United States government had developed a powerful new computer chip. This device employs a very complicated mathematical formula -- known in the industry as an alogrithm -- to scramble, or encrypt, electronic communications. The chip can encrypt any kind of digital communication of voice, data or video. But by using two numerical keys, it is possible to unlock this scrambling device and thus eavesdrop on the transmission.   The device we reported on last year was the "Clipper Chip," part of a procedure the Clinton Administration calls "Key Escrow Encryption:"   TAPE: McNULTY ACTUALITY :04   "It is a complex approach to what is fundamentally a very simple problem."   HOST: Lynn McNulty is the associate director for computer security at the National Institute for Standards and Technology. According to Mr. McNulty, the key escrow encryption is intended to solve the problem of two conflicting issues:   TAPE: McNULTY ACTUALITY :37   "In a democracy, it's a balancing act between the needs of the individual citizens for privacy and the ability for them to protect their communications from eavesdroppers, whether those are government authorities operating without authorization, or individual citizens that may just have an interest in invading your privacy. And at the same time, the government's requirement to protect the domestic tranquility, protect the citizenry against criminals. Cryptography is one of those technical issues that we're evolving into that is a double-edged sword."   HOST: On one hand, the ability to scramble communications through cryptography protects the privacy of individuals. But the other edge of the cryptography sword can potentially cut to the heart of society. Criminals, drug dealers, spies and terrorists can also use scrambling to conceal their plans.   Last April the Clinton Administration unveiled its plans for a chip that would be a highly effective encryption device. This device would also allow law enforcement agencies, operating under strict judicial guidelines, to unlock the encryption and listen in on suspected criminals. Response to this proposal from the telecommunications and computer industries was immediate and overwhelmingly unfavorable. In the face of this strongly negative reaction, the Clinton administration decided to more fully consider its policy on encryption.   Early this month, the administration announced its decision. It will move ahead with the plan articulated last Spring.   The organization, "Computer Professionals for Social Responsibility," has strongly opposed the Clinton Administration's plans for encryption policy. The group's legal counsel, David Sobel, says the key escrow encryption proposal is moving ahead because it has some powerful supporters:   TAPE: SOBEL ACTUALITY :54   "I think a lot of it has to do with the influence that agencies like the FBI, and the National Security Agency have in the upper echelons of the government. I think that agencies like that are able to go to the president, go to the National Security Council, and basically come up with horror stories about terrorist attacks, more World Trade Center bombings, things like that. And I think politically, anyone in a decision-making position, when presented with those kind of scenarios, is likely to take what they would probably consider to be the cautious approach. And I would assume that's what the administration believes it's doing here."   HOST: Even though the administration will implement key escrow encryption, Mister McNulty says use of the special chip will not be mandatory:   TAPE: McNULTY ACTUALITY :19   "Based upon a review of the policy implications here, the government implications here, the government re-affirms its commitment to make this a voluntary initiative rather than try to mandate the key escrowing technique for all communications within the country, or all voice communications, or any of it. It's strictly a voluntary initiative and will be treated as such by agents of the federal government."   HOST: David Sobel of Computer Professionals for Social Responsibility says making key encryption escrow a voluntary standard renders it meaningless. He says criminals and terrorists will simply avoid using the government's authorized encryption technology. But Mister Sobel fears today's voluntary standard could eventually become mandatory:   TAPE: SOBEL ACTUALITY :40   "Maybe five, ten years down the road, the government will say: 'Well, this technology is widely-used within the government. We've proven its effectiveness. However, we are having problems with terrorists and criminals using other technologies.' So now, we are finding it necessary to mandate the use of this technology. And we are going to outlaw the use of any other type of encryption technology.' So that's the concern when the government says that it's voluntary. This kind of proposal on a voluntary basis just doesn't make any sense."   HOST: At the heart of public concern about key escrow encryption is the question of whether governmental agencies can be trusted to protect communications privacy. Mister McNulty of the federal government's National Institute of Standards and Technology says the Clinton Administration has taken every measure to insure the encryption policy will inspire trust:   TAPE: McNULTY ACTUALITY :32   "The record will show the government has always acted based upon the principles that are embedded in the Constitution and the Bill or Rights in determining this particular policy. And beyond that I believe that history will show that government's intent was always to act correctly and within its legal scope in developing this cryptographic policy." [SEGUE TO SOBEL] "Unfortunately, in this country, as in many other countries, there has been a history in the past of abuses in the area of electronic surveillance."   HOST: But in the view of David Sobel, the history of government wiretapping has left a legacy of public distrust:   TAPE: SOBEL ACTUALITY :40   "It wasn't that long ago, in the 1960s and '70s, that local police agencies, federal agencies like the Federal Bureau of Investigation were abusing the power of electronic surveilance. So, I think people in this country are justifiably concerned when the proposal is made that the government should hold the keys to private communications. It's just contrary to the way that people in this country view the role of the government to say that the government should have that kind of power over our personal lives."   HOST: The U-S federal government will move ahead with its plan for key escrow encryption, despite strong opposition from the telecommunications and computer industries. The legal counsel for Computer Professionals for Social Responsibility, David Sobel, says this conflict is the first of many battles which will be fought over the future of America's telecommunications:   TAPE: SOBEL ACTUALITY :50   "A lot of talk has been going on in this country about the so-called national information infrastructure or the information highway, as some people call it, and I think this is really the first indication we're seeing that there are going to be some fights along the way over the design of that highway. And, this raises questions about what features we think as a society should be built into that highway. And there are obviously people in the government who believe that the ability to conduct surveillance is an important design goal, and I think that raises some very serious issues that there really needs to be an informed public debate on (?) before those decisions are made."   HOST: In the view of Lynn McNulty, these kind of issues extend far beyond the United States:   TAPE: McNULTY ACTUALITY :24   "I think that every government in the world will ultimately have to face this particular issue and come to grips with it. And some may decide that they're not going to do anything, they'll just allow the technology to evolve in an unfettered way. And other societies may decide that they're going to strike the same kind of balance that we're attempting to do here in the United States."   HOST: Lynn McNulty is the assistant director for computer security at the National Institute of Standards and Technology.   There is an ironic timeliness in reporting on the government's encryption policy on this edition of Communications World. One year ago today -- February 26th 1993 -- a massive bomb exploded beneath the World Trade Center in New York City. The attack killed six people and injured more than one thousand. That attack also shattered a sense of security that Americans had taken for granted. On that day it became clear terrorists could strike directly at the United States.   Today there's an urgency to protect the nation against terrorist attacks. The administration's policy on encryption puts this urgency in sharp conflict with the old and cherished value of Americans protecting their personal privacy from government intrusion. At the crux of the issue is telecommunications technology. It is the same technology that we rely on to make our efforts more productive and our lives more convenient. But in this instance, telecommunications technology is forcing American society to make difficult choices.   [non-pertinent material deleted]   HOST: Doug Johnson directed this program, the studio engineer was _______. My thanks to them and to you for being with us. I'm Gene Reich wishing you the best in the week ahead. Until next Saturday, keep your mind open and your radio on.   TAPE: CW CLOSER MUSIC ((in full to close))  

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