Floor Statement by Senator Conrad Burns

Introduction of "Pro-CODE" bill May 2, 1996

     Mr. President, I rise today to introduce the "Pro-CODE" bill, 
or The Promotion of Commerce Online in the Digital Era Act of 
1996, with the following cosponsors: the distinguished Majority 
Leader Senator Dole; Senator Pressler, Senator Leahy, Senator 
Murray, Senator Wyden, Senator Nickles, Senator McCain, Senator 
Ashcroft and Senator Faircloth.

     Like the title of the bill states, my primary objective with 
this legislation is to promote commerce both domestically and 
abroad.  But I have two other goals that I believe will be 
achieved by Pro-CODE: one is to improve the competitiveness of 
American software companies with their foreign competitors, the 
other is to protect the intellectual property and privacy or both 
businesses and individuals.

     Mr. President, Pro-CODE would have a profound impact on our 
economy and the way each of us lives our life from day to day.  
It's a relatively simple bill, but it deals with a term few of us 
are familiar with: encryption.  Encryption is simply the use of a 
string of letters or numbers or a "key" to render our computer 
files and transmissions unreadable by people who have no business 
reading them.  If you have the right key, you can unlock the code 
and have access to that information.

     Unfortunately, American businesses and computer users face a 
threat and it's a threat from their own government because the 
current administration won't let American companies export 
encryption at a level higher than 40 bits.  That's a fancy word, 
but it means is that it's a level of security that can be cracked 
by your basic supercomputer in about one-thousandth of a second at 
a cost of a tenth of a cent.  Companies can sell stronger 
encryption here at home, but it's too expensive to create two 
different standards, so they don't.

     What this means is that commerce and communication on 
computer networks including the Internet is not reaching its full 
potential.  How many of you would feel secure sending your credit 
card number over the Internet especially when you learn that 
reported invasions by computer hackers increased nine-fold between 
1990 and 1994?  Or when Internet World magazine estimates that the 
actual number of unwanted computer penetrations in 1992 alone was 
1.2 million?  If you were a business, how many of you would feel 
secure passing sensitive information to your branches around the 
world or around the nation?  If you were an ordinary citizen, 
would you feel secure knowing that many of your records and files 
are subject to the kind of security that the cyber-criminals of 
today just laugh at?

     Yet that's the problem we face today, and my colleagues here 
today and I find it unacceptable. Just three months ago we passed 
a historic telecommunications law that is designed to make it 
easier to interact with each other.  But that law that vehicle 
which will take us along the information highway is useless 
without the engine of information security driving it forward.

     Mr. President, our bill would allow the unrestricted export 
of mass-market or public-domain encryption programs.  It would 
also require the Secretary of Commerce to allow the export of 
encryption technologies if products of similar strength are 
available elsewhere in the world.  Finally, it would prohibit the 
government from imposing a mandatory key-escrow system in which 
the government or another third party would have a "back door" to 
your computer files.

     I come from a state where distances can often keep us apart.  
From Eureka, Montana, in the northwest to Alzada, Montana, in the 
southeast is the same distance as from Washington, D.C., to 
Chicago.  Anything to bring us closer together will give us 
benefits only enjoyed now by folks in larger areas.  It will also 
give the mom-and-pop businesses in our smallest communities a leg 
up on their bigger competitors as we enter the information age.

     But my concern is also based on the effect the current policy 
is having on jobs and industry in this nation.  Because of our 
current ill-advised policy, American companies will lose their 
share of the world market which now stands at 75 percent to 
foreign companies who don't have to abide by such restrictions.  
For example, I have discovered a World Wide Web page from a South 
African company that boasts 128-bit encryption.  In many cases, 
these encryption programs are available to download from the 

     Mr. President, American companies clearly are at a 
competitive disadvantage.  A study by the Computer Systems Policy 
Project found that within just the next four years, American 
companies could lose $60 billion in revenues and American workers 
could lose 216,000 high-tech jobs.  Our bill is a jobs bill that 
I'm sure the administration can agree with.  But it's not only 
that.  As you can see, it's also a consumers bill.

     One of the questions I have heard is, "How does this 
legislation differ from a bill you are also sponsoring with 
Senator Leahy?" The answer is, not a lot.  However, Pro-CODE  is 
narrower in its scope.  It deals exclusively with the issue of 
commerce and omits the criminality provisions. In addition, it 
does not set up guidelines for a voluntary key-escrow arrangement.  
This is a streamlined measure that I hope to move quickly through 
the Committee on Commerce, Science and Transportation and the 
Science, Technology and Space subcommittee, which I chair.  We 
will have hearings on this bill, hopefully as soon as this month, 
and I hope to have at least one of those in the field where the 
people are affected most by this bill.

     In addition to the diverse and bipartisan group of senators 
you see before you, support for this legislation in the private 
sector is both broad and deep.  There are two homepages on the Web 
that are dedicated to tracking encryption legislation and making 
people aware of why it is needed.  As with the "blue-ribbon 
campaign," Internet users will be encouraged to download the 
golden key and envelope symbol.  They will then be able to link to 
one of the two encryption pages and show their support for this 

     I am also sending today an open letter to the Internet 
community encouraging support for this bill, and I expect it to be 
made available to hundreds of thousands of Internet users.  I will 
also make myself available for at least two online forums to 
discuss my bill with computer users.  Mr. President, I urge 
support for this bill, and I yield the floor.

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