January 15, 1998

The Honorable Dianne Feinstein
United States Senate
Washington, DC 21510

Dear Senator Feinstein,

As Chief Executive Officers of leading California companies, we were disappointed by your November 5 comments at a Senate Judiciary Committee hearing implying that California companies are ambivalent regarding your position on encryption policy. We are anything but ambivalent about an issue that will have a profound impact on our companies, our customers, the citizens of our country, and our nation itself.

We are in the midst of a transformation of our society into an era where information technology is affecting and improving all of our lives and all of our businesses. Without effective security we put at risk the confidentiality of our intellectual property, the public's privacy and the nation's critical infrastructure. And none of us will be able to take full advantage of the opportunities being presented to us by the promise of global electronic commerce.

And consider the burgeoning threat of personal identity theft. As emphasized in the September 1997 issue of Consumer Reports, "the crime is one of the fastest-growing in the nation, according to the California District Attorneys Association. Identity thieves make off with billions of dollars a year...." Strong encryption with no systemic vulnerability is the best protection against such damaging fraud. Indeed, the credit-card industry, as you heard in testimony before the Judiciary Subcommittee on Terrorism and Technology on September 3, soon will be offering publicly a very sophisticated system for secure credit-card transactions over the Internet. While the system will be able to reconstruct transactions soon after the fact in response to legitimate law-enforcement requests, it does not employ keys and would not comply with the kind of mandate contemplated by the FBI.

Mandatory key recovery policies, domestically and for export, will make the United States a second class nation in the Information Age.

We are very sympathetic to the concerns of law enforcement, and we greatly respect your continuing support for them. In fact, if we believed that the policy of mandatory key recovery could successfully prevent criminals from having access to unbreakable encryption, we might support that position. However, this policy cannot succeed, and in the process of failing it will sacrifice the leading role that the State of California is playing in the international economy. Even more important, perhaps, the policy will create new law enforcement and national security challenges because U.S. corporations and government officials will be forced to rely on unproven foreign encryption technology. Maintaining United States leadership in the development of state-of-the-art cryptography is in the best interests of U.S. national security and law enforcement. California companies and industries nationwide are united in opposition to domestic and export controls that jeopardize this leadership.

California companies need your support to be able to meet this new day with a strong and competitive encryption industry. We urge you to meet regularly with representatives from our companies, in Washington D.C. and in California, to discuss this issue further.

Sincerely,

Christopher Allen
President and CEO
Consensus Development Corporation

Bill Archey
CEO
American Electronics Association

Jim Barksdale
CEO
Netscape Communications, Inc.

Carol Bartz
CEO
Autodesk, Inc.

George Bell
CEO
Excite, Inc.

Eric Benhamou
Chairman and CEO
3Com Corporation

Jim Bidzos
CEO
RSA Data Security, Inc.

Philip Bowles
President
Bowles Farming Co., Inc.

Steve Case
Chairman and CEO
America Online, Inc.

Wilfred J. Corrigan
Chairman and CEO
LSI Logic

Thomas B. Crowley
President & CEO
Crowley Maritime Corporation

Philip Dunkelberger
CEO
PGP

Judy Estrin
President & CEO
Precept Software, Inc.

David W. Garrison
CEO
Netcom On-Line Communication Services, Inc.

Karl Geng
President and CEO
Siemens Business Communication Systems, Inc.
Santa Clara, Calif.

Charles M. Geschke
President
Adobe Systems, Inc.

Brian L. Halla
President, Chairman & CEO
National Semiconductor, Inc.

Gordon Mayer
CEO and Chairman
Geoworks Corporation

Scott McNealy
Chairman and CEO
Sun Microsystems, Inc.

Ed Mueller
Predident and CEO
Pacific Bell

Kenneth J. Orton
President and CEO
Preview Travel, Inc.

Willem P. Roelandts
CEO
Xilinx, Inc.

Eric Schmidt
CEO
Novell, Inc.

Tom Steding
CEO
Red Creek

Deb Triant
CEO
Checkpoint

David E. Weiss
Chairman, President and CEO
Storage Technology Corporation