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Computer underground Digest    Sun  May 22, 1994   Volume 6 : Issue 44
                           ISSN  1004-042X

       Editors: Jim Thomas and Gordon Meyer ([e-mail])
       Archivist: Brendan Kehoe
       Retiring Shadow Archivist: Stanton McCandlish
       Shadow-Archivists: Dan Carosone / Paul Southworth
                          Ralph Sims / Jyrki Kuoppala
                          Ian Dickinson
       Covey Editors:         D. Bannaducci & S. Jones

CONTENTS, #6.44 (May 22, 1994)

File 1--EFF's Jerry Berman testimony - House Clipper/DigTel hearing 5/3/94
File 2--Whit Diffie testimony - Senate Clipper Hearing, May 3 1994

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----------------------------------------------------------------------

Date: Fri, 6 May 1994 12:10:26 -0400 (EDT)
From: Stanton McCandlish <[e-mail]>
Subject: File 1--EFF's J Berman testimony - House Clipper/DigTel hearing 5/3/94

Testimony of
Jerry J. Berman, Executive Director
Electronic Frontier Foundation

before the

Committee on Science, Space and Technology

Subcommittee on Technology, Environment and
Aviation

U.S. House of Representatives


Hearing on

Communications and Computer Surveillance, Privacy
and Security


May 3, 1994

Mr. Chairman and Members of the Committee

I want to thank you for the opportunity to testify today on
communications
and computer surveillance, privacy, and security policy.  The Electronic
Frontier Foundation (EFF) is a public interest membership organization
dedicated to achieving the democratic potential of new communications
and computer technology and works to protect civil liberties in new
digital environments.  EFF also coordinates the Digital Privacy and
Security Working Group (DPSWG), a coalition of more than 50 computer,
communications, and public interest organizations and associations
working on communications privacy issues.  The Working Group has
strongly opposed the Administration's clipper chip and digital telephony
proposals.
EFF is especially pleased that this subcommittee has taken an
interest in these issues.  It is our belief that Administration policy
developed in this area threatens individual privacy rights, will thwart
the development of the information infrastructure, and does not even
meet the stated needs of law enforcement and national security agencies.
A fresh and comprehensive look at these issues is needed.


I.Background on digital privacy and security policy
-------------------------------------------------------

>From the beginning of the 1992 Presidential campaign, President
Clinton and Vice President Gore committed themselves to support the
development of the National Information Infrastructure.  They recognize
that the "development of the NII can unleash an information revolution
that will change forever the way people live, work, and interact with
each other."  They also know that the information infrastructure can
only realize its potential if users feel confident about security
measures available.
If allowed to reach its potential, this information infrastructure
will carry vital personal information, such as health care records,
private communications among friends and families, and personal
financial transactions.  The business community will transmit valuable
information such as plans for new products, proprietary financial data,
and other strategic communications.  If communications in the new
infrastructure are vulnerable, all of our lives and businesses would be
subject to both damaging and costly invasion.
In launching its Information Infrastructure Task Force (IITF) the
Clinton Administration recognized this when it declared that:

   The trustworthiness and security of communications channels and
   networks are essential to the success of the NII....  Electronic
   information systems can create new vulnerabilities.  For example,
   electronic files can be broken into and copied from remote locations,
   and cellular phone conversations can be monitored easily.  Yet these
   same systems, if properly designed, can offer greater security than
   less advanced communications channels.  [_Agenda_for_Action_, 9]

Cryptography -- technology which allows encoding and decoding of
messages -- is an absolutely essential part of the solution to
information security and privacy needs in the Information Age.  Without
strong cryptography, no one will have the confidence to use networks to
conduct business, to engage in commercial transactions electronically,
or to transmit sensitive personal information.  As the Administration
foresees, we need

   network standards and transmission codes that facilitate
   interconnection and interoperation between networks, and ensure the
   privacy of persons and the security of information carried....
   [_Agenda_for_Action_, 6]

While articulating these security and privacy needs, the Administration
has also emphasized that  the availability of strong encryption poses
challenges to law enforcement and national security efforts.  Though the
vast majority of those who benefit from encryption will be law abiding
citizens, some criminals will find ways to hide behind new technologies.


II.Current cryptography policy fails to meet the needs of
------------------------------------------------------------
       the growing information infrastructure
----------------------------------------------

As a solution to the conflict between the need for user privacy
and the desire to ensure law enforcement access, the Administration has
proposed that individuals and organizations who use encryption deposit a
copy of their private key -- the means to decode any communications they
send -- with the federal government.
 In our view, this is not a balanced solution but one that
undermines the need for security and privacy without resolving important
law enforcement concerns.  It is up to the Congress to send the
Administration back to the drawing board.

A.Current Export Controls and New Clipper Proposal Stifle Innovation
------------------------------------------------------------------------

Two factors are currently keeping strong encryption out of the
reach of United States citizens and corporations.  First, general
uncertainty about what forms of cryptography will and will not be legal
to produce in the future.  Second, export controls make it economically
impossible for US manufacturers that build products for the global
marketplace to incorporate strong encryption for either the domestic or
foreign markets.  Despite this negative impact on the US market, export
controls are decreasingly successful at limiting the foreign
availability of strong encryption.  A recent survey shows that of the
more than 260 foreign encryption products now available globally, over
80 offer encryption which is stronger than what US companies are allowed
to export.  Export controls do constrain the US market, but the
international market appears to be meeting its security needs without
help from US industry.  The introduction of Clipper fails to address the
general uncertainty in the cryptography market.  Announcement of a key
escrow policy alone is not sufficient to get the stalled US cryptography
market back on track.

B.The secrecy of the Clipper/Skipjack algorithm reduces public trust
------------------------------------------------------------------------
      and casts doubt on the voluntariness of the whole system
--------------------------------------------------------------

Many parties have already questioned the need for a secret
algorithm, especially given the existence of robust, public-domain
encryption techniques.  The most common explanation given for use of a
secret algorithm is the need to prevent users from bypassing the key
escrow system proposed along with the Clipper Chip.  Clipper has always
been presented by the Administration as a voluntary option.  But if the
system is truly voluntary, why go to such lengths to ensure compliance
with the escrow procedure?

C.Current plans for escrow system offer inadequate technical
----------------------------------------------------------------
      security and insufficient legal protections for users
-----------------------------------------------------------

The implementation of a nationwide key escrow system is clearly a
complex task.  But preliminary plans available already indicate several
areas of serious concern:

1._No_legal_rights_for_escrow_users_:  As currently written, the
escrow procedures insulate the government escrow agents from any legal
liability for unauthorized or negligent release of an individual's key.
This is contrary to the very notion of an escrow system, which
ordinarily would provide a legal remedy for the depositor whose
deposit is released without authorization.  If anything, escrow agents
should be subject to strict liability for unauthorized disclosure of
keys.

2._No_stability_in_escrow_rules_:  The Administration has
specifically declared that it will not seek to have the escrow
procedures incorporated into legislation or official regulations.
Without formalization of rules, users have no guaranty that subsequent
administrations will follow the same rules or offer the users the same
degree of protection.  This will greatly reduce the trust in the system.

3._Fixed_Key_:  A cardinal rule of computer security is that
encryption keys must be changed often.  Since the Clipper keys are
locked permanently into the chips, the keys can never be changed.  This
is a major technical weakness of the current proposal.

4._Less_intrusive,_more_secure_escrow_alternatives_are_available_:
The Clipper proposal represents only one of many possible kinds of key
escrow systems.  More security could be provided by having more
than two escrow agents.  And, in order to increase public trust, some
or all of these agents could be non-governmental agencies, with the
traditional fiduciary duties of an escrow agent.

D.Escrow Systems Threaten Fundamental Constitutional Values
---------------------------------------------------------------

The Administration, Congress, and the public ought to have the
opportunity to consider the implications of limitations on cryptography
from a constitutional perspective.  A delicate balance between
constitutional privacy rights and the needs of law enforcement has been
crafted over the history of this country.  We must act carefully as we
face the constitutional challenges posed by new communication
technologies.
Unraveling the current encryption policy tangle must begin with
one threshold question: will there come a day when the federal
government controls the domestic use of encryption through mandated key
escrow schemes or outright prohibitions against the use of particular
encryption technologies?  Is Clipper the first step in this direction?
A mandatory encryption regime raises profound constitutional questions.
In the era where people work for "virtual corporations" and
conduct personal and political lives in "cyberspace," the distinction
between _communication_ of information and _storage_ of information is
increasingly vague.  The organization in which one works may constitute
a single virtual space, but be physically dispersed.  So, the papers and
files of the organization or individual may be moved within the
organization by means of telecommunications technology.  Instantaneous
access to encryption keys, without prior notice to the communicating
parties, may well constitute a secret search, if the target is a
virtual corporation or an individual whose "papers" are physically
dispersed.
Wiretapping and other electronic surveillance has always been
recognized as an exception to the fundamental Fourth Amendment
prohibition against secret searches.  Even with a valid search warrant,
law enforcement agents must "knock and announce" their intent to search
a premises before proceeding.  Failure to do so violates the Fourth
Amendment.  Until now, the law of search and seizure has made a sharp
distinction between, on the one hand, _seizures_of_papers_ and other
items in a person's physical possession, and on the other hand,
_wiretapping_of_communications_.  Seizure of papers or personal effects
must be conducted with the owner's knowledge, upon presentation of a
search warrant.  Only in the exceptional case of wiretapping, may a
person's privacy be invaded by law enforcement without simultaneously
informing that person.
Proposals to regulate the use of cryptography for the sake of law
enforcement efficiency should be viewed carefully in the centuries old
tradition of privacy protection.

E.Voluntary escrow system will not meet law enforcement needs
-----------------------------------------------------------------

Finally, despite all of the troubling aspects of the Clipper
proposal, it is by no means clear that it will even solve the problems
that law enforcement has identified.  The major stated rationale for
government intervention in the domestic encryption arena is to ensure
that law enforcement has access to criminal communications, even if they
are encrypted.  Yet, a voluntary scheme seems inadequate to meet this
goal.  Criminals who seek to avoid interception and decryption of their
communications would simply use another system, free from escrow
provisions.  Unless a government-proposed encryption scheme is
mandatory, it would fail to achieve its primary law enforcement purpose.
In a voluntary regime, only the law-abiding would use the escrow system.

III.Recent policy developments indicate that Administration policy is
-----------------------------------------------------------------------
      bad for the NII, contrary to the Computer Security Act, and
-----------------------------------------------------------------
      requires Congressional oversight
--------------------------------------

Along with the Clipper Chip proposal, the Administration announced
a comprehensive review of cryptography and privacy policy.  Almost
immediately after the Clipper announcement, the Digital Privacy and
Security Working Group began discussions with the Administration on
issues raised by the Clipper proposal and by cryptography in general.
Unfortunately, this dialogue has been largely one-sided.  EFF and many
other groups have provided extensive input to the Administration, yet
the Administration has not reciprocated -- the promised policy report
has not been forthcoming.  Moreover, the National Security Agency and
the Federal Bureau of Investigation are proceeding unilaterally to
implement their own goals in this critical policy area.
Allowing these agencies to proceed unilaterally would be a grave
mistake. As this subcommittee is well aware, the Computer Security Act
of 1987 clearly established that neither military nor law enforcement
agencies are the proper protectors of personal privacy.  When
considering the law, Congress asked, "whether it is proper for a super-
secret agency [the NSA] that operates without public scrutiny to involve
itself in domestic activities...?"  The answer was a clear "no."  Recent
Administration announcements regarding the Clipper Chip suggest that the
principle established in the 1987 Act has been circumvented.
As important as the principle of civilian control was in 1987, it
is even more critical today.  The more individuals around the country
come to depend on secure communications to protect their privacy, the
more important it is to conduct privacy and security policy dialogues in
public, civilian forums.
The NII can grow into the kind of critical, national resource
which this Administration seeks to promote only if major changes in
current cryptography and privacy policy.  In the absence of such
changes, digital technology will continue to rapidly render our
commercial activities and communications -- and, indeed, much of our
personal lives -- open to scrutiny by strangers.  The Electronic
Frontier Foundation believes that Americans must be allowed access
to the cryptographic tools necessary to protect their own privacy.
We had hoped that the Administration was committed to making these
changes, but several recent developments lead us to fear that the effort
has been abandoned, leaving individual agencies to pursue their own
policy agendas instead of being guided by a comprehensive policy.  The
following issues concern us:

*Delayed Cryptography Policy Report
----------------------------------------

The policy analysis called for along with the April 16, 1993
Presidential Decision Directive has not been released, though it was
promised to have been completed by early fall of 1993.  We had hoped
that this report would be the basis for public dialogue on the important
privacy, competitiveness, and law enforcement issues raised by
cryptography policy.  To date, none of the Administration's policy
rationale has been revealed to the public, despite the fact that
agencies in the Executive Branch are proceeding with their own plan

*Escrowed Encryption Federal Information Processing Standard (FIPS)
------------------------------------------------------------------------
      approved against overwhelming weight of public comments
-------------------------------------------------------------

The Presidential Decision Directive also called for consideration of a
Federal Information Processing Standard (FIPS) for key-escrow
encryption systems.  This process was to have been one of several
forums whereby those concerned about the proposed key-escrow system
could voice opinions.  EFF, as well as over 225 of our individual
members, raised a number of serious concerns about the draft FIPS in
September of this 1993.  EFF expressed its opposition to government
implementation of key-escrow systems as proposed.  We continue to
oppose the deployment of Skipjack family escrow encryption systems
both because they violate fundamental First, Fourth, and Fifth
amendment principles, and because they fail to offer users adequate
security and flexibility.

Despite overwhelming opposition from over 300 commenters, the
Department of Commerce recently approved FIPS 185.

*Large-Scale Skipjack Deployment Announced
-----------------------------------------------

At the December 9, 1993 meeting of the Computer Systems Security and
Privacy Advisory Board, an NSA official announced plans to deploy from
10,000 to 70,000 Skipjack devices in the Defense Messaging System in
the near future.  The exact size of the order was said to be dependent
only on budget constraints.  The Administration is on record in the
national press promising that no large-scale Skipjack deployment would
occur until a final report of the Administration Task Force was
complete.  Ten thousand units was set as the upper limit of initial
deployment.  Skipjack deployment at the level planned in the Defense
Messaging System circumvents both the FIPS notice and comments process
which has been left in a state of limbo, as well as the Administration's
promise of a comprehensive policy framework.

*New FBI Digital Telephony Legislation Proposed
----------------------------------------------------

The FBI recently proposed a new "Digital Telephony" bill.  After initial
analysis, we strongly oppose the bill, which would require all common
carriers to construct their networks to deliver to law enforcement
agencies, in real time, both the contents of all communications on their
networks and the "signaling" or transactional information.

In short, the bill lays the groundwork for turning the National
Information Infrastructure into a nation-wide surveillance system, to be
used by law enforcement with few technical or legal safeguards.  This
image is not hyperbole, but a real assessment of the power of the
technology and inadequacy of current legal and technical privacy
protections for users of communications networks.

Although the FBI suggests that the bill is primarily designed to
maintain status quo wiretap capability in the face of technological
changes, in fact, it seeks vast new surveillance and monitoring tools.

Lengthy delays on the promised policy report, along with these
unilateral steps toward Clipper/Skipjack deployment, lead us to believe
that Administration policy is stalled by the Cold War-era national
security concerns that have characterized cryptography policy for the
last several decades.
EFF believes that it would be a disastrous error to allow national
information policy -- now a critical component of domestic policy -- to
be dictated solely by backward-looking national-security priorities and
unsubstantiated law-enforcement claims.  The directions set by this
Administration will have a major impact on privacy, information
security, and the fundamental relationship between the government and
individual autonomy.  This is why the Administration must take action--
and do so before the aforementioned agencies proceed further--to ensure
that cryptography policy is restructured to serve the
interests of privacy and security in the National Information
Infrastructure. We still believe the Administration can play the
leadership role it was meant to play in shaping this policy. If it does
not, the potential of the NII, and of fundamental civil liberties in the
information age, will be threatened.

IV.Congressional oversight of cryptography & privacy policy is
-----------------------------------------------------------------
      urgently needed to right the balance between privacy,
-----------------------------------------------------------
      competitiveness & law enforcement needs
---------------------------------------------

All participants in this debate recognize that the need for
privacy and security is real, and that new technologies pose real
challenges for law enforcement and national security operations.
However, the solutions now on the table cripple the NII, pose grave
threats to privacy, and fail to even meet law enforcement objectives.
In our judgment, the Administration has failed, thus far, to articulate
a comprehensive set of policies which will advance the goals upon
which we all agree.
Congress must act now to ensure that cryptography policy is
developed in the context of the broader goal of promoting the
development of an advanced, interoperable, secure, information
infrastructure.
In order to meet the privacy and security needs of the growing
infrastructure, Congress should seek a set of public policies which
promote the widespread availability of cryptographic systems according
to the following criteria:

*Use Voluntary Standards to Promote Innovation and Meet
------------------------------------------------------------
      Diverse Needs:
--------------------

The National Information Infrastructure stretches to
encompass devices as diverse as super computers, handheld personal
digital assistants and other wireless communications devices, and plain
old telephones.  Communication will be carried over copper wires, fiber
optic cables, and satellite links.  The users of the infrastructure will
range from elementary school children to federal agencies.  Encryption
standards must be allowed to develop flexibly to meet the wide-ranging
needs all components of the NII.  In its IITF Report, the Administration
finds that standards also must be compatible with the large installed
base of communications technologies, and flexible and adaptable enough
to meet user needs at affordable costs. [_AA_, 9]  The diverse uses of
the NII require that any standard which the government seeks to promote
as a broadly deployed solution should be implementable in software as
well as hardware and based on widely available algorithms.

*Develop Trusted Algorithms and End-to-End Security:
---------------------------------------------------------

Assuring current and future users of the NII that their communications
are
secure and their privacy is protected is a critical task.  This means
that the
underlying algorithms adopted must have a high level of public trust and
the overall systems put in place must be secure.

*Encourage National and International Interoperability:
------------------------------------------------------------

The promise of the NII is seamless national and international
communications of all types.  Any cryptographic standard offered for
widespread use must allow US corporations and individuals to function as
part of the global economy and global communications infrastructure.

*Seek Reasonable Cooperation with Law Enforcement and National
-------------------------------------------------------------------
      Security Needs:
---------------------

New technologies pose new challenges to law enforcement and national
security surveillance activities.  American industry is committed to
working with law enforcement to help meet its legitimate surveillance
needs, but the development of the NII should not be stalled on this
account.

*Promote Constitutional Rights of Privacy and Adhere to Traditional
------------------------------------------------------------------------
Fourth Amendment Search and Seizure Rules:
------------------------------------------

New technology can either be a threat or an aid to protection of
fundamental privacy rights.  Government policy should promote
technologies which enable individuals to protect their privacy and be
sure that those technologies are governed by laws which respect the
long history of constitutional search and seizure restraints.

*Maintain Civilian Control over Public Computer and
--------------------------------------------------------
      Communications Security:
------------------------------

In accordance with the Computer Security Act of 1987, development of
security and privacy standards should be directed by the civilian

V.Conclusion
----------------

Among the most important roles that the federal government has in
NII deployment are setting standards and guaranteeing privacy and
security.  Without adequate security and privacy, the NII will never
realize it economic or social potential.  Cryptography policy must, of
course, take into account the needs of law enforcement and national
security agencies, but cannot be driven by these concerns alone.  The
Working Group, along with other industry and public interest
organizations, is committed to working with the Administration to
solving the privacy and security questions raised by the growing NII.
This must be done based on the principles of voluntary standards,
promotion of innovation, concern for law enforcement needs, and
protection of constitutional rights of privacy.

------------------------------

Date: Fri, 6 May 1994 12:07:04 -0400 (EDT)
From: Stanton McCandlish <[e-mail]>
Subject: File 2--Whit Diffie testimony - Senate Clipper Hearing, May 3 1994


Key Escrow: Its Impact and Alternatives


                            Testimony of
Dr. Whitfield Diffie
Distinguished Engineer
Sun Microsystems, Inc.

           Before the Subcommitee on Technology and the Law
                  of the Senate Judiciary Committee


                            3 May 1994

Dr. Diffie is also testifying on behalf of the Digital Privacy and
Security Working Group, a group of more than 50 computer, communications
and public interest organizations and associations working on
communications privacy issues.



 I would like to begin by expressing my thanks to the chairman, the
members of the committee, and the committee staff for the chance not
only of appearing before this committee, but of appearing in such
distinguished company.  It is a pleasure to be able to present not
only my own concerns and those of Sun Microsystem, but to have the
opportunity of representing the Digital Privacy and Security Working
Group.

    I think it is also appropriate to say a few words about my
experience in the field of communication security.  I first began
thinking about cryptography while working at Stanford University in
the late summer of 1972.  This subsequently brought me into contact
with Professor Martin E. Hellman of the Electrical Engineering
Department.  Marty and I worked together throughout the mid-1970s and
discovered the family of techniques now known as public key
cryptography.  It is these techniques that are directly responsible
for the issue before the committee today.  Prior to public key
cryptography, any large scale cryptographically secure system required
trusted elements with the fundamental capability of decrypting any
message protected by the system.  Public key cryptography eliminated
the need for network subscribers to place this level of trust in any
network element.  In so doing, it potentially reduced the subscribers'
vulnerability to government wiretapping.  It is this vulnerability
that the Escrowed Encryption Initiative, seeks to reintroduce.

    In 1978, I walked through the revolving door from academia to
industry and for a dozen years was `Manager of Secure Systems
Research' at Northern Telecom.  In 1991, I took my present position
with Sun Microsystems.  This has allowed me an inside look at the
problems of communication security from the viewpoints of both the
telecommunications and computer industries.


The Key Escrow Program

    Just over a year ago, the Administration revealed plans for a
program of key escrow technology best known by the name of its
flagship product the Clipper chip.  The program's objective is to
promote the use of cryptographic equipment incorporating a special
back door or trap door mechanism that will permit the
Federal Government to decrypt communications without the knowledge or
consent of the communicating parties when it considers this necessary
for law enforcement or intelligence purposes.  In effect, the privacy
of these communications will be placed in escrow with the Federal
Government.

    The committee has asked me to address myself to this proposal and
in particular to consider three issues:

      o Problems with key escrow, particularly in the area of privacy.

      o The impact of the key escrow proposal on American business
both at home and abroad.

      o Alternatives to key escrow.


Scope

    In the course of discussing the key escrow program over the past
year, I have often encountered a piecemeal viewpoint that seeks to
take each individual program at face value and treat it independently
of the others.  I believe, on the contrary, that it is appropriate to
take a broad view of the issues.  The problem confronting us is to
assess the advisability of key escrow and its impact on our society.
This requires examining the effect of private, commercial, and
possibly criminal use of cryptography and the advisability and effect
of the use of communications intelligence techniques by law
enforcement.  In doing this, I will attempt to avoid becoming bogged
down in the distinctions between the Escrowed Encryption Standard
(FIPS185) with its orientation toward telephone communications and the
CAPSTONE/TESSERA/MOSAIC program with its orientation toward
computer networks.  I will treat these, together with the Proposed
Digital Signature Standard and to a lesser extent the Digital
Telephony Proposal, as a unified whole whose objective is to maintain
and expand electronic interception for both law enforcement and
national security purposes.


Privacy Problems of Key Escrow

    When the First Amendment became part of our constitution in 1791,
speech took place in the streets, the market, the fields, the office, the
bar room, the bedroom, etc.  It could be used to express intimacy,
conduct business, or discuss politics and it must have been recognized
that privacy was an indispensable component of the character of many
of these conversations.  It seems that the right --- in the case of
some expressions of intimacy even the obligation --- of the
participants to take measures to guarantee the privacy of their
conversations can hardly have been in doubt, despite the fact that the
right to speak privately could be abused in the service of crime.

    Today, telephone conversations stand on an equal footing with the
venues available in the past.  In particular, a lot of political
speech --- from friends discussing how to vote to candidates planning
strategy with their aides --- occurs over the phone.  And, of all the
forms of speech protected by the first amendment, political speech is
foremost.  The legitimacy of the laws in a democracy grows out of the
democratic process.  Unless the people are free to discuss the issues
--- and privacy is an essential component of many of these discussions
--- that process cannot take place.

    There has been a very important change in two hundred years, however.
In the seventeen-nineties two ordinary people could achieve a high
degree of security in conversation merely by the exercise of a little
prudence and common sense.  Giving the ordinary person comparable
access to privacy in the normal actions of the world today requires
the ready availability of complex technical equipment.  It has been
thoughtlessly said, in discussions of cryptographic policy, that
cryptography brings the unprecedented promise of absolute privacy.  In
fact, it only goes a short way to make up for the loss of an assurance
of privacy that can never be regained.

    As is widely noted, there is a fundamental similarity between the
power of the government to intercept communications and its ability to
search premises.  Recognizing this power, the fourth amendment places
controls on the government's power of search and similar controls have
been placed by law on the use of wiretaps.  There is, however, no
suggestion in the fourth amendment of a guarantee that the government
will find what it seeks in a search.  Just as people have been free to
to protect the things they considered private, by hiding them or storing
them with friends, they have been free to protect their conversations
from being overheard.

    The ill ease that most people feel in contemplating police use of
wiretaps is rooted in awareness of the abuses to which wiretapping can
be put.  Unlike a search, it is so unintrusive as to be invisible to
its victim and this inherently undermines accountability.
Totalitarian regimes have given us abundant evidence that the use of
wiretaps and even the fear of their use can stifle free speech.  Nor
is the political use of electronic surveillance a strictly foreign
problem.  We have precedent in contemporary American history for its
use by the party in power in its attempts to stay in power?

    The essence of the key escrow program is an attempt use the buying
power and export control authority of government to promote standards
that will deny ordinary people ready options for true protection of
their conversations.  In a world where more and more communication
take place between people who frequently can not meet face to face,
this is a dangerous course of action.


    The objections raised so far apply to the principle of key escrow.
Objections can also be raised to details of the present proposal.  These
deal with the secrecy of the algorithm, the impact on security of the
escrow mechanism, and the way in which the proposal has been put into
effect.

Secrecy of the SKIPJACK Algorithm

    An objection that has been raised to the current key escrow
proposal is that the cryptographic algorithm used in the Clipper Chip
is secret and is not available for public scrutiny.  One counter to
this objection is that the users of cryptographic equipment are
neither qualified to evaluate the quality of the algorithm nor, with
rare exceptions, interested in attempting the task.  In a fundamental
way, these objections miss the point.

    Within the national security establishment, responsibility for
communication security is well understood.  It rests with NSA.  In
industry, the responsibility is far more diffuse.  Individual users
are not typically concerned with the functioning of pieces of
equipment.  They acquire trust through a complex social web comprising
standards, corporate security officers, professional societies, etc.
A classified standard foisted on the civilian sector will have only
one element of this process, Federal endorsement.

    One consequence of the use of a classified algoritym that is of
particular concern to industry is the fact that the algorithm is only
available in tamper resistant hardware.  Software is one of the most
flexible and economical ways of building products known.  In typical
computer engineering practice, the additional expense of implementing
functions in hardware is only undertaken when the speed of software in
not adequate for the task.  Often in these cases, more expensive,
higher performance, hardware implementations interoperate with less
expensive, lower performance versions.  Having a standard that can
only be implemented in hardware will increase costs and damage
interoperability.

Security Problems with Key Escrow

    From the viewpoint of a user, any key escrow system diminishes
security.  It puts potential for access to the user's communications
in the hands of an escrow agent who's intentions, policies, security
capabilities, and future cannot be entirely known.  In the context of
modern secure telephone systems, the contrast between escrowed and
unescrowed communications is particularly stark.  In the process of
setting up a secure call, modern secure telephones manufacture
cryptographic keys that will be used for the protection of one and only
one call and will be erased after the call is complete.  Public key
cryptography has made it possible to do this in such a way that these
keys, once erased, can never be recovered.  This give the users
a degree of privacy similar to that in a face to face meeting.  The
effect of key escrow is much like having a tape recorder on throughout
the meeting.  Even if the tapes are very carefully protected, the
people whose words they hold can never be certain that they will not
someday be played to a much wider audience.


    There are also specific vulnerabilities associated with the
present proposal.

    The Skipjack algorithm uses 80-bit keys.  If it is as good as NSA
claims, cryptanalyzing it will require searching through all these
keys or doing about a million billion billion encryptions.  This makes
it sixteen million times as hard to break as DES.  A telephone
conversation would have to be valuable indeed to justify the expense
of such a computation and it is quite plausible that this is entirely
infeasible today.

    The problem is that in creating the Law Enforcement Access Field,
or LEAF that implements key escrow, the Clipper chip also uses 80-bit
keys.  This means that in order to be able to decode everything ever
encrypted by a Clipper chip it is only necessary to do a little more
than twice as much work as would be required to read any one message
--- one cryptanalysis to recover a Session Key followed by one to
recover the Device Unique Key.  A third cryptanalysis is needed to
obtain the Family Key, but this need be done only once, since it is
the same in all chips.

    The process is conceptually straightforward.

     1. Starting with a set of messages encrypted with a particular
Clipper chip cryptanalyze the LEAF fields, by trying every
key, until a key is found that produces a well formed
plaintext from every LEAF.  This works because the LEAF
specifically includes an authenticator designed to make well
formed LEAFs recognizable.  Once the Family Key has been found
it can be used in attacking any Clipper Chip and this process
need not be repeated.

     2. Pick a message and decrypt its LEAF with the family key.
Eighty bits of the result form a cryptogram whose plaintext
is the Session Key used to encrypt the message.  Decrypt
this field with every key in turn.  Try decrypting the message
with each resulting 80-bit quantity to see if it is the
correct session key.  When the correct session key is discovered,
the key that produced it will be the correct Device Unique
Key.

     3. The combination of the Family Key and the Device Unique Key
can now be used to read any message ever encrypted by
the Clipper chip under attack.

    It might be argued that the scenario described above requires
knowing the SKIPJACK algorithm and the LEAF creation method, both of
which are classified.  It is an article of faith, however, in
communications security that nothing that stays constant for a long
period of time can be counted on to remain secret.  With the passage
of time, the chances that the chips will be reverse engineered
increases.

Irregularities in Adoption of the Standard

    Finally, there are disturbing aspects to the development of the
key escrow FIPS.  Under the Computer Security Act of 1987,
responsibility for security of civilian communications rests with the
National Institute of Standards and Technology.  Pursuant to this
statute, the Escrowed Encryption Standard appeared as Federal
Information Processing Standard 185, under the auspices of the
Commerce Department.  Apparently, however, authority over the secret
technology underlying the standard and the documents embodying this
technology, continues to reside with NSA.  We thus have a curious
arrangement in which a Department of Commerce standard seems to be
under the effective control of a Department of Defense agency.  This
appears to violate at least the spirit of the Computer Security Act
and strain beyond credibility its provisions for NIST's making use of
NSA's expertise.


Impact on Business

    Business today is characterized by an unprecedented freedom and
volume of travel by both people and goods.  Ease of communication,
both physical and electronic, has ushered in an era of international
markets and multinational corporations.  No country is large enough
that its industries can concentrate on the domestic market to the
exclusion of all others.  When foreign sales rival or exceed domestic
ones, the structure of the corporation follows suit with new divisions
placed in proximity to markets, materials, or labor.

    Security of electronic communication is as essential in this
environment as security of transportation and storage have been to
businesses throughout history.  The communication system must ensure
that orders for goods and services are genuine, guarantee that
payments are credited to the proper accounts, and protect the privacy
of business plans and personal information.

    Two new factors are making security both more essential and more
difficult to achieve.  The first is the rise in importance of
intellectual property.  Since much of what is now bought and sold is
information varying from computer programs to surveys of customer
buying habits, information security has become an end in itself rather
than just a means for ensuring the security of people and property.
The second is the rising demand for mobility in communications.
Traveling corporate computer users sit down at workstations they have
never seen before and expect the same environment that is on the desks
in their offices.  They carry cellular telephones and communicate
constantly by radio.  They haul out portable PCs and dial their home
computers from locations around the globe.  With each such action they
expose their information to threats of eavesdropping and falsification
barely known a decade ago.

    Because this information economy is relentlessly global, no nation
can successfully isolate itself from international competition.  The
communication systems we build will have to be interoperable with
those of other nations.  A standard based on a secret American
technology and designed to give American intelligence access to the
communications it protects seems an unlikely candidate for widespread
acceptance.  If we are to maintain our leading position in the
information market places, we much give our full support to the
development of open international security standards that protect the
interests of all parties fairly.


Potential for Excessive Regulation

    The key escrow program also presents the specter of increased
regulation of the design and production of new computer and
communications products.  FIPS185 states that `Approved
implementations may be procured by authorized organizations for
integration into security equipment.'  This raises the question of
what organizations will be authorized and what requirements will be
placed upon them?  Is it likely that people prepared to require that
surveillance be built into communication switches would shrink from
requiring that equipment make pre-encryption difficult as a condition
for getting `approved implementations'?  Such requirements have been
imposed as conditions of export approval for security equipment.
Should industry's need to acquire tamper resistant parts force it to
submit to such requirements, key escrow will usher in an era of
unprecedented regulation of American development and manufacturing.


Alternatives to Key Escrow

    It is impossible to address the issue of alternatives to key
escrow, without asking whether there is a problem, what the problem
is and what solution, if any, the problem requires.

    In recent testimony before this committee, the FBI has portrayed
communications interception as an indispensable tool of police work
and complained that the utility of this tool is threatened by
developments in modern communications.  This testimony, however, uses
the broader term `electronic surveillance' almost exclusively and
appears to include some cases in which the electronic surveillance
consisted of bugs rather than wiretaps.  Although the FBI testimony
speaks of numerous of convictions, it names not a single defendant,
court, case, or docket number.  This imprecision makes adequate study
of the testimony impossible and leaves open two issues: the
effectiveness of communications interception in particular and that of
electronic surveillance in general.

    On balance, it appears more likely that the investigative and
evidential utility of wiretaps is rising than that it is falling.
This is partly because criminals, like law abiding citizens, do more
talking on the phone these days.  It is partly because modern
communication systems, like ISDN, provide much more information about
each call, revealing where it came from in real time even when it
originated a long way away.  This detailed information about who
called whom, when, and for how long, that modern switches provide,
improves the PEN register and trap and trace techniques that police
use to map the extent of criminal conspiracies.  It is unaffected by
any encryption that the callers may apply.

    With respect to other kinds of electronic surveillance, the
picture for law enforcement looks even brighter.  Miniaturization of
electronics and improvements in digital signal processing are making
bugs smaller, improving their fidelity, making them harder to detect,
and making them more reliable.  Forms of electronic surveillance for
which no warrant is held to be necessary, particularly TV cameras in
public places, have become widespread.  This creates a base of
information that was, for example, used in two distinct ways in the
Tylenol poisoning case of the mid-1980s.

    Broadening the consideration of high tech crime fighting tools to
include vehicle tracking, DNA fingerprinting, individual recognition
by infrared tracing of the veins in the face, and database profiling,
makes it seem unlikely that the failures of law enforcement are due
to the inadequacy of its technical tools.

    If we turn our attention to foreign intelligence, we see a similar
picture.  Communications intelligence today is enjoying a golden age.
The steady migration of communications from older, less accessible,
media, both physical and electronic, has been the dominant factor.
The loss of information resulting from improvements in security has
been consistently outweighed by the increased volume and quality of
information available.  As a result, the communications intelligence
product has been improving for more than fifty years, with no end in
sight.  The rising importance of telecommunications in the life of
industrialized countries coupled with the rising importance of
wireless communications, can be expected to give rise to an
intelligence bonanza in the decades to come.

    Mobile communication is one of the fastest growing areas of the
telecommunications industry and the advantages of cellular phones,
wireless local area networks, and direct satellite communication
systems are such that they are often installed even in applications
where mobility is not required.  Satellite communications are in
extensive use, particularly in equatorial regions and cellular
telephone systems are being widely deployed in rural areas throughout
the world in preference to undertaking the substantial expense of
subscriber access wiring.

    New technologies are also opening up new possibilities.  Advances
in emitter identification, network penetration techniques, and the
implementation of cryptanalytic or crypto-diagnostic operations within
intercept equipment are likely to provide more new sources of
intelligence than are lost as a result of commercial use of
cryptography.

    It should also be noted that changing circumstances change
appropriate behavior.  Although intelligence continues to play a vital
role in the post cold war world, the techniques that were appropriate
against an opponent capable of destroying the United States within
hours may not be appropriate against merely economic rivals.

    If, however, that we accept that some measure of control over
the deployment of cryptography is needed, we must distinguish two
cases:

The use of cryptography to protect communications and

The use of cryptography to protect stored information.


It is good security practice in protecting communications to keep any
keys that can be used to decipher the communications for as short a
time as possible.  Discoveries in cryptography in the past two decades
have made it possible to have secure telephones in which the keys last
only for the duration of the call and can never be recreated,
thereafter.  A key escrow proposal surrenders this advantage by
creating a new set of escrowed keys that are stored indefinitely and
can always be used to read earlier traffic.

    With regard to protection of stored information, the situation is
quite different.  The keys for decrypting information in storage must
be kept for the entire lifetime of the stored information; if they are
lost, the information is lost.  An individual might consider
encrypting files and trusting the keys to memory, but no organization
of any size could risk the bulk of its files in this fashion.  Some
form of key archiving, backup, or escrow is thus inherent in the use
of cryptography for storage.  Such procedured will guarantee that
encrypted files on disks are accessible to subpoena in much the same
way that file on paper are today.

    Many business communications, such as electronic funds transfers,
fall into an intermediate category.  Although the primary purpose is
communication rather than storage, the transactions are of a formal
nature.  In these cases, an escrow mechanism much like those in
current commercial use may be appropriate.  In a high value
transaction, where the buyer and seller do not have an established
business relationship, either party may demand the use of a mutually
trusted escrow agent who will take temporary custody of both the goods
and the payment.  In a similar fashion, either party to an encrypted
transaction might demand that only keys escrowed with a mutually
acceptable escrow agent be used.

    What is most important here is that the laws, customs, and
practices governing electronic commerce and, in a broader context,
electronic society are just beginning to develop.  It is likely that
escrow mechanisms will be among the tools employed.  It is, however,
too early to say what form they should take.  They will need to be
worked out as society gets more experience with the new communications
media.  They should not be imposed by government before society's real
needs have been determined.


Conduct of the Key Escrow Initiative

    In my experience, the people who support the key escrow initiative
are inclined to express substantial trust in the government.  I find
it ironic therefore that in its conduct of this program, the
administration has followed a course that could hardly have been
better designed to provoke distrust.  The introduction of mechanisms
designed to assure the governments ability to conduct electronic
surveillance on its citizens and limit the ability of the citizens to
protect themselves against such surveillance is a major policy
desision of the information age.  It has been presented, however, as a
technicality, buried in an obscure series of regulations.  In so
doing, it has avoided congressional consideration of either its
objectives or its budget.  The underlying secrecy of the technology
has been used as a tool for doleing out information piecemeal and
making a timely understanding of the issues difficult to achieve.


Suppose We Make a Mistake

    In closing, I would like to ask a question.  Suppose we make a
mistake?

      o Suppose we fail to adopt a key excrow system and later
decide that one is needed?

      o Suppose we adopt a key escrow system now when none is
needed?

Which would be the more serious error?

    It is generally accepted that rights are not absolute.  If private
access to high-grade encryption presented a clear and present danger to
society, there would be little political opposition to controlling it.
The reason there is so much disagreement is that there is so little
evidence of a problem.

    If allowing or even encouraging wide dissemination of high-grade
cryptography proves to be a mistake, it will be a correctable mistake.
Generations of electronic equipment follow one another very quickly.
If cryptography comes to present such a problem that there is popular
consensus for regulating it, this will be just as possible in a decade
as it is today.  If on the other hand, we set the precedent of
building government surveillance capabilities into our security
equipment we risk entrenching a bureaucracy that will not easily
surrender the power this gives.


Recommendation

    In light of these considerations, I would like to suggest that the
Federal Standards making process should be brought back into line with
the intent of the Computer Security Act of 1987.  Congres should press
the National Institute of Standards and Technology, with the
cooperation of the National Security Agency, to declassify the
SKIPJACK algorithm and issue a revised version of FIPS 185 that
specifies the algorithm and omits the key escrow provisions.  This would
be a proper replacement for FIPS 46, the Data Encryption Standard, and
would serve the needs of the U.S. Government, U.S. industry, and U.S.
citizens for years to come.


Notes

    I have examined some aspects of the subjects treated here at
greater length in other testimony and comments and copies of these
have been made available to the committee.

"The Impact of Regulating Cryptography on the Computer and
Communications Industries" Testimony Before the House Subcommittee on
Telecommunications and Finance, 9 June 1993.

"The Impact of a Secret Cryptographic Standard on Encryption,
Privacy, Law Enforcement and Technology" Testimony Before the House
Subcommittee on Science and Technology, 11 May 1993

Letter to the director of the Computer Systems Laboratory at the
National Institute of Standards and Technology, commenting on the
proposed Escrowed Encryption Standard, 27 September 1993.


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End of Computer Underground Digest #6.44
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