SPA Renews Call for Liberalizing Export Controls on Encryption Software 

Offers New Evidence of Foreign Encryption Products

June 3, 1993 (Washington DC) -- At a National Institute of Standards and
Technology (NIST) hearing today on national cryptographic policies, the
Software Publishers Association (SPA) explained how continued "munitions"
export controls of mass market software with encryption capabilities were
seriously harming the American software industry and renewed its call for
significant export liberalization of mass market software using DES or
other encryption algorithms such as RC2/RC4 at comparable strengths. SPA
also warned that the Administration's recent announcement of its "Clipper
Chip" initiative did not address the software industry's concerns and
should not be an excuse to delay export liberalization.

The SPA announced the preliminary results of its recent research which
reveal a robust and rapidly expanding foreign market in encryption
programs and products. "Unilateral US export controls do not make any
sense given the widespread legal availability of foreign encryption
programs," testified Llene Rosenthal, SPA's General Counsel. "Foreign
companies will buy foreign encryption products if they cannot buy from
American companies and in turn become ex-US customers. As a result, the US
Government will only succeed in crippling an American industry's exporting
ability."

The SPA research team preliminarily concluded that:

* The US no longer dominates the encryption field. In fact, the SPA has
identified to date more foreign than domestic encryption programs and
products (143 versus 133).

* There clearly are many foreign options for strong encryption, contrary to
assertions by the US government. SPA has preliminarily identified to date
80 foreign software, hardware, and combination hardware/software products
for text, data, and file encryption from companies in 13 foreign
countries. Forty-eight (48) of these employ DES, which is nearly
impossible tc) export from the US in other than very rare circumstances.
Sixty-three (63) additional foreign encryption programs and products have
been identified (including those from an additional five countries) but
have yet to be investigated. However, SPA believes many of these also will
be found to employ DES or other comparable strength encryption
algorithms.

* Fifteen (15) foreign mass market encryption software programs and kits
are available that employ the DES algorithm. These are published by
companies in Germany, Israel, the United Kingdom, Denmark, Canada,
Belgium, and Australia. These software programs are installed by the user
inserting a diskette; the kits enable encryption capabilities to be easily
programmed into a variety of applications.

* Foreign companies increasingly recognize and are responding to the need
to provide software only encryption solutions. Although the foreign
encryption market is still heavily weighted towards encryption hardware
and hardware/software combinations, the market trend is going to
software.

The SPA noted that in addition to these commercially available programs and
products, any analysis of the availability of foreign encryption
alternatives must consider programs available on the Internet, which is
the largest global network connecting millions of users throughout the
world.

* DES is widely available on the Internet, including implementations that
can be simply down-loaded and used.

* A recently popularized encryption program entitled Pretty Good Privacy
(PGP) also is widely available throughout the world. PGP implements the
International Data Encryption Algorithm (IDEA), which provides protection
comparable to DES. The program is intended for electronic mail, but also
is ideal for encrypting files. It is available for free, may be used
legally throughout Europe, whether in a business or at home, comes with
easy-to-read instructions, is trivial to install, and simple to use.

"Some government officials routinely assert that even if the Government
prohibits America's software publishers from offering encryption features
demanded by their customers abroad, we should not be concerned because
there are no foreign programs and products available," said Ken Wasch,
SPA's Executive Director. "Our research shows that such an assertion is
erroneous. In fact, there are a very large number of such programs and
products available on the market today. The result is lost sales for
American business without any improvement in national security."

The Software Publishers Association is the principal trade association of
the PC software industry. Its more than 1000 members represent the leading
publishers in the business, consumer, and education markets. The SPA has
offices in Washington, DC, and Paris, France.

Software publishers Association
1730 M St, Northwest, Suite 700, Washington, D.C. 20036
202-452-1600,  Fax: 202-223-8756

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