The Clinton administration on Friday proposed a series of new data-scrambling policy initiatives that would permit U.S. companies to more effectively compete internationally.
Administration officials said they are considering liberalizing export controls on encryption software, according to a report by the New York Times. They also are willing to work with the industry to develop an international system for managing the mathematical keys used to scramble data, making it possible for law-enforcement officials to monitor messages.
If the computer industry is willing to cooperate on these key-escrow systems, the officials said, the government would transfer jurisdiction over encryption products from the State Department to the Commerce Department.
During the last three years the administration has attempted to persuade the public to support an approach to protecting the privacy of computer and telephone communications that would permit law-enforcement and intelligence-agency officials to continue to wiretap electronically scrambled messages and conversations.
Originally proposed as a system known as Clipper Chip, the data-scrambling technique would split the mathematical "keys" -- large numbers -- that are used to scramble data and then hold those keys in escrow, making them available to law-enforcement officials who have court orders, permitting them to eavesdrop.
The administration policy, driven by law-enforcement and intelligence-agency requirements, has created bitter opposition from U.S. computer makers, which insist that they are losing sales because of export controls, and by civil libertarians, who argue that Clipper would allow for Big Brother-style surveillance.
Indeed, industry was skeptical of the new proposals.
"We are furious," said James Barksdale, chief executive of Netscape Communications. "This is a proposal that doesn't do anything to solve the immediate needs of industry jobs."
In recent months three bills have been introduced in Congress calling for complete deregulation of export controls, and on Friday the administration appeared to be stepping up its campaign to make the case for a system based on key escrow.
In its statement the administration stressed what it said were the dangers of unregulated encryption technology. It argued that criminals could use encryption to frustrate legal wiretaps and render search warrants for electronic data useless.