Cryptography is under intense debate in the United States. Cryptography's ability to guarantee both complete anonymity and totally private communications is viewed differently by different groups.
Law enforcement perceives widespread cryptography as a powerful threat to their ability to conduct surveillance. Cryptography is classified as a munition by the International Traffic in Arms Regulations (ITAR) for the purpose of export, and until 1996 was controlled by the National Security Agency (NSA) through the U.S. State Department.
The restrictions on the export of cryptography was not terribly significant until the 1980s brought an increasing internationalization of business. When software and hardware giants like Microsoft and Motorola began developing products with global audiences in mind, there was a significant economic disincentive for them to create two different products - one for domestic use and one for export. This resulted in the availability of "dumbed down" encryption technology on the domestic market. Industry argues that it's not realistic to think that foreign competitors are incapable of designing and implementing more secure encryption into their products, and that our short sighted export restrictions will ultimately cost them global market share.
One proposed middle route to the domestic encryption debate came in the 1994 Clinton administration proposal called the Escrowed Encryption Standard (EES) or "Clipper Chip". The Clipper Chip is a key escrow hardware-based encryption implementation targeted to communications. The Clipper Chip uses a secret algorithm called Skipjack and a unique, hard coded 80-bit key to encrypt communications. The proposal specifies that the key is escrowed in two halves at two different escrow agencies - both halves are required to recover the key. Each Clipper Chip is designed to resist reverse engineering and also contains a serial number and an 80-bit family key.
When two Clipper-enabled devices communication, they first establish a session key, then broadcast something called the law-enforcement access field (LEAF) in addition to the encrypted communication. The LEAF includes the session key K encrypted with the unit key U, the serial number of the sender and an authentication string, and then, finally, all encrypted with the family key. The receiver decrypts the law-enforcement field, checks the authentication string, and decrypts the message with the session key K.
If a law-enforcement agency wishes to tap the line, it uses the family key to decrypt the LEAF; the agency now knows the serial number and has an encrypted version of the session key. By presenting the appropriate authorization warrant and serial number to the two escrow agencies, law enforcement agency can obtain the two halves of the unit key and decrypt the actual message.
The Clipper Chip proposal stirred up the civil liberties and cryptology fields, both because it was a "secret" algorithm and therefore could not be tested, and because it seemed to give a false sense of security. Why should we think that organized crime won't be able to crack Skipjack or the escrow system. To date, the administration has instituted it as a voluntary standard, with limited success.
The social implications of cryptography are debated passionately at many levels, by very vocal participants. For the time being, the Internet continues to be a primary field for this debate because these early adopters of technology understand the nuances of the debate.
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