Of Privacy and Security: The Clipper Chip Debate ------------------------------------------------ By PETER H. LEWIS Published: April 24, 1994 AT first glance, the Clipper chip is a rather undistinguished slice of silicon, no more exotic than the microprocessors found in millions of personal computers. Even so, it has managed to inflame the hearts and minds of the technological elite who are struggling to shape the country's future in the digital age. Congressional hearings are scheduled to resume this week on the chip, the heart of the Clinton Administration's new voice and data security system, officially known as the key escrow encryption initiative. The Administration's goal is to make it easier for law enforcement officials to conduct legal wiretaps on new generations of devices that send information over the telephone system, including wireless phones, computers and facsimile machines. The hearings, before subcommittees of the Senate Judiciary Committee and the House Committee on Science, Space and Technology, have been called to review the adoption of Clipper as a new encryption standard, a move that has been widely criticized on privacy grounds, and to explore modifications and alternatives. It is the hope of Administration officials that Clipper will eventually become a standard part of telephones and other communication devices. Clipper works this way: When two people decide they want to secure their communications, they activate their encryption devices. The devices exchange "secret" numerical keys and use the Clipper chip to encode and decode the voice message or data stream, making them gibberish to outsiders. Using current technology, an eavesdropper would be unable to crack the code without having access to the right keys. But to reduce the risk of criminals or spies using the encryption standard to hide illegal acts, the Government would hold master keys to each Clipper chip. As a safeguard against potential Government abuse, the master keys would be divided in half and each half would be held in "escrow" by different Government agencies. At issue is the balance between the Government's determination to preserve its ability to conduct lawful wiretaps and the right to privacy cherished by its citizens. The outcome of the debate will, in large measure, illuminate the values of a society that is trying to cope with rapid change. "The decisions we make about communication security today will determine the kind of society we live in tomorrow," Whitfield Diffie, a cryptography expert and an engineer at Sun Microsystems Inc., said in testimony before Congress last year. The Government hopes to establish Clipper -- a code name that apparently has no special significance -- as a "voluntary standard" for protecting both private and Government communications. Although it appears to have softened its stance in recent weeks, the Administration is expected to argue this week that Clipper is the best technology to meet the differing desires of privacy advocates and law enforcement officials. Opponents say it is an unnecessary, expensive initiative that has more potential for abuse than for good use. The Background Secret codes have been around for more than 2,000 years, but in recent years, boosted by the power of computers, encryption has become extremely elaborate. At the same time, computers have accelerated code-breaking skills. Development of the Clipper chip encryption system began during the Bush Administration in response to concerns among law enforcement officials that rapid advances in technology would make it much more difficult to conduct wiretaps and electronic surveillance. There also were concerns that the Government's current data encryption standard, which is used in everything from Government communications to bank cash machines, was vulnerable to attack. So several years ago, the National Security Agency, part of the Department of Defense, devised a new and more powerful encryption algorithm, or math formula, code-named Skipjack, that the Government contends is robust enough to withstand any code-breaking attempt in the foreseeable future. The Skipjack algorithm, which is highly classified, has been encoded into the tamper-resistant Clipper microprocessor. The Government has spent millions of dollars to encourage production of the chip (it is made by a California company, Mykotronx Inc.), hoping to drive down costs to the point that the chip could be commonly installed in new telecommunications devices. To date, the only commercially available Clipper product is the AT&T Surety Telephone Device 3600, a $1,195 box about the size of a video cassette that can be attached to a standard telephone. While it is significantly less expensive than previous "secure" telephone devices used in the business world, its relatively high cost means the Clipper technology is unlikely to become a widely available consumer feature for many years. In the meantime, strong data encryption products other than Clipper -- some of which are available simply as software, which makes them cheaper than Clipper -- are readily available in the United States and abroad. Some are proprietary, developed by AT&T and other companies, while others are commercial products. The Debate Both the Administration and privacy advocates agree that some form of data and voice encryption is needed to safeguard information that travels over electronic networks. Unencrypted tax returns, medical records, corporate trade secrets, Government bids, and, as an embarrassed Prince Charles discovered last year, even wireless phone calls to friends are vulnerable to interception as they pass through the telephone system. "Every time we make any sort of transaction in a digital environment, we smear our fingerprints all over cyberspace," said John Perry Barlow, a co-founder of the Electronic Frontier Foundation, a lobbying group concerned with issues of the data networks. "If we are to have any privacy in the future, we will need virtual 'walls' made of cryptography," Mr. Barlow added. But as the Administration noted in a statement in February announcing its endorsement of Clipper as a new encryption standard, "Unfortunately, the same encryption technology that can help Americans protect business secrets and personal privacy can also be used by terrorists, drug dealers and other criminals." To keep criminals from turning the Clipper standard against the Government, the National Security Agency included in it the "key escrow" mechanism, the combination lock to which the Government holds the keys. In February, Attorney General Janet Reno said the National Institute of Standards and Technology and the automated systems division of the Treasury Department would act as escrow agents for the encryption keys. Law enforcement officials would have to obtain court orders before these agencies would grant them access to the keys. To the relief of critics, Vice President Gore has insisted that the Justice Department name an independent third party -- one not controlled by the executive branch and perhaps not even a part of the Government -- to hold at least one of the keys. The issue is likely to be raised in this week's hearings. Although an independent key-holder could reduce the anxiety of some Clipper opponents, those who do not trust the Government's motives say any key escrow system could make it possible for a Big Brother Government to eavesdrop on all Clipper-encoded messages, from private citizens as well as from nuclear terrorists. "Relying on the Government to protect your privacy is like asking a Peeping Tom to install your window blinds," said Mr. Barlow of the Electronic Frontier Foundation. But supporters of the Clipper scheme say the fears are unrealistic. "The standard will not make it any easier to tap phones, let alone computer networks," said Dorothy Denning, chairwoman of the computer sciences department at Georgetown University and an expert in cryptography. "All it will do is make it technically possible to decrypt communications that are encrypted with the standard, assuming the communications are not superencrypted with something else. "Law enforcers still need to get a court order just to intercept the communications in the first place, and advances in technology have made interception itself more difficult," Ms. Denning added. The Government requests fewer than 1,000 legal wiretaps a year, and it declined to say how many of those have involved encryption. Opponents of the Clipper plan say no criminals or terrorists smart enough to use data encryption would be dumb enough to use a system invented and potentially monitored by the Government. "Why would a terrorist organization go down to Radio Shack and buy a Clipper chip scrambling system that says 'Made by N.S.A.'?" asked Jerry Berman, executive director of the Electronic Frontier Foundation. Stewart A. Baker, general counsel for the National Security Agency, responded, "Never underestimate the stupidity of criminals." A Federal Bureau of Investigation official who spoke on the condition that his name not be used conceded that Clipper "will not catch smart criminals, but it will get some dumb ones. A lot of them don't use encryption now, and that's pretty stupid." The official, asked to enumerate specific cases in which the Government's inability to crack a criminal's encryption scheme thwarted a successful investigation, said Clipper advocates are in a bind. "We can't discuss that, for obvious reasons," he said. The Fears Amplifying Ms. Denning's point about misplaced fears, Government officials say that even though Clipper has been endorsed as a new standard, everyone, including Government agencies, may use other encryption systems in place of or in addition to it. "Voluntary, voluntary, voluntary," said an exasperated Edward A. Roback, a specialist in the computer systems laboratory of the National Institute of Standards and Technology in Gaithersburg, Md. "We are advising Federal agencies that they should be using security products that best meet their security needs in a cost-effective manner. Those outside the Government can avail themselves of this technology as well. We're certainly not forcing anyone to use it. "Domestically, anybody can use whatever they want," Mr. Roback continued. "There are no domestic restrictions and, no, the Administration has no plans to propose any." However, critics say a Government standard could be used to force others to adopt Clipper if they wanted to do business with the Government. As for Clipper being voluntary within the Government, "It is not at all clear to me that Federal agencies will feel free not to comply," said Mr. Diffie, the cryptography expert, citing a perceived tendency for bureaucrats to protect their jobs. Foreign restrictions are another matter. The Government, citing national security issues, has restricted the export of competing strong encryption systems. If strong encryption technology "is made freely available worldwide, it would no doubt be used extensively by terrorists, drug dealers and other criminals to harm Americans both in the U.S. and abroad," the Administration said in its February statement. Critics say such restrictions harm companies that make competing encryption systems and place them at a disadvantage to foreign codemakers. High-tech hardware and software companies in the United States cannot use the best encryption technologies in products intended for sale overseas. And, they note, foreign customers are not enthusiastic about the prospects of Clipper-based systems. As a result, high-tech companies are reportedly searching for an alternative encryption system they can rally around. The prospect of a widely adopted Clipper alternative does not seem as hopeless as it might have a few months ago; even Mr. Gore suggested recently that the Administration is open to studying alternatives.