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CLIPPER CHIP BACKERS SAY the microprocessor will be limited to phone gear, keeping Big Brother away from the Information Highway. The chip transforms messages into a code that commercial competitors can't break, but still lets government eavesdrop in the national interest, catching crooks and such. The White House hopes to persuade a distrustful Corporate America to adopt the chip by insisting the feds will stay out of companies' computer banks.

IN REALITY, various arms of the government are already planning to slip the same basic Clipper technology into federal computers. And that raises the fear that the feds eventually will require all who do business with them to do the same. The National Security Agency, for instance, has solicited bids for an encryption card, containing a Clipper-like chip, that can be used to make communications on any network secure. The card, NSA tells bidders, will be used widely in government computer networks, including those in the House and Senate.EDITED BY LARRY LIGHT AND JULIE TILSNER John Carey

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