Big Brother Could Hobble High Tech

Like some techno-Santa, President Clinton swept into office laden with promises for America's high-tech industries--and delivered on many of them. The White House boosted technology funding, eased export controls on computers, and laid out a vision for a national Information Highway.

But a funny thing is happening on the way to high-tech nirvana. Government defenders of law and national security are warning that the world is still too dangerous to give techies free rein. The Pentagon, which supported relaxation of export controls last year, has shifted back to a cold-war-like stance. The FBI, fretting that the Digital Age makes it harder to spy on criminals, wants expanded powers to patrol the Info Highway. And the National Security Agency is trying to suppress the use of virtually unbreakable codes by foreign terrorists.

These are all legitimate concerns. The problem is that the spooks, G-men, and generals have persuaded the White House to back initiatives in the name of law enforcement and national security that range from unfortunate to seriously misguided--and could hamstring the advancement of technology.

MONKEY WRENCH. Consider the latest scheme, the so-called digital telephony bill, an FBI proposal embraced by the Administration in early March. It would require that any new technology installed by communications common carriers permit the nation's watchdogs to eavesdrop on calls and electronic mail. It would also require phone companies to collect "setup" information--basically who is calling whom--on connections as they are made. As a result, agents could watch every move suspects make on-line, from shopping for clothes to breaking into data bases. "We're all for the Information Superhighway," explains FBI Director Louis J. Freeh. "We just don't want a superhighway without a cop on it."

But the current proposal goes too far. "It turns a system of communication into something whose purpose is surveillance," says David Banisar, policy analyst with Computer Professionals for Social Responsibility, an advocacy group. The FBI's past record of illegal wiretaps makes it hard to assume that the power won't be abused.

What's more, the measure might even throw a wrench into the development of the Infobahn. Communications industry officials say that portable personal phone numbers are one innovation that could be stymied by the proposed rules. When the numbers are used on the road, the call can't be picked up by standard wiretaps on home exchanges. So phone companies would have to install cumbersome technology to reroute calls back to the home switch--or not offer the service at all. "The thrust of the bill is: `If we can't tap it, you can't do it,'" complains David J. Markey, vice-president for government affairs at BellSouth Corp. "That will interfere with our ability to modernize the network."

Just as ill-advised are attempts to control encryption technology. Pushed by the NSA, the White House wants companies to adopt the "Clipper chip," a device that turns communications and files into nearly unbreakable code. The catch is that the feds can open a "trap door" and listen in. To encourage use of the chip, the Administration is blocking export of rival encryption systems. The net effect could be disastrous. The law-enforcement benefits are minuscule, since terrorists wouldn't code messages with the Clipper chip. And with equally secure systems available around the world, the export controls could end up costing U.S. companies up to $6 billion a year in sales, estimates the Business Software Alliance.

So why is the White House pushing the retrograde notions? One reason is the Clintonites' fear of appearing soft on crime and terrorism. "No one wants the head of the FBI walking around saying: 'I don't have what I need to do my job,'" says BellSouth's Markey.

Things aren't entirely bleak. The Administration, taken aback by vehement opposition from industry, Congress, and civil libertarians, is suggesting it may back off. "People are willing to work things out," says White House Staff Secretary John D. Podesta, who is involved in technology issues. FBI Director Freeh says he's willing to accept higher hurdles to get court approval for surveillance. And there are tantalizing hints that the White House is reconsidering its hard line on the Clipper chip. Such policy shifts would go a long way toward avoiding some serious bumps on the Information Superhighway--and restore Clinton to the techie's pantheon.

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