1996 Congressional Hearings
Intelligence and Security

Atalla's Bob Gargus testifies before US Senate

June 26, 1996

Testimony of Robert G. Gargus, President of Atalla
Before the Science, Technology and Space Subcommittee of the Committee on Commerce, Science and Transportation

Mr. Chairman, members of the Subcommittee, my name is Robert Gargus. I am the President and General Manager of Atalla Corporation, a Tandem Company. Atalla is a major supplier of cryptographic security processors to financial networks around the world with as much as 70% of ATM traffic in North America going through an Atalla security box. In addition, our recently announced Internet Security Processor will extend Atalla s leadership to this rapidly emerging marketplace.

The issue in front of the committee is both complicated and serious. It is an issue filled with conflicting facts and emotions that, quite frankly, have no easy resolution. What is required is choosing the best alternative. Therefore, my approach in this paper is to define the problem, discuss the alternatives, and propose a conclusion.

Definition of the problem

Current export regulations have not kept pace with technological advances and growing cryptographic needs for the internet, communications, electronic commerce, telemedicine, digital cash, etc. Foreign competition, unencumbered by these regulations is making inroads and poses a threat to the US computer industry (hardware and software.) At the same time, the advances in strong cryptography pose a threat to law enforcement and national security.

Law, technology, and economics are the three central elements in any society. All these be kept in balance if freedom and prosperity are to be secure.

The alternatives

The four scenarios which are most likely to appear are: (I) Do Nothing, (II) Mandatory Key Escrowed, (III) Self Escrow, and (IV) Decontrol. Let s take each of these one at a, but recognize that the first one is the longest because it sets the stage for discussion of the other alternatives.

I) Do nothing:

There is an implicit assertion in this alternative: either what we have is good enough or we don t know what to do, therefore let s not act until we figure it out. Neither of these assertions recognizes the growing need for encryption, the explosive advances in encryption technology, or the impact to the whole information industry - not just the encryption industry.

Let's examine each of these:

The growing need for encryption

There is a growing need for information to be held privately and securely. Senator Wyden said it>

Transfer interrupted!