(Uses tiny chip to encrypt transmissions)  (650)

By Jim Fuller

USIA Science Writer

Washington -- President Clinton has announced a plan for use of a new

technology to scramble telephone and computer transmissions to protect

privacy while still allowing law enforcement agencies to intercept the

phone conversations of criminals.

A White House statement released April 16 said that the new initiative is

based on a state-of-the-art microcircuit called the "Clipper Chip"

developed by the U.S. Department of Commerce's National Institute of

Standards and Technology (NIST).

The chip can be installed in relatively inexpensive encryption devices that

can be attached to an ordinary telephone or computer to scramble

transmissions, preventing access by unauthorized eavesdroppers.  The new

encryption chip is more powerful and provides more security than many other

encryption products currently in use.

The new technology will be offered to private industry as part of a

voluntary program.  At the same time, the president has directed the

Secretary of Commerce to develop standards that will allow all federal

agencies to purchase and use the technology.


American Telephone and Telegraph has announced that it will incorporate the

new standard into its products.  A spokesman said that the Clipper Chip

would enable all commercially available AT&T voice encryption products to

be compatible with each other.

The White House statement said that, under the new plan, export licenses

will be granted on a case-by-case basis for U.S. companies that want to use

the devices to secure their communications abroad.

"The Clipper Chip is designed to protect U.S. business communications

against economic espionage, and will be used by government agencies to

protect sensitive information, including defense and intelligence-related

information," said Raymond Kammer, acting director of NIST.  "It can also

be used to protect the privacy of personal phone conversations."

At the same time, he said, the technology preserves the ability of law

enforcement agencies to lawfully intercept the phone conversations of

criminals, terrorists or drug dealers.

According to Kammer, the current problem is that several different

encryption devices are in use to protect business communications from

eavesdroppers.  But these systems also foil traditional means of

wiretapping used by law enforcement agencies.  It thus becomes more

difficult for these agencies to track down criminals or others who can use

these encryption devices.

Under the proposed new system, each device containing the Clipper Chip would

have two unique numbers, or "keys," needed by authorized government

agencies to decode the transmissions.  Manufacturers of the devices would

send the two numbers for each unit to a data base that would be established

by the U.S. Attorney General.

Only properly authorized government officials would get access to the keys.

The administration emphasized that authorities would never use the new

invention to wiretap without a proper court order.

"The Clipper Chip technology provides law enforcement with no new

authorities to access the content of the private conversations of

Americans," the White House statement said.

The Clipper Chip is currently being manufactured by only one company,

Mykotronx of Torrance, California.  However, it is expected that other

firms will be licensed to manufacture the chip in the future.

To demonstrate the effectiveness of the new chips, the White House said the

Attorney General will soon purchase several thousand of the devices.  In

addition, experts from outside the government will be offered access to the

confidential details of the chip's encryption algorithm to assess its

capabilities and report their findings.

The president has also ordered the Commerce Department to conduct a broad

review that will address the need to use voice or data encryption for

business purposes, the possibility of permitting increased exports of

encryption technology, and the ability of government officials to access

phone calls and data under existing legal authority.  The review is

expected to result in a new comprehensive policy on encryption.