With increasing use of the Internet for private business and personal information transfer, consumer demand for products with strong encryption capabilities is clear; however, products with government access are unwarranted and undesirable. Such a policy not only jeopardizes the personal freedom of every American, it threatens the future of the U.S. software industry—one of the fastest-growing and successful industries in the nation. The impact on the U.S. economy will be significant—lost jobs for American workers and lost revenues in state and local taxes.
It is time for the American people to be informed of the far-reaching implications of this policy. Below are some key developments in this debate:
Department of Commerce admits export controls stifle growth—
On January 18, the Department of Commerce (DOC) released a study which confirms the software industry's worst fears. The DOC report states the "growth" of an international market for encryption software is being slowed by strong export controls, both in the U.S. and other major countries." Commerce Secretary Ron Brown appears to recognize the severity of this situation and according to articles in The New York Times, Los Angeles Times, San Jose Mercury News, and USAToday, he will reportedly recommend easing export controls on encryption software.
Justice Dept. Charges dropped—
On January 11, the Department of Justice dropped charges against Phil Zimmerman, author of "Pretty Good Privacy," a popular encryption program posted free on the Internet. After a 28-month investigation, the Administration has recognized the Internet will provide unprecedented market opportunities. And, the "technology genie" is out of the bottle. U.S. software companies should be permitted to compete on a level playing field with foreign software producers and others who are providing encryption products.
Jobs and U.S. economy threatened: A wake-up call to the Administration—
A study on the impact of these restrictions was released this week by the Computer Systems Policy Project—a project headed by CEOs from Apple, AT&T;, Compaq Cray research, Data General, Digital, Hewlett-Packard, IBM, Silicon Graphics, Stratus, Sun, Tandem and Unisys. "The Impact of Export Control Policy on U.S. Competitiveness" found that within four short years, the U.S. economy could lose $60 billion in revenues and roughly 216,000 jobs due to outdated U.S. encryption export controls.
Companies forced to use stop-gap measures—
Strangled by government encryption export restrictions, U.S. software companies have resorted to stop-gap measures to answer consumer demands for products with stronger encryption capabilities. Ray Ozzie, creator of Lotus Notes, stated in the Wall Street Journal on January 18, "We do not believe this is the right long-term solution."
The Business Software Alliance's member companies firmly believe lessened export restrictions are necessary to prevent the U.S. software industry from losing its pre-eminence in the international marketplace. Immediate relief is absolutely critical.
The Internet has the potential of developing into brilliant, global arteries for the flow of information, finance, and trade. However, if business and consumers are to fully utilize the Internet, for electronic commerce and the transmission of confidential information, their valid concerns about the security and privacy of electronically stored and transmitted data must be answered.
For more information, please contact Diane Smiroldo at (202) 872-550 or via e-mail at [email protected]