On October 1, 1996, the White House released the latest version of the key escrow -- now called "key recovery" -- plan intended to promote government access to encoded communications. The new proposal follows earlier proposals in which the Administration offers to relax export regulations in exchange for an industry commitment to establish key escrow encryption.
Under the plan announced by the Office of the Vice President, companies would be permitted to export 56-bit encryption systems for the next two years if they establish a formal process to fully develop a key escrow system. After two years, non-escrowed systems would be prohibited. Jurisdiction for the control of exports would be transferred from the State Department to the Commerce Department. The Justice Department would be given veto power over export applications. The White House plans to introduce legislation to facilitate the operation of key escrow centers.
According to the statement released by the Vice President, the Administration will continue to promote key escrow encryption through the purchase of key recovery products, bilateral and multilateral discussions, federal cryptographic and key recovery standards, and federal funding. The statement also said that "the Administration's initiative is broadly consistent with the recent recommendations of the National Research Council." However, the NRC report recommended against government promotion of key escrow encryption, noting that "the risks of key escrow encryption are considerable." Earlier this year, the Internet Society also endorsed a recommendation of the Internet Architecture Board and the Internet Engineering Steering Group which found that "such policies are against the interests of consumers and the business community, and are largely irrelevant to issues of military security."
A day after the release of the White House statement, a consortium of companies led by IBM announced that it will work to develop "high-level cryptographic 'key-recovery' solutions that meet the requirements of business and could allow easing of restrictions of cryptographic import/export around the world."
Documents and Press Coverage