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U.S. Govt Relaxes Encryption Export Rules

The Clinton Administration's new encryption policy, which loosens previous restrictions on the export of encryption technology, has been greeted with varying levels of enthusiasm.

The new policy will allow encryption software to be sold to any individual or business other than seven states the U.S. government considers sponsors of terrorism. The largest extent of government intervention is a review requirement.

Cisco Systems Inc. (CSCO) and other industry leaders praised the White House for the move, saying that it would offer international markets the U.S. standard of encryption and open up "closed technology markets worldwide."

Cisco said it intends to work with its partners in the industry and the US government to promote similar encryption policies overseas.

Various Internet industry associations also welcomed the move.

"Forcing US companies to do business under tight export controls was like asking them to use a black rotary telephone in a cellular, call-waiting world," said Harris Miller, president of the Information Technology Association of America.

"We're pleased that the Clinton Administration has joined with Congress inacting to move the entire marketplace forward."

Still, some Internet security firms said that the new policy did not go far enough, and still limits U.S. companies' ability to compete abroad.

"This proposal is a move in the right direction but it doesn't go far enough," said Neal Meehan, Hush Communications USA's president and chief executive officer.

"We believe that the way the U.S. government regulates encryption does not protect the privacy of its citizens or allow U.S. companies to compete in a global market."

The policy includes a bill dubbed the Cyberspace Electronic Security Act of 1999 which calls for the creation of a technical support center to assist in the investigation of illegal uses of encryption technology.



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