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Office of the Press Secretary


For Immediate Release April 16, 1993


The President today announced a new initiative that will bring the Federal Government together with industry in a voluntary program to improve the security and privacy of telephone communications while meeting the legitimate needs of law enforcement.

The initiative will involve the creation of new products to accelerate the development and use of advanced and secure telecommunications networks and wireless communications links.

For too long, there has been little or no dialogue between our private sector and the law enforcement community to resolve the tension between economic vitality and the real challenges of protecting Americans. Rather than use technology to accommodate the sometimes competing interests of economic growth, privacy and law enforcement, previous policies have pitted government against industry and the rights of privacy against law enforcement.

Sophisticated encryption technology has been used for years to protect electronic funds transfer. It is now being used to protect electronic mail and computer files. While encryption technology can help Americans protect business secrets and the unauthorized release of personal information, it also can be used by terrorists, drug dealers, and other criminals.

A state-of-the-art microcircuit called the "Clipper Chip" has been developed by government engineers. The chip represents a new approach to encryption technology. It can be used in new, relatively inexpensive encryption devices that can be attached to an ordinary telephone. It scrambles telephone communications using an encryption algorithm that is more powerful than many in commercial use today.

This new technology will help companies protect proprietary information, protect the privacy of personal phone conversations and prevent unauthorized release of data transmitted electronically. At the same time this technology preserves the ability of federal, state and local law enforcement agencies to intercept lawfully the phone conversations of criminals.

A "key-escrow" system will be established to ensure that the "Clipper Chip" is used to protect the privacy of law-abiding Americans. Each device containing the chip will have two unique

"keys," numbers that will be needed by authorized government agencies to decode messages encoded by the device. When the device is manufactured, the two keys will be deposited separately in two "key-escrow" data bases that will be established by the Attorney General. Access to these keys will be limited to government officials with legal authorization to conduct a wiretap.

The "Clipper Chip" technology provides law enforcement with no new authorities to access the content of the private conversations of Americans.

To demonstrate the effectiveness of this new technology, the Attorney General will soon purchase several thousand of the new devices. In addition, respected experts from outside the government will be offered access to the confidential details of the algorithm to assess its capabilities and publicly report their findings.

The chip is an important step in addressing the problem of encryption's dual-edge sword: encryption helps to protect the privacy of individuals and industry, but it also can shield criminals and terrorists. We need the "Clipper Chip" and other approaches that can both provide law-abiding citizens with access to the encryption they need and prevent criminals from using it to hide their illegal activities. In order to assess technology trends and explore new approaches (like the key-escrow system), the President has directed government agencies to develop a comprehensive policy on encryption that accommodates:

          the privacy of our citizens, including the need to 
          employ voice or data encryption for business purposes;

          the ability of authorized officials to access telephone 
          calls and data, under proper court or other legal 
          order, when necessary to protect our citizens;

          the effective and timely use of the most modern 
          technology to build the National Information 
          Infrastructure needed to promote economic growth and 
          the competitiveness of American industry in the global 
          marketplace; and 

          the need of U.S. companies to manufacture and export 
          high technology products.

The President has directed early and frequent consultations with affected industries, the Congress and groups that advocate the privacy rights of individuals as policy options are developed.

The Administration is committed to working with the private sector to spur the development of a National Information Infrastructure which will use new telecommunications and computer technologies to give Americans unprecedented access to information. This infrastructure of high-speed networks ("information superhighways") will transmit video, images, HDTV programming, and huge data files as easily as today's telephone system transmits voice.

Since encryption technology will play an increasingly important role in that infrastructure, the Federal Government must act quickly to develop consistent, comprehensive policies regarding its use. The Administration is committed to policies that protect all American's right to privacy while also protecting them from those who break the law.

Further information is provided in an accompanying fact sheet. The provisions of the President's directive to acquire the new encryption technology are also available.

For additional details, call Mat Heyman, National Institute of Standards and Technology, (301) 975-2758.