Who Should Keep the Keys?

Until quite recently, cryptography -- the science of making and breaking secret codes -- was, well, secret. In the U.S. the field was dominated by the National Security Agency, a government outfit so clandestine that the U.S. for many years denied its existence. The NSA, which gathers intelligence for national security purposes by eavesdropping on overseas phone calls and cables, did everything in its power to make sure nobody had a code that it couldn't break. It kept tight reins on the "keys" used to translate coded text into plain text, prohibiting the export of secret codes under U.S. munitions laws and ensuring that the encryption scheme used by business -- the so-called Digital Encryption Standard -- was weak enough that NSA supercomputers could cut through it like butter.

But the past few years have not been kind to the NSA. Not only has its cover been blown, but so has its monopoly on encryption technology. As computers -- the engines of modern cryptography -- have proliferated, so have ever more powerful encryption algorithms. Telephones that offered nearly airtight privacy protection began to appear on the market, and in January U.S. computermakers said they were ready to adopt a new encryption standard so robust that even the NSA couldn't crack it.

Thus the stage was set for one of the most bizarre technology-policy battles ever waged: the Clipper Chip war. Lined up on one side are the three-letter cloak-and-dagger agencies -- the NSA, the CIA and the FBI -- and key policymakers in the Clinton Administration (who are taking a surprisingly hard line on the encryption issue). Opposing them is an equally unlikely coalition of computer firms, civil libertarians, conservative columnists and a strange breed of cryptoanarchists who call themselves the cypherpunks.

At the center is the Clipper Chip, a semiconductor device that the NSA developed and wants installed in every telephone, computer modem and fax machine. The chip combines a powerful encryption algorithm with a "back door" -- the cryptographic equivalent of the master key that opens schoolchildren's padlocks when they forget their combinations. A "secure" phone equipped with the chip could, with proper authorization, be cracked by the government. Law-enforcement agencies say they need this capability to keep tabs on drug runners, terrorists and spies. Critics denounce the Clipper -- and a bill before Congress that would require phone companies to make it easy to tap the new digital phones -- as Big Brotherly tools that will strip citizens of whatever privacy they still have in the computer age.

In a Time/CNN poll of 1,000 Americans conducted last week by Yankelovich Partners, two-thirds said it was more important to protect the privacy of phone calls than to preserve the ability of police to conduct wiretaps. When informed about the Clipper Chip, 80% said they opposed it.