The NSA, with a budget of dollars 30bn ( pounds 20.5bn) a year, is responsible for intercepting foreign government communications and breaking the codes that protect such transmissions. America's most exclusive spooks are worried that advances in encryption technology are about to rob them of their ability to conduct surveillance on a global scale.
After nearly 50 years of electronic eavesdropping, the NSA is finding that some widely available codes are impossible to crack. The worry is that hostile governments, drug barons, terrorists and money launderers will have a field day using networks or information highways built and maintained by the US or, for that matter, the European Union.
But here is the rub. Anyone who wants to use government-funded information highways in future may be forced to use the lacklustre encryption technology provided by the intelligence agencies, complete with a backdoor access for official eavesdropping.
Simon Davies, of Privacy International, a consultancy, has no doubt this will happen. 'A Wild West frontier - self-regulated by ethics and culture - has evolved in the computer communications business and now that the stakes are getting higher, government is trying to muscle in.'
It is widely predicted that by the end of the century about 50 per cent of world trade will be in services and that much of this will be carried out via computer- linked databases communicating across continents at the speed of light. It is this lucrative trade which the NSA intends to protect and oversee. The Internet system has already been identified by the Clinton Administration as the basis of a new information superhighway. If that should happen, organisations such as Computer Professionals for Social Responsibility and the Electronic Freedom Foundation fear that future access to the networks could be restricted to users of an encryption product developed by the NSA - which ironically enough is called Tessera.
The fear is that the freewheeling, anonymous access that hundreds of thousands of individual network users enjoy at the electronic frontier may end. To the outrage of users in the US and elsewhere, the Administration recently backed the NSA's plans to ensure that the agency will always be able to intercept and decode messages sent over computer and telephone lines. The privacy concerns are by no means confined to US computer users. Anyone who has every logged onto a bulletin board or computer service like Compuserve or Internet could be affected.
The Administration has played up the law and order side of the debate, arguing that advanced encryption will be used by criminals and terrorists. Al Gore, the Vice- president, announcing the new policy at the beginning of February, said: 'Our policy is designed to provide better encryption to individuals and businesses, while ensuring that the needs of law enforcement and national security are met.'
However many leading experts in cryptography, computer security and privacy in the US do not agree and said so in a letter to President Clinton last month asking him to withdraw the NSA's proposal. That appeal failed to avert the decision to back the Tessera and since then a petition organised by Computer Professionals for Social Responsibility has been signed by more than 1 million people who have sent their complaints by electronic mail to the President.
There is no parallel debate taking place in the European Union, but the intelligence agencies here are just as busy trying to ensure that the information highways of the future can be monitored. Jacques Delors, president of the EU Commission, sees data highways as being key to future competitivity and job creation. Before long individuals will be able to hook up to the highway for all sorts of transactions, from renting a movie to view at home to swiping a smartcard through a reader at the doctor's surgery to bring up an entire medical history.
The real business will of course be conducted by service companies, from banks to insurers to market traders. For these companies privacy and security are of growing concern, to which the NSA has responded with its relatively cheap encryption devices. But Tessera, which fits into the back of a computer, will also identify the user and has a special built-in 'trapdoor' that will allow the NSA to eavesdrop on E-mail and other messages.
Another cryptographic device known as the Clipper Chip can be used to scramble telephone and fax communications while giving the security services the same ability to eavesdrop with the help of a special electronic key, held in 'escrow' by the government agencies. Government agents will be able to obtain the 'keys' upon presentation of what has been vaguely as 'legal authorisation'.
These 'keys' will be held by two 'escrow agents' and would enable the government to access the private voice transmissions. A similar device known as Capstone would be used for data sent via computer modem. The Administration hopes its encryption devices will at some stage have to be universally used by US industry.
However, the outpouring of vehement objections from the computer industry, telephone companies and privacy groups in the US may have shaken the Administration and some computer professionals say that the NSA's encryption technology has no chance of being accepted in the market place.
Sharron Webb of the National Computer Security Organisation is one of those leading the fight against the spy agency's encroachment into the world of computer communications. 'If the US government has a hand in setting up the information superhighways here, they may require users to use Tessera to participate, it is then only a matter of time before foreign users are brought on board as well.'
Already the signs are that big business will knuckle under in the face of fierce pressure from the US Administration. The largest American telephone company, AT&T, has agreed to buy the NSA's technology and to include it in scrambling devices which sell for about dollars 1,000 ( pounds 680) each. Other companies are expected to follow suit, especially if they wish to maintain their lucrative contracts with the federal government.
What remains unclear is how the EU and individual European governments intend to react to the US moves. So far the US is looking only to American companies and their overseas subsidiaries to use the new encryption technology. But sooner or later decisions will have to be made that affect European users. The smart money is on the EU adopting the Tessara philosophy, but with different electronic keys for each country's eavesdropping agencies.
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