Electronic Frontier Foundation
Comments on Proposed Escrowed Encryption Standard
Page 1


September 27, 1993

National Institute for Standards and Technology (NIST)
ATTN:  Proposed FIPS for Escrowed Encryption Standard
Technology Building, Room B-154
National Institute of Standards and Technology
Gaithersburg, MD  20899

To The Director:

        The Electronic Frontier Foundation (EFF) writes in strong
opposition to the Proposed Federal Information Processing Standard (FIPS)
for an Escrowed Encryption Standard, docket # 930659-3159.  We believe that
NIST's guidance is setting technical standards for security and privacy
protection is a critical part of the growth of the National Information
Infrastructure, but that any action on the proposed escrow technical
standards must await the resolution of several fundamental policy issues. 
We oppose the proposed FIPS in all of its parts.

Introduction

        Widespread, affordable cryptography is vital for the protection of
individual privacy in the Information Age.  As more and more personal
information flows around electronic networks, we all need strong encryption
to safeguard information from unwanted intrusion.  Vital personal
information, such as health care records, private communications among
friends and families, and personal financial transactions will also travel
over this information infrastructure.  The business community can only make
full use of the infrastructure if it is assured that the data it transmits
is secure from unauthorized interception.  In short, if communications in
the new infrastructure are vulnerable, all of our lives and businesses
would be subject to both damaging and costly invasion.

        EFF is a nonprofit, public interest organization whose public
policy mission is to insure that the new electronic highways emerging from
the convergence of telephone, cable, broadcast, and other communications
technologies enhance free speech and privacy rights, and are open and
accessible to all segments of society.  EFF has also been coordinating the
Digital Privacy and Security Working Group -- a cooperative effort of civil
liberties organizations and corporate users and developers of communication
technology.  

        Well over two hundred EFF members have also delivered to NIST
comments critical of the Proposed FIPS.  We believe this demonstrates the
depth of public concern about the implementation of key escrow systems.

Resolve Policy Issues and Objectives Before Promulgating Technical Standards

        EFF and the Working Group have been in ongoing dialogue with NIST,
the White House, and Members of Congress regarding the very complex public
policy choices raised by cryptography policy.  We are hopeful that this
dialogue will result in a positive, comprehensive set of cryptography and
privacy policies.  But until these issues are resolved, we believe any
approval of technical standards is premature.  Among the public policy
issues to be resolved are the following:

1.      Guaranteed Continued Legal Use of All Forms of Encryption

        When the Clinton Administration announced the Clipper Chip, it
assured the public that this would be a purely voluntary system.  We must
have legal guarantees that Clipper isn't the first step toward prohibition
against un-escrowed encryption.  Yet the Administration has not offered any
such guarantees, either in the form of proposed legislation or even agency
rules.  

2.      Identity of Escrow Agents

        When Clipper was first proposed some in the Administraiton suggest
that one of the two escrow agents would be a government agency, and one a
private, non-governmental organization.  Now it appears that plans for a
private escrow agents have been dropped in favor of NIST and the Department
of Treasury, though there is still no final designation of agents.  We are
unable to comment of the security or reliability of escrow procedures
proposed here when we do not know who will be administering the escrow data
bases.  We also note that there is active consideration of having more than
two escrow agents.  This option should be explored from a policy
perspective before a technical standard is adopted.

3.      Legal Rights of Escrow Users

        If anyone does choose to deposit their keys with the government or
any other escrow agent, they must have some legal recourse in the event
that those keys are improperly released.  The most recent draft of escrow
procedures specifically states, however:

"These procedures do not create, and are not intended to create, any
substantive rights for individuals intercepted through electronic
surveillance, and noncompliance with these procedures shall not provide the
basis for any motion to suppress or other objection to the introduction of
electronic surveillance evidence lawfully acquired."

Leaving users with no recourse will discourage use of the system and
provides little disincentive against unscrupulous government behavior.  

        In the Proposed FIPS NIST also suggests an unusual, and we believe,
incorrect notion of what an escrow agent is.  The Proposed FIPS adopts the
incomplete defintion of an escrow system found in Webster's Dictionary. 
The Proposed FIPS states:

To escrow something (e.g., a document, an encryption key) means that it is
"delivered to a third person to be given to the grantee only upon the
fulfillment of a condition."  (Webster's Seventh New Collegiate
Dictionary).

This definition omits the very basic notion that an escrow agent has
responsibilities to those who deposit things of value in the escrow
account.  Black's Law Dictionary, which be believe may be a more
appropriate source of information about escrow relationships, states that
an escrow contract is an:

Agreement between buyer, seller, and escrow holder setting forth rights and
responsibilities of each

It is the general legal rule that one who deposits value with an escrow
agent is entitled to recover damages from the escrow agent in the event of
a breach of the agents duty of care:

Depositor is entitled to recover damages sustained because of  escrow's 
unwarranted act, and where grantee participates in wrongful delivery he
also may be liable, but recovery is limited to damages actually
attributable to wrongful delivery.   Collier v Smith (Mo App) 308 SW2d 779.
(See ANNOTATION: Who must bear loss resulting from defaults or peculations
of escrow holder. 15 A.L.R.2d 870.)

The notion of an escrow agent who is insulated from all liability to the
depositor is wholely alien to American law and custom.  The government may,
of course, seek to establish escrow agents free of legal liability, but
this is fundamentally a policy choice, not a matter of technical standards.
 Until there is some agreement on the real responsibilities of the escrow
agents, NIST is not in a position to set technical and operating standards.

4.      Open, Trusted Standards:  

        A key goal of the Clipper Propsal is to promote widespread
encryption in the market. Yet people won't use encryption unless they trust
it.  Secret standards such as Clipper cannot be evaluated by independent
experts and do not deserve the public trust.  Other parties, including
Whitfield Diffie of Sun Microsystems, have commented extensively on this
issue.  EFF fully subscribes to those remarks.

Insufficient Technical and Operating Information Available for Comments

        Even aside from the major policy issues left unanswered, the
Proposed FIPS itself lacks the detail necessary to allow full public
comment.  First,.the full operating procedures for the escrow agents has
yet to be issued.  Public comment must be sought on the complete
procedures, not just the outline presented in the draft FIPS.  Even the
government-selected algorithm review group has declared that it needs more
information on the escrow process.  Second, asking for comments on an
algorithm that is classified makes a mockery of citizen participation in
government decisionmaking.

Action on the Proposed FIPS Must be Delayed to Allow Completion of
Public-Private Consultation Mandated by Presidential Decision Directive

        President Clinton's annoucement of the Clipper initiative made very
clear that there should be "early and frequent consultations with affected
industries, the Congress and groups that advocate the privacy rights of
individuals as policy options are developed."  (April 16, 1993 Press
Statement)  EFF and other organizations have invested significant effort in
dialogue and policy review with the Administration.  We have made some
progress, but see many issues still unresolved.  EFF believes that for NIST
to rush forward with a FIPS in advance of resolving the fundamental policy
issues cited above would prematurely curtail the dialogue that the
President ordered.  

        Finally, NIST will be involved in making many critical decisions
regarding the National Information Infrastructure.  The next time NIST
solicits public comments, it should be ready to accept reply by electronic
mail in addition to paper-based media.  Over 200 of EFF's members emailed
comments to our offices, which we then printed and hand-delivered to NIST. 
We hope that in the near future, NIST and other federal agencies will be
prepared to accept comments directly via the Internet.


Respectfully Submitted,





Jerry J. Berman                        Daniel J. Weitzner
Executive Director                     Senior Staff Counsel
