Opening Statement by Rep. Tom Bliley (R-VA). Re: House Telecom Subcommittee Hearing on HR 850, SAFE Act. Date: May 25, 1999. Source: This document was created by Tech Law Journal by transcribing from an audio recording of the hearing.

Thank you, Mr. Chairman. I want to thank you for yielding to me, and holding this hearing.

The Subcommittee meets to consider H.R. 850, a bill to provide export relief for certain encryption products. This is not a new issue. The Commerce Committee reported export relief legislation two years ago.

In 1997, we learned first-hand how contentious and important this issue is to all parties involved. The law enforcement and intelligence communities argue passionately that the current policy is workable and necessary for them to do what we expect from them.

On the other hand, the high tech community -- the companies that are fueling our nation's economy and producing dramatic innovation -- argue strongly that the current policy is based on faulty logic and is directly harmful to their ability to compete internationally. They also point out that while they are harmed by U.S. policy, American consumers and the growth of electronic commerce are harmed just as well.

The Commerce Committee has been a leader in opening the landscape for electronic commerce. We take seriously our role in promoting electronic commerce. And for instance, I have introduced legislation dealing with electronic signatures and the scope of database protection, both of which the Committee will turn to very soon.

I support the effort to revise our nation's export policy with regards to encryption to reflect the current availability of encryption products and the benefits of stronger products. The Administration's policy of today is unworkable and an impediment to U.S. encryption producers and users. We need the policy to change.

It is hard to restrict U.S. companies from selling 128 bit encryption products when the same product can be bought from an Israeli, French or Irish company. The Administration has tried to minimize opposition to its policy by providing limited relief for certain sectors and certain type of companies.

This policy is partly based on the idea that containing U.S. encryption products will aid our national security. The Administration has attempted to sell this approach in an international forum with little success or resulting in vague promises.

The current piecemeal encryption policy does nothing for the multiple companies that want to integrate encryption into their products as an add-on feature. For instance, foreign software companies selling word processing products are using the U.S. restrictions as a marketing tool to sell their products over American companies.

The current policy also lets uncertainty rule the day. We have been in contact with numerous electronic commerce firms that are trying to fight through the new rules to figure if they qualify or don't qualify for a licensing exception, and thus are able to provide service consumers want.

With that said, I am always interested in trying to find a compromise, if possible. If there is room for agreement that can help law enforcement or protect national security without codifying the current policy, I want to know about it.

We will move encryption legislation soon in this Committee. And, is 850 the best approach to do this? Should changes be made to the bill? Should we consider another approach -- like the one introduced by Senator McCain in the Senate?

I look forward to hearing from the panelists today on these important issues. And thank you again Mr. Chairman for yielding me the time.