Despite a suggestion from Senate Majority Leader Lott that the Senate Commerce Committee take "more time to let this [issue] percolate," the panel Thursday passed by voice vote a bill imposing additional restrictions on the export of "encryption," or data- scrambling, software programs.
The bill, co-sponsored by Commerce Chairman McCain and Senate Intelligence ranking member Bob Kerrey, D-Neb., encourages the development of a system in which U.S. software makers would turn over "keys" to their data-scrambling programs to government-approved third parties.
Under current Commerce Department regulations, designed after World War II to prevent the sale of munitions to potential U.S. enemies, U.S. software firms may not sell military-grade encryption programs in foreign markets.
The high-tech industry argues it is rapidly losing the encryption market to Japanese and European competitors because of the export restrictions. The U.S. law enforcement and intelligence communities argue, however, that removing the export limits would allow terrorists and criminals to develop virtually unbreakable computer-based communications systems.
The McCain-Kerrey bill replaces a less restrictive measure proposed in February by Senate Commerce Communications Subcommittee Chairman Conrad Burns, R-Mont.
In Thursday's markup, Burns offered an amendment to the McCain-Kerrey bill to remove the key-recovery system, but it was defeated on a 12-8 vote.
In the House, the Judiciary Committee has cleared a measure relaxing export controls on encryption devices, and leading GOP members of that panel have been negotiating with the administration in to reach a compromise.
The administration has objected to a provision in that bill to allow developers of the technology to export products without giving law enforcement agencies a way to crack their codes in criminal investigations.
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