Corporations Eye Private Security Schemes

Peter Wayner

Over two years ago, the U.S. Government raised the passions of many computer users when it offered encryption chips named "Clipper" that left a back door open for surveillance. Any law enforcement employee with a warrant could tap into a central database of "escrowed" keys and decrypt the data encrypted with this chip. The Clipper chip never found much of a market beyond the U.S. Government, because of its cost and its aura of Big Brother, but the notion of escrowing keys with a third party lives on. Several influential companies are investigating providing private backups of keys to corporations and users.

The distinction between giving the government copies of the keys and storing them with a private data backup agency may seem small to individ uals, but it can make a crucial difference for corporations. Many businesses face the problem of recovering encrypted files when employees with the keys leave the company, retire, go on vacation, call in sick, or disappear.

Several companies both large and small are testing the market for providing software that escrows keys automatically for businesses. Trusted Information Systems (Glenwood, MD), a security software company that first started investigating software-based escrow systems over a year ago, is one such company (see "Software-Key Escrow Emerges," October 1994 BYTE). They're also currently working with National Semiconductor, which is exploring providing special smartcards. Motorola recently announced plans to build escrowing features into its encryption products. RSA Data Security (Redwood City, CA), one of the pioneers in the field, offers an intriguing feature in its software for the Windows PC and the Macintosh. The escrow back door can be turned off easily.

The escrow systems enc rypt files by using standard algorithms, but they finish by appending a copy of the encryption key that can be used to read the hidden data. This key is encrypted with a different key, which is usually the escrow service's public key. Now, only people with the corresponding secret key that matches the public key can unlock the appended key and get at the contents of the main file.

Someone within the company, such as the general counsel or the MIS manager, may hold the secret key. Another option is to have an external service bureau hold a copy of the key. Many software companies may vie for this job, but they may have some unexpected competitors. Bankers Trust will likely enter the market and trade on the corporate culture of privacy and security that it developed in the banking business.

It is not clear how external service bureaus will guarantee their work. Stewart Baker, a former general counsel of the National Security Agency (Ft. Meade, MD), predicts that escrow companies may offer bonds in the same way that locksmiths guarantee their fidelity. One of the biggest problems may be estimating the value of the keys, because information can have such a protean nature.