News Release

Thirteen High-Tech Leaders Support Alternative Solution to Network Encryption Stalemate

Ascend, Bay Networks, Cisco Systems, 3Com, Hewlett-Packard
Jul 13, 1998

Ascend, Bay Networks, Cisco Systems, 3Com, Hewlett-Packard Company, Intel, Microsoft, Netscape Communications, Network Associates, Novell, RedCreek Communications, Secure Computing, Sun Microsystems support alternative solution to win U.S. export relief

SAN JOSE, Calif. -- July 13, 1998 -- Thirteen leading high-tech companies today announced support for a 'private doorbell' solution to the network encryption stalemate called 'operator action.' Ten of the 13 companies filed proposals with the U.S. Department of Commerce last week, asking for permission to sell strong encryption products abroad that use operator action technologies.

An alternative to key recovery, the operator action model delivers a 'private door-bell,' not a 'house-key' to parties lawfully seeking access to data. Under the operator action model, information traveling over a data network remains secure and private unless a network operator is served with a legal warrant or court order. Once served, the network operator can access a network control switch that actively filters messages delivered over a private network or the public Internet. The solution allows customers to keep their private information 'private,' unless directed to disclose information by legal warrant or court order. While this effort represents a partial solution to the encryption debate, industry is committed to work together toward a complete solution.

An Industry Solution

Ascend, Bay Networks, Cisco Systems, 3Com, Hewlett-Packard Company, Intel, Microsoft, Netscape Communications, Network Associates, Novell, RedCreek Communications, Secure Computing, and Sun Microsystems jointly support the industry alternative, which balances the privacy needs of individuals and businesses with the security needs of U.S. law enforcement. Today's announcement reflects the convergence of thirteen companies around a technology concept that addresses the complex issue of accessing encrypted information over data networks. The filings request broad export relief for a range of networking products including most firewalls, VPNs (Virtual Private Networks), and E-commerce products. Industry leaders have been working to define an operational standard since October 1997.

"As the global public network becomes increasingly important to both business and consumers, resolving issues such as exportation of security technology become more and more critical," said Mory Ejabat, CEO of Ascend Communications. "We fully support this effort as we believe it meets the needs of both the public and private sector."

"Bay Networks and other American companies have developed the world's leading encryption technology," said Dave House, chairman, president, and CEO of Bay Networks. "Our overseas customers want that technology and the privacy that goes with it, and this solution will allow us to export our technology, instead of handing the business over to foreign companies."

"As the Internet continues to drive economic and job opportunities worldwide, it's important customers feel safe doing business on the web," said John T. Chambers, president and CEO of Cisco Systems. "This industry proposal extends the same privacy rights we enjoy today to tomorrow's digital world, delivers a market-driven solution our customers want, and secures a competitive advantage for the U.S. high-tech industry."

"U.S. technological leadership depends on a reasoned resolution to this debate," said Eric Benhamou chairman and CEO of 3Com. "Continued evolution of converged networks will require balancing the needs of businesses and government agencies concerning data security."

"We are committed to providing our worldwide customers the network security that they demand," said William Larson, CEO of Network Associates. "The industry is presenting an innovative solution that meets both market and government requirements for network layer encryption."

"Relief from export controls is an industry wide matter," said Jim Barksdale, president and CEO of Netscape. "We believe the "private doorbell" feature, if successful, will demonstrate that industry and government can work together. Further relief, however, will be necessary in the near term, if US vendors are to remain ahead of their overseas competitors."

"This solution represents a real step forward for U.S. encryption policy," said Eric Schmidt, CEO of Novell. "At last, we have a market solution that meets the needs of consumers, corporations, law enforcement and national security."

"RedCreek believes that the adoption of this proposal is essential to the healthy development of the market for products that address business use of the Internet," said Tom Steding, CEO of RedCreek Communications Inc. "This international market has in the main been denied to U. S. companies. Particularly for VPN companies, our ability to compete internationally will be significantly restored by its adoption."

"It is vital for our customers to be able to implement technology on aglobal level, without country-specific restrictions limiting their use oreffectiveness," said Jeff Waxman, CEO and Chairman of Secure ComputingCorporation. "Security is a top priority for multi-national corporationsand this action, which attempts to find a solution, will help move thepromise of ubiquitous security to a reality."

Critical Differences from Key Recovery

The proposal is a compelling alternative in the network space to key recovery. Protecting privacy and due process rights, the industry proposal delivers an important solution for securing data over a public or private network.

In seeking government export approval, the companies made no modifications to their products or encryption technology. The companies however offered to restrict sales to some foreign governments and militaries, and to continue to comply with existing U.S. Department of Commerce regulations.

Cisco Systems

Cisco Systems, Inc. (NASDAQ:CSCO) is the worldwide leader in networking for the Internet. at


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