Subject: Clipped Wings-- The Economic Impediment to the Clipper Chip...

From: Peter Wayner <[email-masked]>
Date: Tue, 20 Apr 1993 14:23:39 -0400

If all of the privacy concerns about the Clipper chip magically disappeared,
the chip will still encounter widespread economic resistance.  Why? Because
almost everything can be done cheaper in software and the secrecy surrounding
the algorithm effectively prohibits software implementations.

Why would a computer designer add a high-speed encryption chip to the machine?
Even if the chips cost about $25 in large quantities, they could still add
about $100 to the final cost after everyone takes their markups.  The computer
designer must ask whether people are willing to spend extra to buy a box when
the clone manufacturer in the garage down the street isn't going to be putting
one in.

Adding encryption in software is a different proposition.  There is a one-time
cost of engineering and a small extra cost for increased support.  Once the
code is written, the manufacturing costs do not increase.  Also, software can
retrofit machines for no extra cost and add widespread compatibility after the
update is finished.  This is why Novell, Apple and Microsoft choose to add
encryption software in their latest rev of the system software.

It is not even clear that the standard has much of a chance in the phone
system.  DSP chips and digital designs are becoming more and more part of
cellular standards.  Why pay extra for another chip if it can be done in the
DSP? Weight and power consumption are important considerations for these
applications.

I'm sure that the algorithm designers and NSA committee considered the RISKS
of exposing the algorithm.  Scrutiny weakens the code because it makes it
easier for people to attack the system.  It is obvious that the committee
tried to consider some of the economic RISKS involved in promulgating a "Big
Brother" standard.  That is why they arranged for the chips to be presented as
a fait accompli as part of AT&T's latest phones.  But they face an uphill
battle against the forces of economics.

--Peter Wayner