Shock Horror: Identrus inventor proposes banks become escrow agents (and nationalisation of crypto patents)

[Caspar Bowden]

Relevant quotes...

"Congress, finding there has been a market failure in escrow encryption
systems, charters an "Escrow Patent Pool Corporation" (EPPC), funds it,
and gives it eminent domain powers to take intellectual property rights
(IPR) and pay reasonable compensation to the holders.  All these patents
are going nowhere right now anyway"

"There is nothing magic about banks and trust companies, but they
constitute an existing secure and regulated infrastructure that is
relatively close to what is needed for key storage and access.  They
have substantial minimum capital requirements; their managers face
criminal penalties for violations of trust; they are subject to frequent
audits and inspections; and if they "fail" a formal process exists for
state or federal regulators to seize and merge them into another solvent
entity, assuring continuity of services.=20

Since the government in its sovereign capacity issues money, in theory
it could provide all banking services as well.  Instead it fosters a
layer of meta-sovereign entities, which compete with each other to
provide value added services.  They offer a friendly and responsive face
to the customer, or at least that is the idea, yet they are also
creatures of the state, subsidized and cushioned from failure, and
responsive to its requests.  Because they centralize citizen activity it
is convenient to employ them as instruments of policy, and governments
have done so since ancient times, as a matter of practical necessity."


--
Caspar =
Bowden=A0=A0=A0=A0=A0=A0=A0=A0=A0=A0=A0=A0=A0=A0=A0=A0=A0=A0=A0=A0=A0=A0=A0=
=A0=A0=A0 www.fipr.org
Director, Foundation for Information Policy Research
Tel: +44(0)20 7354 2333=20



-----Original Message-----
From: owner-politech@politechbot.com
[mailto:owner-politech@politechbot.com] On Behalf Of Declan McCullagh
Sent: 17 September 2001 00:04
To: politech@politechbot.com
Cc: fsudia@home.com; frank@sudialab.com
Subject: FC: Frank Sudia's proposal: Let's revive encryption key escrow


Frank Sudia's bio says that he is a programmer, a lawyer, a public
policy=20
analyst, and a co-founder of the CertCo encryption company, formerly
part=20
of Bankers Trust. He is also the creator of the "Bankers Trust Corporate

Key Escrow System."

His paper (see the link below)  is a suggestion for a route for Congress
to=20
take if they "decided to require all encryption systems to be readable
by=20
authorized legal authorities."

-Declan

**********

From: "Frank Sudia" <fsudia@home.com>
Saturday: September 15, 2001 02:14 AM
To:   <info@security-policy.org>
       <mailbox@gregg.senate.gov>
       "Dorothy Denning" <denning@cs.cosc.georgetown.edu>
       "Stewart Baker" <SBaker@steptoe.com>
Subject:  Encryption and the Restoration of National Sovereignty

Dear Policy Professional,

In response to the Attack on America, I have drawn upon my extensive
work in secure banking systems, key escrow systems, and patent licensing
to bring you the following white paper (about 10 pages of text).

Frank W. Sudia, JD, "Encryption and the Restoration of National
Sovereignty: Proposal for an Escrow Patent Pool Corporation," September
14, 2001.

     http://www.sudialab.com/sov-eppc.htm.

While at Bankers Trust (1991-98) I designed one of the largest
encryption systems in the world, the Global Trust Organization.
Chartered in 1999 as Identrus LLC (www.identrus.com) it now includes 50
of the world's largest banks.

In my view, encryption policy options are poorly understood.  The power
of government to protect the nation should not be in doubt, yet the
debate has been skewed by the claims of opponents that such systems will
not or cannot work.

In reality, it would be straightforward to build a system that is much
more secure than the current banking system.  However, this has not been
done, and cannot be done, because complex patent problems must be
resolved.

Before anything serious and believable can ever be built, even on a test
basis, we must aggregate the required patents into product pools, using
government money and eminent domain powers, if necessary.  And we must
fund the development of prototypes.  Only after viability has been
established can the commercial sector move forward with products that
are highly secure and credible.

For further information, please do not hesitate to contact me.  If you
are a contact or friend of mine, I would appreciate comments, which will
be acknowledged in any future version.

Regards,
Frank Sudia

www.SudiaLab.com
415-648-7415




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