The tragic events of Sept. 11, 2001, which focused national attention on detecting and preventing terrorism, threatened to unravel the developing consensus for minimal restraints on encryption that took shape in 2000.  The Clinton Administration had reformed Commerce Department regulations governing encryption products, substantially easing the controls on exports to nearly all destinations.  In addition, that reform effort essentially eliminated the licensing requirements for exports to the 15 European Union countries and to eight other close U.S. allies.     

     To combat the threat of terrorist attacks, however, some policymakers called for new legislation or regulations to tighten encryption controls once again, and to give government agencies “back-door” access to encrypted data.  But the consensus has held, and there has been no retreat as yet from the reforms of 2000.  Those calling for renewed controls have backed down, and there is no indication that the Bush Administration intends to impose regulations or seek legislation to clamp down on encryption.

     Several bills to liberalize encryption regulations had been under consideration in Congress during 2000.  While these proposals enjoyed wide support, none passed before Congress adjourned.  Nonetheless, these legislative efforts, and perhaps the danger of adverse First Amendment decisions in the courts, undoubtedly helped create incentives for the Clinton Administration to liberalize the encryption regulations.

     In the immediate aftermath of the terrible events of Sept. 11, however, some in and out of Congress began to call for reconsideration of the new, more liberal, regime of encryption regulations.  For example, Sen. Judd Gregg (R-N.H.) called for legislation to require all encryption products to include “back door” access that would allow national security and law enforcement agencies, subject to permission and oversight of a court, to decrypt encrypted communications.  He also suggested that the United States push for a multinational system to establish a global regime with the same rules. 

     Both of these proposals represented a return to the strategies pursued by the government throughout the 1990s that had ultimately been rejected at home and abroad.  Sen. Gregg’s stance received some support, but also generated significant controversy and criticism.  Within a week, Sen. Gregg had backed away from these proposals and said he had no intention of introducing such a bill.  While a number of antiterrorist measures have been enacted in the wake of Sept. 11 and the Afghan war, giving new tools and powers to national security and law enforcement agencies, no legislation to tighten encryption regulation has been introduced.  So far, at least, neither the Bush Administration nor Congress has shown any real intention of retreating from the encryption reforms of 2000.

     In three separate lawsuits initiated before the 2000 reforms, academic cryptographers argued that the requirement to obtain a government license before publishing encryption source code on the Internet or by other electronic means is nothing more than a prior restraint on free speech that is contrary to the First Amendment.  The government defended the regulations by maintaining that source code is functional, not speech, and that it is regulated for what it does, and not for any ideas it may communicate.

     In one case, a district court held that source code was protected speech, and struck down the export regulations as an unconstitutional prior restraint.  Bernstein v. Department of State, 922 F. Supp. 1426 (N.D. Cal. 1996); 945 F. Supp. 1279 (N.D. Cal. 1996); 974 F. Supp. 1288 (N.D. Cal. 1997).  A panel of the U.S. Court of Appeals for the Ninth Circuit upheld the district court -- see 176 F.3d 1132 (9th Cir. 1999) -- but its opinion has been withdrawn and the case set for rehearing en banc. 

     The district courts in two other cases rejected the professors’ challenges and upheld the government’s regulations.  Junger v. Daley, 8 F. Supp. 2d 708 (N.D. Ohio 1998); Karn v. Department of State, 925 F. Supp. 1, 9-10 (D.D.C. 1996).  In Junger, the U.S. Court of Appeals for the Sixth Circuit, like the first Ninth Circuit panel, held that source code was protected speech.  It did not strike down the regulations, however, but remanded the case to the district court to determine whether the government’s interests outweighed Prof. Junger’s First Amendment rights.  Junger v. Daley, 209 F.3d 481, 484-85 (6th Cir. 2000).  In the Karn case,  the D.C. Circuit remanded to the district court (and a new judge) without ruling on the merits.