For years, the US Government has been terrified of losing surveillance powers over digital communications generally, and one of their biggest fears has been broad public adoption of encryption. If the average user were to routinely encrypt their email, files, and instant messages, whole swaths of public communication currently available to law enforcement with a simple subpoena (at most) would become either unreadable, or readable only at huge expense.
The first broad attempt by the Government to deflect general adoption of encryption came 10 years ago, in the form of the Clipper Chip. The Clipper Chip was part of a proposal for a secure digital phone that would only work if the encryption keys were held in such a way that the Government could get to them. With a pair of Clipper phones, users could make phone calls secure from everyone except the Government.
Though opposition to Clipper by civil liberties groups was swift and extreme the thing that killed it was work by Matt Blaze, a Bell Labs security researcher, showing that the phone's wiretap capabilities could be easily defeated, allowing Clipper users to make calls that even the Government couldn't decrypt. (Ironically, ATT had designed the phones originally, and had a contract to sell them before Blaze sunk the project.)
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