Cryptographic schemes involving key recovery are cripplingly expensive to users, according to the most senior figures in the networking industry.
US government plans to impose key recovery mechanisms to decode encrypted data will cost $7.7bn (#4.72bn) a year, according to a report by a group of chief executives that includes Bill Gates.
The software executives said at a news conference for the Business Software Alliance (BSA) that the government's proposals for tapping into secret data are expensive and increasingly irrelevant.
"The (encryption) genie is out of the bottle," said Novell chief executive Eric Schmidt. "Encryption policy must be guided by the digital Hippocratic Oath - first, do no harm." The high cost of the key-escrow system does not pass this test, Schmidt said.
Users would have to pay key-escrow agents a total of $6bn a year under the US government's plan, according to a report called The Cost of Government-Driven Key-Escrow Encryption, issued by the BSA.
The money would pay for monthly fees to key-escrow agents, for compliance activities, and the cost of key recovery by law enforcement agencies.
At least $1.7bn more would be paid by users to set up key-escrow accounts, and for software.
The damning assessment follows a crisis summit between Attorney General Janet Reno, FBI Director Louis Freeh and software industry leaders, including Bill Gates and Eric Schmidt, to resolve the political impasse over encryption.
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