Even as the U.S. government is embroiled in a debate over the legality of wiretapping, the fastest-growing technology for Internet calls appears to have the potential to make eavesdropping a thing of the past.

Skype, the Internet calling service recently acquired by eBay Inc., provides free voice calls and instant messaging between users. Unlike other Internet voice services, Skype calls are encrypted — encoded using complex mathematical operations. That apparently makes them impossible to snoop on, though the company leaves the issue somewhat open to question.

Skype is certainly not the first application for encrypted communications on the Internet. Secure e-mail and instant messaging programs have been available for years at little or no cost.

But to a large extent, Internet users haven't felt a need for privacy that outweighed the extra effort needed to use encryption. In particular, e-mail programs such as Pretty Good Privacy have been considered too *****bersome by many.

And because such applications have had limited popularity, their mere use can draw attention. With Skype, however, criminals, terrorists and other people who really want to keep their communications private are indistinguishable from those who just want to call their mothers.

"Skype became popular not because it was secure, but because it was easy to use," said Bruce Schneier, chief technology officer at Counterpane Internet Security Inc.

Luxembourg-based Skype was founded by the Swedish and Estonian entrepreneurs who created the Kazaa file-sharing network, which has been the subject of several court actions by the music industry.

Skype's software for personal computers is distributed for free. Members pay nothing to talk to each other over PCs but pay fees to connect to people who are using telephones. Skype software is also being built into cell-phone-like portable devices that will work within range of wireless Internet "hot spots."

While still somewhat marginal in the United States, Skype had 75 million registered users worldwide at the end of 2005. Typically, 3 million to 4 million users are online at the same time.

Skype calls whip around the Internet encrypted with "keys," which essentially are very long numbers. Skype keys are 256 bits long — twice as long as the 128-bit keys used to send credit card numbers over the Internet. The security is much more than doubled — in theory, Skype's 256-bit keys would take trillions of times longer to crack than 128-bit keys, which are themselves regarded as practically impossible to break by current means.

"It is a pretty secure form of communication, which if you're talking to your mistress you really appreciate, but if Al Qaida is talking over Skype you have probably a different view," said Monty Bannerman, chief executive of Verso Technologies Inc. His company makes equipment for Internet service providers, including software that can identify and block Skype calls.

Security experts are not completely convinced that Skype is as secure as it seems, because the company hasn't made its technology open to review. In the cryptographic community, opening software blueprints to outsiders who can point out errors is considered to be the safest way to go. Because of the complex mathematics involved, a properly designed cryptographic system can be unbreakable even if its method is known to outsiders.

But according to Schneier, if Skype's encryption is weaker than believed, it still would stymie the kind of broad eavesdropping that the National Security Agency is reputed to be performing, in which it scans thousands or millions of calls at a time for certain phrases. Even a weakly encrypted call would force an eavesdropper to spend hours of computer time cracking it.

Kurt Sauer, Skype's chief security officer, said there are no "back doors" that could let a government bypass the encryption on a call. At the same time, he said Skype "cooperates fully with all lawful requests from relevant authorities." He would not give particulars on the type of support provided.

The U.S. Justice Department did not respond to questions about its views on Skype's encryption.

Verso's Bannerman notes that Skype calls are decrypted if they enter the traditional telephone network to communicate with regular phones, so a conversation could be intercepted there. Skype does not reveal how many of its calls run on the phone network.

"There are other ways of getting at the conversation than brute-force decryption of the hacking," Bannerman said.

Schneier believes that eavesdropping on the content of calls is not as important to the NSA as tracking the calls, which is still possible with Skype. For instance, if a particular account were associated with a terrorist or criminal, it would be possible to identify his conversation partners.

"What you and I are saying is much less important than the fact that you and I are talking," Schneier says. "Against traffic analysis, encryption is irrelevant."

Steve Bannerman, vice president of marketing at Narus Inc. (he is unrelated to Verso's Bannerman), said his company's systems enable wiretapping of voice calls routed over the Internet, but not those from Skype.

The most that Narus' technology, which is used by telecommunications carriers, can do is identify what type of Skype traffic — voice call, text chat or video conference — is being used, and record the scrambled data for law enforcement officials. From there, he said, "who knows what those guys can do?"
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