even wanted to bring back the Clipper Chip," an anti-encryption standard that would have let the feds read any e-mail and snoop on other scrambled communications.

Bidzos said that NTT's chips, which have been developed and manufactured by a subsidiary, NTT Electronic Labs, were far more powerful than the so-called Clipper chip, a data-scrambling system that the Clinton administration proposed for the nation's telephone system.

The Clipper and Capstone chips also represent only one possible approach to achieving a reasonable balance between unconstrained privacy and the needs of law enforcement and national security, Silvio Micali of the Massachusetts Institute of Technology has proposed an alternative scheme - developed well before the Clipper chip announcement - that eschews complicated chips and special hardware in favor of a considerably more flexible, inexpensive software solution.