BlackBerry Ban Averted as RIM, UAE Strike Deal on Encryption

Crisis is averted for BlackBerry users in the Middle East as Research In Motion works out a deal with United Arab Emirates over BlackBerry services.

It came right down to the wire, but Research In Motion worked out a deal with United Arab Emirates to avert the BlackBerry ban, reported Dow Jones Newswires on Oct. 8.

If a deal hadn't been reached, UAE was set to ban key BlackBerry services, including instant messaging, e-mail and Web browsing, starting Oct. 11. RIM said it could not publicly discuss the terms of the agreement.

Canadian-based RIM had been negotiating with the small emirate's Telecommunications Regulatory Authority since early August. Calling it a national security issue, the government agency had claimed the company was in "non-compliance" because its encrypted servers, based in North America, inhibiting local law enforcement's ability to monitor and access customer data.

According to the WAM, UAE's official news agency, the TRA "has confirmed that BlackBerry services are now compliant with the UAE's telecommunications regulatory framework."

A UAE-imposed ban would have shut down BlackBerry Messenger, BlackBerry e-mail and BlackBerry Web-browsing services, and affected around 500,000 customers-both local residents and visitors-in the region.

The ban would not have affected other services, such as voice calls and SMS messaging.

The UAE is not the first country to object to RIM's encryption technology. The company successfully negotiated with Saudi Arabia to reinstate BlackBerry services in August. Details of that agreement were also not publicly disclosed.

Lebanon and Indonesia have said they were considering similar moves, but have not announced any plans yet.

The company is still trying to figure out how to accommodate India's end-of-October deadline for compliance with its eavesdropping laws. India would like access to encrypted BlackBerry messages in case of emergencies. The deadline had been Aug. 31, but the government agreed to a 60-day reprieve to study the possibility of routing all services through a server in India, which Indian law enforcement would be able to access directly.

RIM has repeatedly said that it has no ability to provide its customers' encryption keys.

These security negotiations post a dilemma for RIM, whose expansion into international markets is critical to its continued growth. The smartphone-maker has been struggling in North America against the Apple iPhone and the various handsets running Google's Android operating system. During RIM's fiscal fourth quarter for 2010, 48 percent of its revenue came from outside North America.

Corporations rely on RIM for its messaging services precisely because it is practically impossible to eavesdrop on BlackBerry communications, unless you have access to the corporate e-mail servers. The e-mails are encrypted while in transit, and even RIM doesn't have the keys to decrypt them. While designed to keep corporate and government secrets safe, even Canadian and United States law enforcement have complained about criminals relying on BlackBerry now that the phones are more affordable.

On Aug. 12, RIM said it "genuinely tries to be as cooperative as possible with governments in the spirit of supporting legal and national security requirements, while also preserving the lawful needs of citizens and corporations."

It's unclear what concessions RIM has made to UAE, since the company has to ensure its business customers continue to trust the level of confidentiality and security of the system. It may have agreed to re-route the country's traffic through a local-based server, as it is supposedly investigating in India.

Or as IHS Global Insight telecoms analyst Shardul Shrimani told the Associated Press, it is possible the UAE was granted "limited" access to encrypted BlackBerry data.

RIM co-CEO Jim Balsillie has suggested in the past that countries can set up a national registry where companies doing business within their borders are required to provide the government with the ability to access their BlackBerry servers.