The company said the few users who opted for the premium service -- which operated on the Montreal, Canada-based company's "Freedom Network" -- will no longer be able to receive e-mail as of October 11th. The majority of Freedom servers will be taken offline and users will no longer be able to send e-mail after October 22nd, the company said.

"This decision was not taken lightly," said Zero-Knowledge executive vice president and chief operating officer Hamnett Hill in a letter to Freedom Network users. "It reflects the ongoing high cost and limited returns of operating the Freedom Network -- the engine that drives the encryption and anonymity process."

Minimal Anonymity

Zero-Knowledge spokesman Dov Smith told NewsFactor Network that the company had been working with focus groups, computer makers and others to find out what the average user wants in terms of safety and protection on the Internet.

"Increasingly, we're finding it's not the network services like encryption and anonymity that we offer in our premium package," Smith said. "The mass market is not looking for encryption and anonymity. The mass market, the family of four, the new computer user, is looking for something else."

The company says it will focus instead on the latest version of Freedom Privacy and Security Tools 3.0, which offers a personal firewall, form filler/password manager, cookie manager and ad manager. The suite also includes keyword alert, which scans outbound communications for sensitive and private information, Zero-Knowledge says.

Timing Coincidental

The September 11th terrorist attacks have fueled the debate over Internet encryption and anonymity, which many speculate are common elements in communication among terrorists. However, Smith told NewsFactor that the company had planned its new product and the end of its premium services long before the devastating assaults.

"This product design preceded those tragic events, and there's absolutely no connection whatsoever," Smith said.

Following the attacks, some lawmakers drew sharp criticism from technology companies after proposing a requirement that encryption software makers provide government agencies with keys for decoding messages.

Encryption Debate

Smith said the heated debates over encryption, anonymity and their use by terrorists has become a non-issue for his company, as it no longer deals with those technologies.

However, the Zero-Knowledge spokesman did indicate that the company had a relationship with law enforcement while facilitating the Freedom Network.

"While we had the network, we had a very cordial relationship with law enforcement," Smith said. "In the entire time we offered encryption and anonymity, it was really minimally abused from our perspective."

No Keys

Anonymizer president Lance Cottrell, who said his company is seeing strong demand for encryption and anonymity tools, told NewsFactor that Anonymizer also works with law enforcement. However, he does not favor a government repository for encryption keys.

"Obviously, strong encryption in source code format is widely distributed across the world," Cottrell said. "So there's no law you can make today that will take iron-clad, military-strength encryption out of people's hands."

"You can make a law that takes it away from the average user, but that's not right," he added.