Phil Zimmermann created the first version of PGP encryption in 1991. The name, "Pretty Good Privacy", is humorously ironic and was inspired by the name of a grocery store, "Ralph's Pretty Good Grocery", featured in radio host Garrison Keillor's fictional town, Lake Wobegon. This first version included a symmetric-key algorithm that Zimmermann had designed himself, named BassOmatic after a Saturday Night Live skit. Zimmermann had been a long-time anti-nuclear activist, and created PGP encryption so that similarly inclined people might securely use BBSs and securely store messages and files. No license was required for its non-commercial use. There was not even a nominal charge, and the complete source code was included with all copies. PGP found its way onto Usenet and from there onto the Internet, and it very rapidly acquired a considerable following around the world. Users and supporters included dissidents in totalitarian countries (some affecting letters to Zimmermann have been published, and some have been included in testimony before the US Congress), civil libertarians in other parts of the world (see Zimmermann's published testimony in various hearings), and the 'free communications' activists who call themselves cypherpunks (who provided both publicity and distribution). Criminal investigation
Shortly after its release, PGP encryption found its way outside the United States, and in February 1993 Zimmermann became the formal target of a criminal investigation by the US Government for "munitions export without a license". Cryptosystems using keys larger than 40 bits were then considered munitions within the definition of the US export regulations; PGP has never used keys smaller than 128 bits so it qualified at that time. Penalties for violation, if found guilty, were substantial. After several years, the investigation of Zimmermann was closed without filing criminal charges against him or anyone else.
Zimmermann challenged these regulations in a curious way. He published the entire source code of PGP in a hardback book, via MIT Press, which was distributed and sold widely. Anybody wishing to build their own copy of PGP could buy the $60 book, cut off the covers, separate the pages, and scan them using an OCR program, creating a set of source code text files. One could then build the application using the freely available GNU C Compiler. PGP would thus be available anywhere in the world. The claimed principle was simple: export of munitions—guns, bombs, planes, and software—was (and remains) restricted; but the export of books is protected by the First Amendment. The question was never tested in court with respect to PGP. In cases addressing other encryption software, however, two federal appeals courts have established the rule that cryptographic software source code is speech protected by the First Amendment (the Ninth Circuit Court of Appeals in the Bernstein case and the Sixth Circuit Court of Appeals in the Junger case).
US export regulations regarding cryptography remain in force, but were liberalized substantially throughout the late 1990s. Since 2000, compliance with the regulations is also much easier. PGP encryption no longer meets the definition of a non-exportable weapon, and can be exported internationally except to 7 specific countries and a named list of groups and individuals (with whom substantially all US trade is prohibited under various US export controls)