Netscape Communications Corp. has received federal approval to make its encryption software available online to U.S. customers, the software will make available 128-bit encryption on the Internet to U.S. buyers, and will take precautions to verify the location and citizenship of customers by verifying domain names.

Federal law prohibits exporting encryption software stronger than the 40-bit version now available online because government officials fear it would be used to evade wiretaps. But software companies argue that the current policy puts U.S. firms at an unfair disadvantage.

The software is should be available next week on the Netcape site.

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