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What you're proposing amounts to the total abandonment of all the principles that have governed amateur radio for over a century.If you're going to be dramatic about it: yes, that's exactly what I'm proposing. We've learned in the last couple of decades on the Internet that communication needs to be encrypted and authenticated as a matter of course. We did not know that a century ago. (We didn't have modern cryptography a century ago.) I think it's perfectly fair to re-evaluate in light of that.
Specifically, you basically can't use any modern network protocol over packet radio any more, because no modern network protocol worth using has a non-encrypted mode.
> What activity would people like to undertake that a) requires encryption and b) is compatible with the basis and purpose of amateur radio as stated in part 97?
Personally, I'd like to tunnel E2E-encrypted text messages, a mosh session to my IRC box, etc., which ordinarily would go over cellular internet links, over ham radio to reach parts of my city with poor cellular coverage, for the purpose of casual conversations with friends and also getting experience with building/operating portable wireless communication systems. Casual conversations that inspire you to get better at building wireless communication systems is a completely normal, intentional, well-accepted use of the amateur service, perhaps the most normal and well-accepted use.
(I also suspect that being able to tunnel normal internet communication protocols over ham radio would be more reliable and valuable in an emergency than voice and ham-specific protocols, and I'd argue that building and gaining practical experience with such systems is also a reasonable use of the amateur service.)
> How could a simple rule on the duration of transmissions or the length of QSOs meaningfully distinguish between technical experimentation, communications that could not occur by any other medium and the commercial exploitation of the amateur service?
If your transmissions are long or regular, then they cannot be encrypted. This does not ban long transmissions, this rule bans long and regular encrypted transmissions - i.e., it is effectively a subset of the existing rule banning encrypted transmissions of any length. So, all existing uses are permitted.
(Are you envisioning a legitimate purpose for encrypted data over low-SNR links? Then you're probably being more ambitious than I am in your hopes for encrypted ham radio!)