Some months ago I published a small work on the list calling for
property rights to be assigned to privacy. There was some
interest, but for some reason I chose to explore the subject
even further.
I prefer to release the work through the list, and I would appreciate
it if no one distributed it any further without consulting me.
Consider this a mailing among friends. Look over the work, let
me know if you like it, or better yet send me some hate mail,
just as long as you get stirred up.
The work below is quite long, and some may find that the message
is cut off after the 650 mark.
If so, and if anyone really wants to read the end by the time
they get to the break, let me know and I will repost with breaks.
Should there be enough interest, I will put the work up
for ftp somewhere.
-----BEGIN PGP SIGNED MESSAGE-----
Reliance on The New Property
and the
Questions of Electronic Privacy and Centralized Power
in an
Atmosphere of Federal Enforcement Empowerment.
- - a legal and philosophical notation -
March , 1994
Expansion Generally:
The United States of America is characterized of late by a culture of
centralization. Increasingly, whether a result of media, advances in
infrastructure, sociological factors, or technology in general, the
Federal Government has become the problem solving and allocative
entity of choice and often the entity of first resort. Causation
explanations for the expansion are numerous but, it is the advancing
technology model of explanation for expanding federal power that
presents the most illustrative backdrop by which to examine centralist
trends. This is not because advancing technology suggests an
unforeseen departure from the principals embodied in the Constitution
of the United States by the "Founding Fathers," (although this
supposition in itself has a distinct appeal) but rather because it
exposes the double standard that permits the increase of federal power
without parallel increases in individualist protections. Technology
is a common explanation for the need for greater regulation, but
rarely accepted as a legitimate argument in reference to individualist
rights, privacy being a key example. This is not, of course, to
suggest that the advance of technology is the best, most accurate or
only legitimate explanation. Clearly other examples exist and
moreover, are equally or more persuasive than the technology model I
intend to explore, but the common theme is generally applicable to all
the models I have examined.
The advance of technology takes on a much more devious meaning when
compared to the concepts of property outlined in Reich's "New
Property" theories. In 1964, Reich began to publicly question the
effect of government expansion and the increasing reliance of the
citizenry on government largess, over traditional property. Reich
reasoned that government largess required the application of property
protections.
The difficulty in accepting Reich's "New Property" paradigm and using
the model to justify a regulated state with new legal protections are
its basic assumptions that:
(1) Government is always best suited to serve as the basic controller
and decision maker for questions of distributional efficiency.
(2) The growth of government largess and regulation is inevitable.
(3) The growth of government largess and regulation is desirable, even
with the proper protections.
(4) The expansion of property protection to government largess and the
new property will effectively curb government abuses.
After critical analysis of some or all of these assumptions, the new
property concept becomes much more workable and, apart from the
author's apparent intent, a valuable conceptual tool in the argument
against centralizing regulation.
As the types of governmental entitlements treated as new property
increase in number and scope which is, in Reich's opinion unavoidable,
the citizenry must depend on government to assure, protect and insure
property rights of such a local and individualized character so as to
be incompatible with a majoritarian representative form of decision
making. Clearly individualistic concepts like privacy, freedom of
contract, and freedom of speech will fall victim to the shortfalls in
representation throughout the political process when issues like
security and distributive regulation are the other factors on the
balance. Additionally, and much more sinister is the use of
government largess to affect behavior with the threat of its
withdrawal. Often this has the effect of denying otherwise
enforceable constitutional protections. History demonstrates that the
judicial branch is generally unwilling or unable to police the
continual expansion of federal power, or forbid the use of largess
withdrawal coercion, and has been so situated since the late 1930's.
Simple failure of process is clearly a necessary evil in cases where
resort to the federal system is more efficient in accomplishing
allocation of resources. (Federal infrastructure projects,
interstates for one example.) It is also clearly important not to
rule out regulation and oversight as a tool to rectify legitimate
market failures. It is important to recognize here, that the standard
must be one of careful discretion focused on the proper definition of
a market failure, and consistent guidelines for regulation for which I
will turn to Stewart, Krier, and Manell.
However tolerable the legal process failures may be, an expansion that
actively permits and creates largess to be used in coercion is never
acceptable. The difficulties begin when centralist regulation is
applied to a market in such a way to either:
(1) Extend the paternalistic hand of governmental entitlement over
newly fabricated individual rights under the pretense of protecting
them while at the same time appropriating actual individualistic
concepts. (I label these Creationist Entitlements)
or:
(2) Engulf existing and legitimate individualistic concepts with
regulation and then dismissing their loss as an unfortunate casualty
of securing protections which are hardly entitlements at all.
(Illusionist Entitlements)
[The health care legislation is a good example of a creationist
entitlement. A troubled industry is made the focus for scrutiny, a
national crisis is declared, and every citizen becomes "entitled" to
costless health insurance. The absolute right to insurance has been
"created." Surely a desirable outcome, but deceptive none the less in
that insurance was never considered, by any stretch of the
imagination, an individualist right. The net result is the absorption
of privacy, freedom of contract concerns, and the reliance on
government to insure the citizenry. All these are substituted for the
newly created "right" to health insurance and are thus casualties of a
creationist entitlement. National security, on the other hand,
presents itself as an illusionist entitlement. Violent crime has
gripped the national agenda. A crime crisis is declared, and federal
law enforcement power is expanded. The civil liberties swallowed up
in the process are the casualties of an illusionist entitlement.]
The source of justification for such regulation is almost always that
a "national crisis" must be solved. The associated externalities,
which are almost never shown to result from the lack of regulation are
pointed to as creating the need for market preserving regulation. As
a result, essential property or personal rights are effectively
engulfed in the public sphere, a realm with no interest, and in many
instances possessing a negative incentive, in preserving them. The
balance that has historically depended on representation to counter
the disregard for the individual inherent in the collective is thus
bypassed by appointing a trustee with a glaring conflict of interest.
In addition the Judicial branch, affords little or no protection.
Clearly the distinct difference between individually secured rights
and government entitlements, is that the latter are easily taken away
by a variety of means not limited to underfunding, lack of resource
allocation, coercive largess application, or simple incompetence in
administration.
The most concerning potential expansions in federal power to date are
looming on the horizon. The Digital Telephony and Communications
Privacy Improvement Act of 1994, and the Clipper or Key Escrow
Proposals together utilize the complexities of what Wilson terms
"client politics" and entitlement manipulation to expand the scope of
federal law enforcement power, and by extension federal power
generally, to an alarming breadth by capitalizing on the current
national crisis externality, crime. These proposals in effect make
whatever rights to privacy existed within the context of
communication, government entitlements. The advances in encryption
technology that returned the potential for self secured privacy are
effectively eliminated under the nexus of the pending legislation. In
return for the high price paid, (Constitutional Amendments I, II, IV,
V, X and the oft quoted, rarely guarded right to privacy) the
citizenry is presented with a government backed insurance against
crime. An illusory entitlement to the benefit of new federal laws and
increased funding for enforcement. An entitlement likely to be lost
in its effect by nation wide dilution, mismanagement, abuse and
incompetence while at the same time empowering the federal mechanism
by curtailing what defenses the citizenry retain. There are strong
indications that the new bills will create large regimes of government
largess coercion, not withstanding the coercive effects of the Key
Escrow plan admitted to by the administration.
Expansion of Federal Power Generally:
In a series of cases including, _Panama Refining Co. v. Ryan_, 293
U.S. 388 (1935); _Railroad Retirement Board v. Alton Railroad_, 295
U.S. 330 (1935); _A.L.A. Schechter Poultry Corp. v. United States_,
295 U.S. 495 (1935), and _Carter v. Carter Coal Co._, 298 U.S. 238
(1936), the United States Supreme Court struck down key segments of
legislation in Franklin D. Roosevelt's New Deal Programs. Much of the
legislation was considered to have infringed upon traditional notions
of private property, and it is thus understandable that the programs,
which had lost favor in the years following the President's election,
were vigorously challenged. President Roosevelt's re-election and the
court's refusal to adopt the legislation led to proposed changes in
the structure of the Supreme Court. Under the pretext that the
Justices were too old to fully complete their duties, the President
proposed that new Justices be appointed for each Justice then on the
bench over the age of seventy. As there were six justices then over
seventy, the total number of Supreme Court Justices might well be
fifteen today were it not for the timely retirement of Justice Van
Devanter and the switch opinion of formerly anti-New Deal Justice
Roberts in _West Coast Hotel Co. v. Parrish_, 300 U.S. 379 (1937).
(The move was commonly referred to as "the switch in time that saved
Nine.") In addition, the court modifying bill's key sponsor, Senator
Robinson fell to a fatal heart attack. See generally, Stone, et al.,
Constitutional Law (1991 2d ed.). See also, Leuchtenberg, The Origins
of Franklin D. Roosevelt's Court-Packing Plan, 1966 Sup. Ct. Rev. 347.
The pro-New Deal decision that followed opened the door for federal
expansion under the crack in the law left by the New Court's reading
of The Commerce Clause of Article I, section 8 of the United States
Constitution. See, e.g., _National Labor Relations Board v. Jones &
Laughlin Steel Corp._, 301 U.S. 1 (1937). By 1942, The Commerce
Clause was construed so widely by The Court that it reached even
private functions so intimate as to include the growth of wheat on
private property for self consumption. _Wickard v. Filburn_, 317 U.S.
111 (1942) (Farmer's growth of wheat on private property for own
consumption held as affecting commerce and thus within the reach of
congressional regulation under The Commerce Clause). The result was
to allow nearly any activity to potentially affect interstate commerce
when taken in its aggregate. Combined with Justice Stone's outright
dismissal of the Tenth Amendment, the power afforded Congress no
longer had any practical limits. _United States v. Darby_, 312 U.S.
100 (1941). Describing the rapid growth of Federal power from _Darby_
to date might in itself fill a textbook. Let it suffice then to
comment that much of the civil rights legislation of the 1960's found
its authority in The Commerce Clause and more on point, that no
statute that finds its base for authority in The Commerce Clause has
been struck down on those grounds since _Wickard_. The other powers
granted Congress are no less encompassing than the Commerce Clause
itself.
Federal Power and Centralist Regulation:
The expansion in federal power has produced an explosion of federal
regulation since the first organized attempts to institutionalize
regulation in the post depression years. Federal regulation and the
wide reading of the Commerce Clause gives states an incentive to buy
into, and regulate industries otherwise served by the private sector.
This is because the "Dormant Commerce Clause" can be circumvented when
states participate in the markets they wish to regulate. This is the
"Market Participant" doctrine. See _Hughes v. Alexandria Scrap
Corp._, 426 U.S. 794 (1976); _Reeves, Inc. v. Stake_, 447 U.S. 429
(1980); _White v. Massachusetts Council of Construction Employers,
Inc._, 460 U.S. 204 (1983). But see _South-Central Timber Development
v. Wunnicke_, 467 U.S. 82 (1984). The Dormant Commerce Clause refers
to those markets upon which Congress has not yet imposed regulating
legislation. Often States are prohibited from regulating these
markets under the rational that Congress has the enumerated power to
"...regulate Commerce with foreign Nations and among the several
States...." U.S. Const. art. I, section 8, cl. 3, and therefore
states have given the right to regulate to Congress. _City of
Philadelphia v. New Jersey_, 437 U.S. 617 (1978). The exception to
the grasp of the Dormant Commerce Clause encourages states to buy into
the market and be free of congressional restrictions on interstate
discrimination and restrictions on protectionist state regulations.
Note however that states can easily accomplish the same regulation by
harsh subsidies in markets they participate in. As a result it is as
if there existed no deterrent to state regulation at all. "Under
existing precedent, the State could accomplish [the] same result
[regulation of the industry] in any number of ways.... It seems to me
unduly formalistic to conclude that the one path chosen by the State
as best suited to promote its concerns is the path forbidden it by the
Commerce Clause." _South-Central Timber Development v. Wunnicke_, 467
U.S. 82 (1984) (Justice Rehnquist dissenting).
The net result is to encourage "spin off regulation" by the states,
and as a result of the buy up of industry required, an increase in
government largess and government holdings. (Particularly now that
all production from the state interests in the industry is regulated
by the issuance of government contracts to manufactures. Government
contracts being a privilege, and not a right, withholding them is not
subject to tradition constitutional protections.) See, e.g., Charles
A. Reich, The New Property, 73 Yale L.J. 733,762 n.5 (1964).
Federal legislators then typically respond to the protectionist
regulations of states by preempting state practices with federal
regulation. This is "double spin off regulation."
Spin off regulation and double spin off regulation is not the only
cycle of federal growth that feeds off it self to inflate federal
power and holdings. The cycle of government largess is equally if not
more dramatically vicious. Government largess is used to compel
behavior, which in turn creates more government largess. Thus,
stifling taxes are imposed, a tax break is given to businesses who
comply with regulation, control of these businesses becomes a power in
itself which can be used as largess over the employees and downstream
of the market. More complicated and devious models are easy to
imagine.
The New Property, coercion, regulation, and the individual.
Reich characterized the increasing reliance of the citizenry on
government as a source of wealth as "The New Feudalism." The chief
characteristic, and the most convincing in my opinion, that Reich
points to is the fact that wealth distributed by the government is
conditional and subject to the state. Charles H. Reich, The New
Property 73 Yale L.J. 733, 768 n.5 (1964). Reich points to 8 key
factors in comparing the use of government largess to traditional
understandings of feudalism:
(1) Increasingly we turn over wealth and rights to government, which
reallocates and redistributes them in the many forms of largess; (2)
there is a merging of public and private, in which lines of private
ownership are blurred; (3) the administration of the system has given
rise to special laws and special tribunals, outside the ordinary
structure of government, (4) the right to possess and use government
largess is bound up with the recipient's legal status; the status is
both the basis for receiving largess and a consequence of receiving
it; hence the new wealth is not readily transferable; (5) individuals
hold the wealth conditionally rather than absolutely; the conditions
are usually obligations owed to the government or to the public, and
may include the obligation of loyalty to the government; the
obligations may be changed or increased at the will of the state; (6)
for breach of condition the wealth may be forfeited or escheated back
to the government; (7) the sovereign power is shared with large
private interests; (8) the object of the whole system is to enforce
"the public interest" - the interest of the state or society or the
lord paramount - by means of the distribution and use of wealth in
such a way as to create and maintain dependence. Id. at 770.
Consider by way of illustrations some of Reich's examples, which I
find quite elegant and persuasive. In 1964 the New York Taxi
medallion [the license required by the city to operate a taxi] was "a
piece of tin worth 300 times its weight in gold." Id. at 735 n.7.
Television channels, which are issued at no cost, can be sold at
extraordinary sums. Id. at 735.
Clearly the ability to deprive citizens of wealth without traditional
notions of process is power. The words of Justice Stone illustrate
the scope of the congressional spending power and the refusal of the
courts to recognize traditional protections : "Threat of loss and not
the hope of gain, is the essence of economic coercion." _United
States v. Butler_, 297 U.S. 1 (1936) To resort to the mundane (in
concept and in source), "He who can destroy a thing, controls a
thing." and "...the power to tax is the power to destroy...."
_McCuloch v. Maryland_, 17 U.S. (4 Wheat.) 316 (1819). The wider the
dependence on government wealth, the wider the power of government.
Reich asks the most relevant question in light of government largess
coercion. If, or when, the primary property is in the form of
governmental distributed wealth, what constraints against the
government will be available to the citizenry?
Where I depart from Reich is the manner in which to assure individual
protections in light of the rise of new property. Reich argues that
additional protections are required, perhaps protections that would
extend the constitutional umbrella over the new property or government
largess. Charles A. Reich, The New Property After 25 Years, 24 U.S.F.
L. Rev. 223, 241 (1990). This approach clearly presents the
politically difficult problem of granting property rights to all
government largess, including such largess as welfare and insurance.
In addition, it exposes government largess to the same problem present
in all rights not individually secured, namely dependence on
government as an enforcement body for rights that often conflict with
the general interest of the sovereign. The complexity of allowing
government to regulate a market or individualist right and then
assigning a governmental oversight authority to prevent government
abuse is a wasteful and unpolished solution that merely presents more
opportunity for loss in the form of failure of process, abuse or
inefficiency.
Instead the conceptually simpler approach is to prevent the expansion
of federal power into individualist constructs to begin with.
The General Effect of Technology on Federal Power:
Technology has three basic effects on Federal Power.
(1) Technological advances expand existing power.
Technology, especially data processing technology, considerably
increases the effect of existing power by reducing the cost of
information collection, organization, and compilation.
Consider the Social Security Number. Clearly, on the eve of its
adoption, the Social Security Number was not conceived as an identity
measure. Regardless, the number proved exceptionally fitted to
identification uses simply by its nature. Each person (theoretically)
has but one. No two are alike, and almost every citizen has one by
nature of economic coercion (its requirement to file tax return
information for one). On its face the number seems benign, but
coupled with computing power and the ability to quickly collect, sort
and exchange data, the Social Security number has become a powerful
tracking tool. In addition, the continued reliance on the number as a
secure and accurate identifier creates a dangerous potential for
abuse. Technically confidential tax return information is available
for the asking provided one has the subject's name, and Social
Security Number.
It is a simple matter today to track the movements of a citizen by the
combined information available from parking tickets, passport records,
moving violations, credit card receipts, and telephone records. The
travel document that was once a mere request by the government of the
United States that the bearer be treated as an American citizen,
Comment, Passport Refusal for Political Reasons: Constitutional Issues
and Judicial Review, 61 Yale L.J. 171 (1952), is today considered
mandatory for travel outside the United States, and bears a bar code.
Customs officials are today armed with computer terminals and bar code
readers. Driver's licenses, also basically mandatory, are
increasingly growing magnetic strips and digitized databases of photos
and even fingerprints are seeing increased use. Parking enforcement
officials travel about in mini-vans with portable terminals connected
by radio link to the Vehicle Registry database prepared to seize any
vehicle that might draw a red flag. Many agencies are entirely
impotent without the technology appearing as recently as the 1960's.
How would the Security and Exchange Commission conduct enforcement
without sophisticated data processing equipment today?
Data processing technology is not, however, the only impacting
advance. What would become of Federal Communication Commission
enforcement power without advanced monitoring equipment?
(2) Technology justifies new federally empowering legislation.
There are few major regulations that seek to address electronic
privacy, restrict federal or local power, which justify themselves on
advancing technology grounds. The best examples of such legislation
in the public sector, The Right to Financial Privacy Act of 1978, Pub.
L. No. 95-630, sections 1100-122, 92 Stat. 3697 (codified throughout
12, 31 U.S.C.), The Fair Credit Reporting Act, 15 U.S.C. section 1681
(1988), The Family Educational Rights and Privacy Act, 20 U.S.C.
section 1232g(b)(2)(A)-(B)(1988), are sectorized approaches to
legislation and offer little if any resort to civil actions. The
private sector versions of these acts, The Fair Credit Billing Act, 15
U.S.C. section 1666 (1988), The Fair Debt Collections Practices Act,
Id. section 1692, and The Electronic Fund Transfer Act, Id. section
1693, fall far below the pace set by Omnibus legislative efforts in
Europe and both the public and private legislation is lacking in its
implementation. See Peter Mei, The E.C. Proposed Data Protection Law
25 Law & Pol'y Int'l Bus. 305 n.1 (Fall 1993).
Despite the fact that it is seldom if ever used as a justification for
legislation to protect the individual, often it is the case that new
centralizing regulatory legislation is called for to "cope with recent
advances in technology." More interesting still is the propensity to
create regulations in the form of "living documents" that usually
include a clause to "provide a flexible response to changes in
technology." Often the result is to create legislation that possesses
no theoretical limit to its scope or enforcement power in seeking to
advance the stated purposes. Export regulation can often be so
characterized. Some prime examples of technologically justified
legislation include: The National Competitiveness Technology Transfer
Act of 1989, Pub. L. No. 101-189; Reproductive Technology Legislation,
Pub. L. No. 102-493; Genetic Technology Acts, 15 C.F.R. 295.1; and
numerous export regulations e.g., 22 U.S.C. 2751. Often these
legislative efforts grant powers much beyond that needed to enforce
the stated goal, or beyond that which could be justified by the
advance of technology alone. (See, e.g., 50 U.S.C. Appx.) (Supposed
export justification accomplishes many forms of "fringe benefit
regulation.").
The New Property and Technology:
Technology gives government great power. Government has the power to
gather information, to coerce through largess manipulation, to compile
records, and to make resistance to policy difficult. At the same
time, government uses technology, both directly and as a justifying
rational for increased regulation and federal empowerment. The
increase in government power, and especially the creation of new types
of government largess (Guaranteed Internet Access, Federal Computer
Educational Assistance Programs, Universal Health Care) is a threat to
individualism in the Unites States. Certainly Charles Reich's
concepts of government coercion only gain credibility and ominous
implications when the raw power of government augmented with
technology is factored in. If indeed we have "no principal that
forbids organized society from making use of our dependency to achieve
goals of social control," The New Property After 25 years, supra, at
224, then we must either develop such a principal as Reich suggests,
Id. at 225, or resist the continual growth of federal power.
Considering the current judicial disposition to allow government
coercion by the threat of largess withholding, See, e.g., _Steward
Machine Co. v. Davis_, 301 U.S. 548 (1937) (Federal tax imposed on
employers. Employers who participated in state unemployment funds
received 90% refund. Statute upheld and held not to constitute
coercion.), it is highly unlikely that largess will see the
constitutional protections Reich seeks. Indeed restrictions of these
largess coercions, an important legislative tool for federal
empowerment, might well invalidate every major regulatory program
instituted since the New Deal legislation.
Assuming such protections were possible to implement, an assumption
that ignores the time, legal, philosophical and momentum restraints,
it is difficult to assert that constitutional protections overseen by
government would not be watered down by a "balancing" test, or the
lack of sufficient redress for the victim of coercion. Reich's model
of restricting government with a governmental regime intended to
protect citizens from government is simply clumsy.
Instead it is today within the power of the citizenry to protect
itself from many forms of government largess coercion and control.
Consider encryption as an example. Encryption is empowering. With
encryption, and specifically public key encryption, the individual
thwarts millions of dollars in governmental surveillance development.
(The author assumes a basis knowledge of public key encryption on the
part of the reader.) If theories are correct, and in the battle
between cipher and cryptoanalysis the cipher always wins, the prospect
for government control is unusually poor. Consider the crossbow as an
analogy. The crossbow was an advance in technology that allowed the
common man without training to unhorse and usually kill a mounted,
armored knight at range. Chuck Hammill, Address at the Future of
Freedom Conference (Nov. 1987). The threat to the balance of power
prodded the church and the monarchs to take all steps available to
eradicate the use of crossbows; excommunication and death for example.
Id. Of course, it was never wrong for the knights to use crossbows
against heathens.
Today, the advent of public key cryptography threatens government's
control over the transfer of information. It is no surprise then that
government is desperately trying to maintain a grip over the
technology that threatens to be available to everyman. Witness the
attempt to legislate the information highway, the Digital Telephony
Bill, the Clipper Key Escrow proposal. If these technologies, digital
communications, Internet access and encryption, cannot be directly
banned or restricted because of constitutional restraints, they can
certainly be converted to government largess without constitutional
issue. The new feudal, federal system has seen a crossbow in the
making, and it seems that the knights want exclusive use rights.
What implications would truly anonymous transactions, digital cash
have on the current tax collection structure of the United States?
The registration of automobiles? Firearms? What impact might truly
untraceable and secure communications across an unsecured
channel*[reword]? The current technologies threaten to break the
current trend of federal empowerment, and worse for the centralists,
reverse it.
The (Il)legitimacy of Pending Legislation:
(1) The Digital Telephony and Communications Privacy Improvement Act
of 1994:
The Digital Telephony and Communications Privacy Improvement Act
expands federal power by placing a positive burden on the common
carrier to provide law enforcement with communications intercept and
"call setup information" and imposes penalties upon common carriers
who do not comply. The Digital Telephony and Communications Privacy
Improvement Act of 1994, section 2. See also, Mike Godwin, Section-
by-Section Analysis of the 1994 Draft of the Digital Telephony
Legislation (1994). Godwin suggests that the new burdens on common
carriers are imposed because 18 U.S.C. 2518(4) is not commonly read to
impose such a burden, and thus common carriers are often reluctant to
provide the kind of solutions to intercept problems law enforcement
would like. Mike Godwin, Section-by-Section Analysis of the 1994
Draft of the Digital Telephony Legislation (1994). The specific
provision provides "Common carriers shall be required to provide
forthwith, pursuant to court order or lawful authorization, the
following capabilities and capacities in order to permit the
government to conduct electronic surveillance and pen register and
trap and trace investigations effectively." Digital Telephony Bill,
section 3 (amending 18 U.S.C. 109, section 2237(a)). The draft goes
on to provide for simultaneous interception of communications and call
setup information. Digital Telephony Bill, section 3 (amending 18
U.S.C. 109, section 2237(a)(1)). The intercepted information then
must be forwarded to a facility of the government's choice. Digital
Telephony Bill, section 3 (amending 18 U.S.C. 109, section
2237(a)(4)). Penalties for failure to comply are set at $10,000 per
day and subjects offending common carriers to F.C.C. sanctions or
fines. Digital Telephony Bill, section 3 (amending 18 U.S.C. 109,
section 2237(f)). Enforcement power is given to the United States
Attorney General or at the Attorney General's request, the Federal
Communications Commission. Digital Telephony Bill, section 3
(amending 18 U.S.C. 109, section 2237(e)).
Apparently the Digital Telephony Bill does expand federal enforcement
power significantly by giving new powers to the Attorney General,
placing new burdens on common carriers, and assigning new fines for
non-compliance. In addition, the bill would make interception a much
easier task for federal and local law enforcement, both of which
benefit from provisions of the Digital Telephony Bill. As the
technical nuances of forwarding intercept information to the
government "location" are not addressed, one wonders if government
officials can access any intercept and call setup information they
wish, or if they must request the information from the common carrier,
presenting evidence of their lawful authority in the process, and have
it forwarded.
The reference to common carriers raises the question, will these
include "public access" internet providers. Note that the Digital
Telephony Bill adopts the definition of common carrier in 47 U.S.C.
153(h):
"Common carrier" or "carrier" means any person engaged as a common
carrier for hire, in interstate or foreign communication by wire or
radio or in interstate or foreign radio transmission of energy. 47
U.S.C. 153(h)(1993).
In addition, it is possible that such providers might fall under the
"common carrier support services" provider provision of the Digital
Telephony Bill. Digital Telephony Bill, section 2. Mr. Godwin
suggests this might impose obligations upon local telephone service
providers to acquire "transactional information" from Internet
providers when e-mail is sent. Mike Godwin, Section-by-Section
Analysis of the 1994 Draft of the Digital Telephony Legislation
(1994). The implications for anonymous mail in this instance would be
dire.
Of particular interest is the focus on "pen register" and "call setup"
information. Pen register and call setup information has a much lower
standard of protection than the actual communication. _Smith v.
Maryland_, 442 U.S. 735 (1979)(Installing pen register without warrant
did not violate suspects fourth amendment rights). See also,
_California v. Greenwood_, 486 U.S. 35 (1988)(Information voluntarily
turned over to third parties, including call setup information, not
protected by fourth amendment). See also, 18 U.S.C. 3123 (1988). The
net effect of this section of the Digital Telephony Bill would be to
make such virtually unprotected information trivial to collect.
Although the proposed legislation may or may not technically expand
authority it most certainly does give law enforcement huge increases
in capabilities, especially in data collection.
(2) The Escrowed Encryption Standard:
On April 16, 1993 the administration announced the Escrowed Encryption
Standard initiative. The proposal allegedly seeks to address and
reconcile the conflict between privacy of citizens and the intrusive
needs of law enforcement. In effect the initiative proposes a
standard public key encryption algorithm for voice and data
communications. The algorithm is implemented in hardware, the
"Clipper" chip, that will be installed in a variety of communications
devices. The keys required to decrypt the communications between the
devices are segmented and "escrowed" between two agencies. The
cooperation of both agencies is required in releasing the key segments
to allow wiretapping of any individual device using the Clipper chip.
The theory is that the encryption algorithm will provide security for
the public from unauthorized eavesdroppers, while allowing law
enforcement access to the encrypted communications. The program is
described as "Voluntary." See generally, Statement of the White House
Press Secretary, April 16, 1993.
The Escrowed Encryption Standard is justified by the reliance of law
enforcement, and particularly federal law enforcement, on interception
of telephone communications in the battle against drugs and terrorism.
The Effects of Legislation:
Security and privacy are often considered mutually exclusive in their
nature. One cannot serve both masters without duplicity.
In this respect, the Escrowed Encryption Standard , which is presented
as a compromise between the two, is a paradox. Clearly the EES is not
at all interested in privacy for citizens. If indeed strong
cryptography is such a threat to law enforcement, its availability can
only be privacy enhancing in reference to whatever other listeners
might seek to overhear. If law enforcement, especially in light of
the scope of federal power, does not have the resources to penetrate
the currently available strong encryption methods, then EES is not
required for privacy. Indeed the EES initiative merely limits privacy
to a manageable level under the guise of a government entitlement to
privacy. The government here has created an illusionist entitlement
to privacy, and given it to the citizenry hobbled, while with the
other hand taking what tools were present for the citizens to see to
their own privacy in electronic communications.
The concept of "standing" illustrates the enhanced privacy available
to citizens in the context of one constitutional right, the Fourth
Amendment to the Constitution of the United States. The Fourth
Amendment is protected by a doctrine called the exclusionary rule.
Law enforcement is deterred from violating the Fourth Amendment by the
exclusion of such evidence as is illegally obtained from admission at
trial. _Mapp v. Ohio_, 367 U.S. 643 (1961). In order to exert this
redress, a complaining party is required to have "standing." Simply
put, it must be your constitutional rights that have been violated in
order to obtain any redress. Were a third party to be searched
without the process of a warrant, there would be little redress except
for resort to a civil suit, few of which are successful and fewer of
which are profitable. _Zurcher v. Stanford Daily_, 436 U.S. 547
(1978). Encryption fills the standing gap. Instead of relying on
inefficient process to insure individual privacy in communication, it
is now possible for the individual to secure such privacy and
protection provided by the amendment but not enforced by the
exclusionary rule or civil procedure.
If strong encryption presents no threat to law enforcement other than
as a cost in time and resources, then it is clear that the scope of
domestic monitoring is beyond that which is authorized by court order.
According to filings for the year of 1992 state and local authorities
performed 846 "intercepts" averaging $46,492 per intercept. Donald P.
Delaney, Dorothy E. Denning, Wiretap Laws and Procedures, Sept. 23,
1993. Intercepts under the Foreign Intelligence Surveillance Act of
1978 numbered 484 for 1992, costs are unreported. Id. See also, The
Foreign Intelligence Surveillance Act of 1978 50 U.S.C. sections 1801-
1811.
Non-FISA intercepts totaled in cost for the year of 1992 near 40
million dollars by these figures. If the implementation of EES is
merely a cost cutting measure, and the costs are associated with the
economics of decryption of suspect's intercepts using strong
encryption, an assertion that lacks any basis, then the EES proposal
must total in costs less than 40 million per year and the sum of the
FISA intercepts assuming each of these was an interception of
encrypted material. If the EES proposal exceeds the cost of these
intercepts, we must assume that either:
(1) The plan is not economically sound.
(2) There are more domestic intercepts than are reported as
legitimate.
It might be added that EES will not itself reduce the cost of actual
interception from the common carrier, while Digital Telephony might.
This may explain the similar timing of the initiatives as an attempt
to coordinate a cohesive data policy.
In addition, encryption technology is a growing and thriving market.
The market for security software, fueled by virus and general security
interests has attracted many competitors and several contributors in
the public domain who have helped to prop up the quality of commercial
software. The fact that a market has evolved even in the face of
harsh export restrictions suggests that a free marketplace would be a
significant force. Clearly regulation is not proper here where: (1)
There has been a fairly liquid exchange and availability to consumers
of information in the marketplace. (2) There are no restricted
commodities (within the United States). (3) There are large numbers
of buyers and sellers in the market. (4) There are no localized
externalities. Stewart, Krier and Manell, Environmental Law and
Policy (3d ed. 1990). In this case the market is restricted by a
supposed externality of "national security."
The contention that law enforcement and counterintelligence activities
will fall apart without the unhindered ability to wiretap is without
merit. Supporters of the EES proposal are utilizing a logical fallacy
in pointing to the number of convictions obtained by the use of
wiretaps as evidence of EES's merits. Indeed law enforcement has
relied heavily on their ability to wiretap with basic impunity. The
abuses that do come to light surely indicate that more lie
undiscovered below the surface of investigatory processes. The
assertion that law enforcement cannot properly adjust their methods to
rely instead on physical microphones and non-intercept type
surveillance is a mere front to preserve the current regime; one of
rubber stamp approval and lowered standards of "cause." Law
enforcement has found in the ability to wiretap an easy circumvention
of the Fourth Amendment because courts have indicated that the key
legal principal (the manifestation of an expectation of privacy) is
lower in telephone conversations than in the home. How is it that
when the citizenry attempts to exert an increased shield of privacy
over telephone and electronic conversations by not turning them over
to the third party (common carrier) in intelligible form the
government seeks to make this impossible? _Smith v. Maryland_, 442
U.S. 735 (1979)(An individual has no legitimate expectation of privacy
in the numbers dialed on his telephone because he voluntarily conveys
those numbers to the telephone company...) See also, _California v.
Greenwood_, 486 U.S. 35 (1988). _Katz v. United States_, 389 U.S. 347
(1967)(What a person knowingly exposes to the public, even in his own
home or office, is not a subject of Fourth Amendment protection).
What evil is there in individuals filling the gap that fails to
enforce higher protections on our phone and electronic conversations,
which incidentally, we rely on today much more than in years past.
That the government has an affirmative right to be allowed access to
the raw conversation is perhaps understandable. That the government
has a right to be provided with a plain meaning translation of what
they intercept is not. Even the provisions in the Digital Telephony
Bill recognize that the government will not place a duty of
translation on the common carrier. The Digital Telephony and
Communications
Privacy Improvement Act of 1994, section 3(i)(5) (Amending 18 U.S.C.
109 section 2237). Why then is it obvious that this burden should be
placed on the citizen? At the very least, the increased expectation
of privacy manifest in the attempt to encrypt conversations, even
under the EES initiative, should entitle the parties to greater
protections of process under the Fourth and Fourteenth Amendments,
_Katz_ and _Greenwood_.
The EES program is presented as a voluntary program. Unfortunately
the government's definition of voluntary falls short. In the case of
the EES program, government is trying to establish a de facto standard
by requiring all government communications to be made with the new
technology. The result is the threat of withholding the government
largess of government contracts to the companies that rely on such
contracts for their existence. The companies in turn, in the interest
of economy, will request that other associations outside of a
government context be made with the new technology. Coupled with
import/export policies that make competing technologies highly
unprofitable to market, the level of coercion is obvious.
In order for the EES program to accomplish its goals in relation to
crime and the use of strong encryption to deter law enforcement
interference, other technologies must not be readily available in the
United States. Clearly any group of criminals that might wish to use
strong encryption would not adopt a standard labeled at the outset as
penetrated by the government. It is hard to take the government's
assertion that the program will be voluntary at face value in light of
these analysis.
The dangers of allowing government to make privacy a collective good
distributed, and incidentally seized, by government itself, which is
essentially what the EES and Digital Telephony Bill proposals do,
should be self apparent. There is little or no reason to believe that
this form of government largess will be treated any different as far
as coercion by threat of withdrawal is concerned. Coupled together,
the ability to eavesdrop on citizenry and cripple a blossoming ability
for the individual to secure his or her own privacy, the government
has not only eliminated the most significant potential advance in
individual and private property, but also gained a good deal of
capability in preparing future regulation. Digital cash, which
without EES would be potentially untraceable and anonymous, will be
tracked as easily or easier in the new regime than the hard currency
of today and yesterday. A governmental control of the information
structure through subsidy will impose government requirements for
disclosure on what would otherwise be private carriers with no such
requirements. If these concepts are available to reasoned analysis,
they have likely occurred to the administration. Clearly anonymous
digital cash and completely untraceable transactions, at little or no
cost, are not in the administrations best interest. This suggests
that the Digital Telephony, National Information Infrastructure and
EES proposals are about, and have always been about, much more than
law enforcement, assured access and privacy, but also continued
control, regulation, and the status quo.
unicorn(a)access.digex.net
-----BEGIN PGP SIGNATURE-----
Version: 2.3
iQCVAgUBLYK97xibHbaiMfO5AQGHXwP/ZBVQYOaf63HtFU5FJuRnUj8AyHWRB5Bt
/MH0yanuV3+LkaalDXzTt3j/f7gFi5AEJK62CdOMU/T+nMfNg2QGjVTeYY1t9c09
d/NyddXgICd7uEtddced5+jvsMoVwSeDoGn4RLV8hokOvEiLXn9ifcloAnZ55epU
FOR//d3uU9Y=
=UsvS
-----END PGP SIGNATURE-----
