[Clips] FCC approves Net-wiretapping taxes

Thu May 4 13:28:42 PDT 2006

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  Subject: [Clips] FCC approves Net-wiretapping taxes
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  CNET News

  FCC approves Net-wiretapping taxes

  By Declan McCullagh

http://news.com.com/FCC+approves+Net-wiretapping+taxes/2100-1028_3-6067971.html

  Story last modified Wed May 03 13:16:56 PDT 2006

  WASHINGTON--Broadband providers and Internet phone companies will have to
  pick up the tab for the cost of building in mandatory wiretap access for
  police surveillance, federal regulators ruled Wednesday.

  The Federal Communications Commission voted unanimously to levy what likely
  will amount to wiretapping taxes on companies, municipalities and
  universities, saying it would create an incentive for them to keep costs
  down and that it was necessary to fight the war on terror. Universities
  have estimated their cost to be about $7 billion.

  "The first obligation is...the safety of the people," said FCC Commissioner
  Michael Copps, a Democrat. "This commission supports efforts to protect the
  public safety and homeland security of the United States and its people."

  Federal police agencies have spent years lobbying for mandatory backdoors
  for easy surveillance, saying "criminals, terrorists and spies" could cloak
  their Internet communications with impunity unless centralized wiretapping
  hubs become mandatory. Last year, the FCC set a deadline of May 14, 2007,
  for compliance. But universities, libraries and some technology companies
  have filed suit against the agency, and arguments before a federal court
  are scheduled for Friday.

  "We're going to have a lot of fights over cost reimbursement," Al Gidari, a
  partner at the law firm of Perkins Coie, who is co-counsel in the lawsuit,
  said in an interview after the vote. "It continues the lunacy of their
  prior order and confirms they've learned nothing from what's been filed" in
  the lawsuit, he said.

  The original 1994 law, called the Communications Assistance for Law
  Enforcement Act, or CALEA, authorized $500 million to pay
  telecommunications carriers for the cost of upgrading their networks to
  facilitate wiretapping. Some broadband and voice over Internet Protocol
  (VoIP) providers had hoped that they'd be reimbursed as well.

  Jonathan Askin, general counsel of Pulver.com, likened Wednesday's vote to
  earlier FCC rules extending 911 regulations to VoIP. "It essentially
  imposed a mandate on the industry without giving the industry the necessary
  support to abide by the rules--and the same thing seems to be happening
  here," Askin said.

  Even without the CALEA regulations, police have the legal authority to
  conduct Internet wiretaps--that's precisely what the FBI's Carnivore system
  was designed to do. Still, the FBI has argued, the need for "standardized
  broadband intercept capabilities is especially urgent in light of today's
  heightened threats to homeland security and the ongoing tendency of
  criminals to use the most clandestine modes of communication."

  The American Council on Education, which represents 1,800 colleges and
  universities, estimates that the costs of CALEA compliance could total
  roughly $7 billion for the entire higher-education community, or a tuition
  hike of $450 for every student in the nation. Documents filed in the
  lawsuit challenging the FCC's rules put the cost at hundreds of dollars per
  student.

  But during Wednesday's vote, commissioners dismissed those concerns as
  unfounded. "I am not persuaded merely by largely speculative allegations
  that the financial burden on the higher-education community could total
  billions of dollars," said FCC Commissioner Deborah Taylor Tate, a
  Republican.

  The FCC's initial ruling last fall had left open the question of whether
  broadband and VoIP providers would be reimbursed for rewiring their
  networks and upgrading equipment to comply with CALEA.

  Another open question is what portion of a university's or library's
  network must be rendered wiretap-friendly. One possibility is that only the
  pipe (or pipes) connecting a school with the rest of the Internet must be
  made CALEA-compliant. Another is that the entire network would be covered.

  The FCC adopted its second order on Wednesday but released only a two-page
  summary, which didn't offer much clarity. In its initial ruling last year,
  the FCC said only that it had reached "no conclusions" about exactly what
  universities and libraries would have to do, prompting a flurry of comments
  filed with the agency and the federal lawsuit. (Plaintiffs in the lawsuit
  include Sun Microsystems, the American Civil Liberties Union, the Center
  for Democracy and Technology, the American Library Association, the
  American Council on Education and VoIP firm Pulver.com.)

  Commissioner Copps acknowledged that there is "still some clarity to be
  provided" for library and university network operators, but he suggested
  that additional clarity would not be forthcoming from the FCC. Instead,
  "all those agencies and offices of government who are involved in CALEA
  implementation should be working together to provide clarity there to avoid
  confusion and possibly expenses for these institutions," Copps said.

  At the Computers, Freedom and Privacy conference here Wednesday, John
  Morris of the Center for Democracy and Technology said libraries and
  universities are still left with more questions than answers.

  "There's some serious uncertainty about how it will really play out for
  universities," Morris said. Even if the FCC technically calls for Internet
  interception at the edge of a campus network, that likely won't be enough
  to satisfy law enforcement demands for all of an individual student's
  network traffic, including on-campus activities, he added.

  Injecting additional uncertainty is whether the FCC's action is legal. It
  represents what critics call an unreasonable extension of CALEA--which was
  designed to address telephone features such as three-way calling and call
  waiting--to the Internet.

  A House of Representatives committee report (click here for PDF) prepared
  in October 1994 emphatically says CALEA's requirements "do not apply to
  information services such as electronic-mail services; or online services
  such as CompuServe, Prodigy, America Online or Mead Data (Central); or to
  Internet service providers."

  When Congress was debating CALEA, then-FBI Director Louis Freeh reassured
  nervous senators that the law would be limited to telephone calls. "So what
  we are looking for is strictly telephone--what is said over a telephone?"
  Sen. Larry Pressler, R-S.D., asked during one hearing.

  Freeh replied: "That is the way I understand it. Yes, sir."

  Two of the four FCC commissioners who voted for the initial CALEA ruling
  last fall acknowledged that the federal government was on shaky legal
  ground. The FCC's regulation is based on arguing that the law's definition
  of "telecommunications carrier" applies to broadband and VoIP providers.

  Then-FCC Commissioner Kathleen Abernathy, a Republican, said, "Because
  litigation is as inevitable as death and taxes, and because some might not
  read the statute to permit the extension of CALEA to the broadband Internet
  access and VoIP services at issue here, I have stated my concern that an
  approach like the one we adopt today is not without legal risk."

  The FCC is no stranger to having its decisions rejected by a federal
  appeals court that can be hostile to what it views as regulatory
  overreaching. Last May, for instance, the FCC's "broadcast flag" was
  unceremoniously tossed out by the U.S. Court of Appeals for the D.C.
  Circuit.

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  R. A. Hettinga <mailto: rah at ibuc.com>
  The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
  44 Farquhar Street, Boston, MA 02131 USA
  "... however it may deserve respect for its usefulness and antiquity,
  [predicting the end of the world] has not been found agreeable to
  experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'
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-----------------
R. A. Hettinga <mailto: rah at ibuc.com>
The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'