21 November 1999. Thanks to GG/DF/PM.
Source:
http://www.canoe.ca/MoneyNewsTechnology/sept13_tmisatellite.html
The Financial Post, Monday, September 13, 1999
WASHINGTON - A tiny Canadian satellite communications company will be the first foreign firm to receive top security approval from the FBI to operate a telecommunications business in the United States after agreeing to allow U.S. security agencies to wiretap its service.
The precedent-setting deal, to be signed today, will soon allow TMI Communications Inc. to offer satellite telecommunications services in the U.S. market, Larry Boisvert, TMI's chief executive, confirmed in an interview.
"If you want to provide telecommunications in the U.S. you have to be prepared to meet the security required as determined by the FBI and the Department of Justice," Mr. Boisvert said.
Even though it will operate the service from Canada, TMI agreed to put a digital switch in the United States that would give FBI and other U.S. security agencies the ability to listen in on satellite calls or copy data, such as financial records, as required by new federal laws that will force all U.S. mobile communications companies to do the same by next June.
As first reported by the National Post in June, the FBI had blocked TMI from getting a Federal Communications Commission licence because it was worried that criminals or terrorists would use foreign-based telecommunications companies to avoid wiretaps. The FBI has complained it can not easily tap phonecalls going through foreign countries.
The new agreement, which comes after 17 months of negotiations, would put TMI's switch on U.S. soil, something the FBI plans to demand of any other foreign telecom company wanting to offer services in the United States as part of the 1994 Communications Assistance for Law Enforcement Act, said Mr. Boisvert.
"It's going to cost us to do business in the U.S.," he said. "But if you're going to play in someone else's market, you got to be CALEA compliant."
A key part of the two agreements being signed today includes one between Canada and the U.S. that prohibits the FBI and any other security agency from tapping the calls being made by, or to, Canadian citizens.
Ottawa had balked at giving the FBI blanket access, saying it wanted to protect the privacy of Canadians.
Mr. Boisvert insisted the reason the negotiations took so long was not because the U.S. government had security concerns about Telesat or Canada. Rather, he said, the Department of Justice was being extraordinarily careful because the TMI deal would be the model for all other foreign telecommunications companies wanting access to the U.S. market.
The United States and 130 other countries agreed in February 1997 to open their telecommunication markets to foreign competition.
At the time, however, the United States insisted its security concerns had to be met first, but did not spell out what that meant until TMI became the first foreign telecommunications company to apply for an FCC licence a year later.
"Security became the key issue," said Mr. Boisvert. "I suspect this will be a surprise to a lot of others waiting behind us."
Besides TMI, which is owned by Telesat Canada Inc. and BCE Inc., Globalstar Canada LP, a partnership of U.S. Globalstar and Canadian Satellite Communications, is also looking to offer U.S. telephone service using Canadian facilities.
TMI is hoping to be the first out of the gate to not only offer conventional satellite telephone services, but also to get into two new areas in Canada and the United States -- one involving data transmission and the second called asset management.
Mr. Boisvert said TMI is about to roll out the second service in Canada. It essentially involves placing tiny transmitters on everything from railway cars to trucks to allow companies to know exactly where their goods are anywhere in the country.
In addition, TMI is talking to major U.S. utilities about installing the devices in homes and businesses so they can remotely track electricity use.
"You don't have to send someone to the home to read the meters," he said. "The applications are enormous."
The deal being signed today clears the way for TMI to receive an FCC licence after pledging to have the new security features in place before next June.
The FCC was worried that demands by the FBI and the Department of Justice would be so onerous that no foreign telecommunications company would want to compete in the U.S. market, something that could set the stage for retaliation against U.S. companies around the world.
Copyright © 1999, Canoe Limited Partnership. All rights reserved.