22 January 2004
The New York Times, January 22, 2004
By Stephen Labatron
WASHINGTON, Jan. 21 — The Federal Communications Commission's efforts to reduce regulations over some Internet services have come under intense criticism from officials at law enforcement agencies who say that their ability to monitor terrorists and other criminal suspects electronically is threatened.
In a series of unpublicized meetings and heated correspondence in recent weeks, officials from the Justice Department, the Federal Bureau of Investigation and the Drug Enforcement Administration have repeatedly complained about the commission's decision in 2002 to classify high-speed Internet cable services under a looser regulatory regime than the phone system.
The Justice Department recently tried to block the commission from appealing a decision by a federal appeals court two months ago that struck down major parts of its 2002 deregulatory order. Justice Department officials fear that the deregulatory order impedes its ability to enforce wiretapping orders.
The department ultimately decided to permit the F.C.C. to appeal, but took the highly unusual step of withdrawing from the lawsuit, officials involved in the case said.
As a result of the commission's actions, said John G. Malcolm, a deputy assistant attorney general who has played a lead role for the Justice Department, some telecommunications carriers have taken the position in court proceedings that they do not need to make their networks available to federal agents for court-approved wiretapping.
"I am aware of instances in which law enforcement authorities have not been able to execute intercept orders because of this uncertainty," Mr. Malcolm said in an interview last Friday. He declined to provide further details.
The clash between the commission and officials from the Justice Department and other law enforcement agencies pits two cherished policies of the Bush administration against each other. On one side stand those who support deregulation of major industries and the nurturing of emerging technologies; on the other are those who favor more aggressive law enforcement after the Sept. 11 terrorist attacks.
The outcome of the debate has far- reaching consequences.
Law enforcement officials say it will determine whether they can effectively monitor communications between suspects over new kinds of phone services that otherwise might allow them to escape detection. Also at stake is whether the government or industry will bear the considerable costs of developing the technology for such surveillance.
By contrast, some F.C.C. officials and telephone industry executives say that if the commission buckles to the other agencies and forces the industry to take on a host of expensive obligations the development of promising new communications services may be stalled or squelched for years to come.
The law enforcement officials have also raised concerns about recent statements by the commission's chairman, Michael K. Powell, that suggest he intends to propose rules soon that would place nascent Internet-based telephone services under a looser regulatory regime than the traditional phone system.
Through a spokesman, Mr. Powell declined to discuss the subject.
David Fiske, the commission's chief spokesman, said that he could not respond to Mr. Malcolm's statement that the F.C.C.'s interpretation of the rules was making it more difficult to execute surveillance orders.
A senior official at the F.C.C. said the commission was not unsympathetic to the concerns of the law enforcement agencies. "We're an economic regulatory agency as well as a law enforcement agency and we have to look at the interests of everyone," the official said.
Some industry experts say that their biggest worry is that law enforcement demands may reshape the technical specifications of the new Internet voice services, an accusation that officials at the Justice Department and the F.B.I. deny.
"What's most scary for industry and perhaps some people at the F.C.C. is the notion that the architecture of the Internet will depend on the permission of the F.B.I.," said Stewart A. Baker, a former general counsel of the National Security Agency, which monitors foreign communications. Mr. Baker now represents a number of telecommunications companies as a partner at the law firm of Steptoe & Johnson.
But law enforcement officials say they are not seeking uniform technical standards but requirements that the new companies offering so-called "voice over Internet" services build into their systems easy ways for agents to tap into conversations between suspects.
In a strange-bedfellows twist, officials from the F.B.I. and other agencies have found themselves the unlikely allies of groups like the American Civil Liberties Union, which have also argued that the new Internet services offered by cable companies should be under a regulatory regime like the phone system — but for different reasons. The A.C.L.U. prefers that approach because it would prohibit cable companies from discriminating against Internet service providers, and as such would assure a greater diversity of voices.
The law enforcement officials have repeatedly complained about the direction the agency has been taking on the issues.
Last month, officials from the Justice Department, the F.B.I. and the drug agency warned officials of the F.C.C. that the commission's regulatory rulings on high-speed Internet access through cable systems "suffers from statutory interpretation problems" and "directly threatens" the ability to apply the law permitting them to monitor suspects, according to a letter on file at the F.C.C. describing a meeting on the issue.
The meeting at the F.C.C. included lawyers from the Justice Department's criminal division, civil appellate division, narcotics and dangerous drugs section and solicitor general's office, as well as officials from the F.B.I., and D.E.A.
Shortly before that meeting, the Justice Department tried to block the F.C.C. from appealing a decision by a three-judge panel of the United States Court of Appeals for the Ninth Circuit, sitting in Seattle, because of the problems it could pose for law enforcement, officials said.
The commission lost the case last October, when the panel issued a ruling that may force the cable companies to share their broadband networks with competing Internet service providers.
The F.C.C. order, which was partly struck down, had classified cable broadband as an "information service" under the 1996 Telecommunications Act. In so doing, it threatened to undermine the ability of law enforcement agencies to use the Communications Assistance for Law Enforcement Act of 1994, a wiretapping law that applies to phone services but exempts information services.
The Justice Department ultimately reached a compromise that permitted the commission to go forward and petition the entire Ninth Circuit to review the case, Brand X Internet Services v. Federal Communications Commission. But government lawyers removed the department from the case, rejecting the Justice Department's traditional role as the main legal advocate for the United States in nearly all cases before federal appeals courts.
Law enforcement officials have also warned the F.C.C. that the approach that Mr. Powell has begun to articulate to have few regulations over the emerging technology that will permit consumers to use the Internet to send and receive phone calls could make it significantly more difficult for prosecutors and federal agents to monitor those calls.
The F.B.I. and the Justice Department have told the commission that greater use of high speed Internet phone services "offers increasing opportunities for terrorists, spies, and criminals to evade lawful electronic surveillance," according to a document on file at the F.C.C.
Classifying Internet-based phone services as "telecommunications" would allow law enforcement officials to require companies to provide them with access to contemporaneous conversations on their networks under the 1994 wiretapping law.
But such a classification also imposes on the companies a host of onerous requirements under the 1996 act, including those intended to assure that telephones are universally available and that everyone has access to 911 emergency services. These obligations, purveyors of the new Internet telephone services say, are so expensive that they will deter their development.
Government and industry lawyers say that the commission could try to define the new services as "telecommunications" under the 1994 surveillance law and "information" under the 1996 act. But taking that potentially conflicting approach could undermine the F.C.C. in court in the inevitable legal challenges that would follow its rulings.
Mr. Powell, in a series of recent speeches and interviews, has suggested that the new technologies need to be classified as "information services" and thus be subjected to fewer regulations.
"Don't shove the round Internet into a square regulatory hole," Mr. Powell said at a luncheon appearance last week before the National Press Club. "We cannot contort the character of the Internet to suit our familiar notions of regulation. Do not dumb down the genius of the Net to match the limited visions of the regulator.
"To regulate the Internet in the image of a familiar phone service is to destroy its inherent character and potential," Mr. Powell said. Such new technologies empower people, "giving them more choice and control."
"And I think as consumers do more, governments do less, because we don't regulate our citizens."
In the same speech, Mr. Powell added, "We will need to ensure the legitimate concerns of public safety and law enforcement are addressed."