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Appeals Court Overturns Much of the Law Involving Telecom Carriers and Wiretapping

15 August 2000

A federal court of appeals today rejected portions of a 1994 law that requires telecom carriers to make their systems available for legal wiretapping, a decision that could put additional pressure on the government to shelve its controversial e-mail snooping device, a.k.a. "Carnivore."

In a ruling issued today, the Federal Court of Appeals for the District of Columbia overturned large swaths of the Communications Assistance for Law Enforcement Act (CALEA), a 1994 statute that required wireline and wireless telephone companies to build law enforcement surveillance capabilities into their newer digital communications systems.

After Congress passed the statute in 1994, the Federal Communications Commission (FCC) granted an FBI request to mandate additional eavesdropping capabilities in order to keep up with changes in technology (most notably digital or wireless transmission modes, or features and services such as call forwarding, speed dialing and conference calling.)

Last year, several privacy groups and telecom industry associations sued the FCC, saying the commission's actions did not satisfy two key CALEA restrictions: Namely, it failed to protect the privacy of communications not authorized for interception, and did not seek to minimize the cost of such compliance on telecom providers or ratepayers.

In a three-part, unanimous decision, the appeals court largely sided with the privacy and industry groups, and chided the FCC's requirements as "an entirely unsatisfactory response" to CALEA that did not take into account the significant cost to telecom providers.

Faced with multiple cost estimates ranging as high as $4 billion for all carriers to implement all of CALEA's capabilities, the court said the FCC simply adopted an estimate submitted by five software suppliers predicting that they would earn $916 million in revenues for implementing CALEA and $414 million for imple- menting the four added capabilities.

"The commission's response to CALEA's cost directives reflects a classic case of arbitrary and capricious agency action," the court wrote. "Although it mentioned residential ratepayers, it never explained what impact its order would have on residential telephone rates."

Privacy groups argued before the court that the new features the FBI requested included the ability to extract from a call any dialed digits, which might include long distance numbers but also would include bank account and credit card numbers.

The court said the FCC did not clearly explain the definition of "call identifying information," or how it would decide which type of information to intercept, and that the "commission simply concluded, with neither analysis nor explanation, that each capability is required by CALEA."

With little effort, law enforcement agencies can obtain a "trap-and-trace" order that allows them to determine the origin and destination of a phone call. But the law requires a much higher level of authority - including a court order and Justice Department approval - before officials can eavesdrop on a conversation.

Yet, privacy groups alleged that when applied to the Internet, even trap and trace orders capture some of the content in the message, where content under the original definition of the statute could not be intercepted without a higher court order.

In interpreting the CALEA restrictions, the FCC claimed that while communications carriers should not be required to separate the addressing information from content, law enforcement officials would not be forced to dismiss the information if it were gleaned from a regular trap and trace order.

The court today accepted the FCC's first assertion, but said the FBI would need to meet the highest legal standards if they did not choose to separate content from addressing information when using trap and trace orders.

The court ruled in favor of an FCC decision requiring wireless carriers to build into their networks a means for figuring out the general location of a cell phone user, although it restricted that requirement to the location of the antenna handling the call, rather than requiring a "triangulation" method to pinpoint the exact location of the cell user.

Jim Dempsey, senior staff counsel for the Center for Democracy and Technology - one of the many groups participating in the lawsuit - praised the court for its decision.

"The court told the FCC that it was wrong to give in to the FBI's surveillance demands at the cost of privacy," Dempsey said.

But Steve Colgate, the assistant attorney general for the Justice Department, said the court's decision did not settle the matter for good.

"I look at this sort of like a high school term paper, where the teacher says 'I told you to write a six-part theme and you did fine in explaining the development of the character in two of the parts, but you didn't address what I asked you to do in the other four parts,' " Colgate said.

The court has remanded the decision back to the FCC for clarification on the many points it found rather vague. Colgate predicted all parties to the suit would be back in court again once the commission clarifies the intent and scope of its CALEA statutes.

The court's ruling gives ammunition to privacy groups and lawmakers who in recent weeks have demanded that the FBI pull the plug on its "Carnivore" system, a device that attaches directly to an Internet service provider's internal systems, allowing law enforcement to sift through vast quantities of e-mail messages to find those that meet specifications of a court order.

"The court's statement rejects the FBI's 'trust us' approach, and among other things, it casts a dark shadow of doubt over the legality of Carnivore," Dempsey said.

Last week, Attorney General Janet Reno said the Justice Department was in the process of recruiting scientists and experts from among the nation's universities to sit on a panel that will examine Carnivore's inner workings.

Colgate, who will preside as chair of the review panel, declined to comment on the impact of the court's decision on Carnivore, saying only that the court's findings would be included as part of the review panel's record.

Privacy and consumer groups, including the American Civil Liberties Union (ACLU) and the Electronic Information Protection Center (EPIC) sued the government for failing to respond to expedited requests for any and all information related to and gleaned from the use of Carnivore. A federal judge subsequently gave the FBI ten working days to come up with a timetable under which it would comply with the requests. The FBI is expected to submit its timetable Wednesday.

A copy of the court's order can be found online at: http://pacer.cadc.uscourts.gov/common/opinions/200008/99-1442a.txt.

Reported by Newsbytes, www.newsbytes.com.

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