SUMMARY OF 8/11 DT HEARING

[David Farber <farber () central cis upenn edu>]

HOUSE/SENATE JOINT HEARING CONSIDERS DIGITAL TELEPHONY BILL
===========================================================


August 12, 1994


The House Subcommittee on Civil and Constitutional Rights and the Senate
Subcommittee on Technology and the Law held a joint hearing Thursday on the
most recent incarnation of the Digital Telephony legislation.  The bill,
(H.R. 4922, S. 2375), was introduced on Tuesday August 9 by Representative
Don Edwards (D-CA) and Senator Patrick Leahy (D-VT)  (for a copy of the
bill and EFF's summary and analysis, see the URL's at the end of this
document).
Witnesses appearing before the panel:


FBI director Louis Freeh,
General Accounting Office (GAO) director of Information Resources Hazel
    Edwards,
United States Telephone Association (USTA) president Roy Neel,
Cellular Telecommunications Industry Association (CTIA) president Thomas
    Wheeler, and;
EFF policy director Jerry Berman


The hearing centered on 4 aspects of the legislation: the necessity of the
bill, privacy, scope, and cost issues, with cost concerns providing the
most interesting exchanges.


IS DIGITAL TELEPHONY LEGISLATION NECESSARY?
===========================================


FBI director Freeh and GAO's Edwards both argued that law enforcement has
experienced significant difficulty conducting electronic surveillance in at
least 183 cases over the past several years.  Although the specific
circumstances of those cases remain classified by the FBI, director Freeh
stated that the digital telephony legislation is necessary to address
problems with existing technology and to avoid problems as new technologies
are deployed.  When pressed by Rep. Edwards on the specifics of the 183
cases, Director Freeh acknowledged that many of those cases involved pen
registers (not court ordered wiretaps).  GAO's Edwards added that law
enforcement officers have frequently chosen not to request a wiretap order
because they knew a carrier could not comply.


EFF Policy Director Jerry Berman and USTA President Roy Neel both
questioned the necessity of any bill, noting that the Administration has
based its argument on classified figures.  Neel argued that carriers are
currently cooperating with law enforcement, both as required by existing
law and through industry/law enforcement cooperative endeavors such as ATIS
(Alliance for Telecommunications Industry Solutions).


Despite the concerns raised by EFF, USTA, Rep Edwards, and others, Freeh
and GAO's Edwards testified that new communications technologies pose, and
will continue to pose, problems for law enforcement.  Freeh called this the
"number one" issue affecting law enforcement today, and said that the
public safety would be adversely affected with out Congressional action.


Both Senator Leahy and Representative Edwards sided with the FBI on the
question of the bill's necessity, agreeing that Congressional action to
address law enforcement's problems is called for.  At the same time
however, both Chairman pointed out that any Congressional action must be
balanced by enhanced privacy protections.  As Senator Leahy noted in his
opening statement, "While we seek to assist legitimate law enforcement
needs, we must take care not to jeopardize the important privacy rights of
all Americans or frustrate the development of new communications
technologies.  I believe the companion bills Chairman Edwards and I
introduced on Tuesday achieve those goals".




PRIVACY PROTECTIONS
===================


All parties, including the FBI and members of the committees, applauded the
expanded privacy protections in the bill.  FBI director Freeh stated that
the bill "carefully balances the legitimate concerns of law enforcement,
the telecommunications industry, and privacy advocates".  Senator Leahy and
Representative Edwards both praised the increased protections for
transactional data, the extension of ECPA to cordless phones, and the open
and public process for determining and challenging the technical standards
under the bill as significant gains for privacy.


EFF's Jerry Berman expressed strong support for the increased standard for
law enforcement access to transactional data.  Under the Edwards/Leahy
bill, law enforcement could only gain access to online transactional
records (i.e.: email records, addressing information, which movies you
request on a pay-per view channel, etc.) only by proving to a court, by
showing of "specific and articulable facts", that the records requested are
relevant to an ongoing criminal investigation.  Under current law, such
records are available to law enforcement through an administrative
subpoena.  "Court order protection will make it much more difficult for law
enforcement to go on 'fishing expeditions' through online transactional
records, hoping to find evidence of a crime by accident", Berman added.




SCOPE OF COVERAGE
=================


The scope of the bill was also discussed in detail.  The re-engineering and
capacity requirements of the bill would apply only to telecommunications
carriers who provide a subscriber with the ability to "originate,
terminate, or direct" communications.   In other words, the requirements of
the bill apply to local telephone exchange carriers, cellular providers and
PCS.   The requirements of the bill do not apply to Information services,
private networks, PBXs, and most long distance carriers.  USTA's Neel, who
represents both large and small telephone companies, argued that the
current scope of the bill may put many of his members at a competitive
disadvantage.  USTA believes that networks which are not covered by the
bill may take away customers from covered carriers because their costs may
be lower and their networks more secure. Neel requested that the scope be
expanded to cover all telecommunications networks.  Anything less, Neel
added, may create "safe harbors for criminals".


EFF's Jerry Berman supported the narrow scope of the bill, noting the
exemption of information services, Internet providers, and BBSs.  On this
issue, FBI Director Freeh acknowledged that the exemption for information
services may leave some areas open to criminal activity.  He also added
that, if future events prove that a re-examination of this exemption is
necessary, he expects Congress to take up the issue.   Jerry Berman
disputed this, noting that under current law, law enforcement can, with a
probable cause warrant, access stored electronic communications.
Furthermore, Berman noted, online services are carried over the facilities
of covered carriers.  Thus, although an Internet provider is not be
obligated to meet the reengineering requirements of the bill, the FBI is
would still be permitted, with proper authorization, to access the content
of online communications by tapping the facilities of a covered carrier.
Because of this, there is no need for the FBI to require online services,
BSSs, and Internet providers to re-engineer their networks.




COST:  WHO PAYS? IS $ 500 MILLION ENOUGH? 
==========================================


The costs associated with compliance proved to be the major focus of the
discussion, and the FBI appeared to make a concession on a critical point:
that compliance with the requirements should be linked in some way to
reimbursement.  The bill currently authorizes $500 million for government
reimbursements to carriers for capacity upgrades within four years.  At
issue is whether telecommunications carriers should be required to comply
with the capacity and re-engineering requirements of the bill after four
years and in the absence of government reimbursement.  USTA's Roy Neel
testified that the industry may eventually be forced to incur massive costs
if the government requires capacity upgrades after the appropriated funds
have been expended.  EFF's Jerry Berman argued that allowing government to
enforce capacity requirements without reimbursement would pose a large
threat to civil liberties.  "We are concerned that failure to limit the
bill's requirements to actual reimbursements will cause deployment of
unnecessary surveillance capability around the country", an obvious threat
to privacy and civil liberties.


When pressed on this issue by Senator Leahy, FBI director Freeh appeared to
acknowledge that the FBI would be willing to accept a linkage between
funding and a carrier's obligation to comply with capacity requirements.
Freeh stated, "it would be unlikely that a judge under this bill would
force compliance when compliance is impossible due to lack of funds".
Although, as CTIA's Wheeler noted, carriers would prefer to avoid court
action, Director Freeh appears to have signaled a willingness to resolve
industry and privacy concerns about the cost issue before passage.




THE NEXT STEP
=============


The bill will next be considered at a markup before the House Subcommittee
on Civil and Constitutional Rights, followed by a markup at both the House
and Senate Judiciary committees.   Additional hearings in the House and/or
Senate Commerce Committees may also occur, although no information was
available at the time of this writing.  The bills will then go to the
respective floors of both houses, and a final vote on passage is likely to
take place sometime before the end of September.




Paths to relevant documents:


1994 final draft, as sponsored


ftp.eff.org, /pub/EFF/Policy/FBI/digtel94.bill
gopher.eff.org, 1/EFF/Policy/FBI, digtel94.bill
http://www.eff.org/pub/EFF/Policy/FBI/digtel94.bill
bbs: +1 202 638 6120 (8N1, 300-14400bps), file area: Privacy - Digital
     Telephony; file: digtel94.bil




EFF Statement/Analysis


ftp.eff.org, /pub/EFF/Policy/FBI/digtel94_statement.eff
gopher.eff.org, 1/EFF/Policy/FBI, digtel94_statement.eff
http://www.eff.org/pub/EFF/Policy/FBI/digtel94_statement.eff
bbs: +1 202 638 6120 (8N1, 300-14400bps), file area: Privacy - Digital
     Telephony; file: digtel94.eff


August 11, 1994 Hearing Docs (not yet on-site)


..........................................................................
Jonah Seiger, Project Coordinator                       <jseiger () eff org>
Electronic Frontier Foundation                           202/347-5400 (v)
1001 G St, NW  Suite 950 East                            202/393-5509 (f)
Washington, DC   20001


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