Feds back wiretap rules for Internet

The 5-0 vote by the FCC is a major step toward regulations designed to help police and spy agencies eavesdrop on all forms of high-speed Internet access, including cable modems, wireless, satellite and broadband over power lines.

IP refers to the Internet Protocol, a fundamental underpinning of the Web, and VoIP is a voice technology that uses the protocol to direct phone calls over the Internet.

The vote comes five months after the FBI, the Drug Enforcement Administration and the Justice Department formally asked for guaranteed wiretapping access to broadband networks. If the FCC had done nothing, wiretaps would be possible but could be more difficult and time-consuming for police to carry out.

The political tussle over wiretapping is one facet of a broader struggle over Internet regulation. VoIP providers have been fighting a defensive battle against state regulators and some Washington politicians who are eyeing the fledging technology as a potentially lucrative source of revenue. State governments have been attempting to gain authority over VoIP providers, and the U.S. Senate could vote at any time on a bill to authorize many of those state taxes and regulations.

There is "no higher priority than promoting national security," said FCC Commissioner Kathleen Abernathy during the meeting. "All of us are in favor of doing all we can to assist law enforcement."

The FCC's five commissioners agreed that 1994 Communications Assistance for Law Enforcement Act, or CALEA, clearly covers broadband and "managed" VoIP services.

Still, the FCC did not grant the police agencies' request to extend CALEA to cover instant messaging and VoIP programs that are not "managed"--a reference to peer-to-peer programs like the original version of Skype and Pulver.com's Free World Dialup, which do not use the public telephone network.

The commission "tentatively concludes that non-managed, or disintermediated, VoIP and instant messaging are not subject to CALEA, and that it is unnecessary to identify future services and entities subject to CALEA," Powell said.

The FCC decision would require Vonage, 8x8, AT&T and other prominent providers of broadband telephone services to comply with the 1994 law. Executives from these companies have said in the past that they all intend to comply with any request law enforcement makes, if technically possible.

Jeff Pulver, co-founder of Free World Dialup, said the decision strongly hints that a day is arriving when some VoIP providers will have to follow many more of the rules that govern traditional telephone service.

The tentative ruling will also serve to divide the providers of unmanaged services from those that market themselves as an alternatives to Verizon Communications, BellSouth and other major local phone companies.

"This ruling is shouting that soon, if you hold yourself out as a replacement telephone service, you will ultimately be beholden to all traditional phone rules," Pulver said. "It's a big sign to the industry that it's time to innovate."

Pulver said he had hoped the ruling would come "years from now," rather than in mid-2004 but that there is a general sense that CALEA compliance "was inevitable." The FCC's decision not to force Free World Dialup and other "non-replacement services" to abide by the law was expected, Pulver said.

Vonage, the world's largest commercial VoIP provider--which once told its customers to "fire your phone company"--believes it can comply with CALEA rules "within a year," a representative said. She added that Vonage is already working with the FBI and two equipment vendors on the technical backdrop for meeting the requirements.

The ruling "is not a deal breaker," the representative said.

An AT&T spokeswoman said the company, as a practice, always cooperates with law enforcement. The spokeswoman had no comment on Wednesay's FCC decision.

CALEA does not change current wiretapping authorization requirements imposed on police. Depending on the situation, such wiretaps do not always require court approval, in part because of expanded wiretapping powers put in place by the Patriot Act.

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Wednesday's vote is technically a notice of proposed rulemaking that asks for public comment before a formal regulation is adopted. But because the FCC commissioners were adamant during their discussion that CALEA must be extended to the Internet, final approval is expected.

One note of dissent came from Commissioner Michael Copps, who said he agreed with the decision but warned that its legal arguments were shaky.

"Too often, it gets the reasoning wrong," Copps said. "(It's) too flush with tentative conclusions. It would be a shame if our reliance on thin legal arguments result in the CALEA rules being thrown out" if challenged in court.

The FCC's expected final decision is vulnerable to a legal challenge because it's not clear that CALEA apples to the Internet, which Congress did not explicitly include in the law when it was enacted a decade ago.

An alliance of telecommunications companies and nonprofit groups--including the ACLU, Americans for Tax Reform, and the Center for Democracy and Technology--asked the FCC in April to reject the FBI's demands. "CALEA applies only to telecommunications common carriers," the groups said. "Congress excluded Internet service providers."

The FCC also indicated that broadband and VoIP providers subject to the law would have to pay the costs of buying equipment to follow the law. By contrast, from 1997 through 2001, Congress appropriated a total of $500 million to reimburse analog phone companies for the costs of complying with CALEA.

Push to delay
The FCC also on Wednesday determined that walkie-talkie style telephone calls known as "push to talk" are also subject to wiretap regulations.

Push-to-talk technology allows callers to connect to other cell phones with just the push of a single button. Only one person can talk at a time, and there is no need to dial a number. Motorola and U.S. cell phone carrier Nextel Communications introduced the technology about a decade ago. For about eight years, difficulties perfecting such a service and the high price of push-to-talk handsets gave the two companies an almost exclusive hold on the market.

But now, "the button" is spreading globally--mostly because a carrier's cost of adding the service has dropped with the introduction of alternative push-to-talk technologies from Qualcomm, Kodiak Networks and other companies. The price of handsets with the feature also has decreased.

Nextel Communications said it has been wiretapping these types of calls for years, using a technology it developed. "It was a very difficult thing to do," a company representative said.

But compliance won't be easy for other carriers that have since launched similar services. A Verizon Wireless representative said the carrier will soon seek a waiver from the FCC, because "while we are well aware of the need for public security reasons, we can't do it yet."

"We expect that the FCC will provide a reasonable timeframe for push-to-talk services to become CALEA compliant," said Steve Largent, chief executive of cell phone lobbying group Cellular Telecommunications & Internet Association.