Appeals court upholds Net-wiretapping rules

Bush administration's Net surveillance plans receive boost from appeals court, which refused to overturn rules.

Declan McCullagh
Declan McCullagh Former Senior Writer
Declan McCullagh is the chief political correspondent for CNET. You can e-mail him or follow him on Twitter as declanm. Declan previously was a reporter for Time and the Washington bureau chief for Wired and wrote the Taking Liberties section and Other People's Money column for CBS News' Web site.
4 min read
The Bush administration's plans to force Internet providers to comply with extensive wiretapping rules received a boost on Friday, when a federal appeals court upheld the controversial regulations.

A three-judge panel of the U.S. Court of Appeals in Washington, D.C., refused to overturn the Internet surveillance regulations, saying the Federal Communications Commission made a "reasonable policy choice" when approving them last fall.

FCC Chairman Kevin Martin, a Republican, applauded the ruling (click for PDF), saying it "will ensure that law enforcement agencies' ability to conduct lawful court-ordered electronic surveillance will keep pace with new communication technologies."


Judge Harry Edwards, who had called the FCC's arguments "gobbledygook" and "nonsense" during oral arguments before the appeals court last month, dissented. He said the 1994 Communications Assistance for Law Enforcement Act, or CALEA, does not give the FCC "unlimited authority to regulate every telecommunications service that might conceivably be used to assist law enforcement."

The organizations behind the lawsuit say Congress never intended CALEA to force broadband providers--and networks at corporations and universities--to build in central surveillance hubs for the police. The list of organizations includes Sun Microsystems, Pulver.com, the American Association of Community Colleges, the Association of American Universities and the American Library Association.

Even without the FCC rules that are scheduled to take effect in May 2007, police have the legal authority to conduct Internet wiretaps--that's precisely what the FBI's Carnivore system was designed to do. Still, the FBI has claimed, the need for "standardized broadband intercept capabilities is especially urgent in light of today's heightened threats to homeland security and the ongoing tendency of criminals to use the most clandestine modes of communication."

As first reported by CNET News.com, representatives of the FBI's Electronic Surveillance Technology Section in Chantilly, Va., began quietly lobbying the FCC in mid-2003 to force broadband providers to provide more-efficient, standardized surveillance facilities. The Drug Enforcement Administration and Justice Department eventually signed on too.

The FBI met with a sympathetic ear among federal telecommunications regulators, who voted, in a series of decisions starting with a preliminary 5-0 vote in August 2004, to mandate the wiretapping backdoors. If the FCC had done nothing, Net wiretaps would be possible but could have been more difficult and time-consuming for police to carry out.

Included in the FCC's rulings are voice over Internet Protocol, or VoIP, companies. But the FCC did not grant the police agencies' request to rewrite 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.

Two of the four FCC commissioners who voted for the regulations last September acknowledged that the federal government was on shaky legal ground. Michael Copps, a Democrat, warned at the time that if a court case were to lead to the rules being struck down, the move might do "more harm than good." The FCC's logic, he said, was "built on very complicated legal ground."

Friday's decision comes as the Bush administration is facing increasing congressional pressure, especially from Sen. Arlen Specter, a Pennsylvania Republican, over its telephone and Internet surveillance program overseen by the National Security Agency. AT&T is being sued in a separate case in San Francisco over allegations that it cooperated in a way that violated federal privacy laws.

A dispute over "information service"
At issue in the legal spat are arcane definitions of "information service" and "telecommunications service" used in CALEA and other chunks of telecommunications law.

Because CALEA does not apply to "information services," the companies and professional associations filing the lawsuit argued that broadband Internet access fell into that legal category and was immune from the law's requirements. They also claimed that the FCC unlawfully extended CALEA to apply to private networks, such as ones operated by a university or corporation.

But two of the three judges on the panel disagreed, saying that analysis is "inconsistent" with their own interpretation--and said that where the law is ambiguous, the FCC should enjoy substantial leeway.

The majority opinion was written by Judge David Sentelle and signed by Judge Janice Rogers Brown.

The plaintiffs in the case could seek a rehearing before the entire D.C. Circuit appeals court or ask the U.S. Supreme Court to review the case.

In his dissent, Edwards said that while the FCC may be correct that eavesdropping would be facilitated by its regulations, "it is not congressionally authorized to implement this view."

"What we see in this case is an agency attempting to squeeze authority from a statute that does not give it," Edwards wrote. "The FCC's interpretation completely nullifies the information services exception and manufactures broad new powers out of thin air."

A House of Representatives committee report prepared in October 1994 emphatically says CALEA's requirements "do not apply to information services such as electronic-mail services; or online services such as CompuServe, Prodigy, America Online or Mead Data (Central); or to Internet service providers."

When Congress was debating CALEA, then-FBI Director Louis Freeh reassured nervous senators that the law would be limited to telephone calls. "So what we are looking for is strictly telephone--what is said over a telephone?" Sen. Larry Pressler, R-S.D., asked during one hearing.

Freeh replied: "That is the way I understand it. Yes, sir."