EFF HEARING SUMMARY September 14, 1994 ========================================================================== HOUSE TELECOMMUNICATIONS SUBCOMMITTEE CONSIDERS DIGITAL TELEPHONY PROPOSAL OVERVIEW -------- On Tuesday September 13 the House Energy and Commerce Subcommittee on Telecommunications and Finance held a hearing to examine the Digital Telephony legislation. The bill (H.R. 4922/S. 2375), introduced in August by Representative Don Edwards (D-CA) and Senator Patrick Leahy (D-VT), would require telecommunications carriers to ensure that advanced technology does not prevent law enforcement from conducting authorized electronic surveillance. Tuesday's hearing focused mainly on questions of cost. More specifically, whether all future costs associated with law enforcement surveillance capability should be borne by private industry or the government. Witnesses appearing before the panel: Louis Freeh, FBI Director Tom Reilly, Middelsex County (Mass) District Attorney Richard Metzger, FCC Common Carrier Bureau Chief Daniel Bart, Telecommunications Industry Association (TIA) V.P. Jerry Berman, Electronic Frontier Foundation (EFF) Policy Director Roy Neel, United States Telephone Association (USTA) Pres. & CEO Thomas Wheeler, Cellular Telecommunications Industry Association (CTIA) Pres. TIA's Dan Bart and USTA's Roy Neel joined EFF's Jerry Berman in questioning the necessity of any digital telephony legislation, expressing concern that the FBI has not adequately substantiated its case that its surveillance efforts are being frustrated by advanced telecommunications technologies. However, all agreed that the Edwards/Leahy bill is substantially improved over previous FBI proposals, noting its increased privacy protections, prohibition of government design authority, and requirements for public processes. On the issue of cost, TIA's Bart, USTA's Neel, and CTIA's Wheeler all argued that forcing industry to incur compliance costs may slow technological innovation and the development of the NII. EFF's Berman also argued for government reimbursement, adding that, "if the telecommunications industry is responsible for all future compliance costs, it may be forced to accept solutions which short-cut the privacy and security of telecommunications networks". He further noted that linking compliance to government reimbursement has the benefit of providing public oversight and accountability for law enforcement surveillance capability. FBI Director Freeh stated that passage of the digital telephony legislation this year is a "drop-dead issue for us", and praised the telecommunications industry for their cooperation and good faith efforts to craft a balanced compromise. While acknowledging that the costs associated with meeting the requirements of the legislation remain a significant issue, Freeh indicated that this question should be left to Congress to determine. Many Subcommittee members, apparently swayed by the FBI's intense lobbying campaign for the bill (which included many personal visits by the FBI Director), praised the privacy protections in the legislation and committed themselves to working through the remaining issues in order to pass the bill this year. As Subcommittee Chairman Edward Markey (D-MA) stated in his opening statement, the task of the Subcommittee is to "come up with a policy that 1) protects the privacy interests of our citizens, 2) is mindful of the limited financial resources of taxpayers or ratepayers, 3) meets the legitimate needs of law enforcement, and 4) does not unduly interfere with our telecommunications industry, which is racing to the future with advances in communications technology". COST -- WHO PAYS FOR LAW ENFORCEMENT CAPABILITY? ------------------------------------------------ At issue are the provisions in the legislation that require telecommunications carriers to deploy features and services which enable law enforcement to conduct authorized electronic surveillance. The current bill authorizes $500 million to cover the cost of upgrading existing equipment during the first 4 years after the bill is enacted. Carriers would be required to modify their equipment, at the governments expense, or face fines of up to $10,000 per day for each day in violation. Although the FBI maintains that $500 million is enough to cover all upgrade costs, the industry has repeatedly stated that the costs will be five to ten times higher. The industry is requesting that their liability under the bill be linked to government reimbursement -- that the government should get what it pays for and no more. After four years, the bill stipulates that carriers must ensure that all new features and services meet the wiretap requirements. The FBI has argued that future compliance costs will be minimal, because these costs will be addressed at the design stage and will be spread throughout the industry. The industry maintains it is impossible to estimate compliance costs for technologies which are not even on the drawing boards. If the costs are substantial, as industry believes, forcing industry to incur those costs may slow the deployment of advanced technology to the public. Therefore, the industry believes that the government should be responsible for all future compliance costs. PUBLIC ACCOUNTIBILITY OF LAW ENFORCEMENT SURVEILLANCE COSTS IS ESSENTIAL ------------------------------------------------------------------------ Many members of the Subcommittee stated that law enforcement's ability to conduct electronic surveillance is an important public good which must not be denied by advances in technology. However, Subcommittee members also stressed that the privacy and security of the American public must be balanced against the legitimate needs of law enforcement, and that the current bill in no way expands the authority of law enforcement to conduct electronic surveillance. Both FBI Director Freeh and Middelsex County (Mass) District Attorney Reilly noted that electronic surveillance is an essential and vital tool for law enforcement, and that public safety will be placed in jeopardy if that ability is hindered. As EFF's Berman stated, the current legislation incorporates significant new privacy protections, and, in terms of privacy, is substantially improved over previous FBI proposals. Among the privacy protections in the current bill, Berman noted: * The standard for law enforcement access to online transactional records is raised to require a court order instead of a mere subpoena * Law enforcement may not require the capability to receive information which reveals the location or movement of a subject from dialed number information. * Information revealed by pen register devices (equipment which captures numbers dialed) cannot reveal any information beyond the telephone number dialed. Law enforcement is prohibited from receiving any additional information which may be captured (such as transactions with a bank). * The bill does not preclude a citizen's right to use encryption * Privacy interests will be integral to the design process. Just as law enforcement gains the ability to specify wiretap capability,the bill requires that privacy interests are incorporated when technical standards are developed. * Privacy groups and other concerned citizens are granted the right to intervene in the administrative standard setting process if they feel that privacy and security are not being adequately addressed * Law enforcement gains no additional authority to conduct electronic surveillance. The warrant requirements specified under current law remain unchanged Berman argued that the important privacy protections in the bill turn on the question of cost. Asking government to cover compliance costs is the only way to ensure that industry dose not short-cut privacy by accepting more invasive solutions; that the law enforcement surveillance expenditures are accountable to the public, and; that industry will continue to offer advanced technologies. "In our view," Berman said, "the public interest can only be served if the government assumes the risk and pays the cost of compliance". The Next Steps -------------- The bill is expected to be considered at a markup of the House Judiciary Committee on September 20. The Senate Judiciary Committee is expected to consider the bill shortly thereafter. The House Energy and Commerce Committee may also hold a markup on the legislation, although no decision has been made. Access to Related Documents --------------------------- Documents from Tuesday's hearing, including Jerry Berman's testimony, will be placed in EFF's online archives. Berman's testimony is located at ftp.eff.org, /pub/EFF/Policy/FBI/eff_091394_digtel_berman.testimony/ gopher.eff.org, 1/EFF/Policy/FBI, eff_091394_digtel_berman.testimony http://www.eff.org/pub/EFF/Policy/FBI/eff_091394_digtel_berman.testimony/ BBS: +1 202 638 6119 (8-N-1), file area: Privacy--Digital Telephony, file: EFF91494.TES For the text of the Digital Telephony legislation, related documents, and more testimony (when available), look in the same areas.