DigTel: EFF Hearing Summary - House Telecom. Subcmte. - Sept. 13, 94

[Stanton McCandlish <mech@eff.org>]

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/OP/eff_091394_digtel_berman.testimony/
gopher.eff.org, 1/EFF/OP, eff_091394_digtel_berman.testimony
http://www.eff.org/pub/EFF/OP/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.



-- 
<A HREF="http://www.eff.org/~mech/mech.html">       Stanton McCandlish
</A><HR><A HREF="mailto:mech@eff.org">              mech@eff.org
</A><P><A HREF="http://www.eff.org/">               Electronic Frontier Fndtn.
</A><P><A HREF="http://www.eff.org/~mech/a.html">   Online Activist       </A>