Summary of DOJ Petition for Rulemaking to Expand the CALEA to Cover Information Services, 4/9/2004.

Summary of DOJ Petition for Rulemaking to Expand the CALEA to Cover Information Services

April 9, 2004. On March 10, 2004, the Department of Justice (DOJ) submitted a petition for rulemaking [83 pages in PDF] to the Federal Communications Commission (FCC) regarding requiring broadband service providers, voice over internet protocol (VOIP) application providers, and others, to design and modify their networks, hardware, software, and equipment in a manner that enables the DOJ to intercept VOIP and other internet based communications.

Introduction. The petition is long. Some of its legal arguments are lengthy displays of complex interpretative acrobatics. The list of requested relief is long. Yet, on many important points, the petition is silent or vague.

The DOJ wants to be able to access internet based communications the way it has long been able to wiretap the old public switched telephone network (PSTN). The DOJ has authority, which it regularly uses, to intercept internet communications. The USA PATRIOT expanded and clarified this authority.

But, the DOJ now faces two substantial obstacles with new technologies. First, it lacks legal authority to compel providers of information services, as well as equipment manufacturers and software producers, to design their products and services in a way that facilitates government interception and access. Second, accessing internet based communications is more complex than wiretapping circuit switching analog voice communications.

In this petition, the DOJ seeks from the FCC, first, a declaratory ruling, and second, a rulemaking proceeding, that start to address these two obstacles.

The DOJ strategy is to use the FCC rulemaking process to obtain an interpretation that the Communications Assistance for Law Enforcement Act (CALEA). The CALEA is a 1994 statute that provides that a "telecommunications carrier" must design its network to facilitate wiretapping. This had not been a problem for the government until the widespread use of cell phones. The focus of the CALEA was these new cell phone technologies.

The DOJ's threshold problem with this strategy is that the CALEA, which is codified at 47 U.S.C. з 1001, et seq., only applies to a "telecommunications carrier". Moreover, it expressly exempts "persons or entities insofar as they are engaged in providing information services". Broadband internet access services, and VOIP applications that use broadband internet connections, are both, quite arguably, information services.

Hence, the DOJ argues in this petition that providers of information services are really telecommunications carriers. At bottom, the DOJ seeks, not implementation of the CALEA, but a redrafting of the CALEA by regulation. The DOJ asks a regulatory agency to perform a legislative function.

Two bills have recently been introduced that address regulation of VOIP services generally, and include provisions relating to law enforcement surveillance. For example, on April 2 Rep. Chip Pickering (R-MS) introduced HR 4129, the "VOIP Regulatory Freedom Act of 2004".

This bill would not expand the CALEA to include connected VOIP applications. Rather, it creates a new statutory requirement, with a separate statutory basis. But, in the end, it makes the requirements imposed on providers of connected VOIP applications similar to the requirements imposed by the CALEA upon telecommunications carriers. It would require providers of "connected VOIP applications" to "ensure that its equipment, facilities, or services are capable of ... enabling the government to intercept communications transmitted using such application ... delivering such intercepted communications and call-identifying information to the government".

DOJ's Description of the Proceeding. The DOJ has captioned this petition, in part, "Joint Petition for Rulemaking to Resolve Various Outstanding Issues Concerning the Implementation of the Communications Assistance for Law Enforcement Act". The opening sentence of the petition states, in part, that the petitioners "bring this joint petition for expedited rulemaking pursuant to their authority to implement the Communications Assistance for Law Enforcement Act".

These statements are not descriptive of this proceeding in three respects.

First, the petition is signed by three persons -- John Malcolm of the DOJ's Criminal Division, Patrick Kelley of the DOJ's Federal Bureau of Investigation (FBI), and Robert Richardson of the DOJ's Drug Enforcement Administration (DEA). These people are all employed by one entity -- the DOJ. No other executive branch departments or agencies (such as the Treasury Department, CIA, NSA or DHS), and no states or state law enforcement agencies, have joined in this petition. In this sense, this petition is not "joint".

Moreover, throughout the petition, the petitioners refer to themselves, not as petitioners, but rather as "law enforcement". Again, the DOJ is just one element of the law enforcement system in the U.S. federal system.

Second, the DOJ has long been communicating with the FCC both through public comments, and through closed meetings, regarding the issues raised in the present petition. In this sense, the DOJ has not sought "expedited" treatment of this matter.

For example, almost two years ago, on April 15, 2002, the DOJ's FBI submitted a comment [15 pages in PDF] in the wireline broadband proceeding (Nos. 02-33, 95-20, and 98-10) in which it argued that the FCC should require in its rules that the CALEA applies to "DSL and other forms of wireline broadband Internet access". Also, on June 17, 2002, the FBI submitted a comment [16 pages in PDF] in the cable broadband proceeding (No. 02-52) in which it argued that the FCC should require in its rules that the CALEA applies to "cable modem service". The DOJ has long been active on this issue, but has declined, until March 10 of this year, to ask for a rule making proceeding.

Third, the statement that this petition concerns implementation of the CALEA begs the threshold question. The threshold question of whether the CALEA gives the FCC authority to regulate internet services, and to promulgate the regulations requested by the DOJ, must first be decided by the FCC.

CALEA Statute. The Communications Assistance for Law Enforcement Act (CALEA) is codified at 47 U.S.C. зз 1001-1010. (The section numbers of the statute and the codification in the U.S. Code do not match.) Congress passed the CALEA in 1994 for the purpose of allowing law enforcement authorities (LEAs) to maintain their existing wiretap capabilities in new telecommunications devices. The wireline phone network had been relatively easy to tap. Cell phones presented problems for the LEAs. The CALEA addressed these problems. It required that "telecommunications carriers" must make communications over their equipment, facilities, or services capable of interception by the LEAs. And, it expressly included "commercial mobile service".

Section 103(a) of the CALEA, which is codified at 47 U.S.C. з 1002(a), provides, in part, that "a telecommunications carrier shall ensure that its equipment, facilities, or services that provide a customer or subscriber with the ability to originate, terminate, or direct communications are capable of expeditiously isolating and enabling the government ... intercept, to the exclusion of any other communications, all wire and electronic communications carried by the carrier within a service area to or from equipment, facilities, or services of a subscriber of such carrier concurrently with their transmission to or from the subscriber's equipment, facility, or service, or at such later time as may be acceptable to the government".

Section 103(a) of the CALEA also requires telecommunications carriers to ensure that its facilities are capable of enabling the LEAs "to access call-identifying information".

Thus, the CALEA is a statute that imposes requirements upon "telecommunications carrier"s. These requirements pertain to modifying their networks to make communications susceptible to government surveillance.

Section 102 of the CALEA, which is codified at 47 U.S.C. з 1001, provides definitions. Subsection 102(8) defines "telecommunication carrier" as "a person or entity engaged in the transmission or switching of wire or electronic communications as a common carrier for hire". And, it provides that this includes "a person or entity engaged in providing commercial mobile service", which in turn is addressed in 47 U.S.C. з 332.

However, this CALEA definition of "telecommunications carrier" also provides that its "does not include ... persons or entities insofar as they are engaged in providing information services".

Subsection 102(6) provides that "The term ``information services'' --
(A) means the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications; and
(B) includes -- (i) a service that permits a customer to retrieve stored information from, or file information for storage in, information storage facilities; (ii) electronic publishing; and (iii) electronic messaging services; but
(C) does not include any capability for a telecommunications carrier's internal management, control, or operation of its telecommunications network."

Moreover, Subsection 103(b) provides that the requirements of Subsection 103(a) "do not apply to ... information services".

But, Subsection 102(8)(B)(ii) provides that "telecommunications carrier" includes "a person or entity engaged in providing wire or electronic communication switching or transmission service to the extent that the Commission finds that such service is a replacement for a substantial portion of the local telephone exchange service and that it is in the public interest to deem such a person or entity to be a telecommunications carrier for purposes of this chapter".

Thus, the DOJ wants to force entities such as broadband service providers and VOIP application providers, as well as their equipment suppliers, and software developers, to make communications over their networks, equipment and services capable of government interception. But, it wants to rely on a statute that only imposes requirements on "telecommunications carrier"s.

The DOJ's problem is compounded, first, by the definition which excludes "information services" from the meaning of "telecommunications carrier", and second, by the exemption of "information services" from the basic requirement of the CALEA.

But, the Subsection 102(8)(B)(ii) does provide the DOJ an opening to argue for an expansive application of the CALEA, to VOIP and similar things, but not other internet services. Not surprisingly, the DOJ petition relies heavily upon this subsection, and all but ignores the provisions of the CALEA that exempt "information services".

Moreover, the DOJ petition argues that while many of the entities upon which it seeks to impose CALEA burdens are providers of information services within the definition of the CALEA, and have been declared to be information services under the Communications Act by the FCC, these entities are still, somehow, "telecommunications carrier"s for the purpose of imposing CALEA burdens.

DOJ Arguments Regarding Its Inability to Conduct Necessary Surveillance. The DOJ petition argues that "The importance and the urgency of this task cannot be overstated. The ability of federal, state, and local law enforcement to carry out critical electronic surveillance is being compromised today by providers who have failed to implement CALEA-compliant intercept capabilities." (Page 8. Emphasis in original.)

The petition adds that "Communications among surveillance targets are being lost, and associated call-identifying information is not being provided in the timely manner required by CALEA. These problems are real, not hypothetical, and their impact on the ability of federal, state, and local law enforcement to protect the public is growing with each passing day."

The DOJ petition also complains that some entities claim that they are not subject to the requirements of the CALEA. However, the petition is silent as to who these entities are. Nor does the petition enumerate the types of entities that cause it concern. The DOJ wrote the key sentence quoted above in the passive mood -- "surveillance is being compromised" -- thereby evading the revelation of who is compromising surveillance.

"Yet when the current trend of IP convergence is complete, and most if not all forms of electronic communications are transmitted over a common IP core, CALEA will be of little value if it is applied only to legacy circuit-mode networks" the DOJ petition states.

DOJ Arguments Regarding the Meaning of "Telecommunications Carrier". The petition then launches into a long discourse regarding why, notwithstanding the language of the statute imposing requirements upon "telecommunications carrier"s, but not providers of "information services", the FCC should nevertheless declare that some providers of information services are telecommunications carriers for the purpose of imposing the requirements of the CALEA upon these information services.

The petition argues that the CALEA definition of "telecommunications carrier"s is different, and broader than the definition in the Communications Act. (47 U.S.C. з 153 contains relevant definitions in the Communications Act.) The petition compares and contrasts the definitions at length.

This argument, if meritorious, might provide the FCC a basis for not automatically following the precedents of its rulings that DSL service and cable modem service are information services (which construed the definitions in the Communications Act). It would not, however, get around the definitions that are contained in the CALEA.

The petition then asks that the FCC "initially issue a Declaratory Ruling or other formal Commission statement, and ultimately adopt final rules, finding that, because the CALEA definitions of ``telecommunications carrier┤┤ is different from and broader than the Communications Act definition of the term, CALEA applies to two closely related packet-mode services that are of rapidly growing significance for law enforcement: broadband access service and broadband telephony service." (Page 15.)

It is not until much later that the petition offers its interpretation of the CALEA's "information services" language. It asserts that "We note that CALEA's definition of ``telecommunications carrier┤┤ does not include ``persons or entities insofar as they are engaged in providing information services.┤┤ This provision, however, does not place broadband access itself outside the scope of CALEA. When Congress enacted CALEA, it thought of information services simply as the basic retrieval of stored data files and certain electronic messaging functions. Congress did not intend the phrase ``information services┤┤ in CALEA to include Internet access service or electronic voice services such as broadband telephony services." (Pages 26-7.) The petition does not cite any statements, speeches or correspondence by any Senators or Representatives, any Committee reports, or any Presidential signing statement to substantiate this assertion.

The DOJ petition concludes that it wants the FCC to act "decisively today to bring CALEA into the broadband age. Preserving law enforcement's ability to conduct lawfully-authorized electronic surveillance in the face of the increasing migration to new technologies -- namely, broadband access services and broadband telephony services -- is exactly the situation that CALEA is intended to address."

The petition goes on to argue that providers of broadband access, VOIP, and push to talk are all "telecommunications carrier"s for the purposes of imposing CALEA requirements.

On the subject of VOIP, the petition argues at length that Subsection 102(8)(B)(ii) requires imposition of CALEA obligations.

One point that the petition makes here is that even if VOIP service is not provided on a common carrier basis, it is nevertheless "telecommunications carrier" under the CALEA "as long as the service is a replacement for a substantial portion of the local telephone exchange service". Perhaps the petition is arguing that even the provision of a free VOIP service is a "telecommunications carrier".

The petition also argues that "the fact that a broadband access provider may also be engaged in the provision of ``information services┤┤ does not place the provider beyond the reach of CALEA."

Finally, the petition makes an argument in the alternative. It states that "if the Commission were to conclude that broadband telephony cannot be brought within the ambit of CALEA without simultaneously categorizing broadband telephony providers as ``telecommunications carriers┤┤ for purposes of the Communications Act, Law Enforcement would urge the Commission to strongly consider classifying such entities as telecommunications carriers for purposes of both the Communications Act and CALEA."

It adds that "if the Commission concludes that the definitional outcomes under CALEA and the Communications Act cannot be disengaged from each other, the Commission may find it appropriate to resort to other mechanisms, such as regulatory forbearances, to avoid undue regulation of broadband telephony without compromising critical law enforcement needs."

Proposed Rules for Bringing Other Information Services Under the CALEA Regime. The petition states that the FCC should adopt rules that will make it easy to place other, and yet to be invented, services under the regulatory requirements of the CALEA.

The petition states that "Such rules, at a minimum, should provide that (1) a service that directly competes against a service already deemed to be covered by CALEA is presumptively covered by CALEA pursuant to Section 102(8)(A) of CALEA; (2) if an entity is engaged in providing wire or electronic communication switching or transmission service to the public for a fee, the entity is also presumptively covered by CALEA pursuant to Section 102(8)(A) of CALEA; and (3) a service currently provided using any packet-mode technology and covered by CALEA that subsequently is provided using a different technology will presumptively continue to be covered by CALEA." (Page 33.)

The petition does not cite any statutory authority for these rules. These proposal are inconsistent with the CALEA statute. The DOJ petition here essentially asks that for other services, that the FCC amend the Congressional statute by regulatory rulemaking.

Proposal to Institute Government Planning and Licensing of Information Technologies. The DOJ petition then states, "In addition, the Commission should require any carrier that believes that any of its current or planned equipment, facilities, or services are not subject to CALEA to immediately file a petition for clarification with the Commission to determine its CALEA obligations."

This rule would require prior approval by the government for a wide range of new information technologies. That is, one would no longer be allowed to invent and deploy. One would need to take inventions to a government planning body for permission.

The petition says that this should be the FCC acting in consultation with the FBI. This would institute a form of industrial planning for the information and communications technology sectors. It is also a de facto licensing scheme.

Carriers. The quotation in the first paragraph of the preceding section (".. the Commission should require a carrier ...) marks a shift in the DOJ's petition. Up until this point the petition has used the term "carrier" frequently, but mostly in the definition "telecommunications carrier", or in the definition "common carrier".

In other contexts the use of the word "carrier" might be taken to mean "telecommunications carrier", "common carrier", CLEC, or ILEC. But, in this petition, the DOJ now begins to use the "carrier" to mean those entities that are subject to the CALEA. Moreover, "carrier" cannot mean "telecommunications carrier" or "common carrier", because, under the DOJ's deconstruction of the statute and its definitions, an entity need not be either to be subjected to the requirements of the CALEA.

The DOJ uses "carrier" in a far broader sense than it has heretofore been used in law. But just how broad, it does not specify.

Enforcement. The DOJ petition then proceeds to propose a complex set of procedural and enforcement rules.

The proposals reveal several features. First, the process would be complex and expensive. Compliance would be beyond the capacity of some small businesses. Second, while the FCC nominally would review and approve new technologies, issues benchmarks, set deadlines, and conduct enforcement proceedings, the FBI would also play a significant, though undefined, role. The petition proposes numerous requirements for information sharing and consultations between the FCC and FBI.

Third, the petition makes clear that not only "carriers", whoever they are, would be subject to pre-approvals, rules, requirements, and enforcement proceedings. Their various equipment manufacturers and others would also be brought into the process. A range of equipment makers, software developers, service providers and others that are not now subject to FCC regulation, would be subjected to FCC regulation, and their equipment and software to FCC licensing.

The petition is vague about the information services that ought to be subject to CALEA regulation, and how they are to be regulated. The gist of this petition is to bring providers of information services within the regulatory framework of the CALEA. Even though the target of this expanded regulatory scheme will include computers, servers, routers, microprocessors, software, applications and code, these items are hardly mentioned in the petition.

Cost Accounting and Price Regulation. The petition asks that the government not have to pay for any of the costs of coming into compliance with the requirements imposed by the proposed expansion of the CALEA regulatory framework. This was to be expected.

However, the petition goes on to ask that the FCC "exercise its authority under Section 229(a) of the Communications Act to establish rules that permit carriers to have the option to recover some or all of their CALEA implementation costs from their customers."

The DOJ petition adds that the "CALEA requires that the Commission minimize the cost of CALEA compliance on residential ratepayers."

If the FCC were to establish rules allowing these "carriers" to recover some of their CALEA implementation costs, then the FCC would have to establish a complex, and certain to be controversial, accounting methodology. If the FCC were to allow recovery of only some costs, as the DOJ suggests, this would constitute price regulation.

Thus, the DOJ is inviting the FCC to create a cost accounting and price regulation regime reminiscent of regulation of monopoly telecommunications carriers, but apply it to many new, small, start up, thinly financed competitors, with new innovative information technologies. The DOJ not only wants to subject new technologies to legacy phone industry wiretap rules, it wants to subject them to legacy monopoly price regulation.

But then, it is these new and innovative information technologies that are making it harder for the DOJ to maintain universal surveillance.

Moreover, this proposal, like many other proposals in the DOJ petition, would favor legacy service providers and incumbents over new technologies and new competitors. It would also encourage legacy providers to compete at the FCC, and the FBI, rather than in the marketplace.

Signatures. The petition is signed by three persons: John Malcolm of the DOJ's Criminal Division, Patrick Kelley of the DOJ's FBI, and Robert Richardson of the DOJ's DEA. None are senior DOJ officials.

Malcolm, the lead signer on the petition, is a Deputy Assistant Attorney General in the Criminal Division. He is subordinate to Christopher Wray, the Assistant Attorney General for the Criminal Division. Wray reports to James Comey, the Deputy Attorney General, who reports to John Ashcroft, the Attorney General. Neither Wray, Comey nor Ashcroft signed the petition, or had their names placed on the petition. Similarly, Patrick Kelley is Deputy General Counsel of the FBI. He is several steps below the FBI Director, Robert Mueller. Robert Richardson is Deputy Chief Counsel at the DEA.

This is in contrast to earlier filings in the FCC's rule making proceedings to implement the CALEA. The proceeding is Common Carrier Docket No. 97-213. See for example, the May 8, 1998 filing of the DOJ. Both former Attorney General Janet Reno and former FBI Director Louis Freeh lent their names to that filing.