Summary of the CALEA NPRM's Future Services Analysis

August 9, 2004. The Federal Communications Commission's (FCC) CALEA NPRM [100 pages in PDF], released on August 9, 2004, addresses the Department of Justice's (DOJ) request that certain future services also be subjected to CALEA requirements.

The DOJ's March 10, 2004 petition for rulemaking [83 pages in PDF] included several related requests.

First, the DOJ petition requested that the FCC "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." (See, DOJ petition, at page 34.)

The petition also stated that the FCC's rules "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." (See, DOJ petition, at page 33.)

Numerous commenters strongly criticized some or all of these requests. For example, the Center for Democracy and Technology (CDT) wrote in its comment [PDF] (at page 29) that, "To put it bluntly, this is nonsensical. The statute places no burden on any carrier to prove that its service is not subject to CALEA before going forward with a new technology -- that would be a hyper-regulatory burden of the worst kind. Moreover, the plain terms of CALEA state exactly the opposite."

Similarly, the ISP CALEA Coalition wrote in its comment [PDF] (at page 32) that "This suggestion is breathtaking, both in its contradiction of Congress's plain instructions and in the devastating impact it would have on innovation and on the competitive position of U.S. companies in international technology markets. Such a regulatory pre-approval process would impose the cost of building wiretap capabilities into new technologies even before it is clear whether they will succeed, as well as the substantial costs of delay in fast-moving technology markets – and these costs would be particularly damaging for the small and start-up companies that have historically driven much of technological innovation."

The NPRM does not grant the DOJ its requests. This is one of the few significant items requested by the DOJ that the FCC denied.

The NPRM, citing both of the above quoted sections of the DOJ's petition, states that "We tentatively conclude that it is unnecessary for us to adopt Law Enforcement's proposal regarding the identification of future services and entities subject to CALEA." (See, NPRM at Paragraph 60.)

However, the CDT, ISP CALEA Coalition, and other opponents of the future services proposals may only have won a pyrrhic victory.

The reason is that the NPRM's analysis of the substantial replacement clause of the CALEA attaches a new meaning to that clause that is so broad that it could enable the DOJ and FCC to sweep many varieties of new applications, services and technologies into the scope of the CALEA. It is also sufficiently vague that many providers will not know from the statute and the FCC's rules whether they are subject to CALEA requirements.

There is also the statement in the NPRM that the FCC need not create a new procedure for applying to the FCC, because "providers of new services may avail themselves of existing Commission procedures to seek clarification as to whether they are covered under CALEA." (See, NPRM at Paragraph 61.) Moreover, there is the suggestion elsewhere in the NPRM that the FCC assume an enforcement role.

In short, the substantial replacement analysis, if incorporated into the final order, would hang the sword of Damocles above the heads of investors, developers and providers of new information services. The only way to remove this threat would be to petition the FCC in advance for license to develop a product. And this is, in essence, what the DOJ sought with it future services requests.