FCC Amends CALEA Statute
August 5, 2005. The Federal Communications Commission (FCC) adopted, but did not release, an Order and Further Notice of Proposed Rule Making, that provides that facilities based broadband service providers and interconnected VOIP providers are subject to requirements under the 1994 Communications Assistance for Law Enforcement Act (CALEA).
Summary of the Order. The FCC issued a short release [PDF] that describes the unreleased order. It states that the FCC has determined that CALEA obligations extend to "facilities-based broadband Internet access service providers and VoIP providers that offer services permitting users to receive calls from, and place calls to, the public switched telephone network. These VoIP providers are called interconnected VoIP providers."
The FCC, in August of 2004, issued tentative conclusions that broadband internet access services (BIAS) and managed voice over internet protocol (VOIP) are subject to the requirements of the CALEA.
The FCC release states that the FCC has made its determination on two separate grounds. First, it states that "the definition of ``telecommunications carrier´´ in CALEA is broader than the definition of that term in the Communications Act and can encompass providers of services that are not classified as telecommunications services under the Communications Act."
Second, the release states that "these services can essentially replace conventional telecommunications services".
The release makes no mention of relying upon Title I ancillary jurisdiction.
There is a series of articles in TLJ Daily E-Mail Alert 960, August 17, 2004, which offer the legal analysis that neither of these two legal arguments is tenable. Hence, the action by the FCC is better characterized, not as an implementation, but rather as an amendment, of the statute. And, since the FCC lacks authority to amend statutes, or to exceed its statutory authority, the present order is at risk of being overturned on judicial review.
The FCC release says nothing about how CALEA obligations will be applied to these providers. Nor is there anything about who will hold enforcement authority. Nor does it address the installation of surveillance equipment, the operation of surveillance activities, and other activities related to carrying out surveillance and intercepts. Nor does it address the NPRM's proposal regarding the use of private intercept management providers. Nor does it address cost recovery.
The FCC's Julie Veach, speaking at a news conference on August 5, stated that this order only addresses who is covered.
FCC Chairman Kevin Martin wrote in a separate statement [PDF] that "The Order that we adopt today is an important first step, but there is still more work ahead of us. In the next few months, we intend to issue a subsequent order that will address other important issues under CALEA such as cost recovery, standards, and enforcement."
The FCC release also states that "Because broadband Internet and interconnected VoIP providers need a reasonable amount of time to come into compliance with all relevant CALEA requirements, the Commission established a deadline of 18 months from the effective date of this Order, by which time newly covered entities and providers of newly covered services must be in full compliance."
However, since the FCC has only stated, in broad strokes, who is covered, but not what the new obligations are, there are not yet any rules with which to come into compliance. Moreover, the 18 month deadline allows sufficient time for affected entities to obtain from the Court of Appeals a judgment vacating the present order.
Tom Navin, Chief of the FCC's Wireline Competition Bureau (WCB), stated at a news conference on Friday, August 5, that this item will be released "hopefully later this month".
The FCC's release does not provide titles or numbers for this item or proceeding. However, the NPRM issued in August of 2004 is FCC 04-187 in ET Docket No. 04-295 and RM-10865. Also, Commissioner Abernathy's statement recites the same two proceeding numbers.
What Is the CALEA. The CALEA is an act, enacted by the Congress in 1994, that requires telecommunications carriers "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 ..."
The CALEA provides that telecommunications carriers must design their equipment and networks to facilitate lawfully conducted wiretaps and other intercepts. Statutes other than the CALEA address what intercepts are lawful.
The CALEA was enacted to require that cell phone service providers make their networks subject to wiretaps sought by law enforcement agencies (LEAs), such as the Federal Bureau of Investigation (FBI), Drug Enforcement Administration (DEA), and state and local police.
The CALEA applies to "telecommunications carrier", and exempts "information services".
This presents a threshold problem for the FCC and FBI. Not only are broadband service providers and interconnected VOIP providers arguably "information services", but the Supreme Court held in its June 27, 2005, opinion [59 pages in PDF] in NCTA v. Brand X that the FCC declaratory ruling that cable modem service is an information service is a permissible reading of the statute..
Thus, the FCC now argues that broadband service providers and interconnected VOIP providers are "information services" for the purpose of being classified as Title I services, but are not "information services" for the purposes of the CALEA. Moreover, the FCC now argues that broadband service providers and interconnected VOIP providers are not telecommunications carriers for the purposes of regulatory classification, but are telecommunications carriers for the purposes of the CALEA.
§ 102(8) of the CALEA, which is codified at 47 U.S.C. § 1001(8), provides the following definition of "telecommunications carrier".
(8) The term ``telecommunications carrier''--
(A) means a person or entity engaged in the transmission or switching of wire or electronic communications as a common carrier for hire; and
(i) a person or entity engaged in providing commercial mobile service (as defined in section 332(d) of this title); or
(ii) 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; but
(C) does not include--
(i) persons or entities insofar as they are engaged in providing information services; and
(ii) any class or category of telecommunications carriers that the Commission exempts by rule after consultation with the Attorney General."
But then, § 102(8)(B)(ii) provides that a "telecommunications carrier" also "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 ...".
Procedural History. The FBI has long been lobbying the FCC to expand the CALEA regulatory regime to apply to uncovered entities.
The FBI and DOJ submitted a petition for rulemaking [83 pages in PDF] on March 10, 2004. See, story titled "Summary of DOJ Petition for Rulemaking to Expand the CALEA to Cover Information Services" in TLJ Daily E-Mail Alert No. 873, April 9, 2004.
On August 4, 2004, the FCC adopted a Notice of Proposed Rulemaking and Declaratory Ruling (NPRM & DR) [100 pages in PDF] in response to this petition. See, story titled "FCC Adopts NPRM and Declaratory Ruling Regarding CALEA Obligations" in TLJ Daily E-Mail Alert No. 953, August 5, 2004. See also, stories titled "FCC Legislatively Expands Scope of CALEA Obligations" in TLJ Daily E-Mail Alert No. 953, August 5, 2004, and "Powell Discusses Brand X Case" in TLJ Daily E-Mail Alert No. 954, August 6, 2004.
The FCC released the text of this NPRM and DR on August 9, 2004. There is a series of stories on this item in TLJ Daily E-Mail Alert 960, August 17, 2004:
Comments by Commissioners. Several of the Commissioners appear to have undergone a conversion on the question of whether the FCC has statutory authority to make the determinations that it just announced.
In August of 2004 Commissioner Michael Copps was bluntly critical of the substantial replacement analysis. He wrote in a separate statement [PDF] that the NPRM "is flush with tentative conclusions that stretch the statutory fabric to the point of tear. If these proposals become the rules and reasons we have to defend in court, we may find ourselves making a stand on very shaky ground. It would be a shame if our reliance on thin legal arguments results in the CALEA rules being thrown out."
He wrote that "it strains credibility to suggest that Congress intended ``a replacement for a substantial portion of the local telephone exchange´´ to mean the replacement of any portion of any individual subscriber's functionality."
Commission Copps wrote in his August 2005 statement simply that "We ensure that law enforcement officials will have the tools that they need to protect our country through the Communications Assistance for Law Enforcement Act".
He added that "the Supreme Court’s Brand X decision makes it clear that the Commission’s ancillary authority can accommodate our work on homeland security". However, the FCC August 5, 2005 release is silent on the issue of whether the FCC has, or can, impose CALEA like obligations under Title I ancillary authority. It did raise this in its August 2004 NPRM, at Paragraph 59.
In August of 2004 Commissioner Kathleen Abernathy wrote in a separate statement [PDF] that "at the end of the day, the federal courts -- rather than this Commission -- will be the arbiter of whether we are authorized to take the actions proposed in this rulemaking, and we must remain mindful of that fact as we consider final rules."
In her August 5, 2005 separate statement [PDF] Abernathy wrote that "I believe we have interpreted the statute faithfully". However, she wrote that litigation is "inevitable", and she twice recommended that the Congress enact legislation.
She wrote that "because some might not read the statute to permit the extension of CALEA to the broadband Internet access and VoIP services at issue here, I have stated my concern that an approach like the one we adopt today is not without legal risk."
She added that "because some parties will dispute our conclusions, the application of CALEA to these new services could be stymied for years. For this reason, I continue to believe that the Commission, the law enforcement community, and the public would benefit greatly from additional Congressional guidance in this area."
In August of 2004 Commissioner Jonathan Adelstein wrote in a separate statement [PDF] that this NPRM "seizes upon notable but thin distinctions between definitions in CALEA and the Communications Act. Moreover, the item does not acknowledge fully and seek comment on existing precedent that is in tension with the tentative conclusions here. For example, whether or not the Commission ultimately appeals the decision in the Ninth Circuit’s Brand X case, which concluded that broadband access via cable modem includes a ``telecommunications service,´´ this Notice’s failure to seek comment on a legal analysis that would comport with the Circuit’s holding is an unnecessary failing."
In his August 2005 separate statement [PDF] Commissioner Adelstein wrote only that "I'm also pleased that we adopt a companion Order applying the Communications Assistance for Law Enforcement Act (CALEA) to facilities-based broadband Internet access providers and providers of interconnected VoIP services."
Law Enforcement Needs. Commissioner Abernathy wrote in her August 2005 statement that "I believe that the construction we adopt is reasonable, particularly given law enforcement's indisputably compelling needs."
This statement is notable for several reasons. First, the CALEA statute does not provide that "compelling needs" is a basis for expanding CALEA obligations to additional categories of entities.
Second, the FCC did not include in its NPRM a section regarding "compelling needs". That is, the August 2004 NPRM did not seek comment on whether telecommunications carriers and information service providers are now capable of providing the intercept capabilities for new technologies. Nor did the NPRM seek comment on the extent to which new information services are harming efforts by LEAs.
Commissioner Abernathy has reached a conclusion, without following notice and comment procedure.
The FCC release states that the order will meet "the needs of the law enforcement community". The first words of Chairman Martin's statement are "Responding to the needs of law enforcement ..." Moreover, in the companion policy statement regarding network neutrality, announced on August 5, 2005, the FCC release includes a provision regarding "the needs of law enforcement".
None of the documents released by the FCC define or describe the term "needs of law enforcement", or identify how determinations will be made regarding what are the evolving "needs of law enforcement".
Reaction. At least one group has already publicly announced that it may bring a legal challenge. The Center for Democracy and Technology (CDT) wrote in its web site that "CDT believes the decision exceeds the terms of the statute. The ruling imposes undue burdens on innovation and threatens the privacy of Internet users. CDT is considering a court challenge."
Ed Black, P/CEO of the Computer and Communications Industry Association (CCIA), stated in a release that "We have yet to see the full text of the order, but CCIA is deeply concerned over what details have been released concerning the CALEA decision ... Initial indications suggest that the FCC has overstepped in granting too much authority to law enforcement."
The Electronic Frontier Foundation (EFF) also released a
of the FCC's determination.