Wiretap Rules Need Cost Vetting

Published July 1, 2004

On March 10, the Federal Bureau of Investigation (FBI), Drug Enforcement Administration (DEA), and Department of Justice (DOJ) petitioned the Federal Communications Commission (FCC) to require all Internet and broadband service providers to modify their technology to allow the FBI to intercept communications on their systems.

The agencies, relying on the Communications Assistance for Law Enforcement Act (CALEA), want the FCC to make sure anyone providing a new communications service (e.g., voice over Internet Protocol or cable modems) leaves a trap door, so law enforcement agencies can listen in whenever they are authorized by law to do so.

The Petition for Rulemaking is pending before the FCC, which is expected to take action on the request this summer.

There is great value in the ability of law enforcement to intercept the communications of those bent on criminal conduct or terrorism. Under the proper judicial authorization and supervision, it is a legitimate and sometimes necessary tool of law enforcement.

But CALEA takes communications interception one step further, not only providing the authority to wiretap, but requiring private companies to put the technology in place to make it possible. Such technological mandates could be particularly harmful when applied to new, innovative technologies, as proposed in the FBI/DEA/DOJ petition.

The petition envisions opening up to FCC regulation a whole new range of service providers who traditionally have not been subject to comprehensive regulation. Those providers operate in a dynamic and changing field, in which government technology mandates, however well-meaning, could be particularly disruptive.

The cost of compliance with CALEA requirements is almost certain to exceed $100 million, making this petition a significant regulatory action. Before ruling on the petition, the FCC should either conduct its own cost-benefit analysis of the request or seek guidance from the Office of Management and Budget (OMB) on the comparative costs and benefits to be gained from the new rule.

At the outset, OMB needs to perform a rigorous cost-benefit analysis of the request. At present, the benefits of extending CALEA appear, at best, to be speculative. A thorough vetting of the petition is needed before true costs and benefits can be adequately judged.

Paul Rosenzweig ([email protected]) is senior legal research fellow at The Heritage Foundation.