IP Convergence: Beyond VoIP, Beyond Cost Savings

The FCC adopted its Second Report and Order and Memorandum Opinion and Order applying CALEA to “facilities-based broadband Internet access providers and interconnected voice over Internet protocol (VoIP) providers”. Susan Crawford provides some good background and interesting perspective, but there are several disturbing aspects of this action that go beyond the insular world of telecommunications.

Following the Department of Justice’s lead, the FCC has tortured the language of the Telecommunications Act of 1996 and the Communications Assistance for Law Enforcement Act of 1994 to conclude that the term “information services” has different meanings in the two statutes. The FCC was forced into this situation because of its determined effort to classify DSL services as “information services” and not as “telecommunications services” in the aftermath of the Brand-X decision. Since embarking on this course of action, the FCC has been doing everything ass-backwards ever since. Rather than have the courage of its convictions to affirmatively deregulate the Bell Companies, the FCC has instead chosen to re-define everything as an “information service” and then build up regulation of these services to suit the political and social aims of the Commission. They did it with E911 for VoIP providers and they are doing it again with this CALEA order.

Previously, services were either “telecommunications services”, with all of its attendant common carrier regulations or they were “information services” which were not regulated. Now, services may be regulated information services. How is it that the FCC was able to create this new category of services?

But as I said, this CALEA order has consequences far beyond the world of telecommunications. In its Order, the FCC refused to allow carriers to charge law enforcement for the capital expenditures necessary to make their networks CALEA compliant. The FCC also refused to adopt a national surcharge to recover CALEA costs. By denying carriers the right to recoup their costs for making their networks CALEA compliant, the Department of Justice and the FCC have effectively funded their surveillance activities “off the books”. Recall the Iran-Contra Affair of the Reagan Administration where the CIA funded its operations in Nicaragua by selling arms to Iran, bypassing the federal budget process and privatizing national security. Now the Department of Justice is bypassing the federal budget and getting the telecommunications industry to fund its wiretap efforts. And in light of the revelations coming out in the EFF class action suit against at&t, it appears that the federal government is continuing its efforts to privatize law enforcement and national security activities.

According to the 2004 Wiretap Report in 2004 there were 1,710 (legal) wiretaps executed in the United States at an average cost to law enforcement of just over $63,000 per wiretap. This does not include the costs incurred by the telecommunications carriers. The federal budget is a one of the ways that the citizenry curbs the power of government. If government is able to go off the books and fund its objectives, then I truly fear for the future of our “free” society.

As I write this, I am receiving word that the U.S. Court of Appeals for the District of Colombia was very skeptical of the FCC's defense of its first CALEA order and has serious doubts about the FCC's legal rationale surrounding the multiple definitions of information services. But I am sure there is also a takings case brewing here. After all, the government couldn't order every household to build a platform outside their window to allow the government to view inside without reimbursing people for their expense (never mind the absurdity of the suggestion), but that is exactly what they are doing with CALEA. They are requiring the industry to build a platform for the government to eavesdrop on virtually every communication and refusing to compensate the industry for their activity.

Of course compensation for the telecommunications industry should be the least of this country's worries. If you believe that VoIP is going to be a truly ubiquitous application embedded in virtually everything we do (including your voice recognition PCs), then you need to be concerned with how CALEA is being applied...unless you don't mind the government listening in on all of your electronic communications.