Costs May Foil Wiretap Bill

FBI experts say its $500 million price tag will help prevent another Oklahoma City explosion. Industry officials say it'll cost taxpayers several billion dollars. Privacy proponents say it won't work regardless how much is spent.

"Everyone is fighting over [cost estimates]," said Catherine Reid, a telecommunications expert working for Texas Republican Rep. Jack Fields, chairman of the House Commerce Committee's panel on telecommunications.

Passed in the last hours of the 1994 congressional session, the act is intended to help the FBI cope with the extreme complexity and variety of modern telecommunications networks. The networks convert phone conversations into digital signals that are processed by speed-dialing buttons and computerized phone-exchanges, compacted by data-compression software, and pumped through fiber optic cables, satellites, cellular phone networks and executives' call-forwarding systems, making the FBI's traditional wiretap device -- a pair of alligator clips and a headphone -- completely obsolete.

In 1994, the courts allowed 1,154 electronic surveillance orders, including 768 for phone wiretaps and 208 for interception of electronic messages sent via cellular phones and other devices. Of the surveillance efforts, 86 percent involved narcotics, gambling or racketeering, and none involved suspected terrorists.

But preserving wiretap capability while technology rapidly advances may prove too costly. The FBI says 183 wiretaps were frustrated by the technical complexity of the phone networks, which can be fixed for $500 million over the next three years. The wiretapping act permits the FBI to distribute as much as $500 million to the phone companies, but Congress has so far failed to hand over any of the cash to the FBI.

However, the act understates the cost of the task by "at least a factor of 10," argues Richard Marks, a technology lawyer with Dows Lohnes &amp Albertson based in Washington. The effort will cost "a minimum of $5 billion, probably closer to $10 billion," once the phone companies make the next generation of phone technology wiretap-friendly, he told a Washington meeting hosted by the Computer Law Association.

Larry Clinton, a spokesman for the Washington-based U.S. Telephone Association, said the cost is large, but difficult to determine. For example, it will cost $1.8 billion to fix the current generation of call-forwarding systems, he said. Phone companies are concerned they will have to pass the cost on to subscribers, although "we are hopeful the [Federal Communications] Commission will determine this a government service... and should be paid for out of taxes," he said.

But Congress will be reluctant to pony up, partly because it is girding itself for a painful round of cuts intended to balance the national budget by 2002.

The phone companies' fears are unfounded, said a congressional budget analyst. The cost may exceed $500 million, but is "certainly not going to go anywhere near the telephone companies' [estimate]," he said. A report prepared last year by the Congressional Budget Office estimated the cost to be $500 million over three years, plus $100 million each year afterward.

"Whether it will cost $500 million or not, we don't know," said Bill Carter, a spokesman for the FBI.

James Curlin, an analyst with the Congressional Office of Technology Assessment, says the cost is simply too difficult to measure. It is "virtually impossible... nobody really knows," said Curlin, who is completing a report on the effort for Rep. Michael Oxley, an Ohio Republican and former FBI agent. The best estimate of the short-term cost will come in October, when the Attorney General is required to submit a cost estimate for making the current generation of phone technology wiretap-friendly, he said.

Curlin is completing a report on the effort, titled "Electronic Surveillance in a Digital Age." The report is being held up as government and industry officials give their comments on the final draft.

The costs can be controlled by limiting modifications to current phone networks, and ensuring that modifications are made to future networks during the low-cost design phase, said observers.

But even if the cost is tightly controlled, the act will do little to preserve the FBI's long-term ability to wiretap, say observers. New technology, such as asynchronous transfer mode and satellite-based cellular phone networks pose new problems for the FBI, said Curlin. "They haven't really started to think about that," he said. Similarly, the proliferation of easy-to-use encryption technology will scramble any phone conversation the FBI manages to wiretap, said Marks.

The wiretap bill does not apply to the phone switches that transfer long distance calls, nor to computer networks, such as Internet service providers. And while the FBI has the legal authority to tap computer networks, a variety of privacy laws and the active lobby for electronic privacy limit the tracking of E-mail messages, such as the bomb-making recipes that can be found on the Internet.

Privacy proponents groups who opposed the wiretap bill are now trying to minimize its funding. Among the Washington-based groups trying to limit the effort because it intrudes on privacy are the Electronic Privacy Information Center and the Electronic Frontier Foundation.

The wiretapping bill is not needed, costs too much and will promote illegal electronic eavesdropping by industrial spies and bad cops, said Marc Rotenberg, EPIC's director. The Oklahoma City investigation shows how little antiterrorist investigations are aided by wiretaps, and the FBI has never released documentation to justify their claim that the 183 wiretaps were frustrated by technical problems, he said.

Calls to expand wiretapping laws following the Oklahoma City blast have quickly met with opposition from "people reluctant to see government's surveillance laws expanded," he said. With the law in place, EPIC is trying to stop the funding needed to implement it, he said.