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Mr. KASTENMEIER. What is your view of these ads? Do these ads violate the law?

Mr. KNAPP. I am reluctant to comment on a specific ad which may or may not constitute a violation. Let me just state a general proposition that it is a violation of 18 U.S.C. 2512, subparagraph (1)(c)(2), where an advertisement promotes the use of a scanner for the purpose of the surreptitious interception of wire or aural communications. So with that statutory guidance in mind, I think you would want to look at the language of a particular advertisement to see if it appears to fit within that.

Mr. KASTENMEIER. Certainly cellular telephones are very much a part of the scene as an important means of communication. Someone just brought to my attention a copy of the current Time magazine cover. The question is: "Who's This Man Calling? Influence Peddling in Washington." Actually, it is a picture of lobbyist Michael Deaver. Clearly, he is using a cellular phone. So we can conclude that important calls are taking place on cellular telephones. Presumably there is an expectation of privacy-whether that is actually the case or not I do not know.

I have a number of questions but I do want to yield to my colleagues to ask whatever questions they have. The gentleman from California, Mr. Moorhead.

Mr. MOORHEAD. Thank you.

In your statement you maintain the private interception of cellular phone calls should only be illegal if there is both interception and disclosure with a bad purpose, that is, illegal, tortious, or commercial gain.

Is this a statement of how you intend to investigate and prosecute offenders under the bill, or a statement of how the offense should be structured?

Mr. KNAPP. As I indicated when I gave my remarks a few minutes ago, we are still examining this issue carefully. Initially when we took a look at it, it was our reaction that we clearly don't want to cover the unintentional interception by radio scanners. We thought that perhaps it would be sufficiently effective just to have a statute analogous to what you have for radio communications right now.

However, the cellular industry has asked us to take another look at this problem. What you suggest, perhaps would be a guideline for investigative policy as opposed to the way the bill is drafted, and it is one possible alternative. It is something we have to take a look at. We want a statute that is effective, that is readily understood by the public, and that creates no misconceptions.

Mr. MOORHEAD. It is very clear there are all kinds of mischievous things that you can pick if you have got one of those scanners and you are trying to pick things up-family fights, conversations between someone and their girl friend, confidential information that stockbrokers might be giving out on the phone to a client, corporate heads talking about things that were going to happen within the corporate field that could be used to someone's advantage. Needless to say, it is very difficult to prove commercial gain right away; or even where someone got the information.

Up until recently, there was no cellular technology and the scan

scanners for the sole purpose of picking up these calls. These ads are very explicit that they have got in the newspaper right now. Here is one of them:

The Regency MX7000 scanner lets you monitor military, FBI, space satellites, policy and fire departments, drug enforcement agencies, Defense Department, aeronautical AM band, aeronavigation band, Fish and Game, Immigration, paramedics, amateur radio, Justice Department, State Department, plus thousands of radio frequencies most scanners can't pick up.

Many of them advertise that you can pick up personal calls and you can be entertained as if you had gone to the adult movie theater. These are people's private calls, and perhaps something should be done to limit the range of these scanners. Admittedly you can't just ban all scanners because they are important for useful purposes.

But our bill tries to get at the basic problem, and that is deliberately trying to intercept these calls. There is no intent to punish someone that happens to pick up something that they shouldn't be listening to and switches to the next band. But it concerns me if you say that we cannot generally try to protect these calls.

There are people that live so far out in the country that they cannot afford the copper wires to take the telephone out that far, and yet with this kind of communication they can have the telephone like everybody else. Are you going to protect them?

Mr. KNAPP. As I indicated, we are going to take a careful look at this specific issue. We feel that a large majority of situations where we were able to prove a violation, you would have the divulgence and a disclosure-and those are the situations that are most aggravated. There is no question we clearly would support such a thing. Whether we go that second step and predicate a violation based on the initial interception itself, I think it is something we want to take a careful look at. But we have agreed to discuss this with the cellular industry and any other concerned parties in the coming weeks, and we will certainly take into consideration your comments and observations.

Mr. MOORHEAD. The bill that has been introduced creates a broad definition of electronic communication, and then proceeds to exempt certain kinds of communication services, like ham operators, police, and fire.

Do you agree that this general approach is better than approaching the subject on a technology basis? Technology by technology.

Mr. KNAPP. I think we probably, in drafting any legislation as indicated in our testimony, want to take a look at the specific technologies first because these devices have legitimate uses as well as illegitimate uses.

Mr. MOORHEAD. In your view, should the development of a new surveillance technology be able to erode the reasonableness of our expectancy of privacy?

Mr. KNAPP. Perhaps it shouldn't, but it does as a practical matter in some situations. That is a concern I expressed in my testimony on cellular. Nevertheless, we factor in the fact that people do have an expectation of privacy, or still a large number of people do. But we feel, so there is no doubt about the state of the law, that

Mr. MOORHEAD. I would very much appreciate it if you would come back to the committee when you have gone through this process of formulating positions and directions, because most of the things that we have asked you don't have an answer for yet.

Mr. KNAPP. I think other than that one issue we do have an answer for just about everything, except for this one issue which I said we would reconsider.

Mr. MOORHEAD. That is the big issue, though, for many of the people out there. There are over 300,000 of these cellular phones now and there will probably be a million within a year. In spite of the fact that part of it goes through the air by radio, people in this country-and perhaps they should know better-expect privacy in their own calls.

I don't think we have got necessarily got the perfect answer for protecting cellular telephone calls. However, in one way or other we value privacy very highly in this country, and we have got to find a way that we can give them as much protection as possible; not 100 percent, it is not available, I would agree with you on that. But we have got to find a way to give them as much as possible. Mr. KNAPP. OK. We have made two very specific proposals on this and as to whether we want to take that third-step, I think that is something we will take a very close look at in the next few weeks.

Mr. MOORHEAD. OK.

I yield back the balance of my time.

Mr. KASTENMEIER. The gentleman yields back his time.

There are a couple of distinctions made which I would like to discuss with you. One is on the current technology of electronic mail messages that are carried between users by a third-party provider, pretty much in the same way that the post office carries mail. One significant difference is that the third-party provider-who could be GTE or Western Union-stores these messages until the recipient is ready to receive them. At that point in time there is a transmission which is stored before delivery.

Would you agree that law enforcement officials should use a search warrant to obtain access to the contents of that stored message? I think you indicated yes.

Mr. KNAPP. Yes.

Mr. KASTENMEIER. On the other hand, if an "E" mail provider kept copies of messages for security purposes, you don't feel that law enforcement officials should be required to obtain some form of court order before gaining access to that particular message?

Mr. KNAPP. Either a court order or grand jury subpoena. If there is an investigation in progress, I think we should be able to utilize the grand jury subpoena as we do for any other type of records.

Mr. KASTENMEIER. Do you make a distinction before and after delivery, in terms of third-party repository of "E" mail? Do you think there is a distinction to be made? That is to say, should the same process be used with respect to "E" mail which is stored before delivery or a copy which is stored subsequent to delivery?

Mr. KNAPP. Yes; because I think it probably is predicated on a reasonable expectation of privacy. Before delivery it is still in the process of transmission, it is still a message, it is still a communication, and the search warrant requirement should apply. After it is

received, the customer presumably should know or be familiar with what the customs are of the business of the common carrier with which they are dealing and they should be on notice of the fact that they may or may not in a particular situation keep copies where that is the case. If he should know or reasonably should know that they are going to store and keep a permanent record of it, he should not have such a reasonable expectation of privacy as to defeat the proper usage of the grand jury subpoena. That is standard for financial records as well.

Mr. KASTENMEIER. I guess either of them might have knowledge, that is true. The sender would have caused the message to be sent to the recipient. Of course, in terms of the contents of the message the recipient would not be able to do anything about it—he did not cause the contents, which may be very sensitive with respect to him, to be composed. I wonder if there is a difference between the parties.

In any event, I won't expand on that any further.

In your testimony you have also asked us to distinguish between voice and nonvoice communications. We have recent news clippings which describe new AT&T services which will enable customers to use a combination of telephones and personal computers for various purposes, for various transactions, for example, view financial information on a screen and talk with their brokers at the same time. These communications, I understand, are carried by the same wire. Moreover, at various points in the network these communications are carried in digital form, so that voice and data will in fact be indistinguishable.

With these services and many others like them, is it realistic to make this distinction between the two? Haven't we reached the point where technology has overcome the difference between voice and nonvoice communications?

Mr. KNAPP. Not for the purposes of determining whether or not you are going to have the specific additional protections of title III over and above what you have for the ordinary search warrant. I think the question is going to be beyond those protections that you have with the ordinary search warrant-is there some practical need for any of the additional protections afforded by title III? And in those situations the answer is no. Although it is said that when we went through and discussed electronic mail I did indicate there were four or five additional protections that were applicable and appropriate, including minimization and including some sort of showing of need. But that is not true. I think you have to look at each technology on a case-by-case basis. Ordinarily, a search warrant requirement of probable cause and order of judicial approval should be sufficient.

In the hypothetical you mentioned, of course, if it is covered partially by wire, communication by wire, title III would apply.

Mr. KASTENMEIER. In testimony before the subcommittee, ADAPSO suggests the bill be modified to provide additional privacy protection to data stored by remote data processing service providers. What is your view of that suggestion? Or haven't you looked at it, perhaps, and thought about it?

Mr. KNAPP. Before transmission it is covered by a search war