Mr. KASTENMEIER. Our next and last witness for this morning is Mr. Philip J. Quigley, president and chief executive officer of PacTel Mobile Co.'s of Costa Mesa, CA. PacTel is the Nation's largest cellular telephone company with 35,000 customers. Mr. Quigley has been in the telecommunications industry since 1967, when he started with Pacific Telephone.

Mr. Quigley, we are delighted to welcome you here this morning. We have your statement, and you may proceed from it if you wish, or however you care to. We are happy to have you.

TESTIMONY OF PHILIP J. QUIGLEY, PRESIDENT AND CHIEF EXECUTIVE OFFICER, PACTEL MOBILE CO.'S, ACCOMPANIED BY ROBERT W. MAHER, EXECUTIVE DIRECTOR, CELLULAR TELECOMMUNICATIONS INDUSTRY ASSOCIATION

Mr. QUIGLEY. Good morning, Mr. Chairman, and members of the subcommittee. I would like to take this opportunity to thank you for allowing us to testify today in support of H.R. 3378, the Electronic Communications Privacy Act of 1985, and particularly commend the chairman and my fellow Californian, Congressman Moorhead, for their sponsorship of this very important bill.

I have with me today, Bob Maher, who is the executive director of the Cellular Telecommunications Industry Association. That is the group and the members of which I represent today. As I am sure you know, cellular telecommunications is an advanced form of mobile telephone service that weds computer technology with radio spectrum into a highly efficient and reliable communications tool for people who conduct business out of their office and are generally on the move. CTIA represents all segments of the industry, including both wireline and nonwireline carriers, resellers of cellular service, and also manufacturers of cellular equipment. Our association represents almost 90 percent of the cellular operators operating in the United States.

Let me begin by saying the right of privacy is a fundamental personal right. Many times, under varied circumstances, the Supreme Court has upheld this right, finding that it emanated "from the totality of the constitutional scheme under which we live." As Justice Brandeis explained more than 50 years ago, privacy is "the most comprehensive of rights and the right most valued by civilized men.

It has often been noted that the development of electronic communications has brought the people of our Nation and the world closer together, and has served to create new business and personal relationships and to enhance old ones. With these benefits, unfortunately, the development of electronic communications has also provided unscrupulous individuals with the opportunity to intrude upon the privacy of a conversation through the use of wiretaps or radio receiving devices.

The authors of the 1968 wiretap law sought "to prevent or deter improper invasions of privacy," in part by protecting telephone conversations against interception. However, the law equated telephone conversations with wire communications. As technology has developed to transmit telephone conversations over radio frequencies as is the case with cellular, rather than through wires or

cables, the applicability of the 1968 act has become increasingly unclear and murky.

In effect, technology has leapfrogged the law. We are pleased with H.R. 3378 and today's proceedings because they are, we hope, witness that Congress is moving to reassert the original intent of the 1968 act, safeguarding the fundamental right of our citizens to privacy.

The issue of nonwire telephony goes beyond cellular communications. Even calls made over conventional telephones today in the home or office may be transmitted only in part over wires. For much of the distance they travel, such calls are often transmitted by radio in the form of terrestrial microwave or satellite. Because these calls are transmitted over both wire and radio, there is some question as to the applicability of the privacy law. If, for example, a call is intercepted on the radio leg of a transmission rather than on the wire leg, the law may offer little or no privacy protection. Almost since the Privacy Act was passed, courts have had to consider whether and to what extent the statute applies to the communications transmitted in part by wire and in part by radio. The results have been mixed. In 1970, for instance, one Federal court held there was no reasonable expectation of privacy for calls transmitted over a mobile car telephone when the conversations could be easily overheard with an FM radio receiver. Three years later, another Federal court concluded that the statute offered no privacy protection to calls placed from one radio-telephone to another, but that radio-telephone conversations were protected if they traversed a conventional telephone network.

More recently, a number of State courts have addressed the vesting question of applying the 1968 act to conversations over mobile and cordless telephones. These courts concluded that conversations transmitted over the radio spectrum are neither wire communication, because they are transmitted at least in part by radio, nor oral communication, because a person communicating by radio has no reasonable expectation of privacy, and so fall outside the scope of the current Privacy Act regardless of whether they traverse the conventional wired telephone network.

While none of these cases involved cellular service, their inconsistent approach to the law cast a shadow of uncertainty over the privacy rights of all users of mobile communications. It is incumbent upon Congress to make explicit that the law is not technology specific, but guarantees the privacy of all electronic communications. CTIA feels very strongly that advances in communications technology should in no way diminish the right of privacy. To the contrary, the right of privacy must be protected especially in the face of technological change.

Today, for instance, after 13 years of regulatory delay at the FCC, cellular communications systems are up and operating in 80 markets throughout the United States, and cellular is riding a steep growth curve. It is anticipated that within 5 years there will be almost 2 million subscribers of cellular service, and industry will equate to approximately $2 billion in revenue.

I mentioned in the opening that we are in the process of building, continuing to build one of the largest systems in the world.

not only use their service in Los Angeles, but also in San Diego and Sacramento and, as I did yesterday as I came from California, stopping in Houston, while I was still on the plane used this portable telephone to call my office to see what was in abeyance, what action was required since I had left the office.

These portable phones are going to become more and more common and I am sure, Congressman, as you leave Washington to meet with your own constituency you find that you have a need to communicate back with the office or forward to your next destination. This kind of portable technology is not the thing of the future, it is really today's technology. And I submit that you, as other business people throughout the country today, will have a continuing need to move ahead with this new technology and experience its benefits of productivity.

The substantial demand for high-quality, mobile communications is not surprising. Again, a need to keep in touch with efficient communications; that works when you want it to work.

However, the growth of cellular and its contribution to economic development are closely tied to the legislation before this subcommittee today. Users of sophisticated communications services like cellular have a reasonable expectation of privacy when they pick up the phone, as they should. Without the certainty of legislation, however, the task of defending the right could take years of litigation in the courts.

For these reasons, CTIA supports H.R. 3378. This bill would remove the cloud over the privacy rights of cellular communications by revising the privacy statute to replace wire communications with electronic communications, the willful interception of which would be prohibited under the criminal code. The Electronic Communications Privacy Act of 1985 will bring the historic American guarantee of privacy protection into the information age. By protecting the security of conversations regardless of the medium of transmission, the legislation will encourage the continued growth and development of new and more effective means of communication, including cellular communications.

Of course, even if H.R. 3378 is enacted, there will still be some people who flout the law and intentionally listen in on private conversations transmitted via the radio spectrum. Individuals can use scanning devices today. And it is not our intent to impose any restrictions on the common public channels that are available for scanning today, but frankly to merely excise out of those scanning capabilities the capability that exists today to zone in on the channels and the frequencies that are associated with cellular telephony.

One way to close this loophole would be to limit the frequencies again that scanners can receive. We have had discussions with the FCC, and it is very unclear as to what their position is. I am certain that this legislation will have a serious impact on influencing their view of what might be done to control scanning devices.

Again, I would like to thank the subcommittee for their action in sponsoring this bill and inviting us to appear today, and at this point I would be happy to answer any questions.

CTHA

The right of privacy is a fundamental personal right.

Many times, under varied circumstances, the Supreme Court has
upheld this right, finding that it emanated "from the totality
of the constitutional scheme under which we live."1 ́ As
Justice Brandeis explained more than 50 years ago, privacy is
"the most comprehensive of rights and the right most valued by
civilized men. 2/

It has often been noted that the development of

electronic communications has brought the people of our nation and the world closer together, and has served to create new business and personal relationships and to enhance old ones. With these benefits, unfortunately, the development of electronic communications has also provided unscrupulous individuals with the opportunity to intrude upon the privacy of a conversation through the use of wiretaps or radio receiving

devices.

The authors of the 1968 wiretap law sought "to prevent or deter improper invasions of privacy," in part by protecting telephone conversations against interception. However, the law equated "telephone conversations" with "wire

1/

Poe v. Ullman, 367 U.S. 497, 517 (Douglas, J.,

dissenting).

2/

Olmstead v. United States, 277 U.S. 438, 478

(1927) (Brandeis, J., dissenting).

37

Zweibon v. Mitchell, 606 F.2d 1172, 1182 (D.C.Cir.