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fact, it is because more security is really the answer to lots of computer crime in this new digital era.

On top of that, here comes the administration and it says because of other crime issues, which they would like to look at separately, they are talking about creating holes in the network or potential holes to be able to do wiretapping which others might be able to exploit from computer crime to gain access to financial information and so forth.

So it is a very complicated issue of about where the security balance is here and the privacy issues are here.

We also have a government which is saying that our communications are moving into a wireless era, and Senator Leahy is holding hearings after the recess on this issue. What was recommended by industry to protect the privacy of communications, these new sensitive communications, is encryption, that we need to scramble these communications in order to protect it against private intrusion. The cellular, the Robb-versus-Wilder, can be duplicated on the street all the time. And we are moving into PCS where everyone is going to carry their phone around, and it is out in the open.

You need technical solutions to that. An industry-civil liberties task force recommended to Senator Leahy in 1991 that we move toward those solutions, but the Government has decided that they are going to impose their own security device, which is very controversial, the clipper chip encryption device developed by NSA. And they are also blocking the availability of mass market encryption software on the market today, which makes it hard to build security in these networks.

I think that if Congress is going to take these issues on, privacy and law enforcement, in a legislative arena, then all of those issues should be on the table and we should look for a solution which really does not let these become segmented off into different portions, but that we look at those three issues related together.

Senator SPECTER. I am going to conclude with just a brief statement, less than a minute, and I know Chairman Edwards has time commitments and pressures, and I want to thank my colleagues for deferring to me. I found the hearing to be most useful, as the complexity of the problem is enormous. I do not want the Attorney General at the head of industrial policy, at all which is your statement. I do not want an industrial policy. I want to continue with the free enterprise system and a balancing of law enforcement interests and privacy interests. When the crunch comes, we have always chosen privacy as the superior value in our country, and I think that has to be maintained. But within that context of that value, we have to do what we can for law enforcement.

I think we are prepared to do the work on it. Senator Leahy has had a lot of experience on evaluating probable cause and mere suspicion and stop at risk, and so have some of the rest of us. Thank you very much.

Senator LEAHY. Thank you, Arlen.
Mr. Chairman?

Representative EDWARDS. Thank you, Senator Leahy. This is a very useful hearing, if just to frighten us to death, because the problem is rather awesome.

I have a nuts-and-bolts question for you, Mr. Neel. The Director said that he had 91 instances where the FBI did run into trouble that caused them some difficulty in wiretapping because of the advancements in technology. Do you know about those?

Mr. NEEL. We do not know specifically about those, and, in fact, up until just a few days ago, we had no evidence of these. Now, it may be semantics. It may very well be that the Agency has had problems with capacity on cellular telephone services that we have talked about in the past, and the companies have moved to expand that capacity. There may have been some other technical issues that created a delay.

There have been disputes about compensation, but to my knowledge, or at least to our knowledge most recently, there have not been cases where a local telephone exchange has refused to comply with such a request.

Mr. PLESSER. May I jump in on that, Congressman? Representative EDWARDS. Yes. Mr. PLESSER. In the Freedom of Information Act requests that CPSR initiated we got the information from the FBI on Project Root Canal, there was no indication of 91 problems of capability. There is a capacity issue that has been raised in the telephone company areas, but I think as Senator Leahy said in his questioning, there is a difference between compliance and guarantee. As these issues start to grow—and CTIA, I know, will be in on Monday—the companies have a responsibility to comply with the law. There is no question about that. And the question that I am really—I represent PCS companies and other people in the field, and the idea that a lawyer, any lawyer in this country is advising a client to say that you do not have to respond to digital-you know, to law enforcement requests in a digital environment is just totally foreign to me. The PCS, by the way, is covered. There is forbearance, but they would be subject and covered in this area.

So I am not sure where that information comes from, and I am not sure where the incidents of noncompliance are. I am sure CPSR and others will put some more FOI requests in and see if we can get some more information on it. But at this point I am not sure that we have had the basis to be able to evaluate what those 91

are.

Mr. BERMAN. I have for the record to submit CPSR FOI requests, Operation Root Canal, which essentially asked for incidents of failure to you know, difficulty with law enforcement, and there were no difficulties. And we have been in a whole year dialog with the Clinton administration to expand on the record and give us instances so that industry could address these issues, and this coalition has been anxious to work with the FBI.

They have not given us 91 incidents. Those are new to us. And so it is a mystery why we have not been able to expand on the cooperative efforts and we are back here with a legislative effort that is

Representative EDWARDS. Well, I think that I can speak for both the Senators and for the House members. We certainly have every intention of holding your feet to the fire, both sides. You know, total security is probably not possible. It would be possible, but we

would not want to live in that kind of a society. So we do have to balance that.

Mr. PLESSER. There is not a policy dispute here. There is not a policy dispute about the fact that the FBI or other law enforcement should be able to get access to digital communications through title III warrants. There is not a policy dispute. There is a technology solutions dispute. There is a dispute as to whether the solution is really appropriate in the proposed legislation, whether or not it has the normal boundaries legislation should normally have, and whether or not it identifies the solutions. The technical case has not been made. No one is arguing with the policy case.

Representative EDWARDS. Have you a written proposal, or have you talked to the telephone companies about your idea of a compromise, Mr. Berman?

Mr. BERMAN. The Berman compromise. I think that before moving to legislation that structures a whole set of band-aids, it would be better to perhaps go back and look at why this informal process is not working. In other words, maybe there are not enough people at the table. Maybe it needs to be that there—you know, if it took the FBI a long time to figure out that call forwarding was a problem, if there had been an ongoing dialog about what new technologies were being developed and they had input from the industry, the might have been aware of the problem and worked cooperatively with industry towards a solution much sooner. And I do not think that you can just limit that to the telephone industry because it is the cable industry and it is the computer industry. But rather than putting a big stick on top of them with fines and injunctions, perhaps a Federal advisory board or a more structured process for looking at these issues over a period of time with reporting back to Congress and everybody keeping everybody's foot to the fire and trying to identify problems and create a process for working on these might be a better solution than going this far towards an industrial policy approach.

Representative EDWARDS. I think your bringing up the matter of the NCIC is timely because historically we have had to watch the development of the NCIC, while encouraging it as a very valuable law enforcement tool, to make sure that it does not become a Big Brother. And with all the requests for involvement in the NCIC, think we have kept it relatively pure, although we have had some defeats where it is being used for non-law-enforcement purposes. So I think that as a model, we do need the

Mr. BERMAN. We did bring together—and you have brought together-experts from different parts of industry, the computer industry, law enforcement, privacy, and they have worked together. I think in many ways the industry is moving to try and meet the standards of the FBI in terms of software design and hardware design, and I think that from a privacy point of view, privacy interests ought to be represented at that table as they discuss those requirements even outside of legislation so that there is a process which is weighing these issues as the technology is developed and deployed and comes out of the shop.

Maybe Congress can do some very narrow surgical legislation that creates a process which, you know, if it does not work, then you can come back and escalate. But to go from informal process

and, geez, we have had some problems and we have 91 incidents, but some of them have been solved and we have this contest about who did what, and then to move on this kind of legislation or to try and set requirements I mean, Senator Specter, with all due respect, knowing what the FBI is saying, you meet our requirements for cellular ports, capacity and capability, well, how does the-if the FBI cannot tell industry what the requirements are, how much they are going to need, it is hard to build.

Mr. PLESSER. But it is not even that. This legislation, the way it is written, does not require them to say what they need. When they come around to it, if they do not have it, then they are going to be penalized. It requires a guarantee rather than compliance. There is no standard. As a lawyer advising a company, how do you advise what you have to do to comply? This legislation does not set that up. This legislation says if in the end you cannot do what we want, we are going to hit you.

There is no way to resolve it, and I think there is a lot of middle ground that can be looked at.

Mr. NEEL. Mr. Chairman, if I may add to that, I think it is important to point out that the telephone industry in particular-in fact, I think the entire communications industry-has absolutely no incentive to not cooperate with law enforcement on this issue. The fact that the process has not borne fruit in the way that the Director would have hoped is more of an indicator of just how tough the problem is, not that the parties involved, certainly the telephone industry, are intransigent somehow, in some respect, in finding that solution.

Representative EDWARDS. I find all your testimony hopeful, and I think that we have work to do, Mr. Chairman. I would yield.

Senator LEAHY. Thank you very much.

As I sit here listening to this, I realize that we are not that far from a time when I am going to be able to sit at home, make telephone calls to my children in college, use the same lines to balance my checkbook, and either withdraw money or send it on to pay bills, order videos, probably move my medical records back and forth or get the results of a medical exam or set up appointments for another.

Frankly, I do not want anybody to be able to go in and nose around in all that any more than I would want anyone to open my mail if the videos were being mailed to me or if my doctor was sending my latest cholesterol reports. Actually, I would be willing to do that because they are very good. That is about the only thing in this aging body that is.

But there is another part that frightens the hell out of me, and that is letting the U.S. Government determine where our technology goes, especially in telecommunications. The highlight of the U.S. Government's telecommunications has been our military and the White House communication system. These systems have been decades behind what is available at Radio Shack to buy. We have ships that are side by side that cannot talk to each other.

The much-vaunted telecommunications system at the White House, up until the very recent time, worked only because you had about 20 times more people than anybody in their right mind would ever have to run anything. Up to just about a year ago they

still used a phone system where you plugged in wires to make conections. This is the sort of system advertised back in the 1940's, and in the 1950's and 1960's went into the Smithsonian. Had they not been able to find another one, they could have gone to the White House and gotten it.

We spend billions in communications for the military. Most people in industry buy off the shelf far, far better equipment that works quicker, better, and is more versatile. In Desert Storm, after the millions we put into our military communications systems, what really worked is when somebody just went and got off the shelf a cellular phone system. That is the one thing that they could be sure of working. But the stuff they had that had been designed and superdesigned and refined would not work. And I am concerned about a situation where the Department of Justice is going to sign off on this. My gosh, the Department of Justice is not filling second-, third-, or fourth-level positions a year or so into a new administration. Nothing against this particular Department of Justice; it happens in most of them. Can you imagine them signing off on new technology, determining whether you are going to have this phone system or a new one? We would still be back with rotary telephones. Bring back the princess phone.

If we thought the old AT&T was stodgy and behind the times, which, of course, it was because they had a monopoly, can you imagine what it would be like if you have some study committee at the Department of Justice determining whether with 40 or 50 or 60 or 100 different telecommunications companies or high-tech companies, whether a particular technology could go forward?

So I am concerned by that idea, and I do not think, in credit to the FBI, that is really what anybody wants. But I am afraid that may be the result. If we do that, you are going to find people going to Sweden, Germany, and everywhere else to buy their communications systems because we will have fallen behind, just as we did back when we had a monopolistic phone company because there was no incentive to move forward.

Mr. NEEL. Mr. Chairman, I would point out one thing. You mentioned the backward nature of the White House telephone system. I can tell you from personal knowledge that the reason that system exists is because they felt like they could not afford to put in a state-of-the-art telephone system. When I was there, I had a telephone that was in the same office during the Nixon administration, and if the White House cannot afford to upgrade its telephone system, it is hard to imagine the Department of Justice coming up with many billions of dollars to authorize the increased capability envisioned in this proposal.

Senator LEAHY. Let's go back to another point, though. Are the telephone companies trying to deny the FBI this technology? Do you know of any phone companies that are saying let's build our switching systems this way, so the FBI or the State police or whomever else under proper court order cannot get in here?

Mr. NEEL. No, absolutely not. As I said, there would not be any incentive for doing that. It would be a huge public relations outcry, frankly, if you were to do that. But I would point out one thing: By exempting a broad range of technologies, as this proposal has

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