done, you will create an incentive for very sophisticated criminals to buy and deploy technology that will evade this kind of system. Senator LEAHY. This does have large exemptions.

Mr. NEEL. Yes, absolutely.

Senator LEAHY. Now, phone companies have to isolate particular lines for both billing and maintenance purposes, do they not? It does not make any difference whether they are digital or analog? Mr. NEEL. I believe that is correct.

Senator LEAHY. Then I would raise the question-and you can submit your answer on this for the record if you would like-why that same technology could not be used for wiretap capability, assuming it could. Let me ask this question: If you have to isolate digital or analog lines for both maintenance and billing purposes, do you know of anybody within the telephone companies who, if told that they could use that same technology for wiretap purposes, would be opposed to that?

Mr. NEEL. I do not believe so. We will certainly get further information about that and get it to you. But I do not believe that is the case.

Mr. PLESSER. Senator, from our research this last summer, the implication was that that was really the best protection for wiretap information, is that, in fact, companies do have to maintain isolated bit streams for billing and maintenance purposes, and it is essentially through those paths that wiretaps are made, and I think those are continuing in digital.

Senator LEAHY. Are there services in the present systems that are untappable?

Mr. NEEL. In the present system, I believe not.

Senator LEAHY. Are there features or services being planned that would be untappable?

Mr. NEEL. I cannot speak for the literally thousands of companies that have new services technology on the drawing board. I do not know the answer to that question. There may very well be some entrepreneur somewhere who is brilliantly designing a piece of equipment who would have no reason to know what the FBI may or may not want in the future. So it would be almost impossible to know that.

Senator LEAHY. There are over a thousand digital switches in use in the Unites States today. Do you know if any interception orders were served on any of these switches?

Mr. NEEL. Orders for failure to comply?

Senator LEAHY. No, were any interception orders conducted on facilities using these digital switches? Is that done?

Mr. NEEL. Oh, yes.

Mr. PLESSER. All the time.

Mr. NEEL. That is commonplace.

Senator LEAHY. And have there been problems with those orders?

Mr. NEEL. Not to my knowledge. Other than, as I mentioned earlier, some possible delays to solve interim problems and these capacity issues that do not go to the issue of whether it is digital or analog, I do not believe so.

Senator LEAHY. Speed dialing, call forwarding, do those services make wiretapping difficult, if not impossible?

Mr. NEEL. Well, we do not know if it makes it impossible. Clearly what we do know is that the technical problem related to call forwarding can be alleviated through a new switch that would allow the FBI to monitor the calls from the switch, and we are working to make sure that that technology is made available.

As I mentioned earlier, the software upgrade for that alone would cost nearly $2 billion, so we are working on that, and call forwarding has been cited as a problem now and in the future, and we think there is a fix underway.

Senator LEAHY. Under this proposal, whatever the cost of that fix was, would the U.S. taxpayers pay for that?

Mr. NEEL. I believe that is correct.

Senator LEAHY. Had this proposal been in place when call forwarding and speed dialing were first designed, would the industry have had to hold back from marketing them until a wiretap solution was found?

Mr. NEEL. Well, I cannot imagine that any company considering the deployment of new product or service that could be facing a $10,000 fine, much less the kind of public humiliation that would be involved here, deploying this technology until the Justice Department certified it.

Senator LEAHY. You mean I would have to learn my telephone numbers all over again? I couldn't just hit line 5 for a particular phone number?

Mr. BERMAN. Excuse me, Senator. I mean, it is important to look back at the last draft. While they have changed the bill to make it less controversial, they did have a certification process, one before the FCC and the second before the Attorney General. So the specter of having the telecommunications industry taking its products into the Justice Department and going through a clearance process, whether that is a PBX system or something going on with the Internet or a new computer chip, it was really there. And, in fact, even though this bill is drafted politically to cover only common carriers, many of the problems cannot be solved without bringing other people to the table, because the telephone company is not in the position always to be the most reasonable place to go to get the communications.

Senator LEAHY. I want to yield to Mr. Canady, but the concern I have is more of an anecdotal one. After 20 years of dealing directly with the Federal Government, both its civilian and military parts, I have never seen any organization that has so consistently, so doggedly, and with such expertise, stayed behind the curve on telecommunications as the Federal Government. They have raised it to an art form. I would be very concerned to see the Government in a position of determining how the rest of us move into the 21st century.

Mr. Canady?

Representative CANADY. Thank you, Mr. Chairman.

I want to thank each of you for your testimony. It has been very interesting, and I think it highlights for us how complex an issue we are dealing with here.

I will tell you that I am a little uncertain about whether you think there is a problem for law enforcement or not. There were discussions, indications in the testimony early on that at that point

led me to believe that you thought there was a problem for law enforcement and that at a certain point it might be difficult for you to comply with the requests that they would make as they have made in the past.

Then we hear the indication that these access points for individual customers will still be there, and you will be able to tap into those as you have in the past. I just want to see, for me and for the other members here, if we can get a better fix on whether you think there is going to be a problem for law enforcement. I understand there is a special concern here about call forwarding, but putting that aside, looking at the other issues, what do you say to that?

Mr. NEEL. Well, we do not believe there is a problem right now, and, in fact, I think the Director reaffirmed that.

Representative CANADY. My question is not so much right now, because I understand-I think the key point we have to understand here is this is a rapidly changing technology. The world out there is moving very fast. We just spent time in the Judiciary Committee over in the House hopefully helping move that world forward in some of the things we are doing on legislation relating to telecommunications. But I think what we have to be concerned about is where this is moving, and I think that time is of the essence here because we need to make certain that we avoid problems that we can avoid and we avoid expenses that we can avoid. I would prefer and I believe all of us would prefer for this to be worked out in the private sector without the need for additional legislation. But I am certainly and I believe the other members here are also concerned about maintaining the capability of law enforcement to get the information the way they have been getting information since 1968. And our goal is to ensure that that goes on without disruption for a significant period of time.

So don't just address the way things are now but the way things are going to be within the foreseeable future, given the technology that exists and that is going to be implemented.

Mr. PLESSER. May I just respond? Going back, 1968 was a different world. There was one telephone company. There was one person, one corporate entity that did everything. Today

Representative CANADY. I do not know of a time when there was one telephone company.

Mr. PLESSER. Well, one primary telephone company, and a couple of smaller ones. Today, this is

Representative CANADY. Well, I think that, quite frankly, does a little in justice to the entities such as General Telephone and United Telephone and others, but you can proceed.

Mr. PLESSER. Well, I was going back to 1968, and I did not mean to slight them.

There are a lot of people involved in telecommunications today. Part of the problem that I think the FBI is expressing is a concern that not everybody has maintenance ports available to each communications.

When I send a call to the west coast, it may be on one company; it may be on two or three companies. There may be a packet switching system. There may be other people carrying parts of that communication through different pipes.

The issue addressed by this legislation and I think the

concern

Representative CANADY. OK, I do not think you are answering my question.

Mr. PLESSER. No, I am agreeing with you, actually.

Representative CANADY. If you would not mind, let me ask Mr. Neel to address my question and Mr. Berman to address my question, the people who have testified, and I will be happy for you to make your comments.

Mr. NEEL. Congressman, since there are new products and services being envisioned on drawing boards, about to be deployed, potential future technologies, no one knows what the potential problems would be for law enforcement in wiretapping. That

Representative CANADY. Well, let me ask you, though. We know about technologies that are there and that are planned for implementation. OK? People have plans. And I understand from the testimony of the Director that he has been told by people in the industry that a couple of years down the road we are not going to be able to comply with requests that will be made at that time given the technology and the devices that will be used at that point. Is that true or not true?

Mr. NEEL. Well, I do not know the specifics of what he is referring to, and he referred to, you know, telephone company lawyers and lawyers tend to be extremely precise in not guaranteeing things. But the point is this is what the Quantico Group is exactly trying to establish right now, what those problems will be and how we address them.

Frankly, even if this proposal were to become law, it would not fix the problem. You cannot wave a magic wand and say it is done. Representative CANADY. Right I understand that, and

Mr. BERMAN. Let me answer the question.

Representative CANADY. Sure.

Mr. BERMAN. There are going to be problems. There are problems. We are going from, you know, AT&T and Ma Bell. We are splitting into a network of networks. And what is running over the Internet is 40,000 different networks. That is running over the telephone lines which the telephone company does not control. There are cable networks that are going to be in the telephone business. That is a new kind of network. There are wireless networks. There is enormous diversity, and communications are going to be carried by many kinds of providers, not just common carriers but all kinds of providers. And so there is complexity out there of where in the stream do you go and where is the most reasonable place to impose responsibilities, and are those technical, are they legal and so forth. That is why I think it underscores that the FBI has a problem, but it does not support a legislative proposal that says let's try and fix it for all time in some sort of industrial policy that says we want to control where all these networks are going, but rather suggests that the FBI has to come up to speed and learn a lot more about where network technology is and get in a much clearer dialog with the new computer and communications industry as they develop products and figure out solutions. I think that is the way to go, and it is not to put a big baseball bat or the power of the State in the hands of the FBI or the Attorney General.

Representative CANADY. On that point, I agree with the thrust of what you are saying. I think this is something that requires dialog, and that obviously is a two-way street. But given the complexity of the situation, given the multitude of entities that are involved, I am not at all certain that this is something that can be worked out by the FBI sitting down at the table with some people and coming to an agreement. I think that the complexity that you have described actually indicates that that type of solution may not be possible and that some type of legislation may be required to bring that dialog to a focus so that we can make policy decisions about how this is going to be addressed. It may not be the legislation that the FBI has submitted at this point, and I am certainly not wedded to that.

Mr. NEEL. Congressman, we would support giving teeth to the Quantico process that is in place right now. That could be one solution here. Also, let me point out that you are exactly right, there have been over 1,100 independent and small telephone companies for many decades, even when there was just Ma Bell, and they have been complying with wiretap requests as well. But the prospective problems that could exist in this network would be a little bit like saying, well, where is war going to break out next? You do not deploy enormous armies in 500 points across the world to prevent the potential of an outbreak somewhere. To a certain extent, this proposal says, well, we do not know exactly what the problem will be and we really cannot tell you exactly what specific technical standard we want you to comply to, we just want to make sure you will do it whenever we want it. And it is a little bit like using a hammer when a small wrench is really what is required.

Representative CANADY. I understand your concerns with that, and I think that is a legitimate concern. I believe our task is to try to focus on what the problem is and the ways that we can come up with defining standards that are workable, that you can be expected to meet, and that will still ensure that law enforcement gets the information that is needed.

I have taken longer than I should have.

Mr. BERMAN. Can I just amend

Representative CANADY. Yes.

Mr. BERMAN. That we make sure that when we are engaged in this process, that we look at, in this network of networks, we also have privacy, confidentiality, and security problems of major proportions which need to be addressed, and they need to be addressed in the same technical and dialog between industry, government, private sector, public interest, Congress, that has to go together, that it is not a one-sided effort, that we are trying to keep the balance that Congress struck when it passed the Electronic Communications Privacy Act in 1986, which recognized a new era of communications. If we have to add to that and in a process that keeps everyone up to date, both on the privacy threats and on law enforcement threats, let's add that process and address all those issues at the same time.

Representative CANADY. Well, I think it is important that we do that, and I will just conclude by thanking each of you for your testimony. It has been very helpful. This is something that is going to require a lot of work by all of those who have an interest in this,