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Washington, DC. The subcommittees met jointly, pursuant to notice, at 1:10 p.m., in room 2237, Rayburn House Office Building, Hon. Don Edwards, chairman of the Subcommittee on Civil and Constitutional Rights, and Hon. Patrick J. Leahy, chairman of the Subcommittee on Technology and the Law presiding.

Also present: Representatives Coble and Canady, and Senator Pressler. OPENING STATEMENT OF HON. DON EDWARDS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA Representative EDWARDS. The hearing will come to order.

Today, we resume joint hearings with our Senate colleagues. The question before us is how can law enforcement agencies conducting court-authorized wiretaps keep pace with emerging technologies while still respecting privacy and not hampering the innovation that is fundamental to the competitive success of American industries.

Earlier this week, the ranking Republican, Henry Hyde, and I introduced legislation responding to these concerns. Identical legislation was introduced in the Senate by Senator Leahy.

Some have questioned whether there is a need for this legislation at all. I believe that the need is real. The General Accounting Office has looked at the issue and has found that new technologies and services do pose problems for wiretapping.

The FBI has conducted an informal survey of State, local, and Federal agencies and found 183 instances in which technological problems impeded court-authorized wiretaps. The FBI submitted this information to us but asked that it not be publicly disclosed. However, I have received a summary of the information from the FBI and the FBI has agreed it can be released. I will enter it in the record with my statement.


Finally, I believe that the industry itself acknowledges we have a problem, as reflected by the creation of an industry committee to develop solutions for a number of these newer technologies.

We listened very carefully over the last several years to the interest of concerned parties and the bill before us reflects many suggestions from industry and privacy advocates. I must congratulate three of the key participants in this effort.

FBI Director Louis Freeh has been sensitive to the concerns of industry and privacy. While always insisting that law enforcement's basic needs be respected and met, he has recognized that any legislation must be narrowly focused. He has recognized the need for flexibility and a reasonableness standard, and this is going to be reflected in this bill.

Second, I must thank Jerry Berman of the Electronic Frontier Foundation for putting together the dialog that has brought us to this point. Without Jerry, we wouldn't have had a balanced bill that included privacy protections.

Finally, I thank Larry Clinton of the U.S. Telephone Association, who has worked with us diligently. There are many provisions in the bill that reflect the concerns of his members.

I am personally comfortable with the bill. It is a balanced bill. We have gone a long way to accommodate the interests of everybody.

Senator Leahy?


FROM THE STATE OF VERMONT Senator LEAHY. Thank you very much, Mr. Chairman. I want to commend you for having this hearing and the tremendous work you have done. As I said at the time of the crime bill conference, I am one member of the other body who is going to miss your leadership. Being a colleague of yours has been one of the great joys of my service here in the Senate.

Director Freeh, at our last hearing you identified digital telephony as "the number one law enforcement, public safety, and national security issue facing us today.” You and other law enforcement agencies told us difficulties we are going to have as we go into the next century if we can't meet the needs for wiretapping.

I will tell you right at the outset, I do not want law enforcement to lose its capability to use this powerful tool in its crimefighting arsenal. Having spent nearly a decade of my own life in law enforcement, I know how important it is. I know that wiretaps can produce powerful evidence against our most dangerous criminals at the lowest risk to the agents involved. We don't have to make deals with criminals or protect witnesses or expose agents to dangers when the police can convict criminals with taped words out of their own mouths.

But I also want to make sure we don't jeopardize either important privacy rights of all Americans or frustrate the development of new communications technologies. There was a time when the local sheriff could drive up in his pickup truck, stand on the roof, hook alligator clips to the phone, put on the earphones, and know what was being said.

We got concerned there might be a few too many people hooking on the old alligator clips and passed wiretap legislation, which made it very clear that you go through the courts, you do all the things you have to do. So we passed the law that protects people's constitutional rights, but then, the technology changed. We have the law but advancing technology is leaving law enforcement behind in its ability to use that law.

Now you can have a money launderer in Boston calling a drug kingpin in Miami to arrange for a shipment of drugs to come into Los Angeles. Those calls could be going over microwaves or over fiber optic lines. Of course, if it is digitized, it is a bunch of ones and zeroes, and whether you have the alligator clips or something else, you are really not going to find out anything about that money laundering, the drug kingpin, or any part of the criminal conversation. That is not what we want.

We have tried to put together a bill that won't stop technology but will help law enforcement. Congressman Edwards and his staff, my staff, the FBI, telephone companies, and everybody else involved, that have spent hours on crafting a reasonable bill that will assure law enforcement's ability to conduct court-authorized wiretaps.

It sets forth four wiretap capability requirements that telecommunication carriers would be required to meet, so they would know what to do when they set about designing new equipment. Phone companies make sure when they plug in new services that the phone system is not shorted out, so that if I use a new service to call from my farm in Middlesex, VT, to somebody in my office in Washington, DC, we are going to get through. We are not going to short out that system, but we are also not going to short out effective law enforcement.

The privacy and security protections for telephones and computers have been expanded in ways that were first recommended to me by a privacy and technology task force organized back in 1991. The protections in the Electronic Communication Privacy Act of 1986 are extended to cordless phones. We take care of questions about the extent of privacy protection for messages sent over a computer. If you send an E-mail message to somebody, you ought to be protected the same way you would if you picked up the phone. We improve the privacy of mobile phones by expanding criminal penalties for stealing the service from legitimate users. But we do it without impeding innovation in telecommunications services.

Under the bill, law enforcement agencies may not require the specific designs of telecommunications systems or features nor prohibit adoption of such design by any telecommunications providers. Industry, not government officials, will run the show.

I did this because I have always had some frustration with what we have done with telecommunications within the Federal Government. We have studiously tried to stay 15 to 20 years behind the curve. The Department of Defense sometimes at multi-billion-dollar installations will have something that looks like World War II telecommunications. The only thing lacking is somebody turning a . handle.

Mr. Neel knows what it was like when the administration went to the White House and found that you have a 1950's system, so poorly designed that when the President asked if he could get a phone of his own they told him, certainly, within a few months they could have one. I suggested that he call the local telephone company and he could probably have it put in that afternoon.

So we don't want that to happen, and we are taking care of many questions. We are still going to have questions remaining about how much it is going to cost and who is going to pay for it.

Mr. Chairman, I will put my whole statement in the record because I suspect that we are going to learn more from the witnesses here than what I would have to say. [The prepared statement of Senator Leahy follows:]

PREPARED STATEMENT OF SENATOR PATRICK J. LEAHY At our last joint hearing, FBI Director Freeh identified the digital telephony issue as "the number one law enforcement, public safety, and national security issue facing us today."

The FBI and other law enforcement agencies have told Congress that their ability to conduct wiretaps is being undercut by new communications features and services that are designed with no thought as to how they might affect law enforcement.

I, for one, do not want law enforcement to lose its capability to use this powerful tool in its crime-fighting arsenal. Wiretaps produce powerful evidence against our most dangerous criminals, at the lowest risk to the agents involved. We don't have to make deals with criminals, protect witnesses, or expose agents to danger when police can convict criminals with tapes of their own conversations.

At the same time that I want to assist legitimate law enforcement needs, I want to make sure we do not jeopardize important privacy rights of all Americans or frustrate the development of new communications technologies. I believe the companion bills Chairman Edwards and I introduced on Tuesday achieve those goals.

Over the past few months, I have worked closely with the distinguished Chairman of the House Judiciary Subcommittee on Civil and Constitutional Rights, Don Edwards, to craft a digital telephony bill. I am always delighted to the opportunity to work with the Chairman, whose hard work and deserved reputation for staunchly defending our civil liberties will be sorely missed in Congress upon his retirement at the end of this session.

Our digital telephony bills were carefully hammered out during numerous meetings with House and Senate staff, industry groups, privacy and civil liberties advocates and the FBI. These parties have worked diligently and in good faith in this effort. It has not been an easy task, and we are all continuing to work to resolve this matter.

This bill ensures law enforcement's continued ability to conduct court-authorized wiretaps by setting forth four wiretap capability requirements that telecommunications carriers would be required to meet. This means that when the phone companies set about designing and deploying new services or features, they must consider law enforcement's needs among the numerous other factors that go into such designs.

Just as phone companies make sure that when they plug in new services, the phone system is not shorted out so, too, we do not want to short the American people's need for effective law enforcement.

The bill also expands privacy and security protections for our telephone and computer communications in ways that were first recommended to me by a Privacy and Technology Task Force I organized in 1991. The protections of the Electronic Communications Privacy Act of 1986 are extended to cordless phones and certain data communications transmitted by radio.

In addition, this bill increases the protection for consumers when they transact their business over the telephone or send messages over their computers. If you call your bank to transfer money, send E-mail messages to an online discussion group, or order a movie from a payperview service, the bill protects the privacy of your transaction.

The bill further protects privacy by requiring telecommunications systems to protect communications not authorized to be intercepted and by restricting the ability of law enforcement to use pen register devices for tracking purposes or for obtaining

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