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Representative EDWARDS. Thank you very much, Mr. Neel.

The next member of the panel to testify is Thomas E. Wheeler. Mr. Wheeler is President of the Cellular Telecommunications Industry Association.

You may proceed, Mr. Wheeler.

STATEMENT OF THOMAS E. WHEELER, PRESIDENT, CELLULAR

TELECOMMUNICATIONS INDUSTRY ASSOCIATION Mr. WHEELER. Thank you very much, Mr. Chairman.

We appreciate the opportunity to be here before you today, particularly because we were kind of the poster child of the last hearing when everybody was talking about cellular as the example of some of the new telecommunications technologies that require some of the changes we are talking about today.

One retrospective on that hearing. It is interesting to note that by the FBI's own estimate, the cellular industry, which today serves approximately 5 percent of the population, was responsible for 25 percent of the wiretaps in 1993. I just put that forward as a physical manifestation of our commitment to addressing the issues of court-authorized surveillance and our recognition of our responsibility to provide both the capability and the capacity to do that.

This legislation, as everybody else has previously said, is a significant improvement over the previous draft, and again, cudos need to be extended to the staffs of these committees, to the FBI, and to the other industries involved.

There are four principal wireless-related issues in the current draft of the legislation, and let me just address those quickly.

One is that the bill outlaws the ability to steal someone else's electronic code in order to impersonate another user of the wireless service. We have all heard stories about people with humongous cellular bills because somebody had snatched their electronic code out of the air, cloned that into another phone, and was charging phone calls to Colombia or wherever onto their phone. Amazingly, that is not an illegal act. This bill makes it so.

That is very significant, because not only is this a crime against consumers and against the providers of wireless services, but also if you have a situation where there is floating around out there multiple users of the same electronic serial numbers, you don't know who you are tapping. You have three or four or five options and they say, hello, I am this one person, but they may not really be. So that change in the law not only helps protect consumers but also is a linchpin into making wireless court-authorized surveillance possible.

The second provision in the bill is the establishment of requirements and procedures for wiretaps in a wireless environment. This deals with the two C's, if you will, capability and capacity.

First, you have to have the capability technically to be able to get the desired information. There is underway right now, through an organization called the Electronic Communications Service Providers Committee, joint efforts of carriers, law enforcement, and manufacturers to come up with the standards for those kinds of technical capabilities. This bill recognizes that kind of process and provides appropriate review procedures, but I am happy to say that that is underway and a long way down the track.

However, the capacity issue, the number of simultaneous taps, is a matter which is not so easily standardized and to which the kind of process which worked on capability may also want to be applied. I will withhold further discussion of that for 1 more minute while I discuss the third wireless related component of this legislation.

That third component is that it is a recognition that what we are talking about is an industry-wide effort that must involve not only carriers but also the suppliers and manufacturers who enable the service. Simply put, if they don't build it, we can't do it and we have to be a team in this whole exercise.

The shortcoming in this bill is that, as Ms. Edwards and others have said, the cost is unknown because the capacity and capability requirements are unknown. So we would suggest that there might be a way of addressing that. Obviously, the key to the cost question is a capacity question. The more capacity, the greater the cost. We know that in Topsham, VT, the capacity is different than in New York City in terms of the requirement levels, but how different?

The bill says, well, relax, the Attorney General is going to tell you how different after consultation with the appropriate parties. We would specifically submit that consultation isn't enough, that what is needed is the discipline of an on-the-record proceeding. Human nature being what it is, it is important to differentiate between what is really necessary and what is requested.

We all go through, personally and in corporate lives and elsewhere, the differentiation between wants and needs. The way that works best in a governmental environment is in a formal rulemaking where the parties put information on the record and then challenge each other's assumptions and there is a conclusion which is based on a formal procedure, not just an informal consultation. We believe that the taxpayers deserve that kind of disciplined consideration of their financial exposure.

Therefore, we would suggest that we work together to catch crooks and to save taxpayers' money without delaying the process by focusing on adding a formal procedure as a substitute for the informal activity which will determine the capacity needs to be established by the Government.

To both of the chairmen and to the Director, we reiterate our gratitude for the manner in which you have been sensitive and responsive to the issues that we have raised throughout the discourse of this debate and we look forward to working further with you on these additional changes. [Mr. Wheeler submitted the following:) PREPARED STATEMENT OF THOMAS E. WHEELER ON BEHALF OF THE CELLULAR TELECOMMUNICATIONS INDUSTRY ASSOCIATION

I. INTRODUCTION The commercial mobile wireless telecommunications industry appreciates the opportunity to appear before you today to discuss our industry's involvement in meeting law enforcement's surveillance requirements.

The Cellular Telecommunications Industry Association (“CTIA") was organized in 1984. Over the past ten years its membership has grown to encompass all aspects of two-way wireless telecommunications (known as "commercial mobile service"), including licensed cellular, personal communications services, and enhanced specialized mobile radio. The association also counts as members the wireless service providers in Canada and Mexico, equipment and infrastructure manufacturers, and others with a general interest in the wireless industry.

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The wireless decade began with pioneers from both large and small companies taking risks to create a nationwide cellular network. Private entrepreneurs have in. vested almost $14 billion in wireless infrastructure. Today, more than 300 cellular carriers provide service to over 16 million Americans in every one of the nation's 734 metropolitan and rural service areas. As of December 1993, almost 40,000 people are directly employed by the cellular industry, another 125,000 are employed in related industries. In less than ten years of operation, the cellular industry has created over 165,000 jobs for Americans.

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Local
calls

1. Call from cellular phone
2. Call sont to call site transmitter

6.
3. Call she transmits signal to central collular systern computer (swhich)
4. Switch sondo call to a thor:
a. another cellular phone

Long
b. local land line) telephone company Mike Pacific Bell)

Distance
G. another cellular switch, or

calls
d. directly to the long distance company
5. Calls to a local home or office number
6. Long distanco calls go through a long distance company (AT&T, MCI, Sprint, etc.)

Exhibit I

When a subscriber makes a call on a wireless phone, as shown in Exhibit I, radio waves are transmitted to the nearest tower. By constructing the network using small, low power cells, wireless technology reuses the same radio frequencies and, thus, can handle a large number of simultaneous users. Instead of having a radio channel, like Citizen's Band radio, that reaches across a market and must be shared by everyone, low power, limited reach wireless cells permit the channel to be used again and again. The ability to travel between cells is achieved by a sophisticated signal strength monitoring and computer control system which senses when a caller is leaving a cell and hands that call off to an adjacent cell.

Once the communications signal is received at the cell tower, the "wireless” component of the transmission is over and more traditional technologies take over. From the cell tower the system transfers the call to the mobile telephone switching office (“MTSO"). The MTSO is the wireless system's equivalent of the landline local exchange central office switch. At the MTSO, the subscriber's connection is mon. itored by wireless messages to and from the subscriber's unit on a control channel separate from the voice channel. The MTSO reads the information contained in the control channel and, depending upon the information received, routes the subscriber's call to the public switched landline network, a long distance carrier, or to an

1 CTIA Data Survey, “The Wireless FactBook," March 1994.

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