within the system, and then it says to Congress, if you want compliance, you have to appropriate more funds.

Mr. FREEH. I think the interested parties are completely protected. I cannot conceive of-I shouldn't say this. I think it would be unlikely, extremely unlikely for a district court judge in the process which is contemplated by this legislation to force compliance or use any sanctions when compliance is impossible because of the nonreimbursement which is the predicate in the legislation. I can't think of a better protection than that and a better definition of reasonableness.

For district courts who err, of course we have courts of appeals. So I don't think it is a dangerous path for the parties to begin to tread.

Mr. WHEELER. Mr. Director, with all due respect, there are two issues here. One is the issue of a defense in court against an action. The other is a requirement. We don't want to get to court. We don't want to have to say, hey, but-if the law says you are going to provide this capability and this capacity, we want to salute the flag and say, yes, sir, we will. Then we write the check and we turn around and, to use your term, the bucket is dry.

Mr. FREEH. I guess I can't allay all of that anxiety. What I will say, for instance, is with respect to the 183 instances that we have documented where the execution of court orders have been frustrated, in none of those instances was any action undertaken or, as far as I know, contemplated by the Government authorities to force compliance.

Your industries, all of your industries represented here, are our natural and historical allies and colleagues in this endeavor. We have never had an adversarial relationship with any common carrier. I did hundreds of court-authorized wiretaps in the Southern District of New York as a prosecutor. I never heard of a challenge where a prosecutor decided to force compliance under the current statute, which because of the general language of "all necessary assistance" would certainly give jurisdiction for the Government to come into court.

We have never done that. I don't contemplate that would ever be done, because the whole premise of this regime, in order to work, is a cooperative effort where the parties are melding standards and not in an adversary proceeding.

So I think the rule of reasonableness protects you and I think the track record and the history here should assure you that you will be well protected.

Representative COBLE. Mr. Chairman, I told you I would be short and sweet, so before I become long and sour, I will yield back the balance of my time.

Representative EDWARDS. Thank you.

Senator Pressler?

STATEMENT OF HON. LARRY PRESSLER, A U.S. SENATOR FROM THE STATE OF SOUTH DAKOTA

Senator PRESSLER. Thank you, Mr. Chairman, for holding this hearing. I think it is very important.

Let me ask from a layman's point of view what this really means in terms of the new so-called information superhighway, or what

ever that means to other people. Just this morning, the Senate Commerce Committee passed out a huge infrastructure bill, which I believe the House has already passed, which will now go to the Senate floor. But are we talking about communications between would-be criminals that could pass not through a telephone but through portions of the information superhighway and what might those parts of the information superhighway be? How does this legislation or this discussion apply to that?

Mr. FREEH. Senator, if I may, first, I think it is an excellent question. It is a discussion I had with the Vice President when he raised it.

In the simplest layman's terms, my answer, and I am not a technical person, is that as much as we need and want a superhighway of information, most reasonable people would agree that we need a policeman on that highway to protect the citizens who use it.

We are talking about, in this bill as proposed, a telecommunications utilized, transited, facilitated by a common carrier, whether it go from a computer to a computer via a common carrier network or directly between common carriers and switching points. We have exempted, as we have discussed, a segment, a fairly significant segment, of the evolving telecommunications industry. We are really talking about phone-to-phone conversations which travel over a telecommunications network in whole or part. That is the arena of criminal opportunity that we are discussing.

Senator PRESSLER. What other portions of the information superhighway could people communicate with the new technology that there is not now a means of listening in or following?

Mr. FREEH. From what I understand, and again, I am probably the worst person in this room to answer the question, communications between private computers, PC-PC communications, not utilizing a telecommunications common net, would be one vast arena, the Internet system, many of the private communications systems which are evolving. Those we are not going to be on by the design of this legislation.

Senator PRESSLER. Are you seeking to be able to access those communications also in some other legislation?

Mr. FREEH. No, we are not. We are satisfied with this bill. I think it delimits the most important area and also makes for the consensus, which I think it pretty much has at this point.

Senator PRESSLER. Yes, but in the future, will you be seeking the ability to tap into those other forms of communication?

Mr. FREEH. It is certainly a possibility. I am sure if, God forbid, somebody blows up the World Trade Center 10 years from now using a PC-PC private communications network, a question would validly be raised in the Congress and by the President as to whether that form of communication now needs to be accessed. But we are not taking that position now. We are not contemplating coming back and asking for additional coverage.

Senator PRESSLER. So what we are looking for is strictly telephone, what is said over a telephone?

Mr. FREEH. That is the way I understand it, yes, sir.

Senator PRESSLER. That runs through a digital-yes, go ahead. Mr. BERMAN. My understanding is, I think, a little different, which is that the Internet providers are not covered under this, but

the Internet traverses the public switch telephone network. It uses the transmission and switching facilities of the networks that are covered under this legislation.

My understanding is that that communications stream has to be delivered into the future by common carriers and therefore a communication that is travelling across the Internet which is the subject of a court-ordered wiretap would be intercepted. PBX's are not covered under the statute, but the FBI's technical experts have said that if they get handed the PBX, in other words, they could get the wiretap at the hotel, that they have ways of getting that communication without requiring all PBX designers to re-engineer their networks.

So I think that for the foreseeable future, the world of telephone communications and even data communications where people are using a ubiquitous network, and even when that is partly the cable network, that law enforcement needs are going to be met.

But at the same time, what is left out is a totally ubiquitous or penetrating FBI compliance which will require every piece of every network to design to meet this requirement because actually, it is not necessary.

Senator PRESSLER. Each Senator, and I suppose each member of the House, has a special telephone in our office that supposedly has a secure line. I guess when the Secretary of State wants to tell us a secret, they can call us up and tell us or something like that.

Does that go through a digital capacity, or how does that get scrambled? Does anybody know? How does that work?

Senator LEAHY. It is just a regular telephone but it has an algorithm built into it. What you do is you identify yourself with your key when you put it in and you can take the secure phone anywhere. You can take the secure phone home and plug it into your house and make a telephone call over your regular house line.

Senator PRESSLER. Can you now tap into that? Do you have the capability?

Senator LEAHY. You can tap into the line. Then you have to be able to decipher what it says.

Senator PRESSLER. Does that become a digital thing on the line? Representative COBLE. It is not a digital

Senator LEAHY. It is entirely different. You are dealing with apples and oranges. It doesn't make any difference whether it is digital or otherwise. It is a question of whether you have the algorithms to decipher it. Now you are going into another issue which we don't want to go into and won't go into.

Senator PRESSLER. Would you be opposed to requiring the FBI to meet a heightened standard for such content information, perhaps somewhere between probable cause and a reasonable suspicion? For this additional ability to listen in, would the standard be the same for a warrant? What standard would you want to use, probable cause or reasonable suspicion?

Mr. FREEH. The current standards are unchanged under the statute. We would still need, for contents of conversations, the probable cause standard, which is the standard for a search warrant for an indictment.

Senator PRESSLER. In what types of crimes is electronic surveillance most critical for prosecution?

Mr. FREEH. It is most critical with respect to organized crime, drug trafficking, and terrorism on the Federal level. On the local level, it is more in the realm of kidnapping and extortion cases.

Senator PRESSLER. I may have some additional questions for the record. I thank you very much.

Representative EDWARDS. We thank all the witnesses. We will have some more questions. I am sure the witnesses will cooperate in responding promptly.

I would like to insert a written statement from the AT&T Corporation into the record.

I think we had a very useful hearing. We thank you for your cooperation, and we are adjourned.

Senator LEAHY. Thank you, Mr. Chairman.

[Whereupon, at 2:54 p.m., the subcommittees were adjourned.]

APPENDIX

ADDITIONAL SUBMISSIONS FOR THE RECORD

CPSR WASHINGTON OFFICE, Washington, DC, January 24, 1994.

The PRESIDENT,
The White House,
Washington, DC.

DEAR MR. PRESIDENT: We are writing to you regarding the "Clipper" escrowed encryption proposal now under consideration by the White House. We wish to express our concern about this plan and similartechnical standards that may be proposed for the nation's communications infrastructure.

The current proposal was developed in secret by federal agencies primarily concerned about electronic surveillance, not privacy protection. Critical aspects of the plan remain classified and thus beyond public review.

The private sector and the public have expressed nearly unanimous opposition to Clipper. In the formal request for comments conducted by the Department of Commerce last year, less than a handful of respondents supported the plan. Several hundred opposed it.

If the plan goes forward, commercial firms that hope to develop new products will face extensive government obstacles. Cryptographers who wish to develop new privacy enhancing technologies will be discouraged. Citizens who anticipate that the progress of technology will enhance personal privacy will find their expectations unfulfilled.

Some have proposed that Clipper be adopted on a voluntary basis and suggest that other technical approaches will remain viable. The government, however, exerts enormous influence in the marketplace, and the likelihood that competing standards would survive is small. Few in the user community believe that the proposal would be truly voluntary.

The Clipper proposal should not be adopted. We believe that if this proposal and the associated standards go forward, even on voluntary basis, privacy protection will be diminished, innovation will be slowed, governmentaccountability will be lessened, and the openness necessary to ensure the successful development of the nation's communications infrastructure will be threatened.

We respectfully ask the White House to withdraw the Clipper proposal.