switches involved. In the case of land-line switches, there are more than 20,000 switches nationwide. To further illustrate the difficulty of precisely estimating the cost associated with this bill, consider the following scenario. Industry cost estimates for land-line switch upgrades range from somewhere in the neighborhood of $15,000 to upwards of $100,000 per switch, depending, of course, on the extent of changes required in the hardware and software. Assuming that law enforcement will require nationwide access to wiretapping capability for land-line services, then the cost of upgrading all 20,000 switches would range from the hundreds of millions of dollars into the billions of dollars. I will conclude my remarks with three observations that could help control the cost of this initiative. The first is that as technical solutions are developed, law enforcement and industry should find effective ways to share the solutions and thereby avoid unnecessary cost. Second, law enforcement and industry should prioritize the development of solutions to address the most critical needs first and where possible control costs by coordinating switch upgrades to coincide with the upgrades already planned by the service provider. Finally, law enforcement agencies and industry should make wiretap requirements part of the industry's standards which guide the design and the development of new and emerging technologies. Incorporating these needs at the beginning of the product cycle should help lower the overall and ultimate cost of meeting law enforcement's needs. Mr. Chairman, that concludes my remarks. I would be happy to respond to any questions from you or other members of the committees. [The prepared statement of Ms. Edwards follows:] PREPARED STATEMENT OF HAZEL E. EDWARDS, DIRECTOR, INFORMATION RESOURCES MANAGEMENT/GENERAL GOVERNMENT ISSUES, ACCOUNTING AND INFORMATION MANAGEMENT DIVISION Mr. Chairman and Members of the Subcommittees: I am pleased to appear today to discuss S. 2375. My comments will focus on the wiretapping challenges facing law enforcement agencies, the status of law enforcement's technological requirements, and the potential costs of satisfying those requirements. TRADITIONAL WIRETAPPING METHODS ARE CHALLENGED BY TECHNOLOGY In July 1992, we reported to the Congress that law enforcement's ability to execute court-approved wiretaps was challenged by advanced telecommunications technologies. To determine the current status of digital telephony and to identify the changes that have occurred during the last 2 years, we interviewed representatives from law enforcement organizations, telephone service providers, and manufacturing companies. Between April and June of this year, we discussed various telecommunications technologies, such as analog and digital voice communications carried over copper wire and fiber optic telephone lines; land-line, cellular, and satellite switches; and Personal Communication Services, a technology that could be available in the near future. We also discussed special features, such as call forwarding, voice mail, and speed dialing. (A list of the organizations we met with is attached to this statement). These discussions revealed that although some technological solutions have been developed to facilitate law enforcement agencies' wiretap efforts, other technology 1FBI: Advanced Communications Technologies Pose Wiretapping Challenges (GAO0/IMTEC— 92-68BR, July 17, 1992). changes have made it more difficult for them to use traditional wiretap methods. While these agencies are still able to conduct most court-approved wiretaps, they have reported problems in effecting wiretaps. Further, they report that investigations were delayed or court orders simply were not pursued because of these problems. For example, the National Technical Investigators' Association, which represents over 3,000 federal, state, and local law enforcement officers engaged in technical investigative activities, reports that "it was almost two years after the introduction of Cellular Telephones before law enforcement had any means to intercept criminal activity conducted on cell phones."2 In addition, industry representatives told us that there are current and imminent technological situations that would be difficult to wiretap, even though they have not yet received wiretap court orders for those situations. Clearly, there is a need for action that will preserve law enforcement agencies' ability to conduct court-approved wiretaps. Because the details of law enforcement agencies' problems and the specific technological challenges are classified, I cannot elaborate on them in this hearing. However, I would be glad to arrange a separate classified discussion on those topics at your request. DEFINITION OF LAW ENFORCEMENT REQUIREMENTS HAS IMPROVED In 1992 we reported that law enforcement agencies had not sufficiently defined their wiretap requirements. Since then, the Federal Bureau of Investigation, in cooperation with other law enforcement personnel, has issued two documents one in July 1992 and an update in June 1994 describing their capability and capacity requirements. These documents represent considerable effort by law enforcement agencies to delineate their needs. The capability requirements, which include the timing and nature of information required from wiretaps, making the wiretap undiscernible to the subject of the wiretap, and the reliability and quality of service, are reasonably well defined. The capability requirements include key technical and operational conditions that are needed to conduct wiretaps, and they are often accompanied by helpful clarifications and examples. On the other hand, the capacity requirement, or quantity and geographic location of simultaneous wiretaps, is not yet precisely defined. Specifically, the June 1994 requirement document states that law enforcement agencies and industry will need to work together to determine the additional capacity that is needed to implement all lawful requests for wiretaps. COSTS HINGE ON EVOLVING LAW ENFORCEMENT REQUIREMENTS S. 2375 specifies that the Attorney General, subject to the availability of appropriations, shall reimburse telecommunications carriers for reasonable costs incurred in carrying out the provisions of the bill, and details the nature of the costs that can be reimbursed. The bill authorizes the appropriation of a total of $500 million for fiscal years 1995 through 1998, and authorizes the appropriation of such sums as needed to carry out the bill for fiscal years 1999 and beyond. However, it is virtually impossible to precisely estimate the reimbursement costs discussed in this bill because costs will depend on evolving law enforcement requirements. For example, even though the capability requirements are reasonably defined, much work remains for industry to identify technological alternatives that will satisfy those requirements across the various technologies. Further, industry must implement those alternatives, which will sometimes involve working with telephone equipment manufacturers. The costs associated with delivering these capabilities can vary widely depending on the technical approaches selected to satisfy the requirements. More significantly, costs could be affected by how the capacity requirements are defined. S. 2375 suggests basing capacity requirements on characteristics of equipment or service in place, number of subscribers, geographic location, and other factors. If law enforcement requirements demand capacity beyond what is available in current switch technology, then some technology redesign or replacement will be needed to attain the desired capacity levels. Under S. 2375, costs incurred in attaining the desired capacity levels will be subject to reimbursement by the government. These costs will vary greatly depending on how many of the approximately 20,000 land-line switches will need to be replaced to meet the capacity requirements once they are defined. 2 "Digital Telephony and Communications Privacy Act of 1994," National Technical Investigators' Association, April 1, 1994. Although we cannot precisely estimate total costs associated with this bill, an example may illustrate the way costs could vary. Industry estimates for switch upgrades ranged from $15,000 to about $100,000 per switch, depending on the extent of changes required to the switch hardware and software. In addition, there could be costs to deliver capabilities in technologies other than land-line switches. As a result of this imprecision, the ultimate total cost of meeting this bill's requirements could range from hundreds of millions to billions of dollars. LAW ENFORCEMENT AND INDUSTRY CAN TAKE STEPS TO CONTROL COSTS In conducting our discussions, we observed that industry and law enforcement representatives had made considerable progress in communicating with one another since our July 1992 report. Each demonstrated a better understanding of the technologies involved and of each others' concerns. This progress has been facilitated by their voluntary participation on the Electronic Communications Service Provider Committee sponsored by the Alliance for Telecommunications Industry Solutions. We support continued cooperation of law enforcement and industry representatives through this organization, as well as through other means, to identify and resolve problems. I would like to conclude my remarks with three observations that could help control costs. First, law enforcement and industry representatives should identify known solutions and communicate these to appropriate law enforcement and industry employees across the country. In our discussions with industry representatives, it was clear that some companies had solved problems using equipment that other companies thought was unavailable or were using methods that other companies had not considered. Working cooperatively, the government could avoid reimbursing industry for reinventing solutions that already exist. Second, law enforcement and industry representatives should work together to identify ways to prioritize and sequence development and deployment efforts needed to satisfy this bill's requirements, to ensure that costs are contained and the most critical law enforcement capability and capacity issues are addressed first. For example, if a switch replacement that is needed to meet a capacity requirement can coincide with a switch replacement to meet a carrier's business needs, then costs could be lowered. Finally, as provided for in S. 2375, law enforcement agencies need to work with industry to provide law enforcement requirements to the standard-setting organizations, which industry consults in designing telecommunications products and services. Alerting industry to these needs near the beginning of the product development cycle should help lower the costs of meeting law enforcement requirements. Mr. Chairman, this concludes my remarks. I would be happy to answer any questions you or members of the Subcommittees may have at this time. ATTACHMENT LIST OF ORGANIZATIONS CONTACTED BY GAO Telephone Service Providers AT&T Company, Bell Atlantic Corporation, BellSouth_Corporation, Motorola, NYNEX Corporation, Pacific Telesis Group, Southwestern Bell Corporation, United States Telephone Association, U.S. West Communications. Manufacturing and Research AT&T Company, Bell Communications Research, Motorola. Law Enforcement Federal Bureau of Investigation, International Association of Chiefs of Police, National Association of Attorneys General, National District Attorneys Association, National Security Council, National Technical Investigators' Association. Other Alliance for Telecommunications Industry Solutions. Senator LEAHY. Thank you. I would put in the record the letter I sent to Mr. Bowsher on March 24 of this year requesting the study that you are referring to. [The letter from Senator Leahy to Mr. Bowsher follows:] U.S. SENATE, COMMITTEE ON THE JUDICIARY, Mr. CHARLES A. BOWSHER, General Accounting Office, Washington, DC. DEAR MR. BOWSHER: I am writing as Chairman of the Senate Judiciary Subcommittee on Technology and the Law to request that the United States General Accounting Office review the Federal Bureau of Investigation's (FBI's) proposal to amend current wiretap laws to ensure law enforcement's capability to conduct courtauthorized electronic surveillance in light of advanced telecommunications technology. A copy of the FBI's proposed amendments is enclosed. This proposal differs from proposed legislation circulated by the FBI in 1992 that your office evaluated in a report, dated July 17, 1992. As part of your review, please evaluate the following aspects of the proposal: 1) Effect of Proposal on Embedded Telecommunications Systems-Under the proposal, common carriers must ensure the government's ability to isolate and get concurrent content information “notwithstanding the mobile nature" of the targeted communications or other features used by the subscriber. Please evaluate the extent to which this requirement may force redesigns of the cellular telephone system and current designs for emerging personal communications services (PCS) and other radio frequency-based mobile communications services to permit court-authorized wiretapping. Please include in your evaluation whether redesigns of these systems and services to guarantee wiretapping capability will be as efficient and cost-effective for consumers. 2) Cost-Under the FBI's proposal, the government will reimburse common carriers for reasonable and cost-effective charges incurred to comply with new requirements within three years after enactment. The FBI estimates that the cost of retrofitting current telecommunications systems and equipment to meet the proposed requirements is about $500 million, but industry disputes this figure as too low. Please evaluate the estimated cost of modifying existing networks, services, and features to comply with the FBI's proposed requirements over the next three years, and the costs of incorporating these requirements into future designs for networks, services, and features. 3) Enforcement Mechanisms-The FBI's proposal empowers the Attorney General to enforce law enforcement's wiretapping requirements by seeking injunctive relief, $10,000 per day in civil penalties, and by consulting with the Federal Communications Commission for additional sanctions or fines. The proposed requirements are absolute and contain no flexibility for reasonable efforts to comply. Please evaluate whether, because of the penalties, this proposal will effectively give the Attorney General the ability to veto new telecommunications systems or features. If you have any questions, please do not hesitate to contact Beryl A. Howell at 202-224-3406. Thank you for your prompt attention to this matter. Sincerely, PATRICK J. LEAHY, U.S. Senator. Senator LEAHY. I would note regarding the cost estimates for switches, that we should not lose sight of the fact that as technology changes, and it is changing very rapidly in telecommunications, some of these switches would change anyway. It is not simply a case of assuming that under the bill every single switch has to be replaced overnight. Ms. EDWARDS. That is right. Senator LEAHY. I think you made that point clear, that as technology changes and switches are being replaced for whatever reason, such as changes in technology, wear, or anything else, this should be taken into consideration. Mr. Neel, I am delighted to have you here. You and I have worked on telecommunications, privacy and other issues for a long, long time. I am glad to have you here. STATEMENT OF ROY M. NEEL, PRESIDENT, U.S. TELEPHONE ASSOCIATION Mr. NEEL. Thank you, Mr. Chairman. Like Director Freeh and others, I want to thank you and Chairman Edwards and your able staffs in working so hard on this. There has been a lot of time devoted to it. It has been a difficult balancing act and your staff has really done a Herculean job trying to figure all these things out. It is true that this legislation that you have introduced is a significant improvement over the original administration proposal, particularly in the areas of extending the transition period to 4 years, requiring that the Government reimburse carriers in perpetuity for the costs of expanding capacity to meet law enforcement's needs, improvements in the reasonableness standards, and a number of the privacy considerations. These are all important improvements and we appreciate that. But as I testified in March, we are still not sure that this kind of legislation is really necessary, beyond, of course, appropriating the kinds of funds that will be necessary for law enforcement to purchase the technical capacity and capabilities from the telecommunications carriers. Law enforcement authorities already tell us they have the authority to force communications carriers to make these transmissions wiretappable, and as many have said, we have been working with Government to try to figure out these technical solutions. In fact, whether this legislation becomes law or not, this kind of cooperative effort will have to continue. I think it is important to remember the history of this relationship. We understand there are only about 1,000 court-ordered wiretaps a year, about half of these in New York City's metropolitan area alone, and about a quarter of them involving cellular technology, and half of those in only two States. So the incidence of the demand here is somewhat isolated. We are concerned that this legislation would create a ubiquitous demand for this technology throughout the country, affecting all manner of compliance problems for telephone companies where there have never been wiretap requests. Contrary to the testimony, or at least somewhat different from the testimony of the Director, we don't know of any instances where our companies, where telephone companies, have refused to assist law enforcement to accomplish a legal wiretap order. His testimony indicates that they found 183 instances where there have been problems. We may just disagree on the semantics involved. We would very much like to see that list and those examples and try to help work through them, if possible. Moreover, our companies spend a great deal of money routinely complying with law enforcement requests with no reimbursement. One of our companies alone in an area with only moderate requests spends well over $3.5 million a year routinely meeting these requests. |