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Current issue : #38 | Release date : 1992-04-26 | Editor : Dispater
Phrack LoopbackDispater & Phrack Staff
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The Digital Telephony ProposalFBI
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PWN/Part 1Datastream Cowboy
PWN/Part 2Datastream Cowboy
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Title : The Digital Telephony Proposal
Author : FBI
                                ==Phrack Inc.==

                 Volume Four, Issue Thirty-Eight, File 11 of 15

                         The Digital Telephony Proposal

                     by the Federal Bureau of Investigation

 Phone Tapping Plan Proposed                                      March 6, 1992
 By Associated Press

               Law Enforcement Agencies Would Have Easier Access

WASHINGTON -- The Bush administration wants you to pay a little more for
telephone service to make it easier for the FBI or local police to listen in on
the conversations of suspected criminals.

The Justice Department is circulating a proposal in Congress that would force
telephone companies to install state-of-the-art technology to accommodate
official wiretaps.  And it would authorize the Federal Communications
Commission to grant telephone companies rate increases to defray the cost.

A copy of the legislation was obtained by The Associated Press.

Attorney General William Barr discussed the proposal last week with Senator
Ernest Hollings, D-S.C., chairman of the Senate Commerce Committee, which
oversees the FCC according to congressional sources who spoke on condition of

Justice Department spokesman Paul McNulty refused to comment on the proposal.

The bill was drafted by the FBI and the Justice Department in response to
dramatic changes in telephone technology that make it difficult for traditional
wiretapping methods to pick up conversations between two parties on a telephone

The Justice Department's draft proposal states that the widespread use of
digital transmission, fiber optics and other technologies "make it increasingly
difficult for government agencies to implement lawful orders or authorizations
to intercept communications in order to enforce the laws and protect the
national security."

The FBI has already asked Congress for $26.6 million in its 1993 fiscal year
budget to help finance a five-year research effort to help keep pace with the
changes in telephone technology.

With the new technology that is being installed nationwide, police can no
longer go to a telephone switching center and put wiretap equipment on
designated lines.

The advent of so-called digital transmission means that conversations are
broken into bits of information and sent over phone lines and put back together
at the end of the wire.

The bill would give the FCC 180 days to devise rules and standards for
telephone companies to give law enforcement agencies access to conversations
for court-ordered wiretapping.

The attorney general would be empowered to require that part of the rulemaking
proceedings would be closed to the public, to protect the security of
eavesdropping techniques used by law enforcement.

Phone companies would have 180 days to make the necessary changes once the FCC
issues the regulations.

The bill would prohibit telephone companies and private exchanges from using
equipment that doesn't comply with the new FCC technology standards.

It would give the attorney general power to seek court injunctions against
companies that violate the regulations and collect civil penalties of $10,000 a

It also would give the FCC the power to raise telephone rates under its
jurisdiction to reimburse carriers.  The FCC sets interstate long distance
rates and a monthly end-user charge -- currently $2.50 -- that subscribers pay
to be connected to the nationwide telephone network.

Telephone companies will want to examine the proposal to determine its impact
on costs, security of phone lines and the 180-day deadline for implementing the
changes, said James Sylvester, director of infrastructure and privacy for Bell

Though no cost estimates were made available, Sylvester estimated it could cost
companies millions of dollars to make the required changes.  But rate hikes for
individual customers would probably be quite small, he said.

 As Technology Makes Wiretaps More Difficult, F.B.I. Seeks Help   March 8, 1992
 By Anthony Ramirez (New York Times)(Page I12)

The Department of Justice says that advanced telephone equipment in wide use
around the nation is making it difficult for law-enforcement agencies to
wiretap the phone calls of suspected criminals.

The Government proposed legislation requiring the nation's telephone companies
to give law-enforcement agencies technical help with their eavesdropping.
Privacy advocates criticized the proposal as unclear and open to abuse.

In the past, the Federal Bureau of Investigation and other agencies could
simply attach alligator clips and a wiretap device to the line hanging from a
telephone pole.  Law-enforcement agents could clearly hear the conversations.
That is still true of telephone lines carrying analog transmissions, the
electronic signals used by the first telephones in which sounds correspond
proportionally to voltage.

But such telephone lines are being steadily replaced by high-speed, high-
capacity lines using digital signals.  On a digital line, F.B.I. agents would
hear only computer code or perhaps nothing at all because some digital
transmissions are over fiber-optic lines that convert the signals to pulses of

In addition, court-authorized wiretaps are narrowly written.  They restrict the
surveillance to particular parties and particular topics of conversation over a
limited time on a specific telephone or group of telephones.  That was
relatively easy with analog signals.  The F.B.I. either intercepted the call or
had the phone company re-route it to an F.B.I. location, said William A. Bayse,
the assistant director in the technical services division of the F.B.I.

But tapping a high-capacity line could allow access to thousands of
conversations.  Finding the conversation of suspected criminals, for example,
in a complex "bit stream" would be impossible without the aid of phone company

There are at least 140 million telephone lines in the country and more than
half are served in some way by digital equipment, according to the United
States Telephone Association, a trade group.  The major arteries and blood
vessels of the telecommunications network are already digital.  And the
greatest part of the system, the capillaries of the network linking central
telephone offices to residences and businesses, will be digital by the mid-

Thousand Wiretaps

The F.B.I. said there were 1,083 court-authorized wiretaps -- both new and
continuing -- by Federal, state, and local law-enforcement authorities in 1990,
the latest year for which data are available.

Janlori Goldman, director of the privacy and technology project for the
American Civil Liberties Union, said she had been studying the development of
the F.B.I. proposal for several months.

"We are not saying that this is not a problem that shouldn't be fixed," she
said, "but we are concerned that the proposal may be overbroad and runs the
risk that more information than is legally authorized will flow to the F.B.I.

In a news conference in Washington on Friday, the F.B.I. said it was seeking
only to "preserve the status quo" with its proposal so that it could maintain
the surveillance power authorized by a 1968 Federal law, the Omnibus Crime
Control and Safe Streets Act.  The proposal, which is lacking in many details
is also designed to benefit state and local authorities.

Under the proposed law, the Federal Communications Commission would issue
regulations to telephone companies like the GTE Corporation and the regional
Bell telephone companies, requiring the "modification" of phone systems "if
those systems impede the Government's ability to conduct lawful electronic

In particular, the proposal mentions "providers of electronic communications
services and private branch exchange operators," potentially meaning all
residences and all businesses with telephone equipment.

Frocene Adams, a security official with US West in Denver is the chairman of
Telecommunications Security Association, which served as the liaison between
the industry and the F.B.I.  "We don't know the extent of the changes required
under the proposal," she said, but emphasized that no telephone company would
do the actual wiretapping or other surveillance.

Computer software and some hardware might have to be changed, Ms. Adams said,
but this could apply to new equipment and mean relatively few changes for old

 FBI Wants To Ensure Wiretap Access In Digital Networks           March 9, 1992
 Taken from Communications Daily (Page 1)

Proposed legislation being floated by Justice Dept. and FBI would require RHCs
and equipment manufacturers to reengineer their products so that federal, state
and local law enforcement agencies could wiretap digital communications systems
of all types, Bureau said.  The proposal is a "collaborative effort" at
"highest levels" involving law enforcement officials, government agencies,
telephone executives and equipment manufacturers, said John Collingwood of
FBI's office for legislative affairs.  It seeks to authorize FCC to grant
telcos rate increases to defray the cost of reengineering the network to bring
it into compliance.

Associated Press reported Attorney General William Barr discussed the proposal
last week with Sen. Hollings (D.-S.C.), chairman of Senate Commerce Committee;
however, Committee staffers wouldn't comment.  Sources at FCC said they hadn't
heard of the proposal, and neither had several RHCs we contacted.

The bill was drafted by FBI and Department in response to what FBI Director
William Sessions said were dramatic changes in telephone technology that have
"outpaced" government ability to "technologically continue" its wiretapping
activities.  James Kallestrom, FBI's chief of technical services section, said
the bill wouldn't extend the Bureau's "court-authorized" electronic
surveillance authority, but would seek simply to maintain status quo with
digital technology.  New legislation is needed because law enforcement agencies
no longer can go into a switching center and place a tap on single phone line,
owing to complex digital multiplexing methods that often route number and voice
signals over different channels.  Kallestrom said digital encoding also doesn't
allow specific wiretap procedures, unlike analog systems, which use wave forms.
Bureau wants telephone companies and equipment manufacturers to "build in" the
ability to "give us what we want."  He said legislation wouldn't mandate how
companies comply, only that they do.  William Bayse, chief of FBI's Technical
Services Division, said the reengineering process would be "highly complex" but
could be done at the software level.

The FBI said it has been in contact with all telcos and "several" equipment
manufacturers to get their input to determine feasibility.  Bayse said FBI had
done preliminary cost analysis and estimated changes would run into "tens of
millions," declining to narrow its estimates further.  The bill would give FCC
the authority to allow RHCs to raise rates in order to make up the costs of
implementing the new procedures.  Although FBI didn't have any specifics as to
how FCC would go about setting those rates, or whether state PUCs would be
involved in the process, they speculated that consumer telephone rates wouldn't
go up more than 20 cents per month.

The bill would give FCC 120 days to devise rules and standards for telcos to
bring the public network into compliance.  However, the Commission isn't a
standards-making body.  When questioned about the confusing role that the bill
would assign to FCC, FBI's Collingwood said:  "The FCC is the agency that deals
with phone companies, so we put them in charge."  He acknowledgedn that the
bill "needs work" but said the FBI was "surprised" by the leak to press.
However, he said that the language was in "very early stages" and that FBI
wasn't averse to any changes that would bring swifter passage.

Other confusing aspects of proposal:  (1) Short compliance time (120 days)
seems to bypass FCC's traditional rulemaking procedures, in which the public is
invited to submit comments; (2) No definition is given for "telecommunications
equipment or technology;" (3) Provision that the attorney general direct that
any FCC proceeding concerning "regulations, standards or registrations issued
or to be issued" be closed to the public again would violate public comment

FBI said legislation is the "least costly alternative" in addressing the issue.
It said software modifications in equipment now would save "millions of
dollars" over making changes several years from now.  However, the agency
couldn't explain how software programming changes grew more expensive with
time.  FBI's Kallestrom said:  "Changes made now can be implemented easier over
time, rather than having to write massive software changes when the network
gets much more complicated."  FBI already has asked Congress for $26.6 million
in its proposed 1993 budget to help finance a 5-year research effort to help
keep pace with changes in telephone technology.  Asked why that money couldn't
be used to offset the price of government-mandated changes as the bill would
require, FBI declined to comment, saying:  "We may look at having government
offset some of the cost as the bill is modified."

 CPSR Letter on FBI Proposal                                      March 9, 1992
 By David Banisar (CPSR) <banisar@washofc.cpsr.org>

CPSR and several other organizations sent the following letter to Senator
Patrick Leahy regarding the FBI's recent proposal to undertake wire
surveillance in the digital network.

If you also believe that the FBI's proposal requires further study at a public
hearing, contact Senator Hollings at the Senate Committee on Commerce.  The
phone number is (202)224-9340.

Dave Banisar,
CPSR Washington Office

March 9, 1992

Chairman Patrick Leahy
Senate Subcommittee on Law and Technology
Committee on the Judiciary
United States Senate
Washington, DC  20510

Dear Senator Leahy,

     We are writing to you to express our continuing interest in communications
privacy and cryptography policy.  We are associated with leading computer and
telecommunication firms, privacy, civil liberties, and public interest
organizations, as well as research institutions and universities.  We share a
common concern that all policies regarding communications privacy and
cryptography should be discussed at a public hearing where interested parties
are provided an opportunity to comment or to submit testimony.

     Last year we wrote to you to express our opposition to a Justice
Department sponsored provision in the Omnibus Crime Bill, S. 266, which would
have encouraged telecommunications carriers to provide a decrypted version of
privacy-enhanced communications.  This provision would have encouraged the
creation of "trap doors" in communication networks.  It was our assessment that
such a proposal would have undermined the security, reliability, and privacy of
computer communications.

     At that time, you had also convened a Task Force on Privacy and Technology
which looked at a number of communication privacy issues including S. 266.  The
Task Force determined that it was necessary to develop a full record on the
need for the proposal before the Senate acted on the resolution.

     Thanks to your efforts, the proposal was withdrawn.

     We also wish to express our appreciation for your decision to raise the
issue of cryptography policy with Attorney General Barr at his confirmation
hearing last year.  We are pleased that the Attorney General agreed that such
matters should properly be brought before your Subcommittee for consideration.

     We write to you now to ask that you contact the Attorney General and seek
assurance that no further action on that provision, or a similar proposal, will
be undertaken until a public hearing is scheduled.  We believe that it is
important to notify the Attorney General at this point because of the current
attempt by the administration to amend the Federal Communications Commission
Reauthorization Act with provisions similar to those contained in S. 266.

     We will be pleased to provide assistance to you and your staff.

Sincerely yours,

Marc Rotenberg,
Computer Professionals for Social Responsibility

David Peyton,

Ira Rubenstein,

Jerry Berman,
Electronic Frontier Foundation

Michael Cavanaugh,
Electronic Mail Association

Martina Bradford,

Evan Hendricks,
US Privacy Council

Professor Dorothy Denning,
Georgetown University

Professor Lance Hoffman,
George Washington University

Robert L. Park,
American Physical Society

Janlori Goldman,
American Civil Liberties Union

Whitfield Diffie,
Sun Microsystems

John Podesta,
Podesta and Associates

Kenneth Wasch,
Software Publishers Association

John Perry Barlow,
Contributing Editor, Communications of the ACM

David Johnson,
Wilmer, Cutler & Pickering

cc: Senator Joseph R. Biden, Jr
    Senator Hank Brown
    Senator Ernest F. Hollings
    Senator Arlen Specter
    Senator Strom Thurmond
    Representative Don Edwards
    Attorney General Barr
    Chairman Sikes, FCC

 FBI, Phone Firms in Tiff Over Turning on the Taps               March 10, 1992
 By John Mintz (Washington Post)(Page C1)

                    Technology Has Made Eavesdropping Harder

The FBI says technology is getting ahead of taps.

The bureau says the digital technology in new telephone networks is so
complicated -- it translates voices into computerized blips, then retranslates
them into voices at the other end -- that agents can't capture conversations.

So the FBI wants a law requiring phone companies to re-engineer their new phone
networks so the taps work again.

But the phone companies warn that the proposal could raise ratepayers' monthly

And civil liberties groups say the technological changes sought by the FBI
could have an unintended effect, making it easier for criminals, computer
hackers and even rogue phone company employees to tap into phone networks.

"We have grave concerns about these proposals," said Jim McGann, a spokesman
for AT&T.  "They would have the effect of retarding introduction of new
services and would raise prices."

Bell Atlantic Corporation, owner of Chesapeake & Potomac Telephone Company
here, said the changes could cost its own ratepayers as much as hundreds of
millions of dollars.

The cause of the FBI's concern is a new generation of digital technologies in
which phone conversations are translated into the computer language of zeroes
and ones, then bundled with other conversations for speedy transmission, and
finally retransformed into voices.

Another problem for the FBI is fiber-optic technology, in which conversations
are changed into pulses of light zapped over hair-thin strands of glass.  The
U.S. government has delayed sales of fiber-optic equipment to the former Soviet
Union because of the difficulty of tapping it.

The FBI proposed a law requiring phone companies to modify their networks to
make wiretaps easier.  The agency would still have to obtain a court order to
tap a line, as it does now.  It also proposed allowing the Federal
Communications Commission to let the phone companies pass the costs on to
consumers and letting the FCC consider the issues in closed-door hearings to
keep secret the details of phone system security.

"Without an ultimate solution, terrorists, violent criminals, kidnappers, drug
cartels and other criminal organizations will be able to carry out their
illegal activities using the telecommunications system without detection," FBI
Director William S. Sessions said in a prepared statement.  "This proposal is
critical to the safety of the American people and to law enforcement officers."

In the past, investigators would get the phone company to make adjustments at
switching facilities, or would place taps at junction boxes -- hard metal
structures on concrete blocks in every neighborhood -- or even at telephone
junction rooms in the basements of office and apartment buildings.

But sometimes tappers get only bursts of electronic blipping.  The FBI said the
new technologies have defeated wiretap attempts on occasion -- but it declined
to provide details.

To get the blips retranslated back into conversation, tappers have to place
their devices almost right outside the targeted home or office.  Parking FBI
trucks outside targets' houses "could put agents in danger, so it's not
viable," said Bell Atlantic spokesman Kenneth A. Pitt.

"We don't feel our ratepayers should pay that money" to retool networks, said
Bill McCloskey, spokesman for BellSouth Corporation, a major phone company
based in Atlanta.

Since there are 150 million U.S. phone lines, a cost of $ 1 billion that's
passed on to ratepayers could translate into about $ 6.60 per consumer,
industry officials said.

Rather than charge ratepayers, Pitt said, the government should pay for the
changes.  Bell Atlantic prefers continued FBI and industry talks on the subject
to a new law.

The FBI proposes that within 120 days of enactment of the law it seeks, the FCC
would issue regulations requiring technological changes in the phone system and
that the modifications be made 60 days after that.  The FCC rarely moves on
even the simplest matter in that time, and this could be one of the most
complex technological questions facing the government, congressional and
industry sources said.

Given the huge variety of technologies that could be affected -- regular phone
service, corporate data transmissions, satellite and microwave communications,
and more -- one House staffer said Congress "will have to rent RFK Stadium" to
hold hearings.

Marc Rotenberg, a lawyer who has attended meetings with FBI and phone company
officials on the proposal, said the FBI, by taking the issue to congressional
communications committees, is trying to make an end run around the judiciary

Last year, the Senate Judiciary Committee, responding to civil libertarians'
protests, killed an FBI proposal to require that encrypted communications --
such as banks' secret data transmissions -- be made available in decoded form.

Representative Edward J. Markey (D-Mass.), who chairs the House subcommittee
handling the latest FBI proposal, said the plan has troubling overtones of "Big
Brother" about it.

 Let's Blow the Whistle on FBI Phone-Tap Plan                    March 12, 1992
 Editorial taken from USA Today (Page 6A)

OUR VIEW - Congress should disconnect this unneeded and dangerous eavesdropping
scheme as soon as possible

The FBI -- lambasted in the past for wiretapping and amassing files on
thousands of "subversives" such as Martin Luther King -- seems determined to
prove that consistency is a virtue.

The Bureau wants phone companies to make costly changes that critics say could
let agents eavesdrop on your phone calls without detection -- and boost your
phone bill to pay for it.

The FBI says that this new law is needed because it can't wiretap all calls
transmitted with the new digital technology.  It also wants the public barred
when it explains all this to Congress.

Wisely, lawmakers show signs of balking.  They're already preparing for high-
profile hearings on the proposal.

Congress, though, should go much further.  It should pin the FBI's wiretap plan
to the wall and use it for target practice.  Here are just a few of the spots
at which to take aim:

     *Rights:  The FBI says it is still would get court approval before
               tapping, but experts say if the agency gets its way, electronic
               eavesdropping would be far easier and perhaps untraceable.  The
               FBI's plan, they say, could make a mockery of constitutional
               rights to privacy and against unreasonable searches.

     *Need:    Some phone companies say they are already meeting FBI wiretap
               requirements and question whether the agency really needs a new
               law -- or just would find it convenient.  The FBI says it can't
               tap some digital transmissions -- but it hasn't given any

     *Honesty: The FBI tried to evade congressional review by financing its
               plan with a charge to phone users.

The bureau must have realized the reception this shady scheme could expect:  It
tried to slip it though Congress' side door, avoiding the committees that
usually oversee FBI operations.

Over the decades, wiretaps have proved invaluable in snaring lawbreakers.  Used
selectively and restrained by judicial oversight, they're a useful weapon,
especially against organized crime.

But if catching gangsters never should take precedence over the rights the
Constitution guarantees the citizens who try to follow the law, not break it.

 Back to Smoke Signals?                                          March 26, 1992
 An editorial from The Washington Post

The Justice Department spent years in court breaking up the nation's
telecommunications monopoly in order to foster competition and technological
advances.  Now the same department has gone to Congress asking that
improvements in telecommunications technology be halted, and in some cases even
reversed, in the name of law enforcement.  The problems facing the FBI are
real, but the proposed solution is extreme and unacceptable on a number of

Wiretaps  are an important tool in fighting crime, especially the kind of
large-scale, complicated crime -- such as drug conspiracies, terrorism and
racketeering -- that is the responsibility of the FBI.  When they are installed
pursuant to court order, taps are perfectly legal and usually most productive.
But advances in phone technology have been so rapid that the government can't
keep up.  Agents can no longer just put a tap on phone company equipment a few
blocks from the target and expect to monitor calls.  Communications occur now
through regular and cellular phones via satellite and microwave, on fax
machines and computers.  Information is transmitted in the form of computer
digits and pulses of light through strands of glass, and none of this is easily
intercepted or understood.

The Justice Department wants to deal with these complications by forbidding
them.  The department's proposal is to require the Federal Communications
Commission to establish such standards for the industry "as may be necessary to
maintain the ability of the government to lawfully intercept communications."
Any technology now in use would have to be modified within 180 days, with the
costs passed on to the rate payers.  Any new technology must meet the
suitable-for-wiretap standard, and violators could be punished by fines of
$10,000 a day.  As a final insult, commission proceedings concerning these
regulations could be ordered closed by the attorney general.

The civil liberties problems here are obvious, for the purposeful designing of
telecommunications systems that can be intercepted will certainly lead to
invasions of privacy by all sorts of individuals and organizations operating
without court authorization.  Further, it is an assault on progress, on
scientific endeavor and on the competitive position of American industry.  It's
comparable to requiring Detroit to produce only automobiles that can be
overtaken by faster police cars.  And it smacks of repressive government.

The proposal has been drafted as an amendment rather than a separate bill, and
there is some concern that it will be slipped into a bill that has already
passed one house and be sent quietly to conference.  That would be
unconscionable.  We believe, as the industry suggests, that the kind of
informal cooperation between law enforcement agencies and telecommunications
companies that has always characterized efforts in the past, is preferable to
this stifling legislation. But certainly no proposal should be considered by
Congress without open and extensive hearings and considerable debate.

 The FBI's Latest Idea: Make Wiretapping Easier                  April 19, 1992
 By Anthony Ramirez (New York Times)(Section 4, Page 2)

Civil libertarians reacted quickly last month when the Federal Bureau of
Investigation proposed new wiretapping legislation to cope with advanced
telephone equipment now being installed nationwide.

The FBI, which has drafted a set of guidelines, but has as yet no sponsor in
Congress, said the latest digital equipment was so complicated it would hinder
the agency's pursuit of mobsters, terrorists and other criminals.  But civil
liberties groups like the American Civil Liberties Union, joined by several
major telephone companies like American Telephone and Telegraph Company,
described the proposal as unclear, open to abuse and possibly retarding the
pace of technological innovation.

Civil libertarians fear a shift from a world where wiretaps are physically
onerous to install, therefore forcing the FBI to think twice about their use,
to a world where surveillance is so easy that a few pecks on an FBI key pad
would result in a tap of anyone's telephone in the country.

The inventive computer enthusiasts who call themselves hackers are also calling
the legislation unnecessary. If teenagers can quickly cope with such equipment,
they argue, so can the FBI.

"The easier it is to use, the easier it is to abuse," said Eric Corley, editor
of 2600 magazine, a quarterly publication "by and about computer hackers."

According to the FBI, in 1990, the latest year for which data are available,
there were 1,083 court-authorized wiretaps -- both new and continuing -- by
Federal, state and local law-enforcement authorities. Robert Ellis Smith,
publisher of Privacy Journal, said the relatively small number of wiretaps
reflects the difficulty of obtaining judicial permission and installing the
devices. Moreover, he said, many cases, including the John Gotti case, were
solved with eavesdropping devices planted in rooms or on an informant.

Besides, Mr. Smith said, complicated digital equipment shares similarities with
obstacles free of technology.  "Having a criminal conversation on a digital
fiber-optic line," he said, "is no different from taking a walk in the park and
having the same conversation."  And no one, he added, would think of requiring
parks to be more open to electronic surveillance.

At issue are the latest wonders of the telecommunications age -- digital
transmission and fiber-optic cables. In the standard analog transmission,
changes in electrical voltage imitate the sound of a human voice.  To listen
in, the FBI and other agencies attach a device to a line from a telephone pole.

A Computer Hiss or Nothing

Today phone systems are being modernized with high-speed, high-capacity digital
lines in which the human voice is converted into computer code.  Moreover, a
fiber-optic line in digital mode, which carries information as pulses of light,
carries not only clear conversations but a myriad of them.  Using a wiretap on
a digital line, FBI agents would hear only a computer hiss on a copper cable,
nothing at all on a fiber-optic line.

There are at least 140 million telephone lines in the country, and more than
half are served in some way by digital equipment, according to the United
States Telephone Association, a trade group.  However, less than 1 percent of
the network is fiber optic.

The legislation proposed by the FBI would, in effect, require the licensing of
new telephone equipment by the Federal Government so the agency could wiretap
it.  Telephone companies would have to modify computers and software so that
agents could decipher the digital bit stream.  The cost of the modification
would be passed on to rate payers.

"Phone companies are worried about the sweep of this legislation," said Jerry
Berman,  director of the Electronic Frontier Foundation, who solicited the
support of the phone companies for a protest letter to Congress.  By requiring
the FCC to clear new technology, innovation could be slowed, he said.  "We're
not just talking about just local and long-distance calls," Mr. Berman said.
"We're talking about CompuServe, Prodigy and other computer services,
electronic mail, automatic teller machines and any change in them."

Briefcase-Size Decoders

One telecommunications equipment manufacturer said he was puzzled by the FBI
proposal.  "The FBI already has a lot of technology to wiretap digital lines,"
he said, on condition of anonymity.

He said four companies, including such major firms as Mitel Corporation, a
Canadian maker of telecommunications equipment, can design digital decoders to
convert computer code back into voice.  A portable system about the size of a
large briefcase could track and decode 36 simultaneous conversations.  A larger
system, the size of a small refrigerator, could follow up to 1,000
conversations.  All could be done without the phone company.

James K. Kallstrom, the FBI's chief of technology, acknowledged that the agency
was one of Mitel's largest customers, but said the equipment hackers and others
describe would be "operationally unfeasible."

The FBI was more worried about emerging technologies like personal
communications networks and services like call forwarding.  "Even if we used
the equipment the hackers say we should use," Mr. Kallstrom said, "all a
criminal would have to do is call-forward a call or use a cellular telephone or
wireless data transfer to defeat me."
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