LAW OFFICES OF THOMAS K. CROWE, P.C.

LEGAL AND CONFIDENTIAL

Clients and Interested Parties:

On May 12, 2006, the FCC released a Second Report and Order and Memorandum Opinion and Order (“VoIP CALEA Second R&O”) addressing implementation of the Communications Assistance for Law Enforcement Act (“CALEA”) by interconnected VoIP providers.  In September, 2005, the FCC released an order (“VoIP CALEA Order”) determining that CALEA requirements would apply to such providers, but left determinations regarding implementation to last week’s ruling.  Pursuant to the new VoIP CALEA Second R&O, interconnected VoIP providers must be CALEA compliant by May 14, 2007. 

In the interim, and as discussed further below, the FCC also requires that monitoring reports and CALEA system security plans be filed by interconnected VoIP providers.  The system security plans are due within 90 days after the effective date of the order, meaning that interconnected VoIP providers will most likely be expected to file them before late September or early October.   The FCC’s ruling also applies to facilities based broadband Internet access providers and contains determinations that apply to all carriers subject to CALEA. 

Background

Section 103 of CALEA imposes specific obligations on "telecommunications carriers" (as defined under CALEA and which already includes wireline, wireless and other carriers) for assisting law enforcement, including with respect to 1) call intercept; 2) accessing call identifying information; 3) delivering intercepted communications and call identifying information to the government; and 4) doing so with a minimum of interference to subscriber service and privacy.

In the VoIP CALEA Order, the FCC affirmed its tentative conclusion that the definition of “telecommunications carrier” under CALEA is more inclusive than the definition of the same term in the Communications Act of 1934.  CALEA is different because, under a concept known as the “Substantial Replacement Provision (“SRP”),” some information services can be treated as telecommunications services if the service replaces a substantial portion of the local telephone exchange. 

The FCC used the SRP to extend CALEA to “interconnected VoIP providers.”  “Interconnected VoIP services” are those VoIP services that: 1) enable real-time, two-way voice communications; 2) require a broadband connection; 3) require IP-compatible customer equipment; and 4) permit subscribers to receive calls from and initiate calls over the PSTN.  

CALEA Safe Harbor

For carriers already subject to the CALEA requirements (which, as indicated above, generally includes wireline, wireless and other carriers), the safest and easiest way to comply is to implement the accepted industry standard.  Although carriers do not have to use the standard, compliance with the standard is a “safe harbor” under which a carrier will be deemed to have complied with CALEA requirements.  The FCC imposed the same approach for the extension of CALEA requirements to interconnected VoIP providers and determined that it would leave technical compliance to the standards-setting bodies. 

Pursuant to the VoIP CALEA Second R&O, interconnected VoIP providers (and other carriers) may also use the services of a trusted third party (“TTP”) to comply with CALEA.  The TTP would “operate as a service bureau with a system that has access to a carrier’s network equipment and remotely manage the intercept process for the carrier.”  The TTP process is permitted but not required, and it should be noted that the interconnected VoIP provider remains responsible for all CALEA compliance requirements.    

Monitoring Reports

The FCC determined that all interconnected VoIP providers must file a monitoring report with the FCC demonstrating the actions the company has taken towards CALEA compliance and establishing a date that compliance is anticipated.  Once the Office of Management and Budget approves the paperwork collection requirement, the FCC will issue a public notice setting a deadline for these monitoring reports. 

CALEA System Security Reports

All telecommunications carriers subject to CALEA are required to develop and file with the FCC a CALEA system security plan.  Pursuant to the VoIP CALEA Second R&O, interconnected VoIP providers will be required to file such a plan within 90 days of the effective date of the order.  The effective date is 30 days after publication in the Federal Register.  Publication is likely to occur by the end of this month or the first week of June, which means that the CALEA system security plan submissions should be due before late September or early October, 2006.    

The system security plan includes company policies and procedures for providing call interception and access to call-identifying information only pursuant to lawful request; maintaining adequate records; and meeting the reporting requirements.   The system security plan also identifies a senior officer responsible for such company policies and procedures, recordkeeping and reporting.  The FCC can assess a monetary penalty against any provider that fails to file a system security plan.

Enforcement

In the VoIP CALEA Second R&O, the FCC established its independent enforcement authority (including monetary penalties and cease and desist orders) over interconnected VoIP providers (as well as other carriers) to implement CALEA.  The FCC determined that it may enforce its existing rules to ensure CALEA compliance. 

CALEA Surcharge

The FCC declined to adopt a national surcharge to recover CALEA costs.  However, interconnected VoIP providers (as well as other carriers not subject to rate regulation) may recover CALEA-related costs from their customers through any lawful manner.  For example, interconnected VoIP providers may recover these costs through a surcharge as many carriers do for the Universal Service Fund. 

Section 107 Extensions

Section 107(c) of CALEA provides for limited time extensions when compliance with the assistance capability requirements is not “reasonably achievable” before the deadline.  However, among other things, the FCC determined in the VoIP CALEA Second R&O that this section may not be used by interconnected VoIP providers (or other carriers) seeking extensions for equipment, facilities, and services deployed on or after October 25, 1998 (the effective date of CALEA). 

Section 109 Cost Recovery

The FCC established a high burden of proof in order to impose the cost of CALEA compliance on the Department of Justice.  An interconnected VoIP provider (or other carrier) must file a petition demonstrating that it has examined all possible solutions and that all solutions would impose a “significant difficulty or expense.”  If the FCC is aware of any CALEA solution that the interconnected VoIP provider has not considered and addressed in its petition, the FCC will dismiss the petition as insufficient.

CALEA Rules Consolidation

The FCC determined that it should consolidate its CALEA rules into Part 1 of the Code of Federal Regulations.  Currently the rules are contained in three different Parts of the FCC’s rules.   The new, consolidated CALEA rules are attached to this legal alert and will take effect 30 days after publication of the VoIP CALEA Second R&O in the Federal Register (which, as indicated above, should occur at the end of May or first week of June). 

Please feel free to contact us if you have any questions or if we can be of any assistance to you. 

fcc.Consolidated CALEA Rules.5.16.06.pdf
 

Thomas K. Crowe, President "firm@tkcrowe.com"
Joshua T. Guyan, Staff Attorney, Admitted only in Virginia, 2004. District of Columbia application pending. (Supervised by Thomas K. Crowe, a member of the District of Columbia bar).
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