RENO THREATENS LEGAL BATTLE TO ENSURE ELECTRONIC SURVEILLANCE

Attorney General Janet Reno yesterday threatened a legal battle with the
telecommunications industry to ensure that law enforcement can conduct
electronic surveillance in the digital age.

Reno said that after nearly three years of negotiations, the Justice
Department had reached an impasse with industry representatives over what
kinds of modifications to communications technology are necessary to ensure
wiretapping abilities and whether the government or industry would pay for
them.

Unless the deadlock can be broken, Reno said, the department will ask the
Federal Communications Commission on March 13 to set new standards for all
telephone networks so that local, state and federal law enforcement agencies
have the wiretapping capabilities they feel are necessary for the successful
surveillance and prosecution of criminals.

"Unfortunately, if we are pressed to take this step, we will avail ourselves
of all lawful mechanisms available," said Reno in an unusually combative
statement during a hearing by a House Appropriations subcommittee.

Justice Department and industry officials said the matter could end up in
court if no negotiated agreement is possible.

Rep. Harold Rogers (R-Ky.), who chaired the hearing, encouraged Reno to
press the case with the FCC, telling her, "I'll buy your car fare down there
to file the papers."

Reno and FBI Director Louis J. Freeh have repeatedly argued that keeping up
with the rapid evolution of communications technology is one of the most
fundamental challenges facing law enforcement. Asked yesterday whether the
Justice Department would face limits on its ability on conduct electronic
surveillance unless industry made changes, Reno responded, "I think we're
there."

While old-style copper wire telephone systems were simple to tap into, the
FBI and other agencies now find themselves contending with communications
systems that are increasingly digital and wireless.

Telephones can also be used to transmit everything from ordinary
conversations to text to pages.

In response to these developments, Congress enacted the Communications
Assistance for Law Enforcement Act of 1994 and authorized the spending of
$500 million to help the communications industry replace or modify equipment
and software so that it would accommodate surveillance equipment.

Reno acknowledged yesterday that during the first two years of negotiations
little was accomplished and that positions hardened on both sides, with the
FBI partially to blame for taking an unnecessarily "rigid"

position with the industry. Freeh revamped the FBI's negotiating strategy
and put a new team in place last summer, and since then Reno said there had
been some progress. But she said that as of this week the talks had
deadlocked.

The immediate conflict is over whether government or industry should pay for
modifications to existing equipment. But defining those modifications will
determine what capabilities for electronic surveillance law enforcement will
carry into the 21st century and those capabilities are increasingly the
focus of the debate.

While the 1994 law originally envisioned reimbursement for the upgrade of
equipment in place by Jan. 1, 1995, Reno said yesterday that industry
representatives wanted the reimbursement coverage to extend until October
1998. That would cover massive technological changes that have been put into
place since the law was enacted. Reno said that meeting this demand would
exceed the funding Congress authorized and that therefore an impasse had
been reached.

"I think it is a mistake to characterize this just as a money issue," said
Thomas E. Wheeler, president of the Cellular Telecommunications Industry
Association, one of the industry groups that has been negotiating with the
Justice Department over the implementation of the 1994 law.

Wheeler said that the industry supported passage of the 1994 law but that
law enforcement pressed demands that go beyond what Congress authorized.
"The issue is also whether the FBI is using this situation to expand its
capacity and capabilities to conduct electronic surveillance,"

Wheeler said. That complaint has often been echoed by privacy and civil
liberties advocates as well.

In rejecting standards proposed by the industry for law enforcement access
to telecommunications, Wheeler said, the FBI last year added a list of
conditions that represented new surveillance capabilities and it was these
demands that had inflated the costs of the modifications.

"When you add ornaments to the Christmas tree, the costs go up," Wheeler
said.

FBI and Justice Department officials said that nine specific conditions
remained in dispute and that they represent efforts only to maintain current
capabilities.

For example, if law enforcement officials are eavesdropping on one
individual who participates on a conference call with criminal accomplices,
they want the technological ability to continue listening to the call even
if the first person hangs up. That would be essential to knowing which
participants in the call were part of a conspiracy that was planned after
some parties had hung up.

"There are a lot of things that we can do in the old copper wire telephone
that are very difficult, if not impossible, in the new systems," said a
senior FBI agent. "It is happening to us every day."